Welfare Reforms and Poverty

Debate between Chris Williamson and Simon Danczuk

Monday 13th January 2014 Commons Chamber

[Simon Danczuk (Rochdale) (Lab)]

Let me start by thanking those Members who pressed for this important debate, particularly my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and the hon. Member for Worthing West (Sir Peter Bottomley). I believe that we should be proud of our welfare system in this country. It provides a vital safety net, and not just for people who have fallen into poverty, but for the disabled, older people and those who need to get back into employment.

However, we should not fall into supporting an argument that suggests that the system is perfect. Too many people take the view that the welfare system is a sacred cow that should be left alone. I do not share that view; on the contrary, I believe that self-reliance and making the welfare state much more accountable and appropriate to people are extremely important. I certainly believe that reforms can be made, especially to the way in which the system supports and challenges people—and, yes, pushes them back into employment. However, when reform of the welfare system is undertaken we must be certain that we do not abandon the most vulnerable people and push them into poverty.

I will give two examples of the Government’s welfare reforms having left vulnerable people without the safety net they need. First, I want to talk about one of my constituents, Sheila Holt. On Friday I met her father, Mr Kenneth Holt, and other members of her family. Sheila is 47 years old. She had an exceptionally traumatic childhood that I will not detail here, but needless to say it was a period of her life that scarred her mentally. She has not worked for 27 years because she has a severe psychiatric condition; she is unable to work. Because of cuts, I suspect, Sheila was relatively recently persuaded to sign off her psychiatric treatment. Soon after that, she was being pushed by the DWP towards the back-to-work scheme. Her family advocated for her, explaining that she had had trauma in early life and had a psychiatric condition. They made those points strongly, but to no avail. Sheila had to start attending back-to-work classes in another town. She struggled with meeting other people. Most importantly, no mental health support or service was offered to her. The safety net was not there for her. She also had to start paying the bedroom tax. Needless to say, she was falling into poverty and beginning to worry about becoming increasingly poor. She started to become agitated and her medication could not keep up with her condition. On 6 December she was admitted to Birch Hill hospital under section 3 of the Mental Health Act 1983. A few days later, she suffered a heart attack—at the age of 47, which is my age—and she is now in a coma.

The reason I tell this story is that Sheila’s family want people to be aware that she was pushed into this situation. Soon after Sheila started her life, she experienced terrible trauma that mentally crippled her. The truth is that she is trying to live through the welfare system as best she can, but the unsophisticated and haphazard way in which it has been changed has forced a very vulnerable woman into a terrible predicament. She had a very difficult early upbringing and now finds herself in the situation she is in today.

My second point is about the discretionary social fund, which has provided crisis loans to people in need. Hon. Members will be aware that in April this year the DWP passed that responsibility on to local authorities. They will also be aware that the fund is not ring-fenced, and it has been open to local authorities to spend it however they wish. For me, this came to light because a number of constituents were presenting to me with difficulty in being able to claim any sort of crisis loan from any sort of crisis fund. One woman who came to see me was heavily pregnant and was being told by Rochdale council’s social services that unless she provided a carpet in her property she would lose the child, who would be taken into care. Ironically, the local authority was not administering the local discretionary social fund in a way that would enable her to claim money to be able to get the carpet.

Rochdale is not an exception to the rule. I carried out some research looking at local authorities right across the country, and it shows that the passing down to them of this responsibility has meant that they have set criteria far too strongly, to the point where one local authority has spent only 1% of its budget for helping people through crisis loans or grants. The irony is that, when the fund was administered nationally, it encouraged self-reliance because it was a loan that the recipient could pass back, but since responsibility was given to local authorities it has not done so because it is now a grant that cannot be passed back.

The best bit came just before last Christmas, when the Government announced that the fund will be scrapped completely from 2015. It will not exist at all and there will be no safety net for those people who really need it. They will be pushed towards loan sharks and money lenders. That will certainly happen in Rochdale and, I have no doubt, in other places as well.

[Chris Williamson]

Does my hon. Friend agree that this is tantamount to the reintroduction of the Poor Law, which was abolished by the 1945 Labour Government?

[Simon Danczuk]

I certainly take on board the point that we are moving that way in some respects. I am wholly in favour of reform of the welfare state, as I pointed out at the beginning of my speech, but it has to be done compassionately and it has to retain the safety net. If we do not do that, we will see, as my hon. Friend suggests, a return to Victorian values in the way that we administer our welfare state.

I call on the Government to reverse their decision on the discretionary crisis fund. I believe that the purpose of the welfare system is to provide a safety net for the vulnerable, but it is clear that some of the Government’s reforms are destroying parts of that safety net and leaving people much more vulnerable to poverty. As my hon. Friends have said, we need an inquiry into how the reforms are impacting on people so that they are not abandoned and left to poverty.