Pensions Disability and Carers Service

Simon Hart MP, WELSH FOCUS CONFERENCE April 4, 2012.

HENRY: Thank you very much for that, that is great. So Simon, your turn if you will please.
HENRY: Simon Hart, I know there are two missing, John Dixon and labour candidate, I forget his name now. Nick… [inaudible] if they were here as well we could have an election.

SIMON HART: Thank you so much for coming and it is always a pleasure to follow my friend and colleague Angela who I know really does believe passionately in the cause that you have sort of brings us altogether to talk about. I don’t think I need probably to say in this room rather than anywhere else, just what a job Henry does in keeping us all looking in the right direction as far as politics is concerned, does it in a very delicate and gentle but direct way. I know that I have learned a lot over the last couple of years from Henry, I can tell you, he does a very good job on behalf of everybody in the room.

A few weeks ago he asked me to come and talk about welfare reform. This is one of the more complex, controversial, difficult in an economic as well as a social sense and morally challenging area that we have all been involved with since May 2010 and one of the reasons for that is all the parties, I will try and be completely apolitical if I can, but all the party as I agree that welfare reform was a priority, whoever should be elected. The big problem we faced was of course there isn’t a one size fits all solution to welfare reform because the nation is not one size, whether that is Wales or the wider UK. So immediately we were plunged into the situation of having a good idea and principle, some good detail but then struggling to apply evenly and fairly across everybody who was affected by it. I will touch on and each area of welfare reform. What started off as a genuinely sensible intention on behalf of all the parties to come to a position which was fair to everybody, has proved to be challenging to say the very least.

I want to just paint a bit of a sort of backdrop to all of this, a reality check as to where we started on our welfare reform journey and it is simply this. Every single tax paying family and every single working family in the UK contributes £3,000 a year to the benefit system. £3,000 a year, by far and away, about the biggest single contribution out of our tax that we make.
Workless households increased in the last few years, from 3.7 to 3.9, thousands of people gone into a workless situation.

2 million children conned to poverty, 1.9, in 2009 alone. These would be serious problems, whoever was in government, recognised as serious problems by all the political parties. All the political parties have a reasonably common approach to how they should be resolved forget the tribal warfare you see in the House of Commons, actually when good sense prevails, most of the parties understand exactly what we need to do and we just differ a little bit. Not even by that much. Differ a little bit on how we get there.

1.4 million people spent the last decade on out of work decades, 2.6 spend [inaudible] in the last 10 years, that is a shameful position, I don’t blame the previous government or the one before that or the one before that. We know it is simple, easy for us to point the finger and say, of course under the last government if they had done this, it would have been different. The last government has sensible ideas as far as this is concerned. We have tried to inherit as many as we can given the circumstances in which we live.

It seems we have a system that allows all be it few, but some people to claim up to and indeed over a hundred thousand pounds a year on benefit. In, up to £24,000 earnings, it is hard to look those families in the eye and explain why it is possible, beneficial to society to be paying other families over a hundred thousand pounds a year in benefits, than those working families have paid for themselves.

There is of course an economic background, whatever anybody says this is about lurking back there in the clouds is a stark economic reality. We have paying 820 million£ a day on our debts.

That is the reality of it.

That is debt repayments; we are struggling at the moment to tackle the deficit. Forget the debt we haven’t got to that yet. The deficit is what we are trying to deal with at the moment. The debt will come later. The reason there is, in some people’s eyes a fixation with this complicated challenge is this — if we allow interest rates to increase and if we allow employment to increase — then the benefit problems that I will touch on will become even worse. So at the moment we are keeping the lid on the bottle. Not as well as we would have hoped. I accept that. Things have come up and attacked us from behind which we didn’t expect. The private sector growth which was going to allow us to crawl out of recession hasn’t been as positive as we liked. We all think we know what the reasons for that might be.

But the reality is, back there in the sort of, in the distance is a stark economic reality in which we cannot escape from.

Lastly, ladies and gentlemen, is that there is an ideological objective that the government is seeking to pursue which is that work should always pay as far as it is ever possible to achieve that and that benefit is something that you get when you need it. It is not an alternative life style. That is an ideological position and I fully accept, probably in this room let alone the rest of the nation that that is not something that everybody subscribes to, it is a coalition view and I think by in large it is one in which the majority of people who are attempting to live a reasonable life, free from discrimination, it is a reasonable objective that people sign up to.

A few of the core details of benefit and welfare reform. I want to say about two, the first is the benefit count. Everybody knows what it means I think, which is that nobody will receive more than £26,000 a year in benefit, that is the equivalent of £35,000 pre-tax, the reason for that, is that if the national wage is something in the region of 22 to £24,000 as it is here, it seems reasonable that we should think seriously about restricting benefits which exceed that in such a significant way. So there will be a cap, it is, I think the first time this has ever been introduced by any government it hasn’t always been met with widespread approval, the cap is there, there is an explanation of why it is there.

The second major plank is the universal credit. That will I hope achieve the objective of making sure that work always pays. I think the date is 2013 but job seekers, I a ….income support and employment support allowance will be merged — that is supported by labour in opposition in Westminster, we have a reasonable chance as long as we can iron out the detail of making sure we end up with something which is in the national interest and which is actually fair.
When I talk about fair, it is not about punishing millionaires or anything like that, it is making sure that the distribution of money is fair. It is of benefit to go, greater quantity, with great as easy as it can, for those people who genuinely need them. In other words, those who don’t need benefits should as far as possible eased away from a life , if you do need benefit, in significant amounts, get it as quickly and in a stress free manner as they possibly can.

I want to talk a tiny bit more about the universal credit because there are some I think positive outcomes for this. One of which is 2.9 low to middle earners better off by up to £29 a week if we go down that route. 900,000 people come out of poverty including 350,000 people under the age of 16. So if we can make the system easier and clearer we should be able to make it fairer, one of the complaints we have had since 2010 is actually the benefit system is complicated. So people don’t necessarily know that it is better and more financially advantageous to work because it seems that the penalties are too great for working therefore it is better to stay on benefits. We have to reverse that, reverse it by making it simpler and clearer and introducing some checks and balances along the way. I want to talk later on about DLA, disability living allowance. The startling fact that 71% of people on DLA once they are on it never ever get assessed again for the entire duration of their lives as to whether they need it. I have had disabled people coming to me saying this is ridiculous, my disability situation has improved to the extent that I am now able to do a limited amount or a full amount of work, therefore I don’t need the KLA I am currently receiving. Universal credit and other measures I hope will deal with that.

There is such a thing as the claimant contract. Again, this is a to some, quite a controversial measure, this means that people claiming benefits will be assessed in a rather more string gent form than they have before. That means they will have to turn up for interviews and they will have to accept work if it is reasonable for them to accept it when they are able to do it and it is there in the first place. There will be penalties for those unable to meet those reasonable standards. The sort of standards which we absolutely expect in the private sector and in any job and any employer expects a certain minimum standard of contribution and behaviour by their boss. This simply puts this system on the same hopefully on the same path.

I mentioned DLA, that comes under the personal independence payment which will replace DLA. It will have a new assessment system; enable us to assess individuals to determine who will be benefit most from additional support. PIP will consider the impact an individuals or health condition has on their life. Each — considering the impact of the health condition rather than basing the condition on the health condition or impairment itself.

That is a really critical reform that is central to the proposals which are currently under discussion.

Then fifthly, second to last point is tackling benefit fraud. It is a fairly obvious statement to make, the figures are quite frightening, £1.5 billion, we are talking billions these days, £1.5 billion wasted every year, benefits that you, your family, your friends, your professionals, your charity should have access to, which is fraudulently claimed, having no business going for the money in the first place. Has been an intention by the governments to make benefit fraud harder, we are simply continuing the pledge made by the former government to continue to crack down on benefit fraud because it is costing us, it is actually costing you, costing the taxpayer, costing anybody who is dependent on benefits, £1.5 billion a year.

Then, limited employment support allowance. We will place a 12 month limit on contributor employment allowance; those who have made national insurance contributions can only claim the allowance for a year. I quote this, it is important that we emphasise the, the subtle I hope quiet but fair way in which we are trying to nudge people away from benefit dependency to the much more rewarding work place, if such a thing is fair and possible.

I recommend anybody, as I did last night, Mary porters programme on telly, which takes a few people working in a clothing factory in the north of England, in order to qualify they had to be out of work for at least 12 months and the dozen or so people that she has taken the look of sheer joy on their faces when they have actually had something to get up for. Their own money to spend in the pub or wherever it might be, their own self-worth back again after so many years in one particular lad’s case he couldn’t remember the last time anybody in his family had a job. Yet he has got a job now and he turns up, bright and breezy in the morning, works hard all day, money in his pocket. Gives him a sense of purpose which he didn’t believe possible. The picture speaks a thousand words, I seriously recommends it.

Then lastly, the thorny old question of child benefit. It is worth mentioning, a simple example of two things, first of all how governments can make a mighty type thing, expression — miscalculation of what public reaction would be. I wouldn’t mind it if my bosses would be were here, the way they have handled it isn’t particularly smooth or sophisticated one. The principle behind it is quite fair and it seems to me as somebody who is on an MP’s salary, a reasonable one, ruled that I should have my child benefit paid by someone who is paid a third of what I am paid. That is what the situation is at the moment. If I have to forego, I want to sound pious about this, if I have to forego it so somebody who is on a third of what I get paid, gets it, you know what, that is a big, a sort of bullet I will have to bite. I think that it goes to the heart of whether how we can get a system which is as fair as we can possibly manage which means that people who are lucky enough to be reasonably well off are not receiving benefits at the expense of those who are not.
Of course the moment that was mentioned I think a year and a half ago, something like that, there was a mighty outcry from the press, mainly because those people are journalism it turns out, were the ones that were getting hit the hardest by this measure. But completely smothered the announcement about the benefit cap, which is a more radical measure, there are proposals which punish people if that is the right word. Will penalise people who are not doing quite so, not struggling quite so much under the current economic situation and that money could be used, saved. Used for better effect by those who genuinely need it?

Two things to finish off with, Mr Chairman if I may, one of which is the work programme, these are measures to get people like Mary porter’s examples you made, back to work, to rediscover what that does for the family, for the individual, what it does for education, the economy of the area. Work programme, fantastic proposal, not without its difficulties as ever. Looks good on pieces of paper when you design it a few years ago, implement it and it couldn’t quite work out. The new enterprise work allowance which will help people setting up new businesses and — the thing I am really keen on is the work experience programme. There are all sorts of stuff in the press about slave labour, the fact is, this is one of the best schemes ever proposed to get people back into work. 400,000 people have gone down the route of work experience, half of them, 200,000 people have gone into jobs which are permanent. That is a fantastic result. Actually, it would be a fantastic result if 20,000 had. Let alone 200,000. Of course it is easy for the press to pick out one or two who put their hand up and say, this didn’t work for me. These were people who got job not advertised; it was the job interview for a position that wasn’t available. They settled into a team, it was a profession nay chose, they chose, it is entirely voluntary, they wanted to do it. Fitted into the team and guess what, when it came to the end of their period in work experience, the company said, you worked so well here, you are one of us, we want to keep you and we will find you a job. That is brilliant. I have no time for the doubters who talk about slave labour, it is a good scheme.

VAT on disabled goods, not a lot of people will necessarily know this; we have a situation at the moment, if you have a working dog, that you can get the dog food without VAT. If you have a guide dog you get charged a full VAT. There is this ridiculous anomaly where people are not able to get disabled goods at the costs they should. Pharmacists do not know what the law is. We have got to make progress, national association of pharmacists written to 14,000 people as a result of, what I have done and a lady called Val Jones to make sure they are going to correct that. But actually the disability charities can be a huge help in making sure that we get that evenly spread across the whole country. So when you go and get your goods, if you are not meant to be charged VAT, you don’t get charged VAT. A lot of people do, they don’t realise they can get the stuff at the zero rated price. That is something we are making real progress, cross party effort in parliament, liberal democrats in Mid Wales and conservatives too. Nice example of when we sweep away the sort of hand to hand fight you witness on the parliament. There are sensible people doing sensible things not only within government but also in the corridors of power to try and make benefit reform something which is fair and affordable which people see as transparent and which one day I hope will enable us all to say that we are in a society which is as far as it is ever possible to achieve treats people as they should be treated. That I think is a worthy goal for the coalition and it is a worthy goal for people like Henry and the fantastic charities and organisation he represents.

Henry, thank you.