Inequality and Social Mobility

Alison Thewliss Excerpts

Wednesday 12th June 2019 Commons Chamber

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

I am grateful for the opportunity to take part in this important debate, and I thank the Opposition for moving the motion.

The IFS’s recent report, “Inequalities in the twenty-first century”, which partly prompted today’s motion and debate, states:

“Too often the debate takes place in silos, focusing on just one type of inequality, a specific alleged cause or a specific proposed solution.”

Indeed, looking back at debates in this House over the past few years—when we had the time to divert our attention from the Government’s Brexit shambles—there have been many discussions on issues such as changes to housing benefit, scrapping student nurse bursaries, freezing working-age benefits, the impact of the state pension changes on women born in the 1950s, income tax changes that disproportionately benefit those on the highest incomes, and universal credit, which in itself covers a plethora of issues that could be the focus of this debate—the two-child limit, the five-week wait or the cuts to disability premiums. Although Members can argue back and forth, as they have done and will again, about the merits and demerits of these individual policies and others, what connects these disparate issues is a sense that the UK Government’s priorities are not geared to tackling inequality across these isles. The Secretary of State is right to say that we all came into politics to improve the lives of others, but we differ on the route to improving people’s lives. The evidence shows that the Government are not tackling burning injustices; they are fanning the flames with petrol.

This debate was originally scheduled for 22 May, which would have been apt as that was also the day when Philip Alston, the UN rapporteur on extreme poverty, released his final report on the impact of austerity and human rights in the UK. If anything, however, having the debate today makes it even timelier, given that the UK Government’s denial and abnegation of the report’s findings have been almost as concerning as the report itself. We must remember what Mr Alston actually said:

“The bottom line is that much of the glue that has held British society together since the Second World War has been deliberately removed and replaced with a harsh and uncaring ethos.”

It seems clear that, collated together, the issues I mentioned earlier, and others, have contributed to some of the stark reading contained in the rapporteur’s report. I hoped that, given the time that has now passed in which to reflect on Mr Alston’s findings, the Minister or the Government would offer a clearer outline of what the Government intend to do about the concerns raised, today or in the near future. Sadly, that has not been offered.

We contrast what we hear in the report about the UK Government’s issues with Mr Alston’s conclusions about the devolved Administrations. He said:

“Devolved administrations have tried to mitigate the worst impacts of austerity, despite experiencing significant reductions in block grant funding and constitutional limits on their ability to raise revenue. Scotland and Northern Ireland each report spending some £125 million per year to protect people from the worst impacts of austerity and, unlike the United Kingdom Government, the three devolved administrations all provide welfare funds for emergencies and hardships.

But mitigation comes at a price, and is not sustainable. The Scottish Government said it had reached the limit of what it can afford to mitigate, because every pound spent on offsetting cuts means reducing vital services.”

Those are Mr Alston’s conclusions.

So many factors can directly and indirectly determine a person’s life chances, including family income, status and health. Although Governments cannot override or entirely supersede all these factors, they can and must try to put in place measures that at the very least do not widen or exacerbate them. Unfortunately, the UK Government’s record in the areas that can determine this appears to show that many of their measures would appear to do just that. Page 6 of the IFS report shows that there has been a sharp rise in the incomes of the highest earners, with the incomes going to the top 1%—the richest in this country—now being 8% of the total incomes, which represents an increase from 3% in 1970. The average pay for a chief executive officer in a FTSE 100 company is now 145 times higher than that of the average worker in those same companies—increasing from 47 times higher in 1998—while household earnings have stagnated at the bottom end of the income distribution. After adjusting for inflation, the lowest earning households today can earn little more than their counterparts did in the mid-1990s.

No one policy can end inequality or progress social mobility, which is why it is essential that all these areas—taxation, income distribution, social security, education, childcare and other policy areas—are looked at collectively and cognisance is taken of how interconnected and crucial a role they play in ensuring that future generations are more equal.

I wish, therefore, to focus on education, social security and tax changes, and policies directly about or impacting the state pension, as I believe that it is only by ensuring that those starting out have the opportunity to achieve all they can, that those who find themselves falling behind have a safety net that they can rely on and that those who have worked hard and contributed to the system throughout their lives are duly rewarded can we address inequality and stagnant social mobility.

Education is clearly key to tackling poverty, which is why the Scottish National party in government has made closing the attainment gap its absolutely priority. This has led to recent statistics showing a record high for school leavers going to positive destinations. For those who have chosen the destination of higher education, there are free tuition fees, which the Social Mobility Commission “State of the Nation” report acknowledges have

“Contributed to the increased number of disadvantaged people attending university.”

However, for those who have chosen instead to enter the world of work straight from school, the UK Government’s age-discrimination policies in respect of national living wage entitlement make life more difficult, as many find themselves doing the same job as their colleagues but for far less pay.

The Scottish Government’s “Every child, every chance: tackling child poverty delivery plan” contains a detailed and ambitious plan for reducing child poverty rates and places education at the forefront of this effort by addressing some of the issues that directly and indirectly affect a child’s chances of getting the best start in life, through initiatives such as a new minimum school clothing grant payment to help low-income families to have more money for school uniforms and £1 million of new practical support for children who experience food insecurity during the school holidays. The Social Mobility Commission acknowledges that these plans are made more difficult in Scotland due to “UK-wide benefit changes”. It is to some of those changes that I shall now turn.

The 2015 Budget announced some of the most punitive cuts to social security in recent memory. We are now starting to see those cuts actively reverse previous reductions in child poverty. The Budget saw the removal of the ESA work-related activity group and the cuts to universal credit work allowances, and the introduction of the two-child policy and a harsher benefit cap, as well as the benefits freeze. The freezing of benefits has made it almost impossible for those already struggling the most to focus on long-term advancements and improvements in their job prospects, their life chances, or their family’s wellbeing. Instead, they have to focus on month-to-month survival, with no certainty about whether they will have enough for the bare essentials.

[Alison Thewliss (Glasgow Central) (SNP)]

My hon. Friend is making a good point. Does he agree with the Church of England analysis that a single parent with three children who works 16 hours at the Government’s pretendy living wage would now need to work 45 hours just to make up the cuts from the two-child cap?

[Neil Gray]

I absolutely agree, and that is clearly impossible. Policies such as the two-child limit, on which my hon. Friend has been a doughty campaigner—she has led the campaign against that pernicious policy—affect the life chances of all members of the family. For the parents, it may mean increased focus only on finding the bare essentials, which for the children means less money and less time for sports, travelling, holidays, extracurricular activities and other factors that play an often unacknowledged or underplayed role in equipping children with the skills and experiences that will prove useful later in life. Often, the focus in these debates is solely on the income side of the equation, and less attention is given to those extracurricular activities and the often-ignored life-chances elements, but it is worth noting that the Child Poverty Action Group’s most recent report said that the removal of the two-child limit or the benefit freeze would be the best way to stop any increased rises in child poverty.

Housing costs have become the biggest worry for many up and down these isles, which is why the Scottish Government have embarked on an ambitious programme of council house building. Since 2007, some 86,000 affordable homes have been built and 59,000 homes have been built for social rent, and they are on course to reach their target of 50,000 in the lifetime of this Holyrood Parliament. The Scottish Government have also ensured that discretionary housing payments are available for those impacted by the bedroom tax and that the housing element of universal credit can be paid direct to the landlord. Although that is beneficial for those who choose that option, one problem I have been made aware of from recent casework is that when the landlord is the local authority, the Department for Work and Pensions takes no cognisance of when the rent is due to the council, meaning that housing payments are often made after the rent was due, leading to constituents being threatened with eviction proceedings by the landlord. I have raised that issue previously and hope that Ministers will look into it.

If we look at those approaching retirement age, or who are already there, we see that the Government’s recent announcement of changes to pension credit entitlement mean that some couples could lose out on up to £7,000 a year, because if one partner is under 65 they will have to claim universal credit instead. The longest running issue in this policy area, and on which the Government have shown little sign of wishing to help, is that of women born in the 1950s and the delays and changes, with little or no notice, to their pension entitlement. The issue has been debated many times in the Chamber already, and I do not wish to go over that ground in any great detail, but such policies mean that inequality is being exacerbated for people at a time of their life when they are least able or likely to be able to rely on work or education to assist them. I hope that we will have a chance to discuss Mr Alston’s report in more detail, but it would have been remiss of me not to highlight some of the aspects I have raised today.