Welfare Reforms and Poverty

Chris Bryant Excerpts

Monday 13th January 2014 Commons Chamber

[Sir Peter Bottomley]

I am grateful to my hon. Friend for that intervention and I appreciated his speech, too. We ought to try to ensure that we have sources of lending in which people understand the industries in which people are working. That is where the building society movement came from—originally, it was about building homes. If we could get some mutuality back into the agency area, people would be able to decide who could be lent money and who should be deferred.

The last point in my mind concerns how we can go on preparing people for the jobs and occupations of the future. Many people’s futures will be as entrepreneurs, as they set up their own businesses; others will be in employment. I remember with pleasure Peter Thurnham, one of our former colleagues. When he was made redundant, he used his redundancy money to buy two machine tools, set up an engineering business and eventually employed 150 to 200 people. People sometimes say to me, “MPs shouldn’t have outside interests.” I would far prefer to have in Parliament people such as Peter Thurnham, who can tell us how business and employment work and how to get more people off welfare and into the kind of jobs that make them pretty independent for most of their life.

Many of us will require some support at some stage in our life; relatively few of us need support all the way through our lives. Before this Government came to office, we were getting to a stage at which too many families were in dependency from generation to generation; Keith Joseph told us quite a lot about that. Statistics show that only 10% of people who were in the bottom decile—the bottom 10%—10 years ago are in the bottom 10% this year. There is a great deal more movement among those who are poor or very poor than most people understand.

[Chris Bryant (Rhondda) (Lab)]

indicated dissent.

[Sir Peter Bottomley]

The hon. Gentleman shakes his head; when he speaks, perhaps he can give his statistics. We need a commission, with statistics that we can all rely on from the Office for National Statistics, the Institute for Fiscal Studies and the Office for Budget Responsibility.

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[Chris Bryant (Rhondda) (Lab)]

I warmly congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and the Government Members who signed the motion, not least because they have given us an opportunity to hear some of the most insightful and moving speeches that I have heard for a long time in the House. It is a shame that nearly all of them had to be made by Opposition Members because so few Government Members turned up to speak, but I am sure that Government Members had other interesting things to do. I should add that I thought that the speech of the hon. Member for Stafford (Jeremy Lefroy) was insightful as well. It had barely a partisan bone in it, and I commend the hon. Gentleman for the views that he espoused tonight.

Let me begin by listing some facts on which I hope we can all agree. We all believe that the best route out of poverty is work, that those who can work should work, that those who need help to work should receive that help, that a civilised nation cares for the vulnerable, that at times we may all need the support of the state to get back on our feet, that a strong national health service, free at the point of delivery, is a key part of getting people back into work, and that education cannot stop at 16 or at 18 or, for that matter, at 21 if people are to acquire the skills that they need in order to prosper in a fiercely competitive world.

As Labour colleagues have been referring to what we will do when we form the Government in 2015, the Minister has, on several occasions, been heard chuntering, “Oh yes, the shadow Secretary of State says you’re going to be tougher on welfare.” We are, because we know that the best way to be tough on the welfare budget is to get people into work. We are absolutely determined that we will not do what this Government did immediately on coming into power in 2010, which was, without a shred of evidence, to abolish the future jobs fund that was giving young people an opportunity. We will do exactly the opposite. We will bring in a jobs guarantee for every under 24-year-old, because we have seen what is happening in Wales where a new scheme has been brought in to replace what this Government have been doing and that has put 7,748 young people into work. Some 80% of those jobs are in the private sector and 96% of those who have gone into those jobs have then gone into full-time employment. That is being tough on the welfare budget—not being tough on the recipients of welfare, but being tough on the welfare budget—and that is exactly what we intend to do.

We all know that there are areas of the country that have suffered deprivation for decades. Those are the places—in particular, the mining, shipbuilding and iron and steel cities and towns of this country—where one industry flourished, dominated and then died. That is what many of the speeches this afternoon have been about. However, the indices of deprivation come not single spies, but in battalions. All too often, with poverty comes poor housing, poor educational attainment and poor diet, as well as high levels of long-term unemployment, disability, mental health problems, obesity, malnutrition, teenage pregnancy, ischaemic heart disease, type 1 and type 2 diabetes and also, therefore, blindness. The poor die younger and are more likely to die of their first coronary or their first stroke. They are more likely to be the victims of crime, especially violent crime. Each of those problems exacerbates the other, so we have a vicious circle of poverty with children trapped by their parents’ opportunities or lack of ambitions. In short, all too often poverty is hereditary in Britain—as hereditary as the monarchy or, for that matter, a place at Eton.

The image that those on the right would have us all subscribe to of those living in poverty is far from the truth. Often the poor work the hardest, at the least hospitable hours, with poor protection and for paltry pay. Frequently, as many Members have said, they take several jobs to be able to pay to put food on the table. They travel for hours to work because they cannot afford properties in expensive places where there are more jobs. They take pride in the ability to stand on their own two feet, so they often refuse to claim all they are entitled to or to accept charity. We should applaud them, not denigrate them.

When the Secretary of State came to Merthyr Tydfil and told everybody that the answer to their problems if they were out of work was to get on a bus down to Cardiff, he simply did not know the facts. First, there are not buses that will get people to Cardiff in time for most jobs on low pay that start very early in the morning. Secondly, if they are going to be doing shift work, they cannot possibly rely on buses to get them to work. Thirdly, there are eight people applying for every job that is available in Cardiff so the situation is not much better than in Merthyr Tydfil. Most importantly, if people are spending half of their daily wage every day on getting on the bus to work and getting back home, the likelihood is that they are not going to be able to make work pay. That is what we need to change: we need to make work pay.

There have been massive changes in welfare in this country since 2010, especially since the Government changes to welfare came in last summer. Food prices have risen far more on average than those of other goods, and that has hit many poor families. According to Which? over the last six years food prices have risen over and above general inflation by 12.6% and nearly half of consumers now say they are spending a larger proportion of their available income on food than just 12 months ago. Six in 10—60%—are worried about how they will manage their future spending on groceries if prices continue to rise, and it looks as though they will. It must surely be shaming for this country that, between April and September, more than 350,000 people—150,000 of whom were children—received at least three days of emergency food from Trussell Trust food banks. That represents a threefold increase on the same period last year and a dramatic rise from 2009-10, when just 41,000 people received food aid. Contrary to what the hon. Member for Birmingham, Yardley (John Hemming) said, the Trussell Trust has stated that

“rising living costs and stagnant wages are forcing more people to live on a financial knife edge where any change in circumstance can plunge them into poverty.”

That is precisely what the Government’s welfare changes have done.

In March last year, Ministers in the Department for Environment, Food and Rural Affairs commissioned research into food banks and promised to publish the results last summer. The Government have had the results of the review since last June and, bizarrely, have now been reviewing them for far longer than it took to write them. I do not know whether they need educational assistance to read the report and present it to the public, but it is about time we all saw the findings that they have had in their pocket since last June.

The Trussell Trust has reported rising food bank use due to the bedroom tax, and states that 35% of its clients were referred due to delays in receiving benefits. There is no way out of this; the Government cannot avoid responsibility. Yes, charities are picking up the difference, but that is not the kind of society we should be living in. On top of that, the National Housing Federation, which represents housing associations, said that a survey of 51 of its biggest members found that more than half their residents affected by the bedroom tax—32,432 people—were unable to pay their rent between April and June last year. Contrary to all the rumours put out by The Sun, the Daily Mail and The Daily Telegraph, the survey shows that a quarter of those affected by the tax had fallen behind with their rent for the first time in their lives. That is not their fault; it is the Government’s fault.

One report, the Real Life Reform report, interviewed 74 households in the north of England last July, three months after the changes came in, then again three months later. In September, it found that over a quarter of the people in the survey reported having less than £10 a week to live on once rent, food and bills were accounted for. The report also found that 37% said they had no spare cash at all, and that families were spending an average of just £23 per person a week—or £3.30 a day—on food. Those were people in work, and for those with school-age children, £1.80 of that daily allowance was going towards a school dinner. Households were spending an average of £26 a week on gas and electricity, which equated to 10% of gross income. That was in July, not during the winter months when the costs would be much higher.

Three months later, that same survey found that the number of households spending less than £20 a week on food had increased from a quarter to a third, that the number of people having no money left each week had risen to 51%—more than half—and that the average spend on food per person per day had gone down from £3 to £2.10. It also found that households were spending 16% more on gas and electricity, taking them into fuel poverty. In addition, 33% of respondents now had council tax debt as well.

The loan sharks are flourishing, the number of those in fuel poverty is rising and the number of homeless people is rising. The number of those relying on charity to feed their children is also rising, and the number of those wanting to work more hours is at a record high. And for the first time ever, the number of those in work and in poverty is higher than the number out of work. The number of those in debt, in arrears and in despair about their finances is rising. Even Sir John Major knows that more and more people this winter have been choosing between heating and eating. It feels as though a worldwide economic crunch, manufactured in the boardrooms of Wall Street, on the executive floors of international banks and on the trading floors of the City of London, has been visited on the most vulnerable in our society. Those who struggle to buy shoes for their children have paid the price of austerity, not the well-heeled. We should be ashamed; the Government should certainly be ashamed. This is why we need a commission of inquiry.

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[Mike Penning]

Whether or not it is a fair representation is a matter for Channel 4. Like the rest of the country, I sat and watched the programme. I have not said anything about it, because I do not know the facts. I will go and see what is happening on the ground rather than speaking in generalisations. Channel 4 is not in any way a mouthpiece for this Government. It has been hugely critical of what we have been doing.

[Chris Bryant]

rose—

[Mike Penning]

I will not give way, because I want to make some progress. I did not intervene on the hon. Gentleman, so he will have to understand.

The hon. Member for Birmingham, Yardley made an important point about people who have moved from employment and support allowance to jobseeker’s allowance. It is enormously important that they know what benefits they are entitled to. As I said to the Work and Pensions Committee the other week, I will look carefully at the decision letter they get when they are told that their ESA has been stopped and what they are able to claim. That is a simple way to ensure that they understand the benefits they are entitled to and that families are not short of money.

The hon. Gentleman was the only Member to raise the issue of the minimum wage. The debate about what it will be raised to is taking place now. We will wait to hear what the independent review says. It is an important debate for people who are in work but require help from other benefits.

My hon. Friend the Member for Worthing West gave a wide-ranging speech. I will have to write to him about when the credit unions will be able to charge monthly interest. I have been a member for more than 12 years, and believe that the credit unions make a very important contribution to our communities. In particular, they stop that man with a threatening look from knocking at the door on a Friday night, just after pay day. All of us who have grown up on such estates have had that frightening experience. In many ways, the credit union can really help with that problem.

The hon. Member for North Ayrshire and Arran talked about discretionary payments and the fact that people have to apply again and again. There is nothing in the rules that says it should be for three months or for any other time scale. It is plainly obvious in many cases that an individual will be able to receive the payment for the long term and that the local authority should be able to rule on that. As we said at Question Time today, most local authorities are not using all their discretionary payments, and those that have can apply for extra payments under the scheme. We are looking forward to seeing how we can take that forward to ensure that we can give those assurances to local authorities. It is important that when Members go back to their constituencies they speak to their local authorities about what they should be doing, because there is no rule on the matter. My own local authority is using the three-month rule and there is no need for that in many cases. Local authorities should look at individuals rather than the numbers.

The hon. Member for Rochdale made an important speech and a good contribution to the debate, not least because he accepted from the outset that welfare reform is imperative. I was slightly concerned during his speech by the idea that if we are not careful, we might start thinking that all welfare reform will have a massive effect. In many ways, welfare reform can have a beneficial effect on people, particularly those who have been out of work for a considerable time and, thinking of my portfolio, those who have disabilities or long-term illnesses and have not been able to get back into work. For instance, the Access to Work programme is often the key to getting those people back in to work. It is important that we understand how the different schemes work and that hon. Members ensure that there is understanding in their constituencies.

The hon. Member for Oldham East and Saddleworth talked about bogus appointments. I would love to know about that and how it happened, so perhaps we can meet after the debate. It is obviously fundamentally wrong for bogus appointments to be made and for people to then be sanctioned. It would be much appreciated if she or any other hon. Member could help us with such issues.

Mr Deputy Speaker—[Interruption.] I am sorry, Mr Speaker. I apologise. I think you have known me long enough to accept that that was a genuine mistake.

The whole debate has been sensible, apart from the contribution of the shadow Minister, who is chuntering away again, ruining the quality of the debate as usual. It is important that the Backbench Business Committee can introduce such a debate. If the Opposition Front Benchers had wanted it so much, they could have introduced it in their own time. We should let the House decide this evening.