Welfare Reform Bill Second Reading: the facts
For the past couple of weeks, Full Fact has been running a campaign to ensure that inaccuracies that we've spotted in the press on welfare and benefit stories don't find their way into the debate surrounding the Welfare Reform Bill.
Earlier this week, we sent all MPs a copy of our Welfare Reform briefing, which outlined where sound information on welfare and benefits could be found, and what the evidence told us.
So have MPs taken note of our warnings? Yesterday saw the Second Reading of the Bill in the Commons, and we've pledged to track every single claim made during this debate. You can keep abreast of our findings via this page, which will be updated throughout the day.
If you spot a claim that you think needs checking, or have any information about any of the claims you see below, do get in touch at email@example.com. Thanks to all those that have already contributed.
Iain Duncan Smith: The problem is that although from 1992 to 2008 this country saw some 63 consecutive quarters of growth, and 4 million more people were in employment by the end of that period, before the recession had even started we still had some 4 million-plus people on out-of-work benefits. The question is: where did all those jobs go? Under the previous Government, over half of the jobs created went to foreign nationals.
Full Fact found: For details about the economy between 1992 and 2008, see our report The Big Question. We've also tackled the issue of the proportion of jobs going to foreign workers (although when we looked at it, Mr Duncan Smith had claimed that the level was closer to 70 per cent.)
Iain Duncan Smith: I am pleased to say that those principles seem to have received support from a number of stakeholders, including Citizens Advice and the Institute for Fiscal Studies. The IFS said that by and large the measure was a progressive change.
Full Fact found: Both Citizens Advice and the Institute for Fiscal Studies in principle welcome the changes proposed in in the Welfare Reform Bill, while also raising a number of concerns. Citizens Advice says that this is an important opportunity for reform, and some people will be better off, but they also say that the sick, disabled and parents needing formal childcare are likely to "suffer significant disadvantage". The Institute for Fiscal Studies argue that, if successful, the changes will make the welfare system more effective and efficient, but they too raise a number of concerns. A more detailed account of what both groups said can be reached through the links above.
Iain Duncan Smith: We anticipate that the universal credit will make some 2.7 million households better off. Over 1 million households will be better off by more than £25 a week-clearly, those will be down in the bottom deciles-and 85% of that increase will go to households in the bottom 40% of the income distribution.
Full Fact found: This is an accurate reflection of what the Department of Work and Pensions forecast in its Impact Assessment on the change to universal credit.
Mr Andy Slaughter: According to the right hon. Gentleman's Department, 70 per cent of those affected by the benefit cap live in social housing.
Full Fact found: The actuality is that according to the DWP Longditudinal Survey, social housing tenants now constitute some 3,303,000 out of a total of 4,817,000 total recipients as at dec 2010. This equates to a share of 70 per cent. The number of social sector tenants grew by 194,000 between November 2008 and december 2010. Whilst private sector tenants grew by 456,000 in the same period. therefore, social sector tenat recipients grew by 8 per cent during this period, their private sector compatriots grew by 44 per cent.
Iain Duncan Smith: We want as many people as possible to get help to engage with the labour market, and we know that about 80% of all lone parents are working or would like to work.
Full Fact found: We're looking into this, and will update later.
Sheila Gilmore: It is not true that someone who receives contributory ESA will receive it for ever without assessment.
Iain Duncan Smith: I remind the hon. Lady that in the support group, the contributory element does not apply. It applies to people with finances that take them above the line. The income-based measure continues-that is not the issue.
Full Fact found: When we looked at assessments for DLA, we found that the Government's own guidance noted that evidence was often submitted as supporting information as part of the claimants original application. We're currently looking into how this impinges upon ESA, if indeed it does.
Iain Duncan Smith: Over the past 10 years, overall spending on housing benefit has almost doubled from £11 billion to £21 billion, which is a huge increase. I accept some of the arguments about the reasons for that-the fact, for example, that house building fell to a record low, and more and more people had to be moved into the social rented sector.
Full Fact found: In cash terms this is correct, however using real terms (which DWP itself does in its Budget Expenditure tables) the rise is slightly more modest: in 2010/11 prices the bill has climbed from £14.5 billion in 2000/2001 to £21.5 billion in 2010/11.
Iain Duncan Smith: It is time for fundamental reform of the social fund, which is poorly targeted and open to abuse. Some 17,000 people have received 10 or more crisis loans in the past 12 months, and we have already taken steps to limit the number of crisis loans for living expenses to three in a 12-month period.
Full Fact found: Some background to crisis loan payments can be find in our factcheck from last month, however we're still tracking down Mr Duncan Smith's source for the 17,000 claim.
Iain Duncan Smith: On the second question that she (Yasmin Qureshi) raises about crisis loans being down to the recession, the trend of upward claiming was on track and had started long before the recession.
Full Fact found: We are still following up the statistics for this claim from the Department for Work and Pensions (DWP). However, this statement from Steve Webb MP (former Minister of State at DWP) seems to confirm that payments from the crisis loan have been increasing since before the recession. More on this when we hear back from the DWP.
Iain Duncan Smith: About 50 per cent of those currently receiving DLA did not have to provide any additional evidence to support their original claim, and more than two thirds of current recipients have an indefinite award.
Full Fact found: When we looked at assessments for DLA, we found that the Government's own guidance noted that evidence was often submitted as supporting information as part of the claimants original application. Whether this counts as 'additional' evidence is a matter of interpretation. Similarly, whilst it is accurate to say that two-thirds of the case load are indefinite awards, it is worth noting that two thirds of all new claimants for Disability Living Allowance are given awards for a fixed period. The difference is accounted for by the cumulative effect of indefinite awards.
Iain Duncan Smith: I fully accept that with the complexity of the system, officials made mistakes and that we were often too ready to badge people as fraudsters when in fact they were not necessarily fraudsters but caught up in a system that left them confused and perhaps not making the right or necessary level of statements to the authorities. This process is about separating those people out. A recent trial of a changed reconsideration process at Jobcentre Plus led to a fall of some 15% in the number of appeals being heard.
Full Fact found: The trial changes to the reconsideration process that Iain Duncan Smith is referring to here involve the JobCentre Plus telephoning claimants who have made an appeal against their ESA decision. By telephone the "original decision was explained to the individual; if they still had reasons to disagree, additional information or evidence was obtained and the case was reconsidered." Following these changes, 15 per cent of claimants who had appealed either withdrew their appeal or had their initial decision revised by the Decision Maker.
Iain Duncan Smith: We are introducing measures to allow non-resident parents to pay through Maintenance Direct when the case is within a statutory scheme. That will provide further flexibility for parents. We need to keep the burden of the cost of collection under control. In 2009-10, the cost of collecting every pound was more than 40p.
Full Fact found: Child Support Agency quarterly statistics confirm that the cost of collecting every pound of Maintenance Direct payments is close to 40p.
Liam Byrne: The Secretary of State presented his view, but elided one or two prominent features of the past 13 years, such as the fact that the number of people on out-of-work benefits before the depression came down by 1 million and the fact that the claimant count halved. We did not once, let alone twice, see unemployment go through the 3 million mark.
Full Fact found: We factchecked Liam Byrne on this issue last month, and found that whilst the numbers of people on out-of-work benefits did fall steadily in the period from August 1999 (when the Nomis data begins) to August 2008, the fall was not quite the one million claimed. Similarly, according to Nomis data the claimant count did fall significantly during Labour's term in office, from 1.48 million in its first year in office to a low of 830,542 in 2008, the fall isn't quite as much as claimed.
Liam Byrne: five people are chasing every vacancy in this country
Full Fact found: In January 2011 - the latest period for which data is available - the number of vacancies advertised at Jobcentre Plus' was 233,983 (again, this is Nomis data). The current jobseekers allowance claimant count was 1.5 million at January 2011, meaning the ratio may even be closer to 6:1. However this figure does not include jobs not advertised in Jobcentres, and Iain Duncan Smith has previously suggested that this may mean that there are as many as twice the number of vacancies in the 'real' economy.
Charlie Elphicke: I take issue with the right hon. Gentleman's statement that the Bill is a leap in the dark. We know that 5 million people of working age could work but do not. We know from December's labour market report by the Office for National Statistics that 1.2 million of the people who took the jobs that were created came from overseas.
Full Fact found: We are unable to currently confirm what statistics are being referred to in these claims. The December ONS statistics report an inactivity rate of 9.36 million people of an economically active age (16-64); 1.53 million of whom have taken early retirement. Alternatively Charlie Elphicke MP could have been referring to the overall numbers of people claiming some form of benefits, which would equal close to 5 million. However, this figure would include those receiving Employment and Support Allowance, many of whom are not able to work.
Looking at the statistic of 1.2 million jobs taken by people coming from overseas, there is not a time frame for which to fact check this statement. However, in a recent fact check of ONS statistics on the numbers of workers from overseas, we showed that between 1997 and 2010 the employment of foreign-born workers went up by 1,871,000.
Liam Byrne: despite the fact that we faced the worst global crash since the 1930s, unemployment did not go beyond 3 million, as it did not once but twice under the Conservative Administration.
Full Fact found: The veracity of this claim rests on Mr Byrne's definition of "twice". Whilst, according to the ONS's Labour Force Survey, the annual unemployment count did rise above three million in 1983, where it stayed until 1986, it hasn't breached that threshold since. However on quarterly data, the unemployment count did tip the scales over the three million mark on a second occassion in 1993.
Liam Byrne: I would do no more than encourage the hon. Gentleman to look at the analysis of his noble Friend Lord Freud, who examined our work to get people back to work and remarked on how fast the number of people on out-of-work benefit had fallen. He examined the number of children lifted out of poverty and said that our record was truly remarkable.
Full Fact found: Child poverty has been a controversial area when it comes to the previous Government's record. David Cameron has previously claimed that it actually went up under Labour, and whilst it did rise in individual years, overall there was a net reduction of 600,000.
Liam Byrne: I would, however, make the point that, after consistent economic growth, employment went up, the number of people on out-of-work benefits came down and the number of people lifted out of poverty, including pensioners and children, was at a record high.
Full Fact found:
Liam Byrne: Many families in our country receiving a combination of housing benefit, council tax benefit and child tax credit have up to 97 per cent of their child care costs supported.
Full Fact found: 97 per cent is the theoretical maximum that can be claimed by those on housing benefit or council tax benefit. Low-income parents in receipt of working tax credits are eligible for 80 per cent of their child care costs. The DWP has not made public any figures detailing the proportion of parents claiming the full 97 per cent.
George Holingbery: There are 8,600 pages of guidance on benefits administration at the DWP and 2,000 pages for local government, and there are 30 different benefits to administer.
Full Fact found: DWP publishes guidance for those administering benefits here, and they add up to a heft tome (however pages aren't numbered, meaning that the only way to fully verify their length is by counting them all!). The total number of benefits is a difficult one to pin down, given that the definition of what constitutes a separate benefit and what does not is by no means fixed. It has previously been claimed that the level is as high as 51, although this is inaccurate. 30 is a more sensible estimate, but by no means unarguable.
Liam Byrne: the Secretary of State's own equality assessment says that 13% of disabled households could be entitled to less help under the new system.
Full Fact found: The DWP Equality Assessment for the Welfare Reform Bill shows that 13% of disabled households could be entitled to less under the new system. However, it also shows that 21% could see a higher entitlement.
Charlie Elphicke: Would not one key reform be to ensure that those claiming the allowance are seen, to check that they are still in need of it? Some 140,000 people have not been seen by the Department for Work and Pensions in the last 20 years, going back to 1992
Full Fact found:
Liam Byrne: This has been so mismanaged that many people-the Mayor of London, Shelter, the Secretary of State for Communities and Local Government-are now saying that the cost of housing benefit could go up.
Full Fact found: We have so far been unable to track down any of these three saying that the cost of housing benefits could rise. Shelter have however said that changes in Local Housing Allowance (LHA) could cost the government £120 million a year due to an increased level of homelessness.
Oliver Heald: There are 500,000 jobs advertised in the jobcentres every month, but many of them are jobs for which people do not have the necessary skills.
Full Fact found: This is an area that Full Fact has researched a fact check on in the past; with Iain Duncan Smith incorrectly reporting the number of job vacancies advertised at jobcentres.
For this factcheck, the nomis statistics show that between January 2010 and January 2011 there was an average of 320,878 vacancies every month advertised at jobcentres. The numbers varied from a low of 222,171 vacancies in January 2010 to a high of 476,743 in October 2010. The most recent data, for January 2011, showed 233,983 vacancies.
Charlie Elphicke: With housing benefit rising 45% in recent years, does my hon. Friend agree that it is a matter for serious concern?
Full Fact found: The Department for Work and Pensions (DWP) statistics show that total housing benefit expenditure in 2009/10 was £19.97 billion and for 1998/09 was £11.06 billion. This works out as an increase of 80.5 per cent in Housing Benefit expenditure between 1998/99 to 2009/10.
Dame Anne Begg: Indeed. We heard on Monday, in Burnley, that the appeal process can take anything from a year to 18 months. There are real doubts about the ability of the tribunal system to cope.
Chris Grayling: At present, the appeal process takes 17 weeks on average. A year or more is absolutely not the norm. I would be happy to discuss the matter in the Select Committee, but I should grateful if the hon. Lady would note what I have said for the record.
Full Fact found: DWP does not appear to have published the data behind Mr Grayling's assertion that the average time customers wait for appeals to be heard is 17 weeks. However he did note in a previous Written Answer that for customers required to undergo two assessments, the average time between the two was 10 months. There is also a Departmental target for appeals to be heard within 14 weeks of a decision being made, however some reports have suggested that as much as 66 per cent of cases fail to meet this.
David Evennett: To have 5 million people living on out-of-work benefits and 2 million children growing up in households where no one works is a disgrace.
Full Fact found: According to DWP statistics, as of May 2010 there were 5.7 million people in receipt or working age benefits. This statistic is slightly higher than that referred to by David Evennett; but it is a figure that includes several benefits where the claimant may still be working, such as carer an income related benefits.
Full Fact has already looked at the issue of children living in households where no one works. The relevant data is published in the Annual Population Survey reports. In 2009 there were 1.88 million children recorded as living in a household where no adult worked. Of these, two thirds belong to lone-parent households.
David Evennett: We have heard the interventions-a 45% increase in housing benefit since 1999 is an incredible figure and such problems cost the taxpayer a fortune.
Full Fact found: This statistic is addressed by Full Fact above.
David Evennett: Benefit fraud has also been a problem, costing the taxpayer about £1.5 billion every year.
Full Fact found: We have seen newspapers and politicians make a number of errors on this point over the last few months; The Sun citing £5.2 billion as the annual cost of fraud, and Lord Freud apologising for putting the cost of fraud at £5 billion. It is therefore encouraging that David Evennett has cited the correct figure of around £1.5 billion in the Welfare Reform debate.
Mark Tami: A 2007 survey found that 83% of families incur significant extra costs associated with their child's cancer and 68% get into actual financial difficulties.
Full Fact found: The research article cited by Mark Tami MP, 'Costs of caring for a child with cancer: a questionnaire survey', goes into depth on the costs incurred by families for cancer care, confirming the figures quoted.