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EVIDENCE SESSION: Department of Work and Pensions Annual Report and Accounts, 2014-15 

 9.30am, Wednesday 28 October, Wilson Room, Portcullis House

 This is Committee’s first oral evidence session of the new Parliament with the Secretary of State. The Committee will question the Secretary of State on the Department’s Annual Report and Accounts. Therefore the session can span the range of DWP’s responsibilities and expenditure, including:

- the impact of spending cuts on claimants; administrative spending; departmental capability and capacity; and fraud and error in benefit payments;

- the Department’s preparedness for implementing pension reforms, including auto-enrolment and the New State Pension;

- delays in processing benefit claims, including Personal Independence Payments and Employment and Support Allowance;

- welfare-to-work and tackling the disability employment gap; and

- the ongoing rollout of Universal Credit.

Today is the last day for voting in the; Fabian Society, National Executive Committee Elections.

A GREAT TALK by Andrew Harrop, General Secretary in Colchester last night. Jeremy Corbyn has revitalised the Labour Party, however balanced against this, is the ‘hollowing out’ of the Party by the success of the SNP in Scotland. 

NO PLEASE - we may be in for a few years of ‘Old Dinosaur’ ‘Back to the Future’ jokes from David Cameron, however Labour’s major issue - Andy pointed out, is the loss of these seats in Scotland rather than the Conservative Party threat, potentially led in 2020 by, George Osbourne. 

With talk of a potential recession and China buying up everything, the future is a long way off, and we might want it to stay that way - (Ed)!

Andy, also provided an insight, into the work of the Fabian Society as a leading thing tank in its own right. There are research projects going ahead in 2016 relating to Social Security and employment. We will be keeping you up to date - as always - when we hear more.

Any undecided Fabians – your votes [for Simon Collyer] are appreciated. The Fabien Society’s membership has jumped along with the Labour Party membership. If you have an interest in left wing politics; contact the Fabian Society, to locate your nearest branch. The Society are a great crowd, and you can expect a warm, friendly welcome, and the opportunity to learn in depth about the issues of the day, as well as participate in social activites and do a bit of networking too.  

Website: www.fabians.org.uk 

Jobseekers are to be given 14 days' warning before facing benefit sanctions under a new scheme being trialled next year, the government has announced.

In a parliamentary statement to the Commons, Mr Duncan Smith said that it was in response to a report by the select committee that he had decided to trial a warning system.

"We will trial arrangements whereby claimants are given a warning of our intention to sanction and a 14-day period to provide evidence of good reason before the decision to sanction is made.

"During this time claimants will have another opportunity to provide further evidence to explain their non-compliance," he said.

Work and Pensions Committee

Committee welcomes Government shift in sanctions policy

In its response, published today, to the House of Commons Work and Pensions Committee’s Report on benefit sanctions, the Government has outlined a series of policy changes.

Prompted by the Committee’s recommendation of the introduction of yellow cards, the Government will trial a sanctions warning system which will give claimants a 14-day window to provide evidence of why a sanction should not be imposed.

The Committee welcomes the Government’s response and notes the Government has also:

- issued new guidance to Jobcentre Plus staff to improve awareness of vulnerability and how conditionality can be varied; and

- accepted in principle the need to make hardship payments available from day one of a sanction; to remove the necessity of a separate application process for a hardship payments for vulnerable claimants and those with dependent children; and to extend the definition of groups considered “at risk” for hardship purposes to include those with mental health conditions and those that are homeless.

Frank Field, Chair of the Committee, said:

“Our predecessor Committee conducted some very valuable work on the benefit sanctions regime. We are pleased that the Government has accepted many of the Committee’s criticisms of its approach and, more importantly, the recommendations for change. In particular, we welcome the trial of the “yellow card” warning system and the reassessment of what constitutes hardship.

“Conditionality is an important part of our benefit system, but sanctions must be fair, clearly understood and not plunge families into unjustifable hardship.

“The Government’s response leaves a number of questions unanswered. We will be tracking the progress closely to ensure that the Government follows through on the spirit of this constructive response in practice.

“I will be writing to the Secretary of State asking for further information on the detail and timing of his plans. We will also ask him about them when he gives evidence to the Committee on Wednesday morning.”

What the politicians say: 

Shadow work and pensions secretary Owen Smith claimed that the written statement had been "snuck out" and did not address "any of the principal recommendations" of the select committee.

"In particular it doesn't address the recommendation as to whether there should be an independent review into those people who have died while subject to benefit sanctions," he said.

Kirsty McHugh, chief executive of the Employment Related Services Association, said: "We welcome the recognition by the secretary of state that the sanctions system is in need of reform, but are concerned that the changes today don't go far enough."

She said that for some jobseekers receiving a sanction could act as a wake-up call, but for the majority the sanction system was more likely to "hinder the journey to employment".

The response is published alongside a letter from the Secretary of State to the Chair.

Iain Duncan Smith, Secretary of State for Work and Pensions, will give oral evidence to the Committee on the Department’s 2014-15 Annual Report and Accounts at 9.30 am on Wednesday 28 October in the Wilson Room, Portcullis House.

The Association of Pension & Benefits Claimants CIC will be bringing that event live here at our website. 

PLEASE FIND ATTTATCHED IAN DUNCAN SMITHS LETTER

BREXIT — UK Lords attempt to extend referendum vote to 16-year-olds: Peers have tabled 10 amendments to EU Referendum Bill to allow 16- and 17-year-olds, U.K.-resident citizens of other EU countries and U.K. citizens living abroad to vote.

According the Guardian:

The Labour backbencher Baroness Hollis tabled a motion that withholds endorsement for the cuts until the government produces a scheme that protects all existing tax credit claimants for at least three years. A third motion may also be tabled by cross bencher Baroness Meacher, which may also delay the cuts.

David Cameron faces a backlash over welfare in the House of Lords after Labour and Liberal Democrat peers tabled motions to block cuts to tax credits.

Cameron was challenged by Jeremy Corbyn during prime minister’s questions to admit he had broken a solemn promise to voters in the general election that he had no plans to cut tax credits.

The prime minister responded by recalling his promise to cut £12bn from the welfare bill at the election, and said he was “delighted” that the changes had been passed by MPs on Tuesday night. Labour MPs said his use of the word “delight” may come back to haunt him.

Source: The Guardian

On 15 October 2015 the Department for Business Innovation & Skills published new guidance for employers on the use of zero hours contracts

What are zero hours contracts?

‘Zero hours contract’ is a non-legal term used to describe many different types of casual agreements between an employer and an individual.

Generally speaking, a zero hours contract is one in which the employer does not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept the work offered, or decide not to take up the offer of work on that occasion.

Regardless of how many hours are actually offered, the employer must pay at least the National Minimum Wage.

This guidance does not cover those who are genuinely self-employed and undertake work on a zero hours arrangement. For example, a self-employed plumber might take up work offered on a zero hours basis from a number of regular clients, but he remains self-employed.

Employment rights

Everyone employed on a zero hours contract is entitled to statutory employment rights. There are no exceptions.

A person will benefit from the employment rights associated with their employment status and individuals on a zero hours contract will either have the employment status of a ’worker’ or an ‘employee’.

Any individual on a zero hours contract who is a ‘worker’ will be entitled to at least the National Minimum Wage, paid annual leave, rest breaks and protection from discrimination. To find more information on employment statuses and all the rights associated with them, see the employment status guidance.

Appropriate use

Zero hours contracts are useful where work demands are irregular or where there is not a constant demand for staff. Zero hours contracts can also provide a level of flexibility for the individual, which allows them to work around other commitments such as study or childcare.

Some types of work are driven by external factors that are out of the employer’s control and this can happen in a range of sectors including, for example, hospitality, leisure and catering.

The following are all examples of when a zero hours contract might be appropriate, but it is not an exhaustive list. There are also other employment choices available to employers in these situations.

New businesses

When a new business starts up it might need to build up a customer base to undertake work so, at first, they may need to employ people on zero hours contracts in addition to any permanent staff to manage fluctuating and unpredictable demands.

Seasonal work

Seasonal work or peaks in demand, where it is known that for short periods of time additional staff are needed to manage surges in demand such as retail sales at Christmas time or providing a cleaning service for example, following a festival or a New Year celebration.

Unexpected sickness

Employers may need to be ready to cover periods of unexpected staff sickness and be able to call on experienced staff, for example, a pharmacist in a chemist or a lifeguard at a leisure centre.

Special events

A wedding venue, restaurant or a bar may need to be able to call on trained and experienced staff when a wedding or function is booked.

Testing a service

A company may be considering testing a new service they are thinking about providing, but need to hire staff on an ad hoc basis before they can make a decision about rolling out the service.

Inappropriate use

Zero hours contracts allow flexibility for both employers and individuals. However, they should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable.

Zero hours contracts might not be appropriate if the job offered will mean the individual will work regular hours over a continuous period of time. For example, if an individual is asked to work from 9am to 1pm, Monday to Wednesday for a 12 month period, it may be more appropriate to offer that worker a permanent part time contract or even a fixed term contract.

Zero hours contracts do not allow employers to avoid their responsibilities. All staff, regardless of their contract, are entitled to employment rights and should be treated fairly and within the law.

Zero hours contracts are rarely appropriate to run the core business, but might be useful for unexpected or irregular events such as bereavement leave by staff, to deliver sufficient customer service during peaks in demand, or when preparing to open a new store. Many businesses provide a regular service or product and have a broadly predictable timetable or output and so permanent or fixed hour contracts can be more appropriate.

Alternatives

Employers should consider whether a zero hours contract is the best type of contract for their business need depending on the nature of the work to be offered and the specific circumstances. Depending on the business need, alternatives might include:

• offering overtime to permanent staff to ensure experienced staff deal with temporary fluctuations in demand
• recruiting a part time employee or someone on a fixed term contract if regular hours need to be worked to adapt to a change in the business needs
• offering annualised hours contracts if peaks in demand are known across a year
• using agency staff can be a quicker and easier way to hire someone if staff are needed temporarily or at short notice

Best practice

Contracts should be clear and transparent so the individual can understand their rights and what the implications of such a contract means to them. For more information see the employment contracts guidance.

When offering a zero hours contract, employers should consider including information such as:

• whether the individual is an employee or worker and what employment rights they are entitled to
• if the individual is an employee, how statutory employment entitlements will be accrued where appropriate, for example, redundancy pay
• the process by which work will be offered and assurance that they are not obliged to accept work on every occasion if they so wish
• how the individual’s contract will be brought to an end, for example, at the end of each work task or with notice given by either party

Employers should plan ahead and give as much notice as possible when offering work. Those who work on a zero hours contract may have caring responsibilities or have studies and may need to plan for childcare or around exams. Employers should be transparent about how they offer work, for example, is there a rota?

Cancelling work at late notice, or when the individual turns up at the place of work, is unacceptable unless truly unavoidable. Employers should consider putting into place a policy explaining the circumstances when and how work might be cancelled, and how they try to avoid this, and whether the individual can expect any compensation for caring costs they may have incurred.

When recruiting for a zero hours contract, the job should be clearly advertised as such and the individual should be clear that hours are not guaranteed, and that work may cease if there is a fall in demand.

Employers should ensure they familiarise themselves with their responsibilities when employing someone on a zero hours contract. Employers must comply with every aspect of the law, including employment law.

Those who take up work on a zero hours contract are often students, partially retired, or have caring commitments. As an employer you should respect the needs of those individuals to arrange care and be flexible in whether they can accept work at short notice or if they cannot arrange suitable care.

Exclusivity clauses

The Small Business, Enterprise and Employment Act prohibits the use of exclusivity clauses or terms in any zero hours contract. This means an employer cannot stop an individual from looking for work or accepting work from another employer.

An employer must allow the individual to take work elsewhere in order to earn an income if they themselves do not offer sufficient hours.

If an employer includes an exclusivity clause in a zero hours contract, the individual cannot be bound by it, the law states the individual can ignore it.

An employer must not attempt to avoid the exclusivity ban by, for example, stipulating that the individual must seek their permission to look for or accept work elsewhere.

EVIDENCE SESSION: Benefit delivery

9.30am, Wednesday 21 October, Wilson Room, Portcullis House

The Work and Pensions Committee is holding an inquiry into the timeliness and accuracy of benefit delivery by the DWP. Potential problems that can arise when benefits are delayed or underpaid include people resorting to food banks for emergency food rations.

This is the first oral evidence session for the inquiry, with organisations who offer benefits advice to claimants. The Committee will be exploring potential problems with benefit delivery and their impact on claimants, issues emerging from the roll-out of Universal Credit and possible options for improving benefit delivery processes.

 

MPs vote against today’s Opposition motion calling on the Government to reverse its decision to cut Tax Credits by 317 votes to 295.

A fine speech by Heidi Allen, who was elected MP for South Cambridgeshire in May. Ms Allen made the point that cuts fail David Cameron’s “family test” and are driven by the chancellor’s mistaken decision to run an overall budget surplus. “It is right that people are encouraged to strive for self- reliance and to find work that pays for their independence from the state,” she said. “But I worry that our single-minded determination to run a budget surplus is betraying who we are. I know true Conservatives have compassion running through their veins.”

'A betrayal of who we are' said Heidi picked up well by Owen Smith MP. 

The Labour Pary arguments for voting against Tax Credit Cuts.

1. The cuts to tax credits will hit more than three million families in work

2. On average, each of these families will lose £1,300 next year

3. For these families, it's effectively a penalty for working

4. The government has claimed that their so-called ‘National Living Wage’ (lower than that calculated by the Living Wage Foundation) will compensate for the cut. The independent Institute for Fiscal Studies has said that this is “arithmetically impossible”

5. As a result of the cut, child poverty will increase. The Resolution Foundation has found that all the tax and benefit changes in the Government’s Summer Budget will push 200,000 children into poverty next year

6. David Cameron never mentioned these plans before his election campaign despite having lots of opportunity to do so. In fact, before the election, he promised not to cut child tax credits and made no mention of any other changes, yet these cuts were announced in his first Budget after the election

The chances of the government being defeated on plans to cut tax credits in the Lords next week have risen markedly after the Liberal Democrat leader, Tim Farron, instructed his peers to vote for the fatal motion to block them.

The Commons Work and Pensions Committee will hold an urgent session on proposed reforms to the tax credit system next Monday. There is an Opposition Day debate on the reforms today, Tuesday 20 October 2015.

The Committee will question representatives of respected independent think tanks that have analysed the plans. The areas the Committee will cover include:

•    The impact of the April 2016 tax credit cuts (in isolation and in the context of other welfare measures in the Summer Budget), and the National Living      Wage
  •    the winners and losers and their characteristics;
  •    the extent to which the National Living Wage will compensate individuals receiving lower tax credit payments;
  •    the distributional impact of these measures, individually and combined,
  •    the scale of the financial gains/losses to households and what influences this;
•    The quality of the analysis produced by the Government to support their proposals;
•    Other options for achieving savings from the tax credit system that will mitigate the impact on the least well off.
•    The implications for work incentives and the Government’s wider objectives in welfare reform;

On Monday 26^th October at 3.30 pm, venue TBC:

Paul Johnson, Director, Institute for Fiscal Studies

William Elming, Research Economist, Institute for Fiscal Studies

Torsten Bell, Director, Resolution Foundation

Frank Field MP, Chair of the Committee, said:

“We hope to be in a position to help the Government reform the tax credit system on three fronts – to make it fairer, simpler and more affordable. Our reform blueprint will be built on suggestions that make tax credits a more effective anti-poverty benefit, so that work always pays a decent income, at no extra cost to the taxpayer.

“A crucial element of this blueprint will be to make it easier for future governments to make changes at the top end of the income spectrum that do not necessarily affect claimants at the very bottom of the pile. One of the flaws exposed by the current political debate on tax credits is the inability to remove relatively high earners from the welfare system without also clobbering the poorest workers and their families. We will aim to address such shortcomings and hope an announcement of mitigating measures will be forthcoming.”

Richard Graham MP, Committee Member, said: "I believe many MPs need more clarity about the details of the financial impact of all welfare changes, including social housing rents. Then there are philosophical and behavioural issues to consider, and lastly a practical question. Is there a way of reducing the huge tax credits bill that affects the poorest earners by less while achieving the overall goal? We'll take verbal evidence on all these points

The Great Tax Credit Debate is about to kick off in Parliament

Some Conservatives are already wavering. Boris Johnson has already spoken out - and behind the scenes others are rumoured to fear the cuts go too far. Osborne can’t pass a plan with all politicians against it. It could get messy. It is a policy that kicks low paid working people in the teeth.

It could be a difficult afternoon for the government.