Welfare Reforms and Poverty

Baroness Primarolo Excerpts

Monday 13th January 2014 Commons Chamber

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. To try to ensure that every Member who has indicated that they want to participate in the debate may do so, I am going to reduce the time limit to seven minutes. I hope that that will mean that everyone will be able to contribute, although I cannot guarantee it. It might be necessary to reduce the time limit further.

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[Katy Clark]

I agree with my hon. Friend. I am sure that that is the case in his constituency, as it is in mine. In areas that are disproportionately reliant on the public sector and the welfare state, cutting benefits is taking millions of pounds out of the economy every year, which is simply putting us in a worse situation.

We have also seen a massive increase in the impact of benefit sanctions, as I am sure many Members are only too aware from their constituencies. It is often the same people receiving those benefit sanctions again and again, and each time it is for a longer period. Many of those people have nowhere to go, because they can go to a food bank only three times.

The other major concern is the bedroom tax, which constituents come to see me about all the time. In North Ayrshire we have seen a 756% increase in discretionary housing payment applications. Only 66% are accepted, which means that a third of those people do not get the payment. Indeed, when people go back to apply the next time, because it is a time-limited payment, they are often refused. That is having an impact on council rent arrears. Rent arrears in North Ayrshire, for example, have increased from 3.6% of annual rent to 5.5%.

Those are just a few examples from my constituency, but we all have many others. This is having a massive impact on our country. We are seeing a massive shift in wealth. We need someone to look at that seriously, which is why I think that the motion before us—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Simon Danczuk.

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

May I start by congratulating my parliamentary neighbour, my hon. Friend the Member for Rochdale (Simon Danczuk)? I agree with him that we must reform the welfare system and make it sensitive to the needs of the 21st century. I also congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), who is another constituency neighbour of mine—I am in total agreement with the points he raised—and the other hon. Members responsible for securing this debate.

I want to spend the next few minutes discussing a few points, particularly those that constituents have raised with me in my surgeries and elsewhere. The Joseph Rowntree Foundation annually monitors social exclusion and poverty and produces data on them. Its most recent report, which was published last month, shows that 3.5 million children, or 27%, live in poverty. In some parts of my constituency, the figure is nearly one in two. The Institute for Fiscal Studies has said that it expects an increase of 1.1 million children living in poverty by 2020 as a result of tax and benefit changes.

Three million parents also live in poverty. The number of pensioners living in poverty has fallen to 1.5 million, or 14%, which is the lowest level in 30 years, but the number of working-age adults without children living in poverty has risen to 4.5 million, which is the highest level in 30 years.

That is only half the story, because those relative levels of poverty relate to median incomes. The average income has gone down by 8% since 2008, which means that 2 million people who would have been deemed to be in poverty in 2008 are not classified as such now, because incomes have dropped. Incomes are going down, but prices are rising. The energy prices of the big six have gone up by 37% since 2010 and food prices went up by 32% between 2007 and 2012.

The most worrying thing—this point has already been made—is that we are seeing an increase in the working poor. For the first time since the data series started back in the 1980s, poverty in working households is higher than that in workless and retired families combined. Therefore, work is clearly not paying. In spite of a shared objective of wanting our welfare system to make work pay, it is not. I was very interested in what the hon. Member for Stafford (Jeremy Lefroy) said about phasing in the introduction of some of the welfare measures. They have been brought in too soon, and they are having a huge impact on families.

Related to the increase in the number of working households living in poverty is the increase of the number of people in low-paid work. For 46% of working families in poverty, one or more of the adults is paid less than the living wage. In total, about 5 million people are being paid below that level, which disproportionately affects women, 27% of whom are paid less than £7.40 an hour.

If we look at the effects of welfare reforms on poverty, we find that instead of alleviating poverty, it is exacerbating it. Our social welfare model is based on principles of inclusion, support and security for all—protecting any one of us should we fall on hard times, or become ill or disabled. Welfare is there to assure us of our dignity, as well as the basics of life, and to give us a hand up, not a handout; the current welfare reforms are doing anything but that.

I want to mention Rebecca, who came to see me at my surgery on Saturday. She is blind, and not only has she had her care package reduced from 13 hours to eight hours, but she is absolutely terrified about what the migration from disability living allowance to personal independence payments will mean to her. She said, “I will not see anybody from when I see you”—her personal adviser was with her—“until Monday, because of the lack of support that I am getting.” She is not alone. A raft of measures is affecting the ability of disabled people to live as normal a life as possible.

We have heard about people on employment and support allowance, and the trials and tribulations of going through the work capability assessment. One constituent on ESA, who has a heart condition, had a heart attack in the middle of going through the WCA process. He was advised to leave and he went to hospital, but a week later he got a letter saying that he had been sanctioned because he had left the work capability assessment. That is not atypical. We have also heard about the bedroom tax, with 500,000 people affected nationally. In Oldham, where 2,048 people are affected, there are only 500 properties for them to move into, which is absolutely absurd.

We still do not know the cumulative effects of all these measures. Despite the valiant efforts of the people behind the WOW—War on Welfare—petition, which has got 100,000 signatures, we still do not have an agreement on a cumulative assessment of all the different measures.

Sanctions have been mentioned. One person who came to see me had been a Jobcentre Plus adviser until relatively recently, and he told me that there is a deliberate culture to develop a sanctions target mentality. Even if people have followed everything they are meant to do, they are still sanctioned, with bogus appointments being made to set them up to fail. That is not just, and it is not what we expect of our welfare system. The implications for health and the social effects on our communities are dire. I commend the commission—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

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[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. In order to fit the last two speakers in before the Minister and the shadow Minister speak, I am reducing the time limit on speeches to five minutes.