Department for Work and Pensions

Alex Burghart Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Alison McGovern]

My hon. Friend has made his point well. We all know that the DWP is failing because we see it every day, but why is that failure happening? I think it is pretty obvious from the DWP’s policies that it has radically misunderstood poverty. While its aims and objectives in dealing with poverty are all absolutely worthwhile and worthy, they will never get to the root cause of it.

The DWP’s policy paper sets out its next steps for action on poverty. It wants to help through the troubled families programme, and it wants to identify people with complex needs. It talks about addiction, and it talks about education. The problem is that while those are factors in people’s lives that are associated with poverty—of course lower educational achievement is a risk for people who grow up in poverty, and of course addiction is a problem in communities that have less wealth—it is possible to do very well at school and still be poor, and it is possible to be poor and not addicted to anything. It is possible for people to have excellent family relationships, to look after each other and be able to take care of their families, but still to suffer the consequences of low incomes, because the root cause of poverty is not any of those other things; it is not having enough money. What my hon. Friend the Member for Coventry South said about poverty wages was right, and that is why the DWP must change course.

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

The hon. Lady is making a powerful speech, and no one would question some of the things that she has said, but does she not understand that when people suffer from addiction—the terrible pain of addiction— they struggle to get into work, and to earn and look after themselves? Addiction is a root cause of poverty. [Interruption.] Of course it is; don‘t be ridiculous.

[Alison McGovern]

I thank the hon. Gentleman for his intervention, because he has illustrated exactly the point that I am making. I have every sympathy and every empathy with people who suffer from addiction and associated mental health conditions, but those conditions affect everyone in society. They are not solely about people who are poor. Moreover, there are plenty of people who just do not have enough money, and who do not suffer from any of those problems. The point that I am trying to make is that the DWP is failing because it has missed the central point. The cause of poverty is not having enough money, and it is our duty in the House to do something about it.

[Alex Burghart]

rose—

[Alison McGovern]

If the hon. Gentleman really wants to argue with me, then be my guest.

[Alex Burghart]

I very much want to argue with the hon. Lady. The truth is, is it not, that poverty is a result of some of the problems that people face in society. If those problems are removed, people are considerably less likely to be poor, because they are more likely to be able to work. I have met people who have started out in life from a very good position, but have suffered terrible heroin addiction and have consequently been unable to work. The reason those people have no money is that they have suffered from heroin addiction.

[Alison McGovern]

Let me try this another way. The people whom the hon. Gentleman has mentioned who are suffering from addiction deserve our sympathy, empathy and solidarity, and they deserve help, but so does the kid at school who is working hard, who has great teachers, but who goes home and sees his parents struggle. The cause of poverty is a simple thing: it is not having enough money. It is possible for the Government to have brilliant programmes in all other spheres and still fail to deal with the wound in our society that means people turning up at food banks and children who are unable not to be hungry during the holidays because they can no longer rely on free school meals.

I simply say to the hon. Gentleman, “Ask yourself this question: if we had dealt with every addiction problem in our country, would that necessarily solve the problem of poverty if wages were still too low and this Government were still hellbent on taking money, year after year after year, out of the welfare state which is there to support the family of that child who is working hard at school?”

What, then, has to change? We have to reassess the contributory principle as it affects families, and we have to decide that in this country we will ensure that families can make ends meet. That is why I—along with a number of other Members and the former Prime Minister Gordon Brown—have set out over the summer to try to establish the principles of a programme that could enable them to make ends meet.

I believe that the programme should look like this. Step one must be to end the policies that are breaking the principle of Beveridge’s welfare state. We know what they are. The two-child limit means that 800,000 families with three or more children who are currently receiving tax credit are at risk. While the Government say that the two-child policy will save them billions of pounds, we know that every child matters—every child counts for something—and that is why that policy cannot be allowed to continue. If it does, we know from all the evidence and the child poverty forecasts that it will drive up poverty for children in this country living in a household with three children or more. If anybody thinks that somehow knowing that the Government are going to punish the third child in a family will help to guide families as to family size, I simply say they have probably missed the fundamentals of reproduction. We do not hold children responsible for the actions of their parents, and our welfare state should not do that.

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

It is an honour to have the opportunity to talk in this important estimates day debate. I congratulate the hon. Member for Wirral South (Alison McGovern) on introducing the debate.

Record and rising employment is the central fact of the Government’s economic record. It is sometimes easy to brush over the fact that we now have the highest rate of employment in this country than at any time since the early 1970s. That is not only important on an economic level, although obviously it has wonderful economic benefits for the country, but extremely important on a social level and a personal level, because of the way it benefits families and communities and gives people opportunity and optimism that they otherwise might not have.

For four years before I came to this place, it was very much my privilege to serve as the director of policy at the Centre for Social Justice, which is a think-tank that looks at the root causes of poverty in the UK. That background is what lies behind my exchange with the hon. Member for Wirral South earlier. One can of course say that the root cause of poverty is people not having enough money. It is true that poverty is people not having enough money, but it is unquestionably the case that the reason why some people do not have any money is that they do not have a job in order to earn money, and that the reason why some people—not everybody at all—are unemployed is that something has gone badly wrong in their life, and that thing needs to be corrected with the help of public services, with the support of their family and with their own personal determination. That must always be an absolutely essential part of any welfare policy, which is why it is so important that the significant changes that have been introduced in the Department for Work and Pensions have been coupled to the work of the troubled families programme in the Ministry of Housing, Communities and Local Government. It is by helping people to overcome some of the root causes of poverty that we can help more people to move into the workplace and so help to support themselves and their families.

There is a group of people who are lucky enough and fortunate enough to come from stable homes, to get a decent education and not to suffer from addiction or any such problems, who still find it difficult to make ends meet, which is why it is extraordinarily important that any Government have an economic policy that generates jobs and drives up wages. The Government have been extraordinarily successful, without parallel, in the creation of jobs. Life has undoubtedly been harder in the generation of higher wages, but it feels like in recent months—over the past 15 months, I think—we have turned a corner on that score and, for the first time since the financial crisis in 2008, we are starting to see wages rise above inflation. Ultimately, that is excellent news for people who are moving into the jobs market and for people who are starting off on low salaries.

It must be remembered that none of that success was predicted by commentators before the 2010 general election. I remember in 2009 listening to a Bank of England economist forecast that the incoming Chancellor of the Exchequer would have to deal with unemployment of more than 5 million. In 2011, he repeated that the policies of the Conservative and Liberal Democrat coalition would unquestionably lead to record unemployment and a massive social security problem. That simply did not happen, because of the business-friendly policies that the Government adopted, which increased investment and business growth and saw employment rise in very many parts of the country.

It was a pleasure to sit and listen to the speech by my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke). I do not believe it can be an accident or a coincidence that his constituency has not traditionally had a Conservative MP, yet after seven years of Conservative employment growth in his area, it elected a Conservative. After seven years, following a major economic meltdown under the previous Labour Government, the Conservatives delivered the job growth in his area that Labour had been incapable of doing for the 13 years that it was in power. We see it not just in Middlesbrough, but in a whole range of seats from Mansfield to Stoke-on-Trent. This new era of Conservative representation in parts of the midlands and the north is a result of this policy, which has helped people to find jobs and improve their lives and the lives of their families. This has been termed the British jobs miracle, because unemployment is now at about 3.8% in the UK, compared with 7.5% in the euro area.

[Neil Gray]

I do not doubt that properly paid work is the best route out of poverty, but when will the hon. Gentleman’s so-called jobs miracle extend to children living in poverty? How can he explain what is currently going on when we see that two thirds of all children living in poverty do so in a working household?

[Alex Burghart]

The hon. Gentleman raises a very good point, but, as I have already said, we had a long period of employment, but with little or no wage increases. We have now started to come out of that period. What he will see is that, if wages and wage growth are maintained in the months and years ahead—as I have no doubt that they will be—we will start to see the number of young people in poverty go down. We will see that their parents have more money because they are in work and their wages are rising above inflation. I am sure that he would accept that point.

[Neil Gray]

Will the hon. Gentleman not accept that, while we wait, children remain in poverty? What are his Government doing? They are continuing to cut universal credit, which is supposed to help move these families away from poverty. Why is this continuing to happen? Why do they have to wait all this time for the never-never of jam tomorrow?

[Alex Burghart]

I do not believe that it is correct to say that the Government are taking money out of universal credit. I am sure the hon. Gentleman remembers the previous Budget when a considerable amount of additional money was put into universal credit. I think that he is, perhaps, slightly out of date on that score.

[Alison McGovern]

The hon. Gentleman has obviously missed the fact that working age benefits have been frozen for four years. That is a real terms cut. Will he just explain to the hon. Member for Glasgow Central (Alison Thewliss), who talked about a single parent with three children who simply cannot put any more hours a day into her working life, how, if benefits stay frozen, people are supposed to see their incomes rise and their children lifted out of poverty?

[Alex Burghart]

The hon. Lady makes a very good point about the benefits freeze. That is something to which I intend to return at the end of my remarks. It is unquestionably the case that the benefits freeze has hit people—and hit some people very hard. She is aware of why the benefits freeze was needed: it was needed because of the disastrous condition in which her party left this country’s finances when it left office in 2010.

The DWP is playing its role in helping people back to work and helping them to find, sustain and progress in work. If Members talk to work coaches across the country, they will find that those coaches now have the tools and a service at their disposal to help them to form a working relationship with the people they are seeking to help. They understand that people who come into the jobcentre are, effectively, in work to find work. The agreement of claimant commitments between the jobseeker and the jobcentre creates an environment in which both the work coaches and the people with whom they are working can get results. No one who has spoken to work coaches across the country can doubt in any way that this has been substantial improvement.

Universal credit, as it is rolled out and improved, is helping to make work pay. It has overcome the terrible problems of the 16-hour cut-off that was raised by my hon. Friend the Member for Copeland (Trudy Harrison). It has helped to overcome these crazy marginal tax rates that popped up at different points in the system. Obviously, it is being rolled out in a test and learn environment. As it is tested, so DWP has learned, which means that a range of improvements have been made.

As a member of the Work and Pensions Committee, under the chairmanship of the right hon. Member for Birkenhead (Frank Field), who is no longer in his place, I was particularly pleased that we managed to work with the Government to scrap the seven waiting days, to ensure that people received their money sooner, to see advances of up to 100% on full monthly payments to claimants, and to develop the landlord portal to make it much easier for housing benefit to be sent to landlords and so on and so forth. These are important changes, but I have no doubt that there are still additional beneficial changes to be made. There is further to go—much further to go.

The hon. Member for Wirral South mentioned the benefit freeze. I very much hope that, in the comprehensive spending review at the end of this year, the benefits freeze is ended and the headroom that the Chancellor has built up is put to good use.

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[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)]

It is a pleasure to respond to a vital discussion of how the Department for Work and Pensions supports the 22 million people who rely on our services.

We have heard a huge number of valuable contributions, including those of the hon. Member for Wirral South (Alison McGovern)—whom I congratulate on opening the debate—and my hon. Friend the Member for Copeland (Trudy Harrison), the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), my hon. Friend the Member for Truro and Falmouth (Sarah Newton), the hon. Member for Ellesmere Port and Neston (Justin Madders), my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), the hon. Member for Glasgow Central (Alison Thewliss), my hon. Friend the Member for Brentwood and Ongar (Alex Burghart), the hon. Member for High Peak (Ruth George), and my hon. Friend the Member for Bexhill and Battle (Huw Merriman). Later in my speech, I will respond to some of the key points that have been raised.

I have been in my post for three months, and over that time my key focus has been on supporting the most vulnerable in our society. No one in the Government wants to see poverty rising, and, while the latest “Households below average income” statistics, from 2017-18, do not reflect the £1.7 billion-a-year cash boost for our welfare system that was announced in the Budget, the Secretary of State and I recognise that there is more to do.

We know that children in households in which no one works are about five times more likely to be in poverty than those in households in which all adults work. We are committed to helping lone parents into jobs that are flexible in relation to their caring responsibilities, and more than 1.2 million are now in work. To help parents into work, the Government spend £6 billion on childcare each year. We are able to do that because we have doubled the number of free childcare hours to 30 a week for nearly 400,000 working parents of three and four-year-olds; introduced tax-free childcare which is worth up to £2,000 per child per year; and made changes in the flexible support fund to help people to pay up-front childcare costs. However, we recognise that we need to continue our work in this area. That is why the Secretary of State and I have publicly committed ourselves to tackling poverty, and child poverty in particular.

As we get closer to the spending review discussions, my ministerial colleagues and I are reviewing our bids, in collaboration with other Departments, to ensure that those who can work do work, and that those who cannot are supported. I can confirm that there are no plans to extend, or maintain, the benefit freeze after March 2020.

[Alex Burghart]

I thank the Minister for the commitments that he has just made. Will he also tell us what more the Government can do to ensure that vulnerable claimants can have access to universal credit?

[Will Quince]

My hon. Friend has made a very good point. We know that about 20% of people seek help when claiming universal credit. That is why we introduced the Help to Claim service, working with Citizens Advice and Citizens Advice Scotland. However, I am acutely aware that a number of vulnerable groups in my portfolio—care leavers, prison leavers, survivors of domestic abuse, and those who are homeless or sleeping rough—need extra support, and the Secretary of State and I are carefully considering a number of further options ahead of potential spending review bids.