Welfare Benefits Up-rating Bill

Debate between Richard Graham and Helen Goodman

Monday 21st January 2013 Commons Chamber

[Helen Goodman]

It is a great pleasure to follow the right hon. Member for Ross, Skye and Lochaber (Mr Kennedy), who made some telling points about the problems with the Bill.

I rise to speak in support of amendment 12, moved by my right hon. Friend the Member for East Ham (Stephen Timms). The proposals to cut the real income of the poorest are ugly and unjust. I am pleased that the Secretary of State is in his place on the Front Bench. He frequently parades his Christian beliefs, so I shall begin by quoting from the Churches Regional Commission report, “Am I My Brother’s Keeper?”, which states that the switch in indexation

“represents an on-going erosion…effectively ratcheting up poverty long into the future.”

By 2015, the effect of 1% indexation compared with indexation in line with the CPI to a person on JSA or ESA will be a loss of £156 a year; that is a 4% cut in real terms for those least able to afford it. If the Office for Budget Responsibility’s inflation forecast is wrong, the situation could be even worse.

As we consider the Bill we need to look across at all the changes that the Government are making—we cannot look at this measure in isolation. To see the impact it will have on people, we need to look across the board. I now receive a lot of correspondence from constituents on ESA, who are particularly badly hit. I want to tell the House about one person. Her £66 a week rent is paid by housing benefit. In April, her benefit will go up to £71.70. Out of that, she pays £10 a week for electricity, and £6 a week for water rates. Like many of my constituents, she still uses coal for heating, and three bags of coal—just to inform the Minister, because I do not suppose he is up with coal prices—will cost her £19.50 a week. Her return bus fare to the town—she lives in a village—is £4 a week, and her bedroom tax is £9.24 a week. All of that will leave her with £22.96 for food, cleaning, all household goods and clothes. I submit that even the hon. Member for Gloucester (Richard Graham) could not live on £22.96 a week. If he actually considered the sums of money that ordinary people will be expected to live on, he would understand the outrage we on this side of the House feel at the continuous erosion of the social security net.

[Richard Graham]

I am grateful to the hon. Lady for giving way after her passionate outburst. Yes, of course I share her concern about people on not very much money. My issue with the speech made by the hon. Member for Chesterfield (Toby Perkins) was his assumption that we were talking about people earning £35,000 a year. I do not think he understands that the average wage in my constituency is less than £25,000. We are talking about young nurses—people whose salaries are capped and who are seeing people on benefits get significantly larger increases. That is the issue at stake this evening.

[Helen Goodman]

I am sorry, but the hon. Gentleman evidently does not understand the Bill. He evidently does not understand that people on those low wages will also lose out through the cuts to working tax credits and housing benefit. In fact, the whole point about the Government’s strategic, political mistake is that more people in work will lose out from the Bill than those who do not work. Furthermore—if he will allow me to do a little more arithmetic for him—a person currently on ESA will get a 70p increase in April, but a person earning £25,000 and receiving a 1% increase will get a £5 a week increase. Can he not understand that 70p is quite a lot less than £5?

[Richard Graham]

rose—

[Helen Goodman]

I am not going to give way to the hon. Gentleman again, because other Members want to speak.

I want to address the Minister. When, in the previous Parliament, we introduced the Bill that became the Child Poverty Act 2010, he gave a great deal of evidence from the Family Budgeting Unit in York and the people at Loughborough about the minimum income standard—the minimum income guarantee. He said that what the Labour Government were doing was absolutely shameful and that benefits were not high enough. Now, however, we see that he is prepared to cut benefits in a way that we never did. The testimony to the great success of this Government’s benefit policy is the expansion in the number of food banks: in Durham last year, the food bank fed 4,455 people, of whom 1,390 were children. That is utterly shameful. To demonstrate that it is not possible to live on £22.96 a week, I am going to try to do so during the February recess. Neither I nor, I believe, any other hon. Member seriously believes that they could live on £22.96 a week. We have to look at this in context.

The Bill is unjust because it is simply not fair in the treatment of people in work and those out of work, and the treatment of people on high incomes and people on low incomes. When the dole was introduced in 1912, it was approximately a fifth of average earnings, and so it stayed until 1979, as the hon. Member for Brighton, Pavilion (Caroline Lucas) said. By 1989, it was 15.8% of average earnings; by 1997, according to the House of Commons Library, it was 13.2%; and by 2015, it will be 11.1%. It is absolutely clear that the Government are trying to take it back to the very lowest point at the very bottom of the recession, irrespective of the impact on people’s normal standards of living. Everything the Prime Minister has said about those with the broadest shoulders bearing the biggest burden is seen to be utterly empty and fallacious when the Government introduce such a Bill.

There has been an ugly attempt to divide the poor between the “deserving” and the “undeserving”—taking us back to the 19th century—between sheep and goats, between strivers and shirkers, and between with those with their curtains closed and those with their curtains open. In my constituency, if people’s curtains are closed at 9 o’clock in the morning, it is probably because they are on nights and they are trying to catch up with their sleep. The Churches Regional Commission states that

“of all the words to describe those who depend on welfare, “feckless” has to be the one that rankles most.”

This attempt to divide has failed, however, on the factual ground that two thirds of those affected by the Bill are in work. The housing benefit and tax credit changes will affect far more people.

The right hon. Member for Wokingham (Mr Redwood), who unfortunately is no longer present, tried to tell us that these changes will improve work incentives. As the noble Lord Freud said in the other House,

“there is an inevitable trade-off between the level of benefits and incentives to work. Raising benefit levels would undoubtedly hamper the work-incentive”.—[Official Report, House of Lords, 13 October 2011; Vol. 730, c. GC498.]

Obviously, that is setting to one side the fact that in order to work harder the poor must be made poorer, but the rich can be made richer.

Let us look at the impact of the changes and the context. In my constituency, 7,200 people will lose out as a result of the Bill, by an average of £500; that will take £3.5 million out of the local economy. If the International Monetary Fund is correct, the second round effect will be even greater, at £4.5 million, so the net upshot is an £8 million loss to the economy of my constituency. It is no wonder shops are closing and small business are folding. That is absolutely illogical, and it goes against what the Chancellor of the Exchequer said about the need to let the fiscal stabilisers work.

--- Later in debate ---

[Helen Goodman]

Yes, I can. It is absolutely obvious: we were in the middle of a very deep recession, which the hon. Gentleman seems conveniently to have forgotten. Of course the number of unemployed people has gone up, but the previous Labour Government helped all sorts of other people back into work—365,000 lone parents, for example. If he would care to look at a map of where incapacity benefit and ESA claimants live, he will see that it looks like a map charting the industrial revolution in the 18th century. Those benefit costs clearly reflect the overhanging legacy of the decline of heavy industry. It is totally unreasonable and unfair to punish the people who happened to work in heavy industry.

Once again, we come to the issue of unemployment. We in the north-east have the highest rate of unemployment in the entire country—9.9%. We have seven people chasing every job vacancy. Whether the gap between the increase for a person on £25,000 a year and the increase for a person on JSA is £4.30 or £4.20 will make no material difference to people’s capability or willingness to find a job, which is why we need a completely different approach to job creation. My constituents want to go back to work.

[Richard Graham]

Will the hon. Lady give way?

[Helen Goodman]

No, I will not. The hon. Gentleman will have a chance to make his own speech. Many hon. Members have given way to him in the course of the debate.

The Chancellor of the Exchequer has broken another promise he made in 2011. He said:

“I also want to protect… those who, through no fault of their own, have lost jobs and are trying to find work”.—[Official Report, 29 November 2011; Vol. 536, c. 802.]

He is patently failing to protect those people. By definition, people on statutory sick pay, statutory maternity pay, statutory paternity pay or statutory adoption pay are not going out to work, but they, too, are seeing their incomes fall, and that is at a time when they have new children coming into the family and need more support.

Tackling Poverty in the UK

Debate between Richard Graham and Helen Goodman

Thursday 10th June 2010 Commons Chamber

[Helen Goodman]

I do not know whether my experience in my constituency has been exactly the same as that of my right hon. Friend, but he reinforces the significant role that credit unions can play, and we urge the Government to maintain support for them.

[Richard Graham (Gloucester) (Con)]

In my constituency and around the county of Gloucestershire, the three credit unions that still exist—in Stroud, Forest of Dean and Gloucester—are all very small and only scratch the surface in trying to reach those on housing estates who are most vulnerable to loan sharks. Under this Government, we will try, with the help of a community foundation and social enterprises, to consolidate those three credit unions into a county-wide credit union that will be bigger and more solid and sustainable, and will reach more of the most poverty-stricken people.

[Helen Goodman]

I am of course interested to hear about what is going on in Gloucestershire. I do not know whether DWP Ministers have yet had time to engage with their colleagues at the Department for Business, Innovation and Skills, but the regulatory issues mentioned by my right hon. Friend the Member for Birkenhead (Mr Field) clearly need to be addressed in conjunction with that Department.

I should like to turn to the issue of free school meals, on which I hope to be able to offer the new ministerial team some constructive advice. I do not know if they have seen the letter that the Secretary of State for Education sent to my right hon. Friend the shadow Education Secretary on 7 June, in which he says that he plans to discuss the whole issue of free school meals with DWP colleagues. Labour Members are disappointed that the Secretary of State has decided not to go ahead with extending the eligibility of free school meals to the 500,000 children in primary schools whose parents are on working tax credits. He says in his letter:

“I am sympathetic to the arguments for extending eligibility—though surprised that a decision to do so was taken before any evidence on the impact on attainment could be collected from pilots.”

That argument is not wholly unfamiliar to us. However, I would like the Minister to understand that we decided to go ahead with extending eligibility to those 500,000 children not only because we expected it to have a beneficial impact on their performance in school but because it is estimated that it would lift 50,000 children out of poverty and would be a serious improvement to the quality of work incentives. I strongly urge him to ask his officials if he could look at the analysis of the most cost-effective measures for addressing child poverty, because I believe he will see, as we did, that this is one of the most effective things that could be done. As the Education Department team are not here, I point out that another advantage of the measure is that it does not come off the DWP budget. This delay will be seriously disappointing for large numbers of families across the country. I urge the Government not to begin their tenure by repeating Mrs Thatcher’s snatching of the milk.