Welfare Reform and Work Bill

Alison McGovern Excerpts

Monday 20th July 2015 Commons Chamber

[Hannah Bardell (Livingston) (SNP)]

I rise to urge the House not to give the Welfare Reform and Work Bill a Second Reading.

On the day of the Budget announcement, I, like many of my colleagues on the SNP Benches and many in society, watched in horror at Conservative Members jeering and cheering as the Chancellor announced swathes of cuts that will hit the poorest and most vulnerable in our society hardest. When I was elected by the good people of Livingston to this House, I anticipated some aspects of Dickensian tradition, largely framed around the traits and traditions of Westminster, but not for one minute did I expect that we would be taken back to Dickensian times by a Government hellbent on dividing our nation in such a regressive way.

The Conservative Government have claimed that they have

“a long-term economic plan to move the nation back to where we should be. This offers that and will reward hard-working families.”

We are certainly going backwards. The rhetoric that the Conservatives use in this Chamber about hard-working families and aspiration is fast wearing thin for many of us. Apart from anything else, when we delve into the detail, what we find is deeply worrying.

Let us look at exactly what the Government plan to do for our so-called hard-working families. The Conservatives will rename the Child Poverty Act 2010 the life chances Act. I spent a number of years in the marketing industry and recognise that this is rebranding on a grand scale. Perhaps the Chancellor is in the wrong job. I have taken the advice of the hon. Member for Islington South and Finsbury (Emily Thornberry) and looked at the impact assessment that came out very recently. Paragraph 33 says of the life chances Act:

“The proposed changes enhance the life chances of children as they ensure that households make choices based on their circumstances rather than on taxpayer subsidies. This will increase financial resilience and support improved life chances for children in the longer term.”

Let me explain why SNP Members do not believe that to be the case.

The Scottish Trades Union Congress says that the “so-called” living wage is

“simply a cheap gimmick aimed at undermining…a meaningful living wage”

and that

“continuation of the public sector pay gap is…a kick in the teeth for hard-working public sector workers.”

The Scottish Council for Voluntary Organisations said that the Budget was an attack on the poorest and most vulnerable communities by an “economically illiterate” Chancellor who has admitted that this is not about tackling the deficit, as he said that it was part of his push for a low tax, low welfare society. In SCVO’s view, he was

“demonstrating a cruel disregard for the impact this will have on hundreds of thousands of people’s lives.”

Barnardo’s has stated that renaming the Child Poverty Act 2010 the “life chances Act” sends the message that eliminating child poverty is no longer an aim of this Government. It is clear that the Bill will push more children, families and vulnerable people across Scotland and the UK deeper into poverty. Rebranding child poverty plans as “life chances measures”, and completely removing any legal obligation to meet those targets, only proves how badly this Government are failing our society on welfare. As indicated by the House of Commons Library, the Social Mobility and Child Poverty Commission’s “State of the Nation” report from October 2014 stated:

“Modelling for the Commission illustrates the scale of the challenge. It projects that—based on current OBR forecasts for employment and wage growth—relative poverty (before housing costs) will rise to 21 per cent by 2020, 11 percentage points above target, and absolute poverty will rise to 24 per cent, even further behind the target of five per cent. This is likely to be an optimistic view as it ignores the impact of the further cuts to welfare benefit entitlements that are pencilled into current plans for deficit reduction in the next Parliament.”

Those plans are no longer pencilled in; they are in black and white for all of us to see. It is crystal clear to me that the Conservatives cannot meet their targets or fulfil their promises to folk across the UK, so instead they will just rebrand and repackage swathes of cuts to make it sound as if we are getting a better deal. It simply will not wash.

Another genius rebranding exercise by the Tories has been the introduction of the so called “living wage”—which, in reality, is a small increase in the minimum wage, up to £7.20 and to £9 by 2020—and the Chancellor has blatantly stolen the terminology used by the Living Wage Foundation that has set the living wage rate at £7.85 outside London and £9.15 in London. Rhys Moore, director of the Living Wage Foundation said:

“Is this really a living wage?...The Living Wage is calculated according to the cost of living whereas the Low Pay Commission calculates a rate according to what the market can bear. Without a change of remit for the Low Pay Commission this is effectively a higher National Minimum Wage and not a Living Wage.”

He went on to say that, to add insult to injury, the current calculation is based on workers receiving tax credits, which are also being cut.

Let us move on to tax credits and universal credit. The four-year freeze starts in 2016 and will affect around 577,000 families in receipt of child benefit in Scotland, and an overlapping 468,000 in receipt of housing benefit. More than a third of a million households in receipt of tax credits will also lose out. The Conservatives claim to be the workers’ party, but that claim could not be further from the truth as they lower the total amount that a household can receive in benefits to £20,000 outside London, and £23,000 in Greater London. In the words of charity Barnardo’s:

“This will significantly reduce the income of some very poor families.”

Worse still, in the Trade Union Bill—yet to be debated by this House—the Government plan to introduce standards for unions when voting for a strike that not even we as politicians are required to meet.

Let us consider the proposals for lone parents and other “responsible carers” in receipt of universal credit. We know that they are not currently subject to “work preparation” requirements until their youngest child reaches the age of three, and they do not have to be available for and look for work until that youngest child reaches five. The Bill reduces the age thresholds for work preparation to two, and for full work-related requirements to three. Let me be clear: the SNP is abjectly opposed to the capping of benefits such as carer’s allowance, child benefit, child tax credits, severe disablement allowance, and widow’s pension. The people who receive those benefits are some of the poorest and most vulnerable in our society, and it is abundantly clear that there is no level to which this Conservative Government will not stoop as they attack those vulnerable groups.

Instead of considering how we can properly protect and support folk who have already faced significant challenges in their life, we have a Government who cannot see past reducing a deficit, and will do so at all costs. This is an “at all costs” attack on the sick, the poor, the disabled, the elderly, and the many families who are working and trying their best to get to the end of the month without getting into debt. This Government’s cuts will affect the working poor, so that instead of being supported to better themselves, those in work will be further marginalised and have their benefits cut. Barnardo’s has noted that:

“A lone parent working full time on the minimum wage for 37 hours a week with two young children would lose £1,200 a year as a result of changes introduced from April 2016, even after accounting for the increase in the minimum wage.”

[Alison McGovern (Wirral South) (Lab)]

The hon. Lady is making an important point. Does she think that all lone parents are able to work 35 hours a week?

[Hannah Bardell]

I believe we must have benefits that are suited to the situation, and the Conservative proposals will not do that.