Department for Work and Pensions
(4 years, 9 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dame Rosie Winterton)
I inform the House that Mr Speaker has not selected either of the amendments listed on the Order Paper.
Alison McGovern (Wirral South) (Lab)
I thank the Backbench Business Committee for allowing me to lead this debate on the Department for Work and Pensions public spending estimates. In so doing, I shall explain what I think are the purpose and principles of the Department; where I feel that, unfortunately, it is currently failing; and what needs to happen to change that.
Today is about public spending. Most people in the House will know that the Department for Work and Pensions is the largest spending Department of all; it spends around a quarter of the Government’s money. However, although this is an estimates day debate, we should not focus on the money. The money is interesting really only in so far as it is for something—in so far as we spend it for a purpose and we carry out that purpose in accordance with our principles.
Mr Jim Cunningham (Coventry South) (Lab)
My hon. Friend has probably noticed that there is nothing in the estimates to help the women born in the early 1950s who lost out on their pensions. Does she agree that there will be a round of estimates coming up shortly, and we would like to know from the Minister what the Government are going to do about that, and whether the Department will include it in its estimates to the Chancellor for a future Budget?
Alison McGovern
My hon. Friend makes an effective point—which I will come to—about the position of the WASPI women, born in the 1950s. They dealt with challenges in the labour market that I have never faced. They fought for the changes that my generation benefited from, and at their point of retirement the Government undermined them. I will say why I think that is contrary to the principles on which we operate the welfare state in this country and I thank him for that appropriate intervention.
Before I come to the principles, I shall address the purpose. What is the purpose of all the money spent by the UK’s biggest spending Department? What is it for? The spending has a simple principle—and Beveridge articulated it in his report, which really commenced the modern welfare state in the UK—and that is to smooth incomes. The idea is that we spend to allow people to take money from the system when their income is low and to pay in when their income is high. It is very simple. If we allow people to smooth their potential for getting wages and income over their lifetimes, on average people will be richer than if they have to cope alone in the hard times. If we allow people to use social insurance to smooth their income, we are all better off. We pay in when we can, we take out when we need; that is how it works. It has a simple purpose. How does the system do that? It operates by some simple principles. It is a huge amount of money, but our welfare state adheres to a straightforward and simple principle—the contributory principle, one that any student of Beveridge will know all about. The idea is that we all pay in when we can and we are all entitled to take out when we need.
Why have I made those points about the simple purpose and principles of the welfare state? I do not think that very much has changed since Beveridge’s time when it comes to the fundamental way that the labour market operates and the risks that people face in their lives that will make them poorer if we do not have an effective welfare state. We are still fighting the same evils that Beveridge identified, and the reasons people might not have enough to get by are fundamentally the same as they were when he wrote his report. The one that we all know about is old age, as my hon. Friend the Member for Coventry South (Mr Cunningham) has already mentioned. That is why it is right that, in the 10 years since the crash, the incomes of pensioners in our welfare state have—by and large, with one notable, shameful exception—been protected. We have seen pensions keep pace with earnings and with the general movement of our economy. When the economy is growing, pensioners’ incomes have kept pace. We know that the uprating, the increase in spend on pensioners, has protected them from the possibility of poverty. No one wants to see people who have worked hard all their lives go without and struggle with poverty in their old age.
Of course, the WASPI women are an exception to that. The principle that they have paid in and that they should be able to take out in an equitable way has been undermined for them. For the reasons that have already been mentioned, that is shameful and must be changed.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
I thank my hon. Friend for giving way and for the way she is introducing the debate. Does she agree that at a time when the Conservative leadership contenders are splurging billions of pounds in spending commitments, not a single penny is available for the WASPI women and that really shows where their priorities lie?
Alison McGovern
I thank my hon. Friend for his intervention. The Conservative leadership election feels like the reversal of politics as I had come to know it. I had always expected that Labour would be on the defensive when it came to public spending. I thought that my party would always have to prove that we were the ones who would deal responsibly with the economy, that we would always be on the defensive and the Tories would always be on the attack. But those competing in the Conservative leadership election seem to want to reverse that principle. They seem to want to be accused of splashing the cash. Given that one of the candidates found nearly £10 billion to be spent on tax cuts, I suggest that the debate should never again be about whether austerity was necessary, but should instead be a simple question of political priorities.
Kevin Hollinrake (Thirsk and Malton) (Con)
The hon. Lady is making some powerful points, many of which I agree with, and I am also concerned by some of the pledges in the leadership contest about the spending of taxpayers’ money. What does she think about Labour’s election manifesto pledges of £1 trillion of spending?
Alison McGovern
The hon. Gentleman asks about the 2017 manifesto. I simply remind him that before the publication of the manifestos in that election most people expected the Conservative party to get a stonking great majority so that it could push through its version of Brexit based on the quality of their manifesto as opposed to ours. I point the hon. Gentleman to the historical facts, as it did not turn out at all like that.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
To return to the point about the WASPI women, I completely accept that we all want to make sure that people have dignity in retirement, but does the hon. Lady acknowledge that the Government’s figures show that reversing the impact of the decision to raise the state pension age in line with rising life expectancy would cost £181 billion? Where on earth would we find such a sum of money?
Alison McGovern
The hon. Gentleman is a fellow member of the Treasury Committee and I thank him for his intervention. That is an interesting forecast. I do not think that dealing with the injustices would cost anything like as much, but if he wishes to have the discussion, we have many hours on the Committee together and I will happily discuss his spreadsheet any time he wishes.
Frank Field (Birkenhead) (Ind)
Before my hon. Friend gets to that spreadsheet, she is making an important point. The budget has been brought more into balance by the cuts in welfare benefits, which have been concentrated on families with children. In our constituencies, many people have been pushed into hunger and destitution for the first time in their experience, not because they have lost talent or the ability to manage, but because for the first time in a century we are cutting benefits to the very poorest.
Alison McGovern
I thank my right hon. Friend and constituency neighbour for that intervention. He brings me to the point that I was just about to make, which was what Beveridge might have thought of what we have done to family benefits. When we have children, life costs more. Beveridge knew that in the 1930s and 1940s, and family benefits were always designed to be a solid part of the modern welfare state that would help our country rebuild after the second world war. That is also because those benefits rely on the contributory principle. How on earth do we expect to get responsible adults who are able to use their talents for the benefit of our country and get to the point in their lives when they can adequately pay back to the welfare state if children’s ability to grow and learn has been undermined at the very point when they needed the welfare state to pay out for them? We take out when we need, and we pay in when we can. That goes for family benefits along with everything else.
Joanna Cherry (Edinburgh South West) (SNP)
The hon. Lady is making a powerful speech, as I would expect of her. Last week the Scottish Government introduced a new Scottish child payment which, when delivered in full, will mean an extra £10 a week for more than 400,000 children. The Child Poverty Action Group has described it as a “game changer” for tackling child poverty. Does the hon. Lady agree that that is the sort of proposal that this Government should be implementing for the whole of the United Kingdom, and to which the Labour party should commit itself?
Alison McGovern
The hon. and learned Lady will know that I believe in the pooling and sharing of resources across the United Kingdom. If the Scottish Government have found evidence that there is a way of aiding children that can work, I will be learning the lessons, but I firmly believe that the way the United Kingdom’s welfare state pools and shares resources is the most powerful tool that we have with which to tackle the child poverty that worries me today.
We know that the projections for child poverty over the next few years are a disgrace. We will see it rise to record highs, and if we do not make a decision and do something about it, it could affect more than 5 million children by 2024. I do not know about you, Madam Deputy Speaker, but I am not prepared to stand by and see the welfare state that this country has built over many years fail at that level. I am not prepared to see the contributory principle that says that we pay out to people in need so that they can pay in when they can, become fatally undermined by the growing wound in our country that is child poverty.
I should like all Members who are present today to ask themselves a simple question. On the basis of the purpose of the welfare state and the principles by which it operates, is the DWP’s current spending a success? We all know the answer to that question. It stares us in the face when we think about what is going on in our own constituencies, and the people whom we see in our surgeries. It stares us in the face when we walk through the doors of the House of Commons and see the destitution, and when we know that a person died on our own doorstep. It stares us in the face when we hear from the Trussell Trust that last year it handed out 1.6 million food bank parcels.
My right hon. Friend the Member for Birkenhead (Frank Field) made exactly the right point. Do we think that there were 1.6 million incidences of fecklessness? Do we think that there were 1.6 million incidences of people being so unable to deal well enough with their lives that they had to turn to food banks and beg for help? Do we think that there were 1.6 million incidences of error, or mistake, or confusion? Quite clearly not. What we have seen are 1.6 million incidences of injustice and unfairness.
Mr Jim Cunningham
I thank my hon. Friend for giving way yet again; she is being very generous.
One of the main contributions to poverty is poverty wages, as a result of which people have been driven to food banks. A couple of months ago, I visited a food bank in my constituency. Think about it: in a semi-rich city like Coventry, 22,000 people used a food bank last year. Does that not tell us a story?
Alison McGovern
My hon. Friend has made his point well. We all know that the DWP is failing because we see it every day, but why is that failure happening? I think it is pretty obvious from the DWP’s policies that it has radically misunderstood poverty. While its aims and objectives in dealing with poverty are all absolutely worthwhile and worthy, they will never get to the root cause of it.
The DWP’s policy paper sets out its next steps for action on poverty. It wants to help through the troubled families programme, and it wants to identify people with complex needs. It talks about addiction, and it talks about education. The problem is that while those are factors in people’s lives that are associated with poverty—of course lower educational achievement is a risk for people who grow up in poverty, and of course addiction is a problem in communities that have less wealth—it is possible to do very well at school and still be poor, and it is possible to be poor and not addicted to anything. It is possible for people to have excellent family relationships, to look after each other and be able to take care of their families, but still to suffer the consequences of low incomes, because the root cause of poverty is not any of those other things; it is not having enough money. What my hon. Friend the Member for Coventry South said about poverty wages was right, and that is why the DWP must change course.
Alex Burghart (Brentwood and Ongar) (Con)
The hon. Lady is making a powerful speech, and no one would question some of the things that she has said, but does she not understand that when people suffer from addiction—the terrible pain of addiction— they struggle to get into work, and to earn and look after themselves? Addiction is a root cause of poverty. [Interruption.] Of course it is; don‘t be ridiculous.
Alison McGovern
I thank the hon. Gentleman for his intervention, because he has illustrated exactly the point that I am making. I have every sympathy and every empathy with people who suffer from addiction and associated mental health conditions, but those conditions affect everyone in society. They are not solely about people who are poor. Moreover, there are plenty of people who just do not have enough money, and who do not suffer from any of those problems. The point that I am trying to make is that the DWP is failing because it has missed the central point. The cause of poverty is not having enough money, and it is our duty in the House to do something about it.
Alison McGovern
If the hon. Gentleman really wants to argue with me, then be my guest.
Alex Burghart
I very much want to argue with the hon. Lady. The truth is, is it not, that poverty is a result of some of the problems that people face in society. If those problems are removed, people are considerably less likely to be poor, because they are more likely to be able to work. I have met people who have started out in life from a very good position, but have suffered terrible heroin addiction and have consequently been unable to work. The reason those people have no money is that they have suffered from heroin addiction.
Alison McGovern
Let me try this another way. The people whom the hon. Gentleman has mentioned who are suffering from addiction deserve our sympathy, empathy and solidarity, and they deserve help, but so does the kid at school who is working hard, who has great teachers, but who goes home and sees his parents struggle. The cause of poverty is a simple thing: it is not having enough money. It is possible for the Government to have brilliant programmes in all other spheres and still fail to deal with the wound in our society that means people turning up at food banks and children who are unable not to be hungry during the holidays because they can no longer rely on free school meals.
I simply say to the hon. Gentleman, “Ask yourself this question: if we had dealt with every addiction problem in our country, would that necessarily solve the problem of poverty if wages were still too low and this Government were still hellbent on taking money, year after year after year, out of the welfare state which is there to support the family of that child who is working hard at school?”
What, then, has to change? We have to reassess the contributory principle as it affects families, and we have to decide that in this country we will ensure that families can make ends meet. That is why I—along with a number of other Members and the former Prime Minister Gordon Brown—have set out over the summer to try to establish the principles of a programme that could enable them to make ends meet.
I believe that the programme should look like this. Step one must be to end the policies that are breaking the principle of Beveridge’s welfare state. We know what they are. The two-child limit means that 800,000 families with three or more children who are currently receiving tax credit are at risk. While the Government say that the two-child policy will save them billions of pounds, we know that every child matters—every child counts for something—and that is why that policy cannot be allowed to continue. If it does, we know from all the evidence and the child poverty forecasts that it will drive up poverty for children in this country living in a household with three children or more. If anybody thinks that somehow knowing that the Government are going to punish the third child in a family will help to guide families as to family size, I simply say they have probably missed the fundamentals of reproduction. We do not hold children responsible for the actions of their parents, and our welfare state should not do that.
Christine Jardine (Edinburgh West) (LD)
The hon. Lady is making a very important point extremely well. Does she agree that one of the unbelievable aspects of the two-child cap is that it does not take into account that not everyone who has two children and decides to have a third is on benefits when they make that decision? A family’s circumstances can change overnight through no fault of their own, yet the Government seek to punish them for that.
Alison McGovern
I thank the hon. Lady for making that important point, and that is the entire point of the welfare state: our circumstances can change overnight through no fault of our own. And the idea that the Government have set up this arrangement of the two-child policy because they want to send some sort of political message to people about having children or not is crazy; there is absolutely no evidence that it works.
The second thing that has to change immediately is the benefits freeze for working-age people, specifically families. We know the cost to families of the four-year freeze that people have already lived through. That should come to an end this year, but who knows—who knows what the next Tory Prime Minister will choose to do; who knows if they will still choose to punish families. But we know that the reality is that working-age families have not had that lock that pensioners have had; they have not had that connection between the wages going up for everybody else in society and the money that they have to support them. It is simply neither fair nor effective to have a welfare state that does not help families grow up with enough to get by. We are simply undermining the ability of our next generation to contribute to the welfare state when it is their turn.
Thirdly, we need to reappraise the welfare state and find a balanced approach of universal benefits and targeted benefits. We do not have time to go into the intricacies of the ways in which universal credit has failed, but we know that it has. We know that the sanctions regime has caused destitution, and we know that so many of the ways in which Universal Credit was supposed to make life easier for people have not turned out to work like that in practice, which is why the Government are yet to deliver the Universal Credit roll-out; we know it and they know it. That is why for the future we need a range of benefits, some of which are simpler to claim, like child benefit. Child benefit is easy. Those who have a child are, by and large, apart from the highest earners, entitled to it; it is easy and straightforward, and it would be an excellent way to stop child poverty rising if we were prepared to invest in child benefit while we also still use targeted means-tested benefits to get money to the poorest.
Finally, we need a mix of the work that the DWP does through the welfare state and through cash transfers to deal with poverty with all the other things that we know help families to get along and move forward, whether that is services for early years, nursery school, childcare or skills development, so that people can move on and move up. We know that the problem is not just low pay; it is also families being able to have enough time to build up their skills so that they can move on to the next job and get higher wages. So we need that balanced approach of universal benefits, targeted benefits and a balanced mix of the welfare state and other services that the Government can provide to help families.
But in the end my point here today is really very simple: the DWP has failed in its purpose of helping people balance their incomes throughout their lives simply because it decided that families in the UK would carry the burden of the cuts they wanted to see to the state. It has failed to adhere to that simple Beveridge principle that we pay in when we can and we take out when we need, because if we cannot fund children who really need help and support, how on earth will they grow up to be able to pay? The DWP under this Conservative Government is a failure; it is time that changed.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. This is a well-subscribed debate, as is the next one. I do not want to impose a formal time limit at this point, but if colleagues could take eight minutes or less that would be very helpful.
Trudy Harrison (Copeland) (Con)
It is a pleasure to follow the hon. Member for Wirral South (Alison McGovern).
In speaking today I want to commend the excellent work of my local work coaches whom I recently met at the Whitehaven Jobcentre Plus office in Copeland. They are doing a tremendous job in helping many hundreds of people in my constituency into work.
I think back to the time when I owned and managed my own children’s day nursery and remember speaking with women who did not want to work for more than 16 hours a week because it would scupper their benefits. The benefits system was a clear disincentive to work, and that has been one of the greatest changes from the introduction of Universal Credit. Under the previous welfare system people could lose over £9 of every £10 they earned, creating no financial incentive whatever to get up in the morning and go to work.
As my business was looking after other people’s children, I heard the experiences of many parents. Under Universal Credit 85% of childcare costs can now be paid regardless of how many hours a parent works, which is a huge increase in support compared with tax credits. Under the previous system it often made no financial sense to work more than 16 hours a week; now, under Universal Credit, work pays.
The recent decision to remove the two-child limit under Universal Credit for those born before 2017 is welcome. When my four daughters were all aged under five I had to combine my full-time employment with taking care of my young girls. As a direct result of this Government’s intervention a working family with two children can now receive up to £13,000 a year for their childcare costs because we have increased the available support from 70% to 85%.
We must also remember that an extra 15 hours of free childcare has now been available to working parents of three and four-year-olds since September 2017, which is enabling more parents to make work pay. Particularly for women, this makes all the difference; we now have more women in the workplace than ever before—since records began in 1971—which is making a significant difference to families’ take-home pay.
One of the greatest influences on a young person seeking employment themselves is seeing their parents enthusiastically going out to work in the morning and positively speaking about their work when they return home, as I do with my own daughters, their friends and boyfriends. There are 458,000 fewer young people out of work than in 2010, which amounts to a 50% decrease in unemployment, and welfare reform has supported the impressive figure of 1,000 jobs on average being created every day since 2010.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the hon. Lady kindly cite the evidence to support her statement that welfare reforms have actually led to the increase in employment, because I have evidence to show that employment has increased in spite of the welfare reforms?
Trudy Harrison
I explained earlier in my speech that previously women in particular were restricting their working hours to 16 hours a week because of the benefit system, and in terms of the evidence the hon. Lady is surely not doubting that the unemployment record is at its lowest since 1971.
Universal Credit is one of the most important reforms the Government are making. I want to see high quality, affordable, flexible childcare in every town and village, and I would like to hear from the Minister what steps he and his Department are taking to make that possible. Certainly the welfare reforms are making it a more achievable goal in my community, and I welcome the Government’s efforts.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I congratulate my hon. Friend the Member for Wirral South (Alison McGovern) on her absolutely excellent speech. She set out what social security should be about. It is about the type of society that we want. The key thrust of her message was to ask whether it is acceptable that so many children are living in poverty—one in four currently grow up in poverty, and one in five are in persistent poverty—when we are the fifth richest country in the world. Is this the sort of society we want them to grow up in, when, despite being the fifth richest country in the world, we also have the highest child mortality in western Europe?
We know the causal relationship between poverty and early childhood death. Is this acceptable? To my mind, it is not, and I am sure that many people across the Chamber agree with me. That is why I asked the hon. Member for Copeland (Trudy Harrison) for her evidence. We have to look at the evidence. There will also be issues with addiction, but are we seriously saying that all poverty issues relate to addiction? There is no evidence to support that. I shall get back to the point of whether this poverty is acceptable. If it is not, we need to look at mechanisms that will ensure that in the civilised society that we aspire to lead we have the policy measures to ensure that this does not happen.
Huw Merriman (Bexhill and Battle) (Con)
Is it acceptable to be in a party that has always left office with unemployment higher than when it entered office, or is it acceptable to be in a party that has delivered record numbers of jobs?
Debbie Abrahams
I respond to the hon. Gentleman by asking whether it is acceptable that we have the highest level of in-work poverty and that two thirds of the children living in poverty are from those working families. I throw that back at the Government.
Christine Jardine
The hon. Lady makes the point that I was about to make, which is that we are in the completely unacceptable situation in which two thirds of the children living in poverty in this country live in households where at least one parent is working. Does she agree that that is not just a failure by the Government to protect those children but an abject failure on their part to protect the welfare state and provide a continuing welfare state that works for the people who need it most?
Debbie Abrahams
I could not agree with the hon. Lady more.
I am going to carry on with my questions about what we deem acceptable in our country. Is it acceptable that sick and disabled people are being isolated and excluded across our society? I believe that, in addition to children, it is sick and disabled people who have borne the brunt of this Government’s cuts. That shames us all. Nine out of 10 disabilities and illnesses are acquired. Would we want this for ourselves or for our nearest and dearest? I am sure that the answer is no, so what does that mean for our policies for sick and disabled people? Many of us on both sides of the Chamber do not think that this is acceptable. We need a thriving economy, but the present levels of inequality are stifling the growth that we need—[Interruption.] That is evidence based. I can provide evidence for the fact that inequality is stifling growth in the economy.
We need a social security system that is there for all of us. I would like to see our social security system held in the same esteem that we have for our NHS. It should be there for each and every one of us, providing dignity and security in our retirement and the support we need if we become sick or disabled or if we fall out of work. Let us face it: with the current flexibility in employment, people are going in and out of work, and the system needs to be able to reflect that. It also needs to be able to protect us from poverty, because that is what a civilised society does. As my hon. Friend the Member for Wirral South said, this should be about smoothing out our incomes so that we do not have to be plunged into poverty when we experience extreme events. A decent social security system is a vital weapon for tackling the poverty and inequality that are now rampant across the UK.
We know that, although work and pensions spending has increased since 2010, working-age support has actually been reduced by £30 billion because of the decisions that the Government have made. We also know that those savings are set to increase even further to £38 billion by the end of the forecast period in 2023-24. These figures should include the effect of the measures announced in the 2018 Budget, which included annual spending of £1.9 billion by 2023 on universal credit. Unfortunately, although some people have benefited from universal credit, 3 million people will still be worse off under it. As I mentioned in Treasury questions this morning, 87% of all disabled people will not benefit from those Budget measures and will remain worse off under universal credit, alongside 640,000 self-employed households and 475,000 working lone-parent households.
As my hon. Friend so eloquently put it, we have seen the rise and rise of food banks and an increase in in- work poverty. We know that 4 million sick and disabled people are living in poverty, as are 330,000 more older people. I mentioned the stifling effect that this is having on the economy. The Office for Budget Responsibility’s own model has shown that the independent effect of austerity has been to stifle economic growth by at least £100 billion in 2018-19, which is the equivalent of £3,600 per household. That is my evidence to the House.
I have mentioned the human toll of these policies. In Work and Pensions questions yesterday, I mentioned Amanda, a lone parent who was pregnant and had significant mental health issues. She had her universal credit claim closed in the final weeks before she was about to deliver her child. She did not know why this had happened, but it was revealed that it was because she had not undertaken an independent review. I am pleased that the Minister said that he would take the matter up, but let us just imagine if this happened to us. How would we feel if we suddenly had our income ripped away from us and we did not know what was happening, just as we were about to have a child? This is simply unacceptable.
We know that, between 2013 and 2018, 60 disabled people a month died after their personal independence payment claims were rejected. Many others have died after being found fit for work. A Government’s first duty is to keep their people safe, and that includes their vulnerable citizens. They are failing to do this. Poverty and inequality are political choices. Many of us have made suggestions on how we can tweak the current social security system, but I believe that we need a radical transformation. As my hon. Friend said, we need a new social contract with the British people, built on the Beveridge principles, to define a 21st century social security system that treats its citizens with dignity and respect and protects them from poverty, destitution and even death.
Sarah Newton (Truro and Falmouth) (Con)
I congratulate the hon. Member for Wirral South (Alison McGovern) on securing this important debate. It is always good to have the opportunity to debate the vital work of the DWP.
The hon. Lady set us a really good challenge because—I hope I have got this right—she was basically asking, “What is the DWP for?” She articulated well Beveridge’s aspirations in the creation of the welfare state, but in addition to what she said about ensuring the smoothing of income and providing a good safety net for people when they need it and for those who are unable to work, the DWP is also about promoting the health and wellbeing of people in employment. It is that important part of the DWP’s work that I will spend some time discussing today, because it seldom gets debated in the House.
The health of the nation’s workers has never been more important. Modern society and the world of work are changing rapidly, bringing new challenges for our physical and mental health. We all spend at least a third of our lives at work, so employers have an important role to play to help workers stay healthy. Fulfilling and meaningful work can be a huge source of wellbeing and having a supportive employer can make a real difference to someone grappling with a physical or mental health condition. Crucially, four in five UK workers say that support from their employer could help them to recover quicker from an illness. Much is being done by employers but, of course, there is so much more that we can all do together.
Recent research conducted by the John Lewis Partnership revealed that, by working together, Government and industry can unlock £38.1 billion for the UK economy by 2025 through fast access to psychological services and physiotherapy for employees grappling with a physical or mental health condition. We know that the main two reasons for people falling out of work is poor mental health or a musculoskeletal condition.
The Working Well coalition is a new and growing group of MPs, charities, employers and think-tanks, and together we are committed to do more to improve the health of the nation’s workers. To achieve that, we all need to play our part. We need businesses to take a leadership role in promoting good physical and mental health at work, and I saw during my time at the DWP what some of the UK’s best employers are doing, supported by the Health and Safety Executive. Business can be a real force for good in society, and we want to do more to support other employers, large and small. We want to galvanise others behind the business case for action and to work in partnership with our public services to promote a healthy society.
The Government have an important enabling role to play to make free occupational health services for workers a non-taxable benefit in kind to promote investment from employers. Currently, such services are subject to employment taxes at an effective rate of 40%. Government and employers need to explore and draw together practical advice on physical and mental health to help employers, building on existing good practice. Many employers want to invest in health and wellbeing, but they just do not know where to start.
The Cornwall and Isles of Scilly local enterprise partnership has started a beacon project, backed by £500,000 of DWP investment. It was launched last September at Cornwall’s GrowthFest, and it aims to provide businesses with tailor-made support to enable them to build inclusive workforces. The Evident Agency is developing a scalable digital project that will deliver advice and ongoing support for businesses, working with the Cornwall growth hub and other partners to provide a single point of contact for employers developing an inclusive work place.
With record employment, many businesses in my constituency and across the country are struggling to recruit. We want to make it easier for businesses both to find the right person and to support existing employees who may have a disability or long-term health condition. In developing a digital solution, Evident Agency has engaged with several local businesses through surveys and face-to-face interviews to explore how businesses respond to mental health and disability in the workplace. It is clear that no two businesses are the same and that a one-size-fits-all approach simply does not work. Navigating businesses through the range of advice and support and following through with ongoing support is key. Developing a peer to peer network will be part of the solution, as will the support that large businesses could give to small businesses in their supply chain.
I welcome the recent announcement made by the Prime Minister and Secretary of State for Work and Pensions of a consultation on new measures to help employers better support people with health conditions in work. Much-needed reforms of statutory sick pay will enable it to reach those on the lowest incomes, to be more flexible, and to offer the support that people need to help them return safely to work. The Government propose to extend occupational health so that more employers are able to offer the service, and I hope that my suggestions about changing the tax system to incentivise those changes will be taken into consideration as part of that consultation, because this is the perfect opportunity to spark a revolution in workplace health and wellbeing.
A healthy society underpins a healthy economy, and we hope that this can be the start of a new dynamic partnership between the Government, employers and charities to support the physical and mental health of our 32.7 million workers and, most importantly, to close the employment gap for people with disabilities and health conditions who really want to work and play their full part in society. Surely that is a goal that everyone across the House can unite in achieving.
Justin Madders (Ellesmere Port and Neston) (Lab)
I welcome this opportunity to scrutinise the DWP’s spending, because when I sit in my surgery, week after week, listening to the stories of people living in poverty and struggling to survive while facing a continual battle with the benefits system, I find myself wondering just where nearly a quarter of all Government spending is going. It is certainly not reaching the people who need it most in my constituency. People have had overpayments, underpayments, long initial waiting periods, inaccessible and complex online forms that lead to uncompleted claims, a lack of support with claims, and cruel disability benefits tests, with fines consistently being overturned at appeal.
We have had plenty of debates about universal credit, and it is not working. The five-week wait for initial payment is driving people into poverty, debt and rent arrears, forcing them to turn to food banks to survive. We have already heard about the number of people using food banks. In my constituency, like everywhere else in the country, the numbers are going up year on year at an alarming rate. Despite the Government’s claim that nobody will be worse off under universal credit, we now know, thanks to the Institute for Fiscal Studies, that 1.9 million adults will be at least £1,000 worse off.
While the Office for Budget Responsibility’s report at the start the year upheld the Government claim that 1 million ESA households will, on average, receive an extra £110 a month, it also showed that exactly the same number of ESA households will lose, on average, £217 a month. It is no wonder, therefore, that the UN special rapporteur, Professor Philip Alston, accused Ministers of window dressing to minimise the political fallout. That is both damning and shaming.
I have spoken on many occasions about the cruel, unfair disability benefits tests that my constituents have to go through, and for what? Record numbers of people are winning appeals against the Department, and it just looks like the whole process is a stick to beat people with. As we have heard, more than 70% of personal independence payment and employment and support allowance appeals will find in favour of the claimant. One of my constituents was assessed five times in eight years of being on ESA, and despite being found fit for work each time, they won every time on appeal. How flawed must the assessment process be to be so consistently wrong? How can the cost of defending five separate appeals be justified when the decision is the same each time?
More than 16,000 appeals have overturned a PIP decision in the first three months of this year, and nearly three quarters of the 22,000 that went through a tribunal also ruled against the DWP. Waiting times for a PIP appeal are coming up to a year in my constituency—nearly a year in which some of the most vulnerable people in our society are denied the financial support that they need. Things can get worse, because if they have a Motability vehicle, they can lose that as well. I met someone last week who clearly could not get to her job on public transport, but she now faces losing her car due to a PIP assessment. I have little doubt that she will win her appeal, but what consolation will that be if she loses her job in the meantime?
Alison McGovern
Does my hon. Friend agree that this poor decision making fatally undermines the relationship between the citizen and the state, and that it must make his constituents wonder what kind of country we live in?
Justin Madders
I thank my hon. Friend and constituency neighbour for her intervention. I do sometimes wonder what kind of country we live in when vulnerable people feel the cards are so stacked against them that it is not even worth their while to appeal. Those are the people who come to see me. I do not know what happens to the people who are so beaten down by the system that they just give up, which I feel is the unintended consequence—or possibly the intended consequence—of this policy time after time.
We know that the cost of successful PIP appeals was £27 million last year. ESA is not included in that figure, but 74% of those claims were successful, too. Let us not forget the figures I uncovered towards the end of last year, which show that the Department is not even turning up to four in five appeal hearings. We know what would happen if my constituents did not turn up to four in five appointments with the DWP: they would be sanctioned straightaway.
I also hear from parents whose children are not eligible for free school meals because their household income is just a little too high, and they are struggling to provide their children with a school lunch because they cannot afford it. Many of these families are struggling to make ends meet.
We now come across parents who are eligible for help but who are not getting it due to the complicated application process and the long waiting times. I have constituents who, in the period before the first universal credit payment is made, are desperate for support but are told that they are not eligible for free school meals. Surely we can do this better and provide eligibility for free school meals when the universal credit application is made, rather than waiting until the first payment comes through.
Briefly, on access to benefits for people at the end of life, the current special rules for terminal illness—SRTI—exclude many people with terminal illnesses. I am meeting the Minister next week to discuss this, and I hope we have a constructive conversation, but I raise it now so that people are aware of some of the difficulties and of the money and time being wasted on inappropriate and unnecessary assessments.
Only 45% of people with motor neurone disease are claiming personal independence payment under SRTI. The majority of people in that situation are still using the standard claims route, which is inappropriate for their situation. They are required to fill in a long form, attend a face-to-face assessment and then wait weeks before the benefits are received.
Neil Gray (Airdrie and Shotts) (SNP)
I commend the hon. Gentleman for his speech. Is he aware of Social Security Scotland’s plans to ensure that all medical evidence is available to decision makers at the application stage, so that a correct decision can be taken without the need for often demeaning, demoralising and horrible assessment processes such as the one he describes? Will he support my call for the UK Government to follow Scotland’s lead?
Justin Madders
The hon. Gentleman makes a helpful suggestion. Certainly those who have, by definition, a very short time to get these matters sorted due to terminal illness should have as much of the process done at an early stage to avoid such difficulties.
It is highly insensitive that people who have been diagnosed with what can be a devastating condition that will end their life, possibly within 12 months, have to face this extra hoop-jumping when they should be focusing on spending what time they have left with their loved ones.
The majority of people with motor neurone disease are awarded the enhanced rate of PIP anyway, so we need to make it easier for them to claim through SRTI instead of the standard route, which many are currently going down. There are a number of helpful suggestions that we can discuss with the Minister next week.
My hon. Friend the Member for Wirral South (Alison McGovern) spoke passionately and eloquently about the Women Against State Pension Inequality Campaign. She rightly drew attention to the scandal, which will not go away. The WASPI women are there, and they are growing in number. She is right that, while the Tory leadership candidates continue to spaff cash up the wall with spending promises on tax cuts for the most well off in society, for big corporations and for whatever else they decide when they wake up in the morning, it is damning that not one penny has been committed in the leadership hustings to the WASPI women.
Ultimately, it comes down to priorities, and it is clear that WASPI women are not a priority for this Government and will not be a priority for the new Prime Minister, either. The hardship, the injustice and the erosion of the contributory principle that underpins the welfare state are clearly not a priority for this Government, and it is to their shame that they continue to ignore this campaign in the face of overwhelming evidence that a real injustice is being done.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
It is a privilege to take part in today’s debate, and I congratulate the hon. Member for Wirral South (Alison McGovern) on opening it. This is an important issue, and we all know that the DWP goes to the heart of so many of our constituents’ lives.
I welcome the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Colchester (Will Quince), to the Front Bench. He has done important work on all the issues surrounding bereaved parents over the past few weeks, and I think everyone on both sides of the House welcomes the Government’s new position.
Over the two years I have been an MP, I have seen at first hand the hard work, considerable commitment and personal dedication put in by the staff at Loftus jobcentre. I have seen it in the context of the redundancies at the Boulby potash mine in my constituency, which were caused by the move from mining potash to mining polyhalite. The way in which the emergency response team moved, and the work it did to support the workforce into productive and fulfilling jobs was impressive.
That speaks well for the professionalism of the men and women in our jobcentres, many of whom are sometimes unfairly miscast as people who either do not know or do not care about the lives of the people they help—that is certainly not my experience. I do not recognise the Opposition’s characterisation of so much of the front-facing work of the DWP. I tend to find that, if anything, the jobcentre workforce are unbelievably adept, graceful and kind.
Alison McGovern
To be clear, not one thing that I or any Opposition Member said criticised the work of the people on the frontline for the DWP. It is the Conservative party’s policies relating to the DWP that are at issue.
Mr Clarke
I would not ascribe it to the hon. Lady’s speech, but I have heard speeches in this place from Labour Members that have come very close to blurring the line between the policy and the people. There is sometimes a real determination to make people afraid of their experience of programmes such as universal credit by stoking up concerns, rather than pointing out the progress on rolling out this fundamentally important reform, which originally enjoyed the Opposition’s support—mainly because it is the right thing to do.
The hon. Lady rightly referred to the Beveridge principle of a welfare state that acts as a strong safety net to help those in need when the chips are down. That is not what we had under the last Labour Government, when the cost of welfare benefits rose by some £84 billion—an enormous sum of money. Welfare has to be fair to the taxpayer, as well as to recipients. This is an important issue. The balance was lost, and the public knew it was lost.
That was one reason, among many, why we won the 2010 general election. There was a widespread perception that the welfare system had strayed from its moorings and was no longer necessarily about helping people into work, or helping them to stay in work longer. For too many, it allowed a lifestyle based on the trap of dependency—my hon. Friend the Member for Copeland (Trudy Harrison) referred to that trap. For too many people, the logical incentive created by the system was not to work, or not to work more hours. There was nothing kind or moral about that. It was, in fact, profoundly the opposite, as the system did not help people take the true route out of poverty, which is, of course, work.
Alison McGovern
The hon. Gentleman is being characteristically generous with his time. Will he answer a simple question? How does the two-child policy provide an incentive to work when children, by definition, cannot work?
Mr Clarke
Child benefit is, obviously, a sensitive issue, but the point is that a family not in the welfare system, perhaps just above the entitlement level for welfare support, has to make rational choices in their life. All families have to make rational choices in their life about the size of the family they can afford. Lots of people find it wrong that the system would allow people to have any number of children, whereas those people not in the system have to make budgetary choices. That is not a principle I am uncomfortable defending.
Let us go to the wider point, as we need to go back to first principles on this. I do not doubt the sincere differences we have and Labour Members’ concerns, but they have to justify the fact that under their Government 1.4 million people spent most of 2000 to 2010 trapped on out-of-work benefits, with some receiving more than the average wage. Some 50,000 households were allowed to claim benefits worth more than £26,000 a year. I represent a low-wage constituency in the north of England and I simply cannot justify a situation whereby the logical thing was for people to stay earning that amount of benefits rather than to be in work. That has profound and adverse social consequences.
Debbie Abrahams
I think what we are trying to do with this debate is look at where we are now. The hon. Gentleman is right, and we did not get everything wrong, but what we need to do is look at the system now. It is clearly not fit for purpose. The way he was talking made it sound as though he also had concerns about the number of children, and the number of sick and disabled people, living in poverty. I am sure he was not suggesting that all the sick and disabled people who require support are shirkers or scroungers, and that there is nothing wrong with them. So what do we do now?
Mr Clarke
The hon. Lady is absolutely right; of course, there are lots of people who, for reasons that are totally out of their control, need our support and compassion. No Conservative Member would argue with that. I would argue that we get more money for those people by ensuring that the system has the resource available to devote to those families and those individuals, rather than to those who do not need that support and need to be in work. We have seen a record number of people come into work. We are seeing record female employment. We are seeing a record number of disabled people move into work. We should celebrate all those things. Just as those on the other side are quick to point out the problems with the system—and any system run by Government that is as Byzantine as the welfare system will always throw up hard cases that need to be looked at carefully—we also need to recognise the considerable social policy success that has been represented by helping the equivalent of the entire population of Wales, more than 3 million people, move into work during this Government’s time in office. That is a really important shift and we do not want to see this go backwards because we have changed the incentives in the system.
That is one reason I was so profoundly opposed to the amendments tabled by my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) in this debate. I do not think it was appropriate for this debate and these estimates to be drawn into the context of the Brexit debate. That was profoundly unwelcome. No matter which side of the House someone sits on, we have to try to keep certain aspects of the debate separate. It will be interesting to hear from the shadow Front Bencher what the Labour party’s position would have been had the amendment been accepted and what it would be were a future such attempt to be made. It is important to put on the record that there are some aspects of this debate that are simply more important than the issue of the UK’s membership of the European Union—or not. In truth, the two things are fundamentally discrete.
Alison Thewliss (Glasgow Central) (SNP)
I am glad to be speaking for the Scottish National party in this debate, because it is an important issue on which I have campaigned for some time, particularly in relation to the two-child limit. I will discuss that in my speech.
It is perfectly clear that the welfare state is no longer a safety net for those who need it. It is a labyrinthine maze of bureaucracy, traps and loopholes to cheat people out of ever feeling safe or supported. The safety net is full of holes. This Chancellor, like the one before him—and, no doubt, the one to follow—has attempted to balance the books on the back of sick, disabled and vulnerable people. Even by the UK Government’s own flawed criteria, they have abjectly failed. The IFS has said that the Chancellor’s plan of running a budget surplus by the mid-2020s is no longer a sensible proposition. Public spending was as high in 2018 as it was in 2008, but what have we got to show for it? We have a rise in child poverty, in homelessness, and in food bank usage. In the fifth richest country in the world, that is a shameful situation. The two-child policy alone is expected to push thousands of families into poverty by the end of this Parliament. The Child Poverty Action Group has said that if we were to intentionally design a policy to put children into poverty, we could not do much better than that one.
The report “All Kids Count: the impact of the two-child limit after two years” was issued last week by the Church of England, CPAG, Women’s Aid, Turn2us and the Refugee Council, with support also from the Interlink Foundation, representing the Orthodox Jewish Community. It paints a stark picture: of families forced into poverty, debt and borrowing money from friends and family. I have to say that the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) is absolutely incorrect in so many of his assertions on this policy, because it will affect families in so many different ways and it absolutely traps them in a situation where they cannot work their way out of poverty. I commend this report to him, because it has modelled this. I recommend that he read all of its details, because it makes it absolutely clear that families cannot compensate for the two-child poverty through work.
The report gives the example of a single parent with three children working 16 hours a week at the national living wage—the pretendy “living wage”—and says that she
“cannot ever compensate for the loss of a child element by increasing her hours, if she incurs childcare costs from doing so (because these are never covered in full by universal credit). Only if she can access free childcare (e.g. by using help from family members in addition to the free entitlement for 2-4 year-olds), can she compensate for the loss, but she would still have to more than double her hours from 16 to 40 per week.”
This is also true for families where there is a couple and for others: nobody can work their way out of the poverty caused by this policy.
The findings from a survey done on the two-child limit by those who are claiming are stark—the impact on those families is dreadful and in some cases it results in family breakdown. That ought to concern the Tories, who seem to like to maintain the family in all circumstances. I will read out some of the quotes. One read:
“I’ve recently split with my long-term partner and father of my four children. When I had my children, I did not intend to be a single parent— and now that I am, I feel like I’m being penalised by the government.”
Another read:
“My partner became ill and unable to work due to disability and I’m now at home having to care for him and our four children. Me and my partner are literally not eating at all during the day to feed the children.”
I would like to see the hon. Member for Middlesbrough South and East Cleveland try to justify why that is fair, because it is absolutely not.
The report shows 95% of families who responded reporting that the two-child limit has affected their ability to pay for basic living costs, with 88% saying it had affected their ability to pay for food, 88% saying it had affected their ability to pay for clothing, 71% saying it had affected their ability to pay for gas and electric—and the list goes on. This is absolutely catastrophic for these families and they cannot do anything to get out of the situation.
Alison McGovern
I thank the hon. Lady for bringing that report to the House. Does she not agree that, contrary to what the hon. Member for Middlesbrough South and East Cleveland said, life is full of unforeseen and unintended occurrences and the welfare state is simply there to help us out with all of them?
Alison Thewliss
None of the families in this report could really have predicted their circumstances when they had their children, and this has been acknowledged by the Government, because they said that if the child was born after the cut-off date in April 2017, it would be unfair to bring this in. They have acknowledged that it is unfair for some families but not for all families, but if they acknowledge it is unfair for some, they should just scrap this brutal policy for all and for ever.
Despite all this, families are trying to cut back. They are trying their best to get by. One parent said:
“We try our best to make sure
the children
“are well fed and pick up the leftovers if they leave anything, or just toast.”
So families—parents—are living on just toast, at best. What kind of society is this that the Minister presides over? Families are not able to pay their bills and are going into arrears—into debt—which means they risk going into homelessness and losing the roof over their head. They are relying on other members of the family to try to support them. One woman said:
“At 36 years old you shouldn’t have to rely on your mum and dad”
to feed the children. People are going into debt because they are not able to pay for things because there is no spare money. They are going into debt on credit cards and with the other types of lenders. Families are so far away from being able to pay for these things that it puts tremendous financial strain on them.
The two-child limit also has an impact on other members of the family. Other children feel as though they are losing out because of their baby brother or sister. That is really quite sad. It gives me a lot of pain to think that children feel as though they are losing their ability to go out and have fun, to live their lives, to go swimming or to do anything else they want to do, because their parents were unfortunate enough to have a third child. That is absolutely appalling, and it affects families’ mental health and wellbeing, as I have said.
The two-child limit has lots of other impacts. There is good evidence from the survey—which should concern all Members, regardless of their opinions on the policy—that families are choosing to abort healthy babies because they are worried about how the two-child limit is going to affect them. [Interruption.] The hon. Member for Chippenham (Michelle Donelan) shakes her head on the Front Bench, but there is evidence. She should read the report and do something about it.
There are also issues for women who have come through refuges—through domestic abuse—and who have to use the rape clause to claim for a third child. Nobody should have to fill in a form to prove that they were raped, just to put food on the table. That is unacceptable, and the Government’s policy is despicable. Last year, 190 women were forced to fill out the form. The figures are not yet out, so I do not know how many women are affected this year, but my bet is that it will be more.
The impact of the rape clause is such that those 190 women are not even all the women who are likely to be eligible for support. There is in the report a good and heartbreaking case study about a woman called Sabrina. The name has been changed, but it says Sabrina in the report so that is the name I shall use. It says:
“Sabrina had been experiencing abuse at the hands of her husband for almost a decade when she and her two young children came to a Women’s Aid member refuge in England. Whilst in the refuge, Sabrina discovered that she was pregnant…Sabrina wept at the news—tears of anxiety and worry about how she was going to cope financially when she eventually moved out of the refuge. Sabrina knew that, because of the two-child limit, she would struggle to bring a third baby into the world. She couldn’t bear the thought of having to tell the government how the child was conceived—out of abuse and fear—in order to get the money she was entitled to. Soon, she packed her family’s bag with the few belongings they had and returned to the home she had shared with her abuser, utterly defeated.”
That is not a situation that this Government should be putting women in. They should be helping women out of abusive relationships, not sending them straight back to their abusers for fear of losing out. I do not want to hear about how a form can be changed and what could happen to make the process better; it should not exist at all. There should be a universal support system for everybody, and that is why it is such a fundamentally important issue.
Although I know that others wish to speak, I could go on all afternoon about the injustices of the two-child policy, because it also affects religious minorities who cannot or will not use contraception or abortion, and it affects refugee families, who come here, wait a long time to be processed, and then find that they are not able to get the entitlements that they had hoped to get to support themselves and their families. The impact of the policy is devastating, and it disproportionately affects families who are already in work. The Minister should look at the report, look at the evidence and scrap the two-child policy, and the rape clause that stands part of it, immediately.
Alex Burghart (Brentwood and Ongar) (Con)
It is an honour to have the opportunity to talk in this important estimates day debate. I congratulate the hon. Member for Wirral South (Alison McGovern) on introducing the debate.
Record and rising employment is the central fact of the Government’s economic record. It is sometimes easy to brush over the fact that we now have the highest rate of employment in this country than at any time since the early 1970s. That is not only important on an economic level, although obviously it has wonderful economic benefits for the country, but extremely important on a social level and a personal level, because of the way it benefits families and communities and gives people opportunity and optimism that they otherwise might not have.
For four years before I came to this place, it was very much my privilege to serve as the director of policy at the Centre for Social Justice, which is a think-tank that looks at the root causes of poverty in the UK. That background is what lies behind my exchange with the hon. Member for Wirral South earlier. One can of course say that the root cause of poverty is people not having enough money. It is true that poverty is people not having enough money, but it is unquestionably the case that the reason why some people do not have any money is that they do not have a job in order to earn money, and that the reason why some people—not everybody at all—are unemployed is that something has gone badly wrong in their life, and that thing needs to be corrected with the help of public services, with the support of their family and with their own personal determination. That must always be an absolutely essential part of any welfare policy, which is why it is so important that the significant changes that have been introduced in the Department for Work and Pensions have been coupled to the work of the troubled families programme in the Ministry of Housing, Communities and Local Government. It is by helping people to overcome some of the root causes of poverty that we can help more people to move into the workplace and so help to support themselves and their families.
There is a group of people who are lucky enough and fortunate enough to come from stable homes, to get a decent education and not to suffer from addiction or any such problems, who still find it difficult to make ends meet, which is why it is extraordinarily important that any Government have an economic policy that generates jobs and drives up wages. The Government have been extraordinarily successful, without parallel, in the creation of jobs. Life has undoubtedly been harder in the generation of higher wages, but it feels like in recent months—over the past 15 months, I think—we have turned a corner on that score and, for the first time since the financial crisis in 2008, we are starting to see wages rise above inflation. Ultimately, that is excellent news for people who are moving into the jobs market and for people who are starting off on low salaries.
It must be remembered that none of that success was predicted by commentators before the 2010 general election. I remember in 2009 listening to a Bank of England economist forecast that the incoming Chancellor of the Exchequer would have to deal with unemployment of more than 5 million. In 2011, he repeated that the policies of the Conservative and Liberal Democrat coalition would unquestionably lead to record unemployment and a massive social security problem. That simply did not happen, because of the business-friendly policies that the Government adopted, which increased investment and business growth and saw employment rise in very many parts of the country.
It was a pleasure to sit and listen to the speech by my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke). I do not believe it can be an accident or a coincidence that his constituency has not traditionally had a Conservative MP, yet after seven years of Conservative employment growth in his area, it elected a Conservative. After seven years, following a major economic meltdown under the previous Labour Government, the Conservatives delivered the job growth in his area that Labour had been incapable of doing for the 13 years that it was in power. We see it not just in Middlesbrough, but in a whole range of seats from Mansfield to Stoke-on-Trent. This new era of Conservative representation in parts of the midlands and the north is a result of this policy, which has helped people to find jobs and improve their lives and the lives of their families. This has been termed the British jobs miracle, because unemployment is now at about 3.8% in the UK, compared with 7.5% in the euro area.
Neil Gray
I do not doubt that properly paid work is the best route out of poverty, but when will the hon. Gentleman’s so-called jobs miracle extend to children living in poverty? How can he explain what is currently going on when we see that two thirds of all children living in poverty do so in a working household?
Alex Burghart
The hon. Gentleman raises a very good point, but, as I have already said, we had a long period of employment, but with little or no wage increases. We have now started to come out of that period. What he will see is that, if wages and wage growth are maintained in the months and years ahead—as I have no doubt that they will be—we will start to see the number of young people in poverty go down. We will see that their parents have more money because they are in work and their wages are rising above inflation. I am sure that he would accept that point.
Neil Gray
Will the hon. Gentleman not accept that, while we wait, children remain in poverty? What are his Government doing? They are continuing to cut universal credit, which is supposed to help move these families away from poverty. Why is this continuing to happen? Why do they have to wait all this time for the never-never of jam tomorrow?
Alex Burghart
I do not believe that it is correct to say that the Government are taking money out of universal credit. I am sure the hon. Gentleman remembers the previous Budget when a considerable amount of additional money was put into universal credit. I think that he is, perhaps, slightly out of date on that score.
Alison McGovern
The hon. Gentleman has obviously missed the fact that working age benefits have been frozen for four years. That is a real terms cut. Will he just explain to the hon. Member for Glasgow Central (Alison Thewliss), who talked about a single parent with three children who simply cannot put any more hours a day into her working life, how, if benefits stay frozen, people are supposed to see their incomes rise and their children lifted out of poverty?
Alex Burghart
The hon. Lady makes a very good point about the benefits freeze. That is something to which I intend to return at the end of my remarks. It is unquestionably the case that the benefits freeze has hit people—and hit some people very hard. She is aware of why the benefits freeze was needed: it was needed because of the disastrous condition in which her party left this country’s finances when it left office in 2010.
The DWP is playing its role in helping people back to work and helping them to find, sustain and progress in work. If Members talk to work coaches across the country, they will find that those coaches now have the tools and a service at their disposal to help them to form a working relationship with the people they are seeking to help. They understand that people who come into the jobcentre are, effectively, in work to find work. The agreement of claimant commitments between the jobseeker and the jobcentre creates an environment in which both the work coaches and the people with whom they are working can get results. No one who has spoken to work coaches across the country can doubt in any way that this has been substantial improvement.
Universal credit, as it is rolled out and improved, is helping to make work pay. It has overcome the terrible problems of the 16-hour cut-off that was raised by my hon. Friend the Member for Copeland (Trudy Harrison). It has helped to overcome these crazy marginal tax rates that popped up at different points in the system. Obviously, it is being rolled out in a test and learn environment. As it is tested, so DWP has learned, which means that a range of improvements have been made.
As a member of the Work and Pensions Committee, under the chairmanship of the right hon. Member for Birkenhead (Frank Field), who is no longer in his place, I was particularly pleased that we managed to work with the Government to scrap the seven waiting days, to ensure that people received their money sooner, to see advances of up to 100% on full monthly payments to claimants, and to develop the landlord portal to make it much easier for housing benefit to be sent to landlords and so on and so forth. These are important changes, but I have no doubt that there are still additional beneficial changes to be made. There is further to go—much further to go.
The hon. Member for Wirral South mentioned the benefit freeze. I very much hope that, in the comprehensive spending review at the end of this year, the benefits freeze is ended and the headroom that the Chancellor has built up is put to good use.
Ruth George (High Peak) (Lab)
It gives me great pleasure to speak in this debate; I thank my hon. Friend the Member for Wirral South (Alison McGovern) for bringing it to the House and for beginning so powerfully.
I want to speak about not just the amount of money in the system, but the impact of our benefits system on a whole range of people including disabled people, people who have children, pensioners and people who are unable to work, because it seems to them that they are being punished for being poor and for being unable to work from the very start of making an application for benefits. For example, the personal independence payment form is 33 pages long and includes very cryptic questions. People know that they are supposed to answer those questions in certain ways, but they just do not have the guidance on how to do so.
People have to claim for universal credit online, which means they need to have computer skills, a computer and access to broadband to make a claim and to manage that claim on an ongoing basis—to retain control over their finances and their benefits. We have seen that a majority of people need support to make their universal credit claim and to be supported throughout the process. And it is not just an online claim form, but effectively a 10-stage process whereby the claimant has to make a phone call, complete a claim form online, go along to a jobcentre, provide 14 bits of documentation and evidence, return to sign their work conditionality agreement, and log on to their journal on a mobile phone or portable device. That is a huge amount of bureaucracy for anyone to have to undergo—much less somebody who is not used to IT systems and who, in an area such as mine, has to spend £7 each way to get a bus to the jobcentre and has to meet those costs upfront before they can even start claiming them back.
Someone applying for the personal independence payment needs to go for an assessment, and we have heard so much about those assessments, particularly those of us who are members of the Work and Pensions Committee. I heard from a group of women who were survivors of sexual abuse, who were assessed on how that abuse continued to affect them years later. They found the whole process absolutely terrifying, as they had to attend cold, informal assessment centres that were often in a tower block in the middle of a city, but away from public transport routes.
Ian Paisley (North Antrim) (DUP)
In Northern Ireland, we are seeing the roll-out of the horror story that the hon. Lady has mentioned. Statistics published in February this year show that there have been 193,000 applications for PIP, 32% of which were turned down. The resulting appeal from 50,000 turned-down applications has cost us £5 million to process. It is a disgrace.
Ruth George
I agree; it is a disgrace, and not just when it comes to the number of applications being turned down.
Over a year ago, the Government signed up to the assessments being recorded so that their quality could be improved, but we have seen no progress in that regard. People in my constituency want to see a video recording of their assessment because they are so terrified after previous experiences. For example, people who are suicidal have been asked why they did not go ahead with committing suicide. They are now terrified of attending another assessment for disability benefits and are desperate for their assessment to be recorded. However, in order to have the assessment recorded, people have to phone up three days in advance and get specific recording equipment that can produce two recordings at the same time. These pieces of equipment are rare nowadays, as cassette tapes are required to produce such recordings. This is the current guidance from the DWP. People have to source that equipment in order to have their assessments recorded, well over a year on from the Government’s commitment that they would ensure that that was the case in every assessment where people wished for it.
Not only do people have to undergo these cold, terrifying and impersonal assessments where they are concerned that they are being marked down—the Minister appears to disagree—but I have heard from women who say they have been curled up on the floor crying at having to remember their sexual abuse, with the assessor not even looking at them but simply repeating the question. So I am sorry, but I do not accept that those assessments are personal and that they take people’s circumstances into account, from the accounts I have been given that are so distressing to hear.
The hon. Member for North Antrim (Ian Paisley) is right to say that 32% of PIP applications are turned down. That is actually better than in my part of the country, where 46% of applications from those moving on from DLA have been turned down. Some of these people go on to mandatory reconsideration. We used to have 80% targets for the refusal of mandatory reconsideration. I would love to hear from the Minister what the current rate of refusal is. With regard to the tribunals, although 74% of people who undergo them are successful, they take 48 weeks to take place—over a year on from the start of the process.
People are absolutely terrified, all the way through, of losing their benefits. In too many cases, they are having to go to the jobcentre and claim universal credit if they cannot access their employment and support allowance any more, and then being deemed fit for work. Doctors have been written to and told that they cannot sign people who are sick off work any more—that the DWP will not accept their professional medical judgment because its assessors have deemed people fit for work. One of my constituents who was going through the process of appeal was forced back into work, and, on the first day back, suffered a heart attack and died. My constituent and his wife and family cannot get that life back, but we can seek to improve this system that does so much damage to so many people.
Even if people on benefits end up being successful in getting through a tribunal, the amount of benefit that they are on is reduced. Under universal credit, they have to wait at least five weeks in order to get their first proper payment. Yes, they can get an advance of that payment, but they have to weigh it up—do they want to spend the next 12 months in debt because they are having that advance payment deducted from their already low amount of universal credit, or do they try to muddle through? People end up getting into debt with family and friends or with loan sharks and online loan organisations. We have heard that 3 million households are still worse off under universal credit. Despite that, local housing allowance is meeting only 3% of all market rents in many areas, including some in my own constituency, so people are seeing a reduction in their benefit. They are having to make up their rent because local housing allowance does not meet it, and over half of universal credit claimants are having deductions made from them as well.
It is no wonder that people end up in poverty. Some of my constituents end up with just £20 a week to pay all their bills. As if that is not enough, people on universal credit are being hit more and more with civil penalties of £50 for being late in supplying information or late for an appointment. Answers to parliamentary questions that I tabled show that nearly £400,000 of such penalties has been passed on to debt collectors by the DWP in the past year. These are people who are already very poor. They are already suffering from having a penalty imposed on them, and then they are having to pay debt collectors the £135 fee that they charge on top of trying to seek the £50 fee. How is this being fair to people who are poor? How is this supporting people back into work? It is no wonder that we have seen the number of people visiting food banks rising, homelessness rising, and in-work poverty rising.
I could say much more as chair of the all-party parliamentary group on universal credit: time and again, we hear about the problems with the system from fantastic advisers who, day in day out, try to support people. In many cases, those advisers—Citizens Advice, Derbyshire welfare rights—have to come to us as constituency MPs to try to sort out problems that they are not empowered to sort out on people’s behalf.
I am sorry to say that my advice agents across Derbyshire are having to come to me to see whether I can help constituents in other parts of the county whose MPs refuse to help them. It is not right that we should be getting to the point where MPs—on the other side of the House, I am afraid: every one of those requests has come from Conservative constituencies—are not prepared to listen to and support their constituents, who need such support to be built into the system.
People feel absolutely powerless. No wonder we have seen a huge rise in debt and mental health difficulties, especially among young people growing up in poverty and in families struggling against this system. Please let us change not just the amount of money that goes into the system, but the whole way in which people are treated. They must be supported and empowered to live fulfilling lives.
Huw Merriman (Bexhill and Battle) (Con)
It is a pleasure to be the last, I think, of the Back-Bench speakers today on the important issue of the spending of the Department for Work and Pensions and its estimates. That vital Department takes a quarter of the £800 billion-odd spent each year on public services. I congratulate the hon. Member for Wirral South (Alison McGovern) on securing this excellent debate.
I spent a happy year sitting behind Ministers PPS-ing at the DWP. I was really passionate about working there, because it is a Department that can really make a difference; it has a huge spend and a vast range of levers to really help people and make a difference. Alternatively, if things go wrong, we see where people are hindered.
In his excellent speech, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) referred to a number of Conservative Members elected in 2017 to seats that might previously have been described as the Labour heartlands. I want to add North East Derbyshire, a seat we won in 2017, to the list. I stood for that seat in 2010 against Natascha Engel—a former occupant of the Chair, Madam Deputy Speaker, and an excellent MP. I spent two and a half years there. I remember how toxic the benefits culture there had become: an issue that set neighbour against neighbour.
People were concerned that they were working hard while they saw other people who they thought were not putting in the shifts. At times, that was unpleasant and unfair: it is very difficult to tell who is capable of work and who is not, and neighbours are not necessarily able to make the distinction. But I was troubled by the situation and by the statistics showing that, in 2010, 1.4 million people had been on long-term benefits for nine years and 2.6 million had been on them for five years. Clearly, that was a difficulty.
The big challenge for any Government elected in 2010, whether Labour or Conservative, was to work out how to get people capable of work off benefits and give them the tools, access and ability to step into work, thus reducing the benefits bill and focusing funds on those who really could not work. It was about helping and empowering those who could work to get into and rise up the jobs market.
I think my hon. Friend the Member for Brentwood and Ongar is right about electoral success. Fast forward to now, and we see that the approach has gone down incredibly well with voters—not only those who saw people on benefits who perhaps should not have been, but those people themselves, who wanted the help and were given the encouragement.
Debbie Abrahams
The hon. Gentleman continues to make the assertion that welfare reforms have driven the increase in employment. There is no evidence to support that: the National Audit Office, for example, disputes it.
On the issue of working as the route out of poverty, I should say that, according to the Joseph Rowntree Foundation, four out of five people in low-income work will still be in such work 10 years later. It is an absolute myth that work is a progression. That does not mean that we should not do stuff about that issue—of course we should.
Huw Merriman
Well, we can argue about statistics, but try this one. [Interruption.] The hon. Lady wants to throw one at me, but then will not let me respond with one, which I find slightly dictatorial. Some 2.2 million people were unemployed when we took office in 2010; that figure is now 1.4 million. I can give her the number of those who have clearly moved off unemployment benefit into work. We can argue about this all the way through—
Huw Merriman
I am not going to take any more interventions because, to be fair, those making them have had a lot of time to speak, and I am not going to get much of a chance.
We have seen people moving into work, and that has been a huge success. From listening to Opposition Members, one would think that the benefits system was completely rosy. As I have said, not only were too many people on benefits—trapped on benefits—but if we look at the tax credits system and the attacks on universal credit, we can see that universal credit has been rolled out in a slow, progressive manner, and we have changed it as we have gone along, while tax credits, which were rolled out in one big bang, were overpaid by over £7 billion, and over £2 billion had to be clawed back from those who were actually the poorest. I do not want to take too many lectures on how to introduce a successful benefits system, because we have seen how things have failed before. What has most impressed me about the Department is that it has learned from the failings over the years and has tried to do things better.
I am absolutely passionate about universal credit, because I have spent time with my jobcentre and seen the enthusiasm that the work coaches have for it. When we go into a jobcentre now it is not like going into some cold, austere office where people are too scared to go in and get any help. It feels almost like a recruitment centre to help people. There are help points and people who are passionate about helping people into work.
I am really proud of this Government’s record. I believe that every Government should be judged on what they have done in helping people into work. As I have said before, on every occasion the Labour party has left office, it has done so with unemployment higher than when it entered, which has got to be considered a failure. The Conservative party has been able to secure 3.6 million extra jobs. We have also increased the living wage, taken people out of tax and incentivised them. We have tried to focus on people who need help the most. It is said that all these jobs are low-paid, but 70% of them are highly skilled. It is said that wages are not going up, but for the 15th month in succession wages are going up by more than inflation. The proportion of jobs that are low-paid stands at its lowest level for 20 years as a result of the national living wage. Yes, there is more to do, but let us not knock the record that we have delivered.
I am going to make one suggestion, and I am echoing a point made by the hon. Member for Ellesmere Port and Neston (Justin Madders), who talked about the Motor Neurone Disease Association. He and I played football against that organisation, and I found it the most extraordinary moment. It was incredibly touching to play alongside them, and I then met that team. The organisation makes the very good point, which is also made by the Marie Curie cancer organisation, that it cannot be right that we have to test those with terminal illnesses for their disability benefit. They are reliant on a doctor saying that they will die within six months, but GPs are not comfortable saying that. The challenge for us as a Government is really to listen, and to look at how much such a change would cost. We know those people are going to be able to claim benefits in the main, so it is only a delay while they have to wait. However, they do not have time to wait, and I would like our Government to look at that. It is not just about those in that period of six months, but also those who have managed to survive their terminal illness three years and then have to be retested.
While I am very proud of the Government for what they have done in putting people into work and in targeting support, with almost an extra 1 million disabled people in work as well—we have record levels—we still have individual policy areas that we need to fix and on which we should do better. We must never rest on our laurels.
Neil Gray (Airdrie and Shotts) (SNP)
It is a pleasure to follow the hon. Member for Bexhill and Battle (Huw Merriman). May I again point him to the Scottish Social Security Agency and the way we in Scotland propose to treat people with a terminal illness? I think he will find that quite illuminating, and it has suggestions for this Government.
It is a pleasure to speak for the SNP in this debate. I congratulate the hon. Member for Wirral South (Alison McGovern) on securing it. There have been a number of interesting speeches, not least that of the hon. Lady herself. She set out very well a strong defence of the welfare state. She rightly contrasted how pensioners, other than the WASPI women, have rightly been protected, while others have not. I will develop that point later in my speech. She also mentioned the fact that austerity is a choice, and she was right to draw attention to the 1.6 million food parcels handed out by the Trussell Trust as a stark reminder of the impoverishing failure of austerity. Best of all was her stout and clear argument that lack of income is the driving force behind poverty.
The hon. Member for Copeland (Trudy Harrison) was right to welcome the Government’s cancelling the expansion of the two-child limit, but I question why she does not expect that policy to be scrapped.
I always enjoy listening to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) in these debates. She rightly asked why we do not hold the social security system in the UK in the same high esteem as the NHS. We should all ponder that, as should some in the fourth estate.
The hon. Member for Truro and Falmouth (Sarah Newton) made a thoughtful speech, but I think that my hon. Friend the Member for Glasgow Central (Alison Thewliss) made the best speech today. It was brilliant and rightly contradicted the Tory rhetoric on the two-child limit, highlighting last week’s report by the Child Poverty Action Group, the Church of England and others. I know it gives her no pleasure—it certainly gives me no pleasure—to say that the report proves that the warnings we gave at the time were correct. No mother—no parent—should have to choose between poverty and an abortion, but sadly that is the stark choice that faces some because of the two-child limit.
The hon. Member for Brentwood and Ongar (Alex Burghart) is simply wrong about universal credit. The last Budget made up for just half the cuts that the 2015 Budget inflicted on universal credit.
The hon. Member for High Peak (Ruth George) was right to highlight the non-financial problems with universal credit and other benefits. The hon. Member for Bexhill and Battle (Huw Merriman) was right to point to the DWP’s influence. Policy drives poverty—we should remember that.
Sadly, so much of the debate has been characterised by raking over decade-old ground rather than addressing the issues that we face today, and I wish that some Members had spent more of our time on the latter. The estimate for DWP spending is still driven by the policies of austerity that have ravaged the Department since 2010. The estimate may have risen by 3%, but, as the Library briefing makes clear, that is largely down to the Department’s accepting greater responsibility for spending that was previously made by other Departments—for example, taking tax credits from HMRC.
Most people who rely on social security do not see any rise in their weekly family budgets. The hon. Member for Ellesmere Port and Neston (Justin Madders) made that point well when he said that 1.9 million people were worse off by £1,000 under universal credit according to the Institute for Fiscal Studies. Family incomes have been slashed, thanks to the austerity agenda that the Tory-Liberal coalition led and the Tories continued after 2015.
Even the modest rises in the state pension leave the UK state pension as one of the most miserly in the developed world. Thousands of people in Scotland and across the UK have been hit by the benefits freeze, the two-child cap, and cuts to disability benefit and universal credit, leading to a rise in food bank use and in-work poverty. That is why we want the UK Government to think again about their budget for the DWP. It is also why SNP Members will vote against the estimate. We do not do so to deny the funding to the Department; we are using the vote as the only blunt instrument we have to protest about the way in which the Department is funded and the way in which the estimates process is scrutinised. In Holyrood, Members can amend the Budget, but that is sadly not the case here.
The Budget allocation will not allow the Department to remove the two-child cap or the benefits freeze, to fix universal credit, or to mitigate the hardship suffered by women born in the 1950s because the state pension age increased without adequate notice or lead-in time.
What is the real world result of the Government’s spending cuts to the Department? It is increased poverty and food bank use. The Trussell Trust, the largest food bank network in the UK, has reported steep rises in demand for its services year on year. In this year’s report, it points to increased food bank use among working families. That should be a stark warning to us all.
The Secretary of State was the first in her role to acknowledge the long-stated link between social security cuts and increased food bank use, but the Government have done little to put the money where it is needed and stop the cuts that hurt the most, such as the benefits freeze and the two-child cap. The investment in universal credit at the last Budget did not even cover the cuts that were inflicted by the disgraceful 2015 Budget, which cut universal credit and other social security benefits to ribbons.
Everything in the estimate before us could be moot as we are going to have a new Prime Minister, a new Chancellor and probably a new Secretary of State for the Department for Work and Pensions by the end of the month. My questions for the two remaining candidates for Prime Minister are these. What are their plans for social security? What are they going to do about child poverty? Are they going to follow the model set out last week by the Scottish Government, with the Scottish child payment? That measure alone, which will be delivered earlier than predicted to tackle the increase in child poverty perpetrated by the UK Government, is predicted to lift 30,000 children out of poverty. The Child Poverty Action Group described that as a game changer in the fight to tackle child poverty, which is quite the contrast from CPAG’s comments on the Tories’ two-child cap:
“You could not design a better policy to increase child poverty than this one”.
Whichever candidate wins, we want to know whether they will follow our example in putting money where it is needed, or whether will they continue with the pernicious cuts to social security we have seen them support since 2010.
It is unlikely that the frontrunner, the former Foreign Secretary, will have the ideological or economic space to address the problems with universal credit, as he will be spending Scottish taxpayers’ money on delivering a massive tax cut that the IFS has said would primarily benefit just the top 8% of earners. Quite how the 4.5 million UK children in poverty will benefit is anyone’s guess, but it is all a guessing game with this candidate. Indeed, yesterday I suggested it might be the Secretary of State’s final outing at DWP questions. Little did I know how prophetic that statement was. Today, we found out that the Foreign Secretary apparently wants to get rid of the DWP altogether. What an absolute farce!
I also raised yesterday the issue of child poverty. The Work and Pensions Secretary said that she saw work as the best route out of poverty. I agree, but it has to be properly paid work and the evidence shows that in-work poverty is rising. Incomes matter, which is why the new Scottish child payment is so important. So is addressing the chronic shortage of social and affordable housing, on which Scotland is leading the way. So is getting more employers to pay the real living wage, on which Scotland is leading the way. Those are just some of the reasons why Scotland has a lower child poverty figure than the rest of the UK.
Sadly, we have so much more to do. The UN special rapporteur on poverty and human rights, Philip Alston, recognised the work that is being done in Scotland to address poverty, but he also pointed to UK social security policies as driving poverty levels in Scotland. The Scottish Government, local authorities and third sector organisations are doing fantastic work to alleviate poverty, but we are pushing against the tide of UK cuts. The problems need to be fixed here.
One of the problems is the five-week wait that is built into universal credit. The waiting period is driving up indebtedness through rent arrears and commercial debt. One way of sorting it could be to use the assessment period for the advance payment of UC proper. If there is an acceptance that people need an advance at the start of universal credit, why say that that money has to be paid back? People cannot be expected to live off fresh air and they should not be expected to prolong indebtedness or financial hardship either. Advance the first payment of universal credit and stop the cycle of hardship. I have already mentioned the two-child cap and the benefit freeze, which, I think we are starting to realise, needs to get sorted. Taken with the five-week wait, fixing them would go a long way to stop the projected rise in poverty.
In terms of treating people with dignity and respect, there is an urgent need to sort out the disability assessment and to ensure there is a “do no harm” approach. Ministers will be aware of the work being done in Scotland to set up the new Scottish social security agency, which is soon to take responsibility for personal independence payments. One of the things we have confirmed we will do is to ensure all medical information about the applicant is available at the application stage, so as to avoid the need for the face-to-face assessments that so many disabled people find demeaning and irrelevant. It is hoped that by doing so we will cut the staggering appeal rights currently seen in the UK system, as we will get the decision right first time. The current Minister for Disabled People, Health and Work, the hon. Member for North Swindon (Justin Tomlinson), once said from the Back Benches that he was sympathetic to that idea. I hope he might be influential in the Department now in looking to follow Scotland’s lead in this area.
The pensions landscape still needs to be properly mapped out. I have repeatedly raised the issues faced by the 1950s-born women. I still believe that UK Ministers have an obligation to act, but we continue to be stonewalled. One issue picked up this morning, in a roundtable that my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford), my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) and I had with pension stakeholders, was lost pension assets. The Association of British Insurers and the Pensions Policy Institute analysed that relatively recently and found that there are 1.6 million lost pension pots, averaging £13,000 each. In total, about £20 billion is unclaimed. Astonishingly, those figures are for defined-contribution schemes alone. Obviously, defined-benefit schemes are harder to analyse, but the total is expected to be far in excess of the £20 billion unclaimed from DC schemes.
What I find most frustrating is that, although the industry has been trying hard to return those assets to their owners, the UK Government have not been terribly helpful in providing the necessary information to allow it to do so. I hope that changes. Phoenix, one of the contributors to our meeting this morning, spent two years researching lost pension pots and managed to reunite people with £13 million from more than 2,300 pots. Clearly, the UK Government need to look at what they can do to help the industry, as we are talking about substantial amounts of money.
We await publication of the pensions Bill. I hope there is serious cross-party work to advance key issues such as the pensions dashboard and our idea for an independent pensions commission.
Sadly, this debate has shown that although there is general consensus on the pensions scene, there is very little in other areas of social security—there are some exceptions—that we agree on across the House. However, the facts speak for themselves. When we invest in families and ensure they receive proper support, poverty drops. Poverty is policy driven, and right now UK policy is impoverishing. That is why we cannot support these estimates this evening.
Mike Amesbury (Weaver Vale) (Lab)
It is a pleasure to follow the hon. Member for Airdrie and Shotts (Neil Gray). I congratulate my hon. Friend the Member for Wirral South (Alison McGovern) on opening this vital debate and thank the many Members who have contributed.
Sadly, there are far too many things that Members could have chosen to focus on when considering the spending approach of the Department for Work and Pensions. Certainly, there is no shortage of examples of delivery failure, catastrophic underfunding and policy approaches that hit the most vulnerable the hardest, including 1950s-born women and citizens who are terminally ill. However, as Members highlighted, there is one area in which many of the Department’s failures come together and one group who all too often suffer the consequences of multiple cuts and changes in policy: children.
It shames us as a society that the Government have allowed children to bear the brunt in such a shocking manner. We therefore welcome this opportunity to scrutinise Department for Work and Pensions spending, and we welcome my hon. Friend’s choice of subject. When the future of some of our most vulnerable children is at stake, it is absolutely right that we should hold the Government to account for their poor decisions.
Shockingly, by 2022, the Department’s spending on social security will be £36 billion less per year than it was in 2010. Social security has become a vehicle for cuts—a political choice that saw 1.6 million emergency food parcels given out last year alone, 577,000 of them to children, and that has seen this Government dragged through the courts on several occasions. For example, 210,000 people who were underpaid employment and support allowance will now rightly receive the £920 million they are owed.
Consequently, as we have heard, the number of children living in poverty has increased by half a million to 4.1 million. As my hon. Friend the Member for Wirral South said, that figure is likely to rise to more than 5 million. In-work poverty is rising faster than employment. Absolute child poverty has also increased over the past year, showing the negative impact of low pay, universal credit, the five-week wait, the four-year freeze and the two-child limit on family income. When poverty and food bank use are rapidly growing industries, tackling and preventing child poverty is clearly not a priority for this Government. When tools that should be used to support people, such as the flexible support fund, are regularly underspent, it prompts a question about whether the Government are even trying to support those most in need through the tools at their disposal.
Even if we were to ignore all the evidence and be generous to Ministers when they say that tackling poverty is a priority, it is clear that they are not doing so with the necessary vigour, success or compassion. When they have applied new policies, they have failed. There have been persistent problems with the personal independence payment, as highlighted by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), with more than 70% of appeals against decisions to remove PIP being successful, at considerable cost to the public purse and, more importantly, with detriment to the life chances and wellbeing of people. The many thousands of families who budget down to the nearest £1 every week to make sure that they can feed and clothe their children and provide a roof over their heads could certainly teach the two candidates rutting to be the next Prime Minister a thing or two about how to prioritise and manage budgets effectively.
Of course, there are many families for whom all the budgeting and prioritising in the world is still not enough to cover the costs of the Government’s draconian cuts to social security. They are victims of the Government’s insistence on continuing to plough on with universal credit and the freeze on working-age benefits, when all the evidence shows that those cuts are causing severe hardship and poverty.
As my hon. Friend the Member for Wirral South has highlighted, poverty is poverty, and food poverty is not separate from it, but a symptom of it—a symptom of low income. It cannot be divorced from the overall effect of Government policy, or wished away by Government-supporting MPs, who think a selfie at a food bank will solve the problems or absolve the Government of their responsibility as the architects of austerity Britain.
We have heard much of the evidence today. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) mentioned a case in which a pregnant woman had universal credit denied to her—I think the phrase my hon. Friend used was “ripped away”—in her time of need. The hon. Member for Glasgow Central (Alison Thewliss) said that social security should be a safety net, but it is a net that is full of holes. She highlighted the immorality of the two-child limit. My hon. Friend the Member for High Peak (Ruth George) spoke about the insensitive assessments applied to the most vulnerable in our society.
Such stories are the real indicator of how we should view the Department and the Government’s record on poverty and their approach to social security. They are committed to the continuation of failing policies, and they would rather trumpet a jobs miracle that in reality, for many people in real communities, is nothing but a mirage; the reality is that most children in poverty live in working households. The Government’s approach has ensured that, for thousands of people, work is not a route out of poverty, given poverty wages and insecure work. That is a damning indictment of their record and of our current economic system. It needs to change.
In just three weeks’ time, we are likely to have one change at least. The leader of the Conservatives, and therefore the Prime Minister, will be someone different. Perhaps the Cabinet Minister responsible for the Department we are scrutinising today will be different too. However, given we have already had six of them in the past three years, that would be less remarkable. If the Government had shown the same willingness to change direction as they have shown to change Ministers, we might be in a different place. But it is not the changing of names around the Cabinet table that will make a difference, or even as some in the media reported yesterday, the scrapping of the Department. It is the changing of policy, the changing of attitude, and the changing of approach that will make a difference.
I ask the Minister to leave a legacy, and heed the clarion call from organisations such as the Child Poverty Action Group and the many voices in the Chamber today. Will the Minister commit himself to ending the five-week wait for universal credit, removing the two-child limit and the benefit cap, scrapping the benefit freeze, paying up-front childcare costs, and putting a stop to punitive sanctions and work capability assessments? Or, better still, let us have a general election and let the people decide.
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
It is a pleasure to respond to a vital discussion of how the Department for Work and Pensions supports the 22 million people who rely on our services.
We have heard a huge number of valuable contributions, including those of the hon. Member for Wirral South (Alison McGovern)—whom I congratulate on opening the debate—and my hon. Friend the Member for Copeland (Trudy Harrison), the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), my hon. Friend the Member for Truro and Falmouth (Sarah Newton), the hon. Member for Ellesmere Port and Neston (Justin Madders), my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), the hon. Member for Glasgow Central (Alison Thewliss), my hon. Friend the Member for Brentwood and Ongar (Alex Burghart), the hon. Member for High Peak (Ruth George), and my hon. Friend the Member for Bexhill and Battle (Huw Merriman). Later in my speech, I will respond to some of the key points that have been raised.
I have been in my post for three months, and over that time my key focus has been on supporting the most vulnerable in our society. No one in the Government wants to see poverty rising, and, while the latest “Households below average income” statistics, from 2017-18, do not reflect the £1.7 billion-a-year cash boost for our welfare system that was announced in the Budget, the Secretary of State and I recognise that there is more to do.
We know that children in households in which no one works are about five times more likely to be in poverty than those in households in which all adults work. We are committed to helping lone parents into jobs that are flexible in relation to their caring responsibilities, and more than 1.2 million are now in work. To help parents into work, the Government spend £6 billion on childcare each year. We are able to do that because we have doubled the number of free childcare hours to 30 a week for nearly 400,000 working parents of three and four-year-olds; introduced tax-free childcare which is worth up to £2,000 per child per year; and made changes in the flexible support fund to help people to pay up-front childcare costs. However, we recognise that we need to continue our work in this area. That is why the Secretary of State and I have publicly committed ourselves to tackling poverty, and child poverty in particular.
As we get closer to the spending review discussions, my ministerial colleagues and I are reviewing our bids, in collaboration with other Departments, to ensure that those who can work do work, and that those who cannot are supported. I can confirm that there are no plans to extend, or maintain, the benefit freeze after March 2020.
Alex Burghart
I thank the Minister for the commitments that he has just made. Will he also tell us what more the Government can do to ensure that vulnerable claimants can have access to universal credit?
Will Quince
My hon. Friend has made a very good point. We know that about 20% of people seek help when claiming universal credit. That is why we introduced the Help to Claim service, working with Citizens Advice and Citizens Advice Scotland. However, I am acutely aware that a number of vulnerable groups in my portfolio—care leavers, prison leavers, survivors of domestic abuse, and those who are homeless or sleeping rough—need extra support, and the Secretary of State and I are carefully considering a number of further options ahead of potential spending review bids.
John Redwood (Wokingham) (Con)
Will the Minister also confirm that it is now always worthwhile to go to work and that people are better off in work, contrary to what we have just heard?
Will Quince
My right hon. Friend is right. By removing the cliff edges, universal credit ensures that work always pays. That was not the case under the previous legacy system.
DWP Ministers always listen and act on feedback. That is why we recently announced that we will end three-year sanctions, initiate programmes to investigate how we can help those in work to progress, work with the Social Metrics Commission on a measurement of poverty, and no longer regularly review those on PIP who have reached state pension age. In addition, I continue to work closely with charities, stakeholders and Members on both sides of the House, using real-life experiences to shape improvements in the Department’s work.
We have worked with the real experts, the stakeholders, including Refuge and Women’s Aid, which have backed training for our work coaches to help victims of domestic abuse so they can better identify, refer and support those in need.
Will Quince
With respect, I will not give way to Members who have not been present for any of the contributions to the debate.
In terms of supporting victims of domestic abuse, we want staff to be able to better identify, refer and support those in need.
We worked with the Ministry of Housing, Communities and Local Government on the commitment to end rough sleeping through the homelessness and rough sleeping strategy and the Ministry of Justice to ensure prison leavers have access to welfare support from day one. Only last week the Secretary of State announced an extension to the UC pilot in HMP Perth and HMP Cornton Vale.
Will Quince
As the hon. Gentleman knows, split payments are available. I know the Scottish Government are looking at split payments by default, and that is an area I am looking at very closely indeed. It comes with huge complexities, as indeed the Scottish Government recognise, and we are working very closely with them. The Secretary of State has done a huge amount of work in this area—we would expect nothing less from a former Home Secretary who has done an awful lot of work around domestic abuse. So this is an area that I am looking at very carefully; I am conscious of it and am very happy to commit to continue to work with the Scottish Government to try to find a solution to what is a very complex issue.
Supporting the most vulnerable in society is at the very heart of our compassionate Conservative Government and my Department does exactly that.
Will Quince
Last year we paid 20 million citizens—more than half of all adults in this country—a huge range of social security entitlements and benefits, from state pension and cold weather payments to universal credit and disability benefits. In total the Department spends £190 billion a year—spending that is equivalent to the GDP of Portugal.
Will Quince
Through our welfare reforms and our reforms to make work pay we have got spending under control while ensuring that we do not trap people on welfare. [Interruption.] Under Labour, 1.4 million people spent most of the last decade trapped on out-of-work benefits, with some receiving more than the average wage. Some 50,000 households were allowed to claim benefits worth over £500 a week or more than £26,000 a year, higher than the average wage at the time. [Interruption.] We are creating a welfare system in which it pays to work, with universal credit simplifying the complex legacy benefits—[Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The Minister is clearly not giving way.
Will Quince
Thank you, Madam Deputy Speaker. The hon. Member for Oldham East and Saddleworth has already had an opportunity to contribute to the debate. She has intervened numerous times and, as I said at the beginning of my speech, far from being frit I will address a number of the key points raised during this debate.
We are creating a welfare system in which it pays to work, with universal credit simplifying the complex legacy benefit system that thwarted opportunities to work through punitive tax rates and a cliff edge for those wanting to do more work and that mired people in debt. We are establishing jobcentres that help people into work, not just to sign on—jobcentres where one-to-one personalised support is provided to a claimant from their work coach, offering advice and access to services to help the vulnerable, and where staff create links with businesses to make it their personal mission to help people not into just a job, but into the right job.
This is not to speak of the huge wider support that this Government offer. Our welfare reforms are assisting the incredible employment statistics we see month on month. The recent labour market figures show the importance of helping people into work, and this Government have created more than 3.6 million more jobs since 2010, helping people out of poverty and creating aspiration and a huge sense of purpose for millions. The employment rate is at a record high, while the unemployment rate has halved since 2010 and has not been lower since the 1970s. As my hon. Friend the Member for Bexhill and Battle rightly said, no Labour Government have ever left office with unemployment lower than when they started, meaning that more people were denied the security of a regular wage. From May to July 1997 to March to May 2010, the unemployment level increased from 2.1 million to 2.5 million. There are now almost 1 million fewer workless households, giving more than 600,000 more children a role model in their home who is in work. The number of children living in workless households increased under Labour, meaning that fewer children were living in a financially stable household with a working role model.
Will Quince
Labour failed to help people into work so that they could provide for their families, with workless households increasing between 1997 and 2010.
Will Quince
The number of young people who are unemployed has almost halved since 2010. Female unemployment is at a record high, and wages are growing at their joint fastest rate in a decade. These are the reasons why our labour market is outperforming many—
Mr Kevan Jones (North Durham) (Lab)
On a point of order, Madam Deputy Speaker. Call me old fashioned, but I thought the purpose of the Minister coming to the Dispatch Box was to reply to the debate. He has now been on his feet for 10 minutes, and all he is doing is reading out his civil service brief. This is becoming a habit among Ministers. He said that he was going to refer to Members in the debate, and I think he should start to do that—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I would have stopped the right hon. Member for North Durham (Mr Jones) a few seconds earlier, but the House must forgive me for being unable to speak volubly today. He knows that this is not a point of order, and that it is up to the Minister to answer the debate however he wishes to do so. The Minister is perfectly in order.
Will Quince
I have taken numerous interventions already, Madam Deputy Speaker, and I stress that the point of a debate is actually being here to take part in it.
These are the reasons that our labour market is outperforming those of many other developed countries. More people have moved into work in the UK since 2010 than in France, Spain, Ireland, the Netherlands, Austria and Norway combined.
Will Quince
We are at record levels of employment and, once fully rolled out, universal credit will support another 200,000 people into work and help those already in work to increase hours. But we do not want people to have just any job; we want them to have good jobs where they are able to progress, and universal credit will enable this while providing an economic benefit of £8 billion a year to our economy and saving the Exchequer more than £3 billion annually.
But this is not “job done”. I know as well as anyone the importance of supporting people into work, particularly among vulnerable groups. That is why we have worked hard to create a safety net that not only supports people when they fall on hard times but gives them a hand up. That is vital. We are spending more than £55 billion this year to support disabled people and those with health conditions. That is more than any Labour Government did. Disability benefit spending will be higher in every year to 2023 than it was in 2010. Under universal credit, disabled claimants who cannot work will receive an average of £100 more each month than under the legacy system. So we are supporting those who have worked their whole lives and paid into our social security, and who now deserve to enjoy their retirement. We created the triple lock on state pensions, which has increased the amount of the basic state pension to almost £1,600 more than it was in 2010. We are further protecting the poorest pensioners through pension credit. This means that in total we spend more than £120 billion on benefits for pensioners in this country. As a result, pensioner poverty is now close to historic lows, which is where we want to keep it.
Will Quince
I will turn now to some of the points made in the debate. The hon. Member for Wirral South talked about the WASPI women. This Government have introduced transitional arrangements costing £1.1 billion. This concession reduced the proposed increase in the state pension age for more than 450,000 men and women, and it means that no woman will see her pension age change by more than 18 months relative to the 1995 Pensions Act timetable. As numerous hon. Members have pointed out, if we were to reverse the state pension changes made under the previous Pensions Act, it would cost more than £200 billion up to 2025-26.
Moving on, the two-child policy ensures that parents in receipt of benefits face the same financial choices when deciding to grow their families. As announced in January, we will no longer be extending the policy for new claims for children born before April 2017. Turning to the benefit freeze, I have already made it clear that we will end the freeze in 2020. As for universal credit, the principle is to have a simpler system, with six benefits rolled into one. When it comes to supporting children, I play a role in the early years ministerial group, which was chaired by the former Leader of the House, my right hon. Friend the Member for South Northamptonshire (Andrea Leadsom). That group is looking at numerous options around cross-departmental work on supporting children.
Will Quince
I will come to the points made by the hon. Lady.
The hon. Member for Oldham East and Saddleworth raised several points. The Government are spending £55 billion a year on benefits to support sick and disabled people. In 2019-20, our spending on main disability benefits is £9 billion higher than in 2010, and main disability benefits are exempt from the benefits freeze. On universal credit, as I have pointed out already, around 1 million disabled households will receive an average of around £100 more a month.
I agree with my hon. Friend the Member for Truro and Falmouth, who is no longer in her place, and she will know that we are working with employers through our Disability Confident scheme, giving them the tools and advice to support staff with a disability or long-term health condition. Over 12,000 employers have now signed up. The Minister for Disabled People, Health and Work, my hon. Friend the hon. Member for North Swindon (Justin Tomlinson), will pick up her suggestions. I thank her for the work she did when she was in the Department.
The hon. and learned Member for Edinburgh South West (Joanna Cherry) made an intervention in relation to the Scottish child payment. I understand that the Scottish Government have laid out their plans to introduce an additional £10 a week for eligible children in Scotland, and I should say that we welcome the overall commitment to tackle poverty, but we note the challenge and look forward to understanding the impact of the payment in detail. We will continue to work with the Scottish Government on the impact and introduction of that payment.
Turning to the remarks from the hon. Member for Airdrie and Shotts (Neil Gray), the pensions dashboard is a digital interface that will allow individuals to see their pension savings online in one place to assist with their retirement planning, and I welcome the cross-party collaboration on that. On the pensions Bill, we intend to bring forward legislation when parliamentary time allows.
We are a Government determined to help the most vulnerable, to support them into work, to support them to stay in work, and to support them when they cannot work. We will continue to do that through all the support that the Department offers, and we will continue to assess and adjust that support by listening, learning and improving. I have met and visited several stakeholders, valuing and taking on their expert views, so we are always listening to colleagues, stakeholders and, most importantly, our constituents, whom we are here to serve and support.
Question deferred (Standing Order No. 54).