Department for Work and Pensions

Debbie Abrahams Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the hon. Lady kindly cite the evidence to support her statement that welfare reforms have actually led to the increase in employment, because I have evidence to show that employment has increased in spite of the welfare reforms?

[Trudy Harrison]

I explained earlier in my speech that previously women in particular were restricting their working hours to 16 hours a week because of the benefit system, and in terms of the evidence the hon. Lady is surely not doubting that the unemployment record is at its lowest since 1971.

Universal Credit is one of the most important reforms the Government are making. I want to see high quality, affordable, flexible childcare in every town and village, and I would like to hear from the Minister what steps he and his Department are taking to make that possible. Certainly the welfare reforms are making it a more achievable goal in my community, and I welcome the Government’s efforts.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I congratulate my hon. Friend the Member for Wirral South (Alison McGovern) on her absolutely excellent speech. She set out what social security should be about. It is about the type of society that we want. The key thrust of her message was to ask whether it is acceptable that so many children are living in poverty—one in four currently grow up in poverty, and one in five are in persistent poverty—when we are the fifth richest country in the world. Is this the sort of society we want them to grow up in, when, despite being the fifth richest country in the world, we also have the highest child mortality in western Europe?

We know the causal relationship between poverty and early childhood death. Is this acceptable? To my mind, it is not, and I am sure that many people across the Chamber agree with me. That is why I asked the hon. Member for Copeland (Trudy Harrison) for her evidence. We have to look at the evidence. There will also be issues with addiction, but are we seriously saying that all poverty issues relate to addiction? There is no evidence to support that. I shall get back to the point of whether this poverty is acceptable. If it is not, we need to look at mechanisms that will ensure that in the civilised society that we aspire to lead we have the policy measures to ensure that this does not happen.

[Huw Merriman (Bexhill and Battle) (Con)]

Is it acceptable to be in a party that has always left office with unemployment higher than when it entered office, or is it acceptable to be in a party that has delivered record numbers of jobs?

[Debbie Abrahams]

I respond to the hon. Gentleman by asking whether it is acceptable that we have the highest level of in-work poverty and that two thirds of the children living in poverty are from those working families. I throw that back at the Government.

[Christine Jardine]

The hon. Lady makes the point that I was about to make, which is that we are in the completely unacceptable situation in which two thirds of the children living in poverty in this country live in households where at least one parent is working. Does she agree that that is not just a failure by the Government to protect those children but an abject failure on their part to protect the welfare state and provide a continuing welfare state that works for the people who need it most?

[Debbie Abrahams]

I could not agree with the hon. Lady more.

I am going to carry on with my questions about what we deem acceptable in our country. Is it acceptable that sick and disabled people are being isolated and excluded across our society? I believe that, in addition to children, it is sick and disabled people who have borne the brunt of this Government’s cuts. That shames us all. Nine out of 10 disabilities and illnesses are acquired. Would we want this for ourselves or for our nearest and dearest? I am sure that the answer is no, so what does that mean for our policies for sick and disabled people? Many of us on both sides of the Chamber do not think that this is acceptable. We need a thriving economy, but the present levels of inequality are stifling the growth that we need—[Interruption.] That is evidence based. I can provide evidence for the fact that inequality is stifling growth in the economy.

We need a social security system that is there for all of us. I would like to see our social security system held in the same esteem that we have for our NHS. It should be there for each and every one of us, providing dignity and security in our retirement and the support we need if we become sick or disabled or if we fall out of work. Let us face it: with the current flexibility in employment, people are going in and out of work, and the system needs to be able to reflect that. It also needs to be able to protect us from poverty, because that is what a civilised society does. As my hon. Friend the Member for Wirral South said, this should be about smoothing out our incomes so that we do not have to be plunged into poverty when we experience extreme events. A decent social security system is a vital weapon for tackling the poverty and inequality that are now rampant across the UK.

We know that, although work and pensions spending has increased since 2010, working-age support has actually been reduced by £30 billion because of the decisions that the Government have made. We also know that those savings are set to increase even further to £38 billion by the end of the forecast period in 2023-24. These figures should include the effect of the measures announced in the 2018 Budget, which included annual spending of £1.9 billion by 2023 on universal credit. Unfortunately, although some people have benefited from universal credit, 3 million people will still be worse off under it. As I mentioned in Treasury questions this morning, 87% of all disabled people will not benefit from those Budget measures and will remain worse off under universal credit, alongside 640,000 self-employed households and 475,000 working lone-parent households.

As my hon. Friend so eloquently put it, we have seen the rise and rise of food banks and an increase in in- work poverty. We know that 4 million sick and disabled people are living in poverty, as are 330,000 more older people. I mentioned the stifling effect that this is having on the economy. The Office for Budget Responsibility’s own model has shown that the independent effect of austerity has been to stifle economic growth by at least £100 billion in 2018-19, which is the equivalent of £3,600 per household. That is my evidence to the House.

I have mentioned the human toll of these policies. In Work and Pensions questions yesterday, I mentioned Amanda, a lone parent who was pregnant and had significant mental health issues. She had her universal credit claim closed in the final weeks before she was about to deliver her child. She did not know why this had happened, but it was revealed that it was because she had not undertaken an independent review. I am pleased that the Minister said that he would take the matter up, but let us just imagine if this happened to us. How would we feel if we suddenly had our income ripped away from us and we did not know what was happening, just as we were about to have a child? This is simply unacceptable.

We know that, between 2013 and 2018, 60 disabled people a month died after their personal independence payment claims were rejected. Many others have died after being found fit for work. A Government’s first duty is to keep their people safe, and that includes their vulnerable citizens. They are failing to do this. Poverty and inequality are political choices. Many of us have made suggestions on how we can tweak the current social security system, but I believe that we need a radical transformation. As my hon. Friend said, we need a new social contract with the British people, built on the Beveridge principles, to define a 21st century social security system that treats its citizens with dignity and respect and protects them from poverty, destitution and even death.

--- Later in debate ---

[Mr Clarke]

Child benefit is, obviously, a sensitive issue, but the point is that a family not in the welfare system, perhaps just above the entitlement level for welfare support, has to make rational choices in their life. All families have to make rational choices in their life about the size of the family they can afford. Lots of people find it wrong that the system would allow people to have any number of children, whereas those people not in the system have to make budgetary choices. That is not a principle I am uncomfortable defending.

Let us go to the wider point, as we need to go back to first principles on this. I do not doubt the sincere differences we have and Labour Members’ concerns, but they have to justify the fact that under their Government 1.4 million people spent most of 2000 to 2010 trapped on out-of-work benefits, with some receiving more than the average wage. Some 50,000 households were allowed to claim benefits worth more than £26,000 a year. I represent a low-wage constituency in the north of England and I simply cannot justify a situation whereby the logical thing was for people to stay earning that amount of benefits rather than to be in work. That has profound and adverse social consequences.

[Debbie Abrahams]

I think what we are trying to do with this debate is look at where we are now. The hon. Gentleman is right, and we did not get everything wrong, but what we need to do is look at the system now. It is clearly not fit for purpose. The way he was talking made it sound as though he also had concerns about the number of children, and the number of sick and disabled people, living in poverty. I am sure he was not suggesting that all the sick and disabled people who require support are shirkers or scroungers, and that there is nothing wrong with them. So what do we do now?

[Mr Clarke]

The hon. Lady is absolutely right; of course, there are lots of people who, for reasons that are totally out of their control, need our support and compassion. No Conservative Member would argue with that. I would argue that we get more money for those people by ensuring that the system has the resource available to devote to those families and those individuals, rather than to those who do not need that support and need to be in work. We have seen a record number of people come into work. We are seeing record female employment. We are seeing a record number of disabled people move into work. We should celebrate all those things. Just as those on the other side are quick to point out the problems with the system—and any system run by Government that is as Byzantine as the welfare system will always throw up hard cases that need to be looked at carefully—we also need to recognise the considerable social policy success that has been represented by helping the equivalent of the entire population of Wales, more than 3 million people, move into work during this Government’s time in office. That is a really important shift and we do not want to see this go backwards because we have changed the incentives in the system.

That is one reason I was so profoundly opposed to the amendments tabled by my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) in this debate. I do not think it was appropriate for this debate and these estimates to be drawn into the context of the Brexit debate. That was profoundly unwelcome. No matter which side of the House someone sits on, we have to try to keep certain aspects of the debate separate. It will be interesting to hear from the shadow Front Bencher what the Labour party’s position would have been had the amendment been accepted and what it would be were a future such attempt to be made. It is important to put on the record that there are some aspects of this debate that are simply more important than the issue of the UK’s membership of the European Union—or not. In truth, the two things are fundamentally discrete.

--- Later in debate ---

[Huw Merriman (Bexhill and Battle) (Con)]

It is a pleasure to be the last, I think, of the Back-Bench speakers today on the important issue of the spending of the Department for Work and Pensions and its estimates. That vital Department takes a quarter of the £800 billion-odd spent each year on public services. I congratulate the hon. Member for Wirral South (Alison McGovern) on securing this excellent debate.

I spent a happy year sitting behind Ministers PPS-ing at the DWP. I was really passionate about working there, because it is a Department that can really make a difference; it has a huge spend and a vast range of levers to really help people and make a difference. Alternatively, if things go wrong, we see where people are hindered.

In his excellent speech, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) referred to a number of Conservative Members elected in 2017 to seats that might previously have been described as the Labour heartlands. I want to add North East Derbyshire, a seat we won in 2017, to the list. I stood for that seat in 2010 against Natascha Engel—a former occupant of the Chair, Madam Deputy Speaker, and an excellent MP. I spent two and a half years there. I remember how toxic the benefits culture there had become: an issue that set neighbour against neighbour.

People were concerned that they were working hard while they saw other people who they thought were not putting in the shifts. At times, that was unpleasant and unfair: it is very difficult to tell who is capable of work and who is not, and neighbours are not necessarily able to make the distinction. But I was troubled by the situation and by the statistics showing that, in 2010, 1.4 million people had been on long-term benefits for nine years and 2.6 million had been on them for five years. Clearly, that was a difficulty.

The big challenge for any Government elected in 2010, whether Labour or Conservative, was to work out how to get people capable of work off benefits and give them the tools, access and ability to step into work, thus reducing the benefits bill and focusing funds on those who really could not work. It was about helping and empowering those who could work to get into and rise up the jobs market.

I think my hon. Friend the Member for Brentwood and Ongar is right about electoral success. Fast forward to now, and we see that the approach has gone down incredibly well with voters—not only those who saw people on benefits who perhaps should not have been, but those people themselves, who wanted the help and were given the encouragement.

[Debbie Abrahams]

rose—

[Huw Merriman]

I will give way only once, as we are short of time.

[Debbie Abrahams]

The hon. Gentleman continues to make the assertion that welfare reforms have driven the increase in employment. There is no evidence to support that: the National Audit Office, for example, disputes it.

On the issue of working as the route out of poverty, I should say that, according to the Joseph Rowntree Foundation, four out of five people in low-income work will still be in such work 10 years later. It is an absolute myth that work is a progression. That does not mean that we should not do stuff about that issue—of course we should.

[Huw Merriman]

Well, we can argue about statistics, but try this one. [Interruption.] The hon. Lady wants to throw one at me, but then will not let me respond with one, which I find slightly dictatorial. Some 2.2 million people were unemployed when we took office in 2010; that figure is now 1.4 million. I can give her the number of those who have clearly moved off unemployment benefit into work. We can argue about this all the way through—

--- Later in debate ---

[Will Quince]

As the hon. Gentleman knows, split payments are available. I know the Scottish Government are looking at split payments by default, and that is an area I am looking at very closely indeed. It comes with huge complexities, as indeed the Scottish Government recognise, and we are working very closely with them. The Secretary of State has done a huge amount of work in this area—we would expect nothing less from a former Home Secretary who has done an awful lot of work around domestic abuse. So this is an area that I am looking at very carefully; I am conscious of it and am very happy to commit to continue to work with the Scottish Government to try to find a solution to what is a very complex issue.

Supporting the most vulnerable in society is at the very heart of our compassionate Conservative Government and my Department does exactly that.

[Debbie Abrahams]

Will the Minister give way?

[Will Quince]

Last year we paid 20 million citizens—more than half of all adults in this country—a huge range of social security entitlements and benefits, from state pension and cold weather payments to universal credit and disability benefits. In total the Department spends £190 billion a year—spending that is equivalent to the GDP of Portugal.

[Debbie Abrahams]

Will the Minister give way?

[Will Quince]

Through our welfare reforms and our reforms to make work pay we have got spending under control while ensuring that we do not trap people on welfare. [Interruption.] Under Labour, 1.4 million people spent most of the last decade trapped on out-of-work benefits, with some receiving more than the average wage. Some 50,000 households were allowed to claim benefits worth over £500 a week or more than £26,000 a year, higher than the average wage at the time. [Interruption.] We are creating a welfare system in which it pays to work, with universal credit simplifying the complex legacy benefits—[Interruption.]

--- Later in debate ---

[Will Quince]

We are at record levels of employment and, once fully rolled out, universal credit will support another 200,000 people into work and help those already in work to increase hours. But we do not want people to have just any job; we want them to have good jobs where they are able to progress, and universal credit will enable this while providing an economic benefit of £8 billion a year to our economy and saving the Exchequer more than £3 billion annually.

But this is not “job done”. I know as well as anyone the importance of supporting people into work, particularly among vulnerable groups. That is why we have worked hard to create a safety net that not only supports people when they fall on hard times but gives them a hand up. That is vital. We are spending more than £55 billion this year to support disabled people and those with health conditions. That is more than any Labour Government did. Disability benefit spending will be higher in every year to 2023 than it was in 2010. Under universal credit, disabled claimants who cannot work will receive an average of £100 more each month than under the legacy system. So we are supporting those who have worked their whole lives and paid into our social security, and who now deserve to enjoy their retirement. We created the triple lock on state pensions, which has increased the amount of the basic state pension to almost £1,600 more than it was in 2010. We are further protecting the poorest pensioners through pension credit. This means that in total we spend more than £120 billion on benefits for pensioners in this country. As a result, pensioner poverty is now close to historic lows, which is where we want to keep it.

[Debbie Abrahams]

rose—

[Will Quince]

I will turn now to some of the points made in the debate. The hon. Member for Wirral South talked about the WASPI women. This Government have introduced transitional arrangements costing £1.1 billion. This concession reduced the proposed increase in the state pension age for more than 450,000 men and women, and it means that no woman will see her pension age change by more than 18 months relative to the 1995 Pensions Act timetable. As numerous hon. Members have pointed out, if we were to reverse the state pension changes made under the previous Pensions Act, it would cost more than £200 billion up to 2025-26.

Moving on, the two-child policy ensures that parents in receipt of benefits face the same financial choices when deciding to grow their families. As announced in January, we will no longer be extending the policy for new claims for children born before April 2017. Turning to the benefit freeze, I have already made it clear that we will end the freeze in 2020. As for universal credit, the principle is to have a simpler system, with six benefits rolled into one. When it comes to supporting children, I play a role in the early years ministerial group, which was chaired by the former Leader of the House, my right hon. Friend the Member for South Northamptonshire (Andrea Leadsom). That group is looking at numerous options around cross-departmental work on supporting children.