Amendments made: 20, page 165, leave out line 25 and insert—

‘In section 37(1)—(a) in paragraph (a)(i), “6, 7”; (b) paragraph (ab).’

Amendment 21, page 165, line 35, at end insert ‘and (1A)’.—(Chris Grayling.)

On a point of order, Mr Deputy Speaker. In the last hour, the BBC has announced that the Chancellor will tell the

City of London at the Mansion House dinner tonight that he has decided to sell off Northern Rock, currently in state ownership, and has rejected the options of flotation or selling it as a mutual. Instead it will be sold in a private sale. Has there been any indication that the Chancellor will make a statement in this House before the speech in the City of London? Do you agree that Parliament and the public should hear about this first, before the City of London Mansion House dinner?

I have been given no indication by the Treasury Bench or any Department that there is to be a statement this evening. I am sure that the Treasury Bench will have heard the right hon. Gentleman’s concerns.

On a point of order, Mr Deputy Speaker. We have just finished the Report stage of the Welfare Reform Bill, but we have failed yet again to reach major parts of the Bill, particularly amendments on the cap on benefits, which I totally oppose and think are a disturbing element of the Bill. As the Leader of the House is here, may I say to him through you, Mr Deputy Speaker, that we are exhibiting to the general public that the House is not working if we are not reaching major parts of such an important Bill. I would hope that the Government would consider pausing, as they did with the NHS Bill, and thinking again in the light of today’s debate.

The programme motion—

rose—

I call Mr Duncan Smith.

Further to that point of order, Mr Deputy Speaker. It might be of assistance to the House to remind those who were not in the Committee that every single Clause was debated there, and we have also had two days on Report, which is almost unprecedented.

This seems to be a continuation of the debate on the programme motion, which was decided on Monday. It was agreed by the House so this is not a matter for the Chair. Let us now move on, in the short time we have, to Third Reading.

Third Reading

I beg to move, That the Bill be now read the Third time.

I am conscious that we have only half an hour, so I will try to make some progress. A great deal has been debated, but I am happy to take a couple of interventions. I recognise that some others on the Back Benches would like to say something because they did not get in earlier, and I think we ought to leave them some time.

The Bill allows us to start dealing once and for all with the welfare dependency we inherited. Just the other week we learned from the Office for National Statistics that there are now nearly twice as many households in the UK where no one has ever worked as there were in 1997, and today there are nearly 2 million children growing up in workless households—children with no positive role models who can teach them the benefits of work. This entrenched worklessness is the issue, and is the product of a broken welfare system that takes away up to 96p in every pound earned as people increase their hours in work. It is a system that shunts people from employment programme to employment programme, never looking at them as individuals but as collective groups. It is a system that provides disabled people with outdated and complex support that often fails them when they most need it. By the end of Labour’s term in office, that system left us with income inequality at its highest level since records began, despite the billions Labour spent. The backdrop to this social breakdown was the inheritance of an economy that was absolutely on its knees when we came into government.

Given the shameless scaremongering in the Chamber today at Prime Minister’s Question Time and during this debate, can the Secretary of State assure us that people recovering from cancer will not have their benefits taken away from them?

I was not going to pick up on that, but given that my hon. Friend has asked me, I will say that the reality, which is clear, is that the Government inherited the employment and support allowance reform from the previous Government. It was this Government who exempted cancer patients on chemotherapy in hospitals; they were not exempted by the previous Government. Our record on this is therefore quite good. As for the exchange at Prime Minister’s Question Time, it is also important to say that if somebody cannot take work, they will remain on the support group or be moved to the support group, where they will continue to receive full support indefinitely—and it will not be income-related.

rose —

One moment, one moment. Let me finish, all right?

In reality, therefore, people on the work-related activity group will already have been seen to be able to do some work with some assistance—that is the key—and of course, as has long been the case, those benefits are income-related. It is also important to note that the figure that Macmillan produced today—of 7,000 people losing everything—is not altogether accurate, because—[Interruption.] No, no, because 60% of the people it was talking about will continue to receive some form of support; they will not be losing all their money. We will not be moving those on chemo. We are looking to review the situation under Professor Harrington to see how much further we can go, but the fact is that if someone is not capable of work and is too ill, they will be on the support group.

Can the Secretary of State confirm, however, that people receiving oral chemotherapy and oral radiotherapy are in the work-related activity group, and that if they are halfway through their treatment and it gets to a year, they will lose all their contributory benefit?

Not if they are on income-related benefit. Of course they will absolutely continue to get the income-related support. The point is that this—

[

Interruption.

]

Wait a minute. The right hon. Gentleman knows very well—he should stop playing silly games—that we have asked—

[

Interruption.

]

No, no—

[

Interruption.

]

Grow up, for God’s sake! He has to recognise that we have asked Professor Harrington to review that, because that is a later form of chemotherapy, and he will report back. Whatever his recommendations are, we have said that we will accept that. The right hon. Gentleman knows that, and I suspect that he should have said it when he got up at the Dispatch Box.

[

Interruption.

]

I think I have done that; I just wish that the Opposition would not play politics with people’s fears and concerns. They made no arrangements at all for cancer patients on ESA, so we will take no lessons whatever from them.

We are now paying as a result of Labour’s mismanagement of the economy, which is causing all the problems and which is why, even in this Bill, we are having to find savings, with an eye-watering £120 million a day going to pay off the interest alone on the debt that the last Government left us. It is because of the deficit reduction plan that Britain has put in place that we have managed to keep our borrowing costs low and comparable to Germany’s rather than to those faced by Portugal, Ireland or Greece. These need to be seen in context, but I want to—

On a point of order, Mr Speaker. To remain in order on Third Reading, is it not necessary to talk only about the content of the Bill, not things external to it?

That is correct. On Third Reading, all speakers must focus on what is in the Bill, not what is excluded from or outside it.

I agree, Mr Speaker, which is why I have done nothing but refer to the reasons for the Bill, the rationale behind it and what is in it, hence the cancer point that we have talked about.

Let me proceed to the issue of the benefit cap, which I do not think the Opposition ever wanted to get to. Our reforms are fundamentally about fairness: fairness to recipients, but also—and too often forgotten—fairness to the hard-pressed taxpayers who have to pay for those on benefits. Across a range of areas, we have made changes designed to ensure that people on benefits cannot live a lifestyle that is unattainable to those who are in work. Let us take the benefit cap—an issue on which the Opposition have got themselves in a bit of a mess. Just two days ago, Mr Byrne, who is now in his place, told the House:

“The cap on overall benefits…is an important part of the legislation”.—[Hansard, 13 June 2011; Vol. 529, c. 491.]

However, it is now clear that his own party is completely divided on the matter. Even late last night, the Opposition tabled an Amendment that they knew they would not be allowed to vote on—a starred amendment—just so that they could posture and appease their Back Benchers, who are on the wrong side of the debate entirely. [ Interruption. ] No, no, the Opposition know very well that they had days to table that amendment, but they did not bother—I suppose that the right hon. Gentleman will say that he did know that there was a time limit on tabling amendments. The reality is that the Opposition are opposed to the cap. They should be honest and say that they do not want it. Indeed, even their amendment would have knocked out the entire effect of the cap.

Let me turn to conditionality, another issue in the Bill.

Before the Secretary of State leaves the benefit cap, let me say that I understand the reason for a national benefit cap. Does he accept, however, that colleagues across the House are concerned that in London, because of the cost of housing, there is a special issue that deserves further debate? I wonder whether he would be willing to meet colleagues from all parties, local government, the Mayor, housing providers and the Housing Minister so that we can get the problem sorted for all those with an interest in London.

I have always said that the door is open to everybody to discuss the effects and how some of them can be ameliorated—or not, depending on what the issues are. The answer is therefore yes—as a London MP, I should join that delegation too—although I still believe that we have the right policy, because it is about balancing fairness for those hard-working people who pay their taxes who often feel that those beyond work are not working themselves.

Will the Secretary of State give way?

Will the Secretary of State give way?

I will give way only once or twice more, and I give way now to my hon. Friend.

I am most grateful to the Secretary of State. Will he join me in reminding the House that, by dint of great effort, in 2011-12—[ Interruption ]—I assure Margaret Curran that this comes from the HMRC website, not the Whips—the pay-as-you-earn tax threshold will be just £7,475 a year? Will he also remind the House that the people paying tax—that is, paying tax to pay the benefits that others are in receipt of—are actually poorly paid and that a year’s pay on the national minimum wage is just £12,300? Will he join me in recognising that it is an issue of social justice that we should introduce the benefits cap?

Order. May I just remind Members that interventions should be brief? I know that the Secretary of State and others will be conscious that other people want to speak in the debate.

I agree with my hon. Friend. That point is also powerfully made by the fact that nearly half of all those who are working and paying taxes fall below the level of the cap. It is important to achieve a balance of fairness. I recognise that there are issues, and we have looked at ways in which the process of change in housing benefit can be done more carefully, for example. This is not about punishing people; it is about establishing a principle that fairness runs through the whole of the benefit system.

The Secretary of State wishes to present the Bill as being about people who are workless or feckless, but hard-working taxpayers who suddenly fall ill and are unable to claim the personal independence payment for six months could well be excluded from benefits because they have been savers. Is that fair?

If the hon. Lady had looked at what the cap covers, she would know that those on tax credit will be exempt, as will those on DLA, widows and others who are in difficulties. The cap is about those who we believe should be able to go to work but are not doing so. Of course, this would just be all stick if it were not for the fact that the Minister of State, Department for Work and Pensions, my right hon. Friend Chris Grayling had recently introduced the biggest back-to-work programme this country has ever seen, to support those in greatest difficulty. Universal credit is about helping to improve people’s incomes when we get them back into work with a bigger incentive. We are striking a fair balance by doing all that while also placing some expectations on those who are waiting to go to work.

That is also the point of the next bit, which is about conditionality and sanctions. The Bill places a level of responsibility back into the system by strengthening our conditionality and sanctions regime and requiring all claimants to accept a claimant commitment setting out their individual responsibilities—a sort of contract that will enable them to understand that they have certain obligations and that there are certain things that we are obligated to do for them. That is fair. Many claimants I have spoken to out there are completely confused about what they should or should not be doing.

When those responsibilities are not met, we will have the power to apply a robust set of sanctions, which will be made clear to the claimant at the beginning. Opposition front bench who were in the previous Government will know from going round jobcentres that claimants often still profess, even at the last moment, to having no knowledge of the fact that they will face sanctions if they do not comply. So we are going to let them know early exactly what the sanctions will be. As with universal credit, they will then have a clearer understanding of what they are meant to be doing.

The next area, which we have dealt with in some detail, involves the personal independence payment. We are bringing more responsibility to the system, but I believe that we are also improving support for those who are able to work and for those who are not. Disability support is an issue. The Bill makes critical changes to the system, and the Under-Secretary of State for Work and Pensions, my hon. Friend Maria Miller made a sterling effort to explain them in Committee and on Report.

The changes to the current system of disability support will ensure that Disability Living Allowance is no longer awarded on the basis of subjective and inconsistent decisions. I hope that all hon. Members will recognise that this is a bold attempt to bring this area of benefit up to date and to ensure that those who are not getting what they should will do so, and that those, however many there are, who are getting too much or not the right amount will get that adjusted as well. The truth is that this will be based on their ability to live their lives.

I agree with my hon. Friend the Minister about the checks involved. The DLA will be replaced in total by a personal independence payment, which will be based, for the first time, on regular and objective assessments of need.

This brings me to perhaps the biggest thing in the Bill: universal credit. This lies at the heart of all our reforms. It involves the principle that it should no longer be possible for people to be better off on benefits than in work, or for people to fear moving into work. I say “fear” because people are often concerned because they simply cannot tell whether they will be better off or worse off in work. No longer are we going to try to pick the number of hours that somebody should be working; rather, we will say to them, “You must make that choice, in line with work, relevant to your caring responsibilities and all the other issues that affect you.” This is a bold reform to help people to improve their chances and give them the assistance they need. That goes alongside the Work programme, as I said earlier, which will support all those people who are trying desperately to make the best of their difficult conditions and get back to work.

In view of the complexities encompassed in the universal credit, does the Secretary of State seriously believe that the Government are capable of producing a computer system that will work properly from the start?

The right hon. Gentleman refers to complexities—he and I have discussed many issues before—and this present system is so complex that if he were in the situation of many of the people in his Constituency, he would find it incredibly difficult to know whether or not they are better off. The principle behind the Bill is that we must try to achieve that. If he wants to know my honest opinion, I believe that we will be able to make it happen. We are working hard to make sure that this medium-level change to IT works out. I recognise it as such a change. I have had conversations about it with his Front-Bench colleague, Stephen Timms. Our views may differ slightly, but the reality is that the process has to happen; IT development is part of the process. I give the right hon. Gentleman as much of a guarantee as I can that we will deliver it—right and on time.

Some 2.7 million households will be better off as a result of the universal credit and almost 85% of the gains—I hope that Opposition Members will support this aspect—will go ultimately to the bottom 40% of people in the income distribution. I would have thought that they wanted to support that. My concern throughout the debates—I now want to bring my comments rapidly to a conclusion—has been that it is not at all clear what exactly the Opposition support and what they do not support. By their actions and by what they say, there is no commonality.

The Opposition tabled more than 200 amendments in Committee, but voted on them only 16 times. They have complained that we did not allow enough time for consideration of issues on Report and then, on the day before yesterday, they proceeded to talk for more than an hour on amendments that they did not even push to a vote. If they had not done that, they would easily have had a chance to debate some of these other areas.

When it comes to spending commitments, the Opposition do not seem to know whether they are coming or going. They would have us believe that they would have taken responsible decisions on the economy, but if they had had their way in Committee, the amendments would have entailed extra spending commitments running into billions of pounds. Not once have they said that they approve of any of the changes or the savings within the scope of the Bill. It was all the more surprising when, the other day, the right hon. Member for Birmingham, Hodge Hill complained—irony of ironies—that the housing benefit bill is apparently set to increase in the course of this Parliament. Imagine that—the man who watched while housing benefit spending crashed through the roof, nearly doubling in 10 years, and was set under his Government to rise by a further £2.5 billion in this Parliament alone, has started to tell us that somehow we are not being harsh enough. What a contrast with his hon. Friend Ms Buck in her place beside him, who claimed that our changes to housing benefit

“would lead to social cleansing on an unprecedented scale.”

Frankly, they need to get their act together, as they do not seem to know whether they are in favour or against cuts—or whether they simply do not agree with anything.

The right hon. Member for Birmingham, Hodge Hill wants to speak, so I shall finish. These measures have always been about welfare reform that forms a contract with the people of this country. It is a promise on our part to provide a simpler, fairer system that protects the most vulnerable and makes work pay; and a promise on the part of those who are claiming benefits to play their part, to look for work whenever they are able to do so, and to take some of the responsibility that Edward Milibandspoke of just two days ago—although half of his party does not agree with him. As I said before, this is about fairness to recipients and fairness to the hard-pressed taxpayer. On that basis, I ask all Members to get behind this Bill, and perhaps the Opposition will make up their minds about whether or not they are in favour of this reform.

I am grateful for the chance to speak on Third Reading this evening. I am glad that the Bill has finally come back to the House and I wish I could say that I thought the Bill’s passage through this place had improved it. I cannot with justice say that. We said from the outset that we wanted to approach this question in a spirit of national consensus.

The Opposition are proud of our record of delivering welfare reform in this country. I am glad that the Secretary of State referred to statistics from the Office for National Statistics that were published the other day because they were the same statistics that confirmed that by 2008 the claimant count was half the level we were left by the previous Government back in 1997. The number of people claiming unemployment benefit for more than 12 months in that year was down to a quarter of the level we inherited in 1997, so, no, it is not a surprise that his own welfare Minister, Lord Freud, said that our record of delivering welfare reform was remarkable.

On Monday night, I set out how I thought that further reforms should be made to toughen the responsibility to get back into work and to enshrine a culture of work in every community in this country. Throughout the passage of the Bill, we have sought to table amendments that would have improved it and allowed it to leave this place for the better. The Government have refused to listen and have refused to accept advice and amendments. The Bill presented to this House might have started with an instinct for compassionate Conservatism in action, but we have in front of us tonight a law that cuts benefits for people with cancer when the Minister says that they will not be ready to work by the time that cut hits them.

I said that we would not oppose the Bill on Second Reading to give the Government some space to improve it. We back welfare reform that gets people back to work and that simplifies the benefit system. We support the principle of universal credit and we support sanctions for those who are not trying hard enough to get a job. We support a cap on benefits if it saves public money, but this is where the agreement ends, not least because this Bill is so cold and so hard that it ends a tradition of compassion in the welfare state that we should conserve and not consign to history.

Once upon a time, this Secretary of State knew about compassion. In 2009, he said that the welfare state is a symbol of a compassionate and civilised society. I think that he has honourable intentions, but he has not presented us tonight with a Bill that is in an honourable state. It is, frankly, a disgrace that the Government have not found additional time to debate cuts to contributory ESA that would cut benefits to people with cancer before they are fully recovered. My right hon. Friend Stephen Timms asked for additional time from the Minister of State, Department for Work and Pensions, Chris Grayling, on Monday, but he refused to give the House that time.

To single out for the proposed cuts benefits that would allow cancer patients to go on receiving the benefits they need is unacceptable. It is unacceptable because it is an attack on compassion. It is unacceptable because we cannot ask people who are still battling cancer to start filling out job applications. It is unacceptable because most of us in the Chamber tonight will either have personal experience or families with experience of the truth that it takes more than courage to beat cancer and finding a job is not part of any recovery programme I have heard doctors recommend. Worse, this is a benefit that people have actually paid in for. Now, when they need it most, it is being taken away.

Ciaran Devane, the chief executive of Macmillan Cancer Support, said:

“Many cancer patients will lose this crucial benefit simply because they have not recovered quickly enough…This proposal in the Welfare Reform Bill will have a devastating impact on many cancer patients. We are urging the government to change their plans to reform key disability benefits to ensure cancer patients and their families are not pushed into poverty.”

Even at this late stage, I ask the Secretary of State to speak to his friend the Prime Minister and to sit down with cancer charities, disability groups and other campaigners to try to get this sorted out. I ask him to take heed of what Owen Sharp, the chief executive of the Prostate Cancer Charity, has said this afternoon:

“The changes to disability benefits will mean that a significant number of people with cancer will be left without vital financial support at a time when they need it the most…The current proposals in the Welfare Reform Bill will discriminate against cancer patients and should be amended.”

Perhaps the Government would be on stronger ground if only a tiny minority of people were affected, so the House is right to ask how many people will be hurt. On 16 May, the Government told us: 77% of people in the work-related activity group will not have recovered from their condition after a year, yet that is when their benefit will be cut. How on earth can that be justified? The Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell gave us his answer in Committee when he said that

“this is a sensible measure”.––[Official Report, Welfare Reform Public Bill Committee, 3 May 2011; c. 655.]

It is a decision that is, in his words, “not about recovery times”.

Perhaps I could understand that argument if I felt that the Department had its spending priorities straight, but the truth is that its message is so harsh that it has had to hire media trainers to teach the Minister with responsibility for disability, the Under-Secretary of State for Work and Pensions, Maria Miller, how to spin her lines. The Department has passed to me documents that detail the media training bill for her, which equals three and a half months’ worth of somebody’s employment and support allowance, which would be cut. It is a shame that her expensive eloquence was not more convincing this afternoon. Cutting benefits for people with disabilities and hiring media trainers instead—that tells us all we need to know about this Secretary of State’s priorities.

Will the right hon. Gentleman give way?

I am afraid that I will not—[ Interruption. ]No, because the Secretary of State talked for well over the time we agreed through the usual channels this afternoon and he is now wasting—[ Interruption. ]

Order. Mr Rob Wilson, you have just toddled into the Chamber, do not shout across the Chamber in that way. [ Interruption. ] No, no; do not argue the point. [ Interruption. ] Order. I am telling the hon. Gentleman—[ Interruption. ] I do not need any expression; I am telling him what the situation is.

Thank you, Mr Speaker. I say to Liberal Democrat Members tonight that today is the deadline for advice on motions to their conference and one has found its way to me this afternoon. They should listen to what their grass roots are saying—that they should support the amendments that we tabled on Report. The Liberal Democrats should not be fooled by the idea that to succeed in politics one has to rise above one’s principles, and they should not betray the principles of Lloyd George, Beveridge and Keynes for the political convenience of the hour. They should show us, show people and show their grass roots that like us they have heard the voices of the vulnerable, who are calling on them to act—and to act tonight.

As if the cuts for cancer patients in Clause 51 were not bad enough, they are rendered worse by the determination of this Government to leave people on disability benefits as prisoners in their own homes. On Saturday morning, my constituent Stephen McClaren came to see me. He has cerebral palsy, attention deficit hyperactivity disorder, learning disabilities and he gets these mobility payments in order to help him to see his mum, go to the gym and live the quiet miracle of a normal life. These plans have filled him with fear. He and 80,000 disabled people are now worried sick about what the Government have in store for them.

The charities say that the changes are “fundamentally unfair”, so what is going on? The Prime Minister has said that the DLA mobility component will not be cut for those in residential care homes—that is what he told the House on 23 March—but the Budget book says that cuts to the DLA mobility component will total £475 million from people in residential care by 2015. Who is telling the truth? We now know that there is a review, but today is the Third Reading of the Bill. The Government want to change the law, but what is their policy? It is a secret. The Minister for spin, the hon. Member for Basingstoke has said, with her new expensive eloquence, that the Government

“have no plans to publish the findings of this work”.—[Hansard, 9 May 2011; Vol. 527, c. 1003W.]

Tonight, we are supposed to give the Government powers to abolish the benefit when their evidence for reform is to be kept secret. What a shambles.

The Bill violates every basic test of compassion and, just as bad, it also fails the test of fostering ambition to work. I know that the Secretary of State is trying as hard as possible to introduce reforms that will help to make sure that work pays, but he cannot honourably say that and give that guarantee for anyone with children because he cannot make up his mind how much parents are going to get for child care under universal credit. We are being told that that credit will be abolished tonight with no sense of what is going to come in its place.

In February, the Secretary of State was unable to say what the Government’s plans are. He told the House, not once but twice—most recently on 24 March, I think—that he would tell us, here in the House before the Bill got through the Committee stage, that he would publish his child care policy. Leaked documents from the DWP say that the cuts could disadvantage 250,000 people, cutting support almost by half, yet tonight we are at Third Reading and the Secretary of State still has not told us what his plans are for child care.

There are new penalties in the Bill for savers. There are new penalties for the self-employed. The Bill was supposed to be a milestone in the evolution of the Government and the compassionate Conservatism they espoused, but tonight they have been found out. We have a law to hurt cancer patients and a Bill to trap the disabled, confusion for parents and penalties for savers. Whether people are ill, disabled or working hard to do the right thing, the Government are determined to attack the benefits they paid to receive. We should stand up—

Debate interrupted (Programme Order, 13 June ).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the Bill be now read the Third time.

The House divided:

Ayes 288, Noes 238.

Question accordingly agreed to.

Bill read the Third time and passed.