Scotland (Poverty)

Anne Begg Excerpts

Wednesday 30th November 2011 Westminster Hall

[Dame Anne Begg (Aberdeen South) (Lab)]

It will be difficult to follow my two colleagues, who have explained the scourge of poverty in terms of the proportion of people living in poverty in Scotland and the shame that that brings on us as a nation. I congratulate my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) on securing this debate.

I shall confine my comments to a group of people who, by definition, find a much higher proportion of themselves living in poverty—namely, those who are disabled or have a disability. All the problems that, as we have already heard, face families living in poverty tend to be amplified if one of the members of those families happens to have a disability. We know that 21% of families who have one person with a disability living with them are living in poverty compared with 16% of the general population. That figure increases for children: 25% of children living in families with a disabled person live in poverty compared with 18% of children living in families with no one who is disabled.

The concern that I want to get over to the Minister, and to which I hope he will respond, is that those figures are bad enough, but the actions of this Government are about to make matters far worse. Despite the impression given in the tabloids by stories of benefit scroungers and people who have languished on incapacity benefit or disabled benefits for years, employment among disabled people had actually improved over the last 10 years of the Labour Government. The employment gap between those disabled and those non-disabled in 2002 was 36%. By 2010, by the time the Labour party lost power, that gap was down to 29% and all the indicators were that it was improving, so many disabled people were in work. However, it is still the case that anyone with a disability is far less likely to be in work than those who do not have a disability, and therefore dependent on benefits.

What happens to the benefits system? What changes will be made to save the £18 billion that the Government are trying to strip out of the welfare system? Those changes will impact even more directly on those who are the most vulnerable—those who have a disability. What is of concern is not just that individuals and their families will face reduced incomes but, as my right hon. Friend the Member for Stirling (Mrs McGuire) said, the reduction in the money that is available to be spent in those communities and the fact that the communities themselves will become even poorer than they are at the moment.

My hon. Friend the Member for Ayr, Carrick and Cumnock mentioned the report from Sheffield Hallam university, written by Christina Beatty and Steve Fothergill, called “Incapacity Benefit Reform: the local, regional and national impact”. That report makes incredibly interesting reading. It shows not only that there is a concentration of people with disabilities who are living on disability benefits, whether that is incapacity benefit, employment and support allowance or disability allowance, but that it correlates exactly to the areas of high unemployment and the areas of industrial decline. So it comes as no great surprise that, of the top 20 districts where the share of adults claiming incapacity benefit is the highest, three of them are in Scotland. Glasgow comes in at 12.3%, but is followed closely by Inverclyde and West Dunbartonshire. In the bottom 10 districts, of the areas with the least number of people on incapacity benefit not a single one is in Scotland and that in itself acts as a stark reminder that there are areas in Scotland, particularly west central Scotland, that have suffered not just the depression and lack of jobs caused by deindustrialisation but, resulting from that, an increase in the number of people who not only suffer ill health and disability but, as a consequence, are claiming benefit. Any cuts to those benefits will fall particularly heavily on those areas.

The figures in the work that Christina Beatty and Steve Fothergill have done are UK-wide, so we must assume that 10% of those people live in Scotland. Those figures show that, as a result of Government changes already announced, in Scotland alone, 97,000 fewer people will be claiming incapacity benefit. Even more worryingly, 58,000 will be removed from benefits all together. How will that happen? The last Labour Government had already introduced changes to reform incapacity benefit and to move people on to the employment and support allowance. The new Government have speeded up that move and have also cut down on the amount of money to be spent. That is where a great deal of the savings will come from.

[Dr Whiteford]

The hon. Lady’s constituency, like my own, was part of the pilot scheme that trialled the new work capability assessment. My view is that it has not been working and instead has been causing great anxiety and distress to disabled people. More importantly, the successful appeal rate is out of all proportion to any system that is working. Something like 70% of appeals are proving successful, where people have support from advocacy agencies. That system should go back to the drawing board, but I am also concerned that the burden will start falling even more so on unpaid carers and other family members for people who have been taken out of the system. Does the hon. Lady share my concerns on that?

[Dame Anne Begg]

Those concerns are shared by all of us. It has been very difficult to get robust figures about the numbers who are being migrated from incapacity benefit on to employment and support allowance, and how many of them will fall out of the benefits system all together or find themselves on jobseeker’s allowance as an alternative. The early indication from the pilot that took place in both Aberdeen and Burnley would suggest that about 30% of those on incapacity benefit will move to JSA. That one single move is immediately a loss of £20, or slightly more, a week for that family. We do not know whether those figures are robust but we do know that, for new claimants, it is far less than that. Part of the reason why the tabloid press has managed to create the impression that there are lots of people languishing on incapacity benefit or disability benefit who do not deserve it is that they conflate the proportions who are new claimants getting the benefit with those already on the benefit but who have been migrated across. Potentially, 30% will be losing £20 or more a week.

We also know that the Welfare Reform Bill proposes to limit contributory employment and support allowance to one year. In areas such as mine and the one represented by the hon. Member for Banff and Buchan (Dr Whiteford), where it is more likely that people will live in a household with some income, because unemployment is relatively low, so a partner, husband or wife might be working, those people will lose benefits altogether because they will not qualify for the income-related benefit that would replace it. That is why 58,000 are likely to fall out of the benefits system completely. These are people who have paid into the system all their lives. They thought that, when things turned difficult for them, when something happened and they were not able to work anymore, the welfare state would be there for them and national insurance would work as the name suggests—as an insurance that they would get that contributory benefit. This Government have decided that that is not good enough and that this group will qualify only for employment and support allowance for a year. In a year, someone might have managed only to get a diagnosis. They might have only just started their cancer treatment, they might still be getting worse but not be bad enough to be in the support group, with a degenerative neurological condition that has just been diagnosed. After a year, their money will stop if they are in the work-related activity group of ESA.

[Mr Reid]

How long does the hon. Lady think that people in that category should continue to receive ESA?

[Dame Anne Begg]

Until they retire, which is what the position is at the moment. If they are in the support group, they will keep it for ever.

The hon. Gentleman’s intervention has given me the opportunity to raise something that he can discuss with his colleagues in the Department for Work and Pensions. The way that the national insurance system works is that if someone has not made a NI contribution for the previous two years, then they do not get the contributory benefit. I tabled a written question to ask what happened if someone had been in the work-related activity group for two years and then got worse, particularly if they had a degenerative illness, and found themselves in the support group. They would not have the national insurance contribution to go back on to the contributory element. Would they be able to get the ESA? The reply from the Minister was unequivocal—yes, they would be able to go back on to contributory ESA if they had moved from the WRAG to the support group after two years.

However, in correspondence with an official, some doubt has been cast on whether that is indeed the case. It is not clear from the Welfare Reform Bill, and it is certainly not clear from the debates around the Bill, whether someone who has been on WRAG for two years will get their contributory ESA back again should they get worse. This is very important for people with conditions such as multiple Sclerosis and Parkinson’s. If someone has a really bad episode and goes straight into the support group, they will be able to keep their contributory ESA for the rest of their working life, whereas, if they have a slowly progressing disease and go into WRAG for a couple of years, but then end up just as ill and disabled as the other person, they do not get it back. It seems unfair and arbitrary. The Government must get this right and be clear about it, or large numbers of people, potentially those with some of the most profound disabilities and ill health, will be disadvantaged simply because they fall the wrong side of the line when they go for their work capability assessment.

[Mrs McGuire]

Is that not why it is faintly ridiculous, at this point in the legislative cycle, when the Welfare Reform Bill has completed its passage through the House of Commons and has completed most of its stages in the House of Lords, that we do not yet know what the regulations will say on something that could have a massive impact on the lives, not just of disabled people but of the poorest people in communities in Scotland?

[Dame Anne Begg]

My right hon. Friend is absolutely right. One of my concerns as Chair of the Select Committee is, when there is parliamentary scrutiny of those regulations, to make sure that there are no unintended consequences. I hope that this is an unintended consequence on the Government’s part—I do not think that they would be so hard-hearted to be that unfair, and I hope that the Minister will acknowledge that they realise that, in some areas, they have simply got it wrong, because they are trying to take money away from people who have paid into the system all their life.

I am conscious of the time, so I will not say a great deal more. We will move from disability living allowance to the new personal independence payment, and the Government say that they are going to cut 20% from that budget. I could go on at length about that but, in summary, all those things taken together will mean that the income of the poorest people in our communities—those who have the hardest time because of ill health or disability—will be drastically cut. They will bear the brunt of many cuts in Government spending. They are the ones least able to cope, and it will be their communities—if the money had come into their hands, at least they would spend it in local shops—who suffer. Those shops and facilities will close, and those areas, which already suffer the highest incidence of poverty, will be hit particularly badly. The Opposition think that that is unfair. It is unjust, and I urge the Government to look again.

[Several hon. Members]

rose—