Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Dan Carden (Liverpool, Walton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on her excellent speech; she set out everything that the city faces, from cuts to local authorities, the hostile environment on benefits and the personal experiences that we come across in our surgeries every week, as well as the evidence in report after report. The Government seem determined to turn a blind eye to those reports and doubt their veracity, and I find it shocking when the Minister shakes his head, when we see such experiences every day.
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
I was not shaking my head.
Dan Carden
You were during my hon. Friend’s speech. The experiences I am talking about are things we see every day in Liverpool.
I was elected for the first time last year, to represent a Liverpool constituency, and it is an incredible privilege. When I am asked what the biggest issue facing my constituency is, I say poverty—and it is, because that is the critical issue affecting people, in their long-term health, educational outcomes, job opportunities, living standards and mental health. Most of all, it affects their sense of self-worth. That is the most hurtful part of seeing the decline in our communities. As my hon. Friends have done, it is right to put on the record how proud Scousers are, and how strong our communities are. That is shown by the work that our community centres and food banks do day in, day out. Liverpool is an astonishing city that is doing well in many respects.
This debate set me thinking about what poverty is, and what we are talking about today. If we look back in history, we see different types of poverty. I have seen individuals fall into poverty—people can lose a job, be moved on, and then perhaps another job appears, and during that time, trade unions and charities may help out. Families also fall into poverty. My family was affected by unemployment. My dad was unemployed for seven years, and sometimes it felt as if we did not have much money when we were growing up. Nevertheless, we had a family unit, we had a community and we had support. We still had good schools and public services, the local authority did its bit, and there were youth facilities. Today we are talking about whole communities being pushed into poverty while the safety net is withdrawn from the bottom.
Poverty is man-made. It does not exist in a vacuum; it is the result of decisions made by the powerful. No one person is responsible for their own poverty. Austerity is and has been a political choice, not an economic necessity. Since 2010 this Government have handed out an eye-watering £110 billion in tax giveaways for the biggest corporations and the super-rich, paid for by devastating cuts to wages, living standards and essential public services for the rest. They have starved our schools of funding—something they deny—taken police off our streets, including 1,000 from Merseyside Police, and left our NHS and social care in crisis.
Not only have the cuts themselves been political, but so too has their distribution. New research from the University of Cambridge shows that post-industrial cities in the north of England have been hit by the deepest cuts to local government spending and that, on average, Labour councils have been hit four times harder than Tory councils. Few places have been hit harder than Liverpool, with the staggering 64% cut to local authority funding that we have heard about. Conservative Members tell us not to fear because the Prime Minister announced at the Tory party conference that austerity is over. Leaving aside the fact that we have heard such empty rhetoric three times before, I assure the Minister that the reality on the streets of Walton and across Liverpool tells a different story as austerity rolls on, piling misery on our communities.
We have already heard many of the statistics, so I will not repeat them all. Average wages in Liverpool are £11,000 below the national average, and 40% of children in my constituency are growing up in poverty. Liverpool is now classed as having the second-highest levels of destitution of any city in the UK. On top of that, this Government now heap universal credit—a policy so fundamentally flawed that it has become an exemplar of institutional incompetence. [Interruption.] I think I heard the Minister tut, but this is being played out on our streets, and we see the evidence in report after report. Perhaps he will respond to some of the points raised today, including the Trussell Trust’s report, which states that demand for food banks has soared by 52% in areas of universal credit roll-out, compared with 13% in other areas.
Housing associations, letting agents and private landlords have told me that tenants are falling into rent arrears in areas such as Bootle and elsewhere where the roll-out has gone ahead, and that evictions will increase. The calamitous roll-out in my constituency comes right before Christmas, and my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) was right to call for it to be delayed, at least until after the Christmas month, when we know it will cause increased hardship. The figures are stark, but they do not do justice to the human misery that I already deal with in my casework under the existing benefits system.
Under this Conservative Government, we are being hurtled backwards to bygone days, reminiscent of when it was a crime to be poor. The Government’s welfare reforms have seen hundreds of millions of pounds sucked out of Liverpool’s local economy. The benefit freeze—in reality it is not a “freeze” but a real-terms cut for millions of low-income families—has meant a loss of £45 million for households in Liverpool. We have heard about the cumulative effect of such cuts.
Given the pressures, some people have to give up employment to care for elderly relatives. A scaffolder came to my constituency office and explained that he has had to give up good, well-paid employment because the care is not there for his elderly mother. We have heard how the local authority already has to act as a sticking plaster, which shows that the current benefits system is failing. I want to congratulate the Mayor and the local authority on their work.
Next week the Chancellor will reveal the Government’s Budget, and we will no doubt have a debate about economic growth and the fudging of figures to mask deep systemic problems in our economy. Not only have we seen the worst decade for wages in centuries, but the UK is the only advanced economy in which wages have continued to fall, even when the economy is growing. That is because of a decades-long trend of the share of gains from growth going increasingly towards profit, not wages. More and more economists tell us the blindingly obvious: having money from economic growth flow to working people and the poor rather than to the rich would stimulate better rates of economic growth and lower unemployment. As income inequality increases, the potential for economic growth is constrained. Since the 1970s, while productivity and the economy kept growing, the average worker’s pay package did not. The Financial Times has stated that since 2007,
“the UK was the only big advanced economy in which wages contracted while the economy expanded. In most other countries, including France and Germany, both the economy and wages have grown…The UK sits on its own as a rich economy that experienced a strong economic performance while the real wages of its workers dropped.”
What does economic growth matter to my constituents if it does not even reach them?
We have heard reports that the Chancellor is considering bringing back regional pay in the Budget in order to deny pay rises to our constituents on a national pay scale. Can the Minister tell us anything about that, and can I urge him to feed back that it would be an absolute disaster for the regions of the country if the Chancellor were to go anywhere near the idea?
The Government’s cuts have not tackled the deficit; they have shifted it on to local authorities and public services, plunging them into crisis, while starving our economy of the patient, long-term investment it needs to thrive. The problems are so stark that the solutions must be radical. The people of Liverpool do not need piecemeal change; they need something much bigger. That is why the next Labour Government will not be satisfied with tinkering around the edges of a rigged economy; they will transform our economy so that it works in the interests of the ordinary people I represent.
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
It is a real pleasure to serve under your chairmanship again, Mr Streeter. I pay tribute to the hon. Member for Liverpool, Wavertree (Luciana Berger) and all hon. Members who contributed to the debate. I clearly do not agree with all the points they made—I am sure they will not agree with everything I am about to say—but it is crystal clear that every one of them is driven by a passion to protect the most vulnerable people in society. We all want the same result; we just disagree about how to get from A to B. I am conscious that hon. Members mentioned lots of different issues. I am merely a junior Minister in the Department for Work and Pensions, so in the limited time I have got, I will try to cover the points about employment, income and poverty, universal credit migration and food banks. If time permits, I will also cover some of the other points that fall at least roughly within my area.
All speakers acknowledged that we have seen record employment, with 1,000 new jobs created every day, unemployment at record lows, and 964,000 fewer workless households. That is important because research statistics show that workless households are four times more likely to be in poverty. I will come to the specific points made during the debate about that.
Many of the speakers mentioned that there had been an increase in zero-hours contracts, for example. That is not the case: the number of zero-hours contracts actually fell by over 100,000 in the last year alone, and they represent only 2.4% of total employment, which is around the same level as under the last Labour Government.
Justin Tomlinson
Briefly, although I will not take too many interventions because I am conscious of time.
Maria Eagle
Can the Minister explain why 32% of those using the South Liverpool food bank said that the main reason they were doing so was low income?
Justin Tomlinson
As I said, I will come to food banks—a little patience, please.
We all recognise that getting people into work is important, but ultimately the question is whether it leads to real cash in their pockets. Research has shown that there are one million fewer people in absolute poverty—a record low—and 300,000 fewer children living in absolute poverty, but there is still more to do. While food insecurity has almost halved in the last five years alone—we are at 5.4%; the European average is 7.9%—there is still more to do.
Luciana Berger
I have been reflecting on all the positive spin that the Minister is trying to put on various figures, but why then we are receiving a visit from the UN special rapporteur on extreme poverty and human rights in the next few weeks? Why is that person coming to this country to see the awful situation that we face?
Justin Tomlinson
We get reviewed as a signatory country and supporter of the UN’s work, and I will be speaking personally to the person coming.
Of the four current measures of poverty—relative, absolute, and before and after housing costs—three are lower than in 2010 and the other is the same. Those in poverty, who are the focus of this debate, are on average £400 better off in real terms than they were in 2010, while those in full-time work on the national living wage have seen a 7% real-terms increase in their income in the last two years alone. We have done that through a combination of increasing the national living wage—there are arguments about what the level should be, but I do not need to remind colleagues that the rate that we first set was higher than the one in the manifesto that Labour Members stood on in 2015—our income tax threshold, which has completely removed the lowest 3.6 million earners from paying income tax, which is worth £1,000 a year, and our extension of free childcare and other areas of support.
Let me turn to universal credit, which is very topical. One thing that surprised me was that nobody mentioned conversations with work coaches. I know that many Opposition Members have been to visit jobcentres—I have done my research and looked at their Twitter feeds. As a constituency MP—I have only recently been recalled as a Minister—I know that the work coaches on the frontline are very enthusiastic about the principle of universal credit. That does not mean that everything is right, but they are enthusiastic about it. For the first time, they can offer personalised and tailored support.
Justin Tomlinson
The hon. Lady says rubbish, but has she been to visit a jobcentre?
Maria Eagle
The Minister knows very well that there have been coaches in jobcentres for many years helping people on an individual basis. He seems to be arguing that there is no problem—that food bank use is going down and that poverty is going down. I can tell him that that is not the experience in my constituency.
Justin Tomlinson
That is not what I am saying at all. I said I would come to food banks. The hon. Lady has not been to a jobcentre to talk to work coaches and see what they have to say. [Interruption.] I know that other hon. Members have.
The key is that the legacy benefits are not some panacea, where everything is great. As constituency MPs, we all know from our casework that legacy benefits are complex, involving three different agencies—HMRC, local government, and the DWP jobcentre—and frankly, one would need to be a nuclear physicist to deal with all three.
Over 700,000 families on legacy benefits were, on average, missing out on £285 of support that they were entitled to, worth a total of £2.4 billion. [Interruption.] The hon. Member for Garston and Halewood (Maria Eagle) is heckling from the sides again, but these are some of the most vulnerable people, and my role as the Minister is to represent them. I have seen in my casework, as a genuine local resident in my constituency, as the MP and, formerly, a councillor, that some people were overwhelmed by the legacy system. Under universal credit, they will have for the first time a named work coach who will stick with them throughout the process to ensure that they are not missing out. That does not mean that universal credit has been perfect—we have had many debates and there have already been many changes. In some cases, under tax credits and legacy benefits we had tax rates of 90%. I know that would please the Leader of the Opposition, but that is not what the decent public want. There were 16, 24 and 30-hour cliff edges, which created a barrier to people progressing in work. The legacy benefits were seeing £2.4 billion-worth of support missed. We cannot knowingly stand by and say, “We’ve got to stop universal credit,” because these are vulnerable people missing out on money.
We are conscious that we have had to make changes to the migration. We have always said that the roll-out of universal credit will be slow and steady—it is a “test and learn”. In last year’s autumn statement, we rightly announced that we would remove the seven-day waiting list, a welcome change that was called for by a cross-party campaign.
A lot of the cases brought up involve people who have not had access to money. We realised that people did not know that the system was not designed to provide advance benefits, so it is now a given that the work coach will push that information in the initial interview.
Anybody currently receiving housing benefit will now get two weeks of housing benefit in addition—no strings attached—which can then be used. We recognised that we should not presume in all cases that they should take full responsibility for paying their housing benefit, so we now offer, particularly where people’s housing benefit payments are sent directly to their landlords.
We have launched the Landlord Portal, which is very much welcomed by local government and housing associations, and we have protected the severe disability premium. In conjunction with the £3 billion-worth of transitional support in place, over one million disabled families will be on average £110 a month better off.
Justin Tomlinson
No, I am sorry; I am running out of time. Severely disabled claimants will benefit from higher rates, ranging from £158 to £326. That is why hon. Members should think carefully about the unintended consequences of seeking political capital by calling for a stop to universal credit. Yes, lobby for improvements, but to stop it would be to deprive some of the most vulnerable people of support.
I am very short of time but I want to touch on food banks. I have met the Trussell Trust and have visited food banks as a constituency MP, a Minister and a councillor, and I have friends who work in food banks. I welcome the work of the football clubs in Liverpool in food collection; I went to see my local football club, Swindon Supermarine FC, which was doing a food bank collection last night. People use food banks for varying reasons, but if they are missing out on formal support, we must do something about that. I made a commitment to the Trussell Trust, with which I want to work closely—I am not precious. It is important that we help those vulnerable people, which could mean having a point of contact in every jobcentre so that if the volunteers spot someone who has been to the food bank first, they can then come to us. My commitment is to do all that we can for vulnerable people.
