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Benefits Simplification

I thank my hon. Friend for that intervention. I shall come to the problems of unintentional error by claimants, caused by precisely the situation that he describes. We have had a series of examples and analyses of the kinds of complexity that we are dealing with. The causes of that complexity can be boiled down to six pathologies—six underlying problems that we must address—which I shall deal with in no particular order of importance. First, there is means-testing, up front or once a benefit has been granted and we are into the territory of benefits withdrawal rates. Secondly, anything that requires people to fill out a long and complicated form to explain their financial situation, and then potentially to fill out yet more forms every time their finances change, is a huge layer of complexity—problems arising from changes of circumstances. Anything that requires people to update bureaucrats about changes of circumstances, such as changes in family circumstances caused because they have got divorced, left their partner or got married, as well as the financial alterations that I have just described, creates horrendous layers of complexity. The best example, perhaps, is people who are liable to take temporary jobs and cycle in and out of work frequently during the year. They have to go on and off benefits, and on and off tax credits. By and large, the delays in processing those applications mean that they are always behind and out of date, and just as the administrative arrangements are becoming organised for a person's current situation, life changes again and they have to go back to square one. Small wonder, therefore, that getting a job is not only difficult for those people, but discouraging. Thirdly, we have far too many tightly drawn small-scale benefits. We have already heard two different figures during the debate. One was 51 different benefits, but the Chairman of the Committee counted 40. I suspect that if we included all the passported benefits, we could probably come up with a third figure. All those narrowly drawn benefits have narrowly drawn eligibility rules, which are all different. That means that if people have to apply for multiple benefits or move off one benefit and on to another, there are yet more forms to fill in. The first example that I gave of the gentleman who could have applied for eight different incapacity benefits illustrated that nicely. Fourthly, the linking rules are probably more complicated than the benefits. Every time people move off one benefit and on to another, then back again on to a third, there are linking rules about backdating and the interacting effects. If claimants thought they were confused when they looked at the benefits, the linking rules would drive them to drink when they tried to understand them. Fifthly, as the Chairman of the Select Committee mentioned, Members of the House have a propensity for regular amendments and initiatives. We all think that we can improve things and make the system better, but every time we lay yet another bright idea on top of the already toppling complex system, it just makes things worse. We need to understand that if we are to introduce amendments, they must reduce the total amount of legislation and the total complexity, rather than add to them. Finally, another area of terrible complexity is straightforward administrative inefficiency; we have heard examples of that from both sides of the House. The hon. Member for Inverness, Nairn, Badenoch and Strathspey mentioned someone who had to turn up three times, roughly a week apart, to the same centre to have the same medical assessment for three different benefits. That is a classic example of administrative inefficiency, and I am sure that Members on both sides could come up with dozens and dozens more. Those are the underlying causes of the symptoms, examples of which we have all been exchanging, but we also need to bear in mind that making things tidier is not just an academic exercise; there are also serious and vital advantages to having a simplified benefits system, and it is worth reminding ourselves about them because they are the prize at which this debate is aiming. They are simple, and there are many fewer of them than the causes of complexity—there are three or four at most. First, we can reduce error. We can do that on behalf of staff. They need a PhD to understand most of what is going on in the system at the moment; it is therefore understandable that mistakes are made—and that is before we move on to the problems caused by computer systems, which my Committee colleague, the hon. Member for Blackpool, North and Fleetwood, mentioned. The complexity is also a problem for claimants, because as we have just heard, they cannot be expected to understand the entire system. They are even less likely to understand it than the people who work as benefits experts within the system. Inevitably, claimants will make mistakes. That makes life hard for them and potentially exposes them to accusations of fraud even if they make a mistake in good faith. The second advantage to simplification is that we can improve take-up. It is striking that child benefit, one of the simplest benefits, has one of the highest levels of take-up of any of them. It is one of the most successful, and the impact on poverty and on reaching the Government's stated objectives for the benefits system would be profound if we could improve the take-up of other benefits in the same way. That might cost more, but I understand that the Government have reserves in their financial estimates.