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People have talked about the CBI. The CBI backed my view that we need reform in Europe and to have a referendum based on a reformed position. I have set out, in the Bloomberg speech, in an article in The Sunday Telegraph and elsewhere, the key changes that need to be made. I recommend that the hon. Lady reads them and sees whether there are any other changes she would seek to make, and then we can have a discussion.

Mr Stewart Jackson (Peterborough) (Con): The Prime Minister should be in no doubt that he spoke for Peterborough and our country last week with his robust leadership at the EU Council. I always knew he had lead in his pencil, but it is good to see him sharpening it on the inexorable drive to ever closer union, as personified by Mr Juncker. If he is looking for areas of serious reform, will he make the free movement directive the No. 1 priority? On the Conservative Benches, he has massive support for reforming that in the UK’s best long-term interests.

The Prime Minister: I am grateful for my hon. Friend’s remarks. It is important to look at the issue of freedom of movement. I particularly mentioned the issue of the benefit changes that are necessary. I also think we need to look at transitional controls, when new member states join the EU. We need a radically different approach from the one that has been held until now. As for my hon. Friend’s remarks about lead in my pencil, I will let the relevant people know.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): Some of us who agree with the Prime Minister on the need for reform in Europe, but who are basically pro-Europe, are rather disappointed and depressed by what happened in the European Council, for the following reasons. Many of us think that Europe expanded a bit too far too fast, but we want the reforms and we want them urgently. What has happened in Europe in the last few days has made the task of reform much more difficult. The fact of the matter is that when we look back on this day, when only his barmy army seem so well pleased, we will see that the trouble is brewing for all of us.

The Prime Minister: I would argue that the hon. Gentleman should not be depressed. As I said, reforming the European Union is going to be a long and hard campaign and undoubtedly there will be difficulties and setbacks along the way. But it is absolutely vital as we go into that reform that people know that when the British Prime Minister and the British Government say there is a principle that is important, they will stick to it.

I do not accept that there is not support for this across the European Union. I have not got to the Luxembourg press yet, but Le Figaro in France says that the approach has been a big mistake, possibly irreversible, and the German press says that there are real worries about the way this development has been handled. I do not think the hon. Gentleman is right to say that the argument that the wrong approach has been taken is simply a British one.

Mr Stephen O’Brien (Eddisbury) (Con): I hope the Prime Minister takes inspiration from the fact that in a previous battle of Britain we saw off many Junckers. As somebody who used to help to run a business that had

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factories manufacturing in every member state of Europe, I know the value of the single market, but that has now nearly been outweighed by all the costs, regulation and constitutional attacks that come with it. Therefore, what the Prime Minister has just done in Europe has given us the best chance, through him, to negotiate the reform necessary to sustain the option to stay in.

The Prime Minister: I know that my right hon. Friend has great experience of the business world. It is important that following my Bloomberg speech, the reaction of the business community was not to say, “This is a risk Britain shouldn’t be taking”, but to say, “We need reform and as long as we can secure good reforms then Britain should stay in that reformed European Union.” It is important that business, large and small, is behind the approach that I am taking.

Richard Burden (Birmingham, Northfield) (Lab): A year or so ago, one of the Prime Minister’s Back Benchers was quoted as saying that he—the Prime Minister—was in danger of coming over a bit Melchett. [Interruption.] Melchett was a character in “Blackadder”. Judging by the Prime Minister’s performance over the weekend, I think that many of us have some time for that comment. When he said that if Mr Juncker was appointed there would be “consequences”, what was he getting at?

The Prime Minister: First of all, there are consequences from Europe adopting the principle that the head of the Commission should effectively be appointed following nominations by European political parties. If that is allowed to continue, and if it happens again, there will be real consequences, because we could end up with candidates who, as I said, have particular views that are totally against the interests of individual member states. That is a very worrying development. In the Council conclusions, we have agreed to review this process, and I hope we can make sure that it does not happen again.

Sir Malcolm Bruce (Gordon) (LD): If exit from the European Union is not what the Prime Minister seeks, can he resist the siren voices who are calling for ever more unachievable demands, backed by the threat of exit, to ensure that that does not happen? After the excitement of this week, will he reflect on how he can build alliances for reform that will promote jobs, cut red tape and reduce waste, which is actually what the citizens of the entire European Union are looking for?

The Prime Minister: I thank my right hon. Friend for that question. The work of the British Government—a coalition Government—in the EU is to complete the single market in digital, energy and services and to sign the trade deals with the fastest growing parts of the world. That agenda is progressing well, and it is important that we stick to it. I am not setting out impossible demands; I am setting out things that could be changed, and should be changed, in order to reform Britain’s place in the EU.

Seema Malhotra (Feltham and Heston) (Lab/Co-op): An estimated 3.3 million of our constituents are in jobs that could be at risk if the UK exits the EU. Business leaders have reacted with fury after Friday’s fiasco and its aftermath. John Cridland, the head of the CBI, has

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said that Britain’s economic future depends on being in Europe. Does the Prime Minister agree with him, and can he guarantee that he will never vote for Britain to leave the EU?

The Prime Minister: I do not agree with the hon. Lady. The CBI’s director general said:

“We will…press the case for the UK remaining in a reformed European Union.”

That is my policy. As I said, the Institute of Directors, the British Chambers of Commerce and David Frost, the former Europe director in the Foreign Office, all made the point that this was the right stand to take, and it is important to stand up for a principle and to fight for it.

Several hon. Members rose—

Mr Speaker: Order. I am keen to accommodate more colleagues on this extremely important matter, but in order to do so I require exemplary brevity. I know that the tutorial will be provided by Dr Julian Lewis.

Dr Julian Lewis (New Forest East) (Con): Trying, as always, to see the bright side of life—I am not going to sing it—is there not something to be said for having an obvious and overt federalist as Commission president rather than a covert and rather cleverer alternative?

The Prime Minister: My hon. Friend is ingenious in seeing a silver lining in every cloud. I had not got him down as one of nature’s out-and-out optimists, but I will have to reassess that judgment. We will now have to deal openly and frankly with the new Commission president if he is endorsed by the European Parliament. He did say in his manifesto—although he was not standing specifically in Britain, as it were—that we have to address the issues of reform that Britain has put on the table, and we now need to make sure that we hold him to that.

Jack Dromey (Birmingham, Erdington) (Lab): The automotive industry in Britain is a world-class success story. Key to that success is inward investment. Key to inward investment is continuing membership of the European Union. Does the Prime Minister not recognise the damage that he is doing to the jewel in the crown of British manufacturing and the British national interest through the ever-greater uncertainty he is creating over membership of the European Union as he takes us towards the exit?

The Prime Minister: I do not accept what the hon. Gentleman says. Over the past four years, we have seen an absolute transformation in the fortunes of the British automotive industry. We see that in Jaguar Land Rover and in Nissan. These companies are choosing to invest and they are doing so after I made the Bloomberg speech, because they can see there is a British Prime Minister and a British Government who are fighting for a better deal in Europe.

Mark Reckless (Rochester and Strood) (Con): When the Prime Minister gets Britain’s new deal in Europe, with

“big and significant improvements on the previous terms”

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and

“after long and tough negotiations”,

so that he can say,

“I believe that our renegotiation objectives have been substantially, though not completely, achieved”—[Official Report, 18 March 1975; Vol. 888, c. 1465.]

will he reflect on the fact that that is what Harold Wilson said?

The Prime Minister: I know and respect that, whatever deal I manage to achieve, my hon. Friend will vote for Britain to leave the European Union, because that is his long-held and deeply felt view. As I explained in answer to an earlier question, the conditions today are very different from those in 1975. Then, of course, Britain had just joined the EU—there was no great change that had taken place in the EU—but this time, since I have been a Member of Parliament, we have had the treaties of Nice, Amsterdam and Lisbon, and huge changes in terms of the eurozone and its development. I was told when I became Prime Minister, “It’s very unlikely, Prime Minister, that you’ll have to deal with any treaty changes at all,” but I think we have already seen three in the past four years. I am confident that, because change is needed throughout the EU, Britain can secure the changes we need.

Phil Wilson (Sedgefield) (Lab): Saturday’s Financial Times editorial said:

“Europe’s leaders should look beyond Mr Cameron’s ineptitude”.

Does the Prime Minister agree?

The Prime Minister: Funnily enough, I do not agree with that. I think that what Europe’s leaders will do is conclude that when they are dealing with Britain, they are dealing with a country that sticks to its principles.

Margot James (Stourbridge) (Con): Thanks to the actions of the Prime Minister last week, Jean-Claude Juncker is now a marked man. Few had previously heard of him, but now a whole continent knows of him and what he stands for. Does my right hon. Friend agree that what we need to do now is ensure that the actions of the EU President be judged through the lens of what they contribute to EU reform and that this seeming setback may well mask a greater opportunity for much-needed change in the long term?

The Prime Minister: My hon. Friend makes an important point. One of the things that will be key to the EU’s success in the coming years is whether it can deal with a Europe that requires change for the eurozone and change for Britain. From my discussions with Jean- Claude Juncker, I think he understands that that is a very important agenda on which we have to make progress, otherwise the British people will take a different view.

Barry Gardiner (Brent North) (Lab): Does the Prime Minister not experience the slightest cognitive dissonance in arguing on the one hand that the voters of Europe feel that the European project has gone far enough, while arguing on the other that the borders of Europe should be extended all the way to Donetsk in the Leninsky district of Ukraine?

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The Prime Minister: I am not making that argument. The argument I am making is that it is right for the European Union to have association agreements and other forms of agreements with countries in central and eastern Europe, in order to help encourage their economic development, politics, fights against corruption and rule of law. Just as I think the membership application process has been so beneficial for countries in eastern Europe that have joined the European Union, so I believe these association agreements can help as well.

Nadhim Zahawi (Stratford-on-Avon) (Con): May I commend my right hon. Friend on saying what he is going to do and then doing it? I know it surprises Opposition Members, but it is called leadership. In his conversation with Mr Juncker, did he manage to remind him that the British people are not isolated in wanting reform and that at least a third of the people of Europe voted for reform of the whole of Europe?

The Prime Minister: My hon. Friend makes an important point. It must be right for the reaction of Europe’s leaders not to ignore the third of the continent that voted for parties that are hostile to, or want very radical reform of, the EU. We have to accept the fact that our citizens want change in Europe, and we should be trying to make changes that reconnect people with the purpose of this organisation, which has been about securing peace on our continent and which should now be about securing greater prosperity and more jobs.

Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op): The PM has had a lot to tell us today about losing, so will he admit to the House how many jobs will be lost if Britain were to leave the EU?

The Prime Minister: My intention is that Britain reforms the European Union and then agrees to stay in a reformed European Union. That is the right outcome. There are all sorts of economic analyses, which people can read, about the consequences for Britain either of remaining in an EU that is overly bureaucratic or, indeed, of choosing to leave.

Jacob Rees-Mogg (North East Somerset) (Con): Once again, my right hon. Friend is the toast of Somerset for his stand against Mr Juncker. Now he has done this bold thing, is it not the ineluctable logic of his position that he should oppose any further moves to the integration of justice and home affairs, which covered the first 13 paragraphs of the Council’s conclusions, and most particularly that we should not opt in to the European arrest warrant, which would give Mr Juncker, the Commission and the European Court of Justice additional powers?

The Prime Minister: I am very grateful to my hon. Friend once again. People seem to do a lot of toasting in Somerset, which I am sure is very good for the health in all sorts of ways.

On the issue of the justice and home affairs opt-out, what we have done is to achieve the biggest return of power from Brussels to Britain that there has been since we have been members of this organisation, by exercising that opt-out. We did that on the basis that it was

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important to opt back into a small number of measures that will actually help us to catch criminals and terrorists, and to keep our people safe.

Fiona O’Donnell (East Lothian) (Lab): When did the Prime Minister realise that he had failed to convince almost everyone, and with that realisation, what adjustments did he make to the substance and style of his engagement with other EU leaders?

The Prime Minister: As I have said, the critical moment was when other leaders who had signed up in some way to this leading candidate process realised that they could not actually change their approach, which I think was the case in many European countries. They were on a conveyor belt they could not get off, so it became apparent that Britain was not going to succeed in our campaign to stop this principle and stop this person. At that point, it is important to stand up for a principle, and to take the arguments all the way to the end. If you get a reputation that every time the going gets tough, you simply give in, you get into the position in Europe that Labour Governments put us in time and again.

Robert Halfon (Harlow) (Con): I hugely respect the way in which the Prime Minister has listened to public opinion following the European elections, unlike Opposition Members and the European Union, but if the European Union continues to ignore public opinion in the way it has over the weekend, is there a mechanism by which we can either continue to cut the EU budget or withhold our budget contributions completely?

The Prime Minister: I am a believer in this: when we sign up to something, we should stick to it and deliver what we said we would do. With the European budget, we achieved a cut over the seven-year financial framework which will effectively mean lower European budgets. Our battle now is to make sure that the EU sticks to that, and does not find new and innovative ways of spending money.

Clive Efford (Eltham) (Lab): The debate about our future role in Europe would be better informed if we knew what the red-line issues were that would force the Prime Minister to recommend a no vote in his referendum. Will he say when he will let the public know what those red line issues are, so that they can have a more informed debate about Europe?

The Prime Minister: Perhaps I could send the hon. Gentleman a copy of my article in The Sunday Telegraph and of the Bloomberg speech, which set out the key areas, including ever-closer union, that are so important.

Paul Uppal (Wolverhampton South West) (Con): A point that is very rarely made—with the democratic deficit we have, following the recent European elections—is that there has been a huge and significant rise in extremist parties. May I impress on my right hon. Friend, for when he next meets his European counterparts, that if we fail to reform the status quo we are creating an environment that is very difficult for minorities across Europe, but if we reform, it will create an environment in which we can extinguish a lot of such extremist feeling?

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The Prime Minister: My hon. Friend makes a very important point. We need to make sure that all of Europe’s leaders address what has gone wrong in the European Union and the view people take of it, because it is not healthy for extremist parties to be given a sort of recruiting sergeant, as it were, by failures in the organisation.

Emily Thornberry (Islington South and Finsbury) (Lab): I am sure that the readers of The Daily Telegraph are reassured by the Prime Minister deciding that he can now work with Mr Juncker. The real question, however, is whether Mr Juncker can work with him, particularly after the insults, including those to the so-called “cowards” by those who are supposed to be the Prime Minister’s supporters. The reform agenda is really important, but has he not proved himself a lame duck when it comes to promoting it?

The Prime Minister: I have sat with Jean-Claude Juncker around the European Council table for the past four years. I spoke to him last night and, as he put in his manifesto, he wants to address the concerns that Britain has about the European Union. My job as Prime Minister is to hold him to that and make sure that we reform the organisation.

Jesse Norman (Hereford and South Herefordshire) (Con): I spent Armed Forces day at a very moving service in Hereford cathedral organised by the Royal British Legion. In that spirit, I congratulate the Prime Minister on standing up both for constitutional principle and for the voice of Britain, of reform and of the nation state, and on doing so with one hand tied behind his back by the Labour party—[Interruption]—because of the Nice and Lisbon treaties. [Interruption.] Does he share my view that the real issues are the deep lack of democratic legitimacy embedded in many EU institutions, the need to address popular discontent, as shown in the recent election, and the need for reform that is backed particularly by European allies who see the need for treaty change to secure the eurozone?

The Prime Minister: My hon. Friend makes an important point. We need to battle the view that in Europe the only democratic legitimacy comes through the European Parliament. Our view is of Europe as a collection of nation states working and co-operating together; therefore, a lot of the democratic legitimacy should come through the European Council, made up of the Presidents and Prime Ministers of Europe, who all have a democratic mandate from their own peoples.

Nia Griffith (Llanelli) (Lab): The Prime Minister has emphasised the importance of national Parliaments. What opportunity will this Parliament have to scrutinise his proposed choice of the next UK Commissioner to Europe?

The Prime Minister: The hon. Lady asks an important question. As has happened on some other occasions, asking a potential candidate to see Members on certain Select Committees is something I am absolutely prepared to consider.

Andrew Selous (South West Bedfordshire) (Con): The constituents I listened to over the weekend told me that they were pleased that the Prime Minister had done

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what he said he would, in the national interest, rather than just going with the flow to the UK’s detriment, for fear of being isolated.

The Prime Minister: I am grateful to my hon. Friend. As I have said, it is important—not least for the future negotiations that this country will need to take part in—to make sure that people know that when we make a stand, we stick to it.

Andrew Gwynne (Denton and Reddish) (Lab): Only an ex-PR man would seek to paint a vote lost 26-2 as a victory. It does not bode well for future renegotiations. What does the Prime Minister put it down to: his withdrawal from the EPP, his failure to build alliances or his hectoring of leaders of other states from the Baltic nations through to Poland and Ireland?

The Prime Minister: As I said earlier, the idea that somehow this all came about because the Conservative party no longer sits in the EPP is complete nonsense. The Liberals sit in the ALDE group—the Alliance of Liberals and Democrats in Europe—and the Labour party sits in the Socialist group. All the groups decided to adopt a leading candidate. Many of the Prime Ministers and Presidents subsequently rather regretted that the treadmill was taking them in a direction that they did not necessarily want to go in.

Gareth Johnson (Dartford) (Con): Right across Europe we have seen an increase in the Eurosceptic vote and a demand for reform. Does the Prime Minister therefore agree with me that the European Union needs to respect that support for the nation state and ensure that whenever we select a President the viewpoint from across the European Union is taken into consideration?

The Prime Minister: My hon. Friend is absolutely right. The Dutch Prime Minister has a mantra, “Nation states where possible; Europe only where necessary.” That is the approach that we should take. There are some in Europe who think that whenever there is a problem of legitimacy, the answer is more Europe. My argument is that in many cases the answer should be less Europe, more for nation states, more for national Parliaments, more subsidiarity.

Lucy Powell (Manchester Central) (Lab/Co-op): Today we have learned that the Prime Minister’s approach to Europe now has the full backing of the right hon. Member for Wokingham (Mr Redwood) and the hon. Member for Stone (Sir William Cash). [Interruption.] Yes, and many other Members. If the Prime Minister is as successful in the forthcoming renegotiations as he has been in these negotiations, will he recommend that Britain leave the EU—yes or no?

The Prime Minister: My position is that I want Britain to secure renegotiation and reform, and then vote to stay in a reformed European Union. I think that the hon. Lady must have written her question before she heard the remarks of my hon. Friends. What we have learned today is that if we had a Labour Prime Minister, as soon as they got in the room and felt a bit of pressure, they would give up.

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Mr Peter Bone (Wellingborough) (Con): This weekend, Tom Pursglove, the excellent Conservative candidate for Corby, and I were campaigning in east Northamptonshire. Everyone we spoke to, whether they were a Conservative supporter, a Labour supporter or a Liberal Democrat supporter—no, sorry, we could not find any Liberal Democrat supporters—all thought that the Prime Minister had done the right thing. Given what has been discussed today, will the Prime Minister confirm that he will not rule out the possibility of leading the out campaign in 2017?

The Prime Minister: I am very grateful to my hon. Friend for the campaigning that he has been doing in Corby and Northamptonshire. I have made it very clear what I want to achieve. This is about Britain’s national interest. I will always do what is in our national interest. The best outcome for Britain will be to secure the renegotiation and the changes, and vote to stay in a reformed European Union.

Mr David Hanson (Delyn) (Lab): Given that more than half the exports from my region, Wales, go to the European Union, will the Prime Minister help me to understand how his Billy-no-mates 26-2 defeat helps businesses such as Airbus, Toyota, Tata Steel and Vauxhall in my region?

The Prime Minister: The right hon. Gentleman should ask the businesses in his region and he will find that they say that it is right for Britain to reform the European Union and vote to stay in a reformed European Union. That is the position of the Institute of Directors, the British Chambers of Commerce, the CBI and many others.

Martin Horwood (Cheltenham) (LD): It is true that Jean-Claude Juncker was not everybody’s favourite candidate. However, having remembered the spark that ignited a war that killed more than 10 million Europeans, was this not the week to celebrate peace, democracy and friendship among the free nations of Europe, rather than to exaggerate difference and disagreement?

The Prime Minister: It was the week, rightly, to commemorate the fallen in Ypres. We had a sombre event and a very good discussion about the peace that Europe—and, I would argue, NATO—has helped to bring to our continent. We should never again go back to the ways of the past. At the same time, it was perfectly legitimate the next day in Brussels for those of us who had a very clear objection in principle to make that objection known.

Heidi Alexander (Lewisham East) (Lab): The events of the past week have exposed not only a lack of judgment on the part of the Prime Minister, but his inability to negotiate with other countries on our behalf. Does this fiasco not demonstrate the need for his departure from No. 10 and not the UK’s exit from the European Union?

The Prime Minister: The hon. Lady was struggling to keep a straight face during that question, but I applaud her effort. As I have said, what this demonstrates is that if we had someone doing this job who set out a principle and an argument, but who caved in at the first sign of fire, we would be in a very weak position.

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Julian Smith (Skipton and Ripon) (Con): The Fresh Start group of Conservative MPs has been making the case for European reform across Europe. On every visit, the Prime Minister’s leadership on the reform agenda has been spoken about and debated. No one else is leading the fray in the way that he is. Will he continue to make the case not just to the UK, but to the rest of the EU, that reform is the only way to go?

The Prime Minister: I am grateful for my hon. Friend’s remarks. In other European countries, many people want the approach that we are taking—greater flexibility, greater competition and powers flowing back to nation states, not just towards Brussels—and support our views.

Paul Flynn (Newport West) (Lab): Does the Prime Minister agree with the hon. Member for Cardiff North (Jonathan Evans), who has great experience of Europe, who said on Radio Wales yesterday that had the Government still been in the EPP, they could effectively have exercised a veto on the decision to elevate Mr Juncker? Is it not true that the worthwhile reforms in Europe will come from the moderate parties and not from the headbangers with whom the Prime Minister is associated at the moment?

The Prime Minister: The question I would ask back to the hon. Gentleman is, if it is so easy to veto the Spitzenkandidat process, why did Labour not do it in the Party of European Socialists? The idea that we would have been able to do so if we had been in the EPP is nonsense. There were other Prime Ministers in the EPP who did not stop the process. I am proud that we have our own political grouping in Europe and that it was the one group that decided not to take part in the process.

Philip Davies (Shipley) (Con): Will the Prime Minister pledge never to adopt the negotiating position of the Leader of the Opposition, which is to go along with absolutely anything the EU asks him so as not to appear isolated in the EU—and before he listens to any advice from the Lib Dems, may I suggest that he has a quick glimpse at the opinion polls? During the summit, did the Prime Minister get any intelligence from his socialist counterparts as to whether the Leader of the Opposition will once again surreptitiously block the private Member’s Bill of my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), which will guarantee the people of this country an in/out referendum on the EU?

The Prime Minister: My hon. Friend asks an intriguing question and I do not know whether Labour will block the opportunity to put into statute now the need for a referendum before the end of 2017. Everyone in this House will have a chance to vote on that Bill, and I hope we will support it.

Jonathan Ashworth (Leicester South) (Lab): Having so skilfully turned a divided EU into an EU united against his position, will the Prime Minister spell out at the Dispatch Box precisely where he expects to win in his renegotiation?

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The Prime Minister: As I have explained, I will send the hon. Gentleman a copy of the Bloomberg speech and The Daily Telegraph article, so he can immerse himself in the detail. We need to make changes to ever closer union, benefit tourism, and the free movement directive, and we need to make changes to embed the single market and save those countries that do not want to be part of the eurozone. This all begs a question—the Government have a clear plan and set of demands that we want to make, but what have we got from the Labour party? It is opposed to a referendum and it caves in on every important European issue; it gave away the rebate and never stood up for Britain on the budget; and it signed up to eurozone bail-outs and it was weak, weak, weak.

Crispin Blunt (Reigate) (Con): Socialist France is rapidly emerging as the principal barrier to the renegotiation objectives of my right hon. Friend, and he is unlikely to get much useful help from its allies on the Opposition Benches. Happily, just in time in 2017 there will be a French general election that should see the Union pour un Mouvement Populaire return to office. Will my right hon. Friend ensure that he and all his colleagues do their best to improve our relations with the UMP?

The Prime Minister: We must work with all elected Prime Ministers and Presidents in Europe, and I work very closely with Francois Hollande. There is an understanding in France that it has always believed in “L’Europe des patries”—the Europe of nation states—and we must make sure that that is followed through.

Kevin Brennan (Cardiff West) (Lab): We know who the Prime Minister was against, but why can he not tell us who he would have favoured to be President of the European Commission? Is it because this had nothing to do with principled statesmanship, and everything to do with cynical behaviour?

The Prime Minister: I was very clear: I thought there were a good number of people sitting round the European Council table who would have made good Commission Presidents, and I can think of people from the left, the right and the centre of politics. This is the important point: if we keep with this leading candidate process named by political parties, again, we will never have a serving Prime Minister or President sitting as President of the European Commission, and I think that is a huge mistake.

Dame Angela Watkinson (Hornchurch and Upminster) (Con): The Prime Minister will have been as disappointed as I was that Sweden did not support him in the vote against Jean-Claude Juncker. Given the recent negative comments by Fredrik Reinfeldt about ever closer union, does the Prime Minister agree that Sweden and other northern European countries with secure and flourishing economies will be a rich seam of support in the reforms he is seeking?

The Prime Minister: My hon. Friend makes an important point. Prime Minister Reinfeldt said:

“Just look into what we have written in our conclusions…You will find references…saying this ever-closer union perception is maybe not the best for everyone.”

That is clear support for Britain’s position.

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Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab): We know that Germany exercises considerable influence in the European Union, and until last week’s vote, the mood music seemed to suggest that Britain and the United Kingdom were on the same page. Will the Prime Minister tell the House exactly why Chancellor Merkel refused to support him?

The Prime Minister: Obviously, it is for Chancellor Merkel to set out her views, but I would explain it like this: among other leaders, she was one of those who had signed up to the concept of the leading candidates and the EPP picking a particular candidate—just as the socialists had picked a particular candidate—and the domestic reaction when she suggested that other candidates could come forward was extremely strong. As a result, as I have put it, I think a number of people got themselves on to a conveyor belt by supporting this process, and they found it very difficult to get off.

Penny Mordaunt (Portsmouth North) (Con): I thank the Prime Minister for the stance he has taken. The poll published this afternoon shows that although the Labour party is not with him, the British people are. Does he agree that it is not just in Britain’s interests that he sticks to his guns, but in the EU’s interests?

The Prime Minister: I am grateful to my hon. Friend, who is right to say that lots of people around Europe want to see reform and to see Britain as the leading voice of reform. Clearly, we will not get that reform unless we set out principles and stick to them.

Mr Andrew Love (Edmonton) (Lab/Co-op): Can the Prime Minister envisage a situation in which he believes it is not in the national interest for Britain to continue its membership of the EU? In those circumstances, will he campaign for an “out” vote?

The Prime Minister: Those are not the circumstances I seek. I will always be guided by what I see as the national interest, and I have set out several times in the House today what defines the national interest: reform in Europe, a referendum in Europe, and Britain in a reformed Europe.

Several hon. Members rose—

Mr Speaker: Order. I want just a small number of very pithy questions. I look in hope if not in expectation to Sir Tony Baldry.

Sir Tony Baldry (Banbury) (Con): Will my right hon. Friend similarly confirm that we did not pick a fight in Europe, and that it was not us who introduced the system of leading candidates, which undermines the constitution? But for that, there would have been no row.

The Prime Minister: My right hon. Friend is entirely right. The socialist grouping first, followed by the EPP and others, decided to take that approach, which I do not believe is in line with the European treaties.

Kate Green (Stretford and Urmston) (Lab): Businesses in my constituency—multinationals such as Kellogg’s; European companies such as ESBI, SAICA and Lucchini;

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and British-owned companies that seek to export to Europe, such as Northern Drives & Controls—all say that it is crucial to their business to stay in the European Union. How does the Prime Minister expect to have the authority to negotiate a better deal for Europe to enable them to do so?

The Prime Minister: I have listened a lot to the voices of British businesses large and small. They, too, want European reform. They are frustrated by the bureaucracy and the red tape, and by the failure to complete the single market. They do not want Britain to be part of a European superstate; they want co-operation and trade between nations. That is what we want. Although the task has undoubtedly become more difficult, I see no reason why we cannot achieve it if we stick to our guns.

Simon Kirby (Brighton, Kemptown) (Con): Last week, I attended Brighton’s wonderful golden handbag awards. May I take this opportunity to nominate the Prime Minister for a different handbag award for sticking up for Britain in the way he has?

The Prime Minister: I am grateful to my hon. Friend. A new element of life in Brighton has been visited on me. I am sure it was a great event and I am grateful for his support.

Geraint Davies (Swansea West) (Lab/Co-op): But, on reflection, does the Prime Minister accept that his aggressive and personalised opposition to Jean-Claude Junker was in fact counter-productive to British interests, and that it would always be that way? In the event that Mr Juncker won, which he did, he would be unsympathetic to British interests. In the event of Mr Juncker losing, the Prime Minister’s aggression would mean that supporters of Juncker would be lined up against Britain, and his friends would demand favours and compromises, undermining our position. Is it not always best to support one candidate rather than demonise another? The Prime Minister has not gone with the flow; he has gone with the wind.

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The Prime Minister: I do not accept what the hon. Gentleman says, and I do not accept that the arguments we made included any insult—they did not. There was an argument about principle and an argument about the direction that the EU was going. On our influence, the German press this morning reports: “Cameron showed consistency in his fundamental conviction. We know where we are. He wants tough EU reforms, further liberalisation, a reduction in bureaucracy, and growth and jobs.” The German press can see what we stand for.

Mr Nigel Evans (Ribble Valley) (Con): I thank the Prime Minister for ditching the useless policy of negotiation and capitulation that got us on to the motorway without exits towards a united states of Europe. Does he believe that the leaders of Europe get it? If there is no reform, the British people will head for their JCBs, create their own exit and vote to go down it in 2017.

The Prime Minister: I am grateful for what my hon. Friend says. There is real understanding that Britain wants and needs reform of the EU. That is why it is encouraging that that is written for the first time in the conclusions of last week’s Council meeting.

Mr William Bain (Glasgow North East) (Lab): Does the Prime Minister believe that his MEPs strengthened or weakened his negotiating position with Chancellor Merkel when they defied him and joined her Eurosceptic opponents in the European Parliament?

The Prime Minister: I do not think it made any difference at all.

Several hon. Members rose—

Mr Speaker: Order. I am sorry to disappoint colleagues, but I have called 86 Back Benchers. The Prime Minister has given very fully of his time and I am grateful to him and to colleagues. I must have some regard to the fact that it is an Opposition day, and people who have been in the House for some time will know that far more people get in on statements than ever before.

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Opposition Day

[3rd Allotted Day]

DWP: Performance

5.10 pm

Rachel Reeves (Leeds West) (Lab): I beg to move,

That this House notes that after £612 million being spent, including £131 million written off or written down, the introduction of Universal Credit is now years behind schedule, with no clear plan for how, when, or whether full implementation will be achievable or represent value for money; further notes the admission of the Minister of State for Disabled People in oral evidence to the Work and Pensions Committee on 11 June 2014 that over 700,000 people are still waiting for a Work Capability Assessment, and the report of the Office for Budget Responsibility in March 2014 that found that projected spending on Employment and Support Allowance has risen by £800 million since December; recognises the finding of the Committee of Public Accounts in its First Report, HC 280, that Personal Independence Payment delays have created uncertainty, stress and financial costs for disabled people and additional budgetary pressures for Government; further recognises that the Work Programme has failed to meet its targets, the unfair bedroom tax risks costing more than it saves, and other DWP programmes are performing poorly or in disarray; and calls on the Government to publish (a) the risk register and other documentation relating to the delivery of Universal Credit as a Freedom of Information tribunal has ruled it should, (b) the time in which it will guarantee that disabled people will receive an assessment for PIP and (c) a full risk assessment showing the potential impact of delays, delivery problems, contract failures and underperformance on (i) people receiving or entitled to benefits, (ii) departmental budgets and spending plans and (iii) the Government’s welfare cap.

This debate is about how we as a country treat our fellow citizens. It is about the young woman diagnosed with a life-limiting illness who has waited six months for any help with her living costs. It is about the disabled man whose payments have been stopped because he did not attend an interview to which he was never invited. It is about the millions of working people in this country who pay their taxes and national insurance every week and who want to know that their money is ensuring a strong and efficient system of social security that will be there for them and their families, with rules applied fairly and promptly to ensure support goes to those who need it and not to those who do not. Instead, the Government are wasting more and more taxpayers’ money on poorly planned and disastrously managed projects, and are allowing in-work benefits to spiral because of their failure to tackle the low pay and insecurity that are adding billions of pounds to the benefits bill.

There is strong support in Britain for a social security system that helps people get by when they fall on hard times; secures dignity and a decent standard of living for those unable to work because of sickness or disability; and ensures that no child goes hungry, without essential clothing or without adequate housing because their parents are in low-paid or insecure work. Instead of a system that works, under this Government we have got chaos, waste and delay. Chaos is 7,000 people waiting for a work capability assessment, and the Government still not able to tell us which provider will replace Atos. Waste is more than £600 million spent on universal credit, including £131 million written down or written off, with no clear assurances about how, when or whether

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this important project will ever be fully operational or provide value for money. Delay is the desperate people, many of whom have been working and paying into the system for years or decades and are now struck by disability or illness, waiting six months or more for help from the Department for Work and Pensions.

Paul Uppal (Wolverhampton South West) (Con): I am glad that the hon. Lady has mentioned the issue of waste. Does she feel comfortable that under the last Labour Government housing benefit bills were occasionally more than £100,000—a figure that many people in the private sector could never afford?

Rachel Reeves: Does the hon. Gentleman feel comfortable that under this Government spending on housing benefit for people who are in work has gone up by more than 60%, reflecting the fact that more people are in low-paid or insecure work and are unable to make ends meet, even though they may be working all the hours God sends?

We have a Government who are totally out of touch with the reality of life for millions of hard-working taxpayers and those in need of help. The Government are careless with the contributions that people make to the system, callous about the consequences of their incompetence for the most vulnerable, and too arrogant to admit mistakes and engage seriously with the task of sorting out their own mess.

Robert Halfon (Harlow) (Con): Does the hon. Lady agree that the whole thrust of the Government’s reforms has been welfare into work? Since 2010, youth unemployment in Harlow has gone down by 30% and unemployment has fallen by a third.

Rachel Reeves: Of course I welcome the fact that unemployment, including youth unemployment, is now falling, but we have to face up to the fact that too many people in work are struggling to make ends meet. The hon. Gentleman will know from his constituency that some people who are in work have to rely on housing benefit and tax credits to make ends meet because they are not paid a wage they can afford to live on, they are on zero-hours contracts, or they are among the record numbers of people who are working part time but want to work full time. We need to address those challenges as well.

Charlie Elphicke (Dover) (Con): Can the hon. Lady explain why the hon. Member for Dagenham and Rainham (Jon Cruddas) says that Labour’s welfare policies are cynical and punitive?

Rachel Reeves: It is all about ensuring that more people are in work through the compulsory jobs guarantee, ensuring that people have the skills to hold down a job with a basic skills test and a youth allowance, and doing more to ensure that people in work can earn enough to live on—through, for example, an increase in the minimum wage and ensuring that more people are paid the living wage. Those policies will make a huge difference to the hon. Gentleman’s constituents in Dover and Deal, which will be a Labour constituency after the next election.

Julie Hilling (Bolton West) (Lab): Does my hon. Friend agree that it is an absolute scandal that the Government do not know what they are talking about?

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They talk about the number of jobs being created, but they do not know how many of them are on zero-hours contracts or how many are on Government schemes or how many have been transferred from the public sector. In fact, the Secretary of State knows absolutely nothing about these so-called jobs that the Government are supposed to have created.

Rachel Reeves: What we do know is that more than 5 million people—20% of the work force—are paid less than the living wage. Furthermore, 1.5 million people are on zero-hours contracts and 1.4 million people are working part time who want to work full time.

When it comes to detailing the extent of the Secretary of State’s dereliction, it is hard to know where to start. For a useful overview, we need look no further than the Department’s own annual report and accounts for 2013-14, which was released at the end of last week. It reveals the latest opinion of the DWP’s head of internal audit—that the Department has yet to take the necessary action to “address control weaknesses” and, in his words, to

“provide an improved…environment from which to manage the continuing challenges and risks faced by the Department.”

It lists no fewer than eight areas described as “significant challenges” where the Department still falls short. Universal credit, we are told,

“continues to be a significant challenge for both the Department and delivery partners”,

and it goes on to say that

“there continues to be an inherent level of risk contained in the plans.”

On fraud and error, we are told that the rate has “worsened” with respect to housing benefit and that the chance of the Government achieving their target for reduction

“remains a very substantial challenge and is unlikely to be achieved.”

The report confirms that in the area of contracted-out assessments for employment and support allowance and the new personal independence payments,

“the volume of assessments undertaken by providers…has fallen consistently below demand, with a detrimental impact on customer service and implications for forecast expenditure on sickness and disability benefits”.

In other words, it is hurting, but it certainly is not working.

Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op): My hon. Friend is offering a stark indictment of this Government’s policies. Does she agree that another stark indictment of their policies is the massive increase in food banks across this country, another one of which I had to open in my constituency just a few weeks ago?

Rachel Reeves: I totally agree with my hon. Friend. Of course, these remarks are from the Government’s own report. In our constituencies we all see people who are so desperate that they have to queue at food banks to be able to feed themselves and their families. That is not something that should be happening in 21st century Britain.

Helen Jones (Warrington North) (Lab): Is my hon. Friend aware that when I asked how many people in my constituency had been waiting more than six months or three months for medical assessments for personal

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independence payments, the Government told me that the figures were not available. In other words, they are not only incompetent; they do not know how incompetent they are!

Rachel Reeves: My hon. Friend puts it very succinctly, and I am coming on to some of the examples we have all heard about from our constituency surgeries.

What we here must take care to do and what this Government have now totally failed to do is to remember the human impact, often on people in vulnerable circumstances, of this catalogue of chaos. Behind the bureaucratic language and spreadsheets showing backlogs and overspends are people in need who are being let down and mistreated, and taxpayers who can ill afford the mismanagement and waste of their money. Let me provide just a few examples that I am sure will be familiar to Members of all parties from our constituency surgeries.

In February, a woman came to my surgery in a state of desperation. Her husband had suffered a stroke the previous year, rendering him unfit for work. He applied for the personal independence payment and employment and support allowance, but a month after making the application, they were still waiting just to get their Atos assessment. She had given up work to look after her husband, but because they had not had their decision on PIP, she could not apply for carer’s allowance. They were so short of money that I referred them to one of the food banks. Both had worked for many years and paid into the system, but when they needed support, it was not there for them. In March this year, the husband died. His Atos appointment letter had never come. His wife, now a widow, had been made unwell by all the stress of this experience. She applied for ESA, but she has heard nothing.

James Duddridge (Rochford and Southend East) (Con): Does the hon. Lady regret the fact that it was her Government who appointed Atos in the first place?

Rachel Reeves: As the hon. Gentleman will have heard, the example that I gave involved personal independence payments, which were introduced by this Government, not the last one. We have made our position clear. Although we appointed Atos, we said last autumn that it should be sacked. However, it is not just a question of replacing Atos; it is a question of reforming the work capability assessment and introducing targets relating not just to the number of decisions, but to the correct decisions.

Another couple came to me after applying for personal independence payments last August. The husband was asked to attend an assessment on a date when he would be in hospital for a spine operation. Nursing staff at Leeds General Infirmary advised the Department for Work and Pensions that he would be unable to attend the appointment, and he was told that a home assessment would be arranged, but he then heard nothing for months. In May, I wrote to the Department on the couple’s behalf. The reply that I received said simply:

“we will respond to your query as soon as possible but due to the volumes being received and the PIP system still being in its infancy there may be delays in getting back to you”.

Meanwhile, we also referred that couple to a food bank when their money ran out. These people deserve better.

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Sheila Gilmore (Edinburgh East) (Lab): Does my hon. Friend share my surprise that, although the problems with Atos were known about—and it is now being suggested that they had been known about for some time—a contract was given to that organisation for PIP? Was due diligence carried out before the new contract was issued?

Rachel Reeves: My hon. Friend has made a very important point. The PIP contract was awarded to Atos although we knew that there were problems with the work capability assessment. It was this Government’s decision to give a contract to a provider that we already knew was failing.

Since this debate was announced at the end of last week, my office has been inundated by communications from people from all over the country with similar tragic and appalling stories to tell. This morning I spoke to Malcolm Graham from Romford, who last September was diagnosed with cancer of the oesophagus. He underwent 10 weeks of chemotherapy and a 10-hour operation. He had been unable to work, and he finds it hard to get around. He applied for a personal independence payment and employment and support allowance on 23 September last year. After phoning the Department nearly every day since then, he finally had his assessment for personal independence payment on 16 May. On 20 June—five weeks later—he received a letter from the Department saying that it now had all the information it needed in order to make a decision, but today, more than nine months after his application, he has yet to receive notification of what support, if any, he will receive. In the meantime, he has had to rely on help from family and friends. He has struggled to keep up with his bills, and has even been visited by a debt recovery firm.

Until he was struck by cancer, Mr Graham had worked all his life. For 40 years he had paid his tax and national insurance. However, he told me today “When I needed it, the help was not there. I never knew what it would be like to be on the other side of the fence.” He added: “But now that I do, I wish that the Secretary of State would imagine what it is like being on this side of the fence—what it is like being in my position.”

Mr Gordon Marsden (Blackpool South) (Lab): My hon. Friend is making a very strong and moving speech about the impact on individuals of these horrendous fiascos, but does she agree that the issues involving PIP go beyond some of the examples that have been given today? I am thinking particularly of Motability. Many of my constituents have been caught by the double whammy of delays involving, first, the disability living allowance and now PIP. They have waited long periods for a resolution, but because a decision is being reconsidered, their Motability—the lifeline that has enabled them to get out of their homes—has been taken away before that decision has been made. Is that not a horrendous indictment of the Government? [Interruption.]

Rachel Reeves: Government Members should listen rather than heckle, because my hon. Friend has made an incredibly important point. I recently went to Ringways garage in Farnley, in my constituency, to give someone the keys to a Motability car. That person talked about the difference that Motability made, in terms of

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independence and family. However, as my hon. Friend has said, we also know that, as a result of some of the Government’s reforms, many people who need to be helped to obtain the car that will give them the freedom that the rest of us take for granted have had that support taken away from them. The delays and the chaos is one thing, but there is also some of the substance of those decisions.

Charlie Elphicke: Will the hon. Lady give way?

Rachel Reeves: I have already given way to the hon. Gentleman, so, no, I will not.

I know that many hon. Members will have similar stories to tell today, and I hope the Secretary of State stays to listen, because when we write to the Department with our constituents’ problems we only ever get replies from the correspondence unit. I realise that the Secretary of State is probably deluged with letters raising problems.

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): I am sorry, but I just cannot agree with that. Every letter from a member of the Privy Council gets replied to by me, and every other Minister replies to every single other Member of Parliament’s inquiry. If the hon. Lady is now insinuating that we do not, perhaps she could demonstrate why.

Rachel Reeves: Well, I will send the Secretary of State all the letters I have had from his correspondence unit, not one of them signed by him. [Interruption.] Well, letters that I have written to the Department about the challenges facing—[Interruption.] The right hon. Gentleman says he replies to these letters; he has not written a single letter to me about—[Interruption.]

Madam Deputy Speaker (Mrs Eleanor Laing): Order. The House is discussing an important point.

Rachel Reeves: If the Secretary of State now claims that he signs his letters “The correspondence unit”, perhaps he has replied, but I would have expected the Secretary of State to sign the letters and I will be very happy to forward all the letters to him. [Interruption.] He carries on chuntering from a sedentary position; I have not had a single letter about my casework from him. I will send them all to him, and perhaps he can write to me and my constituents explaining why they have been treated so abysmally by him and his Government.

Mr Mark Harper (Forest of Dean) (Con): All I can say is that my experience when raising cases from my excellent local citizens advice bureau is that they have been answered very well, in full and thoroughly by the Minister for disabled people, my right hon. Friend the Member for Hemel Hempstead (Mike Penning), who has listened to my concerns and answered them, largely dealing with the appalling performance of Atos, hired by the Labour party and dealt with successfully by my right hon. Friend.

Rachel Reeves: Well, maybe there is one rule for Tory Back Benchers and another rule for Labour party MPs, because I have not had a single letter signed by the Secretary of State.

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The Minister of State, Department for Work and Pensions (Mike Penning) rose—

Rachel Reeves: I will give way; I haven’t had any letters from this one either.

Mike Penning: This one! The shadow Secretary of State should look behind her, and she will see many, many of her colleagues nodding when I say that I have written personally, and dealt with cases personally, and when there was a mistake, I admitted there was a mistake, so the generalisation she has just made about party political bias is fundamentally wrong.

Rachel Reeves: The Minister for disabled people has never replied to the letters I have sent to the Department for Work and Pensions about people in my constituency. I have given two examples today. [Interruption.] He says he has; can the right hon. Gentleman stand up and say he has ever replied to a letter from me?

Mike Penning: Letters from a Privy Counsellor, which the right hon. Lady is, will be responded to by the Secretary of State. [Interruption.] Well, if you’re not a Privy Counsellor, it would be me responding, but look around behind you—I apologise for the “yous”, Madam Deputy Speaker—and see that I have responded in depth to colleagues. They may not have liked the reply, but I have done that, and if the hon. Lady had written to me directly, I would have replied.

Rachel Reeves: Maybe the letters got lost in the post, but I have never received a letter from the Minister for disabled people.

Ian Lucas (Wrexham) (Lab): May I just say that the Minister last week did contact my office, because I was sent a letter by an official, not him—

Mike Penning: And I apologised.

Ian Lucas: And he apologised. But I have to say that the Secretary of State clearly does not know what is going on in his own Department. He is not even listening to the debate, and, frankly, let me say this about the views expressed by the Conservative party about the vulnerable people who are coming to us for help: they are being disregarded and treated with contempt by the laughing cavaliers opposite. They should be ashamed of themselves.

Rachel Reeves: I thank my hon. Friend for that intervention.

I hope the Secretary of State also responds to the calls we are making today for the Government to give sick and disabled people some clarity and assurance by publishing a guaranteed time limit for the assessment of claims. For example, Macmillan Cancer Support has recommended that the personal independence payment assessment process be limited to 11 weeks. I hope the Secretary of State will tell us today that he will undertake to give that guarantee—if not, why not?

We are also calling for the Secretary of State to own up to the extent of the problems in his Department, particularly the mounting costs arising from problems with the personal independence payment, the work capability assessment and universal credit. The introduction

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of personal independence payments in place of disability living allowance was supposed to save £780 million in annual spending by next April, but with £200 million a year being spent on administration, including £127 million a year going to contracted-out assessment providers, this change is set to be completed not next year but, at this rate of progress, in 42 years’ time.

Kerry McCarthy (Bristol East) (Lab): I received an e-mail today from a constituent who is in considerable distress. She first applied for her PIP on 1 November 2013, so she has now been waiting for eight months. She is in work and she has always been physically fit but she has now just been struck by misfortune. She is in such distress and Atos has told her that her referral is subject to a quality check to see whether Atos is doing its job properly. Clearly, if it has taken eight months to get to this stage, it is not doing its job properly.

Madam Deputy Speaker (Mrs Eleanor Laing): Order. Interventions must be short because a great many Members are waiting to speak and it is simply unfair if people make speeches instead of interventions.

Rachel Reeves: Eight months is far too long for anyone to have to wait and, clearly, any further delay is totally unacceptable.

On the work capability assessment, the Government spend £100 million a year on the contracted assessors, as well as tens of millions more on decisions that are appealed. Now, the process has almost reached “virtual collapse”, according to the senior judge overseeing the trials, with Atos walking away from the contract, the Government yet to identify a replacement and a backlog of more than 700,000 assessments in a queue. As a result of the disarray, we are seeing spiralling costs to the taxpayer, with the latest report from the Office for Budget Responsibility showing an £800 million increase in projected spending and leaked documents revealing that the Government now see this as one of the biggest fiscal risks, with spending on course to breach their own welfare cap.

Guy Opperman (Hexham) (Con): This debate is also about employment, so will the hon. Lady welcome the rise in employment, not least in her constituency, where, according to the House of Commons Library, the number of jobseeker’s allowance claimants has reduced by 23% in the past year, with youth unemployment down 26% and unemployment among those who are 50 and over down by 17.6%?

Rachel Reeves: But what we have also seen in my constituency is that average wages in Yorkshire and Humber have reduced by £26 a week since the coalition came into government and employment and support allowance claims have increased by 0.9 percentage points during the same period.

Alison McGovern (Wirral South) (Lab): On that previous intervention, does my hon. Friend share my sense of deep frustration that even after the 1980s the Conservatives have failed to learn that the important thing is not a falling claimant count, but the unemployment rate? Although that is thankfully lower, there are loads of other reasons to think that we still have problems in our economy.

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Rachel Reeves: My hon. Friend is absolutely right to say that there is still an awful lot to do to reduce unemployment and ensure that everybody in work is earning enough to be able to support themselves and their families.

Let us now deal with universal credit, the Secretary of State’s pet project and the Prime Minister’s flagship welfare reform. Where are we with that? It was supposed to be the Government’s way of achieving £38 billion of savings over 10 years and £7 billion a year thereafter by reducing fraud and error and by encouraging more people into work. Today, with more than £600 million spent on set-up costs, we should be starting to see the benefits—1 million people should be claiming universal credit now, as part of a roll-out that the Government said would be completed by 2017—but instead we find that £130 million of this expenditure has already been written down or written off and only 6,000 of the simplest cases have so far received the benefit, which is less than 1% of the level it should be at now. Most worryingly of all, we now have no reliable timetable and no Treasury-approved business case to tell us how, when or whether this project will ever be fully operational or deliver value for money.

We have repeatedly called on the Government to come clean about the state of universal credit. The rescue committee, which we appointed to advise on the future of universal credit, has recommended that the books be opened for a warts-and-all review, with the National Audit Office signing off any new business case before it goes forward. But instead of moving on from the culture of secrecy and denial, which has been identified as the biggest fatal flaw besetting universal credit, the Government are instead spending yet more taxpayers’ money fighting freedom of information requests and court cases to try to stop the publication of documents setting out the risks, milestones and state of progress of this multi-billion pound project. They are hiding behind a veil of secrecy that is making universal credit harder, not easier, to deliver.

David Rutley (Macclesfield) (Con): I respect the hon. Lady’s real world experience and the things that she has done in the business world before coming to this place. In that vein, will she not understand that it is vital to roll things out on a test-and-learn basis and not, as the previous Government did with tax credits, on a crash-and-burn basis?

Rachel Reeves: What I know from my business experience—I am sure the hon. Gentleman knows it as well—is that writing off and writing down £131 million of expenditure is not good value for money. It is good to test things, but I do not see this Government doing much learning from the mistakes they are making.

The evidence is now clear that the Secretary of State’s record has been a complete car crash.

Emily Thornberry (Islington South and Finsbury) (Lab): On the point about learning lessons, is my hon. Friend aware that I have been making freedom of information requests to the Department in relation to mandatory reconsiderations? When people get their work capability assessment, and it has failed, before they can appeal there has to be a mandatory reconsideration. The Department does not know how many cases have

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been overturned, how many claimants have been left without any money and how long the longest period is for reconsideration. It cannot answer a single one of those questions under a freedom of information request.

Rachel Reeves: That links in with what I was saying earlier. If the Government do not learn from their mistakes, how can they make improvements?

Universal credit is widely off track; the work capability assessment has almost completely broken down; personal independence payments are a fiasco; the Work programme is not working; the Youth Contract is a flop; support for families with multiple problems are falling far short of its target; the jobmatch website is an absurd embarrassment; the unfair and vindictive bedroom tax is costing more money than it saves; and the Government cannot even agree on a definition of child poverty let alone take action to deal with it.

To paraphrase Oscar Wilde: to fail to deliver on one policy might be considered unfortunate; to miss one’s targets on two has to be judged careless; but to make such a complete mess of every single initiative the Secretary of State has attempted requires a special gift. It is something like a Midas touch: everything he touches turns into a total shambles.

Meanwhile, the Secretary of State will spew out dodgy statistics, rant and rave about Labour’s record, say “on time and on budget” until he is blue in the face and, in typical Tory style, blame the staff for everything that goes wrong. We have all long given up hope on the Secretary of State ever getting a grip on his Department. The real question today is when will the Prime Minister learn and take responsibility for the slow-motion car crash he has allowed to unfold? The DWP has the highest spending of any Government Department, and the responsibility for handling some of the most sensitive situations and some of the most vulnerable people in our country. We will all be paying a price for a long time to come for this Government’s failure to get a grip, and the lives of too many people, such as Malcolm Graham who is still waiting for his personal independence payment, have been irreparably damaged. It is clear that this Government will never take their responsibilities in this area with the seriousness that is needed. Let me pledge today that a Labour Government will. They will help those thousands of families who have been let down by the system and the millions of taxpayers who are seeing their money wasted. That change cannot come soon enough.

Madam Deputy Speaker (Mrs Eleanor Laing): Order. Before I call the Secretary of State, let me say that Members know perfectly well that making a long intervention instead of waiting to make a speech is simply rude and it is unacceptable. Interventions must be short. As there are so many Members waiting to speak, I will have to impose a time limit of six minutes on Back-Bench speeches, after the Secretary of State has spoken.

5.39 pm

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): I welcome today’s debate. We have waited and waited for a debate on welfare in Opposition time, yet today we see a cynical motion from a cynical party, pandering to their unions and chasing media

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headlines. They have cynically avoided the topic of welfare reform, missing the real point, which is the impact and success of what we are delivering. More people are in work than ever before, with the figure up 1.7 million. More people are in private sector work than ever before, with the figure up more than 2 million. Unemployment and youth unemployment are lower than the Opposition left them at the last election, and workless households are at the lowest rate since records began.

The Department processes 7.4 million claims successfully, issues more than £680 million in payment to 22 million claimants and carries out more than 24 million adviser interviews. To date, since we introduced the efficiency programs, call volumes have been at their lowest level, as have complaints. We have seen record debt collections of more than £2 billion—and, by the way, debt is lower than the figure we were left—as well as record online claims. At the same time, we have saved £2 billion from the Department’s baseline spending compared with 2009-10—

Several hon. Members rose—

Mr Duncan Smith: I am going to make a little progress, as you have told me that we need to, Madam Deputy Speaker. I will give way later.

Let me repeat that: £2 billion has been saved from the Department’s baseline expenditure compared with 2009-10, when the previous Government left office. Let me give two examples of where, when we came into office, there was ridiculous, excessive and personal waste. When I walked through the door, I found that the previous Government and their Ministers had had six cars and six drivers sitting permanently inactive, costing more than £500,000. We have reduced that to one pool car used by all of us, or we get taxis or the tube—

Several hon. Members rose—

Mr Duncan Smith: I will give way in a second.

Equally, under Labour the DWP spent £13 million on first-class travel. I honestly wonder whether anybody wanted to see them that much more quickly as they got off at the other end—I doubt it. We have banned that.

Huw Irranca-Davies (Ogmore) (Lab): Will the Secretary of State give way?

Mr Duncan Smith: I will give way in a second; I want to set out the ground rules. The motion contains no mention of those efficiencies or achievements, no suggestion of what Labour would do and—there is no better illustration of how cynical the Opposition are—no admission of the shambles they left behind. The economy was at breaking point, £112 billion had been wiped off our GDP and we were burdened with the largest deficit in peacetime history. Welfare bills were completely out of control. Housing benefit alone had doubled, contributing to overall spending increasing by 60%. The benefits system was in meltdown, with a mess of 30-plus benefits that meant that work simply did not pay.

Under Labour, the safety net had become a trap—

Ian Lucas: Give way.

Mr Duncan Smith: At its peak, 5 million people on out-of-work—

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Ian Lucas: Give way!

Madam Deputy Speaker (Mrs Eleanor Laing): Order. Mr Lucas, the Secretary of State is not giving way. Do not shout.

Mr Duncan Smith: I said that I will give way, Madam Deputy Speaker, but I wanted to set out the successes of this Government against the nonsense of the Opposition’s debate.

At its peak, when I walked through the door, our inheritance was 5 million people on out-of-work benefits, a million of them for more than a decade. Youth unemployment had increased by nearly half and long-term unemployment doubled in just two years. One in five households was workless and the number in which no one had ever worked almost doubled.

Ian Lucas: I am grateful to the Secretary of State for giving way. I want to talk about incompetence on his part. Every week, people come to my surgery who cannot have their personal independence payment claims processed. Will he take some responsibility and apologise to them for the incompetence of his policy and his Department?

Mr Duncan Smith: We take full responsibility for ensuring that that benefit is rolled out carefully, so that when we do the full national roll-out of the whole benefit, we will know that it works. We have made a series of adjustments and also have more recruitment going on and more staff going in. I will give some pointers about where we will be when I return to this point. I simply say to the hon. Gentleman that when Labour rolled out tax credits, more than 400,000 people failed to get their money and the Prime Minister had to make a personal apology. I do not want to repeat that in this case. I want to ensure that those most in need will get the benefit.

Margot James (Stourbridge) (Con): Amid the litany of failures of the previous Government, which my right hon. Friend was recalling, and their dreadful legacy in this area, does he remember that of all the new jobs that the property boom-fuelled growth generated, three quarters or more went to foreign nationals? Is that not a circumstance which this Government have reversed entirely?

Mr Duncan Smith: My hon. Friend is absolutely right. Well over 70% of new jobs now go to British nationals, as opposed to 90% that went to foreign nationals before.

I want to repeat the figures: there were 5 million on out-of-work benefits, youth unemployment increased by nearly half, long-term unemployment doubled in just two years, and one in five households—it is worth stressing that—was workless, and the number of households where no one had ever worked almost doubled under Labour. Now, as the Opposition themselves seemed to admit over the weekend, as I noticed in the papers, they have no plans, no policies and no prospects—only, as the hon. Member for Dagenham and Rainham (Jon Cruddas) put it put rather succinctly, an

“instrumentalised, cynical nugget of policy to chime with our focus groups and our press strategies and our desire for a top line”.

I agree. Today’s debate is just that—a cynical nugget of short-term policy to put to the unions.

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Huw Irranca-Davies: I thank the right hon. Gentleman for giving way. I make no apology for speaking up for constituents who are very concerned about what is happening to them, having been caught up in the system. He attacks us for cynicism. Is he also concerned by the report last week from Macmillan, which showed that 60% of people who went through the PIP assessment were waiting four and a half months, and a quarter were waiting six months? That could be somebody in my family, in his family or in our constituents’ families? That is not cynicism—

Madam Deputy Speaker (Mrs Eleanor Laing): Order.

Mr Duncan Smith: No one ever complains about someone raising issues to do with their constituents. That is what we are all here for. However, instead of scaremongering, we deal with these points. I do not say for a moment that what we are trying to do is anything but difficult. We are trying to reform a system that was in many senses broken. It was not delivering money to key people. DLA was, by common agreement, not doing what it was meant to do. The delivery times that the hon. Gentleman talks about are out of date. As regards terminally ill people, nobody should wait for more than 10 days under the PIP programme. That is happening.

Several hon. Members rose—

Mr Duncan Smith: I want to move on, but I shall give way to one of my hon. Friends.

Julian Smith (Skipton and Ripon) (Con): Does it surprise my right hon. Friend that the shadow Minister made no mention of the 80 constituents who have benefited in her constituency from the new enterprise allowance, creating successful new businesses? There was no mention of them in her speech.

Mr Duncan Smith: No, that does not surprise me. The purpose of today’s debate is to avoid anything to do with welfare reform and just pick away at issues that the Opposition think will get them some kind of coverage. That is the cynicism that the hon. Member for Dagenham and Rainham was talking about.

Several hon. Members rose—

Mr Duncan Smith: I want to make a little more progress and highlight a couple of programmes. First, let me deal with the issue that shows the cynicism of the Opposition more than anything else—the issue that the hon. Member for Leeds West (Rachel Reeves) did not want to raise, child maintenance, the enforcement commission and the Child Support Agency, on which the Opposition have remained silent. When we came into office, £500 million had been wasted on scrapped IT, including £120 million on a botched rescue scheme. I notice that the Opposition now want a rescue scheme for universal credit. At that rate—£120 million lost—we do not need any of their rescues.

On child maintenance, 75,000 cases were lost in the system. There were no effective financial arrangements at all for more than half the children. The IT system cost £74 million a year in operating costs alone, even as the number of expensively managed clerical cases hit 100,000. [Interruption.] Instead of becoming his party’s megamouth, the hon. Member for Rhondda (Chris

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Bryant) needs to keep a little quieter and listen to reality. It was his party that made a shambles of the IT introduction when it was in government.

As the NAO has confirmed, our phased roll-out is ensuring that we have a new, efficient system that works: 60% more parents than we expected are paying directly; processing procedures are down, from an overall 21,000 to 450; and we expect savings of £220 million a year once it is complete.

Emily Thornberry: I just want to make sure that I understand correctly what the right hon. Gentleman has said. I believe that he has just given an undertaking to the House that work capability assessments will be done in 10 days. [Interruption.] He has not given that undertaking. I wrote to the Department about a constituent who applied for PIP on 19 November, and I received a letter on 18 June telling me that it did not have a time scale for when he would get his work capability assessment.

Mr Duncan Smith: I was referring to PIP and the fact that the terminally ill will not have to wait longer than 10 days to be seen. I think that the hon. Lady is referring to WCA. They will go straight to the support group. [Interruption.] Well, I have given an undertaking that they should not have to wait more than 10 days to be dealt with.

David Mowat (Warrington South) (Con): My right hon. Friend mentioned the shadow Secretary of State’s four-point rescue plan. Part 1 is a three-month delay, which would lead to a write-off. Parts 3 and 4 include scope increases, which at this phase in the programme would be bound to cause further write-offs. That is precisely why Labour lost £20 billion in the previous Parliament.

Mr Duncan Smith: I am grateful to my hon. Friend, who is right about that, and I will come to that point in a minute. That is what happens in the development process. Universal credit is rolling out against the time scale I set last year, as I will demonstrate.

Andrew Bridgen (North West Leicestershire) (Con): On behalf of my constituents, I want to thank the Secretary of State for all the excellent and essential work he is doing on welfare reform and for the part his Department is playing to deliver the Government’s long-term economic plan, which has seen unemployment in my constituency fall by 40% and youth unemployment fall by 50% over the past 12 months.

Mr Duncan Smith: What an excellent intervention. It is a testing one, but I will try to live up to it.

Let me move on to universal credit. Across all 44 programmes of change in the Department, we are taking a careful and controlled approach to achieve a safe and secure delivery. For example, the benefit cap started with an early roll-out and is now fully implemented, seeing 42,000 households capped and 6,000 move into work. Universal credit is on track to roll out safely and securely, against the plan I set out last year. The hon. Member for Leeds West quoted a figure of £12.8 billion but, as ever, shows a poor grasp of the finances. We have always been clear that universal credit’s total budget is £2 billion, and we will not overspend.

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Furthermore, we have taken decisive action so as not to repeat the way in which programmes were rolled out under the previous Government. The reset will avoid the “big bang” concept that they put forward at the last election. They did a number of things that led them to have to write off huge sums of money. For example, their benefit processing replacement programme was not even introduced; it was just scrapped after £140 million had been wasted on IT that could never be used. Lectures about money that has to be written off with nothing to show for it should be directed at them, not us.

We have introduced the pathfinder in order to test and learn. We are now rolling it out, as I announced the other day, to 90 jobcentres across the north-west, and that process will be completed in the autumn. Furthermore, I have announced that, from today, new universal credit claims for couples will be rolling out into the live status, and claims for families will follow that roll-out. That will complete universal credit’s roll-out in the north-west, as we set out last year.

On the digital solution, nothing offers clearer proof that the existing live service works. It is delivering universal credit and will continue to do so. As I have always said, the majority of the existing IT will continue to be used, even as we develop the final element, which is the digital service, using all that equipment. It is about an end-state solution—fully online, fully secure and responsive to all digital threats—enhancing what we have already built. Universal credit will roll out on time, and it will deliver what we have said it will deliver—at least £38 billion in net benefit to the Exchequer.

Sheila Gilmore: I wonder whether the Secretary of State can explain what an “end-state solution” actually is, or what it will mean, and why he did not properly test PIP, which had only a two-month pilot, meaning that every applicant is now a guinea pig?

Mr Duncan Smith: I think that I have been pretty clear about the end-state solution. It is universal credit completely delivering to everybody in the UK. That is the end-state solution—live, online and fully protected. Perhaps I need to spell it out to the hon. Lady again. On PIP, I will simply say that we did not rush it. We have kept control of the level and scale of the roll-out. As we have learnt what the difficulties are, we have made changes, working with the providers. I will demonstrate in a moment that we are driving those numbers down to reasonable levels, as expected.

Guy Opperman: Government Members welcome the rise in job numbers, which have improved by 30%-plus in Hexham. I also welcome the transformation in universal credit, which is fixing a broken system. The pathfinders, the pilots and the reform are necessary and we must stick to our guns. My right hon. and hon. Friends are behind the Secretary of State.

Mr Duncan Smith: I thank my hon. Friend.

Joan Walley (Stoke-on-Trent North) (Lab): Can the Secretary of State tell me how in touch he is with those people who have wasted over six months waiting for PIP? What are we to say to our constituents when they

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cannot get an answer from his Department? Where is his humility and his accountability? How is he dealing with this?

Mr Duncan Smith: First, no wait that is not in accordance with the time it takes to do these assessments is acceptable. We are driving those down. For anybody who has been waiting, I accept that for them it is a personal tragedy. We want to change that, which is what we are doing. That is why we are doing it in this way, and I will come back to that point with some figures later. The point is that we introduced the changes with PIP because ultimately it will be a better system than DLA. Many people did not get the kind of service they needed under DLA, and that is the purpose of PIP.

Joan Walley rose—

Mr Duncan Smith: I will come back to that point in a moment, but first I will make some progress.

Gareth Johnson (Dartford) (Con): Will the Secretary of State give way?

Mr Duncan Smith: Okay, but then I must make some progress.

Gareth Johnson: Does the Secretary of State agree that the most effective way of getting people out of poverty is by ensuring that they achieve employment? To that end, is he aware that not a single Labour Government, from the time they took office to the time they left, have ever reduced unemployment? I therefore urge him to stick with his policies.

Mr Duncan Smith: I am grateful to my hon. Friend. I will return to the matter of unemployment later, but the reality is that we are driving unemployment down and employment up. Youth unemployment and long-term unemployment are falling as a result of this Government’s actions.

Several hon. Members rose—

Mr Duncan Smith: I will make a little progress, because I am conscious that many Members wish to speak.

With regard to employment and support allowance, I make no secret of the fact that the process of reform is challenging; I have said so from the word go. There will always be issues when dealing with such delicate matters, but the question of how we deal with them and what lessons we learn is important. Let me remind the House that the previous Government, with our support—I thought that they were moving in the right direction—introduced the WCA, but the contract was a very difficult one. To break it arbitrarily would have cost over £30 million. What we saw at the beginning, and then had to change, was some very harsh decision making, particularly in relation to those with cancer and mental health conditions. Some 200,000 cases were then locked in the system in a growing backlog, and there were a very high and rising number of appeals. In fact, the previous Government had to increase spending on appeals by 1,500% at the time.

We have taken decisive action to deliver improvements. There have been four independent reviews, which have accepted over 50 Harrington recommendations. There

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is now an easier route into the support group for cancer sufferers, and there are three times more people with mental health conditions in the support group than there were in 2009. We ended the Atos contract a year early, with a significant sum paid back to the Department by Atos. More than 1.35 million incapacity benefit claimants have gone through the reassessment process, and 720,000 more people are now preparing or looking for work. Furthermore, appeals against ESA decisions are down by just under 90% and we are bringing in a new provider. The hon. Member for Leeds West pressed me about the new provider, so let me say something about it. We are going through the competition process and companies are willing to bid and compete. In due course, we will announce which companies secure the bid in the end. There will be a new provider.

Now we are doing the same to drive down the ESA backlog, which has fallen by 100,000 in the past few months—it is now about 688,000 and falling further. That is a good start, but I understand that there are concerns and issues that people want to raise. [Interruption.] I thought that somebody at the back wanted to intervene.

Chris Bryant (Rhondda) (Lab): You’re begging them to intervene.

Mr Duncan Smith: I do not need people to intervene on me; the hon. Gentleman makes enough noise for all of them. One thing I do know is that he needs to listen more and talk less.

We made the deliberate choice to introduce PIP in a controlled and phased way. [Interruption.] It is good fun being opposite the hon. Member for Rhondda (Chris Bryant); one does not need much of an audience with him sitting there.

We have taken the right approach. On PIP, the NAO said, “The Department has learnt from the controlled start in April 2013…the MPA identified the controlled start as a positive way to implement the programme and reduce the risks”. As I said, the delays faced by some people are unacceptable, and we are committed to putting that right. Already we have introduced a dedicated service to fast-track terminally ill people, and that is down to around 10 days and below. The Public Accounts Committee has said that too many people have waited longer than six months. By the autumn, no one will be waiting longer than six months, and before the end of the year, no one will be waiting for more than 16 weeks, which brings things back into line with where we were expecting them to be.

Fiona O'Donnell (East Lothian) (Lab): I am sure that the Secretary of State would not wish to mislead people watching this debate. Will he clarify what he means by “terminally ill”—somebody who is terminally ill, or somebody who has to die by a certain date?

Mr Duncan Smith: It is the definition given by the consultants who refer the people in question to the programme. That group will be seen and dealt with within the 10 days. That is the definition.

I repeat that by the end of the year those on PIP will not be waiting for longer than 16 weeks.

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I say to the hon. Member for Leeds West, who made a poor speech, that my Department has a proven track record of delivery—[Interruption.] In that case, perhaps she will answer this question, which has been raised before. A little while ago, in March, she is recorded as having said that, left to her, “all the changes that the Government has introduced” in welfare reform would be reversed “and all benefits” could be and should be “universal”. She has been asked this question before. It was a quote. I will give way to her if she wants to deny it.

Rachel Reeves indicated dissent.

Mr Duncan Smith: There we have it—we now know what the policy is.

Rachel Reeves: The right hon. Gentleman did not read out a quote and I deny what he said.

Mr Duncan Smith: I have to say to the hon. Lady that it is reported that she said that “all changes that the Government has introduced” in welfare could be reversed and “all benefits can be universal”. That is what she is quoted as saying. I will send her the quote if she likes. This is important.

Rachel Reeves: As I said, what the right hon. Gentleman read out is not a quote of what I said and I deny that that is my view.

Mr Duncan Smith: In that case, will she explain why she was saying—to a group called the Christian socialists, I think—that all the changes that the Government have introduced to welfare can be reversed and all benefits can be universal? That is what she said.

Stephen Mosley (City of Chester) (Con): To be fair to the hon. Member for Leeds West (Rachel Reeves), she spent 30 minutes not saying what she was going to do, so she may not have said what she was going to do then either.

Mr Duncan Smith: This is what is so interesting. Over the weekend, the lid was lifted on what is really going on. [Interruption.] They do not like this, because it is the truth. The hon. Member for Dagenham and Rainham said of the Opposition employment policy announced the other day:

“We managed in the political world to condense it into one story about a punitive hit on 18 to 21-year-olds around their benefits. That takes some doing, you know, a report with depth is collapsed into one instrumentalised policy thing which was fairly cynical and punitive.”

He was making the point, I think, that the Opposition are failing to say what they really want to do. The hon. Lady let the cat out of the bag when she made it clear that the Opposition want to spend more on welfare and to reverse our changes to the welfare system.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): Perhaps we could get back on track and scrutinise the performance of the Department for Work and Pensions. Will the Secretary of State confirm when he anticipates actually delivering 1 million people on universal credit? Will it be by 2191? At the current rate, it will be.

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Mr Duncan Smith: The hon. Lady asks that ridiculous question time and again. We are rolling out in accordance with the plan. Universal credit will have rolled out by 2016, delivering massive benefits. It would be good if the hon. Lady said at any stage that she wanted to support universal credit. Her party has voted against it and all the savings.

My Department has a proven track record of delivery. Nothing illustrates that more clearly than our employment reforms. Universal Jobmatch has transformed how almost 7 million jobseekers look for work, with an average of more than 4 million daily searches. Work experience has been one of the Government’s great successes for young people, with half of participants off benefits at a 20th of the cost of the future jobs fund. The Work programme has been better than any Labour programme. It helps more than any programme before, with half a million people having started a job and 300,000 having moved into lasting work. That was not the case under Labour. We are confident that the programme’s performance will improve, and the payment by results de-risks taxpayers and ensures value for money.

What we are seeing is remarkable. Unemployment is down by 347,000 on the year, the largest annual fall since 1998. Long-term unemployment is down by 108,000 on the year—again, the largest annual fall since 1998. Youth unemployment is down among those who have left full-time education; it is now at its lowest since 2008, down 94,000 on the year.

Penny Mordaunt (Portsmouth North) (Con): The Secretary of State is making excellent points about the Government’s reforms and the maladministration under the Labour party. What about the other issue of the maladministration of pension credit? Under the last Labour Government, pension credit in my city was under-claimed to the tune of £10 million a year.

Mr Duncan Smith: My hon. Friend makes a huge and important statement. The inefficiencies and chaos under Labour were so great that the welfare system was haemorrhaging money. There was a 60% increase in welfare spending—the party that really presided over chaos and malfunction is the Labour party.

Before I get on to some of Labour’s spending commitments, I should say that the hon. Member for Leeds West said to the Minister, my right hon. Friend the Member for Hemel Hempstead (Mike Penning), that she had never had a letter from him. She has had many. In future, instead of making allegations, she might like to read her correspondence.

With a little over a year to go to the general election, this is the choice facing the electorate. On the one hand, there is the party that in government wasted £26 billion on botched IT programmes and lost £2.8 billion on catastrophic tax credit implementation, £500 million on scrapped Child Support Agency IT and £140 million on the axed benefit processing replacement programme in 2006. In opposition, the party has opposed every single measure of welfare reform and it would turn back the clock to reverse our progress—back to more borrowing and spending. Reversing the spare room subsidy would cost £1 billion over two years. The unfunded jobs guarantee has costs underestimated by £0.6 billion in the first year and £1.7 billion in future years. Skills training for all 18 to 21-year-olds below A-level would

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be hugely expensive given that 92% of all those not in education, employment or training do not even have GCSE numeracy skills. Paying older workers higher JSA would mean, because under-25s are already paid less, that money would have to be taken from those with lower contributions such as young people and carers. The welfare party has learned nothing.

Ian Swales (Redcar) (LD): At one of my first Public Accounts Committee hearings in 2010, the permanent secretary of the Department said that, with the systems he had, he could not get losses through fraud and error much below £1 billion. Does the Secretary of State think we can do better?

Mr Duncan Smith: We have already saved over £2 billion on fraud and error. We continue to drive that process forward, and there are more savings to be made. We have done remarkably well considering what we were left by Labour, which, as far as I can make out, did not even bother to try to save any money on fraud and error.

Julie Hilling: Can the right hon. Gentleman explain why only one in 20 disabled people is getting work? He says that the number of people on benefits has dropped. How many of them have stopped claiming because of sanctions? Can he at least tell us what is the quality of the jobs that people are getting? How many are unpaid, how many are zero-hours contracts, and how many are part time?

Mr Duncan Smith: In fact, we have been more successful in getting disabled people back into work. The proportion of disabled people in work is now rising as a result of what we have been doing. On the back of the work capability assessment, some 700,000 people will now be seeking and finding work.

Michael Connarty (Linlithgow and East Falkirk) (Lab): I hope to be able to raise this matter again if I am called to speak. Why did the Treasury have to borrow £13.5 billion extra above its target? The reason given was the fall in income tax receipts. People are now living on poverty wages—they are being forced into what the Secretary of State calls jobs, but they do not pay a wage that they can live on.

Mr Duncan Smith: Fond as I am of the hon. Gentleman, the reality is that this coalition Government have raised the tax threshold, meaning that 26 million people now pay less tax and millions have been taken out of the lowest tax band altogether. That is a huge statement.

Anne Marie Morris (Newton Abbot) (Con) rose—

Mr Duncan Smith: I will give way one last time and then I must finish.

Anne Marie Morris: The Secretary of State should be truly proud that self-employment is now much more on the agenda of those going through jobcentres. When I did a review with the all-party group on micro-businesses, only half the job centres and Work programme providers were able to help people into self-employment. That is not the case any more. In my constituency, unemployment

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is down in the past 12 months by 33%, and many of the people coming into work are setting up their own businesses.

Mr Duncan Smith: My hon. Friend is absolutely right. By the way, the situation is the same for every Labour MP. They do not want to talk about the improvement in employment or the fall in unemployment. They do not even want to talk about the successes in getting the long-term unemployed back to work, on which we have done so much.

We have got Britain back to work. There is record high employment, with three quarters of the rise over the past year accounted for by UK nationals. Half a million people have started a job through the Work programme. We have seen the creation of nearly 50,000 new businesses through the new enterprise allowance. There is the lowest rate of economic inactivity on record. There is the lowest rate of workless households on record. We have a proven track record of delivery. Departmental baseline spending is down by £2 billion. The welfare cap is bringing £120 billion under new controls. Welfare spending is falling as a proportion of GDP. Reforms are set to save £50 billion. This is a record we can all be proud of—one of success, unlike Labour’s waste and failure.

6.13 pm

Dame Anne Begg (Aberdeen South) (Lab): We have to remember three things about welfare reform: first, it is fiendishly complicated; secondly, there are always unintended consequences; and thirdly, enacting such change takes a very long time and can often cost quite a lot of money. It is fiendishly complicated because people do not lead simple lives; they lead very complex lives. In modern Britain, we have very complex family circumstances. The welfare system has grown up over the decades with things being added and, very often, not being taken away because to do so might result in unintended consequences.

The unintended consequences arise because whenever any Government propose change, there are always things that they do not think about. I often think of welfare reform as being like a big blancmange—when you press down on one bit, something pops up somewhere else. For instance, when the Government decided that they were going to raise the pension age, I am pretty sure they did not think of the unintended consequences for the group of women born in 1953 or 1954 who have found that their state pension age has risen by almost two years. The Pensions Minister, who is in his place, has tried to get round that particular unintended consequence, but not with much success, and that group of people feel very aggrieved.

Even more complicated is universal credit, with six pre-existing benefits going into one benefit. It seems so simple to say, “Let’s have a single working-age benefit,” yet it is incredibly complicated. As soon as we start putting things together, as in universal credit, we get unintended consequences when we start to introduce things such as free school meals or child care and suddenly the disregards and tapers that were in the original plan seem to be not as good or generous as they might have been.

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It takes a great deal of time to implement any change. That is why, over the years, previous Governments have looked at one area of welfare reform at most, and tackled that one area, only to find that it takes much longer than expected. When the previous Labour Government introduced employment support allowance and the work capability assessment, they thought that perhaps it could start to migrate two years into the process. Part of the problem in this area is that when the coalition Government came into office in 2010, they speeded up the migration process at a time when it was not working properly for new claimants. That is exactly what we see again with the introduction of the personal independence payment that is going to replace disability living allowance. The Secretary of State keeps saying, “We want to take time to get things right.” Well, there is taking time to get things right and there is a sensible speed of implementation.

The problems with ESA started when we started to migrate people from incapacity benefit to the new benefit. Those problems should have been solved for new claimants before the migration started. The Government have decided to slow down the migration of people from DLA to PIP for the very good reason that they have not got PIP working for new claimants. Part of the problem was that instead of doing a proper pilot so that there was a cohort who had gone through the whole process before it was rolled out across the country, the Government allowed only a month before rolling it out. As a result, not one single individual had gone through the whole process, so the Department did not know how long each assessment was going to take.

Reform takes a long time and needs to be done in stages. It is hard enough for any Government and any Department to implement change in one area of welfare, but this Government and this Department are trying to implement it in several areas. The problem is that they have bitten off more than they can chew. At last Monday’s DWP questions, I asked about the various backlogs. The Secretary of State said today that the backlog of those awaiting assessments for employment support allowance—work capability appointments—had fallen to 688,000. It was 700,000 at the beginning of last week, so it is certainly falling, but it is still a huge number and a huge backlog.

The Government have bitten off more than they can chew because they have forgotten the three basic lessons about welfare reform: it cannot be done easily, it cannot be done simply, and it costs a great deal of money.

6.19 pm

Maria Miller (Basingstoke) (Con): It is a great privilege for me to be able to contribute to this debate, having worked in the Department for a number of years with my right hon. Friend the Secretary of State and the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). I believe these reforms are one of the most important parts of the plan for this country’s long-term economic recovery, because they are helping to recreate the environment for work and enterprise, rather than disempowering people and writing them off to a lifetime on benefits.

I listened with disbelief to the hon. Member for Leeds West (Rachel Reeves). I expected a slightly more thoughtful contribution from her, so I was disappointed.

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These reforms were ducked by the Labour party when it was in government for 13 years. It had 13 years to put things right and missed the opportunity. I think it was clear to many Labour Members that things could not continue as they were. Indeed, as my right hon. Friend the Secretary of State has said, the safety net had become a trap. Labour saw that, but it simply did not have the courage to act. My right hon. Friend does have the courage to act and it is he and his colleagues who will make progress.

It is this Government who are creating the environment that has allowed for 2 million more people to be employed in the private sector since the election, but it is the welfare reform programme that has helped to make sure that the jobs that have been created can be taken by the people who were on benefits. Some 3.6 million people have been helped off jobseeker’s allowance, including through the Work programme. The benefit cap has also encouraged more people to take up those new jobs, and universal jobmatch is enabling 4 million daily searches.

The hon. Member for Leeds West is right to say that this Government inherited significant challenges, but if we are going to succeed we have the right team to make it happen. They are not just taking forward a set of practical measures, as outlined by the Chair of the Work and Pensions Committee; they are also overseeing a cultural change. My right hon. Friend the Secretary of State has not been afraid to talk about the role of work and its importance to families, as well as the corrosive effect of unemployment and intergenerational unemployment. The Labour party was perfectly prepared to sit back and see a generation of people trapped on long-term benefits. That is entirely inexcusable. It is this Government who want to consider what people can do, not simply disregard them for what they cannot do.

This debate would benefit from a few more facts being put on the table, particularly the fact that the overall spend on disability benefits will have been higher in every year up to 2015-16 than it was in 2010. My colleagues on the Front Bench are continuing to spend some £50 million a year to support disabled people. Under universal credit, the expenditure will increase by some £300 million. We will not write people off to a lifetime on benefits. We will provide the right support to help them get back into work.

We have not finished the job yet—there is a great deal more to do—and we will always have to make choices about the way that money is used, but we want to make sure that it is used for those who need it most. I am most pleased that that continues to be this team’s philosophy.

I am particularly concerned about the position in which many young people find themselves when they enter the job market. If we look at countries such as Spain, we see that the level of unemployment for many young people is pretty scary. Under Labour, youth unemployment increased by some 24%, but it has fallen under this Government. We should be proud of those figures and we should continue to make sure that they move in the right direction.

The future jobs fund failed so many thousands of young people and cost up to £6,500 per placement, but it simply did not provide young people with the long-term jobs that they wanted and expected. By contrast, when I visited my own local jobcentre recently I heard how, under the Youth Contract, work experience is enabling so many young people to get their foot in the door, to

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prove themselves and to convert the experience into a proper long-term job. That is the sort of programme we need more of, and I commend my colleagues for the work they are doing.

Chris Bryant: Will the right hon. Lady give way?

Maria Miller: If the hon. Gentleman will forgive me, I will not; there is a time limit.

I urge my colleagues on the Front Bench to make sure that we do more to support more businesses to take on young people and give them the sort of opportunities I heard about at my local jobcentre in Basingstoke.

Time is far too short for me to make all the points I would have liked to make. The hon. Member for Leeds West said that this debate was about how we treated our fellow citizens, and I agree with her wholeheartedly. It is right that every one of our constituents is valued for who they are. It is important that we view them according to their abilities and do not simply write them off to a lifetime on benefits.

6.25 pm

Natascha Engel (North East Derbyshire) (Lab): I am sorry that the Secretary of State believes this debate is cynical and nonsense, because I have received more correspondence on, and more people have come to see me about, this single issue than any other over the past two years. That cannot be unique to North East Derbyshire; it must be true across the country. The experiences of my constituents and hundreds of thousands of others across the country suggest that the DWP and its programmes are in serious trouble. Given that more than 700,000 people are still waiting for work capability assessments and that the length of delays people are experiencing are pushing them into destitution, we really are getting into trouble.

This cannot only be about saving money. I said as much when the previous Labour Government were in power and I say it again in opposition. It has to be about finding work for those who are able to work and looking after those who are not able to work. It is really important that we prioritise that, rather than saving money from the DWP budget, because even under those terms the Office for Budget Responsibility has said that the cost of the employment support allowance has risen since December by a shocking £800 million. It is very important that we focus on people.

It is also important that we concentrate on language, because we are sometimes in danger of talking about deserving and undeserving people on benefits and in poverty. Most people who are on benefits and social security are desperate to work. They are looking as hard as possible for work and they should not be called scroungers and skivers simply because the jobs are not there for them.

A constituent of mine is registered blind and has been on a Work programme for the past two years. He was given plenty of help to find work but could not find any. After two years, he has returned to the jobcentre, but he is no longer being given the support he needs as a blind person who is desperate to get into work. This man is not a scrounger—he is desperate to find work.

By the same token, Jamie Thompson, who is paraplegic, has been coming to see us for two years. He is not able to work—he is paralysed from the chest down—but he

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is being called in for face-to-face interviews every three months. Jamie knows how to contact his MP’s office and how to work with welfare rights, but it is wrong that he is constantly being called in. His condition will not change and his medical records will be the same every three months. I do not understand why the system is pulling Jamie in when it needs to focus on other things.

The last person I want to talk about is Andrew Birks, who has a 15-year-old daughter so severely disabled that she needs around-the-clock care. Both her parents work—they have always worked, and never claimed benefits—but Ella has now had her disability allowance withdrawn, which has pushed her parents into serious financial trouble. They have already waited three months for an appeal, and there is still absolutely no sign of it.

These are the sort of individual cases that I am getting. I have loads of them, and each demonstrates that there is a failure in the system with the DWP. As the Chair of the Work and Pensions Committee, my hon. Friend the Member for Aberdeen South (Dame Anne Begg) said, it is really complicated: the DWP has taken on a huge number of programmes, and many of them are just not delivering what they are supposed to deliver.

The welfare state is designed as a safety net to catch people who absolutely cannot help themselves—that is especially true for those with severe disabilities, who just cannot work—but I am really worried that that safety net is being withdrawn under this Government, which is certainly pushing some of my constituents into destitution. Not only my constituents but hundreds of thousands of people are being affected by the failings of the DWP. They cannot wait 10 months for the next general election; they need help now.

6.30 pm

Mr Mark Harper (Forest of Dean) (Con): In the short time available, I want to make a few brief points. The first is that from listening to Labour Members one would never have thought that they had a record. In rolling out universal credit, my right hon. Friend the Secretary of State is taking the right approach. It is slower than we would originally have liked, but taking a careful approach has a lot to recommend it. When we were in opposition and the Labour party rolled out tax credits in a big bang, constituents of mine who needed the money were given the wrong amount and had to pay it back, so they were getting to the point at which they were pleading for the tax credits to be taken away. Taking a careful approach is very sensible. If she has not already done so, I hope that the shadow Secretary of State takes up my right hon. Friend’s offer to go to a jobcentre that is rolling out universal credit to see how the system is operating in practice. That would be very welcome.

It is worth saying that my right hon. Friend the Prime Minister has been right to allow my right hon. Friend to be the Secretary of State for a significant period so that he can see the reforms through. I looked at what happened under the Labour party: in the nine years that the Department for Work and Pensions existed, there were eight Secretaries of State. To be fair, one or two Secretaries of State tried some reforms, but they were barely in the job long enough to think about them or to design policies

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before they were moved on. It is to this Government’s credit that we have allowed Cabinet Ministers to be in an office, come up with policies, implement them, deal with the difficulties—there will inevitably be some in making the largest welfare reform programme for decades—and see them through. My hon. Friend the Secretary of State discussed and was passionate about the issues before we entered government, and it is very welcome that he has had the chance to see the reforms through.

To turn to my constituency, I want to draw the House’s attention to the benefit cap, which the Labour party opposed. I must say that the only feedback I have ever had in my constituency is that we set the benefit cap too high. In a constituency where the average individual salary is only £24,000 to £25,000, my constituents think that £26,000 net income, which is equivalent to £35,000 gross, is quite generous. Families who work hard for many hours to support themselves do not see why other people should take away more money from hard-working taxpayers than they get for working. The cap is the right policy, and it is to the Labour party’s discredit that it opposed it instead of supporting us in doing what is right. I suspect that many Labour voters support the benefit cap, and think that we are right and that the Labour party is wrong about the policy.

On the difficulties of assessments, I have checked with my office to make sure that I can speak with the facts. On the employment and support allowance, that difficult welfare reform was started by the Labour party with, to be fair, our support. When the Labour Government tried to do the right thing, we supported them, but Labour Members have been sorely lacking in such a cross-party approach. I am afraid that the instant they were on the Opposition Benches, any pretence of being interested in welfare reform fell away. I do not know what the reason was—whether it was their union paymasters or just opportunism—but they have never supported anything that we have done, despite our more cross-party approach.

The main issues about assessments are related to the performance of Atos. As I said in an intervention, the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Hemel Hempstead (Mike Penning), who has responsibility for disabled people, looked into the issues I raised, and wrote thoughtful and considered replies, which I shared with local citizens advice bureaux, and we have managed to speed up the assessments for my constituents. However, I must say that the problem was inherited from the Labour party. The contract was very poor. I know that Ministers took action—

Several hon. Members rose—

Mr Harper: I will not give way, because I am very limited on time.

I am very pleased that Ministers took thoughtful action so that the contract could be ended with Atos having to pay compensation to the Department and to the taxpayer, rather than the taxpayer having to compensate Atos.

Dame Anne Begg: Will the hon. Gentleman give way?

Mr Harper: I will give way to the Chair of the Select Committee.