Welfare Benefits Up-rating Bill

Baroness Sherlock Excerpts

Monday 11th February 2013 Lords Chamber

[Baroness Sherlock]

My Lords, this has been an extraordinary debate. I hope that someone gives the proceedings to the Prime Minister to read. With it, they could give him a DVD of his pre-election appearance on the “Andrew Marr Show” in 2010 when he told the nation that he wanted to,

“take the whole country with me. I don't want to leave anyone behind. The test of a good society is you look after the elderly, the frail, the vulnerable, the poorest in our society. And that test is even more important in difficult times, when difficult decisions have to be taken, than it is in better times”.

We have heard many compelling arguments today against this Bill but I suggest that that statement from the right honourable David Cameron is one of the best. How far this Government have come from the days when its leader promised to protect the most vulnerable families in financially difficult times. Perhaps coalition has not tempered him after all.

My noble friend Lord McKenzie destroyed the case for this Bill in his powerful opening speech and many noble Lords have backed him up since then. Precious few speakers have disagreed with him. The noble Lord, Lord Bates, did his best, as did the noble Lord, Lord Sheikh, and they both stressed the need for fairness as cuts were being made. Coincidentally, that point was also made by the Chancellor of the Exchequer, George Osborne, when he introduced the Autumn Statement on 5 December 2012 when this Bill was announced. He spoke of the need to find savings in a way that was fair. He said that we need,

“to have a welfare system that is fair to the working people who pay for it”.—[Official Report, Commons, 5/12/12; col. 877.]

Just in case the point was not clear, the Guardian reports the Chancellor telling the “Today” programme:

“It is unfair that people listening to this programme going out to work see the neighbour next door with the blinds down because they are on benefits”.

So there we have it: this Bill is intended to penalise the workless in order to be fair to working people. What we have heard today has exposed that statement as being as misleading as it is disgraceful. We are not in a position where the country is populated by workshy people, living in houses where they claim £80,000 in housing benefit a year. The noble Baroness, Lady Gardner of Parkes, may want to know that in fact the limit for housing benefit is £400 a week.

As many noble Lords have noted, contrary to what the Government would have us believe, this Bill leaves behind some of the hardest-working members of our society; 68% of those hit are in work. The Bill will take an average of £165 a year from the pockets of 7 million working households. The Autumn Statement means that the real income of a one-earner working family is set to fall by £534 a year on average in 2015-16. That is without the average £14 a week in bedroom tax coming over the horizon for a third of social sector tenants, or the loss of council tax benefit of at least £5 a week for poor families.

The noble Lord, Lord German, said it is better to take small sums from a large number of people. They may be small sums to some people but I warrant that £10 a week will be sorely missed in those households. The Government’s whole argument about the need to incentivise and reward work is, as the right reverend Prelate the Bishop of Ripon and Leeds said, smoke. In fact I would go further than that. It is really music hall smoke and mirrors—the old-fashioned kind, where you direct the spotlight at the unemployed man in the front row while the accomplice goes round the back and picks the pockets of 40,000 soldiers, 300,000 nurses, 150,000 teachers, 510,000 shop assistants and more than 1 million administrators. This really is playing politics with the lives of hard-pressed families.

What really will be the effects of the Bill? We have heard only too clearly in the moving descriptions of the impact on the most vulnerable from the noble Lord, Lord Adebowale, and in the account from the noble Lord, Lord Best, of the problems being caused to so many low-income and middle-income families by the changes to housing support. According to Crisis, there has been a 22% increase in the number of people approaching their local authority as homeless in the past two years. Rough sleeping rose by 23% last year in England. The changes already made, and those coming through universal credit, have aggravated the problems caused by the serious shortage of affordable accommodation, as described by my noble friend Lord Whitty. This Bill will play its part by pushing low-income families further into a series of impossible choices. This point was made clearly by my noble friend Lord Touhig in a very comprehensive and powerful speech. Should they pay for food or heating; pay the bills or the rent?

Once again, as we heard from my noble friends Lady Donaghy and Lady Lister, there will be a disproportionate impact on women and children. Recent House of Commons Library research has shown that changes to tax and benefits in the Autumn Statement will hit women four times as hard. Of the £1.065 billion from new direct tax, tax credit and benefit changes in 2014-15 that the Library analysed in the Autumn Statement, an estimated 81%—£867 million—will come from women. This Bill is a key culprit. The list of benefits to be hit even includes statutory maternity pay. I do not think that we would have guessed that from the Chancellor’s description of the Bill’s rationale. I suppose that if I were about to give birth I might well have my blinds drawn at 8 am, but I do not think that was quite what the Chancellor had in mind.

It is not just mothers but children who are being hit. The right reverend Prelate the Bishop of Leicester, in a very powerful and impressive speech, reminded us that we are now in the shocking situation of being on course, according to the IFS and CPAG, to see a million more children in relative poverty by 2020. If the noble Lord, Lord German, thinks this poverty measure favours his Government, I would hate to think what would happen to child poverty with one that did not. I would be grateful if the Minister would tell the House how the Bill fits with section 14 of the coalition agreement, which states:

“We will maintain the goal of ending child poverty in the UK by 2020”.

Given the points made on this by my noble friends Lady Lister and Lady Massey of Darwen, what measures do the Government propose to bring forward to compensate for the effects of the Bill?

We have heard lots of figures today but if we remember no other statistic, let us remember this one from the Children’s Society: 11.5 million children will be adversely affected by the Bill. We heard very descriptively from my noble friend Lady Massey of Darwen about the risks posed to children. As Save the Children noted, the Bill will render parents less able to afford the basics in the short term, and will seriously limit the life chances of their children in the long term.

We also heard very powerful arguments from the noble Baroness, Lady Grey-Thompson, the noble Lord, Lord Low, the right reverend Prelate the Bishop of Ripon and Leeds, my noble friend Lord Macdonald of Tradeston, and others, about the impact of the Bill on disabled people. The Disability Benefits Consortium states that since the emergency Budget of 2010, disabled people have suffered a £500 million drop in their income. The Government tried originally to claim that they were protecting disabled people by exempting some benefits for disabled people and carers from the reduced uprating. Mr Osborne said in the Autumn Statement debate:

“We will support the vulnerable, so carers’ benefits and disability benefits, including disability elements of tax credits, will be increased in line with inflation”.—[Official Report, Commons, 5/12/12; col. 879.]

The truth was expressed succinctly by Richard Hawkes, the chief executive of Scope, who said:

“This bill doesn’t protect disabled people. In fact, it cuts support for the many disabled people who are looking for work”.

I think that the Minister has some explaining to do.

We are entitled to judge the Government by their own criteria. Has the Prime Minister passed his own test of creating a good society that does not leave behind the poorest in difficult times? When we are debating a Bill which, as my noble friend Lord McKenzie pointed out, means the unemployed will see their JSA rise by 71 pence a week while 8,000 people get an average tax cut of £2,000 per week, noble Lords may judge for themselves. Has the Chancellor passed his own test about being fair to working people? I think we know the answer to that, as well. In the Bill those working people are being asked to pay the price not only of the Government’s indefensible priorities but of the failure of their economic policy.

I was glad that the Minister acknowledged that unemployment is still a problem. The money this Bill will save will be about the same as the increase in social security spending resulting from the forecast rise in unemployment just between the Budget last year and the Autumn Statement. The pain will be felt by millions of households who are already close to the edge. The noble Lord, Lord German, asked us all where we would get the money from. As my noble friend Lady Hollis pointed out in her extraordinarily compelling speech, at heart the issue is simple. The Government have a choice and are choosing to cut payments to struggling households in order to fund a £3 billion tax cut for the highest earners in the country. I look forward to hearing the Minister defend that choice.