In-work Poverty

Debate between Christina Rees and Mark Durkan

Thursday 28th January 2016 Westminster Hall

[Mark Durkan (Foyle) (SDLP)]

It is a pleasure to serve under your chairmanship, Mr Turner, and I congratulate my hon. Friend the Member for Swansea East (Carolyn Harris) on securing this important debate.

Like my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), I want to address these issues, first of all, based on the experience of people in my constituency. I represent the city of Derry—or Londonderry—which has very high unemployment. The constituency of Foyle ranks No. 1 for unemployment of all the constituencies in the House of Commons. As well as having very high long-term unemployment and very high youth unemployment, it also has a lot of underpaid employment. It is a border city, with all the challenges that that brings for our regional economy, and obviously it has suffered the impact of conflict. Every day, families and working people there contend with the same economic challenges that hon. Members throughout the House have mentioned, in an economy that has structural weaknesses. It is clear that for people in my constituency, the problem is not lack of work ethic but a lack of work. Much of the Government’s agenda and purpose, in the welfare reforms and other measures they have introduced in the last Parliament and this one, seems to be fixated on work ethic rather than availability of work.

That is why I have found myself in opposition to so many of the Government’s reforms and why, along with so many others—I was glad to see that they included Conservatives MPs—I challenged the Government’s proposals on tax credits. They would have hurt people who are in work but coping with marginal incomes given their family, work-related and other living costs. Those changes have been parked, but there has not been a complete U-turn. There has been merely a J-turn, which has gone part of the way. The Government intend to apply the same logic to universal credit, we are just not getting the early implementation of the plan for those still on tax credits. That plan will clearly increase working poverty. We have seen in the various figures that have been quoted—I will not rehearse all the figures from the Institute for Fiscal Studies and others—that there will be a real impact on the family income of people in work.

[Christina Rees]

As the hon. Gentleman knows, new claims for legacy benefits will cease by June 2018 and migration to universal credit will be completed by 2021. As the Department for Work and Pensions says it cannot estimate the number of people who will be on universal credit by the time the roll-out is complete, does he agree that it is difficult for us to deal with the problem in our constituencies?

[Mark Durkan]

I thank my hon. Friend for making that point. That is part of the conundrum that we have. On one hand, DWP tried to offer all sorts of assurances that the change had been platformed and well modelled and would be sound. On the other hand, we know that, to date, many of its assurances and plans have come to little. On other things, it says it does not have a basis for some of its contentions. We get into a circular argument, so we cannot accept its assurances or try to persuade others about them.

Let us be clear. The changes being made are not just those to work allowances, which are part of the Welfare Reform and Work Bill. The hon. Member for Neath referred to when DWP plans to roll the changes out. I will not go into all the administrative and political differences in welfare reform in Northern Ireland, but implementation there has been different so far. The decision has effectively been made to give Westminster direct rule powers on welfare reform, including on the provisions in the Bill. That will obviously have a long-term effect. Although the direct rule powers applying to Westminster include a sunset clause for the end of this year, the legislation passed under those powers will have an impact on my constituents for many long years.

On the impact of working poverty, we need to consider not just the changes to universal credit and how they will affect people who have made the transition to work and meet all the Government’s oft-quoted tests—being hard-working families, not being workshy and so on—but the fact that people will be subjected to invidious treatment in the levels of support they are allowed.

Let us consider the Government’s plans for universal credit and, in the longer term, tax credits—for example, how the two-child rule will affect working families. Let us compare that rule with what was passed in the last Parliament in a blaze of glory. The Minister was one of those who took the Childcare Payments Act 2014 through the last Parliament. The Government boasted that under Bill, parents would be able to claim up to £2,000 a child in childcare support, on the basis that it would be up to 20% of costs of up to £10,000. Let us think about what income bracket parents would need to be in if they were spending £10,000 a child on childcare and claiming up to 20% of that as childcare allowance.

That allowance was going to be bankable. People were going to have discretion to do what they wanted with it, but under universal credit they must claim the childcare element after the event and show the actual cost. They must spend the money before they get it back. That is not so for those who are better off and claiming childcare allowances, and of course they are not subject to a two-child rule. The plan is for one law for the working rich and one law for the working poor. That is why we must speak up about working poverty.

Those policy contradictions are not the only ones we need to raise with the Government. We all have a responsibility to think through the other implications for people working in our constituencies. There will be future liabilities from pension contribution changes, and student loan payments will have to be made through people’s income. The changes in the Housing and Planning Bill will have an impact on who is eligible to remain in social housing. There will be a cliff edge for families, who will face additional housing costs if they remain in employment with a certain income. All those issues will bite on family budgets and make a material difference to the worth of people’s earnings. We should address working poverty much more holistically and not on the basis of some of the more pretentious and specious claims that the Government make.

Transatlantic Trade and Investment Partnership

Debate between Christina Rees and Mark Durkan

Thursday 10th December 2015 Commons Chamber

[Mark Durkan (Foyle) (SDLP)]

It is a pleasure to follow the hon. Member for Cambridge (Daniel Zeichner). Like him, I have heard many concerns expressed by many constituents in relation to this issue at a number of levels. They do not come at it with an anti-American point of view. My constituency enjoys significant US corporate investment—would that we had more—and many people are employed by firms that are US-based or were US-based but now have a more global formation. The city of Derry has long been key to the transatlantic partnership. It was a key transatlantic port for many years, and even during the second world war. As Base One Europe, the Americans’ first base in Europe in the second world war was in Derry. In fact, they started building it six months before Pearl harbour.

My constituency gives such transatlantic relationships a very positive embrace. We are not against anything transatlantic, we are not against trade, we are not against investment and we are not against partnership, but people have a right to be concerned about what has been proposed and to make sure that parliamentarians—at Westminster, in the European Parliament and, I hope, in the Parliaments of other member states—will do due diligence and give due scrutiny to what is involved, because the potential is significant.

I do not dispute that some aspects of TTIP are potentially very positive. I have listened to the arguments that some hon. Members have made in offering assurances about what this trade deal actually represents. However, they too must listen to people’s serious and genuine concerns. I congratulate the hon. Member for Swansea West (Geraint Davies) on introducing this debate, but I also congratulate the right hon. Member for Hitchin and Harpenden (Mr Lilley) on helping to delineate carefully some of the different issues involved.

We have to make sure that we are not creating, in the name of all the good we want to happen in relation to trade and investment, any new constructs that are beyond accountability, meaning that we end up with transnational capital having more legal clout than the parliamentary systems of democratic states in determining public policy and national law.

It is also important to recognise that some hon. Members have cited the assurances given either by Ministers in this Parliament or by members of the European Commission. Some people say, “Well, other investor-state dispute settlement systems have not resulted in cases being lost.” We know that past performance is no guarantee in relation to future prospects. We particularly need to recognise that the scale involved in this deal is much greater than that involved in any of the other existing bilateral ISDS set-ups.

We must remember that there is potential not just for cases against the UK to be lost, but for cases against other member states to be lost, which would then create case law that could, in turn, be used against the UK and other member states. That is a key worry for the devolved Administrations: what are the consequences for them of cases brought elsewhere? Indeed, the devolved Administrations may be targeted—for example, a case may be brought against a devolved health service—because they are seen not to have very deep pockets and are seen not to be in a strong position to hold out against such a case. For some corporate interests, that may then be a Trojan horse to get into other UK services.

We have had such an experience in relation to the EU. The fact is that the European Commission has often introduced directives, and given assurances about its intentions and the import of those directives, but has not then been in control of subsequent European Court of Justice decisions. Such ECJ decisions have meant that the European Commission has had to revise its guidance to member states, and member states that previously relied on those assurances have had to bow to different demands.

[Christina Rees]

Does the hon. Gentleman think that a separate judicial system available only to foreign investors is called for?