Welfare Reform and Work Bill

Carolyn Harris Excerpts

Monday 20th July 2015 Commons Chamber

[Mr Duncan Smith]

I do agree with my hon. Friend, which is why I want to get to the Bill. This backdrop of rising employment, falling deficit, increased productivity and higher wages brings me to the Bill before the House today. This is a Bill for working Britain, and it is underpinned by three key principles: first, work is the best route out of poverty, and being in work should always pay more than being on benefits; secondly, spending on welfare should be sustainable and fair to the taxpayer while protecting the most vulnerable; and, thirdly, people on benefit should face the same choices as those in work and those not on benefits. I wish to talk about each of those principles in turn.

My focus in government—and the focus of the Government —has been to ensure that it pays more to work than to be on benefits. This Bill builds on that principle. First, it extends the important principles of the benefit cap. The £26,000 cap we introduced in 2013 has been a huge success—

[Carolyn Harris (Swansea East) (Lab)]

rose—

[Mr Duncan Smith]

One moment, please. The cap has been a huge success in getting people back to work and reintroducing fairness to the welfare system. Capped households are more than 40% more likely to go into work after a year than similar uncapped households. It is right to keep the level of the cap under review to ensure that it continues to be fair and that it provides the right incentives for people to move into work.

[Mr Duncan Smith]

No, I will give way to the hon. Member for Swansea East (Carolyn Harris) in a second, but I wish to make a bit of progress.

We know that around four in 10 households outside London earn less than £20,000, and the same proportion of households in London earn less than £23,000. To ensure that the cap better reflects the circumstances of hard-working families, the Bill lowers the current cap to £20,000 for households outside Greater London, and the Greater London cap will be set at £23,000. The exemptions will continue to apply to the most vulnerable, which includes people on disability living allowance and personal independence payment, those in an employment and support allowance support group and those moving into work who are entitled to working tax credits.

[Carolyn Harris]

What assessment has been made of the effect of his welfare reforms on children?

[Mr Duncan Smith]

I am sorry, but I did not quite hear the hon. Lady. Will she repeat what she said?

[Carolyn Harris]

The right hon. Gentleman must listen carefully. What assessment has he made of the effect of his welfare reforms on the children of this country?

[Mr Duncan Smith]

The impact assessments are in the Library and the Vote Office. Full assessments have been made.

--- Later in debate ---

[Carolyn Harris (Swansea East) (Lab)]

It is hard to see how the changes contained in the Bill will not result in hardship for the most vulnerable families. We know that the cuts in tax credits will have a serious impact on working families earning low wages, and that neither the increased minimum wage nor the higher personal allowance will plug the gap. We also know that there will be less support for families with more than two children, which will push even more larger families into poverty.

As usual, however, the devil is in the detail. Behind the headline reduction in the household benefit cap to £20,000 outside London is something else that the Government are doing. Proposed new subsection (4) in clause 8 will allow the Secretary of State to change the cap at any time, without consulting Parliament. It grants the Secretary of State significant powers, and provides for no scrutiny whatever. In effect, it means that the Government could continue to lower the cap time and again, rendering more and more families unable to make ends meet, and forcing more and more children into poverty. I urge the Government to reconsider their decision, and—as was suggested by my right hon. Friend the Member for East Ham (Stephen Timms)—to amend the Bill so that Parliament will be able to play a role in scrutinising, debating and voting on any further changes to the cap.

Given that the Bill will make many more families significantly worse off, it is not surprising that the Government no longer want to measure how many children are living in income poverty. The headline measure in the Child Poverty Act 2010, which was passed with cross-party support, is 60% of median income. That measure is internationally recognised and allows for monitoring and transparency. However, the Government want to scrap it and replace it with a measure of workless households and educational attainment. Given that 65% of children in poverty live in a household where at least one adult works, I believe that changing the definition of child poverty is an attempt to avoid scrutiny of in-work poverty. Let us be clear about what that means. Clause 4 will repeal the Child Poverty Act in all but name, but deleting the term “child poverty” from the statute book will not make the problem go away. Changing the definition does not mean that parents working on zero-hours contracts and receiving the minimum wage will not have to rely on food banks to feed their children.

The Bill sends the message that child poverty does not matter, and that as long as parents are in work, we need not worry about whether they can afford to feed and clothe their children. For that reason alone, I will vote against the Bill.