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Benefits Simplification

This has been an informative debate, and I congratulate hon. Friends and other Members on their constructive contributions. In all parts of the House there has been an acknowledgment that for decades, Administrations of all persuasions have been caught in a cycle of constantly adding to the system without necessarily trying to get hold of it in a way that enables us to look forward to change. I shall try to address that subject, as well as the individual points raised by Members. I congratulate my hon. Friend the Member for Bradford, North (Mr. Rooney), the Chair of the Work and Pensions Committee, on securing the debate and on ably opening the discussion. He has also brought to bear his experience as a welfare rights adviser. I have done a quick count, and I think that the Department for Work and Pensions provides 22 benefits, five of which are no longer open to new claims; local authorities pay two benefits; Her Majesty's Revenue and Customs pays four benefits if we include tax credits; and four statutory payments are made by employers, making a total of 32. Therefore, this matter clearly raises challenges for us, but I must add that it is also about the complexities of needs, and that raises a lot of issues in terms of whether we should have a blanket approach. That could be hugely costly to the taxpayer, and having just a single approach across the piece might not be fair in terms of addressing the requirements of those with complex needs. However, we have heard enough evidence this afternoon that there is undoubtedly more to be done in trying to reduce the complexity in the system and in having some analysis of the way forward. The approach must be not only for next year or the next five years, but, as my hon. Friend the Member for Aberdeen, South (Miss Begg) indicated, there must be a generational change for the future, so that we can at least take some steps on a journey towards a destination that—I hope we can achieve a consensus on this—is better than where we are today. We have set up in the Department a dedicated benefit simplification unit. Every submission I get has a little note from the unit attached to the bottom on whether or not this is helping the system. I hope the House will accept my assurance that I have not had too many disagreements with it on that front, and it is pleasing to see the notes attached to the submissions because they act as triggers for thought. A number of changes have been made in the first year, such as aligning the treatment of charitable, voluntary and personal injury income across all benefits, consolidating more than 200 statutory instruments introduced since the start of the housing benefit scheme way back in 1988, and aligning the capital limits across the working-age benefits. Further simplifications were included in the Department's 2007 budget settlement, such as ignoring all final earnings, including holiday pay and pay in lieu of notice, on new claims to benefit. That removed the need for about 1.7 million inquiries to employers each year. My hon. Friend the Member for Bradford, North made that point. I am pleased to be able to say on that front that although the original proposal was that we would do that from April 2008, we actually introduced it from October this year. Again, we met our aspiration of making greater progress in the timing and delivery of that change. Another simplification was to pay all Jobcentre Plus working-age benefits a minimum of two weeks in arrears on a common pay day. That will remove the current mix of different pay periods and the confusion caused when customers change from one benefit to another. Yet another simplification is aligning the treatment of income from sub-tenants across the benefits system by introducing a flat-rate £20 disregard. Today Members will have heard the uprating statement which announced a further substantial package of measures to simplify the state pension system, including process improvements to enable housing benefit and council tax benefit to be claimed over the telephone at the same time as state pension and pension credit. I think we would all agree that that is the right way forward, and it sets an example of what might be achievable in other areas. Due credit has been given to the way that, particularly in the Pension Service, the opportunity has been taken to look more innovatively at practices and how to carry them out. We are also simplifying the structure of income support and jobseeker's allowance by removing the lower rate for 16 and 17-year-olds so that from April of next year single 16 to 24-year-olds will all be paid the same rate. That is another way in which we have removed complexity from the system. We are redesigning our benefits services. It is the ambition of us all that customers should not have to go from one place to another to get the help that they need. The Department's change programme will bring in a no-wrong-door approach, which aims to meet the majority of our customers' needs through a single contact. I appreciate the comments about how we are looking at the Lean ideas and how they can be applied within the Department for Work and Pensions—I was interested in how they could be used in the national health service when I was a public health Minister. Our staff who have been engaged in that work have found it satisfying. They sense that they can have an input that will be listened to, because they are on the front line and know where things work and where they do not. We are trying to improve our self-service channels. From next spring, customers will be able to access a secure online account via Directgov. As has been said, the future is online. This is about examining people's need to access these sorts of services. The work that we have done to provide them in community settings for those who could not necessarily afford to have the technology in their own home is one of the ways in which we provide a more inclusive service for people, rather than a service that is exclusive. I shall touch on the important issue of data protection later. Part of the reason for having that online service is the fact that it will be able to answer a few simple questions in the initial stages. It will then advise customers to what benefits they might be entitled, and work out how much they might be entitled to receive. Importantly, our ambition is that it will signpost them towards other services of which they might not be aware, such as pension forecasts or our internet job bank. We are examining how we can group and package products together to meet the needs of specific groups. We are again working with others. Mention has been made of our work with Her Majesty's Revenue and Customs and local authorities to see how we can pull together the areas of benefits, tax credits and housing benefit, which are often seen as separate. We have had success with the initial pilot in the north-east, and the scheme is now operating in seven other areas. It has reduced the amount of time taken to process those different parts of someone's financial package. In addition, when someone is making the transition from being on benefits to being in work, their knowing that that process and its financial meaning will be worked out quickly is an important incentive. I agree with the hon. Member for Weston-super-Mare (John Penrose) that better-off calculations are useful at any stage, but they are most useful where there is a job for someone to go to, and where people can see joined-up thinking and what things will mean for themselves and their family. We are working on collecting information once and sharing it more accurately and quickly to make it easier for customers to get the financial support that they need if they lose their job. That enables them to focus their attention on getting back to work. A working group across Jobcentre Plus, Pension Service and the disability and carers service has been set up to make improvements in how we deal with customers who need access to disability services and working-age or pensions support, and customers making the transition from working-age to pensions support. A number of contributions were made in this debate. My hon. Friend the Member for Bradford, North talked about error, and I acknowledge that that is an important factor to which we must attend. Initially we looked at reducing fraud, because we saw that as a priority. I think that the loss of resources through fraud is at two thirds of its 1997 level. We are now focusing on the problem of error. In January, the Department launched a comprehensive and ambitious strategy for reducing official and customer error across all benefits, entitled ““Getting welfare right””. We aim to deliver estimated savings of about £1 billion over the next five years to 2012. I agree with the comments made about the fact that some of this is helped by simplification, and as has been rightly pointed out, some customers make mistakes because the system is too complex for them to navigate. My hon. Friend talked about transitional protection, which, again, is one of those legacy issues that we inherited. We heard comments this afternoon about how everybody complains about the system, but there is no shortage of people wanting to add on to the system. We have to be more disciplined about our approach. My final comments will draw attention to the debate that we must have following on from the Select Committee report on how the benefits system of the future might operate. My hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) made an intervention about council tax benefit. It is a rebate. People's council tax accounts are rebated at source by the local authority. Renaming it as a rebate may encourage more people to claim and we will consider renaming it as part of our wider consideration of future delivery. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) made several points. He mentioned the cost of phone calls and that was picked up by my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble). Concerns have been addressed and we try to keep the cost as low as possible. We are encouraging our staff to make the point that they can ring people back. It is an area that we are keeping under close attention, but people want to be able to ring in to access the services. There has been no reduction in the numbers coming forward and, although it may not be the answer for everybody, phones are available in Jobcentre Plus offices free of charge. Several hon. Members mentioned data handling, including a couple who said that I had not replied to their questions. They will receive answers to those questions. The Department is conducting a rigorous review of all data handling procedures to ensure that data security is paramount. We have consistently given this issue high priority and we have been praised by the former data protection commissioner for that work. However, nobody in government should be complacent. Whatever procedures are in place, they are only as good as the people who implement them and understand them, and we all need to take responsibility for making them a success. The issue of the Post Office card account was raised. It has been confirmed that there will be a POCA2. The tendering process is under way and the successful contractor will be announced in the summer of 2008. Members have rightly pointed out that some disabled people undergo different assessments for different benefits. Not all disabled people claim more than one benefit and clearly we need to be careful in those circumstances not to ask unnecessary and potentially intrusive questions, but we are considering the feasibility of building into the employment and support allowance claims process a way of automatically identifying some cases with potential entitlement to DLA, for example. We are trying to deal with the issues in a more efficient and productive way. The better-off in work guarantee, which was announced by the Prime Minister and which we are following through in our Department, offers an exciting opportunity to make the chance to move from benefits to work a reality for people. Some potential issues have been raised this afternoon, and we are considering how the scheme might be trialled next year. We will need to see how successful the new guarantee is, but it is an important step forward that will enable us to do much more than at present to convince people that they will have a higher income in work than on benefits. My hon. Friend the Member for Blackpool, North and Fleetwood talked about the four different sets of backdating rules for different benefits. She was right to draw attention to that issue. From October next year, pension credit backdating rules will be aligned with working-age benefits to make the maximum period three months. At the same time, to maintain alignment, backdating of housing and council tax benefit for pensioners and working-age customers will be reduced to three months. That aligns with the other income-related benefits—income support, jobseeker's allowance and tax credits. We have a lot of work in progress that will meet the concerns expressed by hon. Members. My hon. Friend also talked about letters and we have a review in progress of that area. Any ideas will be gratefully received. On the question of a single system, I accept that the present system is not perfect. I am not even sure that there is a perfect system, because a single system could be a very blunt instrument under which some people could lose out in a way that none of us would want to see. As with anything, good intentions do not always produce the outcomes that would make a difference. The Committee, the IPPR and others have made several helpful suggestions as to what a better system might look like, and we are on record as saying that there may be advantages in moving to a single system of working-age benefits. I can confirm that we are very interested in the issue. Simplification could make the system more effective, but I warn hon. Members that it is not an end in itself. The benefits system should be a powerful force for social justice. It should help people when they are in need, ensure that they are not condemned to poverty and recognise the contributions that they make to society, such as caring for others. It should also encourage them to build a better future for themselves and their families. For the vast majority of people, work is the way to achieve all that. We must promote work as the best route out of poverty, provide value for money for the taxpayer and set clear obligations so that customers understand their responsibilities. We must also ensure that the rules are straightforward and provide fair and consistent treatment. That is the way ahead. It being Seven o'clock, Mr. Speaker proceeded to put forthwith the deferred Questions relating to Estimates, pursuant to Standing Order No. 54(4) and (5) (Consideration of estimates).