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Westminster Hall
Wednesday 21 January 2015
[Sir Roger Gale in the Chair]
Personal Independence Payments
Motion made, and Question proposed, That the sitting be now adjourned.—(Damian Hinds.)
9.30 am
Teresa Pearce (Erith and Thamesmead) (Lab): It is a privilege to have this debate under your chairmanship, Sir Roger. I am pleased to see other Members here today to discuss such an important issue. I will try to keep the length of my speech to a minimum since I have several questions that I would like the Minister to respond to. I will start by reflecting on what a personal independence payment is and what it is meant to do.
The Welfare Reform Act 2012 legislated for the introduction of personal independence payments to replace disability living allowance. PIP is a benefit for people with long-term health conditions or impairments, whether physical, sensory, mental, cognitive, intellectual, or any combination of those. It is intended to provide support for the disabled people with the greatest needs who face the greatest challenges to remaining independent and participating fully in society.
The PIP assessment measures the impact of a person’s health condition or impairment on their ability to participate, rather than focusing solely on the health condition or the impairment itself. PIP is paid as a contribution to the extra costs that disabled people may face to help them lead full, active and independent lives. To put it more simply, it is support for people who would trade anything to have the privileges that we too often take for granted: our work choices, our life choices and our independent living. So PIP is potentially a vital mechanism to help some of the most vulnerable and disadvantaged members of our society, yet like so much of the benefit revolution, PIP’s implementation has been beset by problems and has caused additional hardship, anxiety and uncertainty to our vulnerable and disadvantaged friends.
There are key dates in the history of the implementation of PIP. From 8 April 2013, the Department for Work and Pensions started to replace disability living allowance for people aged 16 to 64 with PIP. On 8 April 2013, PIP was introduced, in a controlled start, for new claims from people living in a limited geographical area in the north-west and part of the north-east of England. On 10 June 2013, PIP was introduced for new claims for the remaining parts of Great Britain. From 28 October 2013, the DWP started to invite DLA claimants living in certain areas to claim PIP.
So how is it all going? Appearing before the Select Committee on Work and Pensions on 10 September 2014, the Minister for Disabled People said:
“It is fair to say that, yes, in terms of the delays to the assessment process it is not in good shape...I absolutely accept there is a problem; it is literally my top priority and I have been spending a lot of time working on it since I was appointed on 15 July”.
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I and my fellow members of the Work and Pensions Committee were pleased to hear that the Minister had made it his top priority.
How many disabled people are being affected? Last December, the DWP published a third set of official PIP statistics. They showed that between April 2013 and October 2014 some 669,200 claims for PIP had been submitted, but only 382,000 decisions had been made. That leaves 287,200 disabled people stuck in a backlog. However, on 15 December in the other place, Lord Bourne of Aberystwyth seemed to be in denial about that figure. He said:
“My Lords, I dispute those figures. The backlog stands at 107,000 at the moment, and 65,000 claims are being processed every month.”—[Official Report, House of Lords, 15 January 2015; Vol. 758, c. 894.]
Will the Minister clarify those figures and explain why there are two different numbers? Whatever the number is, there is still a long way to go.
The figures are simply dry statistics. They do not tell us about the real-life consequences of delay. For the individual, they translate to anxiety and hardship at a time when they are at their most vulnerable and ill-equipped to cope. I have personally spoken to many constituents who have been waiting for six months—in some cases, a year—for a home assessment. They have often taken every possible step to ensure that information is submitted on time, yet they are kept in the dark about their claims. They do not know who to call. When they get through to someone, they are not given a time scale. They replace the receiver feeling as ill-informed as they were at the start, and that is unacceptable.
As MPs, we all have our postbags. I was contacted in October 2014 by the mother of a young disabled woman living in my constituency. She works part time as she cares for her daughter. Her daughter had been waiting for a home assessment since August 2013. She told me that they had been threatened with eviction because money was so tight. She was upset, desperate and scared. She said that her daughter had received no update on her application since she had called in September 2013 to check that the claim had been received.
I contacted Atos and was told that a call had been made to my constituent in May 2014 to arrange a home assessment, but the adviser was told that the constituent did not live at that address. As a result, the daughter’s case had been withdrawn and closed without her knowledge. It transpired that the Atos adviser had called the wrong number. Atos blamed the DWP, but it was the PIP office that had made a mistake when typing the number into the system. It got the wrong number and closed the case.
Such things do not happen only in my constituency. I have heard from Malcolm, who lives in Southwark and is 55. He applied for PIP in March 2014 when he was diagnosed with cancer, and he has still not had an assessment. The delays have affected his ability even to travel to and from hospital for appointments.
Bernadette lives in Wales. Her son is 15 and has autism, and he was receiving DLA. In November 2014, she had a letter from the DWP about transferring to PIP in April 2015. A home visit was set for 16 December. The son stayed off school for the day, but no assessor turned up. The visit was rearranged for 19 December. Another school day was missed and again no assessor
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arrived. A home visit finally happened on 23 December. Bernadette was assessed as being able to handle finances for PIP, but no date was set for the PIP assessment. She was told it would be any time within the next 12 to 18 months. Despite there having been no assessment, the January DLA payment was stopped. She was knocked out of the system, yet no PIP assessment date had been set. The family were thrown into financial difficulties and are now even worse off, because they face bank charges for being overdrawn.
It is not only MPs who are raising such issues. In December 2014, Macmillan Cancer Support stated that the system for PIP is
“riddled with delays...it remains an absolute disgrace that thousands of people with cancer have been forced to wait six months or more...to find out whether they were even eligible...A recent survey of Macmillan...advisers reveals shocking statistics: nearly a third...know of someone who has died while waiting for their benefits, almost one in two...have come across patients who cannot afford to feed themselves properly, and around three in five...say delays have left people unable to heat their homes....No one should have to face these situations simply because they have been diagnosed with cancer.”
Parkinson’s UK conducted a survey that showed that the people it supports have been waiting, on average, longer than six months for a PIP assessment. More than half report an average wait of nine months or more. According to the London-wide anti-poverty charity the Zacchaeus 2000 Trust, commonly known as Z2K, such lengthy delays have a severe impact on its clients in a number of ways. It says that almost all its PIP clients rely on state benefits as their only source of income. Because PIP is paid in arrears, claimants who do not have other sources of income experience severe impoverishment as a result of delays. Many have turned to food banks. That has a knock-on effect, because PIP often acts as a gateway to other benefits and entitlements.
Against that backdrop has come Paul Gray’s independent review of PIP assessment. In the foreword to his review, Paul Gray recognised the limitations on what he could review. He stated:
“The timing for Independent Reviews of the Personal Independence Payment...assessment...was laid down in the 2012 Welfare Reform Act. In accepting the Secretary of State’s invitation to conduct this first Review I was conscious that, with implementation being less advanced than originally planned, this is too soon to draw definitive conclusions on many aspects. The evidence is simply not yet available to do so reliably or robustly.”
That in itself is an indictment of the all-too-familiar lack of implementation. It is a good idea to review what is in legislation, but if the thing being reviewed has not been implemented properly, there is nothing to review. Paul Gray continued:
“Equally it was clear that the primary focus of early comment and attention on PIP has been the unfortunate reality of long delays and backlogs in the assessment process. These have had a major impact on many claimants for PIP so far. It is essential for remedial action to be completed and to avoid similar issues recurring in the future. I have taken it as given this will be done.”
The findings and recommendations of the review include short, medium and long-term measures and fall into three main themes: the nature of the claimant journey; the way in which further evidence is collected; and the overall effectiveness of the PIP assessment. I
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am interested in what the Minister has to say about the review and its recommendations and what his Department intends to do in response.
Turning to the claimant journey, there can be few MPs who have not encountered numbers of constituents who have found the claiming and reassessment process extremely stressful. Impacts can range from a lowering of self-esteem and dignity to an increase in anxiety and a worsening of mental state. It is disappointing that the review did not thoroughly address the effect of interventions, which involve reassessing people for PIP before their award has even expired. Given the significant struggles that people face to be awarded PIP in the first place, it is of some concern that some recipients are already being reassessed in such a way. Interventions place unnecessary pressure on claimants and assessment providers, who already struggle to meet demand. Interventions also suggest that the DWP does not trust the initial decision delivered by its own assessment process.
The first independent review of PIP has recognised some of the serious flaws and failures of the new system and provides the DWP with the opportunity to address those systemic failures as a matter of urgency. Integral to implementing the recommendations of the report, however, will be dealing with the backlog to ensure that all claimants are provided with the best possible service. For many people, PIP delays are causing their conditions to worsen and having an impact on the quality of their lives. That cannot continue, so where areas for improvements in the claimant journey are identified, it is vital for the DWP to respond positively.
I have nine questions for the Minister about the review recommendations. First, the review suggested that the DWP should make better use of digital technology, and that a website allowing claimants to track the progress of their claims would improve communication. Does the DWP have plans to introduce a tracking system that can be accessed by claimants?
“potential for sharing information already held by the Department and across the wider public sector should be explored”
to improve the evidence-gathering process. What are the DWP’s plans to improve the additional evidence-gathering process, and what is the time scale?
Will the Minister confirm the policy intent behind interventions, and how will the Department ensure that they are not simply a repeat of the reassessment process before a claimant’s award has ended? What assessment has the DWP made of the impact of interventions on the existing backlog of PIP claims? The report stated that the Department should:
“Ensure the consistent application of existing guidance for health professionals on reliability and fluctuating conditions.”
How and when will the DWP reinforce guidance on assessing fluctuation to ensure that all assessors are adequately addressing that issue? Furthermore, how will the DWP measure assessor performance in addressing that issue?
I understand that the Government plan to publish data on clearance and waiting times from March 2015. Has the DWP set a precise date for the publication of those data? In light of the review, will the Minister confirm whether the DWP intends to proceed with the main reassessment programme in October 2015, and
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whether the backlog of claims will have been cleared by then? Finally, when will the DWP publish its response to the independent review?
I hope that the Minster can answer those questions, and I look forward to revisiting some of the debate a week today when he appears before the Select Committee on Work and Pensions to look at this issue.
9.43 am
Dr Eilidh Whiteford (Banff and Buchan) (SNP): I congratulate the hon. Member for Erith and Thamesmead (Teresa Pearce) on securing the debate. She has been assiduous in highlighting the impact of Government policies on disabled people, including the introduction of the personal independence payment. The debate is timely given last month’s publication of Paul Gray’s independent report.
My own experiences with the introduction of PIP have not been happy. Some months after the new system was first introduced, a number of constituents got in touch with me regarding the interminable delays that they were experiencing in accessing the support to which they were entitled. All those people had been waiting more than six months for an assessment by the time they got in touch with me; some had been waiting more than nine months and in one case a person took more than a year to get PIP.
The impact that that was having on those people and their day-to-day lives is worth restating. The people making the claims were all living with long-term disabilities or health problems. For all of them, their ability to work, socialise or participate in day-to-day activities was affected to some extent. For some, their conditions prevented them from working altogether, or even from going out without considerable support from families or friends.
A six to nine-month delay in dealing with those people’s PIP application caused not only unnecessary stress, uncertainty and anxiety, but real financial hardship for some and serious cash-flow problems for others. In some cases, the delays also put a financial strain on relatives, who felt that they had to step in with money to pay additional costs associated with the loved one’s disability. In other words, the inordinate and unacceptable delays in the process actually reduced the personal independence of the claimants.
I am conscious that we, as MPs, only see those cases brought to us. I wonder to what extent what we see in our constituencies is the tip of the iceberg. How many more people affected by the policies are also experiencing similar levels of delay, but have not come to an MP to move the process forward? I pressed Ministers on such issues at the time, and steps have since been taken to deal with the backlog, but I noted that Paul Gray said in his review:
“Whilst steps to resolve delays and backlogs are clearly necessary they are not of themselves sufficient and there are other underlying issues to address.”
The debate today is an opportunity to address some of those underlying issues.
I have read the report, and Gray makes various observations about PIP and a number of recommendations, mostly related to the application process. Given that today is the first opportunity that we have had to
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debate PIP since the publication of the report, I am looking forward—like the hon. Member for Erith and Thamesmead—to what the Minister has to say. I think it is fair to point out that the independent review is pretty critical of claimants’ experiences of claiming PIP, aside from the delays, and has made a range of practical suggestions about how the journey could be improved.
I also note that Gray draws attention to the need to understand better how the process is working for people with mental health problems and for people with learning disabilities. There have been serious shortcomings in the work capability assessment which, like the PIP assessment, is made on the basis of functional impact on people with such types of disability. I have had extensive dialogue with Ministers on that in connection with the WCA, so the fact that concerns flagged in the report are similar for PIP makes me wonder whether the type of assessments are suitable for those claimants. Paul Gray points out that such assessments are “not a precise science”—there is a lot of subjectivity in the process—and that that inevitably disadvantages folk whose conditions are less visible, which fluctuate, or which people find hard to communicate. Some of the recommendations that he makes about exploring how there might be greater input of information and evidence from clinicians mirror the kind of suggestions that health care advocacy groups have been making in relation to the WCA, so I hope that the Government will listen, take that on board and look closely at how improvements might be made for the claimants.
One of the issues that the independent review explicitly does not address in detail is that of the contractual arrangements, which have been a matter of wider public concern and merit some scrutiny. I am conscious that responsibility for PIP is one of the policy areas that the Smith commission has recommended be devolved to the Scottish Parliament. Draft proposals are due to be published later this week, and I await them with great anticipation. Given the serious problems with implementation of PIP so far, I would welcome the opportunity to improve the policy in the Scottish context and to make the changes necessary to deliver a workable system that supports disabled people to live dignified, independent lives.
Honest and rigorous evaluation of the existing scheme is therefore essential. I heartily support the recommendations in Paul Gray’s report on better, more detailed and more robust evaluation of the PIP implementation to date. Gray highlights the lack of evidence available and how that inhibited his ability to conduct the independent review. That is all the more important as we are looking to devise a new and improved policy approach, so we need the evidence for what has been problematic in the PIP arrangements.
The Government have not covered themselves in glory as far as the implementation of PIP is concerned. It has been beset by problems, but as a replacement benefit for the disability living allowance PIP is important, enabling people with serious disabilities and health conditions to participate in society, to get around, to get to work, to go shopping and to socialise with friends—activities that able-bodied people take for granted. The benefit promotes independence and counters some of the disadvantages faced by disabled people. The Government need to do an awful lot more to make it work.
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9.49 am
Mrs Emma Lewell-Buck (South Shields) (Lab): It is a pleasure to serve under your chairmanship, Sir Roger, and to follow the hon. Member for Banff and Buchan (Dr Whiteford), after the excellent introduction to the debate by my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce).
This Government have presided over a miserable few years for those who need to turn to the state for help. Those who do not find the door slammed in their faces still have to deal with the incompetence at the DWP that has led to benefit delays of as much as a year in some cases. Those people are genuinely terrified of what the future holds for them.
The Gray review echoes a lot of the concerns that Opposition Members have been raising for some time now, along with the hardship that the problems have caused for our constituents. But the review does not go far enough. My constituent Mr Mark Douglas has Parkinson’s, and applied for PIP in November 2013. After two months he had heard nothing from either the DWP or his assessor. When I chased Atos, it said it could not confirm an assessment date. It took persistent chasing from Parkinson’s UK and me on Mr Douglas’s behalf to get an appointment scheduled at the end of January, nearly three months after he had begun his claim.
It took a further three months and numerous letters for Mr Douglas to get a decision. All the while he had no updates from his assessor or from the DWP. The replies I was able to get from the Department were so vague as to be completely useless. When I asked when Mr Douglas would be notified of the DWP’s decision, the response was:
“We aim to make and notify decisions on most cases within 3 weeks. However, it may take less time than this, or longer.”
In other words, the Department was completely clueless. When I raised another constituent’s delay with the Prime Minister, he admitted it was unacceptable, but that was, sadly, nine months ago, and PIP claimants are still experiencing the same unacceptable problems. When on earth are the Government going to get a grip on this issue?
The overall PIP journey is an unpleasant one. The quality of assessments is uneven, assessors do not properly understand people’s conditions, communication with claimants is poor and decision letters are often unintelligible. All that will sound familiar to some of us: we have seen it all before from this Government with work capability assessments. WCAs do not take account of people’s fluctuating conditions. They may appear to be physically fine at their assessment but on a different day might be housebound; as a result, those people are wrongly declared fit for work. We are likely to see a lot of inaccurate PIP decisions appealed, just as we have seen one in three decisions on employment and support allowance appealed because of the poor quality of assessments.
The real problem, however, is one of delays. It is disappointing that the review does not go into further detail in that regard. Mr Gray explains in his foreword that he has “taken it as given” that the Government will be taking action to speed up the process, but sadly this Government’s record means that Opposition Members are unable to do the same.
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I hope the Minister will explain what is being done to address the backlog. Will he share the data on the current lengths of time that people are waiting for their PIP claims to be processed? The delays must be the urgent priority, because later this year PIP will be opened up to all existing long-term DLA recipients. Until now, the PIP system has been dealing only with a minority of eligible people, so if it is in chaos now, how bad will things be in October?
Does the Minister not think that it would give a clear message to PIP recipients that the Government actually cared if they decided to halt the roll-out until they got the system right? Should the Government not be setting out clearly the monitoring arrangements they have in place for the estimated 500,000 disabled people who are going to lose out in the transition from DLA to PIP?
The review shows that the experience of claiming PIP is a nightmare. People do not have confidence in the assessments, or in the DWP’s ability to process their claims on time. These individuals are in many cases totally reliant on Government support, but right now the Government are showing that they cannot be relied upon. The DWP has failed to learn the lessons of the Work programme and universal credit, and is presiding over another disaster in PIP, yet it is our constituents who continue to pay the price under this heartless and shambolic Government.
9.54 am
Jim Shannon (Strangford) (DUP): I am grateful for the chance to speak today, Sir Roger. I was wondering whether this sitting of Westminster Hall constitutes a record, as we are on our fourth speaker before 10 o’clock. I will try to prolong matters a wee bit, if I may—I joke.
I congratulate the hon. Member for Erith and Thamesmead (Teresa Pearce) on bringing this matter forward for consideration. It is always good to speak on these issues as they are bread-and-butter concerns for people in my constituency and across the whole of the United Kingdom, as we move from the disability living allowance to personal independence payments throughout the United Kingdom. Since PIP is only in its early stages and has not yet taken over from DLA everywhere, the independent review comes at an ideal time, when improvements can still be made. That is vital.
In a debate on this issue in November, the Minister was able to state clearly with regard to Northern Ireland that welfare reform was not yet in place, but all parties in Northern Ireland have now agreed to bring in that reform, and measures on the reforms will come in during the next two weeks, as I understand from my hon. Friend the Member for East Londonderry (Mr Campbell). After that, PIP will be in place across the whole of the United Kingdom.
This debate is important. The background information that was prepared for it is very detailed. I congratulate those who put it together, as the amount of information has made it easier to assess and understand the issues—for me, at least. In Northern Ireland we have been looking at the two-year process and the delays; the delays are what I want to talk about, because it is important that we in Northern Ireland learn from what has happened in the rest of the United Kingdom and introduce the system in a much better form.
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Mr Gregory Campbell (East Londonderry) (DUP): On the issue of lessons that may be learned, does my hon. Friend agree that in Northern Ireland we are looking at this matter with some trepidation, given that we have significantly higher numbers of people on DLA per head of population? I hope that the Minister will be able to tell us that the information gleaned over the course of the past two years will be of some assistance in trying to minimise the problems and errors that the process has been fraught with.
Jim Shannon: My hon. Friend’s intervention clearly illustrates the issue for us in Northern Ireland. I have a member of staff in my constituency office who now does nothing else but deal with benefit issues and issues with the DLA; I spoke to her this morning to talk over some of the issues. We have a higher proportion of claimants in my constituency and a higher proportion of contact with them. The Government have offered Members’ staff the opportunity to have training on the new system, which my staff took up, and I hope that the information that they have gleaned from the training classes here in London will be sufficient to enable the change to be managed more easily in my constituency. That is one of the really good things that the Government have done.
PIP retains key features of DLA, which is important for a smooth transition. It is not means-tested and is non-taxable and non-contributory. It is intended to provide financial support for disabled people who face the greatest challenges in remaining independent—it is important to help those people hold on to some of their independence. It is payable to people both in and out of work and has two components—daily living and mobility—with different levels of award for each based on the assessed level of need.
The benefit has been changed and improved, however, in the sense that it encourages a move to a more transparent and objective assessment of need, with assessments by health professionals employed by contracted providers. I know that there is a lot to be learned from the past two years here on the mainland, but the PIP system itself is something that most of us can welcome, because on paper it has the potential to make lives better and be better at helping people. However, there have been recurring problems and I want to make some observations about what has happened.
The assessment places a stronger emphasis on the functional impact of claimants’ underlying disabling and medical conditions, not on the conditions themselves. That is vital, because people are affected by conditions in different ways. We see that in my office every week. What one person may need might not be needed by another person, so that is one element that I was happy to see changed; it is one of the new system’s pluses, at least on paper. A points-based system to assess eligibility for awards will also be included, with more regular reviews of eligibility for those receiving awards. Finally, there is greater focus on the needs of claimants with mental health conditions.
Over my last four and a half years as a Member of Parliament, I have become more aware of the needs of people with mental health issues. I do not know what it is about society, or whether it is a combination of things, but more people today have mental health conditions, and we need a system that understands the issue. In
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Northern Ireland, we had a conflict over 30 years, which may have contributed to mental health problems, and we have concerns about that.
Mark Durkan (Foyle) (SDLP): The hon. Gentleman will probably recognise that those of us who have concerns about the implementation of welfare reform in Northern Ireland have raised the particular needs of victims of the troubles, and the issue was raised as part of the Stormont House agreement. They were given DLA awards—perhaps for life—because of their condition, and there was concern about the difficulties they would face in being subjected to reassessment and in perhaps having to retell their story, whether the trauma they carried was physical or mental. We have been assured that we can get extra consideration on that.
Jim Shannon: I thank the hon. Gentleman for that valuable intervention—he is right to raise the conflict over 30 years and its repercussions. Those who have lived with trauma have filled in the forms and been given a definite award, but they have then had to go through it all again. It is important that those points are addressed, and it seems, from the Stormont House agreement and the discussions with the Secretary of State and other Ministers, that they are.
As I mentioned in last November’s debate about PIP, the delays and backlogs are worrying. It is unsurprising, therefore, that the independent review expressed the same concerns. The hon. Members for Erith and Thamesmead, for Banff and Buchan (Dr Whiteford) and for South Shields (Mrs Lewell-Buck) have mentioned the delays, and it is important that they are addressed. As PIP is rolled out, serious delays have occurred, which means that some of the most vulnerable have been left without the help they need for too long. For example, of the 220,300 disabled people who applied for PIP from 8 April 2013 to 31 December 2013, only 34,200 received news of their claim by February 2014. That delay is absolutely unacceptable.
Obviously, that was not good enough, so the review suggested having better and more concise communication. The format of decision letters was claimed to be unclear, confusing and of variable quality. It has been suggested that the letters begin with a clear statement of the decision, followed by the award, payment details, a simpler explanation for the reasons and the next steps. I would definitely support that in my constituency, as we role out PIPs in the next month or so.
A large number of claimants have difficulty understanding reply letters. On more than one occasion, my office has had to relay to them what has been written to help them. It is good that my staff have the understanding to do that, but it would be better if the letters used words that people could understand.
I mentioned in our last debate—this has also been touched on today—my concern over the reliability criteria, which measure whether activities can be undertaken safely, to an acceptable standard and repeatedly. I was pleased that the review recognised that conditions and their impact can often fluctuate over time—people can have changing conditions. Although the review saw examples of good practice, respondents expressed concern over whether the criteria were being applied appropriately. There is an issue about how people are assessed and how measures are put in place.
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In the same way that a condition affects different people in different ways, people’s ability to carry out particular activities can vary. It is therefore difficult to apply the reliability criteria over a set period. However, regular reviews might allow the same tests to be carried out each time, which would help to monitor whether someone had remained the same, deteriorated or, indeed, improved. That, in turn, would mean that fairer assessments and payments could be given than under the system. Provided that the right safeguards are in place, that could be a good idea; if it is done in the right way, it could bring benefits.
The review set out short-term, medium-term and long-term solutions to make PIPs work better. Those include short-term actions to address delays and backlogs before the start of managed reassessment; medium-term actions to improve both evaluation of the accuracy and consistency of award outcomes and the collection of further evidence; and longer-term actions to redesign the PIP delivery model in terms of claimant experience and business effectiveness. In his response, perhaps the Minister can tell us whether changes to make the system better can still be implemented even at this late stage.
Ultimately, I am pleased the review has concluded and can now address some of the main issues with the new PIP model. PIP has the potential to improve on DLA, but it needs to be fairer and more objective, and it must meet the needs of people more than has been the case. I welcome the findings of the review, which will mould a new system that can work better. I hope that its suggestions will be taken on board.
10.5 am
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) on securing the debate, which is certainly timely. Like other Members, I was impelled to come to the debate by the experience I have had in my constituency surgery, where I have seen case after case, week after week, of people suffering from delays in PIP assessments, with all the difficulties that arise from that.
In passing, I should say that I am surprised that there are no Members from the Government parties in the debate. I am not one of those MPs who jump to conclusions as to why Members are not present in debates, or who accuse them of base motives, but it is hard to believe that no constituencies represented by Conservatives or Liberal Democrats have similar problems. I will charitably assume that Government Members have raised these issues with Ministers—I am sure they have—and that they are too embarrassed to come along today because they know they cannot defend the delays and the chaos, and because they would have to mention the types of experience that we have had in our constituencies. People have certainly had a bad experience, and the Government need to address that much more directly and seriously.
Jim Shannon: Perhaps they are away campaigning.
Mark Lazarowicz: Perhaps they are. If they are, perhaps they will hear from people on the doorsteps about some of the problems the Government’s policies are causing.
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Like all Members here today, I have a fat file of cases, and if I were to read out all of them I would take up all the time available to me. However, I want to highlight three cases that demonstrate some of the wider problems affecting the system. The first is that of a constituent who wrote to me just before Christmas, saying:
“I am currently a student nurse who works part time as a chef. As a result of my PIP assessment waiting time I have been forced to sell my house and am unable to claim housing benefits to help towards my rent.
I am epileptic and am unable to work more hours to make ends meet. I am already far into my overdraft and I have been told I have to wait around 26 weeks for my assessment.”
Obviously, I took up that case, and things were moved forward a little. However, that is an example of how people’s lives are being turned upside down by the delays all of us experience in the system up and down the country.
Another case, which is quite interesting for a reason that will become apparent, involves a constituent who told me that he had made a claim for PIP in February 2014, following a heart attack in November 2013. In January this year, he told me that a decision had still not been made on his application. He is on a heart transplant list. In the meantime, he has a pacemaker, which is due to be replaced in Glasgow, but he is worried that he will not be able to meet the travel costs for hospital appointments. Again, that is an indication that financial costs and difficulties lead to other stresses and difficulties for those who suffer under this process.
I refer to that case because it illustrates the delays that affect so many people. The response I received from the DWP when I took up the case with the complaints resolution service was interesting. I have to say that DWP staff are normally very helpful when I get in touch with them, and they try to move cases forward, and the same is true of the Minister and his office. However, the reply I got from DWP staff said there had been some issues at the beginning of the case because there were not always up-to-date address details for the constituent—I do not have enough details to know whether the delay could be ascribed to the DWP, my constituent or Atos. In any event, I was told that the uncertainty
“resulted in the request for an assessment”—
“only being made on 3 October 2014. Although it was a little early for us to try and push for an appointment I got in touch with Atos”.
I was then told that a home consultation had been booked for 4 February.
“it was a little early for us to try and push”
for an assessment, here was a case where somebody applied in February and, for whatever reasons, there was some delay in the process; but someone in the DWP felt that they had to allow it to go on a bit longer, no doubt because they knew that there were so many cases that they could not just press for an assessment. When an assessment was finally allocated, it was only at the end of a 16-week period, which as we know is the Government target.
The third case that I want to refer to highlights the difficulties of a constituent who was previously on the higher rate of the care component of DLA, but did not
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have the mobility component. He applied for PIP on 14 March 2013, and he was finally awarded it on 25 September 2014, about 18 months later. He was awarded the higher rate of both components of PIP, including the mobility component, but of course the higher rate could not be backdated by more than 28 days. We see such situations time and again, of course, and that shows the problems with the system. The idea that if someone gets the higher rate it is not backdated, but if they get the lower one they do not get money taken off them, sounds fair—at least, it sounds a simple approach to delays. However, surely no one can think it acceptable when people experience delays of not just 16 weeks but six months or a year.
The situation might not be particularly unfair if those assessed at the higher rate had it backdated but those assessed at the lower rate did not have their previous higher-rate payments taken away from them. We are not talking about large sums of money—well, we are talking about large sums of money, but not for the people receiving the benefits. That should be an incentive to the Government to get their act together and ensure that cases are dealt with more quickly, to prevent a situation in which someone assessed at a higher rate—in my example, for 18 months of the mobility component—is deprived of what they should have had over the relevant period because of delays that are no fault of theirs.
In that context, Paul Gray’s review is welcome. I think the limited scope of the recommendations disappointed many people, but that is not Mr Gray’s fault. It is the fault of his remit and the way he felt obliged to address the issue, given the time scale he was given and other factors such as the timing of the election. However, the fact that people are disappointed means that there is a need for a much more direct Government drive to deal, above all, with delays and associated problems. Let us not forget that the Government must take the blame for delays and failures.
Hon. Members will be aware of the damning report of the Public Accounts Committee. Its Chair said:
“The implementation of Personal Independence Payment has been nothing short of a fiasco. The Department of Work and Pensions has let down some of the most vulnerable people in our society, many of whom have had to wait more than 6 months for their claims to be decided.”
That is true. The Committee’s report said:
“Critical assumptions about the process were not fully tested and proved to be incorrect, resulting in significant delays to benefit decisions and a backlog of claims.”
That is a failure. It is a failure of Government, and the Government need to accept that responsibility.
We want, however, to deal with the problems. I am sure that we all want much more comprehensive action to deal with the delays that affect so many people. The present arrangement, whereby higher awards are not backdated beyond 28 days, needs to be replaced with backdating to the time when the application was submitted. I am sure that other hon. Members have received a briefing from Leonard Cheshire Disability, as I have, urging the Government to consider providing financial help to those who are in difficulties precisely because of delays in dealing with their applications.
Many hon. Members will be aware of a current and well-known campaign in Scotland led by Gordon Aikman—I am sure that the hon. Member for Banff
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and Buchan (Dr Whiteford) is aware of it. Gordon Aikman is suffering from motor neurone disease and is using the last few months of his life to campaign for better treatment for sufferers in many areas. One of the issues that he has raised is the fact that delay in assessment has a particularly serious effect on those whose condition is terminal, but whose prognosis is not that they will die within six months. Someone whose life expectancy is six months or less will be given an accelerated assessment, but I understand that the average prognosis for people with MND is 14 months, and those people are not given an accelerated assessment. However, it is clearly unacceptable that they should wait a year or so. The Minister should look at providing an accelerated assessment process for people whose prognosis includes limited life expectancy.
Leonard Cheshire Disability also proposes a general halt to further plans to extend benefits to more people until the assessment system is fit for purpose. That seems sensible to me, and it brings me to my final point, which is about the implications of recommendations to devolve PIP to the Scottish Government and Parliament. As the hon. Member for Banff and Buchan pointed out, the Smith commission’s report included those recommendations, and it is widely known that the Government will put forward details of the next stage in that process on Thursday. I accept that the Minister may not be able to respond today with reference to an announcement due on Thursday, but I hope that he will recognise that it would be crazy to continue to roll out PIP in Scotland under the present arrangements, with all their difficulties, just when we are about to provide for full devolution of PIP to Scotland with the agreement of all the parties.
Jim Shannon: In the context of the devolution of welfare reform, it is important to look at other parts of the United Kingdom, such as Northern Ireland. Sometimes we should be careful what we wish for.
Mark Lazarowicz: That is an interesting point, but all the parties want devolution, and we will have to live with the consequences. I welcome the devolution of large elements of the welfare system to Scotland. I think it will be better for Scotland, for those on benefits there, and for the UK, but I hear what the hon. Gentleman says.
My final point is that, as has been pointed out, one difficulty in making a judgment about the failures of the PIP system is the lack of data about the extent of the problems and the length of time people must wait for assessments. As the hon. Member for Banff and Buchan pointed out, we get the tip of the iceberg in our constituency offices. We take up cases and hopefully get them moved forward, but of course people tend to come to us only when they have gone through every other avenue and have not been able to resolve their problems. I suspect that there are still people who are not even coming to MPs or to benefit advice centres, and they are probably suffering worse than those who come to us, whose problems we can at least try to resolve.
We need action from the Government, and answers. I would like a commitment from the Minister on the situation in Scotland. I hope that the Department will give a statement quickly after Thursday’s expected
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announcement, explaining how PIP roll-out will be carried out in Scotland as the Smith commission proposals go into their next stage of delivery, which we know all the parties want.
10.19 am
Mark Durkan (Foyle) (SDLP): It is a pleasure to serve under your chairmanship, Sir Roger. Like other hon. Members, I commend the hon. Member for Erith and Thamesmead (Teresa Pearce) on securing this debate on the independent review of personal independence payments, which are a significant part of the concern expressed by Members across the House about how welfare reform will work in practice. They are also pertinent to the delay in legislation on welfare reform in the Northern Ireland Assembly.
Devolution of social security in Northern Ireland is devolution up to a point. The parity principles and the exacting way in which the Government have enforced them mean that, essentially, the Assembly passes karaoke legislation: we can perhaps provide a bit of our own accent, but we cannot change the words and music very much. The key issue of the rules, the rates and the existence of benefits stems from legislation as framed in Westminster. There is something of a blur which, even after the Stormont House agreement, will continue in future. The issues that were brought out in the review of personal independence payments show that an awful lot rests on implementation, proper planning and preparation, as well as the capacity to deal with numbers, volumes, complexities, particular situations and, in some cases, the pattern of issues that have arisen.
Many of us are concerned, in the light of the Gray review, about the implications of further welfare reform. Significant changes can be made in the next Parliament under the Welfare Reform Act 2012 without the need for new primary legislation. Many of the assumptions or givens that need to be improved according to the review might be changed.
The welfare cap will bite into that as well, as it could mean that decision makers and those who process the applications, whether at the assessment provider stage or in the civil service—the Department for Work and Pensions on this island; whoever does it in Scotland under a future regime; and the Social Security Agency in Northern Ireland—will be working against new, fixed envelopes. They could have a fixed budget against which to assess how many people can receive benefits. That would change the nature of assessment decisions and the number of claims that can be approved. That issue was not resolved by what was agreed or understood between the parties when the Stormont House agreement was reached. It is important that we do not pretend that those possible adverse changes will not present real challenges to parties in the Assembly and the Executive in future.
Let me turn to an issue that stems from the evidence that was given to the independent review. In the context of the Stormont House agreement, the parties were concerned that the numbers might fall off in the transfer from disability living allowance to PIP in Northern Ireland, and that some of the decision-making processes might have adverse effects. They were assured that,
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compared with England, where there were delays in outcomes, the problems were not as grave, and that the Social Security Agency has learned from the experiences in England. Those assurances became working assumptions, but that could change.
Ministers here, probably in absolute good faith, made assumptions about how well PIP was going to work and how smooth the transfer would be. Clearly, those assumptions did not turn out to be correct, so we need to work hard in Northern Ireland. The relevant Committee in the Assembly, the Minister and the staff of the Social Security Agency must work hard to apply lessons learned in the light of the review. They must listen to the concerns that I have heard today and on other occasions, both here and in the main Chamber, from many hon. Members who have more direct and immediate experience of this issue, and whose constituents have told them about their frustrations and difficulties.
In an intervention, I spoke about the victims of the troubles, who are worried about having to repeat their stories to assessment providers, civil servants or whoever else. They are worried about making their experience the subject of a review argument. They do not want to be put through those difficulties and talk about such sensitive things. We have made many promises to victims in Northern Ireland. We have set up victims units and victims commissioners to ensure that, when public bodies and agencies deal with them, their needs are given due consideration. It would seem strange if we were to completely confound the position of victims in relation to personal independence payments and treat them in a way that differs from the particular provision that, understandably, has been made by the Government here for people who have served in the armed services and whose disability stems from their experience and the injuries that they received in that context. If consideration is rightly given to people in that situation, it is important that we have bespoke consideration in Northern Ireland. Hopefully, that is being further worked on.
Personal independence payments are not the only thing that affects the future of DLA. In the House last week, we saw the launch of “Right from the start”—essentially the manifesto pitch of the combined campaign, Every Disabled Child Matters. It expressed worry about what would happen to DLA for those under 16, given that under the Welfare Reform Act, Ministers in the next Parliament will have the capacity to “disappear” DLA for under-16s without recourse to primary legislation. That is a live concern for a number of the groups in the policy community that deals with children and families coping with disabilities.
We are glad that lessons are being learned and that they have been reflected in the independent review. However, it is not clear that all the lessons and the issues that hon. Members have raised have been fully reflected and addressed in the review, so more needs to be done by the Department and Ministers. In the specific Northern Ireland context, we can use the light of the review to guide us, but we should not pretend that the path will be straight or smooth, or that we have cracked it. Under the Stormont House agreement, the Executive have been allowed to use some of their block grant resources to provide a hard shoulder to mitigate the impact of the change and its implications. Of course, if the welfare cap and other changes materially change the numbers
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and the issues, the Executive are not going to be able to find more hard shoulder from the block grant. The situation that the Executive face is different from the situation outlined in the Smith commission report. That difference needs to be understood by both places, and it needs to be understood here.
I again thank the hon. Member for Erith and Thamesmead for giving us the opportunity to hear about the issues directly from her and others. It is a good alert for us. I hope that my colleagues and I can ensure that our colleagues in the Assembly and the Department in Belfast take note of all the issues that have been raised.
10.28 am
Kate Green (Stretford and Urmston) (Lab): It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) on securing the debate, and I thank all hon. Members for their valuable comments.
For months, claimants have been telling us of problems with the administration of personal independence payments. It came as no surprise to read Paul Gray’s independent report and the concerns that he raised. Gray highlights a disjointed claimant journey, a lack of trust by claimants, a lack of transparency in the process, and a pretty poor experience all round for claimants seeking to apply for PIP. Gray states that
“the primary focus of early comment and attention on PIP has been the unfortunate reality of long delays and backlogs”,
thus reiterating what MPs have been hearing again and again from our constituents over the past few months. It is very clear that the roll-out of this benefit has not gone to plan.
The initial plans for PIP suggested that 500,000 fewer people would receive PIP than DLA by the end of 2015-16, and that all working-age DLA claimants would be reassessed by that time. That is some 2 million-plus claimants, but according to the most recent official figures, which were published just before Christmas and go up to the end of October 2014, the backlog of cases waiting for a decision stood at 287,000, and just 2% of affected DLA claimants had been reassessed.
The Minister has said—we heard it again this morning—that reducing the delays and the backlog in PIP is his top priority. Clearly, that is welcome, and I am sure we will hear from him about the progress that has been made. As my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) pointed out, on 15 January in the House of Lords, Lord Bourne told peers that the backlog had fallen to 107,000. There has been no official publication of that figure, and I have to say that it really is not acceptable for Ministers suddenly to pull figures out of the hat only a matter of parliamentary days after official figures giving a very different picture have been published. I hope that the Minister will be able to give us more information about the source of that figure of 107,000 and tell us when proper underpinning data about that will be publicly available, so that Members can scrutinise them.
It is welcome to hear that there has been progress in reducing the backlog, but it is also important to remember that the Government have shifted the goalposts. The original intention in the impact assessment was that it would take 12 to 16 weeks from application to receiving
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a decision. However, in June 2014, the Secretary of State said that the aim was that by the end of 2014 it would take a maximum of 16 weeks for an assessment—not a decision, but an assessment, which is one stage before a decision is made. The Minister reiterated the commitment to a 16-week time scale for assessments when he appeared before the Select Committee on Work and Pensions on 10 September. The DWP’s PIP online toolkit, which I checked last night, also confirms the ambition of a 16-week time scale.
However, even that less ambitious target still has not been achieved for all claimants, as we heard from hon. Members today. I hope the Minister will tell us when and whether the 16-week target has been met. It certainly seems to be being indicated to claimants that it will not be met. My hon. Friend pointed out the case of his constituent, who was told that there would be a 26-week wait, and what is more, that it would be too early to chase until 16 weeks had gone by. That does not suggest to me an ambition to clear that assessment within a 16-week time frame.
It is also very concerning, from another example that my hon. Friend pointed out, that where something is wrong in a claim, the clock seems to be set back to zero. An application that might have been made many months ago, as he described, but with a wrong or missing piece of information is not timed from the beginning of that claim, but only from when that piece of information is received. I understand that the Department will say that it cannot process an incomplete claim, but the consequence for that individual and others like him is that they have waited months and months to get an assessment and to get the money that they need.
I particularly want to ask the Minister about the situation with young people turning 16, as mentioned by my hon. Friend the Member for Erith and Thamesmead. Kath Whittam is a parent living in Southwark, whose daughter received DLA. A letter was received from the DWP in February 2014 as her daughter approached her 16th birthday, advising her to prepare for PIP. The family were anxious about the situation, but they put in an application and Kath underwent an assessment to be the responsible fit and proper person to receive PIP payments and administer them for her daughter. However, because of the backlog, the PIP assessment still had not been undertaken by the time of her daughter’s 16th birthday, and because London, where the family live, is not yet in the area affected by migration to PIP, the daughter was no longer in the cohort due to be migrated to PIP, so the family were sent another DLA claim form. The daughter was, in fact, re-awarded DLA indefinitely in September.
That kind of situation is not just appalling for the claimant—and it is; it was stressful for Kath and her daughter, who were anxious about the PIP claim and about having to initiate a claim, and then being told that they had to apply all over again for DLA—it is wasteful of public money. There was all that pointless correspondence, the cost of a wasted assessment to establish that Kath was a fit and proper person, and then her daughter ended up back on DLA.
I asked the Minister in how many cases that had happened, and I received his written answer on 8 January, but it did not address that specific question. Perhaps he will tell us today how many 16-year-olds, or those
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approaching 16, have been through and successfully completed the PIP claims process, and how many have not and have had to return to DLA.
The cost of administering the benefit has been impacted by the need to draft in resources to deal with the backlog. The Minister, again in a written answer on 8 January, told me that 76 temporary staff have been employed to help, although he ignored my specific question about the rise in cost of staff time. Meanwhile, Paul Gray, in his report, highlights the fact that staff are undertaking evening and weekend work to help deal with the backlog.
There is considerable uncertainty about future costs, about the level of awards, and about the capacity to shift large numbers of reassessments once the full programme of managed reassessments commences. That uncertainty has been flagged up by both the National Audit Office and the Office for Budget Responsibility.
In February 2014, the NAO said that PIP was £140 million behind the projected £780 million savings in the current spending review period, and that the DWP had revised down the projected savings four times between January 2012 and December 2013 due to delays. It said that the administrative cost had risen from £49 for DLA to £182 for PIP, and that average waiting times for DLA were 37 days compared with 74 days for PIP. We do not know the current position on waiting times, because the DWP, as has been noted, will not publish all that information until March.
The NAO also said that the DWP had been set a budget of £101 million for delivering PIP in 2013-14 and £85 million in 2014-15. Will the Minister say whether that sum has been used in full or whether it has been exceeded, and if so, has it been used to deliver fewer of the assessments that had been planned when the budget was set? The NAO concluded:
“Because it may take some time to resolve delays the Department has increased the risk that the programme will not deliver value for money in the longer term.”
In October, the OBR published its “Welfare trends report”, which noted DWP projections:
“16 per cent of the DLA/PIP caseload will be on PIP by 2015-16, rising to 63 per cent by 2018-19. With comparatively little outturn data and a delayed rollout, we adjusted our forecast upward in March 2014 to reflect the emerging outturn data on the pace of the rollout. But it is too early to tell whether that was sufficient.”
Then, at the autumn statement in December, the OBR revised spending upwards by a further £400 million a year as a result of more people being found eligible for the new benefit than had been planned.
The Gray report shows that all those concerns about delays and costs to the public purse are matched by poor claimant experience. Starting right at the time of the application, Gray points out difficulties for some claimants with hearing impairments or learning disabilities using the telephone, and says that there is a need for alternative forms of digital access. Will the Minister say how he will take that forward?
There is a lack of information about the processing of people’s claims. Gray highlights that people are being told to ask the DWP, but the DWP says, “Ask the assessor” and the assessor says, “Ask the DWP.” As he said, that is “not an acceptable level” of customer service for any institution in 2014. He identifies problems
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with implicit consent; will the Minister say what steps he is taking to clarify that to staff and assessors? There are issues with the complexity of the claim form and the time taken to complete it, and people do not know that they can ask for an extension. As for gathering evidence to support a claim, Gray suggests better information sharing, which I think is a welcome suggestion, and I would like to know what the Minister is doing about it.
Gray also highlights uncertainty about who is responsible for gathering evidence—whether it is the assessor or the claimant. Sorting that out is pretty crucial, because the claimant has one month to gather information and submit a PIP2 claim, and many miss that deadline. In a written answer on 8 January, the Minister told me that there had been 159,000 disallowed claims, of which 48,500 were the result of non-return of the PIP2 form within the time limit. Is the DWP tracking what happens to those people? Do they apply again? That would mean additional cost to the public purse and more stress for the claimant. How many claims are treated as withdrawn, rather than disallowed? Does that include cases in which evidence has not been returned in time, and what impact has it had on clearance figures?
Gray highlights other problems, including appointments cancelled or people not being notified in time, the configuration of the room for assessments, and a lack of understanding by claimants of the purpose of some of the questions; it needs to be made clear that it is a functional, not a medical, assessment. Gray highlights some problems with the substance of the assessment: the descriptors on planning a journey, the use of aids and adaptations, and the problems with mental health conditions, fluctuating conditions and learning disabilities. He also highlights, very importantly, the use of informal observations as part of the assessment process and the need for transparency around that. He draws attention to poor communication of decisions. I am pleased that the DWP will review decision letters. When and how will that be done, and will claimants be involved?
In conclusion, Ministers need to be sure that the process of administering PIP is fair and effective. Better communications with claimants are clearly needed. Gray also suggests better liaison between assessors and claims managers. Decisions need to be timely and fair. Worryingly, Gray notes wide geographic variations in outcomes. He is right to recommend “horizontal” scrutiny of claims to ensure consistency, and a proper evaluation strategy; and he is surely right, in the light of all the delays, costs and confusion, to recommend action to redesign the PIP model regarding the claimant experience and business effectiveness. I hope that the Minister will take this opportunity to answer the many questions that colleagues and I have posed, and I look forward to his response.
10.42 am
The Minister for Disabled People (Mr Mark Harper): It is a great pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for Erith and Thamesmead (Teresa Pearce) on securing the debate. In the time available, I will do my best to answer as many as possible of the questions that she and others asked.
A number of colleagues raised the issue of delays and statistics. I think that colleagues got the message that I gave before, because a number of them helpfully repeated
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it, about dealing with the delays that claimants have experienced. It was and remains the issue on which I am spending a lot of time, to ensure that we resolve it. Both I and officials have been working very hard to do so, as have both the assessment providers.
We have quadrupled the number of assessments cleared each month since January last year, and the number of people with a PIP claim in payment almost doubled between July and October. This morning, the Department has pre-announced that we will publish next Wednesday information on the number of PIP claims processed. I have written to the Chairman of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), to inform her of that fact, and I will of course take the Committee through those key pieces of information on the day on which I give evidence.
The normal publication of clearance times and outstanding case times, which we pre-announced in December, will take place in March, and the exact date will be pre-announced in the usual way. That will be the publication of the normal set of statistics, which will then take place on a regular basis. However, there will be an ad hoc publication next week, so that my conversation with the Select Committee will be informed by properly verified statistical information, which I think will be helpful, rather than unverified management information. As I said, I have written to the Chairman of the Committee this morning to let her know.
Hon. Members referred to the impact of the delays. It is worth making the point that PIP is designed to meet the extra costs of someone’s disability or health condition; it is not a benefit designed to meet normal day-to-day costs. In this and other debates, hon. Members have sometimes talked about someone who has had to leave work because of their health condition. PIP is obviously not designed to deal with the costs of that. Those costs will be dealt with by other benefits—for example, employment and support allowance.
All new claims for PIP are backdated to the date of the claim. I recognise, of course, that that presents a cash-flow problem for people, which is why we are working hard to deal with the delays. Of course, in the case of all reassessed claims, people will continue to receive their DLA while awaiting the PIP decision. Other support, which is not tied to receipt of PIP, is available for those on a low income. I am talking about help with energy bills, concessionary bus passes and help with NHS transport costs; and there is the ability to get a blue badge through an assessment, rather than being passported through PIP. Carer’s allowance can be backdated to the point from which PIP was awarded, as well. Again, I recognise that there is a cash-flow issue there, but people are able to backdate the costs.
I thank Paul Gray very much for his report. He did a thorough job. He talked to the assessment providers, to a lot of people who have had experience of claiming the benefit and those who have assisted them, and to many organisations involved in the process. It is a thorough report, and we will of course respond to it in due course. I can say some things today, because some of the recommendations are about things that are already under way. For example, we are reviewing and rewriting all the letters to claimants to make them simpler, easier to understand and clearer. We are also exploring the use of other medical evidence held by the Department. For example—this relates to a question asked by both the
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hon. Member for Erith and Thamesmead and the shadow Minister, the hon. Member for Stretford and Urmston (Kate Green)—if someone has gone through a work capability assessment and we have an ESA85 report from that assessment, we are using that information to support and help inform the decision to award PIP. Sometimes that will enable us to make a decision without a face-to-face assessment. It may mean that we have enough information to make those decisions on paper—it is obviously welcome if we can do that—or it may help to inform the decision, so we are looking at doing that.
We are looking at using more proactive communications. For example, since last April claimants get a text message to confirm that their form has been received, so that they know that it is in process. We are also building better relationships between the DWP case managers who make decisions and the health care professionals who make assessments.
We have made changes to some of our internal processes and IT to further streamline clearances of claims. We have improved communications to claimants at the beginning, to try to ensure that they know what the best evidence to supply is and how long their claim may take to be assessed, and to stress the importance of sending us information and following the process. We have a dedicated customer claim line for terminally ill claimants. The assessment providers are also providing claimants with better information about how long a claim may take and whom they should contact at each stage of the process.
As a number of hon. Members mentioned, including the hon. Member for Edinburgh North and Leith (Mark Lazarowicz), there is a fast-track service and a dedicated claim line for terminally ill claimants with a prognosis of six months or less. We are clearing those cases in about 10 days, which is in line with expectations, and 99% of the decisions lead to an award. In the review, Paul Gray acknowledged that the process for terminally ill claimants had significantly improved following the work that the Department and my predecessor did with Macmillan Cancer Support.
Mark Lazarowicz: I hear what the Minister says, and perhaps he will come to this later, but what about the situation that I described of people whose prognosis is more than six months but still relatively short, who will be hit badly when there are delays of much more than 16 weeks?
Mr Harper: The hon. Gentleman makes a perfectly sensible point. The solution is to fix things so that people are not having to wait so long. Clearly, we have to state a time. People have various health conditions and disabilities, and we have to draw a line somewhere, but the real solution for the cases that the hon. Gentleman mentions is to do what we are doing, which is to ensure that people going through the process have an assessment within a sensible time. Then the issue that he set out simply does not arise, because they are getting an assessment, a relatively speedy decision and the support that they need. That is the solution for those with a progressive condition, with a longer prognosis, but obviously for those with a terminal illness who have a very short time to live, we have put in place a much faster process, which is working well.
The hon. Member for Erith and Thamesmead mentioned interventions. The point of them is to ensure that the
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amount of PIP paid is correct, so that awards can be adjusted upwards if someone’s needs have increased or downwards if they have decreased. That has happened in a very small volume of cases to date. The hon. Lady gave a specific example of one of her constituents. Interventions are set on the basis of when needs change and when awards are made. Given that interventions can go in both directions, it is certainly not in the interests of the Department to review awards more frequently than is necessary, because to do so creates unnecessary work.
The hon. Lady mentioned reassessment. There are two kinds of reassessment going on. For those who have time-limited awards, there is a process called natural reassessment—the names are not brilliantly informative—which is being switched on only in areas where we know that we have the capacity to carry it out. One of the things that I do before I take those decisions is to ensure that our assessment providers have the necessary capacity, and I have been switching the process on only when where there is that capacity.
The hon. Lady mentioned managed reassessment, which has previously been announced as starting in October, under which those with an indefinite DLA claim will be reassessed. We have made it clear that we will roll that out only where and when we have the capacity to do so. It is clearly not in our interest to start reassessing people if the system does not have the capacity to do so. By the way, I thank the hon. Member for Edinburgh North and Leith for his positive comments about DWP staff and staff in my private office, where he has had to raise issues. People do not often say nice things, so I acknowledge his comments on behalf of the Department.
Colleagues from Northern Ireland raised a number of matters. The hon. Members for Strangford (Jim Shannon), for East Londonderry (Mr Campbell) and for Foyle (Mark Durkan) talked about the Stormont House agreement. I have been in correspondence with Mervyn Storey, the Minister with responsibility for welfare in Northern Ireland, and he and I are trying to get a date in the diary to meet. One thing that we will talk about is the progress that has been made on the Stormont House agreement and welfare reform. I am sure that we will both want to talk about the lessons learned from rolling out PIP in Great Britain, which may apply to the roll-out in Northern Ireland.
Jim Shannon: I understand that relevant measures will be going through the Northern Ireland Assembly during the next fortnight, so the implementation in Northern Ireland will be in place in time for the Minister’s meeting with Mervyn Storey.
Mr Harper: The hon. Gentleman makes a good point. There are two issues: the legislative process—I take his word about the timetable for that—and the implementation and operational matters. The Department and I will provide every assistance to the Northern Ireland Executive to make sure that that goes smoothly. It is worth putting on record—
Mark Durkan: Will the Minister give way?
Mr Harper:
Let me finish my comment, which is about a point that the hon. Member for Foyle raised.
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The Stormont House agreement states that although the Northern Ireland Executive normally legislate on welfare on a parity basis with Great Britain, they can deviate from parity, partly to recognise the history of Northern Ireland and some of the specific issues that apply. However, the agreement also states that the cost of deviations from parity with Great Britain must be met from the existing Northern Ireland budget. The hon. Gentleman set that out, and I wanted to put that on the record to clarify the position. The Northern Ireland Executive can deviate from the normal process when they legislate to deliver the operational effect.
Mark Durkan: Of course, there have historically been some differences in delivery, even within the parity regime, on matters such as housing benefit. When the Minister meets Mervyn Storey, will he ensure that he, as the Whitehall Minister, says nothing to disturb our working assumption that much of the room that we thought would have to be made up from the Executive’s block grant is available to us within our spending remit under the welfare cap? That cap is not really biting at the moment, but it may do so in the future. Can he assure us that our assumptions about not having to rely so much on the block grant, and on the rest of the Executive’s budget grant, will not be disturbed by any meeting that he has with the devolved Minister?
Mr Harper: I will certainly make sure that the meetings I have with the Minister are helpful. The hon. Members for Banff and Buchan (Dr Whiteford) and for Edinburgh North and Leith mentioned the Smith commission, which is relevant to the conversations in Northern Ireland and in Scotland. It may not be far in the future, but I cannot anticipate the Government’s comprehensive response to the report published by the Smith commission, for which hon. Members will have to wait patiently a little longer. It is worth saying that we have to be careful, because Ministers have to follow current legislation. All that has been announced in the Smith commission report is what will happen in the future. The Government have made commitments, but no legislation has yet been introduced. When legislation is introduced, the Scottish Government will have to decide what they will do, and our conversation today makes it clear that we will have to think about operational delivery. Ministers have to proceed on the basis of the current law.
Dr Whiteford: The point I was trying to make was that in looking forward—obviously, we do not know what is in the proposals—the Government’s evaluation of the current policy is important to inform any future decisions made elsewhere.
Mr Harper: I take that point, and Paul Gray’s review will partly inform that. If there are lessons to be learned about implementation when the proposals are published and changes are made, I am sure that officials in my Department and Ministers in the UK Government will want to work in partnership with Ministers and officials in the Scottish Government to ensure that things proceed smoothly. We will publish the response to the Smith commission in the not-too-distant future. As Members have said, a commitment has been made to do so by 25 January. I want to put on record that we will proceed on the basis of existing law.
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The hon. Member for Foyle mentioned children. There are no plans to extend PIP to children; we have always said that we wanted to see how PIP for adults worked. If a decision was made to extend PIP to children—I emphasise that there are no plans to do so—it would be subject to consultation and to the affirmative procedure in Parliament, so both Houses would have to be involved in that decision. The hon. Gentleman is right to say that primary legislation would not be required, but parliamentary procedures would have to be followed.
On the question of the transition from DLA for young people, which the hon. Member for Stretford and Urmston mentioned, people cannot claim PIP until their 16th birthday, but we contact people in advance to enable them to prepare and, as she said, to see whether the child needs an appointee to help them through the process. She asked some specific questions, following up on her earlier written question. I will look at the Hansard report of the debate and, if she is content for me to do so, I will write to her and place a copy of the reply in the Library, which I hope will help colleagues.
In summary, I have made it clear that delays, which several hon. Members have touched on, are unacceptable. The Department and providers have been working hard to deal with them. The hon. Member for Erith and Thamesmead mentioned that I will be giving evidence to the Work and Pensions Committee next week—I am looking forward to that, as is she—on a number of issues, including PIP. I will be happy to explain the progress that we have made. We will publish properly verified statistics to make sure that that is an informed discussion.
We have welcomed the Gray review. I have said a little about some of the areas in which we are already working on it, and we will publish a full response. I think I have answered seven of the nine questions asked by the hon. Member for Erith and Thamesmead—we will cover the two that I did not answer in our full response to Paul Gray’s review, which we will deliver in due course. I think I have touched on all the questions that hon. Members have asked. The debate has been helpful, and I am grateful to the hon. Lady for securing it.
Sir Roger Gale (in the Chair): Order. Before I call Mr McKenzie to open the next debate, the Chair has not been notified, but there appears to be a change of Minister. Is that correct?
The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd): Yes.
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Fuel Prices
10.59 am
Mr Iain McKenzie (Inverclyde) (Lab): It is a pleasure to serve under your chairmanship, Sir Roger. I am delighted to have secured this debate, although a longer debate would have given other Members an opportunity to contribute. My constituents are not the only ones to have had problems with fuel pricing, and other Members might have highlighted other areas of the country that are having the same problem.
I will highlight three matters that affect fuel pricing across the country to the detriment of motorists. The first is pricing at the pump and the lack of competition. The second is the supply chain and where profits and investments are being made in that supply chain. The last, but by no means least, as my speech will show, is taxation on fuel.
I acknowledge that, at last, we are seeing average petrol prices going back to the levels last seen in the autumn of 2010. However, we are being told and led to believe that that is due to an intense pump price battle between supermarkets and independent retailers. If that is true, my constituency of Inverclyde is certainly not witnessing it. Our prices remain higher than in areas outwith Inverclyde’s boundaries. My constituents would like to take issue with that, and it would seem that we are not alone. There remains significant variation in petrol prices across the country, even between neighbouring communities. Unbelievably, there can be substantial variation between the price of fuel at the pump over very small distances, and my constituents suffer from that. Fuel prices at the pump in Inverclyde can be 3p to 4p more than at forecourts just 15 miles away, and we are probably not the only area of the country that is witnessing such price differences within such a short distance.
Why are prices so variable from community to community? In the past decade, especially in my area, large supermarkets have moved in to dominate the forecourts, with many independent and even oil company-owned fuel retailers closing their roadside filling stations. The Petrol Retailers Association has told me that 900 independent retailers across the country have closed in the past five years. In Inverclyde, 14 independent filling stations have closed in recent years, leaving only two independently operated BP filling stations and, of course, two very large supermarkets. The supermarkets moved in, sold off fuel cheaper than the small independent fuel retailers and ended the competition from those small outlets.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): The hon. Gentleman describes the experience of many people throughout Scotland, particularly rural and island Scotland. He probably agrees that the volumes of fuel going through service stations will affect the price that the stations have to charge, but does he further agree that there is a lack of transparency in the whole fuel chain from the refinery to the forecourt? It is opaque, so it is difficult to see what is happening and who is taking what fraction of the cost all the way through.
Mr McKenzie: The hon. Gentleman makes a good point, which I will emphasise later in my speech. We need to focus on that issue as much as on competition.
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Not all the independent retailers that closed were small fuel outlets; in my area many were owned by well-known oil companies such as BP, Texaco and Esso, whose outlets are now scarce. In fact, some have vanished entirely from our roadsides, and it can be difficult to understand the pricing of those that remain. A classic example is the two BP filling stations in my constituency, which are within three miles of each other. Unbelievably, their prices vary by 3p. Work that one out. However, BP tells me that it franchises the filling stations and allows the franchisees to set their own pump price, and therefore there are differences, although the public will look at the name on the forecourt and assume that they are run by the same organisation. Remarkably, the prices at those two franchise filling stations are always higher than at the supermarkets. How much longer will they be trading?
Jim Shannon (Strangford) (DUP): I congratulate the hon. Gentleman on securing the debate. This issue burns for people in my constituency, because the cost of fuel is enormous for those who need a car to get to work, social activities or school. Does he share my concern that, whenever fuel prices rise, within 24 hours the forecourt prices go up, yet when there is a massive decrease in fuel prices—oil is down by some 60%—we do not see a drop in prices at the forecourt? Why is there such an emphasis on cost when fuel prices go up but not when they come down?
Mr McKenzie: The hon. Gentleman makes a good point. We have seen that in the energy market, too. The blame is always placed on the wholesaler, but the problem is that we do not have evidence to substantiate whether that is where the blame should lie. I will go on to ask the Government to investigate the wholesale price of petrol.
The supermarkets have a much-voiced three-mile radius of competition—they tell us that they will match prices within three miles of each large supermarket. Of course, for my constituents that realistically means matching prices with themselves, because there is no one in that radius to challenge them on their pricing. Is that competitive? No, because competition was killed off many years ago.
In early November 2014, Asda, Tesco, Sainsbury’s and Morrisons all rushed out plans to cut prices at the pumps by 1p a litre. In stark contrast, the RAC called for a further 4p cut in unleaded and 2p cut in diesel, to be fair to motorists. The campaign group FairFuelUK has called for a Government inquiry to get to the bottom of the price fluctuations in fuel. Will the Minister consider adopting Labour’s calls for the Competition and Markets Authority to start the process of launching an inquiry into petrol pricing on the forecourts? She might want to support the Road Fuel Pricing (Equalisation) Bill, which the hon. Member for Wyre Forest (Mark Garnier) introduced yesterday using the ten-minute rule. At a time when we are asking the Government to look favourably on protecting dairy farmers from supermarkets, why not protect motorists, too?
The next area that I would like to explore is the supply chain from extraction, refining and transport to the pump. Just where are profits and investments being
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made? Can we identify where the price is being hiked? As we have seen in the past couple of months, the oil price per barrel has dropped significantly. My rough analysis of the supply chain suggests that exploration costs make up about 5%, capital costs—leasing buildings and rigs, and so on—make up 20%, and paying staff and transport costs and so on makes up 10%. Then there is tax of some 40%, and oil company profits make up the final 25%.
Mr MacNeil: The hon. Gentleman is being kind and generous with his time. He has mentioned tax. As the price goes down, tax becomes a larger share, and the Government have a role to play in that. Is it not iniquitous that, in small places with lower volumes of sales and where higher margins are required on each litre of fuel, VAT is also charged? Small rural places are paying more tax per litre—the islands certainly are—than the big cities that have the advantages of large volumes of sales and tough competition between supermarkets.
Mr McKenzie: I thank the hon. Gentleman, who mentions the VAT hike that the Government placed on fuel when they came to power in 2010. He also mentions the islands. I was contacted by an islander the other day who said that fuel was being transported to the island to supplement the price.
In the past couple of months, the oil price per barrel has dropped significantly. However, as we have already discussed, the wholesale price—the cost of production and refining—is calculated at 22p per litre on fuel that costs 109p. We need to investigate the supply chain to see whether that is the case.
What of the failure to reduce costs as quickly as they are increased? I have highlighted the problem in the domestic energy sector—we had a debate on that the other week—whereby companies pass on wholesale price increases quickly, but not wholesale price drops. Energy companies always announce their price hikes by blaming the wholesale prices, but when wholesale prices fall, they never seem to pass the savings on to customers quickly. We seem to have the same problem with fuel—reduced costs are apparently not being passed on promptly to the consumer on the forecourt.
Oil prices, as I have said, have fallen by about a third since the summer of 2014. Campaigners say that prices are quick to increase when wholesale costs increase, but when wholesale costs go down, prices decrease slowly. We need to investigate that to see whether evidence shows that that is indeed the case, and whether wholesalers are to blame. The AA has called for transparency in the supply chain and for the Government to make petrol wholesalers reveal their prices. It says:
“Consumers can see the price of oil and they know how much they pay for petrol but they do not know the cost of wholesale, which means that petrol retailers cannot defend themselves when they are accused of not passing on price cuts.”
There was an investigation into petrol prices by the Office of Fair Trading, and in 2013 it published its study, which stated that the fuel market was working fine. However, that was not a formal inquiry, and many motoring organisations were dissatisfied with its conclusions. The Petrol Retailers Association considered the report substantially flawed owing to the fact that it did not investigate anti-competitive pricing by oil companies,
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or by supermarkets that subsidise fuel with margins from groceries to eliminate competition and enjoy a monopoly in the fuel market.
It is also worth noting that, in August 2013, the European Commission started a high-profile investigation into alleged oil price fixing by certain oil companies and traders. That involved dawn raids on oil companies in places as far afield as Norway, Holland and London. We have heard very little from the Commission on the findings of its investigation and, given the inadequacy of the OFT report, we need to have an open and transparent look at where profits and investments are being made. It looks as if we need to apply something similar to Labour’s proposals for the energy regulator to enforce an immediate, fair and proportionate price reduction.
Finally, I will look at Government taxes levied on fuel. The largest portion of a fuel bill goes to the Government: with petrol priced at 109p a litre, fuel duty is 58p and VAT is 18.2p of that. Fuel duty has been frozen since March 2011 and it looks like it will remain so—hopefully—until at least May 2015, but it still makes up a hefty chunk of the cost. More than 60% of what motorists pay goes to the Exchequer in fuel duty and VAT. According to FairFuelUK:
“The Treasury hides the staggering fact that the UK still has the highest level of percentage taxation on road users in the EU for diesel and the second highest for Petrol. The Chancellor currently takes considerably more at the pumps for diesel in tax than any other EU Finance Minister.”
The Petrol Retailers Association believes:
“The main reason pump prices have not fallen in line with crude oil is due to the high proportion of Government tax levied on fuel.”
What of Labour’s record in office on fuel duty? According to the House of Commons Library, under the previous Labour Government the percentage of the cost of a litre of fuel paid in tax fell from 75% in 1997 to 65% in 2010. In contrast, between 1990 and 1997, under the Conservatives, it rose from 59% to 75%. In government, Labour announced the postponement of fuel duty increases on several occasions—in total we postponed increases or froze fuel duty in real terms 13 times. The coalition is in government now, so I ask the Minister to discuss with her Treasury colleagues at the very least to drop the extra tax from their VAT hike on fuel.
Mr MacNeil: I am hearing the hon. Gentleman waxing lyrical about the former Labour Government. I was trying to bite my tongue, but I have to remind him of the fuel duty escalator that they were quite happy to use. Is it now a source of shame to him that his Government did not introduce a rural fuel derogation that would have helped island and remote areas, despite being asked for that for four or five years? They could and should have done that, but they refused. Under pressure, this Government have now done that, but that was an opportunity lost by that Labour Government.
Mr McKenzie: As the hon. Gentleman will be well aware, the fuel duty escalator introduced by Labour was a green tax to put funds into green energy. Unfortunately, that idea has never been taken up. We heard from this Government that they were to be the greenest that we had ever seen, but they are not by some margin.
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Let me now focus on why we need to reduce fuel costs. Apart from the obvious—reduction in transport costs for goods, and increasing employment—large numbers of workers rely on a car to get to their place of work. They have no choice in that, especially with the price of rail travel as it is today. Petrol and diesel are simply unavoidable, essential costs for millions of motorists and businesses—90% of people in employment say that they have no choice but to use their car to get to work, and 44% also use their vehicle when at work.
In a recent survey of small and medium-sized enterprises, one in 10 said that they were making staff redundant owing to high fuel prices, and two in 10 said that they had stopped recruitment. Car-owning households are estimated to spend a high percentage of their disposable income on running a vehicle. Again, car ownership is not a luxury but an essential part of modern life. Let us not forget that public transport in the form of bus and rail travel must also reduce in price if oil prices are falling.
In conclusion, I ask the following of the Minister. We need an open and transparent inquiry into fuel pricing. We need more parity on fuel prices at the pump and an end to the ridiculously small radius for competition and price comparison. Fuel wholesalers must be made to reveal their prices, because that will allow retailers to defend themselves when they are accused of not passing on cuts.
At the very least, we need a further freeze in fuel duty. In view of the continuing cost of living crisis and the low rate of inflation, there can be no justification for an increase—if anything, there should be a reduction. Finally, the Government should return the rate of VAT on fuel from 20% to the level it was before they came to power in 2010. I am in danger of showing my age here, but if the British motorist was to sit down and work out how much they paid for a gallon of petrol, they would be appalled.
11.19 am
The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd): It is a pleasure to serve under your chairmanship, Sir Roger. This has been a very interesting topic to debate. It has attracted a lot of attention, and I hope I can answer most of the questions that the hon. Member for Inverclyde (Mr McKenzie) asked.
Let me begin by saying that the evidence is that at a national level the UK fuel sector represents a very competitive market. It is as a direct result of that competition that we see the fall in crude oil prices being passed on to consumers at the pumps and in their homes. The hon. Gentleman particularly wanted to address the issue of whether competition is working nationally and in his constituency, so I will comment on the role and what I believe is the success of competition in the road fuel market.
The downstream fuel market served by UK petrol stations and forecourts is a market in which competitive forces should operate to deliver a fair deal for customers. It is subject to UK competition law, and the Government do not have a direct role in setting the price of petroleum products in an open and competitive market. As the hon. Gentleman said, in January 2013, the Office of Fair Trading published the results of its call for information,
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which found no evidence that oil price rises are passed on to motorists more quickly than oil price falls; that issue was also mentioned by the hon. Member for Strangford (Jim Shannon). The OFT national analysis suggests that the so-called “rocket and feather impact”, whereby prices rise like a rocket and fall like a feather,
“does not appear to be a significant feature of the road fuel sector in the UK.”
“Our estimates of the speed at which upstream price changes were passed down the supply chain when upstream prices rose was not found to be statistically significantly different from the speed of pass-through when upstream prices fell indicating that this pass-through is, on average, symmetric, both for diesel and petrol.”
As we have discussed, movements in pump prices are driven by crude oil prices, and analysis by the Department of Energy and Climate Change suggests that, once crude price changes are converted into sterling, they are fully passed through into pumps within six to seven weeks, which largely represents the time required to refine crude oil into petrol and diesel, and to distribute petrol and diesel. Although we have already seen some price falls, I am hopeful that we may see more in the future, after the time lag of six to seven weeks.
Jim Shannon: I have not seen that in my constituency. What my constituents have seen is an increase within 24 hours every time oil goes up in price, but certainly not the equivalent downturn when oil prices fall. May I respectfully make a suggestion to the Minister? I am not saying that it is always the case, but in some cases the petrol tanks were full of fuel that was bought before the price increase, and I suggest that that practice would result in exorbitant profits for the person concerned.
Amber Rudd: It is interesting to hear the hon. Gentleman’s views and his account of the experience in his constituency. In fact, as I say, it has been six to seven weeks since the oil price fell, so I would be very surprised if he did not start to see that fall reflected in the forecourt price in his constituency. Perhaps he would keep me posted, because the Government are committed to making sure that that happens.
Mr MacNeil: The Minister has asserted that these price falls come through within six or seven weeks, and she may well be right. However, the difficulty—it was mentioned by the hon. Member for Inverclyde (Mr McKenzie)—is that that is not apparent or obvious to anyone, including the general public. It should not take a Government Minister to assert that; there should be transparency in the entire system, so that we can see price falls with our own eyes and do not need to go to the Government or any investigative authority for such guarantees.
Amber Rudd:
I beg to differ. There has been quite extensive coverage in the newspapers—there certainly has been in my local newspaper—about where there are different prices for petrol, and the fact is that people are seeing a reduction in the price of petrol. The hon. Gentleman will be aware that although the price of oil has a big impact on the price of fuel, it is not, as the hon. Member for Inverclyde said, the only element in
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the price of petrol. Duty also plays a large part, and I will make some comments about that in due course. Nevertheless, the oil price fall is beginning to have an impact. I am delighted to take part in this debate today, but it is wrong to suggest that the public are not aware of the changes.
Mr McKenzie: Is it not the case that the evidence the Minister is basing her argument on—the investigation by the OFT—has been criticised for being flawed?
Amber Rudd: I am afraid that the evidence tends not to please everybody. If the hon. Gentleman disagreed with the evidence, I am sure he made that clear at the time. There are groups that would disagree with it; whether that is because they do not like the conclusions of the report or because they doubt the evidence is always open to debate.
Let me say a little more about the 2013 call for evidence; it is relevant to this debate, because it reassures hon. Members and members of the public that we have addressed this issue and looked into it. The OFT analysis found that in August 2012, for example, there was a difference between rural and urban prices; I know that is of particular concern to the hon. Gentleman. Her Majesty’s Treasury engaged with the European Commission to approve the Government’s application for 17 of the most rural areas on the UK mainland to receive a 5p per litre fuel duty rebate. That rebate is targeted at remote areas of the UK that face particularly high pump prices.
Amber Rudd: The Scottish islands and the Isles of Scilly have benefited from that rebate since March 2012, and the story about the rebate appeared in the press recently; there was a reference to it yesterday.
Mr MacNeil: The rural fuel derogation is indeed very welcome; it has been good. However, the money set aside for it was not all spent and I wonder whether there is a possibility of increasing the amount of the derogation as time goes on. It is currently 5p per litre, but could 7p or 8p per litre be considered?
Amber Rudd: I understand that the hon. Gentleman is ambitious to gain a further discount for his constituents. At the moment, however, the derogation is likely to remain the same, although I am sure that members of HMT will always keep it under review.
Time is short, so I will address a couple of the other points made by the hon. Member for Inverclyde, who called this debate. There was a comment about the supermarkets. The big four supermarkets have increased their share of the road fuel sold in the UK, from 29% in 2004 to 39% in 2012. The growth of supermarkets in this sector appears to have had a positive impact for motorists. Supermarkets are able to buy wholesale road fuel more cheaply than other retailers, and the high volumes that they sell allow them to operate on lower gross margins. I am hopeful that the entry of the supermarkets into this sector on such a large scale will have a positive effect on delivering improved prices for our consumers.
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Mr McKenzie: I encourage the Minister to comment on the supermarkets’ radius of competition; as I highlighted, in certain parts of the country it is ridiculously small. In those areas, they are competing with themselves, and only themselves.
Amber Rudd: The hon. Gentleman’s point about supermarkets is interesting. However, the same is true of fuel as of other products, and the fact that supermarkets compete with one another demonstrates that competition is effective and keeps prices low.
I will just make a quick comment about fuel costs, as the hon. Gentleman commented on the role of the previous Government. In 2011, the Government abolished the previous Government’s fuel duty escalator; we cut fuel duty by 1p a litre in March 2011; and we have scrapped four planned increases in fuel duty during this Parliament. By the end of this Parliament, fuel duty will have been frozen for nearly four and a half years, which will be the longest fuel duty freeze for more than 20 years. The Government are taking action to protect the consumer by keeping fuel duty at a manageable level while ensuring that we concentrate on the overall need to stimulate our economy and constantly reduce the deficit.
Mr McKenzie: Will the Minister give way?
Amber Rudd: I have a few more points to make, so I hope the hon. Gentleman will forgive me for not giving away.
I reassure hon. Members that, although the price drop is being passed on, we expect more from the fuel providers. We will watch oil companies carefully to ensure that they continue to pass on the falling oil price, which benefits both consumers and the wider economy. Consumers and motorists are entitled to the best value for money, and the Government are determined to ensure that they get it. We will keep this issue constantly under review, and we welcome the impact that it is having on consumers and their weekly costs.
11.28 am
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Homeless Young People
[John Robertson in the Chair]
2.30 pm
Stephen Gilbert (St Austell and Newquay) (LD): Mr Robertson, it is a pleasure to serve under your chairmanship in this important debate. I warmly welcome right hon. and hon. Members who have joined us here. May I ask if it is in order for me to also welcome to the debate people in the Public Gallery, some of whom are former homeless people?
John Robertson (in the Chair): You have just done it.
Stephen Gilbert: Thank you, Mr Robertson.
As we know, homelessness is a crisis. It is devastating, and it should not happen to anyone. We should all be clear that we are just a few steps away from finding ourselves with nowhere to go, whether through the loss of our jobs or our health, or relationship breakdown. Homelessness can be an isolating and frightening experience. Homeless people often feel that they are invisible, ignored and forgotten. At worst, homelessness can mean sleeping rough on the streets. Of course, we all know that the problem of homelessness is much bigger than the problem of rough sleeping. It is clear that, after years of declining trends, all forms of homelessness have risen due to the shortage of housing and the ongoing effects of the worst economic recession for 100 years.
I register my thanks to Crisis, Shelter, Homeless Link, Centrepoint, the local government ombudsman, Depaul UK, Generation Rent, the Children’s Society and Gallery Youth, as well as to the House of Commons Library for providing supporting information for this debate. I acknowledge the profoundly good work done by many smaller charities across the country, such as St Petroc’s Society and the St Austell community kitchen, in my constituency, and many religious groups that seek to help people who find themselves with nowhere to go.
Crisis points out that almost one in 10 people say they have been homeless at some point, with a fifth of those people saying that it has happened in the past five years. I spent a period after a relationship breakdown out of the flat that we had been in and sofa-surfing with my friends. Although that is not rough sleeping, it is a form of homelessness. The experience was traumatic for me and even more traumatic, I suspect, for the friends I was imposing on. I remain very grateful for their help.
It happened to me later in life, but, alarmingly, half of all homeless people first become homeless aged under 21, with the majority facing the experience again and again because they cannot get the help that they need. Indeed, the Children’s Society tells us that every year about 14,000 children aged 16 or 17 present themselves as homeless, and many are placed in inappropriate accommodation such as bed and breakfast and short-term lets.
Last year, about 3,400 16 or 17-year-olds left care and found themselves in need of accommodation. Soon-to-be-published Children’s Society research shows that more than two thirds of children assessed because of a risk of homelessness are not offered any help, and that a quarter of 16 to 17-year-olds assessed are housed in unsuitable accommodation after presenting themselves.
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Alex Cunningham (Stockton North) (Lab): I congratulate the hon. Gentleman on securing this important debate. I, too, recognise the plight of young people leaving care. I hope the hon. Gentleman agrees that it should be Government policy to ban the use of bed-and-breakfast accommodation for such people.
According to Crisis, only 15% of Members of Parliament believe that people get proper support on homelessness; two thirds of MPs think that there should be clearer duties placed on local authorities to do more; and three quarters of MPs believe that it should be a priority for Government. Does the hon. Gentleman agree that a specific and wider duty of care for homeless people needs to be placed on local authorities and that they should also have the resources they need to deliver a proper service?
Stephen Gilbert: I could not agree more, both about the inappropriateness of bed-and-breakfast accommodation for vulnerable young people—I will mention that later—and about the need to remove the two tiers in the system at the moment for those who are in priority need and those who are not. Experience in the rest of the United Kingdom shows that reform is possible. The mantra in this debate should be that nobody is turned away when they present themselves as homeless.
We know that the increase in the number of homeless young people is despite the fact that 16 and 17-year-olds are supposed to be protected by both the Children Act 1989 and the Housing Act 1988. Charity advocacy services say that they often have to help young people who are not given the adequate protection that this House has asked local authorities to provide under those statutes. It is not just charities saying that. The local government ombudsman says it, too, stating:
“The use of bed and breakfast accommodation often leads to families and young people living in cramped conditions and sharing facilities with adults who may be vulnerable or have significant social problems.”
Research, both from the Minister’s Department and from Crisis, has found that young people who experience homelessness are considerably more vulnerable as a group than other homeless people. They often first experienced homelessness at a very young age, with a third of young people surveyed having become homeless for the first time before the age of 15. Homelessness at a young age that is not resolved can lead to an ongoing cycle of homelessness, with a significant minority of all homeless people—four in ten—having first become homeless before the age of 20. It is critical that we prevent that cycle before it begins.
Ms Karen Buck (Westminster North) (Lab) I, too, congratulate the hon. Gentleman on securing this important debate. Does he recognise the experience of many hon. Members in dealing with homeless young people who have had a harsh experience of gatekeeping when approaching local authorities? In one example that I am still dealing with, we are now in the third calendar year of the local authority, Westminster, resisting an application regarding homelessness from a young man with psychosis, in the course of which we have had to go to court at least once. The total cost to the local authority of refusing to accept homelessness must vastly outweigh what would have been invested if that young man had been able to get a home in the first place.
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Stephen Gilbert: I am aware of the excellent work that the hon. Lady has done in campaigning on the issue in general and on the specific case that she mentions. I know that she has fought strongly for that individual’s right to access proper services. I think we are all aware that local authorities are the key gatekeeper in this process. The duty that this House puts on local authorities needs to be clear, and their pathways need to be certain to lead to help for the young people who approach them.
Sir Alan Beith (Berwick-upon-Tweed) (LD): Is my hon. Friend aware that although ring-fencing is not something that we generally encourage, its removal had quite a significant effect in Northumberland, for example in the move from block-booking supported accommodation from providers to spot-purchase? That is difficult for charities such as Gallery Youth and Berwick Youth Project to cope with.
Stephen Gilbert: My right hon. Friend is right. After the ring fence was removed by the previous Government, the impact was felt in Cornwall under the current Government because of the difficult decisions that they had to take to rebalance the books. Supporting People was one of the first areas of funding to be cut in Cornwall. I found myself sleeping outside county hall overnight, with a cohort of vulnerable people, in protest at that decision. I understand exactly the impact of the removal of the ring fence and the budget constraints on providing such vital services.
The point is not simply that the street is an unsafe and unsuitable place for young people. Most young people who present to statutory services as homeless do so because another strategy for coping with having no safe permanent place to live has broken down. The places young people sleep in an effort to stay off the street are often unsuitable for them as vulnerable individuals.
A third of young people Crisis spoke to during a survey admitted to committing a minor crime in the hope of being taken into custody for the night; 17% had avoided bail or committed an offence to receive custodial accommodation and therefore a bed for the night; almost 20% had attempted to admit themselves to accident and emergency departments to get a bed for the night; and, alarmingly, 10% had entered into a sexual relationship to get a bed for the night. These are not safe havens for young people: they put them in danger of further exploitation.
Steve Brine (Winchester) (Con): Well done to my hon. Friend for securing the debate. He is talking about vulnerable young people. Winchester Churches Nightshelter contacted me in advance of the debate and said that the complexity of its guests’ needs had significantly increased in recent years. Many referrals have a mental health issue, a substance abuse issue or both. Although many of the services are there, they are not working together to meet such complex needs. Does he agree that the next frontier in tackling homelessness among young people must be a national focus by the next Government, of whichever colour, on addressing multiple needs?
Stephen Gilbert:
I completely agree with my hon. Friend. We see a cohort presenting with complex needs that are often associated with substance abuse—whether that is alcohol or illicit drugs—mental health issues and, perhaps, abuse in the family background. As well as having a mantra of nobody being turned away, we have
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to get to grips with the fact that we need to provide joined-up services in a holistic way to deal with the underlying issues that people present with.
Mr George Howarth (Knowsley) (Lab): I congratulate the hon. Gentleman on securing this debate, which is timely and important. I apologise that I am unable to stay for the whole debate because of other commitments.
Within the hierarchy of needs that the hon. Gentleman describes, does he accept that a number of children coming out of care, or in circumstances in which their care arrangements have broken down, seem to fall off the scale altogether as far as the appropriate authorities are concerned? That needs addressing, too.
Stephen Gilbert: The right hon. Gentleman puts an important point on the record. If the state is taking care of young people for a period of time for whatever reason, surely one of its first duties as a guardian is to ensure a smooth transition from the care setting to an environment in which they can flourish and look after themselves. For many, the process becomes a cliff edge when their care package runs out without ongoing support, placing them in a position that means they are unable to manage their finances and understand the situation around them or their obligations. They do not have the ongoing support that they need to adapt in the way that someone with a family could. The right hon. Gentleman’s point is entirely right.
Seema Malhotra (Feltham and Heston) (Lab/Co-op): The hon. Gentleman is being extremely generous in giving way. I, too, congratulate him on securing the debate. On his point about vulnerable children, does he agree that situations of domestic abuse and domestic violence, which might well result in children becoming more vulnerable, should be considered in relation to wider policies, whether in local government or support services?
Stephen Gilbert: The hon. Lady makes a perfectly valid point. Abuse can come in many forms, whether violent, sexual or psychological. Often, family breakdown has a lasting negative impact on people’s mental health. I have a constituent who was turned away by his family and booted out the door because he came out to them as gay. That had a devastating impact, and when he presented to Cornwall council as homeless and was unable to get any support, it felt like a double whammy. Ultimately, we were able to secure support for him, but the hon. Lady makes exactly the right point—many of the individuals who present as homeless have complex underlying needs. We do not do them or ourselves a favour if we do not address those needs.
The first place where many people present with complex needs is their local council. Councils are in a unique position to assist people, but when they fail to do so, people in need of help can be left with nowhere to go and their experience can quickly spiral deeper and deeper into chaotic homelessness. Evidence shows that while the number of young people accepted by local authorities as statutorily homeless is going down, the number of young people accessing homelessness services is increasing.
Duncan Hames (Chippenham) (LD):
I congratulate my hon. Friend on securing this exceptionally important debate. Does he agree that there is a risk that the figures he cites underplay the extent of the problem? I have a
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constituent who for immigration purposes has no recourse to public funds. Her baby daughter—the daughter of a British man who through violence is no longer part of that household—desperately needs adequate housing, yet the council takes the view that it is not obliged to meet the housing need of the mother or that little girl.
Stephen Gilbert: My hon. Friend is a passionate campaigner on these issues for his constituents, and he makes exactly the right point. The official statistics belie the reality of the situation. We know the numbers presented by the Minister, the Department and third parties, such as Crisis, but we are all aware that the housing crisis is such that many thousands more people than the official figures suggest are in inappropriate or overcrowded accommodation or stuck at home in difficult relationships or sofa-surfing. Part of the answer, as I am sure my hon. Friend will appreciate, is getting on and building more homes, but it is also about making the pathways easier for those presenting as homeless.
One of the tragedies is that most single homeless people are not considered to be a priority by local authorities, meaning that the council has no legal duty to find them housing. Many are ignored and given little or no help. Crisis recently carried out a mystery shopper exercise called “Turned Away”, in which eight formerly homeless people visited 16 local authorities to examine the quality of advice and assistance provided to single homeless people. In well over half—50 of the 87 visits—the help offered was inadequate. In 29 cases, they were simply turned away without any help or the opportunity to speak to a housing adviser. That included situations where the mystery shoppers were portraying very vulnerable characters, such as a victim of domestic violence or a woman with serious mental health problems.
That is the result when single homeless people actually get in front of the local authority, but many can be deterred from approaching their local authority at all because of previous negative experiences or low expectations on the outcome. A third of single homeless people who had previously approached their local authority for help said that they did not do so during their most recent episode of homelessness because of the lack of help offered the first time round.
When homeless people do approach their council, the consequences of being turned away with no support can be disastrous. Many are left with no option but to sleep on the floors of friends and family, squat in abandoned buildings or, in the worst examples, sleep rough. That can lead to their falling into a situation where support needs and other issues develop, resulting in their being trapped in homelessness for far longer. We all know that rough sleeping is a traumatising experience that impacts hugely on an individual’s health and well-being. Mental and physical health problems can be exacerbated by rough sleeping. Homelessness is also dangerous, with homeless people 13 times more likely to be victims of crime than the general public. Indeed, the average age of death for someone sleeping rough is just 47, which is 30 years younger than the national average. Homelessness is also expensive. As well as the huge personal cost to individuals, the financial costs are significant. The annual cost of homelessness to the Exchequer is estimated to be £1 billion.
We need to take action now to ensure that homeless people get the help they need. The law creates a two-tier system, with one level for those in priority need who are
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owed the full homelessness duty by their local authority and another for those who are judged not to be owed that duty and can be turned away with little or no help. I want to see all parties in the House commit to carrying out a review of the support given to single people under homelessness legislation in England.
Over the years, Governments of all colours have tried to resolve the persistent problem of single homelessness, but the law has always held back progress. The devolved Governments in Scotland and Wales have taken different approaches. In Scotland, priority need has been abolished, meaning that all homeless people are entitled to accommodation. The Welsh Government have recently introduced a new duty for local authorities to take steps to prevent homelessness for anyone threatened with losing their home, regardless of their priority need status. That shows that reform is possible. The next UK Government should consider what lessons can be learned to reform the law in England.
As the hon. Member for Stockton North (Alex Cunningham) said, there is a lot of support for tackling homelessness—56% of the public agree that the Government should do more and 78% of MPs believe that tackling homelessness should be a priority. We regularly hear from colleagues in the Tea Room about the difficult experiences we all have in getting help for the very vulnerable people who approach us. The hon. Member for Westminster North (Ms Buck) made that point. Homelessness is a devastating experience that should not happen to anyone in the 21st century.
Ian Lavery (Wansbeck) (Lab): I congratulate the hon. Gentleman on bringing this extremely important issue to the House. A delegation from Youth Homelessness North East came to the House of Commons last week—the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) was in attendance—and we had an excellent meeting. The prime reason for youth homelessness is the parents being no longer willing to accommodate them. However, there are other important reasons: welfare reform; the bedroom tax; the extension of the shared accommodation rate; and sanctions. Those are all part of a welfare reform package, introduced by this Government, that has been devastating for young people in our communities. What will the Government do to row back from that and help the young people highlighted in this afternoon’s debate?
Stephen Gilbert: I thank the hon. Gentleman for the point he makes. I visited a project in Newcastle called Outlook, which helps to house homeless lesbian, gay, bisexual, and transgender youngsters who find themselves kicked out of their home when they come out, so I am aware of some of the very good work that happens in his part of the country. On welfare reform, my party and I have no truck with anybody who seeks to remove housing benefit from the under-25s. Difficult decisions have been necessary to rebalance the public finances, but such a measure would simply punish further a group of people who are often very vulnerable.
Mr Andy Slaughter (Hammersmith) (Lab):
There are some fantastic organisations such as St Mungo’s Broadway, which is based in my constituency. Another problem that needs to be dealt with is the lack of
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accommodation: move-on accommodation, first-stage accommodation, hostel accommodation, and permanent council accommodation. I know that the hon. Gentleman’s area of the country has problems as much as mine does, and such problems must be tackled by any incoming Government.
Stephen Gilbert: The hon. Gentleman is exactly right. He may be surprised to know that I have visited St Mungo’s Broadway in the past five years to see the very good work that it does in transiting people from rough sleeping into intensively supported accommodation, then making the transit to more independent living. As a project, it is an exemplar. The very good work that goes on in his constituency should be commended.
Jake Berry (Rossendale and Darwen) (Con): I thank the hon. Gentleman for being generous with his time, and I congratulate him on securing this important debate. I am sure he will acknowledge that one of the things the Government have done to enable local authorities to discharge their homelessness duty is give local authorities a power to discharge that duty to the private sector, which has seen more people being housed.
The hon. Gentleman asked how many MPs want to tackle this scourge in our society. Is he aware of the story of the good Samaritan? When I walk into Parliament, I occasionally see people sleeping rough in the tube station. They are passed every day by hundreds of MPs. How many colleagues, like me, have seen them and phoned the “No Second Night Out” line to report them as homeless, and how many colleagues simply pass by on the other side, rather than take responsibility to try to help tackle the issue?
Stephen Gilbert: My hon. Friend makes a very important point. Phoning the “No Second Night Out” scheme is something that we can all do—certainly in London—every time we see somebody sleeping rough.
I have visited Centrepoint in London, St Mungo’s, Outlook and other projects around the country, and I know that although Members of Parliament may not be putting out press releases and tweeting about their actions in this area, colleagues from all parties do a lot of good work in this area. The matter is urgent and we need to bring homelessness in the United Kingdom to an end, particularly homelessness among very vulnerable groups such as young people.
2.53 pm
Simon Danczuk (Rochdale) (Lab): I thank the hon. Member for St Austell and Newquay (Stephen Gilbert) for securing this important debate. He made an excellent speech. That is not a compliment that I throw around lightly; I truly mean it. He made a great contribution on an exceptionally important issue.
It can often seem that modern politics is swamped by statistics, but some statistics really cut through and tell us something about modern Britain and the society in which we live. The current figures on the number of young homeless people fit that description. They tell us something about our society that we probably do not want to hear.
We live in one of the richest countries in the world—that is the reality—but last year more than 100,000 people approached their local council as homeless. We know that many of them are young single people with nowhere
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to turn and no one to rely on. Figures from the charity Homeless Link show that 53% of people using homeless services in England are between the ages of 16 and 25. That is a shocking percentage. For me there is only one word to describe the current situation: failure. I am sure all hon. Members would agree there is nothing that anyone could have done to bring homelessness upon themselves at the age of 16. When we see a young homeless person, it is a sign not of their failure but of our failure.
The main point I want to make is that we need to do more to prevent young people from becoming homeless in the first place. I want to pay tribute to the many organisations that help support young homeless people and keep them safe. In Rochdale, fantastic work is being done by Petrus, a charity that deals with young homeless people throughout the borough. Petrus is a real force for good. For example, it has been instrumental in helping young girls who have been at risk of on-street grooming in the town. In one case that I heard about, Petrus helped a girl who was described as “the most at-risk young person in Rochdale”. Petrus staff built trust with her, helped her realise she was being groomed and got her to a safe place out of town, but the work of Petrus goes far beyond simply keeping people safe. Its approach is to help young people rebuild their lives and give them opportunities to move on.
In another case, Petrus helped a young girl who was extremely vulnerable and difficult to deal with. Initially, it took her in for a weekend, but she ended up staying for a year. By the end of that year, the girl had become the only young person in the north-west to complete a work experience programme with AstraZeneca, which involved her travelling up to 90 miles to get to work. She progressed to such an extent that she even came here and spoke about her experience as part of the Youth Parliament. It is a really inspiring story and a testament to the fantastic work of the staff at Petrus.
However, even great charities such as Petrus are struggling to cope with the numbers of homeless people that we are seeing at the moment. Figures supplied to me by the charity Crisis show that in the financial year 2013-14 there were 927 households in Rochdale that made a homelessness application—nearly 1,000 in a small town like Rochdale. It is hard to believe. What is even harder to believe is the rate at which that figure is increasing.
Since 2010, the number of people in priority need in Rochdale has increased by 354%. More worrying is that the number of people found not to be in priority need has increased by 332%. I say it is more worrying because, as the hon. Member for St Austell and Newquay pointed out, many of the people who are not in priority need are young people who then—literally—have to live their lives out on the street. They are single young homeless people. The fact that we have seen such a big increase recently is no coincidence. We have been through a recession, and that has had an effect, but we are now in recovery and still the number of homeless people keeps on rising. It is clear to me that the Government are simply not doing enough to address the causes of homelessness among young people.
Although the theme of the debate is Government support for young homeless people, my view is that the real problems start much earlier. What we need to focus on more is preventing young people from becoming homeless in the first place.