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House of Commons

Monday 5 November 2012

The House met at half-past Two o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked—

UK Pension-holders

1. Dan Jarvis (Barnsley Central) (Lab): What steps he is taking to ensure that foreign conglomerates carry out their responsibilities to UK pension-holders. [126298]

The Minister of State, Department for Work and Pensions (Steve Webb): As this is the first session of DWP questions since the announcement of the untimely death of Malcolm Wicks, I hope that you will allow me, Mr. Speaker, to place on record, on behalf of the whole ministerial team, our appreciation of Malcolm and all that he contributed to our debates on pensions and welfare.

The Pensions Regulator has “anti-avoidance” powers to take action against employers when they have acted to avoid supporting the scheme. That includes taking action in foreign jurisdictions when necessary. For example, four financial support directions were issued last year against companies in north America in the Nortel case.

Dan Jarvis: I thank the Minister for his response, and for meeting my constituent Alan Hunton and me to discuss the matter. He is aware of my concern about foreign companies that have purchased and asset-stripped businesses in the United Kingdom. In some cases, those firms have discarded their pension responsibilities in such a way as to endanger the pensions to which their employees are entitled. Will the Minister explain how he is working with the Pensions Regulator, and with his colleagues in the Government, to curtail such predatory behaviour?

Steve Webb: This is indeed an important issue. I can assure the hon. Gentleman that the Pensions Regulator has engaged during the last 12 months, and continues to engage, with more than 1,100 schemes that are linked to overseas employers. Between April 2010 and August 2012, it has exercised its powers on at least 10 occasions in relation to such schemes.

Andrew Bridgen (North West Leicestershire) (Con): The Minister is aware of a case in my constituency in which the BMI pension fund was placed in a pension protection fund by Lufthansa. In this case, Lufthansa voluntarily paid over £84 million in compensation to the fundholders. However, under current HMRC rules the money is being treated as income, and the lifetime and annual allowance rules are being applied to the

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compensation. Does my hon. Friend agree that the position is unfair and should be reviewed by HMRC?

Steve Webb: I am grateful to my hon. Friend for raising that case. I have corresponded with Treasury colleagues about the issue, and, subject to their consent, I shall be happy to share with him the reply that I have just received.

Disability Strategy

2. Stuart Andrew (Pudsey) (Con): What progress he has made on the Government's disability strategy. [126299]

The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey): Fulfilling Potential, our disability strategy, is being co-produced with disabled people. We published “Fulfilling Potential—The Discussions So Far” and “Fulfilling Potential—Next Steps” on 17 September. Our key themes, which we intend to make a real difference, are early intervention, choice and control, and inclusive communities.

Stuart Andrew: Can the Minister explain what the role of the disabled people’s user-led organisations will be in the strategy?

Esther McVey: I can indeed. User-led groups will be a key element in everything that we do. It is essential for disabled people and their organisations to be at the heart of that. We have also created a £3 million fund, and I was delighted to be in Redbridge last week when we delivered £1 million of it.

Sheila Gilmore (Edinburgh East) (Lab): An important part of the disability strategy is to get people into work. Can the Minister tell us what proportion of the people in the work-related activity group who have been mandated to join the Work programme have actually found work?

Esther McVey: The figures have not been published yet, but as soon as they are published, I will give the hon. Lady the information.

Philip Davies (Shipley) (Con): There are many excellent disability organisations in the Bradford district, notably the Bradford and Airedale mental health advocacy group. Can such groups join the disability action alliance to help with the Government’s strategy, or will they be excluded from it?

Esther McVey: We are trying to reach out to as many user-led groups as possible. Those who want to become part of the alliance should visit fulfilling.potential@dwp.gsi.gov.uk. Everyone is welcome: we want the strategy to be embedded in all our local communities.

Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab): Given the cumulative impact of welfare reform on disabled people and the criticism of the Joint Committee on Human Rights, can the Minister explain how the disability strategy will comply with the United Nations convention on the rights of persons with disabilities?

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Esther McVey: It fully conforms with the UN rights. In fact, we are a world leader in that regard. It has been noted that we are—as I have said—reaching out to all disability groups and disabled people, and I have given the House the address of the website.

New Enterprise Allowance

3. Karen Lumley (Redditch) (Con): What recent steps he has taken to expand the new enterprise allowance. [126300]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): Because self-employment is the right option for many unemployed people, on 22 October we expanded the new enterprise allowance so that additional jobseekers could take part. We have also extended it so that jobseekers can take part from the first day on which they claim jobseeker’s allowance, rather than having to wait for six months.

Karen Lumley: In Redditch, more than 40 people have taken up the opportunity to be mentored under the enterprise allowance scheme. What else can be done to encourage more jobseekers to start their own businesses?

Mr Hoban: My hon. Friend has made a good point. I think that we should try to give good examples to jobseekers about where they can start businesses. Under Get Britain Working, we can set up job clubs to encourage people to see self-employment as an option for the future. I think that that is a good route out for many people with great skills.

Bill Esterson (Sefton Central) (Lab): Self-employed people in my constituency are experiencing increasing difficulty in finding work because of the Government’s austerity measures. Does the Minister accept that the bureaucratic requirement for self-employed people to produce two forms of evidence relating to their income is making it very hard for them to claim benefits and to find a way back into work?

Mr Hoban: We try to do as much as we can to reduce the burden of red tape on businesses. That is why the Government set the red tape challenge and introduced the one in, one out rule. All those measures lift the red tape burden from businesses to help them to focus on what they should be focusing on—creating jobs and wealth.

22.[126319] Claire Perry (Devizes) (Con): One great barrier for people in work and indeed for people not in work is the cost of child care. Would the Minister look at allowing people on the new enterprise allowance to deduct the cost of child care from their tax bill? That could be taken out of the profits of their company when it was up and running. Will he meet me to discuss the idea further?

Mr Hoban: I know that my hon. Friend is a great champion of the importance of child care when it comes to helping people into work. I would be happy to meet her to discuss that option.

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Jobseekers (Barriers to Work)

5. Robert Halfon (Harlow) (Con): What recent assessment he has made of the barriers that prevent jobseekers getting back into work. [126302]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Jobseekers can face a number of barriers to work, about which my hon. Friend has spoken to me on a number of occasions. Those include a lack of work experience, a lack of essential computer skills, an incomplete education, which leaves them ill qualified, or coming from a family where worklessness is entrenched across generations. We are taking cross-Government action to tackle all those barriers, and reforming the benefit system so that it more closely resembles life in work, rather than people having to face those huge barriers.

Robert Halfon: Since 2011, the Department has through procurement encouraged its private suppliers to hire apprentices, and 2,000 apprenticeships have been created as a result. Will the Secretary of State share his success with other Departments, so that we can roll out this programme across Whitehall and remove barriers to work?

Mr Duncan Smith: I take this opportunity to congratulate my hon. Friend on the huge work that he has done in encouraging apprenticeship starts. I know that he is particularly keen on that and I take a real steer from him. I also remind him and the House that, since we brought in our changes, over the past two academic years more than 950,000 apprenticeships have been offered by over 100,000 different employers. On top of that, the youth contract offers 160,000 wage incentives for those who wish to start apprenticeships. Therefore, the scheme has been a major success for this Government. The coalition has done far more than the previous Government.

Hywel Williams (Arfon) (PC): Will the Secretary of State concede that the greatest barrier to returning to work is the lack of jobs locally and that that is particularly the case for people with long-term sickness and disability?

Mr Duncan Smith: The hon. Gentleman is right—those people face particular difficulties. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Wirral West (Esther McVey), referred to those earlier. Our job is to ensure that we help all those people to overcome those difficulties. Organisations such as Work Choice and Remploy, which are helping to get people back to work, are hugely important. We are making big strides in that regard. The simple answer is that still not enough people with disabilities are back in work, although the situation is improving. I take the hon. Gentleman’s point. We all want to ensure that disabled people join mainstream work and get a full life out of it.

Mr Julian Brazier (Canterbury) (Con): In welcoming my right hon. Friend's last answer, may I particularly urge him to look at organisations such as the Shaw Trust when trying to assist disabled people into work, rather than having focus desks in jobcentres?

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Mr Duncan Smith: I absolutely agree. It is important to extend the net as widely as possible. My hon. Friend is a huge campaigner for public sector organisations and he is right about the Shaw Trust, which I have visited. It is a phenomenal organisation. We will use the trust and every other organisation we can. In fact we set up desks in jobcentres, which were manned by the Prince's Trust on behalf of all other charities, so that we could extend that net to enable anyone who needed it to get support, not just from the Government but from other organisations.

Mrs Mary Glindon (North Tyneside) (Lab): The unemployed former Remploy workers in my constituency have seen little or no help from the DWP or Remploy since they lost their jobs. What will the Secretary of State do about that?

Mr Duncan Smith: I am very happy to take any particulars from the hon. Lady and to hear more detail from her, but the really successful part of Remploy is the part of the organisation that works to get people back to work. It has had a very successful record. We have put extra money into that organisation. We have made more money and more support available to try to get people who were working in the factories at Remploy back to work. However, I must say that during the period that the Government she supported were in office, next to no support was given to people who left Remploy when it closed up to 29 factories.

Harrington Report

6. Joan Walley (Stoke-on-Trent North) (Lab): What assessment he has made of the recommendations in the Harrington report that have not been implemented; and which such recommendations he plans to implement. [126303]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): The work capability assessment was introduced by the previous Government through the Welfare Reform Act 2007, for which the hon. Lady will doubtless have voted. There have been two independent reviews by Professor Harrington. We implemented, or are implementing, all his recommendations on how to improve the WCA.

Joan Walley: It is impossible to convey the distress, heartache and anxiety caused by this Government’s failure to get a grip on Atos. Whatever the Minister might say about the spirit of the Harrington recommendations, it is essential that he get back to me with clear details on the availability of audio-recording equipment, the recruitment of mental health champions in all offices around the UK, how we will ensure judges give full feedback to DWP decision makers, and advising sick and disabled claimants that they can submit evidence.

Mr Hoban: We are implementing the Harrington recommendations, so the things that the hon. Lady mentions are happening in assessment centres across the country. For example, audio recordings are available if people request them. Progress is being made, therefore, but the hon. Lady needs to recognise that it was the previous Government who set up the WCA and recruited Atos. We are trying to make the system work better and be fairer so as to get the right outcome for all claimants.

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Charlie Elphicke (Dover) (Con): Does the Minister welcome Professor Harrington’s comment in his latest assessment that things have noticeably changed for the better? I have heard it said that 40% of appeals are successful. Is that right, or is the proportion lower than that?

Mr Hoban: Professor Harrington has done a very good job. He will produce his third review shortly. The reality is that the DWP makes about 1 million decisions about entry into work, and only 9% of them have been successfully overturned.

19. [126316] Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): On the “World at One” on 11 October the Minister claimed that one of the reasons for so many successful appeals and wrong decisions was claimants withholding medical evidence. Given that the average time for assessment and appeal is 31 weeks—almost eight months—will he explain exactly what evidence he has for that assertion?

Mr Hoban: There are situations in which new evidence is brought forward by claimants. We all should recognise the importance of getting people into work, to give them the hope and the improvements in their well-being that work brings. We should also, therefore, all recognise the importance of finding ways to improve the system, and I would hope that the hon. Gentleman would welcome our efforts to improve it.

Mrs Anne McGuire (Stirling) (Lab): Last week in Scotland, the Daily Record ran a story about Kieran McArdle and the death of his father, Brian. Brian was paralysed down his left side, blind in one eye and unable to speak properly, and yet was declared fit to work. Atos said in response that

“our trained doctors, nurses and physiotherapists strictly follow the guidelines given to them by the Government”.

Given the crescendo of complaints about the implementation of the work capability assessment, should the Minister not abandon his mantra that progress has been made and instead accept his responsibility and undertake a fast and fundamental review of the test, as called for by the shadow Secretary of State, my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne)?

Mr Hoban: Our condolences are with Mr McArdle’s family at this time, and I believe that the Secretary of State is writing to his son, Kieran, in response to his letter, which was delivered to the Department late last week. We know that going through the WCA process can be difficult for claimants and their families, but we and Atos go to great lengths to make it as fair as possible. That is why we are undertaking this process of refinement, taking the system left to us by the previous Government through the Harrington reviews and ensuring we improve it so that it is fair. The previous Government set up this system, and Opposition Members should not shirk responsibility for that.

Mrs McGuire: I am getting weary of the charge that this contract is somehow—[Interruption.] No; the reality is that we would not have managed the contract in the way this Government are managing it. Although the work capability assessments have been controversial to

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say the least, Atos, which delivered that contract, has recently been awarded two out of the three contracts for the personal independence payment. Did the company enhance its bid by naming disability organisations with which it would work, and what due diligence was done to test the authenticity of such assertions before awarding the contracts?

Mr Hoban: The right hon. Lady might be weary of that charge, but she will have to get used to hearing it. This Government are taking forward the changes that are necessary to get this system to work well. I think all Members on both sides of the House recognise one thing, however: as the evidence demonstrates, it is better for people to be in work where possible so that they can look after their families and provide dignity. That is exactly what we are trying to do in getting this process right. We are making progress, and we await Professor Harrington’s third review, which is due in the near future. Let me just say this to the right hon. Lady: when Atos bid for the PIP contract, it made it very clear that it would look to work with disability organisations to improve outcomes. We should try to work together on these matters, rather than make partisan political points.

Jobseeker’s Allowance

7. Mr Marcus Jones (Nuneaton) (Con): What steps he has taken to introduce a new sanctions regime for jobseeker’s allowance. [126304]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): A new sanctions regime for jobseeker’s allowance was introduced on 22 October. The new regime is clearer and tougher. For example, someone who has turned down a reasonable job offer three times in a year will lose their JSA for three years. Those who can work should work.

Mr Jones: I thank my hon. Friend for that answer. In my constituency, many low-paid, hard-working people get more than frustrated with this cohort of people who continually refuse to take up work. Will he go into a bit more detail about the sanctions now in place to deal with able-bodied jobseekers who continually refuse to take up work they are able to undertake?

Mr Hoban: My hon. Friend is right to highlight the frustration among those who are working at seeing people who can work turn down jobs and simply get away with it. That is why we have introduced a new, tougher regime of sanctions, so that someone who turns down a job without good reason for the first time will lose their benefits for 13 weeks. That then escalates so that someone who turns down a job three times in a year will lose their benefits for three years. That is a very clear sanction, it is a very clear deterrent and it sends a very clear message that we expect people who have reasonable job offers to work and pay their own way.

Alison McGovern (Wirral South) (Lab): We are talking about sanctions, carrots and sticks, and the Work programme is supposed to help people back into work. A constituent who had been on the Work programme and recently found part-time work has contacted me. He was concerned that the Work programme had been

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little or no help and that, although his employment was due to his own hard work, the Work programme contractor was paid anyway. What has the Minister done to prevent this deadweight loss?

Mr Hoban: The hon. Lady should examine some of the schemes that the previous Government introduced, under which people were paid regardless of the outcome—regardless of whether they helped people get back into work. Our Work programme pays people by results; it ensures that contractors are paid only where people get jobs, and sustainable jobs at that.


8. Lorely Burt (Solihull) (LD): What steps he is taking to protect members of pension schemes from being incentivised to transfer their pensions. [126305]

The Minister of State, Department for Work and Pensions (Steve Webb): The Government have worked closely with the pensions industry to address concerns regarding incentive exercises. As a result, an industry code of practice was published in June, which we fully support. A monitoring board has been established to evaluate the effectiveness of the code.

Lorely Burt: I am grateful for that answer. Can my hon. Friend provide evidence on the number of companies that have signed up to the code of practice? Is it achieving its objectives?

Steve Webb: I am grateful to my hon. Friend for that. The industry’s response to the code has been very encouraging. Some 49 individual firms and, perhaps more importantly, 14 representative organisations have publicly signed up to support the code, and the figures are growing. The supporters include the major employee benefit consultancies engaged in these exercises and their representative organisations.

Mr David Crausby (Bolton North East) (Lab): Auto-enrolment of pensions is a wise and overdue step forward, especially for low-paid employees. However, with workers changing jobs an average of 11 times in their working lives, does it not make much more sense for them to park their pensions in low-cost aggregator schemes? If not that, what will the Minister do to ensure that fundholders will not have incurred high charges throughout their working lives as a result of numerous transfers?

Steve Webb: The issue that the hon. Gentleman rightly raises is one of the many loose ends left for us by the previous Government. When auto-enrolment was set up, they simply left us with a situation where people could accumulate a dozen small pots and leave them fragmented. We propose under auto-enrolment that where people leave behind a small pot it will, by default, transfer to their new employer, so that they will accumulate what I have called, in technical terms, a big fat pot.

Jobcentre Plus

9. Mr Peter Bone (Wellingborough) (Con): How many people have found jobs through Jobcentre Plus since May 2010. [126306]

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The Minister of State, Department for Work and Pensions (Mr Mark Hoban): Since May 2010, more than 8.6 million claims for jobseeker’s allowance have ended, of which an estimated 68%—or more than 5.8 million—saw the claimant enter work.

Mr Bone: I have good news for the Minister: another 2,000 are coming off jobseeker’s allowance because of a new development in my constituency—well, between my constituency and the Corby constituency. It is supported by Wellingborough council, East Northamptonshire district council, Higham Ferrers council and Rushden council—all Tory councils—but it is opposed by Labour Corby council. Can the Minister explain that?

Mr Hoban: My hon. Friend makes an important point. When people think about how they should vote in Corby on 15 November, they will see that Labour is wrecking job prospects in that area.

Andrew Gwynne (Denton and Reddish) (Lab): How many unemployed people now go through the fast-signing procedure at Jobcentre Plus and therefore do not get to see an employment adviser?

Mr Hoban: We must work out how much support jobseekers need to get into work to ensure that those who need the most support get into work quickly. The hon. Gentleman might also want to know that more people came off the unemployment register in Corby last month than in any other constituency in Northamptonshire.

Universal Credit

11. Diana Johnson (Kingston upon Hull North) (Lab): When he plans to announce the recipients of universal credit whose children will be eligible for free school meals. [126308]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): We are working closely with all the Departments that administer the staggering number of passported benefits—some 25 benefits in England, as well as about 20 in Scotland and Wales. The administration of passported benefits and determining who will receive them is the responsibility of various Departments—in the case of free school meals, it is the Department for Education. With different eligibility criteria all over the place giving rise to the massive complexity that has built up over the past few years, we are looking to simplify the system under universal credit while ensuring that those benefits continue to be available to the families who need them most.

Diana Johnson: Does the Secretary of State agree with the Church of England’s Children’s Society, which states that all children in families receiving universal credit should be eligible for free school meals? If he does not, why not?

Mr Duncan Smith: I do not agree, because that would mean a huge increase even on the numbers with which the previous Government left us. If we did that, it would include an extra 2.5 million children and an estimated cost of up to £1 billion. I wonder whether the

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hon. Lady has talked to her hon. Friends on the Front Bench about whether that is another spending commitment they would like to make.

Sir Bob Russell (Colchester) (LD): The previous Labour Government left some 3.9 million children living below the official poverty line, about half of whom did not qualify for free school meals. Is it not time that the children who are most in need got the free school meals that they did not get under the Labour Government?

Mr Duncan Smith: The introduction of universal credit will hugely help families with the lowest incomes. Something like 80% of the money is transferred to the bottom 40% on the income scale, so that helps hugely straight away. Secondly, it is very important that we have an opportunity for Departments—they will do this in discussion with us—to consider how best they can ensure that those most in need get the money and support they require.

Employment and Support Allowance Appeals

13. Julie Hilling (Bolton West) (Lab): If he will make it his policy to begin monitoring the number of people who die as a result of (a) illness and (b) suicide whilst awaiting the result of employment and support allowance appeals. [126310]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): My Department publishes information on ESA appeals when they have been heard by Her Majesty’s Courts and Tribunal Service. We have no plans to capture or publish official statistics relevant to the specific circumstances described. In July, we published data on the number of deaths of incapacity benefits recipients. They include claimants awaiting appeal where benefit is still in payment.

Julie Hilling: With Atos failing on 40% of its work capability assessments, with an estimated 30 to 80 people dying each week between assessment and appeal, and with 6% of doctors surveyed reporting that they have patients who have either attempted or committed suicide as a result of work capability assessments, does the Minister not think that he has a duty to monitor the effect of his policies?

Mr Hoban: As I said in answer to earlier questions, we are monitoring the effect of our policies. We are ensuring that the work capability assessment is fit for purpose and that is why we asked Professor Harrington to carry out a third review to ensure that the process is right and fair. The hon. Lady should also remember that the work capability assessment is an assessment of people’s ability to work, not a diagnostic test.

Nadhim Zahawi (Stratford-on-Avon) (Con): Will the Minister confirm that all Atos doctors, nurses and physiotherapists are fully trained and registered with their relevant professional body?

Mr Hoban: My hon. Friend is absolutely right. All Atos health professionals are properly qualified and they get additional training to help them undertake the work capability assessment.

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14. David Mowat (Warrington South) (Con): What recent discussions he has had on the auto-enrolment charging regime for employees. [126311]

The Minister of State, Department for Work and Pensions (Steve Webb): It is vital that people are enrolled in schemes that offer transparent and value-for-money charges. The National Employment Savings Trust’s low charge structure has set a benchmark, prompting several competitive alternatives in the market, and I have called for providers to guarantee not to enrol people into high-cost legacy schemes.

David Mowat: The Minister will be aware of the recent Cass business school report that says that many older defined-contribution schemes charge 3% or more. That is six times the best practice of newer schemes, and it is costing many tens of thousands of people the chance of having a decent pension. Will he act to ensure that people cannot be auto-enrolled into those schemes—by using either a kitemark or a charges cap?

Steve Webb: On the sort of legacy schemes that my hon. Friend refers to, I am pleased to announce that, only today, another provider—Fidelity—has said that fees in its default funds will not exceed 1% and that existing scheme members will have the opportunity to switch out of their current funds. That follows Aviva’s statements that its schemes will have a charge of not more than 1%. It will not allow auto-enrolment into any older-style schemes. I encourage other firms to follow suit.

Kelvin Hopkins (Luton North) (Lab): Auto-enrolment schemes will still be subject to stock market vagaries, the effects of varying interest rates and inefficiencies of scale. Is not what we really need a 100% state system, where we get defined benefits, as well as defined contributions, and efficiencies of scale and best possible value?

Steve Webb: Two sorts of risk are associated with pensions: financial risk and political risk. We have had SERPs—the state earnings-related pension scheme—which successive Governments cut and cut again. So that scheme did not provide any guarantee either. I want a balance of risks for people, a state promise and a private sector entitlement as well.

Andrew Jones (Harrogate and Knaresborough) (Con) rose—

Mr Speaker: I say to the hon. Member for Harrogate and Knaresborough (Andrew Jones) that the choreography of when to stand up is an important parliamentary skill, which he is now developing.

16. [126313] Andrew Jones: I am developing it as fast as I can, Mr Speaker.

Can the Minister update the House on how employees have responded to auto-enrolment?

Steve Webb: Yes. The first firm to auto-enrol was RBS bank, which did so in July. It had 86% scheme membership before auto-enrolment. That has now risen to 93%. The early signs are encouraging.

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Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): We now seem to have a consensus across the House on the need for a charge cap. The leader of the Labour party has called for a charge cap on old-style legacy schemes, and the hon. Member for Warrington South (David Mowat) has just done the same. Can the Minister confirm that, when he refers to Aviva charging no more than 1%, that is an average and does not apply to all schemes?

Steve Webb: On the hon. Gentleman’s first point, this is another of the loose ends left by Labour on auto-enrolment. When Labour legislated, it put in practically no quality requirement at all. So Labour required millions of people to auto-enrol but set practically no standards for what they were auto-enrolled into. This is one of the many issues that we are actively tackling.

Gregg McClymont: The Minister has not answered the second part of the question, so I will ask it again. He just told the House that Aviva—I do not single out Aviva, as this is a broader issue—is charging no more than 1% on its schemes. My understanding is that that is an average of 1%, so a scheme could charge 0.4% and another could charge much more. The hon. Member for Warrington South, the leader of the Labour party and I are calling for a cap on old-style legacy schemes. Why does the Minister not get on with this, so that everyone can have a decent retirement scheme?

Steve Webb: Let me clarify the specific point. The statement by Aviva is that

“its schemes for automatic enrolment will have an average total product charge of less than 1%... It will not allow auto-enrolment into…older-style schemes.”

On the charge cap, the danger of the hon. Gentleman’s idea of having, say, a 1% across-the-board cap is that someone can tick the box with 0.99%. Actually, many in the market will offer below that. There is a danger that people will be misled if they are just below the cap, when many lower prices are available in the market.

Employment Level

15. Gavin Barwell (Croydon Central) (Con): What recent assessment he has made of the level of employment. [126312]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): There are more than 29.6 million people in work—the highest number since records began over 40 years ago.

Gavin Barwell: In my constituency, unemployment is down by nearly 10% since its peak in February this year. We clearly need to do better still. Does my hon. Friend agree that, contrary to some suggestions, the evidence shows that that is not down to an Olympic blip, but that we are seeing welcome progress month on month, with more and more people finding work?

Mr Hoban: My hon. Friend makes a good point. We have seen employment levels rise. Even if we exclude London in its entirety, we have seen the number of people in work increase by 500,000 since the general election.

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Wayne David (Caerphilly) (Lab): What assessment have the Government made of the increasing level of part-time employment?

Mr Hoban: The most recent unemployment figures indicated that 80% of people who work part time actually want to work part time. Many find that part-time work meets their needs in terms of flexible working and returning to the labour market. We need to find more full-time jobs, but we should recognise that 80% of people want to work part time and the labour market is able to accommodate them.

Separated Families

17. Pauline Latham (Mid Derbyshire) (Con): What progress his Department has made on its plans to support separated families. [126314]

The Minister of State, Department for Work and Pensions (Steve Webb): The Government have already announced a £20 million investment in the development of support for separated families in the current spending review period. This will include provision of an online distributable web application to be launched later in the autumn, and up to £14 million for the new innovation fund to support separated families.

Pauline Latham: I thank the Minister for that answer. Will he reassure the House that the £14 million innovation fund will be spent on projects that will ultimately benefit children, and will he explain how that will be achieved?

Steve Webb: Yes. We have had 100 expressions of interest from voluntary groups and charities, and we have whittled that down to about 30. All are trying to build on existing work that enables parents, when they are separating, to deal with each other in a mature way in the interests of the children. That is the central aspect of our new strategy.

Kerry McCarthy (Bristol East) (Lab): When family breakdowns occur, grandparents, aunts, uncles or other relatives often have to step into the breach and a kinship care situation arises. Will the Minister assure me that he is talking to his colleagues in other Departments to make sure that when that situation happens, particularly in an emergency, support is given to those who step up to the plate?

Steve Webb: I agree that we need to support kinship carers, such as grandparents. One change that our Department has made is that, for example, where a mother is going out to work and is not using the national insurance credits that she would have gained for receiving child benefit, they can be passed to a grandparent, who may not be of pension age, to make sure that they are not financially disadvantaged. That is just one of the things we are doing to support that important group.


18. Jonathan Evans (Cardiff North) (Con): What steps his Department is taking to ensure that older workers with little private pension provision are not disadvantaged by the introduction of auto-enrolment. [126315]

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The Minister of State, Department for Work and Pensions (Steve Webb): Our research shows that even under the current rules 99% of savers will get back at least as much as they put in under auto-enrolment, and around 70% will get back twice as much. In addition, our state pension reforms will support planning and saving for retirement by delivering a simpler, single, flat-rate pension set above the basic level of the means test.

Jonathan Evans: I accept that those were the calculations made in 2010 as part of the auto-enrolment review, but since that time we have seen investment returns fall so much that the Financial Services Authority is ordering the industry to downscale its forecasts and we have also seen annuity rates fall. Have the Government recalculated their figures to take account of that?

Steve Webb: The short answer to the hon. Gentleman’s question is no. However, one important point I would raise is that if someone only builds up a very small pension pot, they have a legal right to take it, in most circumstances, as a cash lump sum with a quarter tax-free. Even someone later in life can get an employer contribution tax relief—a lump sum taken with a tax-free contribution. That will be attractive, even in later life.

Social Breakdown

20. Stephen Metcalfe (South Basildon and East Thurrock) (Con): What steps he is taking to tackle the causes of social breakdown. [126317]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Last week we published the social justice outcomes framework, which has a set of indicators that highlight our priorities: to eradicate family breakdown, educational failure, worklessness, addiction and crime, and to grow the social investment market—a big area for us. The framework will measure our progress towards achieving these aims, shifting the policy focus and spending towards outcomes rather than inputs.

Stephen Metcalfe: Can my right hon. Friend tell the House how projects supported by the innovation fund will tackle social breakdown?

Mr Duncan Smith: Indeed I can. The innovation fund was set up by me when I came into the Department. It consists of approximately £30 million of seedcorn funding to enable voluntary groups, charities and organisations—beyond the normal organisations that one comes across in the work process—to show that their programmes, which help people to deal with drug addiction, family breakdown or gang violence, actually work, to prove that concept, and to set them up to be able to run those programmes. At least 11 social impact bonds have come out of this and we have just launched a second round.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): Does the Secretary of State agree that much social breakdown stems from intergenerational worklessness? Is he as enthusiastic as many Opposition Members are about the Heseltine review, “No Stone Unturned”? Will he ensure that he takes a positive role in bringing some—indeed, most—of those recommendations to fruition?

Mr Duncan Smith: When one of the big beasts from the past roars, it is always difficult not to be incredibly enthusiastic about what they are roaring about, so I

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accept the hon. Gentleman’s invitation to express my interest and support for the report. Obviously there are details in it, but he makes the vital point that in too many communities there are families of two and three generations that have been beyond the work cycle. This is about getting them back into the idea of work not just for the money but because their whole lives disintegrate without it. I agree with him and will certainly make sure I tell Lord Heseltine how supported he is.

Youth Contract

21. Gemma Doyle (West Dunbartonshire) (Lab/Co-op): What assessment he has made of the effectiveness of the youth contract; and if he will make a statement. [126318]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): The youth contract was introduced in April 2012 to provide additional support worth almost £1 billion to unemployed young people over the next three years. Although it is too early to make any judgments of its effectiveness, we have commissioned an external evaluation of the youth contract to examine delivery and outcomes, and the first report will be available early next year.

Gemma Doyle: I notice that the Minister gives a cautious response. Is it true that millions of pounds that we should be using to get young people into work are sitting unallocated and helping no one, because the Government cannot get employers on board with the youth contract?

Mr Hoban: A number of young people have been helped by various aspects of the youth contract. Twenty young people in the hon. Lady’s constituency have had work experience as a consequence of it, and another group has been helped into work as a result of the sector-based work academies. I hope that she is doing all she can in her constituency to champion the youth contract and to get more young people into work.

Housing Benefit

23. Bob Blackman (Harrow East) (Con): What assessment he has made of results of the housing benefit demonstration projects. [126320]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): The demonstration projects are testing direct payment of housing benefit to social rented sector tenants in six areas across England, Scotland and Wales. Their purpose is primarily to help people manage their rent in advance of a move into work and the introduction of universal credit. We have commissioned an independent action research-based evaluation of the projects, and the results of initial research will be published in early December.

Bob Blackman: I thank my right hon. Friend for his answer. Will he elucidate on some early learning that has come from the second learning report, which was recently published via the learning network?

Mr Duncan Smith: That is a lot of learnings, but I will do my level best to help my hon. Friend. I shall tell him what we know so far. Some of these are early figures,

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but interestingly, after all the scaremongering about how people would be unable to cope, which, as we know from the local housing allowance, is not the case, the centre at Sheffield Hallam university has found so far that only 2%—less than people thought—of claimants moved because of eviction or a landlord refusing housing to housing benefit tenants, and few claimants gave financial reasons for actually moving. So we are making some good discoveries. We are on the right track and heading in the right direction.

Universal Credit

24. Teresa Pearce (Erith and Thamesmead) (Lab): What discussions his Department has had with Baroness Grey-Thompson following the publication of her report on the effect on disabled people of the introduction of universal credit. [126321]

The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey): Since Baroness Grey-Thompson’s report was released, I have attended meetings with her twice where the contents of her report have been discussed.

Teresa Pearce: “Holes in the Safety Net”, the report just mentioned, indicated that about 450,000 disabled people lose out under the universal credit rules. This number was also raised by my hon. Friend the Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, in a recent Westminster Hall debate that the Minister attended. Will she listen to these two highly respected women and amend her plans?

Esther McVey: We have been listening very much. We found some of the reports to be highly selective and quite skewed. They did not take into consideration how much extra support was going to people with disabilities, but we are listening, there is transitional protection and we will be releasing the assessment criteria later in the year.

Mr David Ward (Bradford East) (LD): The Minister has no doubt read today’s copy of Bradford’s The Telegraph and Argos and the letter from Mr Barry Thorne about his son. He felt compelled to write the letter following the comments from Dame Tanni Grey-Thompson. The fear is that those with clearly defined medical concerns, such as his son Stephen, will feel threatened and fearful at the prospect of reapplying and being interviewed. Are those fears unfounded?

Esther McVey: I believe that those fears are unfounded. Everybody tries to put information into the public arena that is meant to help, but frequently they do not, and instead raise fears. The whole reason for having a face-to-face interview is so that the claimant can explain clearly why they might need the benefit.

Housing Benefit

25. Yvonne Fovargue (Makerfield) (Lab): Whether he plans to withdraw eligibility for housing benefit from people aged under 25. [126322]

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The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): My right hon. Friend the Chancellor of the Exchequer will announce the Government’s expenditure plans in the autumn statement in a few weeks. Until then all discussion about further reform remains, as it always will do, somewhat speculative.

Yvonne Fovargue: Would not removing entitlement to housing benefit from people aged under 25 increase youth homelessness and youth unemployment?

Mr Duncan Smith: As I said, we are happy to look at all these proposals. We are discussing them right now, as has been made clear by my right hon. Friend the Prime Minister and by the Chancellor. But it is worth putting a few features in the public domain. The key issue is that young people who are not eligible for benefits do all sorts of things such as sharing flats and working hard. They use much of their expenditure, on low pay sometimes, to get themselves accommodation. What we are looking to do is make sure there is parity—fairness—in the system so that those who are in a slightly different situation do not get an advantage which is not necessary. It is worth telling the hon. Lady something about that group. About 400,000 claimants who are under 25 are receiving around £2 billion a year, and shared accommodation rates extend to under-35s. That is a lot of money and it is worth looking at.

Greg Mulholland (Leeds North West) (LD): The Department’s own family resources survey shows that only 10% of under-25s live independently. When we take out all the essential exemptions for people who cannot live with family, the number covered would be very small, so why are we talking about a policy that does not add up economically?

Mr Duncan Smith: As I said previously, we are looking at all this. Anyway, entitlement would never be removed from those who are already on housing benefit. The review is about flow and about re-establishing fairness in a system which many think has become unfair and does not help those who are not eligible for such benefits. I accept that there would be people who would be ineligible. That is the point of examining the system and figuring out how the policy would go, but like all policy reports, it is worth looking at. It deals with an element of unfairness and the thing about the benefits system is that if it is unfair, people who should support it will not support it, such as taxpayers.

Topical Questions

T1. [126323] Lilian Greenwood (Nottingham South) (Lab): If he will make a statement on his departmental responsibilities.

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): We have been rolling out the innovation fund, which has so far been very successful, as I said in answer to an earlier question. About 11 social impact bonds have now been launched. The successful bidders in the second round, Prevista, Social Finance and 3SC, will deliver support for our most disadvantaged 14 and 15-year-olds, restoring hope and aspiration to young people in care who are disengaged from school and involved in gangs, crime and drugs. It is a very, very good project.

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Lilian Greenwood: Dr Sue Atkinson, a mental health professional in my constituency, recently told me about the appalling misjudgments that she and her colleagues have witnessed, when their clients’ needs and capabilities have been completely ignored in the work capability assessment process. Why will the Secretary of State not act now to review and revise a system which is clearly failing?

Mr Duncan Smith: There is an awful lot of lost memory among Opposition Members. It was they, when they were in government, who set the process up. It is this Government who have made all the alterations, thanks to Professor Harrington, that have improved the situation. We are doing exactly what the hon. Lady requests. I wish she would speak to members of her Front-Bench team and avail them of that information.

T2. [126324] Andrew George (St Ives) (LD): Disability Cornwall has expressed concern to me that its good name has been used by the company Atos when bidding to undertake the personal independence payment assessments, when in fact no such discussion regarding a potential local partnership has ever taken place between Atos and Disability Cornwall. Does the Minister agree that this may have resulted in Ministers being misled? Will the matter, therefore, please be investigated?

The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey): To correct my hon. Friend, what the contract said was, “Should we win the contract, the sort of people we would look to negotiate with would be Disability Cornwall”—[Interruption.] The right hon. Member for Stirling (Mrs McGuire) is passing comments from a sedentary position; she may be thinking of a different matter altogether. In regard to Disability Cornwall, Atos’s position was that should it win the contract, it would look to negotiate with Disability Cornwall.

Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): May I first associate everyone on the Opposition Benches with the words of commemoration for our much treasured colleague, Malcolm Wicks, who is sorely missed?

Will the Secretary of State confirm that the introduction of universal credit is proceeding according to its original timetable?

Mr Duncan Smith: I can indeed. As we have said, we will start the process nationwide in October, although we have introduced an earlier start for a pilot programme, as the right hon. Gentleman is aware, because he came into the office to talk to me about it. He knows very well that, as I explained then, the four-year process will be completed exactly as we have intended, on time and on budget.

Mr Byrne: That is curious, because last year the Secretary of State told us that every new claim for out-of-work support would be treated as a claim for universal credit from next October, but the Minister of State, the hon. Member for Fareham (Mr Hoban), told Parliament on 26 October that the rules for universal credit from 2013 onward are still “under development.”

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What on earth is going on? On Atos, on caps on pension charges and now on universal credit, it does not appear that the Secretary of State has got a grip.

Mr Duncan Smith: If the right hon. Gentleman does not mind, I must say that that is a rather pathetic question. The reality, as he knows very well—he came into my office to discuss these matters and we showed him exactly what we are doing—is that there is no change. The reality is that over the four years we will bring universal credit completely online—it will be completed by 2017. I wish he would spend more time working on his brief, rather than writing books on China.

T3. [126325] Julian Sturdy (York Outer) (Con): Like all hard-working taxpayers, I support the Government’s attempts to reduce benefit fraud. However, I have recently received correspondence from a terminally ill constituent whose support has been wrongly withdrawn. Will the Minister assure me that those who truly deserve support, such as my constituent, will benefit from our introduction of a fairer welfare system?

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): My hon. Friend makes an important point. That is exactly why we have been working with Professor Harrington to implement the findings set out in his report. One of his findings relates to cancer sufferers, which is why we published new guidance last month on how they should be treated under the work capability assessment.

T6. [126328] Fiona O'Donnell (East Lothian) (Lab): Many of my constituents who devote a great deal of effort to providing Atos with detailed medical supporting evidence will be deeply disappointed with the Minister’s earlier answer. What steps is he taking to ensure that Atos takes full account of medical evidence when determining work capability assessments—

Mr Hoban rose

Fiona O'Donnell: I appreciate that the Minister is eager to answer and look forward to hearing from him. I ask that because at the moment Atos is simply ignoring that evidence.

Mr Hoban: What the work capability assessment does is assess people’s ability to work. It is a review of their capability and functionality, not a diagnostic assessment. That is why the assessment takes place. Of course, it is right that claimants bring along medical evidence, but it must be read in conjunction with the Atos assessment. Decisions about eligibility for employment and support allowance are made by DWP staff, not Atos.

T4. [126326] George Hollingbery (Meon Valley) (Con): The Government have made it clear that although they are keen that most people should be able to deal with the direct payment of housing benefit, that will not be appropriate for all. Will my right hon. Friend reassure the House, and those outside who are concerned about women’s refuges and their futures, that direct payment may be waived in those circumstances?

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Mr Duncan Smith: My hon. Friend raises a very important issue. We are already in discussions with such groups and have made it clear that anybody suffering domestic violence will immediately be taken through the system and the money will be paid directly. The refuges, as we have already said, will get their money and there will be no hesitation. That is an absolutely critical area and it will be provided for completely by universal credit.

T9. [126331] Mr Stephen Hepburn (Jarrow) (Lab): My local citizens advice bureau is getting 30 new work capability assessment cases every week, and 80% of them are won on appeal. That is because the Government are forcing sick people who have cancer or brain damage or who are dying back into work. It is a disgrace. When will this barbarity end?

Mr Hoban: As I have said a few times today—I will continue to say it—this process was put in place by the previous Government, a Government the hon. Gentleman supported. What we are looking to do is ensure that those people who can work get the support they need to get into work, rather than abandoning them to a lifetime on incapacity benefit, which he seems to think is the better option.

T5. [126327] Duncan Hames (Chippenham) (LD): Is the disabilities Minister satisfied that the proposed descriptors for the personal independence payments adequately recognise the impact of Crohn’s disease, colitis and irritable bowel syndrome on the daily lives of our constituents who live with those conditions and the invisible disabilities that they endure?

Esther McVey: I am indeed. As my hon. Friend will know, it is not about the condition, but about how each individual person copes with the condition; and yes, I am happy with the criteria.

T10. [126332] Mark Durkan (Foyle) (SDLP): The Fair Pensions report, “Whose Duty? Ensuring effective stewardship in contract-based pensions”, highlights the relative lack of quality standards being applied to UK schemes, as opposed to other jurisdictions such as Australia. The Minister referred to active steps being taken in relation to auto-enrolment. Do those steps extend to re-visiting actively the qualifying criteria and the default fund guidance?

The Minister of State, Department for Work and Pensions (Steve Webb): The hon. Gentleman is right to raise the important issue of governance. We do not think that we have a significant problem with the early stages of automatic enrolment for the biggest firms. They are coming in at a low cost and are well governed. The issue will arise further through the process and we are indeed looking at the quality of schemes into which people are auto-enrolled, including charges and governance.

T7. [126329] Andrew Jones (Harrogate and Knaresborough) (Con): What progress is being made to ensure that work capability assessments are sensitive to fluctuating medical conditions such as stroke care?

Mr Hoban: My hon. Friend makes a useful point. Professor Harrington highlighted in his second review the issue of fluctuating conditions. We are working on

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an evidence base to look at descriptors for fluctuating conditions, to make sure that they are taken properly into account in the work capability assessment.

Dame Anne Begg (Aberdeen South) (Lab): When the Government started to move people from incapacity benefit to employment support allowance, provision was made for those who were particularly or very disabled so that they would not have to go through the work capability assessment and would go straight into the support group. However, a number of my constituents have been moved from incapacity benefit and on to the work-related activity group of ESA without first going through a work capability assessment. How widespread is this, how many people is it happening to, and why is it happening?

Mr Hoban: I would be grateful if the hon. Lady supplied me with the evidence she mentions. There are clearly situations in which people go straight into the support group without undergoing a work capability assessment. It depends on the information supplied when they originally make the application.

T8. [126330] George Freeman (Mid Norfolk) (Con): The scandalously high rate of youth unemployment was perhaps one of the previous Government’s worst legacies, and my constituents warmly welcome the creation of 1 million new jobs and 600,000 apprenticeships. Does the Secretary of State agree that in rural areas young jobseekers face particular challenges in accessing small, fast-growing companies in the rural economy, and will he join me in supporting the local voluntary big society initiative launched by The Norfolk Way—it started a work club and enterprise bursary in which local entrepreneurs support jobseekers—in Mid Norfolk last week?

Mr Duncan Smith: I pay tribute to the work that my hon. Friend does in his area. I absolutely agree with and support what he says. It is really interesting that youth unemployment was rising in the previous Government’s last six years, even in a time of growth. They fiddled with the figures so that anybody who was unemployed for more than 10 months went on a course; most of them ended up returning to unemployment, where they started from zero again. The then Government deliberately and falsely capped the figure. We are honest about it and tell the truth.

Dr Eilidh Whiteford (Banff and Buchan) (SNP): We have been told that Professor Harrington’s recommendations on the introduction of mental health champions to improve work capability assessments have been implemented, yet only two mental health champions cover the whole of Scotland and both of them are based in the central belt. What steps have Ministers put in place to measure the effectiveness of mental health champions?

Mr Hoban: We have introduced a mental health champion in every single assessment centre throughout the country. We have asked Professor Harrington not only to look at new changes, but to review changes that have already been proposed and to monitor their effectiveness. We will continue to follow that process.

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Damian Hinds (East Hampshire) (Con): On the housing benefit demonstration projects, what assessment has been made of potential budgeting accounts—so-called jam-jar accounts—to help people manage all their finances and build up a savings pot?

Mr Duncan Smith: My noble friend Lord Freud has already discussed with all the financial institutions how to construct systems that support people who may have budgeting issues. The phrase “jam-jar accounts” is an unsophisticated term for such systems, but by and large they help people apportion the money necessary for their rent, food and so on, so that they can see that money flow in and then take it out. On housing benefit, a key area of the local housing allowance will be that we will not allow people to build up arrears of debt. We will intervene early to make sure that that does not happen, which should help landlords understand that we will support them.

Kate Green (Stretford and Urmston) (Lab): Ministers assured us that the flexibilities introduced for lone parents on jobseeker’s allowance under Labour would continue, yet the number of lone parents who have been sanctioned has risen dramatically. In a written answer on 24 October the Minister said that the reasons for sanctions were exactly the same as those for other jobseekers. Can the Secretary of State explain exactly how those flexibilities are being properly applied and what training is being delivered to personal advisers in Jobcentre Plus?

Mr Hoban: I think we all believe that it is important that where lone parents can work, they should work, because that helps to boost their income and that of their family. Guidance is given to personal advisers on jobseeker’s allowance to ensure that the sanctions regime is applied appropriately to lone parents, as in the case of all jobseekers.

Mr Edward Leigh (Gainsborough) (Con): What, hitherto, has been the fraud and error rate in child benefit?

Mr Duncan Smith: It would be pretty negligible because it is paid to everybody, and it would therefore be impossible to figure it out. Across the board in the Department for Work and Pensions, we are beginning to see a downward pressure on fraud and error. My hon. Friend will be pleased to see that over the next few years we will be saving considerable amounts of money.

David Wright (Telford) (Lab): How many people who have been medically retired from their jobs with severe conditions are being put through the work capability assessment and having their benefits attacked?

Mr Hoban: I do not have the precise figures to hand, but I will look into them and write to the hon. Gentleman. It is important to remember—I think there is agreement on both sides of the House about this—that working helps many people’s medical conditions; there is very strong evidence to support that. That is at the heart of the work capability assessment that Labour introduced when in government, and we are trying to sort out the problems with it.

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Jake Berry (Rossendale and Darwen) (Con): With 70% of social housing tenants having no access to the internet, will the Secretary of State update the House on what progress he is making for a low or no-cost social housing tariff to be overlaid on the existing BT Basic package to enable social housing tenants to access universal credit online?

Mr Duncan Smith: In fact, many more people access the internet daily than a lot of people think. Some 78% of all benefit recipients access the internet, and about 48% do so on a daily basis. Obviously it is our job to try to get that figure up, because if people cannot access the internet that affects their employment prospects given that 92% of all jobs require some computer skills. This is an opportunity and, yes, we are looking at that

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passported benefit to make sure that those who need the money get the money directly.

Angela Smith (Penistone and Stocksbridge) (Lab): Universal credit is due to be up and running in less than a year. Surely by now the Secretary of State should be able to give us some detail about who will be eligible for free school meals.

Mr Duncan Smith: We are talking to the Departments involved about how best they want to make this work. They will make it work, and we will come forward very soon with some very clear indication of how it is going to work. The hon. Lady should rest assured that the purpose of this is to make sure that those who need and deserve the money get the money, and I can guarantee that that will be the case.

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Business of the House

3.33 pm

The Leader of the House of Commons (Mr Andrew Lansley): With permission, Mr Speaker, I should like to make a short business statement.

The business for tomorrow will now be:

Tuesday 6 November—Motion to approve the Second Report 2012-13 from the Standards and Privileges Committee, followed by Second Reading of the European Union (Croatian Accession and Irish Protocol) Bill, followed by motion to approve European documents relating to Banking Union and Economic and Monetary Union.

The business for the next day will be:

Wednesday 7 November—Opposition day [8th allotted day]. There will be a debate on regional pay in the NHS, followed by a debate on the criminal injuries compensation scheme. Both debates will arise on an Opposition motion.

The business for the rest of this week remains unchanged, as follows:

Thursday 8 November—Debate on a motion relating to the medium-term financial plan for the House of Commons administration and savings programme, followed by general debate on stimulating growth through better use of the prompt payment code. The subjects for these debates have been nominated by the Backbench Business Committee.

Friday 9 November—Private Members’ Bills.

I will, as usual, announce further business during the business statement on Thursday.

Mr Speaker: The hon. Member for Wallasey (Ms Eagle) does not wish to contribute. We are grateful to the Leader of the House, and if there are no questions—this is almost unprecedented in respect of anything said by the Leader of the House or any other Government representative—we shall move on.

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Growth and Infrastructure Bill

[Relevant documents: The Eighth Report of the Communities and Local Government Committee, Session 2010-12, on the National Planning Policy Framework, HC 1526, and the Government’s response thereto, Cm 8322; Uncorrected oral evidence to the Communities and Local Government Committee, on Planning, housing and growth, HC 626-i; Oral and written evidence to the Environmental Audit Committee, on Sustainable Development in the National Planning Policy Framework, HC 1480.]

Second Reading

3.34 pm

The Secretary of State for Communities and Local Government (Mr Eric Pickles): I beg to move, That the Bill be now read a Second time.

Two years ago, the coalition Government were formed to take the country from difficult times to better days. In the coalition agreement, we pledged to build a new economy from the rubble of the old, to support sustainable growth, balanced across all industries and parts of the country, and to champion enterprise and aspiration. We pledged to shift power from unelected quangos to elected representatives, communities, neighbourhoods and individuals. Most urgently, we pledged to take immediate action to tackle the deficit and get the public finances back on track.

Mr Clive Betts (Sheffield South East) (Lab): Will the Secretary of State give way?

Mr Pickles: I will give way in a few moments.

Since those heady days of May 2010, the economy has been buffeted by the problems of the eurozone. All western economies face the ongoing consequences of the banking collapse and the last decade of boom and bust. The world has changed, however, and so must we. The west is slipping down international league tables as emerging economies push ahead with energy and drive. Countries that make it will be those that step up to long-term challenges to get the economy growing, build more homes for a growing population, and provide factories, offices and infrastructure for the 21st century.

Kelvin Hopkins (Luton North) (Lab): The Secretary of State talks about building more homes. Tens of thousands of homes could be built on land banks, but builders are holding back until the economy recovers and house prices increase, so that they make more profit.

Mr Pickles: I am sure the hon. Gentleman was delighted to see the latest figures that show a net increase of 11% in the number of homes—the biggest increase since 2007. I hope that he will work hard to persuade fellow Labour Members to get behind the Government’s schemes.

Simon Hughes (Bermondsey and Old Southwark) (LD): Will the Secretary of State confirm that, whatever details the Bill contains to allow greater flexibility in housing development, the Government are absolutely committed to having more affordable homes in England, and for more of those homes to have social or target rents for constituents such as mine?

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Mr Pickles: My right hon. Friend can rest assured that the Government are confident of being able to deliver 170,000 homes, and of ensuring affordable homes for those who need housing. That is considerably better than in any of the past 10 years when the Labour party was in power.

Mr Betts: Will the Secretary of State give way?

Mr Pickles: I will, of course, give way to the Chair of the Communities and Local Government Committee.

Mr Betts: The Secretary of State said that one of the Government’s fundamental intentions is to transfer powers from unelected quangos to elected councils. Is the Planning Inspectorate an elected quango?

Mr Pickles: No, it is accountable to Ministers and directly to this House, which I think restores the political balance.

The coalition has taken a number of measures to ensure that Britain can compete in a global world. The Local Government Finance Act 2012, which received Royal Assent last week, provides new incentives for councils to support enterprise and local firms, through the local retention of business rates. Local enterprise partnerships are ensuring that local councils work hard with local businesses to bring about growth. We are also looking in detail at Lord Heseltine’s practical recommendations on how we can further devolve power and funding. Through the wide-ranging Localism Act 2011, we are abolishing unelected quangos such as the Infrastructure Planning Commission and regional assemblies, replacing them with democratic accountability at national, local and neighbourhood levels. We are also scything through the reams of planning red tape imposed by Labour’s Planning and Compulsory Purchase Act 2004, Planning Act 2008 and Local Democracy, Economic Development and Construction Act 2009.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): Will the Secretary of State reassure my constituents, many of whom have fought hard for traditional community and village greens? He will know that some of the developers are absolutely ruthless. In Huddersfield, a company called Padico has bought up bankrupt stock and then spent enormous amounts of money trying to reverse a High Court decision about a village green. He knows how ruthless some of the developers are, so will he say whether our traditional village greens will be more vulnerable as a result of this Bill?

Mr Pickles: The national planning policy framework actually strengthens green spaces.

Mr Peter Bone (Wellingborough) (Con): Is the Secretary of State aware of how much work his Minister of State is doing to unfreeze the blockages that some projects face because of red tape? Only recently our hon. Friend visited Wellingborough to cut through the red tape facing the Wellingborough East development and help with the Skew Bridge retail development, which is opposed by Labour in Corby.

Mr Pickles: I am delighted to hear about the magnificent work done by my hon. Friend the Minister of State. I have to say though, it comes as no surprise to me that he is working very hard indeed.

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Robert Halfon (Harlow) (Con): Will my right hon. Friend confirm that, despite what is being said in the media, the planning guidance hands back local power to local people, in particular through the neighbourhood plans?

Mr Pickles: Of course it does, and it is pleasing that so many local authorities now publish a plan much more quickly and in a much better way than under the old system.

To return to the national planning policy framework, we have streamlined 1,000 pages of planning guidance down to a mere 50 pages and opened up the planning system, which is no longer the preserve of lawyers, town hall officers and non-governmental organisations, but there is more to do.

Mr Jim Cunningham (Coventry South) (Lab): Will the right hon. Gentleman give way?

Mr Pickles: I think it would be reasonable to make a little progress now.

Now some reforms can be delivered by circular and some by order, while others rightly require primary legislation in Parliament. The Bill we are introducing today has three key themes: boosting Britain’s infrastructure, cutting excessive red tape and helping local firms to grow. Let me deal with each in turn.

Mr John Redwood (Wokingham) (Con): I welcome the wish to get on with sensible infrastructure development, and I see that there are provisions to speed up planning permissions for power stations. As EU carbon dioxide regulations will entail the closure of a lot of necessary power stations quite soon, how much quicker will things be under the new procedures? We need to get on with it.

Mr Pickles: The new procedures remove a lot of the old regulations, which have been superseded by time, and make it much easier for those providing power to adapt to modern conditions. Technologies have improved, and the new procedures will enable us to adapt to them.

Mr Jim Cunningham: Is the Secretary of State aware that in Coventry there is a considerable need for social housing in particular? Does he have any incentives on offer to unlock more housing and make a bit of progress?

Mr Pickles: I am sure the hon. Gentleman will be pleased that Coventry has made enormous strides in recent months to ensure that planning applications—particularly for large sites—have improved considerably, so that they are now pretty close to meeting all the necessary requirements. I am sure that he will be delighted with the additional effort the Government have made on social housing and that, as someone who cares about it deeply, he will have felt highly embarrassed by the failures of his Government.

Mr Crispin Blunt (Reigate) (Con): May I thank my right hon. Friend and his colleagues for the assurances that they have given so publicly about the green belt? I represent a constituency that is wholly within the metropolitan green belt, where the green belt is at its narrowest around London, and he will understand the anxiety of my constituents over this matter. What concerns does he have about threat to the green belt posed by the regional spatial strategies that were introduced by Labour?

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Mr Pickles: The regional spatial strategies represent the single greatest threat to the green belt. In them, the Labour Government imposed housing targets on local areas that would effectively have ripped up vast sections of the green belt. We are consulting on the strategies, and I assure the House that I have a completely open mind on that consultation. Once it is over, we will come to a decision on their future.

Kick-starting infrastructure will not only promote construction jobs but ensure long-term, natural expansion. The Bill will unlock billions of new investment in energy projects through repealing outdated energy laws. Thankfully, the Energy Act 1976, which sought to restrict gas use because of the energy shortages at the time, is now redundant. We no longer have to legislate in that way to keep the country’s lights on. This Bill will allow companies to vary consents to incorporate the latest technology and to make their plants more energy efficient.

The Bill will remove the excessive red tape that hinders superfast broadband from being rolled out to local homes and businesses. It will especially help those parts of rural Britain facing a digital divide. As hon. Members will recall, it was telecommunications deregulation in the 1980s that created the modern communications industry that we enjoy today. Measures such as abolishing the special TV licences for satellite dishes and introducing permitted development rights for those dishes are the reason that we have television channels such as Sky News and our own beloved BBC Parliament channel. Satellite dishes can be put up without planning permission. Why should not we be able to do the same with 21st-century broadband technology?

Dr Sarah Wollaston (Totnes) (Con): My constituency covers part of the Dartmoor national park, where there is real concern about a proliferation of radio masts. Does the Secretary of State accept that there is good evidence that national parks around the country already work sensitively to promote rural broadband?

Mr Pickles: And I am sure that they will under this Bill. These regulations are not a free-for-all. All that they will do is apply the prior approval regime. Local planning authorities will be able to object to inappropriately placed posts and wires. For the sake of clarity, given the appalling scaremongering by the shadow spokesman in the Labour party on these issues, I should like to point out that these measures do not relate to 4G. We are a long way from considering 4G improvements; these measures relate exclusively to broadband, and to ensuring that my hon. Friend’s constituency has an equal chance with those of constituencies in other parts of the country that have broadband.

Guy Opperman (Hexham) (Con): I represent the constituency that contains the Northumberland national park. Kielder forest has more than 200,000 trees but no mobile phone or broadband coverage whatever. The Forestry Commission says that it is the only place in the country where it cannot contact its representatives at all. We welcome these provisions.

Mr Pickles: I am most grateful for my hon. Friend’s endorsement.

Bill Esterson (Sefton Central) (Lab) rose

Mr Pickles: I shall give way to the hon. Gentleman, who I am sure will entertain us.

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Bill Esterson: When the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles) gave evidence to the Select Committee a few weeks ago, he was asked repeatedly about how the issue of the correct size of extensions in back gardens would be dealt with. He made it very clear that planning departments would rely on people to dob their neighbours in if they had exceeded the permitted size. Does the Secretary of State think that this will lead to the snoopers’ charter that his colleague suggested when he gave that evidence?

Mr Pickles: That question might have sounded like a good idea earlier this morning, but this is the wrong Bill, the wrong matter and the wrong debate in which to raise it. If the hon. Gentleman writes to me, no doubt we will do our best to help.

In an internet age, Britain must be able to compete virtually; otherwise, businesses will literally select another country at the click of a mouse. We live in a connected age, but technologies also make our society interdependent. Everyday families take for granted the “just-in-time” technologies that stock our supermarkets and drop off internet deliveries to our doors. To make them work, however, we need to build and provide the storage depots, warehouses and rail exchanges, and the supporting energy infrastructure to keep the economy moving.

The number of large-scale business and commercial applications taking over a year to determine is rising, so this Bill will allow an alternative process to decide nationally significant business and commercial projects within 12 months of the start of examination. Existing requirements to consult local communities will be retained, as will democratic checks and balances.

Mr Nick Raynsford (Greenwich and Woolwich) (Lab) rose

Mr Brian Binley (Northampton South) (Con) rose

Mr Pickles: Of course I will give way to the very distinguished gentleman. [Interruption.] Or were there two distinguished Members standing together?

Mr Speaker: On this occasion, I believe the Secretary of State is referring to a former Minister of State—with no disrespect to the hon. Member for Northampton South (Mr Binley), whose distinction is universally known.

Mr Raynsford: I am grateful to the Secretary of State for giving way, and hope this will not cause him any difficulty with his colleague. How will “nationally significant developments” be defined? What definitions will be used to decide whether developments are nationally significant and thus fall within the remit?

Mr Pickles: First, there are national policy statements, in addition to which we are going to consult. Let me be absolutely clear that it is our ambition to ensure that, providing local authorities put together a planning performance agreement with these large developments, this measure will not be necessary; it is there to help. I give way now to my distinguished hon. Friend.

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Mr Binley: I am grateful and I understand why my right hon. Friend gave way to a much more distinguished Member than me.

Let me refer to the issue of infrastructure—not only of utilities, but housing. I know that my right hon. Friend is very aware of the need to build on brownfield sites first, so can he tell me what work his Department is doing to ensure that, when planning permission is given, proper surveys of brownfield sites in a given area are undertaken before greenfield sites are built on?

Mr Pickles: That is a reasonable point. My hon. Friend will know—I know he is an assiduous reader of these things—that the national planning policy framework indeed lays out a test to look at brownfield sites. In a few moments, I shall come on to a few additional measures that will make my hon. Friend even happier than he is currently.

John Healey (Wentworth and Dearne) (Lab): May I press the Secretary of State on the point raised by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford)? The Bill extends to commercial and business developments the system for nationally significant infrastructure projects. The Secretary of State has just said that there will be national policy statements for reference, so is he saying that national policy statements will be prepared for commercial and business developments? Otherwise, I think he might have mis-spoken; perhaps he could make himself clear.

Mr Pickles: There are obviously national policy statements—full stop. In addition, we are consulting on where these should bite in. We will be looking most carefully at those authorities that have not been able to meet these targets, but there is a big distinction—[Interruption.] We are not including housing or eco-towns. We are not suddenly going to impose big developments without local people having a say. That is the difference between Government and Opposition Members.

Cutting excessive red tape is the Bill’s second theme. The Bill will enable us to implement the reforms recommended by the Government’s Penfold review, which examined the multiple, overlapping development consents that were needed for many projects on top of planning permission. While much of the review is being implemented via secondary legislation, other parts require primary legislation. The Bill removes or streamlines duplicate regimes for highways, rights of way, and town and village green registration.

Let me stress, for the avoidance of doubt, that we are maintaining the strongest protection for England’s village greens. Indeed, the national planning policy framework has created a new planning protection for valuable green open spaces. However, we will need to prevent the registration system from being misused to hinder and slow legitimate, planned development. A review conducted by the Department for Environment, Food and Rural Affairs in 2009 slammed

“the existence of two parallel systems”

—village greens and planning—

“between which there is minimal communication”.

It added that, in the view of the Government of the day,

“this seems to be problematic”.

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The problem lay with the last Government’s Commons Act 2006. Labour DEFRA Ministers told Parliament in 2009 that there would be a consultation to streamline the confusing regime and that the results would be published in 2010, but nothing happened. I wonder why. Perhaps the former Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for Leeds Central (Hilary Benn), will take the opportunity this afternoon to apologise to the House for his tardiness.

We are also reforming special parliamentary procedure to remove a duplicate consent regime, introduced as a result of the poor drafting of the Bill that became the Planning Act 2008. As the Ways and Means Committee in this House and the Chairman of Committees in the other place have stated,

“since the 2008 Act did not amend the 1945 Act, we now have a statutory framework which is internally contradictory.”

The Bill removes that overlap, while retaining parliamentary safeguards for land with genuinely “special” historic and parliamentary protection, such as National Trust and common land.

The Bill also cuts red tape by allowing the renegotiation of economically unrealistic section 106 agreements. These measures go hand in hand with changes to secondary legislation on which we have consulted. In our sights particularly are affordable housing requirements that were negotiated at the height of Labour’s unsustainable housing boom. Now that the Brown bubble has burst, bringing us back to reality with a bump, we recognise that 75,000 homes, with planning permission, are lying unbuilt.

Grahame M. Morris (Easington) (Lab): Will the Secretary of State give way?

Mr Pickles: Not for a while.

Unviable section 106 agreements have led to no development, no negotiation, and no community benefits.

Grahame M. Morris: Will the Secretary of State give way?

Mr Pickles: Not for a while.

Grahame M. Morris rose—

Mr Pickles: I will give way in a moment. I ask the hon. Gentleman to be patient, and allow me to develop my point.

More affordable housing will be delivered by the unlocking of those stalled sites than would be delivered without our reforms. The new powers will be used when negotiation is not already under way, and, as the House knows, it has the opportunity to send a clear message to all parties to get round the table and start negotiating now. We can all have pie-in-the-sky targets, but the hard truth is that the houses will not be built unless the sums add up. The reforms will complement our affordable housing programme, which will lever in £20 billion of housing investment over the spending review period.

I will now give way to the hon. Member for Easington (Grahame M. Morris).

Grahame M. Morris: I am grateful to the Secretary of State. He is very kind. Does he accept the view of David Orr, the chief executive of the National Housing Federation,

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who says that the abolition of the section 106 agreements is likely to cost us 35,000 affordable houses each and every year?

Mr Pickles: Only in the fantasy housing figures. The truth is that 41% of local authorities have already started these negotiations. That is one of the reasons why we have seen the number of houses start to increase. Eighty per cent. of authorities are willing to negotiate. Some lack the skills and experience to do so. We are willing to help there, but the truth is that, if we have a 50% target and nothing is built, 50% of nothing is nothing. The idea is to move things on. We have found in the negotiations that, rather than have a 30% target, many authorities have dropped to 26%. Many have managed a little higher than that, but they have shown flexibility to get the whole process moving.

Simon Hughes: Of course none of us wants stalled sites and there are many of them, but will the Secretary of State be helpful, as his Ministers have indicated, and ensure that we have a much more transparent check on what developers say is economically viable? Our experience on the south bank is that they say certain things are not economically viable. They then build the housing and flog it off at higher prices that were not revealed at the beginning.

Mr Pickles: Of course this is not going to be done on the basis of a developer’s word—developers will have to demonstrate clearly to an inspector that the current targets are uneconomic. I believe that we will get more social houses built because of this measure and I believe that we will have more affordable houses. We have put additional sums in, as my right hon. Friend will recall, and fairly soon the schemes will be going out to tender.

Mr John Redwood: I think that this is the best bit in the Bill. It is so obvious that we have to allow the developers and the council to decide what is affordable and realistic. It may be that in some cases all we can get built is houses for sale. What is wrong with that?

Mr Pickles: There is absolutely nothing wrong with that, but I am afraid that a strange municipal machismo has grown up—if one authority managed 40%, another would say, “Well we managed to negotiate 50%.” It is wholly unrealistic.

Helen Jones (Warrington North) (Lab): Healthy competition.

Mr Pickles: That is absolutely right. That goes to the heart of what we are doing. We are pleased to be introducing healthy competition.

Sir Paul Beresford (Mole Valley) (Con): Does my right hon. Friend accept, from his experience of local government, my experience and that of the Minister, that one of the concerns many of us may have is that for a planning authority and a planning committee to understand what is economically viable will be difficult? There may be a slight flaw and a problem there.

Mr Pickles: I think that is precisely how we got into this problem. That is why we are looking to developers and local authorities to work together in open negotiation

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and, to use the words of the hon. Member for Warrington North (Helen Jones), to be much more competition and market-oriented. We want to get a degree of realism into the process.

Bob Blackman (Harrow East) (Con): Will my right hon. Friend give way?

Mr Pickles: I give way for the final time.

Bob Blackman: Does my right hon. Friend agree that it is not just the targets on the percentage of affordable housing and the mix of dwellings, including flats, that are important? The targets on design, density and everything else that goes with it are crippling the market right now. Those decisions were taken years ago, when the housing boom was at its height.

Mr Pickles: My hon. Friend makes a reasonable point. I want to make it clear that we do not want to go back to the bad old days when we were doing swaps. I think we should be building real communities, which means that there should be a mixture of market houses and social houses. That is the way real communities live together. To get that mix right and to get social housing moving, we need, again in the words of the hon. Member for Warrington North, greater competition and a much more market-oriented approach.

Our approach is working. Official figures show that more affordable housing is being provided under the coalition Government than under Labour. On average, a third more affordable housing has been built every year than during Labour's last decade.

Local authorities have an important role in promoting development and shaping where it should go.

Several hon. Members rose

Mr Pickles: I say I will give way for the final time more often than Frank Sinatra said he would be performing for the last time. Therefore, I want to make it clear that, until I have moved off the planning stuff, I will not take any more interventions.

The Bill will make it easier for councils to choose, if they wish, to dispose of surplus land held for planning purposes, thus helping get more brownfield land back into productive use. Councils will also be given more local discretion over when they review the planning conditions for mineral sites, rather than following rigid, centrally-set targets.

The Localism Act 2011 has also given councils more control over local plans to determine where development does, and does not, take place. Some 65% of planning authorities have now published an up-to-date local plan. That is great progress, but the planning system needs to be fair and responsive to applicants and local residents. Alongside tackling the small number of councils whose performance on planning is exceptionally poor, we want to deal with those councils that insist on demanding large amounts of unnecessary paperwork to support planning applications. The Bill will therefore ensure that information requests from councils are genuinely related to planning and proportionate to the scale and nature of the development proposed. The reams of documents demanded have now got out of control. They do not make the planning system more accessible; they achieve quite the reverse. So this practical reform will save everyone time and money.

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Planning includes a quasi-judicial process which, of course, puts fairness at its very centre, yet in some cases it is taking far too long for that process to be concluded. Justice delayed is justice denied. Unreasonable delays are unfair to both applicants and local residents because of the uncertainty delays create. The Bill will therefore help speed up planning decisions where councils have a poor record in deciding applications. This will be a help to localised planning, as it will make the worst councils up their game.

The planning system is at times Kafkaesque, with applicants having to wait months, sometimes years, for different pieces of consent from different people. Our proposed change squares with localism. In a quasi-judicial system, there should be minimum standards of due process. That principle is no different from that for the intervention powers that address rare cases of public service failure such as on best value, care homes or education. In the longer term, however, our goal is that no council should find itself in a position where these powers need to be used.

The Bill also contains a series of measures to help local companies grow. We want to help companies introduce a new employment status that gives employees a stake in the company. Employee-owners will benefit from shares in the company worth between £2,000 and £50,000, as well as a different set of UK employment rights than for normal employees. This is particularly aimed at fast-growing small companies and enterprises that will benefit from a flexible work force. We are currently consulting to ensure that appropriate safeguards are in place so people fully understand the consequences of this new type of contract. Only the enemies of aspiration would oppose this modern embrace of co-operative values.

The Bill also provides for tax stability in the business rates system. Business rates are the third biggest outgoing for local firms after rent and staff, but an unpredictable business rate revaluation would be costly to British firms, so this Bill reschedules revaluation to 2017. This will give businesses five years of tax stability and certainty, leaving companies looking to grow and improve the economy free to concentrate on delivering growth. This revaluation comes off the back of Labour’s unsustainable property boom. Rents have been falling, but at any revaluation that would be offset by a soaring multiplier.

There is a popular misconception that postponing the revaluation means delaying falling rate bills. That is not the case. The postponement will be revenue-neutral. It is most important to stop a game of Russian roulette with municipal finances. Initial Valuation Office Agency estimates suggest that the revaluation would see up to 800,000 firms paying more in business rates, with only 300,000 paying less. The decision will avoid local firms and local shops facing unexpected hikes in their business rate bills over the next five years. Places that would be particularly hard hit are small shops, petrol stations and public houses. We cannot know with complete certainty without spending £43 million on a revaluation, but there is a significant risk of the revaluation going very wrong and harming growth. Small and medium-sized firms will be the hardest hit if we do not take action. Without action, there will be massive volatility, which, in itself, could close down businesses and, at the very

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least, discourage business investment. This reform will provide certainty for business to plan and invest, supporting local economic growth. So these measures complement the local retention of business rates, go hand in hand with the Localism Act’s reforms to small business rate relief and build on the abolition of Labour’s “ports tax”, which threatened to sink Britain’s export trade because of a botched, unfair revaluation.

Andrew Gwynne (Denton and Reddish) (Lab): I share the Secretary of State’s desire to try to use this mechanism to boost our high streets. However, I get a bit lost by his argument, because many small shops in a town centre such as Denton had their business rates set on the basis of their rents before the recession and would benefit from a revaluation on the basis of the current lower rents.

Mr Pickles: The hon. Gentleman should not be mocked for not understanding this, because the misconception is a common one. If London values went down enormously, we would have to adjust the multiplier to ensure that the same amount of money was in the system as whole. Initial estimates of the multiplier suggest that a massive increase would be required, so those very places that have seen a drop in rents—a drop in rateable values—could find themselves paying much more through this process. That is the very nature of it. He may recall that when a revaluation took place last time the values had gone up so high that there had to be a small reduction in the multiplier to compensate. Our feeling is that the multiplier would be likely to have to go up considerably, which is why we have taken the unusual decision of trying to do the revaluation against a more stable position.

Kate Green (Stretford and Urmston) (Lab): None the less, businesses in my constituency have expressed dismay at this announcement. What analysis has the Secretary of State, or his Department, carried out on the geographically distributional spread of the impact of this measure?

Mr Pickles: We cannot definitively model geographical spread. All we can do is rely on our officials’ best professional judgment and initial reports—I stress that they are initial—from the Valuation Office Agency. Big changes are likely to be seen, even within an area. We can see what has happened in the City. We recognise that banks and a lot of financial institutions are likely to see a colossal drop in their rates bill, but compensating that will be enormous increases in other parts of London to pay for it. So the hon. Lady’s constituents should not feel aggrieved. They should feel that we have taken a sensible decision, and we hope that we can get broad consensus on it.

The measures I have outlined today will help Britain compete in a global world. They will support local firms, local jobs, local housing and local regeneration. They will remove the unnecessary red tape that holds our country back and they will ensure that sustainable development goes hand in hand with environmental safeguards and democratic checks and balances We are speeding up the system, cutting excessive regulation and giving employers a helping hand to compete on the global stage.

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We are being true to the aspirations that brought the coalition Government together. We are taking the bold action needed to fight for Britain’s future and ensure that we succeed in a changed and uncertain world. We are promoting economic growth, rebalancing our economy, backing the industries of the future and allowing Britain to compete in a modern, 21st-century world economy. I commend the Bill to the House.

4.15 pm

Hilary Benn (Leeds Central) (Lab): That was a valiant attempt by the Secretary of State to try to pretend that the centralisation of power at the heart of the Bill is nothing more than a bit of his muscular localism. The truth is that the whole House knows where the Bill comes from. It is the product of the Government’s panic over growth during a summer in which Nos. 10 and 11 Downing street thrashed around, trying desperately first to find people to blame and then to find things to do about the state of the economy and the longest double-dip recession since the second world war.

It is the Secretary of State who has been told to try to explain what on earth the Bill is for, and it certainly cannot be described as a growth Bill. First, it will not help to get the economy back on track. For example, he mentioned housing. Members should remember that construction output is estimated to have declined by 2.5% in the three months until September—there is a sector in trouble—and if the Government wanted to boost growth and tackle the housing crisis, the Secretary of State could have adopted our proposal to use the proceeds of the 4G auction to build 100,000 new affordable homes. He could also have repeated the bankers’ bonus tax to build 25,000 affordable homes. What would those two measures do? They would take people off the waiting list and unemployed building workers off the dole queue. The Bill does not do that.

Secondly, in a survey in the summer when the construction industry was asked—and it ought to know—what the main deterrent to investment in infrastructure was, what did 60% of the respondents say?

Simon Danczuk (Rochdale) (Lab): Eric Pickles!

Hilary Benn: No, they said it was the lack of clarity from the UK Government.

Thirdly, the reason we have been one of only two G20 countries in a double-dip recession is not the planning system but the Government’s failed economic policies. The Secretary of State is in a very uncomfortable position today as his whole argument, which is that the Bill will give us growth, has been undercut by the Prime Minister. Let me remind the House of what the Prime Minister said in the summer:

“If you could legislate your way to growth, obviously we would. The truth is you can’t.”

That is what the Prime Minister said.

Robert Neill (Bromley and Chislehurst) (Con): Against that background, will the right hon. Gentleman explain why under the Government of whom he was a member the UK fell from fourth to 89th in the global rankings for the burden of Government regulation? How would he put that right if he were in our place?

Hilary Benn: I do not know which survey the hon. Gentleman means, but as he knows, we did a great deal.

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Robert Neill: I mean the World Economic Forum’s global competitiveness report—those reports run from 1997 through to 2012-13. I can show it to him if he would like to see it.

Hilary Benn: As the hon. Gentleman has a wee bit more time on his hands these days, I would very gladly read a copy of that report. He knows that the previous Government did a number of things to boost the economy and economic development, and he must acknowledge that when the coalition Government took over, the economy was growing. The Chancellor’s spectacular achievement has been to put that growth into reverse.

This is a flawed and incoherent Bill that shows why the Prime Minister was right to say that it is not possible to legislate for growth. It is no wonder that Sir Merrick Cockell, the Conservative leader of the LGA, described it as a missed opportunity. The only thing that will grow as a result of the Bill will be the power of the Secretary of State, who is mentioned 144 times in just 45 pages—that is going some.

Now, why is that? The truth that the right hon. Gentleman would not utter is that the Bill marks the death of his commitment to localism—the localism that he used to proclaim with such passion and sincerity. It is actually a Bill that says, “You know what? You can’t trust local people to take the right decisions, so we’ll take the decisions.” It was noticeable that clause 1 was the bit of the Bill that he was most reluctant to talk about. It is extraordinary. Ministers have tried to dress it up today—the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), who has responsibility for planning, did so when he appeared before the Communities and Local Government Committee—as a minor change that will be used sparingly in a few authorities, apparently, he said, for a maximum of one year. But the Bill says none of those things. Nowhere does it say that. The Government are making this up as they go along. What the Bill does say is that the right hon. Gentleman would take for himself the power to decide on planning applications and cut local communities right out of the process for as long as he likes.

Angela Smith (Penistone and Stocksbridge) (Lab): Is it not noticeable that the Secretary of State refused to give way to answer the key question: how would he define what a failing local authority is in planning terms?

Hilary Benn: If my hon. Friend bears with me a moment, I shall come presently to precisely that point. The first question that the House must ask the Government is that if they are to propose such a fundamental change to the way in which planning decisions have been taken since 1947—that is about 60 years of local decision making—the Secretary of State must have had really strong evidence on why such a change is needed, so where is the evidence? I will make this very easy for him, and I will happily give way. Can he name one example of a so-called failing planning authority? Will he name an authority now?

[Official Report, 6 November 2012, Vol. 552, c. 5-6MC.]Mr Pickles: As the right hon. Gentleman knows and, more particularly, as other Opposition Members know, I have been more than helpful to those Members

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who have had trouble with planning authorities and I have done my best to move things along, but I am very happy to name the worst, which is Hackney.

Hilary Benn: That is extremely interesting. If the Secretary of State can name what is in his view a failing planning authority, he must know the criteria for judging a failing planning authority, yet the criteria are nowhere in the Bill; he is allowed to make them up as he goes along. Officials watching this will be thinking, “Oh, my goodness, he shouldn’t have done that,” because he has just fettered his discretion and the consultation that he will probably have to undertake in deciding which are failing planning authorities.

Mr Pickles: I also made it absolutely clear that, of course, we are working with the LGA and local authorities to define this, and we are prepared to consult on it. But the right hon. Gentleman asks what the worst planning authority is, and I have named it. Whether that will be regarded as a failing authority will be a matter of consultation.

Alison Seabeck (Plymouth, Moor View) (Lab): Will my right hon. Friend give way?

Hilary Benn: Perhaps my hon. Friend will just bear with me for a second, as I am very interested further in the Secretary of State’s answer because he has not defined the worst. I have here before me a list of the slowest decision makers on all applications and the slowest decision makers on major applications. The top three—or the bottom three, depending on our interpretation, in those two categories are Stratford-upon-Avon, Stafford and Warwick for all applications, and for major applications Torbay, Kensington and Chelsea, and North Norfolk.

Government Members really ought to see where their authorities are in the league table that the Secretary of State is in the process of making up as he goes along. They may well find that, unless we remove clause 1, planning decisions will be taken not by locally elected councillors—that is my definition of localism—but by the Planning Inspectorate. The truth is that if he knows the criteria he should make them clear now. Clause 1 will in effect give the Secretary of State the ability to nationalise planning decisions in respect of as many authorities as he likes. It will completely change the basis on which planning applications have been traditionally considered by local communities. That is the very opposite of the localism that he used to speak about, because decisions will be taken not by councillors but by the Planning Inspectorate on behalf of the Secretary of State. There will be a strong reaction when the first local authorities discover that the power to decide has been taken away from them by the Secretary of State under the Bill.

Mrs Anne Main (St Albans) (Con): The right hon. Gentleman needs to go back a little in history and look at the imposed housing targets that local authorities were expected to deliver. This scaremongering—that the Secretary of State, in a micro-managing sort of way, will look at every planning authority and decide the plans himself—is frankly ridiculous. I sincerely hope that the right hon. Gentleman gets back to the real nub

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of the argument, which is that the coalition Government are trying to get away from imposing things on local people and are letting them choose how they want their areas to develop.

Hilary Benn: I say to the hon. Lady that it is not ridiculous; it is what clause 1 says. If she has not read the clause, I suggest that she does so carefully. On housing targets, the truth is that under the new arrangements the figures that local authorities will have to come up with for housing numbers in their area will not be very different from the figures produced by the regional spatial strategy, because there is still the same housing need. That is certainly the case for the authority in Leeds, because I have spoken to the chief planning officer about that.

The truth is that if hon. Members read the Bill, they will see that the Secretary of State will decide which authorities will lose the right to decide applications for themselves, he will decide what kinds of applications will come to him for decision, and he alone will take the decision in the place of local councillors. Of course, there will be no right of appeal—something the Bill also states.

I want to turn, as my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) invited me to a moment ago, to the grounds on which the Secretary of State may designate authorities. Clearly, he has made up his mind; he is just not telling us how he has done it. The clause gives him the power to do that anywhere, on any basis, for as many authorities as he likes, and there will be no check or balance from anybody else.

As for the criteria, when the Minister with responsibility for planning appeared before the Select Committee he said that speed and poor quality measured by decisions overturned by the Planning Inspectorate would be the factors that Ministers would take into account. On speed, I am genuinely puzzled. First, councils currently decide 82% of applications within eight weeks and 93% within 13 weeks. Those are the facts. The percentage of applications approved reached a 10-year high in 2011-12. Secondly, developers can already appeal to the Planning Inspectorate on grounds of non-determination in the required time under section 78(2) of the Town and Country Planning Act 1990. What does the Bill add to that power? Thirdly, there is a practical problem, as the planning Minister had to admit. He said that there was a wrinkle in the statistics. The data on timeliness do not take account of planning performance agreements. As hon. Members will know, that is where developers and councils jointly reach agreement to say, “Hey, this development could take a bit more time to approve. Can we agree, in effect, to set aside the time limits?” Instead of there being a simple measure, the Secretary of State will have to decide whether he thinks the reason given by an authority, when decisions are apparently slow, is good enough to justify his not taking the power away from them.

Bill Esterson: In an intervention a few minutes ago, the Secretary of State said that he would be working with the Local Government Association. Of course, the LGA has said that the barriers to growth are nothing to do with the planning system. Does my right hon. Friend intend to come on to that point—I am sure he does—and comment on the fact that it is the lack of funding that is the problem, not the planning system?

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Hilary Benn: I certainly will come on to that point, but those conversations with the LGA will be jolly interesting. The Secretary of State is apparently going to say, “Can we sit down and talk about the criteria? By the way, whatever they are, they have to include Hackney, because I have just told the House of Commons that Hackney is the worst of the lot.” He has fettered his own discretion and will regret that answer.

The argument that this proposal is like the regime for failing schools falls at the first hurdle. We can judge whether a failing school is improving, because it will still be treating the children, but if we take responsibility for planning applications away from local councils and decide them centrally, we will have no way of knowing whether the planning authority is improving because it will not be taking any decisions. That is nonsense. And as for quality, I say to the Secretary of State and the Minister with responsibility for planning that there can be no real measure of it, because it is a matter of opinion and local democratic accountability, which is why we have had local decision making on planning applications for 60 years.

Robert Neill: Where was the local democratic accountability in the regional spatial strategies?

Hilary Benn: I accept the hon. Gentleman’s argument. The regional spatial strategies meant that local authorities had a responsibility to build houses. He has to acknowledge, however, that the regime before us, which I recognise he played an important part in setting up, will produce exactly the same numbers. That is because the same number of people will need to be housed and there will be the same increase in population. They are two different ways of doing it. However, it is the Secretary of State who has made great play of localism but who is now turning it on its head.

If the Secretary of State is thinking of using as his proxy the speed and percentage of planning applications overturned, people should, as I have indicated, go away very quickly and see where their local authorities are in the league table. To add insult to injury, however—this is pretty bad—he is taking the power to require local authorities to do all the work in connection with applications, even though they will not be taking the decisions and even though the Planning Inspectorate will be paid the fees. That is what he is doing in the Bill.

These are the same planning officers in whom the Secretary of State, in effect, had no confidence to start with—that is why he chose to designate authorities. It is therefore crystal clear what the clause is about: it is about his saying, in respect of councils whose decisions he does not like or which he thinks are being too tardy, that it is the elected council members whom he does not trust. That makes the purpose of the clause plain. He is saying, “I want this power because I think I’m in a better place to take decisions than the local communities themselves.” That is why the clause is so objectionable.