Welfare Reform and Work Act

Alex Burghart Excerpts

Wednesday 21st March 2018 Westminster Hall

[Dr Whitford]

I will come to that point later in my speech, if the hon. Lady is happy to wait.

In addition, carers are now subject to conditionality and treated as jobseekers, regardless of what their caring commitments are. That means that they may be open to sanctions. In 2013 we had the infamous bedroom tax, which thankfully in Scotland we have been mitigating, but which has impacted on people with disability, who will lose 14% of their housing benefit if they are deemed to have a spare room. Many disabled people require additional space, whether that is for complex equipment or because they need to sleep separately from their partner, or because they routinely or occasionally require someone to stay over when they are not well.

With the Welfare Reform and Work Act we also saw the removal of the work-related activity group component from employment and support allowance. We spoke out against that repeatedly. Taking £30 a week away from someone who has been defined by DWP assessors as not fit to work will most certainly not get them back into work. That impacts particularly on people recovering from major illness. As a cancer surgeon, I have seen for myself the impact on people who have gone through a year of intense surgery, radiotherapy and chemotherapy and the time it takes to get back to work. We are talking about extra heating, because they are at home. In England, we are talking about prescription charges and car parking charges at hospitals, both of which, thankfully, patients in Scotland do not have to pay. Is it any wonder that this Government have been criticised by the United Nations for breaking the convention on the rights of persons with disabilities? It has been a relentless attack.

The stress has increased the mental health issues suffered by people with disability. A survey has shown that over 40% have at some time considered suicide. What kind of society are we, if we are not willing to look after those who are vulnerable? We can judge a society by how it looks after its most vulnerable. As these disability benefits come to Scotland, it is our aim to use a human rights approach and ensure that dignity is at the centre of how we treat people.

Carers should also be supported and valued. They save the state millions of pounds by providing virtually free care. In Scotland, one of the first Acts that will come in next year will increase the carer’s allowance to at least the level of jobseeker’s allowance. It is little enough, but it is at least a declaration of intent. It is envisaged that employment support allowance is to support those who, due to their disability, are simply unable to work. PIP is meant to allow those with disability to reach their full potential. We should not be sticking people in their houses, because we take away their mobility, and then saying, “We are trying to get them into work.” People with disability who are working have extra costs, and that is the whole point of PIP, so the Government should put their money where their mouth is.

We also know that child poverty is rising and is expected to rise further. We have seen it climb by about 5%. The poorest areas in the UK now have child poverty rates of around 50%. How can that be right, when we know the impact that will have on children? But while we talk often about child poverty, we should recognise that it is actually family poverty, and that children cannot be separated from the experience of their family. Their income has been hollowed out since 2010. We saw the benefit cap in 2013 set for families at £26,000 a year. That affected about 20,000 families. The Welfare Reform and Work Act 2016 cut that to £23,000 in London and to £20,000 elsewhere in the UK. That affected 88,000 families, who lost either £3,000 or £6,000 from their income.

In 2011 we saw the local housing allowance brought in to cut what was paid for those living in the private sector. It reduced housing allowance from the median in their area to 30%. But in 2016 that was frozen and in a third of areas it does not even come close to 30%. In London, housing benefit for those in the private rental sector will cover only 16% of their housing costs, meaning that they fall about £1,000 a month short. That is significant for anybody’s wallet, but for those at the lower end of income earnings it is a severe hit. That has led to over 4.5 million people in the private rented sector struggling as rents have soared.

In 2016 the Government cut the family premium that was allowed with a new claim or a new birth, leading to a loss of £907. The bedroom tax also affects families, particularly in situations of separation or divorce, because the parent with minor caring responsibilities is not recognised. For example, a man—most likely—now living on his own in a small flat is not allowed a bedroom that would enable his children to stay over when he has them for the weekend. What does it say about us that we are not trying to strengthen families, but actually trying to undermine them?

Tax credits, which had such a big impact on child poverty, have faced attrition since 2011, when the first thing to go was the baby element, removing over £500. The 2012 changes saw families over £700 worse off. We all remember the haggling in the Chamber about changes to tax credits and the Chancellor stepped back from doing it after the Lords objected, but that was because he knew that those tax credit changes were simply hidden within universal credit and that, therefore, eventually they would hit everyone. The Government have removed the family element for the first child, again over £500, and now tax credits are claimable for only the first two children. The third child in a family loses out £2,780 a year. That has a huge impact on such families.

Universal credit has also reduced the work allowance. That means that it will often not be worth the while of the partner in a family—the second earner—going out to work, because they would lose so much and, particularly when childcare is taken into account, could end up worse off than if they did not take the extra work. The Government always talk about making work pay, but they do not always follow through.

The policy from the 2016 Act that has had the biggest and widest net, dragging more people into poverty, is the benefit freeze. Again, that comes on top of a 1% cap that was in place from 2013. The holding down of all working-age benefits has been in place for a number of years.

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

Will the Scottish National party and the Scottish Parliament use the powers they have to raise taxes in order to end the freeze on benefits in Scotland?

[Dr Whitford]

We are already looking to raise more money to mitigate some of the cuts from here but, frankly, with our budget dropping over 8% between 2010 and 2020, it is simply not possible for a Government to mitigate everything that comes from here. This place has to take responsibility. We are already spending £450 million on mitigating changes that came from here. So all the hon. Gentleman is asking is that the Scottish Government should keep sending their budget back to Westminster.

[Alex Burghart]

If the benefits freeze was to be unfrozen in Scotland, people in Scotland would be receiving additional benefits that people in the rest of Britain would not receive. Consequently, it would seem fair if that came out of Scottish tax take. The Scottish Parliament has the ability to raise taxes, but the hon. Lady is declining to do so. Why is that?

[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.

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[David Linden (Glasgow East) (SNP)]

I warmly congratulate my hon. Friend the Member for Central Ayrshire (Dr Whitford) on securing this important and timely debate. I have come to the debate to offer my views from a practical, not an ideological, point of view. I pride myself on being a constituency MP. When I go to my surgeries in Parkhead, Baillieston, Easterhouse or Cranhill, people do not tell me how wonderful the system is. When I go to the jobcentres that are left in my constituency, because the UK—

[Alex Burghart]

I am also a constituency MP and I take my casework very seriously. Does the hon. Gentleman acknowledge that it is not the nature of casework that people come and tell us when things are working? People come and tell us when things are not working. Naturally, we see an unrepresentative portion of the population.

[David Linden]

As well as being a constituency MP who does surgeries, I spend two hours every week door-knocking in my constituency. I do not regularly find people opening their door and saying to me, “This welfare system is absolutely fandabbydozy.”

This week marks two years since the Welfare Reform and Work Act 2016 implemented some of the most punitive cuts from this Government. Some of those were a fresh round of cuts, and some built on the cuts made in the Welfare Reform Act 2012. This debate allows us the opportunity to shine a bright light on the damage caused by those punitive welfare reforms, which have had a direct impact on some of the most vulnerable people in my constituency. I will address two policy areas in my remarks: first, the punitive benefit freeze, which leaves people out in the cold, quite literally, while the cost of living soars, and secondly, the medieval two-child policy and abhorrent rape clause.

Figures commissioned by the SNP and put together by the Library show that, based on the spring statement 2018, between 2018-19 and 2020-21, the benefit freeze will save an additional £3 billion compared with what was forecast for those years in the summer Budget 2015. In November 2017, the Joseph Rowntree Foundation said that the benefit freeze means that between 2010 and 2020, a couple with two kids will be £832 a year worse off. It has also said:

“The freeze is the single biggest policy driver behind rising poverty by the end of the Parliament.”

The impact of the poverty premium means that people on low incomes face higher costs as a proportion of their income than those on higher incomes, due to the nature of products and services. People on low incomes often cannot pay for goods or services by fixed direct debit, but for many things, such as mobile phone bills, energy bills and bank cards, companies only offer discounts based on people signing up for a direct debit.

Economic shocks such as the breakdown of a car or a washing machine are far more significant for people on a low income. I know that from direct experience, having spent two years working at Glasgow Credit Union. One of the most heart-breaking things about being in that job was people coming to me for loans to pay for a washing machine that had broken down or for school uniforms.

Sadly, that is the reality we are now in. I am disappointed that that lived experience did not come into the previous speech. We see it week in, week out when we do our constituency surgeries. With all those factors, the benefit freeze is an additional financial burden on disadvantaged people. The Government must urgently restore the real value of benefits by scrapping the freeze.

The second issue I will raise is the Government’s medieval two-child policy that would frankly make China blush. The idea that in 2018, we are saying to families, “Two children in your family—that’s it. The state won’t pay for any more than that,” sends a strong signal from this place. [Interruption.] If the Minister is unhappy with that, I am more than happy to take an intervention—absolutely not.

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[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?

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[Alex Burghart]

As the hon. Gentleman will have heard from my opening remarks, there are two issues at play. The first was the broken economy. As I have said, if the Government had not taken action to dramatically reduce public spending—[Interruption.] Our deficit has been cut. The hon. Gentleman suggests from a sedentary position that that was in 2008 and the situation is different now. Our deficit has been much reduced by the actions of this Government and the coalition Government over the past eight years, but it has not yet been fully eliminated.

Once the deficit is fully eliminated, we will be able to do the most important thing, which is to start to reduce debt as a proportion of GDP. That is essential, because at the moment we are spending more on servicing our debt than on defence, on education or on our police forces. None of us wants that. Effectively, we have created a new “Department of Debt” that sits in Whitehall and gobbles up money. I want to see the budget for that Department cut year by year, but only the steps that this Government are taking will achieve that.

Let me return to my point about the broken welfare system. Regardless of what happened in 2008, it was essential that the welfare system be reformed to encourage more people to take more work and benefit from all the associate factors surrounding it. We all know that there is great dignity in work and that it provides pride, purpose and a great example to children. It is what we want for ourselves and for our constituents.

[Rachel Maclean]

My hon. Friend is making an excellent speech. Does he recognise that well over half a million fewer children are living in workless households now than in 2010? Children are five times more likely to be in a low-income household if they are in a workless household than if they are in a household in which all adults work. There is a knock-on effect for the next generation.

[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.

[Dr Whitford]

Will the hon. Gentleman give way?

[Alex Burghart]

I will happily give way to the hon. Lady.

[Mike Gapes (in the Chair)]

Order. I am conscious of time. At least two other Members wish to speak. They will not be able to speak if there are any more interventions and if the hon. Gentleman does not conclude his remarks soon. I intend to start calling the Front-Bench spokespeople at 10.30 am.

[Dr Whitford]

Thank you, Mr Gapes. I intervened merely to point out that people’s circumstances change, so if they end up redundant, ill, or whatever, and then apply for benefits and have three or more children from better times, they will not receive that support.

[Alex Burghart]

No, but they will have additional support to get back into work and they will have the benefit of universal credit to progress in work when they do.

I will go back very quickly to the Scottish perspective, because something that is obviously completely unacceptable in the position of the Scottish National party is that they want to fix the problem but they do not want to do it themselves. I find that very peculiar from a party that seeks independence, because of course if Scotland was independent the only way that it could get rid of the freeze would be by paying for it out of Scottish coffers, which would require an increase in tax, and that is something they have declined to do.

I was very surprised when I questioned Jeane Freeman, the Scottish Minister for Social Security, about this issue in a Select Committee. She failed to answer the challenge, just as SNP Members have done today. The SNP can raise taxes now to pay for this, but it chooses not to. It has therefore decided not to prioritise this policy.

Obviously there are always steps we can take to improve the welfare system. Universal credit, which is coming online, will help people to overcome major barriers to employment. It will help people overcome addiction or mental health problems and move back into work. On disability, we have an admirable aim to halve the disability employment gap, and I believe that assistive technology will help us do that. I would like to see us increase work incentives by adjusting the taper as and when the budget allows.

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[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.