The Secretary of State’s Handling of Universal Credit

Neil Gray Excerpts

Wednesday 11th July 2018 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

I will take that on board, Madam Deputy Speaker, and I thank you for your comments in this debate.

I should begin by welcoming the hon. Member for North Swindon (Justin Tomlinson) back to the DWP. Even though it contributed to his return to Government, there surely can be no one gladder of the Chequers version of “Deal or No Deal” than the Work and Pensions Secretary. For a few days, the pressure to fall on her sword was off her, as her extreme Brexiteer chums climbed the altar of vanity to fall on theirs.

But now we must return from the Brexit bubble theatrics to the real world, where we have this week another set of reports following hot on the heels of the National Audit Office report, all condemning the current incarnation of universal credit. The Secretary of State’s position has been called into question, not just because of the failings of universal credit, but also because of her tin-eared response to the externally and expertly provided facts and criticism. I listened carefully to her speech just now, and it appears that there is still little contrition.

We come to the Secretary of State’s response to the National Audit Office report, which is the subject of the motion before us. We know that the NAO report blew a hole as wide as the Clyde in the Government’s defence of universal credit. The Government say that universal credit is about getting people into work quicker and will lead to 200,000 more people in work. The NAO says:

“The Department will never be able to measure whether Universal Credit actually leads to 200,000 more people in work, because it cannot isolate the effect of Universal Credit from other economic factors in increasing employment.”

The Government say that universal credit will be cheaper to administer and reduce fraud. The NAO says that the DWP

“does not know whether Universal Credit is reducing fraud”

and:

“It is not clear that Universal Credit will cost less to administer than the existing benefits system.”

The Government say they will save £8 billion from universal credit, but the NAO says that figure

“depends on some unproven assumptions”,

and that such benefits “remain theoretical”.

The NAO has directly contradicted the Government on the core aims of, and the central defences offered by the Government on, universal credit. It is therefore no wonder that the Secretary of State was so desperate to discredit the NAO on the Monday before last. For instance, in response to the question from the right hon. Member for Delyn (David Hanson) about the NAO recommending a pause in the roll-out, the Secretary of State said:

“The NAO made clear quite the opposite: it said that we need to continue with universal credit. It was also concerned that it was rolling out too slowly and said that actually we should increase what we are doing. So what the right hon. Gentleman says is absolutely not what the NAO said.”—[Official Report, 2 July 2018; Vol. 644, c. 8.]

Actually, the NAO report said that the DWP should:

“Ensure that operational performance and costs improve sustainably before increasing caseloads through managed migration. It should formally assess the readiness of automation and digital systems to support increased caseloads before migration begins, and ensure the programme does not expand before business-as-usual operations can cope with higher claimant volumes.”

These are not debating points; these are facts and quotes in black and white. We have a Work and Pensions Secretary who is either unable to grasp the facts or unwilling to accept them.

[David Hanson]

When the Secretary of State said that to me in the House, some of my constituents were watching the proceedings, and they believed that I was factually incorrect in my comments. The Secretary of State had an opportunity to apologise to me, but she has yet to do so in writing, and this was all before the NAO issued its report. The question for me, which I raised in my intervention earlier, is: why did the Secretary of State wait 48 hours to put the record straight?

[Neil Gray]

I take the right hon. Gentleman’s point. The honourable thing for the Secretary of State to do would have been to apologise directly to him for what might have been a slur on his character and reputation.

This is important, because we are talking about the central—the flagship—social security policy of this Government, which has been criticised in report after report for failing those it should be helping. We are talking about people who are living in poverty as a result. Getting the facts wrong—not just failing on a debating point, but misquoting what is there in black and white—is very serious whichever way we cut it. The House should remember that the last Home Secretary, the right hon. Member for Hastings and Rye (Amber Rudd), recently resigned for something very similar.

[Michelle Donelan (Chippenham) (Con)]

The hon. Gentleman talks about facts, but is it not a fact that 83% of claimants are happier on universal credit, and they are more likely to be in a job within the first six months? Is it not a fact that universal credit is an opportunity for people to get back into work?

[Neil Gray]

On the last point, the NAO entirely contradicted the hon. Lady’s point. One fact I would relay back to her is that the Government’s own figures—this is from the DWP—show that 40% of universal credit claimants are living in poverty and struggling to make ends meet. I hope she will consider that fact as we build towards the autumn Budget, when I hope we can form a coalition around calling on the Chancellor to invest in universal credit.

[Mr Jim Cunningham]

The hon. Gentleman is making some excellent points. When we talk about getting people back into work, we lose track of the fact that people who have serious illnesses and will never work again are facing delays in their personal independence payments, but nothing seems to happen about it. I have a number of cases like that, and if the Secretary of State wants, I will send them to her so that she can see this for herself.

[Neil Gray]

The hon. Gentleman makes some very fair points. We of course know from the recent statistics published by the DWP that 59% of claimants impacted by the two-child policy on tax credits and by universal credit are already in work. These are facts, and the Government should be considering them.

This is not of course the first time that this Government have tried to dismiss evidence placed before them showing the failures of universal credit. When the Trussell Trust said that food bank use was higher in areas where universal credit had been rolled out, UK Ministers described its evidence as “anecdotal”. In actual fact, the evidence came from 425 food banks across these isles, delivering 1.3 million three-day food parcels a year.

This week, the four housing association federations of these isles have called on the UK Government to fix the “fundamentally flawed” universal credit system. With colleagues, I met the Scottish Federation of Housing Associations this morning, and it revealed the scale and linkage of debt with universal credit. It is startling, and it is evidence-based. Ministers have replied that issues with debt were complicated and could not be linked to a single source, in spite of the evidence in front of them saying that nearly three quarters or 73% of tenants on universal credit are in debt, compared with less than a third or 29% of all other tenants.

[Ms Angela Eagle (Wallasey) (Lab)]

Will the hon. Gentleman give way?

[Neil Gray]

I will give way one last time, because I am conscious that others want to speak.

[Ms Eagle]

Does the hon. Gentleman see, as I do, a pattern of reluctance on the part of this Government to collect evidence and information precisely so that they can deny the effects of universal credit, and somehow pretend that the evidence that is accumulating is anecdotal?

[Neil Gray]

The hon. Lady is absolutely right. One of the central tenets of what the NAO called for in its report was that that type of evidence gathering needs to be done.

[Paul Masterton (East Renfrewshire) (Con)]

Will the hon. Gentleman give way?

[Neil Gray]

I said that that was the last intervention I would take.

The evidence is there—it is in black and white—with the clear researched correlation between universal credit and housing debt. It is not even close; any responsible organisation, never mind a Government, would look at that type of key performance indicator and say, “Right, how do we fix this, because it’s failing?” Why are this Government so determined to push back, ignore the evidence, plough on in the face of the evidence and pile more misery on more families? That is what is behind these statistics—people and families, such as the two constituents in tears at my Airdrie surgery a week past on Friday. For some reason, on universal credit this Government ignore the evidence and the lived experience, but are happy to deceive and never accept responsibility.

It is to responsibility that I turn in directly addressing the thrust of Labour’s motion. Labour has suggested that it tabled this motion to stop the Secretary of State’s salary for a month to replicate the experiences of people on universal credit who are sanctioned and, I suppose, so that the Secretary of State had a chance to make the same choices as those on whom she inflicts her policies, to paraphrase the right hon. Lady. The universal credit sanctions regime is utterly punitive, and in the words of the Joseph Rowntree Foundation, is akin to “destitution by design”. I was therefore hesitant last night, when contemplating the motion, about whether we should support it or rise above the deplorable conduct of the Secretary of State’s sanctioning regime. For the reasons I have already outlined, however, I think the Secretary of State should be considering her position.

Of course, a new Secretary of State will not necessarily fix the problems with universal credit. Perhaps the right hon. Lady could redeem herself by honouring the original concept of universal credit on which she worked, in a previous role, with the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). He of course resigned because the Treasury was cutting universal credit to ribbons. In spite of this motion, I reiterate the calls I have made in the past about working with the Government to improve universal credit. I am sure all Members on both sides of the House would take such an opportunity should a genuinely listening ear be afforded to us.

Of course, the Government are not short of suggestions from expert agencies and the third sector. We have already heard about the suggestions of the NAO, which I have not actually heard the Secretary of State comment on or respond to. Those include improving the tracking and transparency of progress towards universal credit’s intended benefits, and working with delivery partners to establish a shared evidence base on how UC is working in practice, as the hon. Member for Wallasey (Ms Eagle) mentioned.

Housing associations have talked this week about issues, on top of the process improvements, that the Government could easily sort out, such as getting payments on time or allowing housing associations and other advocacy organisations to negotiate on behalf of recipients. Housing associations want implicit consent restored and the two-child limit and benefit cap to be scrapped, and they also want to see work allowances restored and the self-employed protected. At my meeting with the Scottish Federation of Housing Associations this morning, I was reminded of just how unusual it is for the four federations to campaign collectively on such an issue, given the devolved nature of housing policy. That is how seriously they see the threat of the further roll-out of universal credit without significant changes.

We in the Scottish National party have talked about allowing people the choice of split payments, restoring work allowances to honour the founding principles of UC and sorting out the disability elements. This call has been echoed by Scope, which wants disability premiums to be restored. It says that, once the Government transitions run out, a single disabled person who receives the severe disability premium and is in the ESA work-related activity group could lose up to £4,745.40 a year on universal credit.

The point of universal credit was to make social security easier to navigate: it does not. It was supposed to be easier and cheaper to administer: it is not. It was supposed to make work pay: it does not. In reality, the cuts being made to universal credit may be saving the Treasury on the DWP budget line, but they will be costing it significantly more in other areas. With worsening mental health, it is costing NHS services. In increased requirement for conditionality and cuts to income, it is costing our local authorities in welfare rights officers and rent arrears. In allowing children to go hungry, it is costing our education outcomes.

Rather than working in silos, we need a new cross-departmental and cross-party approach, and we need that before universal credit reaches our largest cities, such as Glasgow, Edinburgh and Aberdeen, which are due to be migrated soon. The NAO stressed its concern about any further roll-out until the issues it raised are addressed. We agree. We have been saying so for years. So my appeal to the Secretary of State is to work across the House and with the third sector to take a strong coalition to persuade the Chancellor to invest in universal credit at the autumn Budget.

Oral Answers to Questions

Neil Gray Excerpts

Monday 2nd July 2018 Commons Chamber

[Ms McVey]

As we said quite clearly, the NAO did not take into consideration all the changes that we had made and their impact. What we can say is that we know that 80% of people will get their payment on time and in full, but what the NAO report has not taken into consideration is that 90% will get some payment within the first month and it is invariably down to non-verification and not fulfilling their claimant commitment.

[Neil Gray (Airdrie and Shotts) (SNP)]

On Thursday, our concerns became a reality, as we discovered from the Government’s figures that 190 women were put in the impossible position of declaring that their child was born as a result of rape in order to receive universal credit or child tax credits. We can also estimate from those figures that around 200,000 children have been affected by the two-child cap. How does she feel about cutting that money and stopping it being spent on up to 250,000 children?

[Ms McVey]

This whole House voted for the changes to tax credits so that we can make sure that people in work are treated the same way as people on benefits. However, what we did do was bring in a set of exemptions for people who would not be able to have those two children. It is only right that we have brought in specific exemptions to help those people who need them.

[Neil Gray]

The Government continue to mislead. We know from the figures that 59% of all those households impacted are already in work. The Secretary of State continues to suggest today that this was about making the choices the same for those who are in and out of work, but actually it is about the Government making people’s choices for them. What advice does she have for a woman who is in work and in receipt of tax credits or universal credit and who has fallen unexpectedly pregnant with what would be a third child?

[Ms McVey]

The hon. Gentleman will know that we still pay child benefit for all children. We are also paying childcare costs. In fact, those have increased. As I said, what we have done with tax credits is make sure that people who are paying their way and are not dependent on the state get the same support as those people who are also getting support from the state.

Oral Answers to Questions

Neil Gray Excerpts

Monday 21st May 2018 Commons Chamber

[Ms McVey]

My hon. Friend asks a pertinent question. Employment is going up and unemployment is going down, which is reflected in the numbers, but because this is a brand new benefit that takes on people in work and people out of work, we are seeing the number of people claiming double. We are now giving support and career progression to people in work, so we will see the claimant count increase and, in some areas, double.

[Neil Gray (Airdrie and Shotts) (SNP)]

Increased debt, job insecurity, rising stress, housing insecurity and unpredictability of income are all highlighted by Gingerbread as issues raised by single parents in receipt of universal credit, and it states that the Government need to go further. How does the Secretary of State plan to address those problems and the estimated 165,000 single parents of pre-school-age children who are highlighted by Gingerbread’s report as being at risk of poverty and debt from new universal credit conditionality?

[Ms McVey]

As it is a brand new benefit, we are providing extra childcare support, which is needed by people with children and lone parents. We are also giving tailored support. The claimant commitment and the one-to-one relationship that people have with their work coach is about really understanding the needs of the individual. That is what we are doing to help people to get into a job, get a career and fulfil their job ambitions.

--- Later in debate ---

[Alok Sharma]

Ahead of the roll-out, my hon. Friend’s local jobcentre will speak to local partners, such as the local authority and Citizens Advice, to ensure that claimants are supported as they come on to universal credit. My officials and I will host an induction session tomorrow for all colleagues who have UC rolling out in their area in the near future, so I hope that he will join us.

[Neil Gray (Airdrie and Shotts) (SNP)]

Being able to walk 20 metres is an essential part of the PIP assessment process, yet Ministers have told me in written answers that they do not have a policy for their assessment centres to have parking within 20 metres, nor do they know which centres have such a facility. Indeed, the centre that I visited recently had double yellow lines outside. Given that not everyone has access to a home assessment, what would the Minister say to somebody who turns up for an assessment and cannot walk to the door?

[The Minister for Disabled People, Health and Work (Sarah Newton)]

That is not only totally unacceptable, but absolutely unnecessary. When people are invited to come along for their assessment, there is an opportunity to talk about their mobility needs to ensure that the centre is totally accessible for them. Each centre must comply with the equality responsibilities under the Equality Act 2010, and people are also offered home visits.

Oral Answers to Questions

Neil Gray Excerpts

Monday 26th March 2018 Commons Chamber

[Kit Malthouse]

There is no question of unfreezing the benefit cap because it is encapsulated in primary legislation. It might be interesting for the hon. Lady to know that, in the year after the benefit cap was imposed, 100,000 children moved out of poverty altogether. I am surprised that she has not welcomed the news that was announced last week that, as the Secretary of State said, more than 1 million people have moved out of absolute poverty. That shows the greater usefulness of the absolute poverty indicator compared with those for relative poverty, which the EHRC used in its report.

[Neil Gray (Airdrie and Shotts) (SNP)]

Today, we have learned from independent analysis from the Scottish Government the full impact of the UK Government’s cuts on levels of child poverty. Later this week, the Scottish Government will be publishing their plans to do what they can, using the limited powers of the Parliament up the road, to address this looming crisis, but what are this Government doing to address child poverty?

[Kit Malthouse]

As I outlined in my earlier answers, this Government believe that the two routes out of poverty are education and work. We have seen, in essence, a jobs miracle in this country over the past few years, with millions of people moving into work since 2010. It is absolutely the case that children in workless households achieve less, have less good welfare and have more mental health problems, so moving people into work is critical. I have seen reports in the media of the evidence the Scottish Government have brought forward this morning, and we will look at it carefully. I am always aware that one foundation of nationalism is to blame everyone else for problems, and I look forward to seeing the Scottish National party’s proposals in Scotland and whether they will actually work.

[Neil Gray]

Of course we know that 68% of children living in poverty do so in working households, so the Minister’s rhetoric simply does not match the reality. We also know from the research today that the root cause of child poverty and its predicted rise comes directly from the cuts to the reserved benefits in respect of the benefit freeze and the two-child limit. So when will his Government face up to reality and act to stop children being hungry, because everyone knows that it is this Government’s responsibility?

[Kit Malthouse]

This Government have moved heaven and earth to help those on lower incomes: with the introduction of the national living wage, they have had the fastest pay rise in 20 years; we have taken millions out of paying tax altogether with the rise in the personal allowance; and we have given parents up to £5,000 of assistance by increasing their access to free childcare up to 30 hours a week. There is an enormous amount done, but an awful lot still to do. As I say, we have yet to see any concrete proposals from the SNP on its much-vaunted plans to deal with poverty in its own patch, and we look forward to seeing them.

Welfare Reform and Work Act

Neil Gray Excerpts

Wednesday 21st March 2018 Westminster Hall

[Dr Whitford]

That is what I am saying; we are already mitigating £450 million in benefit cuts from this place. We are not here to talk only about Scotland; we are actually talking about the suffering right across the UK. Some hon. Members in this place like to imply that Scottish National party MPs do not care about people in the rest of the UK, but I have friends and family here, as many of us do. The source of the benefit freeze is the Department for Work and Pensions—this place—and it has to be fixed at source.

[Neil Gray (Airdrie and Shotts) (SNP)]

I commend my hon. Friend for her meticulous and erudite speech. Does she agree that the benefit freeze, even by its own measure, is going beyond what was predicted? That is suggested by the DWP’s own figures and the figures that the SNP has obtained from the House of Commons Library, which suggest that the increase in inflation means that £3 billion extra will be saved by the DWP from the benefit freeze.

[Dr Whitford]

Yes. That is exactly what I will move on to. Obviously, the former Chancellor, George Osborne, justified the benefit freeze because at the time inflation was 0.3%, but inflation now, due to Brexit and the fall in the value of the pound, is officially 3%, as measured last September. By 2020, low-income families will be over £830 worse off, just due to the benefit freeze. If we look at the cumulative cuts, an average family will be £1,300 worse off. But if we drill down into families that have three or more children, that builds up and becomes eye-watering.

--- Later in debate ---

[Alex Burghart (Brentwood and Ongar) (Con)]

It is an honour to serve under your chairmanship, Mr Gapes. I congratulate the hon. Member for Central Ayrshire (Dr Whitford) on securing this debate on a very important subject. Although I disagree with her on several points, I fully respect the tone in which she delivered her remarks.

Something that has not yet been spoken about today is the context in which many of the welfare reforms since 2010 were introduced. In 2010, as we all remember, we faced a broken economy and a broken welfare system. We had a deficit that was spiralling out of control. There was a very real threat to public finances and a danger that if Britain did not control its spending, the international bond markets would take action against us, further undermining our ability to pay for our essential public services. That was acknowledged across the House at the time and still holds true.

At the same time, but for entirely different reasons, the welfare system that we inherited was not fit for purpose. Over many years, through no grand design, it had grown into a system of great complexity that was confusing for users and expensive to administer. It had to be reformed. Peculiar, perverse disincentives had arisen, not because anyone had wished for them but because different benefits clashed at different points in the system. The most obvious and regularly cited example is that people were disincentivised from taking more than 16 hours of work, but many people were also disincentivised from moving into the initial stages of work at all. Unfortunately, the system often trapped people out of work or in low wages. That was completely unacceptable, because we all know the importance of work.

[Neil Gray]

Is the hon. Gentleman seriously still attempting to use the banking crash to justify the cuts to welfare? That is what they are: reform would be one thing, but these are cuts to social security. Are the bankers seriously still to blame for the projected 7% rise in child poverty over the next few years?

--- Later in debate ---

[Alex Burghart]

I am extremely grateful to my hon. Friend for stealing my thunder and taking away my next paragraph. Yes, I am fully aware of that fact and she is right to emphasise it. One of the great things that has happened since 2010, which must be acknowledged in a balanced debate on the subject, is that we have achieved record employment in this country. Unemployment has fallen substantially—in all constituencies, I believe—but it is unfortunate that so far my hon. Friend has been the only hon. Member to welcome that in this debate.

It is right to talk about the full package. Yes, there have been cuts and freezes to welfare payments but, as my hon. Friend mentioned, they must be seen alongside increases to the national living wage, increases to the tax threshold, a new offer on childcare and the creation of universal credit, which enables people to progress in work without the disincentives that existed before. Alongside all that, the most important thing that has happened is that far fewer people are in out-of-work benefits. When we talk about assessments that people may have lost money under the welfare changes, we must always acknowledge that this is a dynamic system. The whole point is that people move into work and progress in work so that they earn more money. I fear that that has not been acknowledged in this debate.

The Welfare Reform and Work Act introduced several changes, as hon. Members have already mentioned, but they must be seen in the context of fairness. The welfare cap limited the amount of money that some families receive, because it was deemed by Parliament that it was unfair for families out of work to receive more than families in work. It was not just a parliamentary majority of Conservatives and Liberal Democrats who agreed with that; regular polling has found that 77% of the population do, too.

I am delighted to draw attention to a new report by Policy in Practice, “Low Income Londoners and Welfare Reform”, which has examined the effect of the welfare cap on 600,000 low-income people in London. It shows that there has been a positive impact on employment outcomes for those families and no measurable impact on homelessness in comparison with a control group of similar households. The welfare cap is working in London, and the most serious piece of analysis so far conducted upholds that. It is a good example of how adjusting the welfare system carefully can create work incentives to help people to make positive choices to improve their lives and those of their families.

The hon. Member for Central Ayrshire mentioned the four-year benefit freeze. I acknowledge that inflation is now higher than it was when the freeze was set. I also acknowledge that it is now falling. As my hon. Friend the Member for Redditch (Rachel Maclean) pointed out, the value of benefits increased by 21% between 2008 and the 2016 Act, while the value of wages increased by only 11%. The freeze is therefore not quite as stark a corrective as the hon. Member for Central Ayrshire makes out.

On the two-child limit in universal credit, it is only right that we have a welfare system in which people who are out of work have to make similar decisions to people in work. However, it is extremely important that people in the welfare system understand the potential consequences. I have become concerned that there may be people who are thinking of having a third child but are not aware that they will not be entitled to further benefits under universal credit. The system cannot work as intended if people are not aware of how it works.

[Neil Gray]

The hon. Member seems to have a basic misunderstanding of the impact of this measure. Does he not appreciate that many people start planning their families from a very different perspective from where they end up? We cannot continue to punish people who have fallen on hard times, as he is suggesting should happen.

[Alex Burghart]

I think the word “punish” is entirely wrong in this context. I think we have to say that if people are aware of the consequences of their actions—that there are benefits available for certain decisions they make but not for others—they can make their own decisions. It is up to the state to decide where the balance of benefit lies.

--- Later in debate ---

[Neil Gray (Airdrie and Shotts) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Gapes. I warmly congratulate my hon. Friend the Member for Central Ayrshire (Dr Whitford) on securing this debate and her magnificent speech, which set out perfectly the issues before us. I also thank Emily Cunningham from the SNP research office. She has helped to drive this week of campaigning on the pernicious Welfare Reform and Work Act 2016. I also thank our press office, led by Catriona Matheson, which has helped to highlight our campaign.

This is rather pertinent to some of the issues being discussed this morning, but today is World Down Syndrome Day. They are out of sight, but I am wearing colourful odd socks to help celebrate difference, and I hope others are, too.

I remember well the great frustration and anger—some of that has been brought back to me by some Conservative contributions today—I felt when speaking at the various stages of the Welfare Reform and Work Bill. I remember the anger I felt when we put across the evidence from the expert charities and those arguments were ignored. I remember the meticulousness with which the former Member for Banff and Buchan, Dr Eilidh Whiteford, dismantled the Government’s basis for introducing the Bill and the erudite way she evidenced what the impact would be.

We warned then that the four-year freeze to social security would mean a rise in child poverty, but we were ignored; the Government marched on. We warned then that cutting disability employment support would hurt those who need the support most, but we were ignored; the Government marched on. We warned then that introducing a two-child limit to tax credits would push low-income families on the edge into poverty, but we were ignored; the Government marched on. We warned that lowering the benefit cap would arbitrarily hit low-income families, women and children the hardest, but we were ignored; the Government marched on. Sadly, on all those areas the Government knew what was coming. It was not just the SNP telling them; all the expert charities lobbied hard against the Bill, but they were ignored, too.

Two years on, we can start to see the impact of the arbitrary, austerity-driven cuts to the DWP that have forced arbitrary austerity-driven cuts to social security. My hon. Friend the Member for Central Ayrshire covered that well. She also gave a very good, if sad and desperate, history lesson on the cuts from 2010. In addition to the Welfare Reform and Work Act 2016, cuts have hammered the incomes of the sick, the disabled and those living on low incomes. She also gave constituency examples of people who have been affected by this Government’s policies and said there was no cumulative impact assessment of the Government’s cuts to various elements of social security.

The hon. Member for Redditch (Rachel Maclean) did not have time to talk about the correlation between this Tory Government’s cuts and increased food bank use, including at St Stephen’s church in her constituency—that was highlighted by my hon. Friend the Member for Glasgow East (David Linden)—but I do. The Trussell Trust has highlighted a clear correlation between cuts or delays to benefits, low incomes and those using its food banks. Mary Anne MacLeod’s report, “Making the Connections: A study of emergency food aid in Scotland”, made the very same connections. I encourage the hon. Member for Redditch to read those reports before coming to another debate like this.

My hon. Friend the Member for Glasgow East made another good speech based on his lived experience and what he sees in his constituency. The hon. Member for Brentwood and Ongar (Alex Burghart) said he appreciated the speech of my hon. Friend the Member for Central Ayrshire, but did not agree with much of it. My hon. Friend quoted many facts, so the hon. Gentleman can disagree on policy,

“But facts are chiels that winna ding”.

The facts show clearly how low-income families, children, women, the sick and disabled are paying the price of this Government’s cuts. At the end of his speech, he made a number of inaccurate statements not only about the social security system we are building in Scotland, but his Government’s policies. The UK Government sadly no longer wish to halve the disability employment gap. That policy was removed in the manifesto he stood on.

[Alex Burghart]

I am looking to the Minister for confirmation, but I believe it is still very much our policy to halve the disability employment gap.

[Neil Gray]

I am looking to the Minister to intervene, but he is looking down at his notes sheepishly. As of the Conservative party’s last manifesto, it is clearly no longer an aspiration to halve the disability gap; it merely wishes to reduce it. Rather embarrassingly for the hon. Member for Brentwood and Ongar, that commitment was removed at the time of the last election.

My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) focused on universal credit, as he has done so diligently for years. He also called out the empty Tory and Labour Benches. That is most stark when compared with the debate last night, when Scots Tories and Scots Labour MPs teamed up to try—they failed—to attack the Scottish Government’s policies.

My hon. Friend the Member for Glasgow Central (Alison Thewliss) has been a diligent and award-winning campaigner on the two-child policy and the rape clause. Perhaps this Minister will be the one who finally listens on that pernicious policy.

We know that in Scotland things could have been much worse had it not been for the Scottish Government’s intervention and early action. We have already stopped anyone paying the bedroom tax, and we have ensured the continuation of council tax benefit, which has been stopped by the UK Government in England. The Social Security (Scotland) Bill has just completed its Committee stage. With that, we have seen some of the actions we will take to help build a new and fairer social security system with the limited powers at our disposal in Scotland. We will develop a new benefit to overcome the removal by this Government of housing benefit for most 18 to 21-year-olds. We will make assessments fairer, with no private companies involved and a reduced need for face-to-face assessments. We will set up an independent scrutiny body to ensure that this Scottish Government and future Scottish Governments adhere to human rights and scrutinise social security actions.

More will come out on what we have planned in the areas we control, but it will be a stark departure from the UK Government’s approach to social security. Sadly we cannot clear up all the mess that the UK Government have left for Scotland, and that is why we want social security devolved to Holyrood in its entirety. Until that happens we will keep fighting from Westminster for fairness for people across the UK who need that safety net.

This has been a perfectly timed debate brought to the Chamber by my hon. Friend the Member for Central Ayrshire. It has highlighted the desperate need for the Government to revisit their punitive and indiscriminate social security cuts. The Welfare Reform and Work Act 2016 led to international condemnation of the UK Government, led by the UN committee on the rights of persons with disabilities, which highlighted grave and systematic violations of the convention on the rights of persons with disabilities. The Government have lost court battles on their social security cuts, and just today the National Audit Office said that the DWP has underpaid an estimated 70,000 people on employment and support allowance by an average of £5,000 a person. That is yet more evidence of how this Government are letting people with disabilities and long-term health conditions down. It is time they acted. It is time they helped low-income families. It is time they properly supported people with disabilities. It is time they looked again at the Welfare Reform and Work Act. If the Prime Minister is still serious about tackling burning injustices, this is the place to start.

--- Later in debate ---

[Drew Hendry]

rose—

[Neil Gray]

rose—

[Margaret Greenwood]

I will not give way, because I am short of time. I refer the hon. Member for Inverness, Nairn, Badenoch and Strathspey and others to the excellent speech made by my hon. Friend the Member for Glasgow North East (Mr Sweeney) that showed clearly and in detail how Labour has led the fight for a social security system that supports people in their time of need.

--- Later in debate ---

[Margaret Greenwood]

The Welfare Reform and Work Act 2016 is having a profound impact on the lives of many of the most vulnerable in our society—the disabled, single parents, pensioners and children growing up in poverty—through a range of policies, accompanied by severe reductions in social security introduced in the 2015 Budget and what we are seeing with the roll-out of universal credit. There is the cut to employment and support allowance for disabled people, which is falling by £30 a week to the same level as JSA, leaving them with just more than £70 a week. There is the abolition of the family element of child tax credit and the equivalent in universal credit, which is worth up to £540 a year for new claimants.

We have a cut in the level of the benefit cap; the four-year benefits freeze; the abolition of targets to tackle child poverty, which Labour had introduced; the two-child limit on new claims for child tax credit and the child element of universal credit; the change in support for mortgage interest from a benefit to a loan that will be particularly hard on pensioners and disabled people; and the cuts to work allowances in universal credit in the summer Budget of 2015, which we call on the Government to reverse. So we see that the claims that the Act rewards hard work and is fair to working households simply do not bear scrutiny.

[Neil Gray]

Will the hon. Lady give way?

[Margaret Greenwood]

No, I am going to make some progress.

In-work poverty has risen to record levels: 8 million people, including 2.7 million children, are in poverty, despite being in a working family, and 67% of working-age adults and children in poverty in the UK are in working households. Many people are stuck in a low pay, no pay cycle, where they may pass from employed to unemployed and back again several times in the course of a year.

A study of in-work poverty published by researchers at Cardiff University found that

“those in working poverty are three times more likely to become workless than people living in non-poor working households.”

It also found that not everyone who finds work progresses to better paid employment. The reports states that

“one quarter of those families where somebody finds work, exit worklessness only to enter in-work poverty. Lone parents are over-represented in this group, as are families with three or more children.”'.

I recommend the report to the hon. Member for Redditch (Rachel Maclean).

The cumulative impact assessment by the Equality and Human Rights Commission published last week, which several Members have rightly referenced, states that the measure that has the most impact on households on low income is the four-year benefits freeze introduced in April 2016. When the benefits freeze began in April 2016, inflation was 0.3%. Despite a fall in inflation last month, it is still at 2.7%, and food prices went up by well over 3% in February compared with the year before. So it is little wonder that the chief executive of the Financial Conduct Authority has warned of increasing household debt built up simply by trying to cover basic household bills.

The Resolution Foundation estimates that by 2019 a lone parent in work with one child will lose £420 a year as a direct result of the freeze alone, and a couple with a single earner and two children will lose £570 a year. If the Chancellor was justified in his claims in his spring statement for improvements in the public finances, will the Government abandon the benefits freeze that is pushing households into poverty?

Housing benefit was first cut in 2011 and is also one of the benefits now frozen by the Act, but private sector rents have continued to rise rapidly. Between 2011 and 2018, private rents in the UK increased by more than 15%—and by more than 12% even if London is excluded. The Act also severely cut the levels of the benefit cap so that it is now hitting the whole of the country, and the cap in practice operates through a cut in housing benefit. The benefit cap is supposedly designed to incentivise work by exempting people who start claiming working tax credits. However, 45,000 households that had their housing benefit capped in November 2017 were single-parent families, and 35,000—

[Neil Gray]

Will the hon. Lady give way?

[Margaret Greenwood]

No, I am really short of time.

Thirty-five thousand of the single-parent capped households had at least one child aged under five, including 15,000 with a child aged under two.

The Act also requires the main carer of a child to look for work once their youngest child turns three, rather than five as previously. Many parents of very young children would actually like to work, but it can be almost impossible for them to find affordable childcare or work that fits around caring for young children. That brings me to one of the most contentious parts of the Act: the abolition of the targets to tackle child poverty set by the previous Labour Government in the Child Poverty Act 2010.

The previous Labour Government lifted 1.1 million children out of poverty through a cross-Government strategy that included Sure Start centres and year-on- year increases in social security, which went hand in hand with employment support targeted at specific groups such as lone parents. There was no thought that people should be left trapped on welfare, as the then Work and Pensions Secretary termed it when the Welfare Reform and Work Bill was being debated.

Labour’s policies achieved results. Between 1997 and 2010, the employment rate for lone parents with dependent children in the UK increased from 45% to 57%. That cross-Government approach has long since been discarded by the Government. The Child Poverty Unit set up to oversee it has been dismantled, and renaming the Social Mobility and Child Poverty Commission “the Social Mobility Commission” in the Act, thus excluding child poverty, says much about the purpose of that Act.

All four members of the board of the Social Mobility Commission stood down in December in protest at the lack of progress in creating a fairer Britain, including Baroness Shephard, deputy chair of the commission and a former Conservative Education Secretary under John Major. Will the Minister tell us his Department’s assessment of what contribution the Act has made to social mobility?

In February, the End Child Poverty coalition published new figures that showed that more than 50% of children in some constituencies are growing up in poverty and that 4 million children are in poverty after housing costs are taken into account. The Government claim their figures show that child poverty is actually decreasing, but they do not have up-to-date figures. The End Child Poverty coalition figures compiled by Loughborough University are for 2017-18, yet the Government’s official figures, to be published tomorrow, will cover only the year before, 2016-17. That time lag is important because, although the benefits freeze came into effect in April 2016, other parts of the Act that are likely to lead to an increase in child poverty, such as the two-child policy, were introduced only in April 2017, and so we have yet to see the full impact of them.

[Neil Gray]

Will the hon. Lady give way?

[Margaret Greenwood]

No.

The main provider of food banks in the UK, the Trussell Trust, has highlighted that food bank referrals have risen by 30% in areas after the full service has been introduced. The EHRC report published last week estimated that 1.5 million children will be living in poverty by 2021-22 as a result of tax and benefit changes, and the Institute for Fiscal Studies predicted in November that the proportion of children growing up in poverty is expected to rise from 30% in 2015-16 to 37% in 2021-2022. It really is time the Government listened to the informed opinion that is available out there.

The two-child limit on new claims for child tax credit and the child element in universal credit is one of the most controversial and, to my mind, one of the most offensive parts of the Act. The idea behind it seems to be that people claiming social security should have to think twice before having larger families, but in the real world unplanned pregnancies happen to people, and people might be unexpectedly made redundant having planned a larger family. Moreover, we should value children and not see them as a burden.

Faith communities are especially concerned about the two-child policy because, for many people of faith, reproduction, use of contraception and family size are determined by beliefs. The policy would originally have also covered children born as a result of rape. The Government were forced to back down, but the exemption still requires a woman to disclose sexual violence, which we know many women understandably find extremely difficult because of, for example, the trauma that they have experienced, a need to protect themselves and perhaps their children, and a fear of the perpetrator.

Someone claiming the exemption must also not be living with the person responsible for the sexual violence. Again, we know that women can be at severe risk at the point when they leave an abusive relationship. It should be the woman who has suffered abuse who decides when that should be. She should not be pushed into doing so at the wrong time by the DWP. The Government have not told us how many people have been affected by the two-child policy or how many have claimed exemptions, even though the policy has been in operation for almost a year now. Will the Government publish those figures and abolish the rape clause, which requires women who want to claim the exemption to prove that they have been a victim of sexual violence? Will the Government abandon the disgraceful policy that treats one child as though they were somehow worth less than another?

In a little over a fortnight, support for mortgage interest will be turned from a benefit into a loan. The Government have left it so late to contact people claiming SMI that at the beginning of March more than half of claimants—53,500 out of 110,000—had still not received a follow-up phone call to the initial letter sent out by the DWP. The delay echoes the fiasco of the pension changes affecting women born in the 1950s, where again people were not given enough time to prepare. Forty-one per cent. of people claiming SMI are pensioners. Turning it into a loan risks pushing them into poverty.

[Neil Gray]

rose—

[Margaret Greenwood]

The Government have made it difficult to trace the overall impact of the Act with all its complexity because they have failed to publish a cumulative impact assessment.

[Neil Gray]

rose—

[Mike Gapes (in the Chair)]

Order. It is quite clear that the hon. Lady is not giving way. She is coming to the end of her remarks, so I will be grateful if people do not try to intervene when it has been made clear that she is not giving way.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (Kit Malthouse)]

It is a great pleasure to be in your capable hands this morning, Mr Gapes. I thank the hon. Member for Central Ayrshire (Dr Whitford) for securing the debate, and all Members who have participated this morning and continue to take an interest in the issues of welfare reform and work.

When the Welfare Reform and Work Act was first debated, in the summer of 2015, Ministers spoke of three principles that underpinned the legislation: first, work is the best route out of poverty, enabling people to take control of their lives and achieve their full potential; secondly, spending on welfare should be sustainable and fair to the taxpayer, while protecting the most vulnerable; and thirdly, people who receive benefits should face the same life choices as those who do not get the same support from the state. We remain committed to those three principles. Indeed, in the two years that have passed since the legislation became law, we have been putting them into practice.

Many of the measures in the Welfare Reform and Work Act that hon. Members across the Chamber have highlighted this morning form part of a package of policies through which we have been increasing incentives and support for people to find work, stay in work, build a career and progress.

[Neil Gray]

Will the Minister give way?

[Kit Malthouse]

Not at the moment.

With the national living wage we have been helping people to earn more. From April 2018 the Government will raise the national living wage by 4.4% to £7.83 an hour. At that point, the annual earnings of a full-time minimum wage worker will have increased by more than £2,000 a year since we introduced the national living wage in April 2016. Since April 2015, the lowest paid have seen their wages grow by almost 7% above inflation.

With increases to the income tax personal allowance, we have been helping people to keep more of what they earn. Next month we will raise the personal allowance in line with inflation to £11,850. A typical basic rate taxpayer will pay £1,075 less income tax in 2018-19 than they did in 2010-11. Compared with 2015-16, there are now 1.2 million people who, as a result of our changes to the personal allowance, will no longer have to pay any income tax at all.

[Neil Gray]

Will the Minister give way?

[Kit Malthouse]

I am not going to give way, because I want to address some of the specific questions, and give the hon. Member for Central Ayrshire a chance to respond.

With universal credit, as my hon. Friend the Member for Redditch (Rachel Maclean) touched on during the debate, we are providing claimants with a simpler system that ensures that work always pays. It offers families more generous childcare, and gives parents access to tailored support from personal work coaches to find, and then progress in, work. Three separate research studies have shown that universal credit is having a positive impact on employment outcomes. Compared with jobseeker’s allowance, our evidence shows that people on universal credit are 4% more likely to be in work after six months, put more effort into finding work, apply for more jobs, and do more to increase their hours and earnings. Universal credit is being introduced in a careful and co-ordinated way, allowing us to make improvements along the way. We are listening to the concerns of our stakeholders and making changes where necessary.

The topic for today’s debate invited us all to reflect on what impact this Government’s policies are having. As the hon. Member for Central Ayrshire rose to give her opening speech, the Office for National Statistics published its latest release on the state of the labour market in the UK. That release presents a striking picture, with 32.25 million people in employment as of this morning—a record high. The employment rate for women stands at 70.9%, which is also a record high. Unemployment is down to the joint lowest level since 1975, and 876,000 vacancies are open to people in search of employment, which is also close to a record high.[Official Report, 28 March 2018, Vol. 638, c. 4MC.]

The figures are particular significant when it comes to children—many hon. Members have spoken about children today. The evidence is clear: children living in households where no one is in work are five times more likely to be in poverty than those where all adults work. The chances of a child being in poverty where one parent works full-time and the other part-time is one in 20.

In 2014-15, 75% of children in families where no one is in work failed to reach the expected standard at GCSE compared with 39% for all working families, and 52% for low-income working families. We are supporting parents to find and stay in work with record spending on childcare, which will reach £6 billion in 2019-20. In England, working parents of three and four-year-olds can now get 30 hours of free childcare a week, saving those using the full 30 hours around £5,000 per year in total.

[Neil Gray]

rose—

[Kit Malthouse]

We are making good progress. Nationally, there are now about 880,000 fewer households where no one is in work, and around 600,000 fewer children living in such households compared with 2010. The number of children living in absolute poverty on a before-housing-costs basis is down 200,000 since 2010, and the UK is now the highest spending of all OECD countries as a percentage of GDP on family benefits, standing at 3.5% against an average across the OECD of 2%.

[Neil Gray]

Will the Minister give way?

[Mike Gapes (in the Chair)]

Order. Mr Gray, the Minister has made it clear that he is not giving way. He does not have to give way, so I would be grateful if you would allow him to carry on.

Scottish Welfare Powers

Neil Gray Excerpts

Tuesday 20th March 2018 Westminster Hall

[Bill Grant]

That is an interesting question. We cannot see people going without entirely, so yes, I would lean towards its being a human right. Social security is a safety net that in this country, and in Scotland, we can be proud of providing, and I hope that we are able to do so for a long time to come, through a good, strong economy and people in employment.

The third principle is that the welfare system should give those who can and want to work the opportunity to do so. That is an essential part of its modernisation. It has rightly been the guiding principle of welfare reforms across the UK in recent years, and we should not underestimate the dignity and sense of fulfilment that accompany employment.

It is with those principles that I have approached the debate today, but one further important requirement underpins them all, which is that the system works. That sounds very simple and easy, but I am increasingly concerned that the Scottish Government are simply not moving fast enough to ensure that it does. Hundreds of thousands of people receive the benefits, so it is vital that the devolution of powers is delivered safely and in an orderly way. It is vital also that people know what will happen under the new system, that the Scottish Government think through policy properly and that they have the structures up and running to take over the important responsibilities.

[Neil Gray (Airdrie and Shotts) (SNP)]

Has the hon. Gentleman articulated any of those concerns directly to the Scottish Government?

[Bill Grant]

I can honestly say no, but I believe that it is not my role to do so at this juncture. The hon. Gentleman may have a different view, which I fully respect. If there is a need to do so, I will certainly take him up on that.

This is no easy feat. I accept that we cannot just magic up a new welfare system. I do not underestimate how much work must be done. We have known the timeline for the devolution of the powers for quite some time now, yet there is still no real detail about how the Scottish Government intend to use the important main powers. The fact is that Scottish National party Ministers in Scotland are proceeding exceptionally slowly with implementing this aspect of devolution. I suspect that the SNP is now beginning to realise that creating a welfare system that is fair to everyone, including taxpayers in the UK and in Scotland, is not an easy task. That I accept.

--- Later in debate ---

[Bill Grant]

I have to take the hon. Lady’s word for that. I have not seen that report. I have no reason to doubt it, but I would have to know more about it before I agreed to apply the word “fairness.”

Disability benefits are being devolved by April 2020, and we have been promised that a new Scottish social security agency will be up and running, ready to take on the handling of welfare issues, in time for the next Scottish election. Time is moving on, yet many of the details are still desperately lacking. For example, we do not know how the system will interact with and work in parallel with the UK system and the Department for Work and Pensions. Might the Minister be able to indicate whether he has discussed that with his Scottish counterparts? That might reflect on the hon. Member for Airdrie and Shotts (Neil Gray) tasking me with that job.

That lack of detail and policy is a concerning feature of the SNP Government’s approach to welfare. We know that they will take over responsibility for benefits such as disability living allowance and personal independence payments. What we do not know, however, is precisely what their policy will be on disability benefits. What assistance do they propose for people with disabilities? How will claims be made, assessed and processed through the system? How much will people be able to receive?

[Neil Gray]

With due respect, the hon. Gentleman is clearly not following proceedings in Holyrood. At the Committee stage alone we discovered from the Scottish Government—supported, I think, by the hon. Gentleman’s colleagues in Holyrood—that the medical information required for the assessments will be gathered by the social security agency so that there will be a reduction in the need for face-to-face intervention. That is just one area in which we know there is clear detail from the Scottish Government.

[Bill Grant]

That progress is fairly slow, but I welcome it.

[Bill Grant]

I thank my hon. Friend for that intervention.

[Neil Gray]

Clearly the hon. Gentleman’s colleague is also rather behind the times on how the process works in Scotland. That report came before the Social Security (Scotland) Bill went to its Committee stage in its passage through Holyrood.

[Bill Grant]

I will not be the referee on what is right or wrong in the report, but the truth will be in there somewhere.

Most worryingly, the detail we have from the SNP simply has the look of an attempt to move away from Westminster systems and be different just for the sake of it. Take disability benefit assessments, for example. One of the first and only changes that the SNP has announced is over the role of the private sector in those assessments. It has yet to justify that approach, and I am not clear what the actual benefits will be.

--- Later in debate ---

[Bill Grant]

If the hon. Gentleman will bear with me, I want to make a wee bit of progress. Just like the policies themselves, there is little detail on future costs. It is important that we know how much things will cost and how taxpayers will be expected to fund the Scottish system. Are we going to see yet more tax rises for the people of Scotland, or will other services begin to see cuts? My Scottish Conservative colleagues and I have spoken regularly in this place about the need for Scotland’s two Governments to work effectively together, and that is true for welfare.

[Neil Gray]

Has the hon. Gentleman read the financial memorandum that was published for the Bill on Friday? Has he considered the Scottish Government’s remarks that suggest we will always pay for the social security system out of the funds we have in Scotland and any efficiency savings that come forward? Clearly the finances are there.

[Bill Grant]

I welcome the hon. Gentleman’s comments. I certainly hope that there are efficiency savings in that regard, but I am a bit sceptical.

Take universal credit, for example. The Scottish Government have made use of the flexibilities available, and they are well within their rights to do so, but consultation and information sharing with the DWP could be much better. In Scotland, claimants can choose to have the housing element of their universal credit paid directly to landlords. In England, the DWP does not simply pay people money and turn its back on them. If somebody has fallen two months in arrears with rent payments, a UK-wide system of alternative payment arrangements is triggered and rent can be paid, where needed, directly to landlords. It is best if individuals can manage their own money to match the working environment. It is important that they are allowed to manage their own money where they can and that there is a system to support them.

--- Later in debate ---

[Neil Gray (Airdrie and Shotts) (SNP)]

It is a pleasure to speak in this debate with you in the Chair, Mr Rosindell. I congratulate the hon. Member for Ayr, Carrick and Cumnock (Bill Grant) on securing the debate. As has already been evidenced, it has allowed us to highlight the rather stark differences in the approach to social security in Holyrood and here at Westminster.

I also feel a wee bit sorry for the hon. Gentleman as, when he secured the debate, he really must have thought it was going to be a chance to get another “SNP bad” story on the Scottish Government for failing to deliver on their promises. Of course, the Scottish Government are proceeding quite nicely as they build the new Scottish social security agency. He must have been choking on his kippers at breakfast this morning as he read the headlines about his Prime Minister selling out the Scottish fishing industry. Today is really not the day for Scottish Tories to talk about promises to the electorate, when the SNP Government are keeping theirs.

[Tommy Sheppard (Edinburgh East) (SNP)]

Last week, the Equality and Human Rights Commission published its report on the cumulative effects of the UK Government’s tax and benefit policies, which showed that the very poorest in our society—the bottom 10%—are the ones who have suffered the most, and the ones who have suffered the least are the richest 10%. In other words, it is a system that is in direct and converse relationship to what it should be. Does my hon. Friend agree that, given their legacy, Government Members have a bare-faced cheek to try to attack the Scottish Government?

[Neil Gray]

I absolutely concur.

The hon. Member for Ayr, Carrick and Cumnock suggested that the Scottish Government are not following due process in preparing for the new system, and that they are not ready for the new powers because there is a lack of detail in the plans. I politely suggest to him that both statements cannot be true. Indeed, both are false. He himself acknowledged many of the areas in which the Scottish Government have used their powers to act. The Bill to create the new Scottish agency passed Committee stage at Holyrood—it did so with remarkable consensus, given the topic of discussion—so the process has been followed in a timeous fashion.

The Scottish Government are in regular contact with the hon. Gentleman’s colleagues in the DWP about how the two systems relate to each other. I wonder whether the Minister has done the groundwork that the Scottish Government have. We have yet to see evidence that he has. On the process point, the hon. Gentleman is clearly wrong.

[Luke Graham]

Does the hon. Gentleman agree that benefits across this country should at least be of one high standard? We have to be careful that, in creating another agency, we do not end up duplicating services, creating more cost for our taxpayers and delivering a worse service for our constituents. In other words, there has to be an incremental benefit, not duplication, more cost and bureaucracy.

[Neil Gray]

I agree with the hon. Gentleman’s constructive intervention to a point. That is why the Scottish Government are taking time to consider setting up the agency and are doing what they can to liaise with the UK Government about how the systems will operate in tandem.

The hon. Member for Ayr, Carrick and Cumnock is also wrong on the detail point, which relates to our readiness. From the Bill’s progress in Committee alone, we know that private companies will not be involved in delivering assessments. A new benefit will be provided to overcome his Government’s removal of housing benefits from most 18 to 21-year-olds.

[John Lamont]

Will the hon. Gentleman give way?

[Neil Gray]

To paraphrase Mike Russell, I am afraid I have too few minutes and too much to contradict the Tories on. I am very sorry, but I do not have enough time. I have taken other interventions.

We will establish an independent scrutiny body—the Scottish commission on social security—and we have a legal duty to scrutinise proposals for regulations and have regard to human rights. The new agency will seek medical information at the outset of an application—applicants will not be required to collect it at appeal stage—so face-to-face assessments will be reduced. The legislative process required to deal with the successful transition of 11 benefits is still going on in Holyrood, so there may be more detail to come.

Those who contradict the hon. Member for Ayr, Carrick and Cumnock are not restricted to SNP Members. I am keen to quote a couple of his colleagues in the Scottish Parliament. On 19 December, the Tory spokes- person on social security, Adam Tomkins, described the Scottish Government’s Bill as “landmark legislation” and said that

“the general principles of the bill should be supported.”

His colleague, Michelle Ballantyne MSP, went even further on the same day, and said that our Bill

“has the potential to revolutionise social security in this country.”

It is interesting that the hon. Gentleman has chosen this topic for debate, given that his colleagues up the road are not quite so keen to denigrate the Scottish Government’s actions. That is one of the reasons why I asked whether he had written to the Scottish Government at any stage about any of his concerns. You will be shocked to learn that he has not, Mr Rosindell. Call me cynical, but I think motives other than just inquiring about the progress in this area might have been at play when he called this debate.

The Scottish Tories were supposed to be coming to Westminster to vote as a bloc to protect Scottish interests and advocate for Scotland. Instead, they have used Westminster as a platform to try to denigrate the Scottish Government to the point of farce. Perhaps if the Scottish Tories had spent less time trying to do the job of MSPs, which many of them left, and more time watching what their own Government are doing, they would not be in the fisheries mess they currently find themselves in.

That leads me to my main questions for the Minister. How are the UK Government’s plans for the new Scottish social security agency going? What work has the Minister commissioned to ensure there is no delay to the smooth progress, which is currently on track to be delivered by the Scottish Government? What work have the UK been doing to keep up with—

[Andrew Rosindell (in the Chair)]

Order. You are out of time, I’m afraid.

--- Later in debate ---

[Alok Sharma]

No, I will not, if the hon. Lady does not mind. A lot of comments have been made, and I want to deal with them.

The devolution of welfare powers represents a considerable and positive change, but it will require strong collaboration and co-operation from all sides if it is to be a success. The hon. Member for Airdrie and Shotts (Neil Gray) asked about the UK’s commitment. I can tell him that we have set up and resourced dedicated teams to lead on Scottish devolutions; we have shared—and we continue to share—our learnings and experience with the Scottish Government; we have run more than 100 workshops and operational visits; and we have shared many hundreds of pieces of information. We are absolutely committed to working in partnership with the Scottish Government to ensure a safe and secure transfer of the welfare powers for which they now have responsibility.

Scotland is an integral part of the United Kingdom, and our economic and welfare reform policies recognise that. Unemployment in Scotland is at a near historic low, which we should all welcome, and more people see greater security in retirement. Following the decisive result of the 2014 independence referendum and the ensuing Smith commission, we are delivering on the promises we made to people in Scotland by devolving £2.8 billion in welfare powers.

[Neil Gray]

If we are working together and in partnership, will the Minister support the private Member’s Bill of my hon. Friend the Member for Central Ayrshire (Dr Whitford)? That would negate the need for the Scottish Government to have to negotiate with the Department for Work and Pensions and would pay for the DWP to deliver split payment services under universal credit.

[Alok Sharma]

If I may, I will come on to how we are co-operating with the Scottish Government. At the end of the day, there is of course also a requirement on the Scottish Government to play their part. Many of the powers are being devolved: that involves not only a right for the Scottish Government, but a requirement for them to deliver.

The Scotland Act 2016 was an historic moment that created a shared welfare space for the first time. Since September 2016, the Scottish Government have had power to deliver employment programmes for disabled people and those at risk of long-term unemployment, and to vary the housing cost elements of universal credit through the universal credit choices. They have also had the power to top up reserved benefits using their own resources and to create new benefits in areas of devolved responsibility.

We have seen progress in some of those areas, with the DWP providing considerable support to enable the Scottish Government to deliver their transitional employability programmes from April 2017. From April this year we will support the introduction of their successor employment programme, Fair Start Scotland, which relies on Jobcentre Plus work coaches playing a key role in the referral process.

Since 4 October last year, we have been delivering universal credit Scottish choices through the universal credit system. That has allowed those living in Scotland who make a new universal credit full service claim a choice on whether they are paid twice monthly, instead of monthly, and whether their housing element is paid directly to their landlord. Since January this year, regulations allow for those universal credit Scottish choices to be extended to those who were universal credit full service claimants before 4 October, as well as to those claimants transferring from live to full service, once their claim has been established.

We are yet, however, to see any proposals for how the Scottish Government intend to use their powers to top up benefits or to create new benefits in areas of devolved responsibility. The Scottish Government are proposing to pay a carer’s allowance supplement to carers living in Scotland from this autumn, but they have still not put forward proposals on the disability benefits such as personal independence payments, disability living allowance and attendance allowance for people in Scotland.

My hon. Friend the Member for Ayr, Carrick and Cumnock asked about joint working. As he may know, there is a joint ministerial working group on welfare, which is jointly chaired by the Secretary of State for Scotland and the Cabinet Secretary for Communities, Social Security and Equalities in the Scottish Government. It continues to oversee the transfer of the new employment and welfare responsibilities. The Secretary of State for Work and Pensions also attends the working group. My Department has worked hard to share our knowledge and experience and has invested significant resource to support the Scottish Government’s thinking and planning.

It is two years this week since the Scotland Act received Royal Assent, and I agree with my hon. Friend the Member for Ayr, Carrick and Cumnock that the public need clarity, as there is still much to do. Meaningful devolution in such areas cannot happen until the Scottish Government make their policy intentions clear and put in place the infrastructure to deliver them.

The hon. Member for Airdrie and Shotts asked specifically what we were doing with the Scottish Government. I can tell him that, obviously, we have been supporting them in a whole range of areas, as outlined, but we are keen to understand in greater depth the Scottish Government’s plans for post-wave 1—when I say that, I mean the disability benefits that I have already outlined.

The reality is that if the Scottish Government fail to deliver those welfare powers by 2020, the people of Scotland will need to be protected. Plans are in place to ensure that the DWP will be able to continue to administer and deliver the devolved benefits, as we do now, under an agency agreement for a defined time. We will ensure that we provide the greatest support and the greatest protection for the people of Scotland.

[Neil Gray]

Given that the parliamentary process is proceeding in a timeous fashion and to time, what evidence does the Minister have to suggest that the Scottish Government will not proceed to time unless the UK Government have not done the groundwork?

[Alok Sharma]

My intention is not to create any kind of ranking—we want to work with the Scottish Government. The point that my hon. Friend the Member for Ayr, Carrick and Cumnock made, rightly, is that he has concerns about the pace at which things are moving. I repeat: the faster the Scottish Government move forward, the faster and more easily we can work together to deliver, ultimately, for the people of Scotland. That is what are here to talk about—not the politicians, but the people of Scotland.

Women and Work

Neil Gray Excerpts

Wednesday 14th March 2018 Westminster Hall

[Neil Gray (Airdrie and Shotts) (SNP)]

I am pleased to have the opportunity to speak in this debate under your chairmanship, Sir David. I congratulate the hon. Member for Redditch (Rachel Maclean) on securing it, and agreed with much of what she said, although however much progress has been made, there is still a huge amount to do.

I am a member of the all-party parliamentary group on women and work, which the hon. Member for Chichester (Gillian Keegan) co-chairs. Ironically, I am the secretary of the group. It is one of the most informative and best organised that I have been a member of in my past three years in Parliament. Sadly, I have not been able to attend as frequently as I did at the outset. It has done a fantastic job, complementing the work of the Women and Equalities Committee, illuminating workplace issues that affect women and bringing cross-party consensus to the search for ideas and solutions.

Through my membership of the all-party group I have learned about excellent programmes such as those at Centrica, which has a fantastic female engineering apprenticeship programme, and Royal Bank of Scotland, which does brilliant work on mentoring and female returnships. To my mind, too much intervention of that type happens in isolation. Encouraging as it is, we need more structural intervention to help to address the gender pay gap—and the gender employment gap: women still struggle to get on in traditionally male-dominated sectors. That is why I want more ambitious Government intervention on easily accessible and affordable childcare. I take the point that has been made about the expansion that has taken place already. The Scottish Government currently offer the most ambitious and far-reaching childcare support package in these isles, and that is to be welcomed.

I also want the UK Government to go further to provide greater encouragement and incentive for the take-up of shared parental leave. It was a worthy but, I believe, unfinished policy success of the coalition Government’s time in office. I want more men to be confident about requesting—and to be encouraged to request—shared parental leave. However, that will happen only when there is intervention to that effect, as the hon. Member for Chichester mentioned. The change would help women in competing with men for jobs. Right now, if a man and a woman in their mid-twenties with similar credentials are job candidates and go to an interview panel, there will, sadly, although it will not necessarily be publicly articulated, be an unconscious bias away from the woman, in case she needs maternity leave. If fathers were to take on more responsibility in that area, it would clearly rebalance and equalise the opportunities for women to get on—and help them to be better fathers.

As someone who is proud to “talk flexible working” with my staff, I want more action from the Government to define what flexible working means. All employees currently have a right to request flexible work, but there is no definition of it. Sometimes that leaves both employer and employee in a difficult position in discussions. Guidelines would help both of them to know where they stand. They would strengthen the position of women and men in securing flexible work, and employers in retaining staff and increasing productivity and morale. We are doing what we can in Scotland to make things more progressive, although we cannot act on all the areas where I would want us to.

I understand the points made by the hon. Member for North West Durham (Laura Pidcock). However, we have lowered the reporting threshold in the requirement on companies to publish their gender pay gap, so it now applies to those with more than 20 employees, rather than 250. We currently have the lowest gap in the UK, at 6.6% compared with 9.1% overall. We want more progress, clearly. I understand the concerns of the hon. Member for Chippenham (Michelle Donelan), but we have led by example in matters of gender balance. We have the first female First Minister in Scotland, who chairs a gender-balanced Cabinet. We are also committed to legislating to ensure gender balance in public sector boardrooms by 2020, and to campaigning for gender balance in the boardrooms of private sector organisations that have signed our business pledge.

We welcome the debate, and understand the positivity of the hon. Member for Redditch, but there is much more that we could and should do to make sure that all of society and the whole economy can benefit from the closing of the gender pay and employment gaps.

[Several hon. Members rose—]

Universal Credit

Neil Gray Excerpts

Tuesday 13th March 2018 Commons Chamber

[Ms McVey]

I will carry on for a bit, and then I will gladly take some more interventions.

We are not just debating these regulations today, but trying to save them from the Opposition, who would be happy to destroy this extra support for our benefit claimants. Perhaps I should remind the House of some of the changes that are in these regulations and what benefits they will bring to claimants. After all, the policy underpinning these regulations has been widely debated and supported both inside and outside this Chamber. The regulations abolishing waiting days will help many claimants by, on average, £160, while reducing the time taken to receive the first monthly payment. These regulations bring into effect the housing benefit transitional payment, which amounts to two weeks of housing benefit at the start of the claim. That is worth, on average, £233 towards helping claimants stay on top of their housing costs as they move into universal credit. These regulations increase the work allowances and are worth around £68 a year in further support for those who are striving to enter work.

[Neil Gray (Airdrie and Shotts) (SNP)]

The Secretary of State is attempting to provide a stout defence of the impact of universal credit. Why is it then that, only last month, her colleagues on Stirling Council proposed three years’ worth of mitigation against the impact of universal credit, worth more than half a million pounds?

[Ms McVey]

Actually, if the hon. Gentleman looks at what this Government introduced in the Budget, he will see that it was a package of support worth £1.5 billion for the country. What we are doing is supporting people as best we possibly can. Additionally, these regulations fund temporary accommodation through housing benefit, which has been widely called for and unanimously welcomed by local authorities.

These regulations follow on from a host of other changes that we have already implemented, including making our telephone lines Freephone numbers, extending the maximum repayment period for advances from six months to a year, increasing the maximum advance that claimants can receive to up to 100%, changing the guidance to ensure that, when private sector housing claimants come on to universal credit, we know whether their rent was previously paid directly to the landlord and can ensure that that continues.

--- Later in debate ---

[Neil Gray (Airdrie and Shotts) (SNP)]

I am grateful for the opportunity to speak to these motions for the Scottish National party. I will use the bulk of my time on early-day motions 1004 and 921, as motions two relate only to England or England and Wales.

The universal credit regulations referred to in early-day motion 921 cover most of what was announced in the Chancellor’s autumn Budget, after months of negative headlines for the Government about universal credit. It was the Government’s big sell to their concerned Back Benchers, which was really not much. For instance, they reduced the waiting time before universal credit can be paid to recipients from six weeks to five, which was a welcome but very wee step.

Meanwhile, the Government also included more controversial measures such as changes to the rules on surplus earnings and self-employment losses, which come into force next month. They removed the automatic temporary exemption from work search and availability requirements for illness for claimants who have been found fit for work, and they reduced the time people have to register and supply evidence regarding a change in their circumstances from one month to 14 days.

The Government’s tweaks to the welfare system over the last eight years and the drip, drip, drip of cuts are slowly eroding the value and support it provides. It is completely unfair to expect people on low incomes to cope with the fact that their benefit will be frozen and fail to meet their costs of living, while the Government continue to add layers of punitive bureaucracy designed to trip them up. An individual financial sanction or one person missing the deadline for an increase in entitlement is of tiny financial value to the Department for Work and Pensions, but it is proportionally an enormous chunk of that person’s income. Yet this Government seem content to make these changes off the cuff, in the same way they tweaked the universal credit work allowance, which eroded its value, and the same way they tried to tweak personal independence payments, to stop people with severe mental health problems receiving the higher rate. It is underhand, and it is appalling.

I received an official warning recently that universal credit will be rolled out in my constituency next month. I have been working closely with my local citizens advice bureau to make sure there is a joined-up response to the issues as they unfold, as it has done in many Members’ constituencies. I am worried about the impact that the roll-out of universal credit will have on local employers and their employees, because the picture elsewhere has been disastrous. The continued roll-out of universal credit is having a devastating impact on claimants, with debt and rent arrears through the roof.

[Rachel Maclean (Redditch) (Con)]

The hon. Gentleman is speaking about the roll-out of universal credit. We had the roll-out in Redditch just a few months ago. I can assure him that, according to the manager of the jobcentre, who has worked there for 30 years—an independent person working day in, day out to help people—the roll-out is much better than any previous system. Maybe he would like to visit Redditch and speak to her.

--- Later in debate ---

[Neil Gray]

I have no reason to doubt what the hon. Lady says, except that the experiences of Members on the Opposition Benches are rather different. I point her and her colleagues to my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who has been working tirelessly on this not only while he has been a Member of the House but while he was leader of Highland Council, when universal credit was first tested in Highland. He has been knocking against a brick wall trying to get the DWP to listen to the concerns that he has found in his area, and his experience is not the same as the one the hon. Lady says she has had in Redditch.

[David Linden (Glasgow East) (SNP)]

I intervene in response to the hon. Member for Redditch (Rachel Maclean), who said how wonderful jobcentres are and how much work they do. I do not know whether she has had the same experience as me, but in my city of Glasgow, the UK Government have closed six jobcentres, and in my area of the east end of Glasgow, they have just butchered three out of four jobcentres. How can we go and find out how things are going in jobcentres, when her Government are busy closing them?

[Neil Gray]

I absolutely concur with my hon. Friend, who has been an assiduous campaigner to protect and save the jobcentres in his constituency. Even at this late stage and after some of their doors have closed, I hope that the Government may listen and finally provide a reprieve.

It is right that we acknowledge the knock-on effect felt by landlords, whose incomes are in turn being squeezed due to tenants falling into arrears because of successive cuts to universal credit. The SNP has continually called for the roll-out of universal credit to be paused and properly fixed. That is not just about reducing the wait time by a week for those receiving universal credit, but about restoring the original principles of universal credit, which have been cut back so far to their roots that they have been battered.

The UK Government’s woeful ignorance on this is shameful. The evidence of the social destruction caused by universal credit in its current form is clear from report after report by expert charities. Such social destruction is not masked by the line, repeated ad nauseam by the Government, that universal credit is getting people into work. It is not much good for people if this is just a shift from out-of-work poverty to in-work poverty. We know there has been a rise in the rate of in-work poverty, and we also know that 67% of children—I repeat, 67% of children—currently living in poverty do so in a family where at least one person works.

[Catherine West]

Does the hon. Gentleman agree that most housing providers have deep concerns about universal credit in general, and in particular about direct payments to tenants who have problems with such a relationship?

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I just warn Members that we will have to have a five-minute limit. I do not want to start off with a four-minute limit, but we are in danger of going that way.

[Neil Gray]

I agree with the hon. Lady, which is why we are looking to introduce some flexibilities in Scotland, where we have the minimal powers to do so.

The Government must open their eyes to the crisis that they have created for workers, people who are sick or disabled, landlords and tenants, and employers, and urgently halt and fix universal credit before any more of our constituents have to suffer. In Scotland, the Scottish Government are using some of their minimal new powers in this area to give people in Scotland more choice over the universal credit payments and enable them to manage their household budgets better. We of course want to do more, and we wish that the whole of universal credit had been devolved to allow us to do so.

[Dr Whitford]

Does my hon. Friend agree that the Secretary of State’s suggestion that women can apply for the exceptional alternative payment scheme is not enough? The evidence shows that this needs to be the norm.

[Neil Gray]

I fully agree with my hon. Friend. Again, I hope that the Government are looking at her private Member’s Bill, which is due to be given a Second Reading on Friday, and that they will do what is right and is needed so that all areas of these isles can bring about the changes that are required.

Turning now to early-day motion 1004 on the changes to national insurance contributions that come into force on 6 April, much of the comment in this area has been not about the regulations themselves, but about a policy underpinning one of the changes. That policy is the UK Government’s decision to introduce a new scheme to support parents’ childcare costs—tax-free childcare—and to close employer-supported childcare schemes to new applicants from April 2018. Parents will not be able to receive support simultaneously from both the current scheme and the new tax-free childcare scheme, but parents who wish to remain in the old childcare vouchers scheme will be able to do so while the current employer continues to offer such a scheme. There is no obligation to switch to the new scheme, but existing voucher schemes will be closed to new applicants from next month.

The delivery of affordable childcare is crucial for the development of children as well as for providing for families. Fundamental to that is that parents on low incomes need to be protected from the impact of enormous childcare costs. That is one of the major barriers to resolving the gender pay gap and the gender employment gap. Childcare continues to be expensive and inflexible.

We are deeply concerned about the UK Government’s plans to close the childcare voucher scheme to new entrants from April this year. The SNP wishes to support policies that deliver for parents, ensuring that they have the resources and flexibility they need to give their children the best start in life. The UK Government must support working parents by keeping the scheme going, alongside the tax-free childcare scheme, so that parents can choose what is most suitable for their needs and offers the most support for their family. We must also consider in more detail the impact that the introduction of tax-free childcare will have across all different family types.

One of the key problems is that this is an extremely complex area, and the interaction of two schemes with the benefits system is an additional layer of complicated bureaucracy for parents. For example, the Low Incomes Tax Reform Group highlighted in February that universal credit and tax credit claimants must seek advice before applying for tax-free childcare:

“If an existing tax credit claimant makes a claim for TFC, even if they do not claim any help with childcare costs through tax credits, their whole tax credit claim will be automatically terminated. If they live in an area where universal credit full service has rolled out they may find that they are not able to claim tax credits again and this is very confusing.”

That is a significant issue with the new scheme, so how are the Government making people aware of it? We know that the DWP is notoriously bad at awareness campaigns, as we have seen with the WASPI women—Women Against State Pension Inequality Campaign—or the massively under-marketed Access to Work programme. We also know that the UK Government’s benefit changes are already creating confusion for people. Figures from the Government Digital Service have revealed that claimants appear to be encountering significant problems with the Government’s Verify system for universal credit, with 48 out of 91 needing help at a jobcentre to set up an account.

In Scotland, the SNP Government have committed to almost doubling the funded early learning and childcare entitlement by 2020, from 600 to 1,140 hours, in a bid to transform the life chances of children in Scotland. Our universal childcare offer is unmatched in the rest of the UK. In Scotland, all three and four-year-olds, and eligible two-year-olds, will benefit from 1,140 hours. The full entitlement is estimated to save families over £350 per child per month, or £4,500 a year.

Before I conclude, I would like to touch briefly on the other two motions, which relate to devolved matters. On the free school lunches and milk motion, every child at a local council school in Scotland can get free school lunches in primary 1, 2 and 3, regardless of financial circumstances. Some children in funded childcare before starting school can also get free meals. That is a year more than is currently provided in England. The UK Government’s universal credit system requires arbitrary thresholds, which create a cliff edge for parents, as has been discussed. We continue to call on the UK Government to devolve powers and funding so that we can take control of universal credit in its entirety in Scotland and deliver it in the best way possible for the people of Scotland.

Finally, on the free childcare motion, we have committed to fully funding our transformative expansion of early learning and childcare entitlement to 1,140 hours by 2020, and we have a track record of delivering on the previous expansion from 475 hours to 600 hours.

In conclusion, in all these areas what is clear is that when issues are devolved we see better policy and better outcomes for the people of Scotland.

[Several hon. Members rose—]

Social Security

Neil Gray Excerpts

Monday 5th February 2018 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

It is a pleasure to be able to set out the Scottish National party’s position.

You will not be surprised, Madam Deputy Speaker, if I am rather critical this evening, because I have been speaking about the matters covered by the social security order since my election nearly three years ago. Like the annual review of social security payments, the order covers everything from pensions to maternity allowances, but for many people, there is no annual review, because a number of social security benefits are automatically frozen, regardless of the impact on people who need that support to get by, regardless of the rise in household costs, and regardless of widespread opposition to the continuation of the freeze. Jobseeker’s allowance, child and working tax credit, local housing allowance, income support, child benefit, and the work-related activity group element of employment and support allowance have all been frozen. That means that people who are desperately seeking work, families with children, parents who are working hard but receiving poverty pay, and sick or disabled people will see their support frozen, although their household costs have risen significantly in the past year.

In December, the consumer prices index hit 3%, which means that families in and out of work who need the support of the social security system to get by will need to find extra money just to stand still. The Resolution Foundation has calculated that working families with two children will lose £315 a year as a result of the benefit freeze, and the Institute for Fiscal Studies has said that as a result of higher CPI rates, benefit entitlements will be reduced by an average of £450 per year by 2019-20. We know that this is the worst decade for wage growth in 210 years, and that as a result people who are in work but also in receipt of social security support have had their chances cut off at both ends. As costs rise, they cannot rely on work or social security to help them to keep up.

[Mr Jim Cunningham]

Another issue—I am sure that the hon. Gentleman will come to it—is that of the third child and the so-called rape clause. Nothing has been done about that.

[Neil Gray]

I entirely concur with the hon. Gentleman. He is right to draw attention to one of the Government’s most iniquitous and disgraceful policies. As he has said, no action has been forthcoming to address it.

The End Child Poverty coalition has said that it is because of the four-year benefit freeze that more than 50% of children in the UK’s poorest areas are growing up in poverty. Earlier today, at Question Time, the Minister defended the freeze, saying that overturning it would require primary legislation. I say, “Bring us that legislation and let us vote on it.” The evidence clearly shows the damage that is being done, and I would challenge any Government Back Bencher to vote for its continuation in the face of such evidence. It is time to end the freeze and lift children out of poverty.

Apart from anything else, the Government do not need to continue this, even by their own reasoning. Figures obtained by the SNP from the House of Commons Library show that while the four-year benefit freeze introduced by the Tory Government in April 2016 was intended to result in £3.5 billion of cuts by 2019-20, that figure could now be £5.2 billion owing to rising inflation. The decision not to uprate the bereavement support payment in line with inflation is completely unacceptable while the cost of funerals continues to rise at an incredible rate. What is worst is that the DWP’s own statistics show that 75% of recipients of the new combined payment who have children will be worse off, and that the figure rises to 88% for those who are bereaved with children and in work. The resignation of the entire board of the Social Mobility Commission in December should have been seen as the climax of the Government-driven poverty crisis, but today we see it being driven on.

There are some welcome elements in the order. I am glad that Ministers have used their discretion to uprate statutory sick pay, statutory maternity and paternity pay, adoption pay and statutory shared parental pay, all of which will rise by 3%. They may have done so in the light of a report from the European Committee of Social Rights. I quizzed Ministers about that report earlier, but they appeared to know little about what I was talking about. It states that social security provisions for the self-employed, the sick and the unemployed in the UK are “manifestly inadequate”. The UK is now “not in conformity” with a number of legal obligations in the European social charter, which is a legally binding economic and social counterpart of the European convention on human rights.

[Stephen Kerr (Stirling) (Con)]

The hon. Gentleman is making an impassioned speech and I respect his position on these matters, but it is worth asking this question: since 2016, the Scottish Government have had powers to top up reserved benefits—indeed, they have a wide range of powers in relation to welfare matters—so what do the SNP Government in Scotland intend to do in relation to those benefits?

[Neil Gray]

The hon. Gentleman will be aware that the new Scottish social security agency Bill is going through the Scottish Parliament so that we can bring in measures that allow us to make changes to how things are done down here. He will also be aware that we have put in place hundreds of millions of pounds of mitigation spending over the past few years, including to ensure that none of his constituents have to be impacted by the iniquitous bedroom tax.

[Stephen Kerr]

rose—

[Neil Gray]

I think we have heard enough, and I am sure that if the hon. Gentleman wishes to, he can make a speech later.

The order will not do much to make up for the lack of conformity that the European Committee of Social Rights has highlighted, and that Ministers seem so clueless about. Its latest report follows the High Court ruling on the UK Government’s changes to personal independence payments, which said that the system “blatantly discriminates” against people with mental health problems, and a report from the UN saying that Tory benefit cuts “violate human rights”. This Government have another new Secretary of State for Work and Pensions, who has thankfully accepted the High Court ruling on PIP. Perhaps it is time for her to take a fresh look at all the other areas of international criticism as well.

On pensions, Ministers will not be surprised at my disappointment that another year has gone by without any action on frozen pensions or to sort out the state pension inequalities faced by women. Accompanying the order are regulations—they are brought forward annually under the negative procedure—ensuring that the state pension uprating will not apply to people entitled to the pension living in certain countries around the world. My right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) and my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) have been pressing the Government on this matter since their election in 2015. It is an injustice that some people, who have earned the right to their pension like everyone else, have their payments frozen at the rate they first received for the rest of their life abroad. It is just not right that the pensions of those who live in some countries continue to rise while those of others are frozen. Some 550,000 British pensioners are affected, who represent 4% of all recipients of the state pension and half of all those drawing their pensions abroad.

[Mr Jim Cunningham]

I agree with the hon. Gentleman about overseas pensions. I am sure he recalls—I think this was last year or the year before—that a number of representatives from different countries came to lobby us about this situation, which has been ongoing for a number of years. I am sure that we have all received many emails on the subject.

--- Later in debate ---

[Neil Gray]

We have indeed, and I am sure I have been copied into the same emails that the hon. Gentleman has received. It is wrong that people still face this glaring injustice, and the new DWP team must look at it again to ensure that there is action upon it.

The DWP must also finally act to rectify another pension injustice: that suffered by women born in the 1950s. The WASPI campaign has been the clearest, most persistent and compelling of the dozens we have seen before us in the last two and a half years. It is a scandal that the UK Government continue to refuse to address this issue, which is not going away.

I turn to the draft Guaranteed Minimum Pensions Increase Order 2018. Under the old state pension system, which was made up of the basic state pension and the state earnings-related pension scheme, people built up their basic element through national insurance contributions, but built up SERPS depending on their circumstances. Some people—doing so themselves, or because their employer did it—were contracted out of SERPS. Contracting out occurred because it allowed both parties—the individual and the employer—to pay reduced national insurance contributions. However, to ensure some standard was maintained, the employer had to guarantee that their company pension would match at least the SERPS the employee would have received if they had not been contracted out. That is the guaranteed minimum pension, or GMP.

The system ran for a number of years between the 1970s and 1990s, but was discontinued by the Labour Government, and now the new state pension works in a completely different way. Complicated rules apply to uprating, depending on when the pension was built up. We know that people will be impacted in different ways, but people who were extensively contracted out may just receive the basic state pension, and for some this might come as a shock.

Clearly this is an extremely complex matter and we know that people are struggling to understand their circumstances. Our main concern regarding the order is that the UK Government ensure that people are adequately informed of the impact of the new state pension on their own pension pots.

Not all those who were contracted out were made fully aware of the impact on their eventual pension pot. While it is good that a minimum guarantee is linked to CPI, there are adverse impacts for some people. We understand that the Government’s changes to the state pension mean that any GMPs that people have accrued between 1978 and 1988 will not be uprated, and that a maximum of 3% each year will be uprated for GMPs built up between 1988 and 1997. This applies to those who have retired after 6 April 2016. Whether or not people benefit depends on their circumstances, and some people will get less money than they expected. People who were contracted out were not necessarily aware of what that meant at the time, or did not necessarily understand its implications, and they certainly could not have anticipated that their retirement income would be impacted by such future changes as the Government have made to the state pension. For those without further savings to fall back on, like many of the WASPI women, this can mean a loss in income. The UK Government should have better communicated the impact of these changes for those who were contracted out.

All in all, what this points to is the urgent need to establish an independent pensions commission. The Government continue to ignore the needs of pensioners, as well as the looming pensions and savings crisis we may well encounter in the future. The Government need to ensure that people’s retirement savings are on a sustainable footing so that future generations can plan for their future. The SNP has long called for the establishment of an independent pensions commission to ensure that employees’ savings are protected and that a more progressive approach to fairer savings is looked at as we move to a period in which defined benefit schemes are becoming a thing of the past and the new state pension begins to take effect. The need for that independent commission is greater than ever.

--- Later in debate ---

[Kit Malthouse]

I will carry on. The service has had 7 million views since February 2016. Notwithstanding that, there is obviously more work to do on communications.

The hon. Member for Airdrie and Shotts (Neil Gray) asked why bereavement support payments have not been uprated. A bereavement support payment is not a cost-of-living benefit and is paid in addition to means-tested benefits to protect the least well off, so it is not necessary to uprate it in line with the cost of living. Unlike bereavement allowance and widowed parent’s allowance, bereavement support payment is paid in addition to other benefits to which the recipient is entitled, helping those on the lowest incomes the most. The hon. Gentleman will know that the up-front payment for those with children has been increased from £2,000 to £3,500.

[Neil Gray]

Will the Minister give way?

[Kit Malthouse]

I will not; I do not really have time and the hon. Gentleman and his friends had plenty to say during the debate.

A wider point was raised by several Members that for me distils the difference between the Government and Opposition on this issue. There seems to be on the Opposition Benches a kind of Stockholm syndrome attachment to the old benefits system, despite the fact that it is obviously a fraud perpetrated on the poor, more often than not designed to keep them poor rather than to give them the tools and ladders to climb so that they can take control of their own lives and financial control of those of their families into the future. I understand and would never seek to doubt Opposition Members’ motivation to do the best by their constituents and the rest of the country, but for some reason they seem to think that that motivation applies only to them, rather than to Government Members as well. I reassure the House that the motivation of every Conservative Member of Parliament is the betterment and welfare of our fellow citizens, which is what the order is designed for. With that, it gives me great pleasure to commend the orders to the House.

Question put and agreed to.

Resolved,

That the draft Social Security Benefits Up-rating Order 2018, which was laid before this House on 15 January, be approved.

Pensions

Resolved,

That the draft Guaranteed Minimum Pensions Increase Order 2018, which was laid before this House on 15 January, be approved.—(Kit Malthouse.)

Smart Meters Bill (Programme) (No. 2)

Ordered,

That the Order of 24 October 2017 (Smart Meters Bill (Programme)) be varied as follows:

(1) Paragraphs (4) and (5) of the Order shall be omitted.

(2) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the Motion for this Order.

(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.—(Richard Harrington.)

Oral Answers to Questions

Neil Gray Excerpts

Monday 5th February 2018 Commons Chamber

[Ms McVey]

My hon. Friend makes a very good point, and I have actually met the tremendous work coaches in his constituency. I go out to speak to work coaches all the time, and they are saying to me that the change we are delivering through universal credit is the best thing they have ever delivered. The support they can give—[Interruption.] Rather than Opposition Members laughing, they would be well advised to come and join me or others in meeting work coaches. I will tell them how we know this is working: if it were not working, we would not have an extra 3.1 million people in work.

[Neil Gray (Airdrie and Shotts) (SNP)]

Contrary to the “SNP bad” broken record from the hon. Member for Gordon (Colin Clark), will the Secretary of State join me in welcoming the Scottish Government’s recently introduced flexibilities for universal credit payments, and will she consider implementing Scotland’s model down here, especially as her colleague in the Scottish Parliament, Adam Tomkins, has said he is “very much in favour” of them?

[Ms McVey]

The underlying principle of how we get people into work is working right the way across the United Kingdom. It is working in Scotland, and that is correct. Equally, we agree with giving extra powers to devolved Governments, and Scotland has the right to do things in its own way. As we pointed out earlier, however, some of the changes taken on board in Scotland have actually resulted in slower payment to people who need their benefits.

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[Mr Speaker]

Front Benchers will have to be very brief, because we are running short of time on account of the length of questions and answers. A pithy sentence, or whatever, will suffice.

[Neil Gray (Airdrie and Shotts) (SNP)]

What is the Secretary of State’s response to the report from the European Committee of Social Rights that said statutory sick pay and support for those seeking work or the self-employed is “manifestly inadequate” and therefore in breach of the legally binding European social charter?

[Alok Sharma]

I am happy to have a discussion with the hon. Gentleman on this point. All the policies we have put forward are based on being as fair as we can be to all recipients.