Tax Avoidance and Multinational Companies

Debbie Abrahams Excerpts

Wednesday 3rd February 2016 Commons Chamber

[Roger Mullin]

Yes, full of IKEA furniture.

It has been claimed by Oxfam, although I have not checked this out, that 98 of the FTSE 100 companies have subsidiaries in tax havens. There is a wider ethical question to address. This is not merely about how international corporations may evade UK tax. Some countries are much more vulnerable than the UK. There are considerable concerns, as the hon. Member for Foyle (Mark Durkan) said, in the developing world. Some 30% of Africa’s wealth is held offshore. Research by the International Monetary Fund has found that developing countries lose $200 billion a year to tax avoidance—more than they get in all forms of foreign aid.

The UK needs to take a lead. Hopefully we will see that when the Prime Minister hosts the anti-corruption summit in May 2016, because the UK remains at the centre of a global network.

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

It is three years since the Prime Minister promised to clamp down on tax evasion and to publish the details of UK-based companies and people in the overseas territories. Does the hon. Gentleman agree that the Prime Minister should fulfil his obligation? This is a manifesto commitment that he has failed to fulfil.

[Roger Mullin]

I agree with the hon. Lady, and hopefully the Prime Minister will fulfil that obligation in the conference that he will chair shortly. We shall wait and see.

I shall conclude with one other example that is close to the heart of the Scottish people: our historical links with Malawi. This week, ActionAid launched a new campaign, calling for the UK to negotiate a fairer tax treaty with Malawi. Every constituency in Scotland has strong historical links with Malawi. The UK tax treaty with Malawi was signed in 1955 when Malawi was under British colonial rule, and it limits the ability of the Malawi Government to collect tax revenue from UK firms that operate there, thereby preventing that poor country from raising money that it desperately needs.

It is right to hold a thorough investigation into the Google settlement, and we should press for greater transparency. We should also press the UK to take an international lead in addressing the corrupt tax avoidance practices of the many, and not just the few. Getting our own house in order would be a fine start.

Spending Review and Autumn Statement

Debbie Abrahams Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

There you go—Trident. That is the modern Labour party: it wants to get rid of our nuclear deterrent. Some Labour Members are now shaking their heads. May I make a polite suggestion? Why does not the Labour party sort out its policies and then come to the House of Commons and tell us what they are?

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

I welcome the Chancellor’s announcement of increased mental health funding, especially as it follows a cut to the mental health tariff in the last Parliament. Given last week’s research findings, which showed a clear link between the Government’s own work capability assessment policy and an increase in suicides and other adverse mental health effects since 2010, how much of the increased funding will be spent on ameliorating the adverse effects of the Government’s own policies?

[Mr Osborne]

It is generally accepted across this House that mental health services in the NHS have not always had the support they need over many decades and that we have not always had equality of treatment in the NHS. We have now made that change in the constitution of the NHS. Today I have announced £600 million extra funding for mental health, on top of what was announced at the March Budget. That will help with access to talking therapies and to perinatal mental health services. I would have thought and hoped that the hon. Lady welcomed that.

Welfare Reform and Work Bill

Debbie Abrahams Excerpts

Tuesday 27th October 2015 Commons Chamber

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

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Natascha Engel)]

With this it will be convenient to discuss the following:

New clause 3—Personal independence payment: timing of payment—

‘(1) Schedule 10 of the Welfare Reform Act 2012 is amended as follows.

(2) In paragraph 1(1), at start insert “Subject to paragraph ( ),”

(3) At end of paragraph 1(1), insert the following new paragraph—

“( ) Where a person in receipt of disability living allowance meets the requirements of section 82 of the 2012 Act his or her entitlement to disability living allowance shall terminate immediately and entitlement to personal independence payment shall commence on the same day.”’.

This New Clause aims to enable claimants of DLA who are transferred to PIP due to terminal illness to receive their first PIP payment immediately after being transferred. Currently claimants must wait four weeks from their final DLA payment to be made and then another four weeks to receive their first PIP payment.

New clause 4—Review of application of sanctions—

‘(1) The Secretary of State must before the financial year ending 31 March 2016 provide for a full and independent review of the sanctions regimes attached to working-age benefits, including but not limited to Jobseekers Allowance, Employment Support Allowance and Income Support, to determine whether they are effective and proportionate for meeting the Government’s objectives.

(2) The terms of reference for the review must include consideration of—

(a) the application of sanctions to lone parents with dependent children;

(b) the application of sanctions to claimants who are disabled;

(c) the effectiveness of sanctions in moving claimants into sustained work; and

(d) any other matters which the Secretary of State considers relevant.”

To provide for a full, independent review of the operation of the sanctions regimes attached to out of-work benefits, to determine the effectiveness of sanctions in moving claimants into sustained work as well as any adverse impacts on particular groups.

New clause 5—Report on impact of benefit cap reductions—

‘(1) The Secretary of State must publish and lay before Parliament before the end of the financial year ending with 31 March 2017 a report on the impact of the benefit cap reductions introduced by this Bill.

(2) The report must include an assessment of the impact on each of the measures of child poverty defined in the Child Poverty Act 2010.”

This new clause requires the Secretary of State to review impact of lower benefit cap after 12months.

New clause 7—Changes to the benefit cap—

Changes to the Benefit Cap shall not be made until the Secretary of State has carried out an assessment of the impact on its effect on poverty and laid a report before the House of Commons, The Scottish Parliament, The Northern Ireland Assembly and the National Assembly for Wales.”

New clause 9—Universal credit and carers—

Claimants in receipt of universal credit who are responsible carers for children are not subject to work focused interviews or work preparation requirements until their youngest child starts school.”

New clause 10—Changes to age of eligible claimants of housing benefit—

The Social Security Contributions and Benefits Act 1992 is amended as follows. After section 130(1) insert—

‘(1A) The Secretary of State shall not make provision about eligibility for housing benefit in respect of the age of a claimant except by primary legislation.”.”

New clause 11—Entitlement to housing costs element of universal credit for 18-21 year olds—

‘(1) Entitlement to the housing cost element of Universal Credit shall not be restricted for those 18 to 21 year olds who fall into the following categories—

(a) those who have previously been in work;

(b) a person who lives independently;

(c) those with a disability or mental health problem receiving Employment Support Allowance or Income Support;

(d) those with dependent children;

(e) pregnant women;

(f) those who are owed a rehousing duty under—

(i) section 193 of the Housing Act 1996;

(ii) section 9 of the Homelessness etc. (Scotland) Act 2003;

(iii) section 73 of the Housing (Wales) Act 2014;

(g) those who are homeless or at risk of homelessness who are being assisted by local authority housing teams;

(h) those who are living in statutory or voluntary sector homelessness accommodation;

(i) those who have formerly been homeless and have been supported by voluntary or statutory agencies into accommodation;

(j) those who have formerly been homeless between the ages of 16 and 21;

(k) a person without family or whom social services have found that a home environment is not suitable for them to live in; care leavers and

(l) those leaving custody.

(2) Within three months of section [Entitlement to housing costs element of universal credit for 18-21 year olds] of this Act coming into force, the Secretary of State must, by regulation, provide definitions of—

“a person who lives independently”;

“risk of homelessness” and

“a person without family”.”

New clause 12—Review of application of sanctions—

‘(1) The Secretary of State must on commencement of this bill, commence a full and independent review of the sanctions regimes attached to working-age benefits, including but not limited to Jobseekers Allowance, Employment Support Allowance and Income Support , to measure the impact on—

(a) to lone parents with dependent children;

(b) claimants who are disabled;

(c) moving claimants into continuous work;

(d) homeless;

(e) protected characteristics;

(f) long term health conditions;

(g) claimants with mental health disorders and

(h) any other matters which the Secretary of State considers relevant.”

Amendment 35, in clause 6, page 8, line 39, leave out subsection (2)

Amendment 36, in clause 7, page 9, line 2, leave out “£23,000 or £15,410” and insert “£26,000 or £18,200”

Amendment 37, page 9, line 3, leave out “£20,000 or £13,400” and insert “£26,000 or £18,200”

Amendment 38, page 9, line 15, leave out paragraph (a)

Amendment 39, page 9, line 17, leave out paragraph (b)

Amendment 40, page 9, line 19, leave out paragraph (c)

Amendment 41, page 9, line 21, leave out paragraph (d)

Amendment 42, page 9, line 27, leave out paragraph (f)

Amendment 43, page 9, line 39, leave out paragraph (k)

Amendment 44, page 9, line 41, leave out paragraph (l)

Amendment 45, page 9, line 44, leave out paragraph (n)

Amendment 46, page 9, line 46, leave out paragraph (o)

Amendment 47, page 9, line 48, leave out paragraph (p)

Amendment 48, page 10, line 1, leave out subsection (6)

Amendment 56, page 14, line 15, leave out Clause 13

Amendment 29, in clause 13, page 14, line 26, at end insert—

‘(3A) The Secretary of State may not lay an order under section 31 to bring the provisions of subsections (2) and (3) into force until he has laid before both Houses of Parliament a report giving his estimate of the impact of those provisions on persons who would otherwise be entitled to start claiming the work-related activity component of employment and support allowance.

(3B) No order bringing subsections (2) and (3) into force shall be made unless a draft of the order has been laid before and approved by a resolution of both Houses of Parliament”.

Amendment 31, page 14, line 29, at end insert—

‘(5A) The Secretary of State must make provision for additional personalised and specialist employment support in connection with the changes made by subsections (1) to (3).

(5B) The Secretary of State must issue guidance on the following—

(a) the forms of personalised and specialist employment support;

(b) the means by which a diverse market of suppliers for personalised and specialist employment support can be developed in local areas; and

(c) information for local authorities seeking to improve local disability employment rates.”

Amendment 20, page 14, line 39, leave out Clause 14

Amendment 57, page 14, line 39, leave out Clause 14

Amendment 58, page 15, line 1, leave out Clause 15

Amendment 59, in clause 15, page 15, line 4, leave out paragraph (a)

Amendment 60, page 15, line 4, leave out paragraphs (a) to (c) and insert—

“(a) in section 19(2)(c) for the words “under the age of 1” substitute “who has not yet started primary school””

Amendment 61, page 15, line 9, after “2,”, insert “3 or 4”

Amendment 62, page 15, line 10, leave out paragraph (c)

Amendment 63, page 15, line 13, leave out paragraph (a)

Amendment 64, page 15, line 13, leave out paragraphs (a) and (b) and insert—

“(a) in regulation 91 (claimants subject to work-focused interview requirement only), for the word “3” substitute “5 or when the child starts primary school”;

(b) in regulation 91A (claimants subject to work preparation requirement) for the words “3 or 4” substitute “who has not yet started primary school”;”

Amendment 65, page 15, line 15, leave out paragraph (b)

--- Later in debate ---

[Debbie Abrahams]

It is a pleasure to be here on my first occasion at the Dispatch Box. On Second Reading I conveyed my concerns about the Bill, and after a few weeks in Committee I have not changed my opinion. I said then that I thought this is a wicked Bill, and I still feel that.

Amendments 56 and 20 seek to leave out clauses 13 and 14 so as to prevent cuts to the work-related activity component of employment and support allowance, and to the limited capability for work element of universal credit. We believe it is unjust and unfair that disabled people and those with serious health conditions who have been assessed during the work capability assessment as not fit for work and placed in the work-related activity group should have their social security support cut by nearly £30, from £102.15 to £73.10.

Compelling evidence from the independent Extra Costs Commission, which analysed the additional costs facing disabled people, shows that on average they spend an extra £550 per month on things associated with their disability. The Government’s proposed cuts to people in the ESA WRAG come on top of a host of other cuts to social security and support for disabled people since 2010. Demos has estimated that by 2018, £23.8 billion will have been taken from 3.7 million disabled people, with 13 policy changes in the Welfare Reform Act 2012.

The cut in the ESA WRAG comes on top of the freeze in other social security support and the £3.6 billion of cuts to social care. My hon. Friend the Member for Pontypridd (Owen Smith) has argued for a cumulative impact assessment of cuts to tax credits and other benefit reforms for working families on low incomes, as defined in new clause 2, but why has that not happened already? Why have the Government not undertaken a cumulative impact assessment of the latest proposed cuts for disabled people, given that it is a requirement under the Equality Act 2010? I raised that point in Committee, and although I am grateful to the Minister for her response, she implied that only one model can be used to analyse the distributional effects of a policy. That is a flawed judgment. The Equality and Human Rights Commission is somewhat surprised by the suggestion that such cumulative modelling is not possible, given that it is undertaking its own cumulative impact assessment. I understand that the commission has written to the Government and highlighted the resources that are available to help them do that work, and perhaps when she responds the Minister will enlighten the House as to whether the Government have changed their mind.

The Government have also failed to provide evidence to substantiate their claim that working families on low incomes will be better off in spite of having tax credits taken from them—for example, through the introduction of the new national minimum wage, changes to personal allowances, and extended childcare provision. The Government’s meagre offering of an impact assessment for clauses 13 and 14 has failed to provide reassurance that disabled people will not be subjected to serious financial hardship. Although the assessment estimates that approximately 500,000 disabled people and their families will be affected by the cut to the ESA WRAG, there is no analysis of the impact this will have on the disabled people who will be pushed into poverty.

[Ian Lavery]

I am not sure whether my hon. Friend was present about an hour ago, when the Minister suggested that it was a good idea for people in the work-related activity group to lose 30% of their benefits so as to move them nearer to employment. How ridiculous is that?

[Debbie Abrahams]

I entirely agree with my hon. Friend. In fact, I am going to move on to a section specifically concerned with incentivising work and how on earth people with, for example, progressive conditions can be incentivised.

[Richard Graham (Gloucester) (Con)]

I welcome the hon. Lady to her place. On the specific issue of trying to help people in the work-related activity group to get into work, does she agree that the current system is not working as well as it should and that we need to spend more money on helping them find jobs? It is harder for them to find jobs than it is for other people on jobseeker’s allowance. In answer to the point made by the hon. Member for Wansbeck (Ian Lavery), that is precisely why we should be transferring money into helping them to get jobs.

[Debbie Abrahams]

I thank the hon. Gentleman for his intervention, but his question belies the facts. Some £640 million is being withdrawn from people in the ESA WRAG, while £100 million is meant, in some undisclosed manner, to provide support. There is no information from the Government on how that will support disabled people back into work.

As I was saying, there is no analysis of the impact that this will have on the disabled people who will be pushed into poverty. Disabled people are twice as likely as non-disabled people to live in persistent poverty, and 80% of disability-related poverty is caused by their extra costs. Last year, there was a 2% increase in the number of disabled people who were pushed into poverty. That is equivalent to 300,000 people. The Minister’s recent reply to me did not address this particular point, so I would be very grateful if that could be explained. Half a million disabled people will be affected and lose £30 a week—nearly a third of their weekly income. What is the Government’s estimate of the increase in the number of disabled people who will be living in poverty?

[Neil Coyle]

I welcome my hon. Friend to her rightful place on the Labour Front Bench. Is she aware that in the other place Lord Low is going to carry out an independent review of poverty, in the absence of a Government study? Will she encourage the Government to interact with that independent review, in particular on poverty and the impact on higher health and local authority costs as a result of the reduction in ESA?

[Debbie Abrahams]

My hon. Friend makes some excellent points. The Equality and Human Rights Commission is able to undertake that analysis. Other bodies and organisations are doing it, so why are the Government not able to do it? Surely this is what we should expect from the Government in their implementation of policy. There are real concerns from disabled charities, disabled groups and Lord Holmes, the chair of the EHRC’s disability committee, about the extent to which the assessment of the impact on disabled people is understood.

On incentivising work, on Second Reading the Secretary of State for Work and Pensions stated:

“the current system discourages claimants from making the transition into work.”—[Official Report, 20 July 2015; Vol. 598, c. 1259.]

What about people with progressive conditions, such as Parkinson’s, multiple sclerosis and motor neurone disease, who have no prospect of recovery but have undergone a work capability assessment? They have been found not fit for work and placed in the WRAG group. Are the Government seriously saying that the measure will incentivise this group of disabled people into work? They have already been found not able to work through the Government’s own assessment process. Their progressive conditions are not going to change. This is a real concern.

[Mr Anderson]

I welcome my hon. Friend to her position on the Front Bench. As chairman of the all-party group on muscular dystrophy, I would like to tell her that information shared with me suggests that people across the whole field of disability believe that this measure will actually have the opposite effect from the one intended. Rather than providing an incentive for people to go to work, it will mean that they will struggle to continue to have the independence they need. This £30 deduction will make a big difference: people will wonder whether they can afford to maintain their mobility, which will have a detrimental effect, making it less likely that they will find work than if they are left where they are now.

[Debbie Abrahams]

My hon. Friend makes an entirely valid point. Disabled people will find it more and more difficult to live fulfilling lives that enable them to make contact and fulfil their potential, which everyone should have the right to do, so it will be a disincentive.

[Simon Hoare]

I am chairman of the all-party group on multiple sclerosis. I entirely understand the hon. Lady’s concern and, indeed, the sort of representations made by the hon. Member for Blaydon (Mr Anderson). However, does she take heart, as I do, from the fact that Ministers are part of a party that brought forward pioneering legislation on disability rights, which should provide comfort that Ministers on the Treasury Bench will make sure that no policy will leave people behind?

[Debbie Abrahams]

Yes, it is right to acknowledge the Government’s role in bringing in the Disability Discrimination Act 1995, but this Bill flies in the face of that legacy. I really hope that by the end of today, the Government will be able to provide some reassurance, because to date there has simply been none for disabled people.

In Committee, the Minister said that these cuts would not affect people currently on the ESA WRAG, but does that mean that people diagnosed with progressive conditions, but assessed after the Bill is enacted, will be deemed to have a different form of the progressive condition? Will they require less support, or do the Government finally accept that, apart from being dehumanising and exacerbating people’s health conditions, the work capability assessment is not fit for purpose and needs a complete overhaul so that people with progressive conditions are not placed in the ESA WRAG? I would really appreciate some clarity on that point.

Surely if the Government were serious about supporting disabled people into work, there would be measures in place to support into work those disabled people who are able to work. How many employers will be engaged? Although the Disability Confident scheme is a good first step, only 68 employers are currently active in it, and they will certainly not be able to support the 1.3 million disabled people who are able to and want to work. Do the Government intend to extend Access to Work beyond the 35,000 disabled people it helped stay in work or into a new job last year? What is going to happen about the appalling ratio of one disability employment adviser for 600 disabled people? [Interruption.] What estimates are there of the impact on the employment of disabled people of this measure and the reduction of the 30% disability employment gap?

[Helen Goodman (Bishop Auckland) (Lab)]

My hon. Friend has just said the most astounding thing I have heard in this Chamber for a very long time. There is one work adviser for 600 people. In the course of a year, I wonder whether each person would get some attention just once. Has there been any assessment of the absurdity and ineffectiveness of this situation, as contrasted, of course, with the marvellous suggestions we heard a short while ago from the hon. Member for Gloucester (Richard Graham)?

[Debbie Abrahams]

That figure was revealed through the work done when I sat on the Select Committee. Yes, it is shocking. Some are trying to say that this Bill is about encouraging people into work, but there are no measures in place to support it. Indeed, my next point is—where exactly is the “work” bit in this Welfare Reform and Work Bill? Here we are on Report, and these basic questions have still not been answered. All we know from the Government’s impact assessment is that by 2020-21, approximately £640 a year will have been cut from social security support for disabled people—on top of the £23.8 billion of support that has already been taken from them—and that £100 million a year will be provided in unspecified support to help them into work. That is a disgrace; disabled people deserve much better.

--- Later in debate ---

[Simon Hoare]

Hitherto, the hon. Lady has been making a very thoughtful and considered speech. It may not be up to me, as a new Member, to say this, but the sentence that she has just uttered has fundamentally undermined the cause of her argument, and I invite her to reconsider it.

[Debbie Abrahams]

I appreciate that it is strong language, but I can only provide the hon. Gentleman with the evidence. In 2010, the use of the term “scrounger” by the mainstream press had increased by more than 330%, and it has remained at that level. We should always be mindful of the language that we use as leaders, and of how it is perpetuated.

[Ian Lavery]

May I advise my hon. Friend not to take any lectures from the team opposite when they are asking her to calm down in respect of her language against the disabled? Constantly, for the last five years, they have attacked disabled people, poor people and lower-paid people. No apologies are required.

[Debbie Abrahams]

I used that language to draw attention to the issue in the House, and more widely. I did so partly because I am sure I am not the only one to remember the autumn statement two or three years ago in which the Chancellor, at the Dispatch Box, referred to “closed curtains” when people were going out to work. It was quite clear what that implied. I use such language very carefully, and I repeat that its use in the media has increased by 330%. We all have a responsibility in this regard, including the country’s leaders.

The innuendo is that people with a disability or illness might be faking it or feckless. That is grotesque. As a former public health consultant, I speak with some knowledge. It is recognised that incapacity benefit and ESA are good population health indicators, and the release of the Government’s own data has proved the point. Disabled people in the ESA WRAG are a vulnerable group who need our care and support, and not our humiliation.

[Simon Hoare]

rose—

[Debbie Abrahams]

I will give way to the hon. Gentleman one more time.

[Richard Graham]

I invite the hon. Lady to come to the opportunities fair in my constituency on 6 November, which is specifically focused on helping people in the ESA WRAG category to find opportunities for getting back into work. It will be very similar in tone to the first Disability Confident fair we held a year ago, and I am sure she would want to encourage Members from all parts of this House to hold these events and champion people like that who are trying to find jobs.

[Debbie Abrahams]

In return, I ask the hon. Gentleman to ask his constituents who are on ESA WRAG how they will be affected by these proposals and whether they will have to cut back on such journeys and work fairs because of the cuts the Government are likely to impose. Up and down the country good work is being done to support people back into work, but this measure is not part of that.

[Several hon. Members rose—]

--- Later in debate ---

[Debbie Abrahams]

I am not going to give way anymore, as I am conscious of the time.

These cuts are punitive and wrong. They fly in the face of the Conservative party’s pledge to protect disabled people’s benefits. With this cut to ESA WRAG support, without putting in place anything to replace it, the Government are condemning more disabled people and their families to live in poverty. I predict that more tragedies will happen. I will be pushing our proposals to a vote and urge all Members to do the right thing by supporting the removal of clauses 13 and 14 from the Bill.

New clause 4 requires that the Government undertake a full independent review of their sanctions regime by 31 March 2016. It is with considerable regret that, after the Work and Pensions Committee’s report earlier this year, which also recommended an independent review of benefit conditionality and sanctions, the Government have failed to recognise the real concerns about their new sanctions regime, either in response to what was said in the Bill Committee or to that report.

I have been campaigning for an independent review of sanctions for nearly two years, and in that time constituents have come to me with their stories about how they have been sanctioned. One constituent was told while he was undergoing the work capability assessment that he was having a heart attack and should go to hospital, yet two weeks later he received a letter to say that he had been sanctioned. People up and down the country have also got in touch with their stories of how they have been sanctioned, for example, for being a few minutes late for an appointment with an adviser or work coach. Increasingly, people are being sanctioned unreasonably, for example, because they had attended their mother’s funeral, been hospitalised or gone to a job interview—this is absurd.

There was another category of reasons for being sanctioned. I still have the email from a constituent who had received a letter saying he had been sanctioned for non-attendance at a meeting with his adviser at the jobcentre, even though he had evidence that he had been there. The penny dropped when another constituent, who had worked in jobcentres across Greater Manchester for 20 years, came to me to tell me that as part of the new sanctions regime introduced at the end of 2012, the DWP had targets for sanctions. As he described it, claimants were being deliberately set up to fail, whether they had done anything wrong or not.

The Work and Pensions Committee also became concerned while conducting an inquiry in 2013 on “The role of Jobcentre Plus in the reformed welfare system”. At that stage, it recommended the following:

“DWP should launch a second, broader, independent review of conditionality and sanctions, to include investigation of whether the process is being applied appropriately, fairly, proportionately and in accordance with the rules, across the Jobcentre network.”

[Graham Stuart (Beverley and Holderness) (Con)]

I am concerned about the issue the hon. Lady raised about targets for sanctions, as this is a serious allegation to make and it is a serious issue. It is possible to meet people from all sorts of walks of life who through their profession may have some professional insight, but their word alone is not enough to suggest that something is true—one does need verification from elsewhere. Can she substantiate her point? What did she find out that would make us believe it is true?

[Debbie Abrahams]

The hon. Gentleman makes my point for me: that is why we need the independent review. There was enough evidence to leave real concerns about this matter. The Select Committee thought that the Minister had agreed to a review, but as paragraph 100 of the report states, unfortunately he reneged on that promise. In addition to these serious ethical issues, there were, and still are, concerns about a number of people affected, particularly in the case of ESA claimants, and about the meteoric rise in the use of sanctions.

[Peter Dowd (Bootle) (Lab)]

Does my hon. Friend recall that in the summer the Department for Work and Pensions was forced to admit to having invented quotes from fake benefit claimants, which meant that its sanctions leaflets had to be withdrawn pretty quickly?

[Debbie Abrahams]

My hon. Friend makes a valid point. That is one of the reasons why we need an independent review to investigate such matters.

[Graham Evans (Weaver Vale) (Con)]

I congratulate the hon. Lady on her new role on the Front Bench—she has done far better than me. When she and I served on the Work and Pensions Committee, we investigated this matter and found no evidence of benefit sanctions targets in the jobcentres we visited. I have two outstanding Jobcentre Plus offices in my constituency, and I have seen no evidence whatsoever of any targets there. How can she stand at the Dispatch Box and say that there are targets for sanctions when, to the best of my knowledge, there is no evidence that they exist?

[Debbie Abrahams]

I thank the hon. Gentleman for his kind remarks. I understand that his wife has previously worked in a Jobcentre Plus office. To reiterate my response to the hon. Member for Beverley and Holderness (Graham Stuart), the whole point is that there is some evidence and that we need a better understanding, which is why we need an independent review.

[Helen Goodman]

If there is to be an independent review, does my hon. Friend agree that it should take evidence from the National Audit Office, which has stated that although the targets might not come from the Minister’s office, the performance management of the jobcentres amounts to targets, because what it measures does not take into account the numbers of people who are supposed to go back into work or the quality of advice they receive?

[Debbie Abrahams]

My hon. Friend makes a valid point. The Select Committee reported on the fact that there are targets for off-flow, which means getting people off the books. Those in themselves are targets. [Interruption.]

[Graham Stuart]

That has nothing to do with sanctions.

[Debbie Abrahams]

Well, I will move on to that shortly and show exactly why we believe that is happening.

In addition to those serious ethical issues, we have also seen a meteoric rise in the use of sanctions. ESA sanctions increased from 60,363 between June 2010 and October 2012 to 245,679 between November 2012 and March 2015, which corresponds with the introduction of the new sanctions regime. As I have said, people on ESA are disabled or have serious health conditions.

The new sanctions regime is also particularly punitive. People are without financial support not just for a week or two, because the minimum sanction is now four weeks. Subsequent misdemeanours can mean up to three years of sanctions, whereas previously the maximum was six months. That has particularly affected young people, disabled people and lone parents. In addition, during 2013-14 it became clear that although no other benefits, such as housing benefit, were meant to be affected, in some cases housing benefit was automatically being stopped. The obvious implication is that families will be getting into debt as a result.

The fact that since January 2014, on average, nearly half of ESA sanctions have been overturned on appeal surely confirms that there are issues with sanctions policy and practice. The Work and Pensions Committee published its report in March this year, revealing even greater concerns about the inappropriate use of sanctions, their ineffectiveness in getting people into work and the impact on the health and wellbeing of claimants.

The Select Committee received evidence that sanctions were being driven by targets to get claimants off-flow in a way that distorted the JSA claimant count. A team from Oxford analysed data from 376 local authority areas and found that 43% of JSA sanctioned claimants left JSA and that 80% did so for reasons other than employment. In July, the Social Security Advisory Committee also raised concerns about the effectiveness of the sanctions regime in getting people into good quality jobs, and called for better evidence to underpin sanctions policy.

--- Later in debate ---

[Helen Goodman]

Exactly. It is a long-term problem.

[Debbie Abrahams]

Absolutely.

Similarly, there are concerns about the impact of the benefit cap on disabled people, who already face extra costs associated with their disability, as I mentioned earlier. It is estimated that 150,000 adults and 395,000 children will be affected by the reduction in the cap. We believe that, in conjunction with the freeze in local housing allowance, cuts in social housing rents and a lack of affordable homes, the lower cap also risks exacerbating the housing crisis. The Government’s own impact assessment concedes that rent arrears, evictions and homelessness will increase as a result of the lower cap. We believe that further reductions in the benefit cap in London and elsewhere risk pushing tens of thousands of children, families and disabled people into poverty. We are the sixth wealthiest country in the world. It is not right that the Government are seeking to secure the recovery on the backs of the working poor, their children and disabled people. I hope they will think again.

[Graham Stuart]

I, too, would like to congratulate the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) on her new position.

I want to speak narrowly to new clause 3, tabled by the hon. Member for Sheffield Central (Paul Blomfield). The new clause would amend the regulations that currently mean that a claimant who is moved from the old disability living allowance system to the new personal independence payment award must wait 28 days after a decision before receiving the new benefit. Those regulations allow a claimant who is moving to a lower award to adjust to their new financial circumstances by receiving the old award for a period of time, which is extremely welcome.

The unintended consequence of the regulations, however, has been that some of the most disabled and vulnerable people in our society, including those who are terminally ill, are being forced to wait almost a month, and sometimes longer, to receive the extra money they need to meet the costs resulting from their illness. That situation most commonly affects individuals who have become entitled to additional money through PIP because their diagnosis has become terminal.

I am grateful to Macmillan Cancer Care for the work that it has done in this area. Let us imagine a cancer patient, who is already receiving some support under the old DLA system because of their illness, and who receives a terminal diagnosis. They inform the Department for Work and Pensions about this, and the Department makes a decision about their eligibility for additional financial support as a result of their terminal diagnosis. I am pleased to say that that decision should be made within six days—a target timescale that was introduced precisely in recognition of the fact that those who are terminally ill are in particular need of timely assistance.

Welfare Reform and Work Bill (Seventh sitting)

Debbie Abrahams Excerpts

Tuesday 13th October 2015 Public Bill Committees

[Damian Hinds (East Hampshire) (Con)]

The amendment seeks to delay the Government’s proposed changes to the family element of child tax credit until April 2022. The Government were elected on a mandate to reduce the deficit and restore order to our public finances. As part of the plan to get us into surplus and to continue the progress made in the previous Parliament, the Government have committed to making a further £12 billion of welfare savings.

To set the scene, the most recent statistics show that, in 2011, the level of UK expenditure on family benefits was the second highest out of the 34 countries in the OECD and almost double the average. Child tax credits are there, of course, to provide support to low-income families to help them with the costs of raising children.

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

Will the Minister clarify those figures? Are they in terms of percentage of spend to GDP or absolute figures?

[Damian Hinds]

The OECD has done a survey based on percentage of spend to GDP. The hon. Lady has not asked this question but let me clarify further: it takes together family benefits, cash benefits, tax breaks and childcare. Of course, the mix is different in different countries. Nordic countries tend to spend more on direct childcare and Anglophone countries tend to spend less on that but put more into tax breaks. Our country has tended to spend a little bit more on cash benefits and on childcare.

As I said, child tax credits are there to provide support to low-income families to help them with the cost of raising children, but the system has grown unsustainably—a family with three children that earns up to almost £40,000 could still be eligible for some support. The previous Labour Government let public spending on tax credits rocket out of control so that, in 2010, nine out of 10 families with children were eligible for tax credits. That was not targeted support for low-income families.

--- Later in debate ---

[The Chair]

Just before I call Debbie Abrahams, a number of colleagues have been using the word “you”, which of course refers to the Chair, when they really mean the hon. Gentleman or the Government. I say that to all my colleagues, both experienced and inexperienced. It is an easy mistake to make.

[Debbie Abrahams]

It is a pleasure to serve under your chairmanship, Mr Streeter. This is the first opportunity I have had to speak as the shadow Minister for Disabled People, so if you will allow me, I would like to start by paying tribute to my predecessor and friend, the hon. Member for Stretford and Urmston (Kate Green). She did a fantastic job, not just in this Bill Committee but in the past in this role and her mantle is going to be hard to take up.

I want to add my voice to what my hon. Friend the Member for Islington South and Finsbury has said. The tax credit provisions in the Bill are pernicious, and these elements are particularly callous and unjust. We are seeking to try to exempt families with disabled children from their impact.

Those who have spoken to parents and carers with disabled children will know that there are additional costs associated with raising disabled children. Contact A Family’s “Counting the Costs” report found that families with disabled children are more likely to be living in poverty than other families and that it costs three times as much to raise a disabled child. Families with disabled children face considerable additional expenditure on heating, housing, clothing, equipment and other items compared with other families. My youngest daughter was diagnosed with asthma when she was very little. One of the triggers for her was the cold and we had to have our heating on all day and all night when she was little to try and avoid what often happened, which was that she stopped breathing. I have that personal experience and, fortunately, we were able to cope with the financial costs of additional heating, but that is not the case for many families.

Research over many years demonstrates a strong relationship between low income, social exclusion and disability among families who have a disabled child. As the “Every Disabled Child Matters” campaign has said, childhood disability is frequently a trigger event for poverty, as a result of additional costs, family break-up and unemployment following the birth or diagnosis of a disabled child. As I said, disabled children are also at a high risk of poverty as a result of low household incomes. Many parents of disabled children are unable to work because of care responsibilities and the lack of, or the cost of, appropriate childcare. I would be interested in the Minister’s response to the issue of providing appropriate childcare for disabled people because, within the proposed provisions, the Government have not been particularly explicit about how that relates to disabled children.

[Neil Coyle]

I welcome my hon. Friend to her new role. The Minister has already mentioned a commitment to providing 30 hours of childcare, but at no point have the Government provided any information on how it will be assessed and whether parents can genuinely access that level of childcare, in particular the parents of disabled children. Would my hon. Friend welcome the Government clarifying whether childcare is genuinely accessible, particularly for parents of disabled children?

[Debbie Abrahams]

My hon. Friend makes a valid point and I would be grateful if the Minister could address it in his response.

Barriers to work are created by the stress of caring, often with no support. I am thinking again in the context of the £3.6 billion of cuts in social care, which also affect disabled people. When people do not have that support enabling them to work, it can build difficulties into family relationship. It is not clear in the impact assessment whether an assessment has been done on the likely increase in poverty of families with disabled children.

For example, what is the increase in NHS admissions predicted to be? I have mentioned my daughter who has asthma. The implication is that there will be other families in similar circumstances. Is there any prediction of an increase in family breakdown? We cannot be in a situation where, potentially, the Government are arguing that the measure will balance the books when it is really about cost-shunting from one Department to another. What assessment has been done on that?

We do not believe that disabled people, their families and their carers should be subject to further cuts and therefore seek to exempt households with one or more disabled children from the provisions on both child tax credit and universal credit. The Government and the social security system rightly recognise the additional costs of raising disabled children but the provisions in clauses 11 and 12 seem to be at odds with that. I oppose them absolutely and in their entirety. At the very least, the effect of the provisions should be mitigated for households with a disabled child and I urge all members of the Committee to do the right thing and support the amendments.

[Emily Thornberry]

Might I rise again? It is entirely my mistake but I realise that I spoke just to amendments 83 and 84 and not to new clause 16. Would it be convenient for me to do so now?

National Insurance Contributions (Rate Ceilings) Bill

Debbie Abrahams Excerpts

Tuesday 15th September 2015 Commons Chamber

[Harriett Baldwin]

My remarks will be so short that hon. Members will need to intervene quickly with their points of clarification on this five-clause Bill. The hon. Lady will be aware that in the summer Budget the Chancellor announced that we are asking the Office of Tax Simplification to look at class 2 and class 4 contributions. We are expecting that consultation, which opened on 21 July, to inform the Budget next year. She asks a sensible question and I welcome her curiosity.

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

Can the Minister clarify what assessment she has made of the number of self-employed people who may apply for an exemption from paying class 2 contributions, especially as at least half of the increase in employment is self-employed people and, on average, self-employment incomes have fallen to less than £10,000?

[Harriett Baldwin]

We are very pleased that we are backing those who want to take a chance, start their own business and become self-employed. In fact, we have taken measures in previous Budgets to simplify the process so that self-employed people can consider making those contributions alongside their self-assessment.

--- Later in debate ---

[Harriett Baldwin]

I thank my hon. Friend for making that excellent point. The Government want to back small businesses, entrepreneurs and those who want the certainty over the next five years that if they employ four people on the new national living wage, they will not have to pay any national insurance because of the employment allowance.

[Debbie Abrahams]

May I press the Minister on the point I made in my earlier intervention, which she did not actually answer? What assessment has she made of the number of self-employed people who earn so little that they could apply for an exemption from class 2 national insurance contributions?

[Harriett Baldwin]

When one starts out in business, it is often the case that one earns a small amount, but it is those fantastic people who start businesses, often at their kitchen table, whom the Government are trying to back with the measures in the Bill, which will give them a certainty that they would not have if Labour were in charge.

Budget Resolutions and Economic Situation

Debbie Abrahams Excerpts

Monday 13th July 2015 Commons Chamber

[Greg Clark]

I can give that reassurance to my hon. Friend. That is the essential difference between the programme of devolution that we are offering and what has been attempted in the past. Every proposal will come from local people. I do not have the power, still less the inclination, to force local people into any arrangements other than those for which they are enthusiastic.

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

Will the Secretary of State explain to me and the residents of Greater Manchester how the devolved £6 billion health and social care budget marries with the £7.1 billion that is currently spent in Greater Manchester? What will happen to the residents of Greater Manchester when that money runs out?

[Greg Clark]

The hon. Lady, who is a Greater Manchester Member of Parliament, should talk to her leaders in Greater Manchester who put the proposal to the Government. The proposal was not invented in Whitehall and visited upon Greater Manchester. The leaders of Greater Manchester made the very good point that when there is a strong connection between the needs of the national health service and the social care of residents across Greater Manchester, it makes complete sense for them to be managed together. That was their proposal and, in line with what my hon. Friend the Member for North Wiltshire (Mr Gray) said, we were very pleased to endorse it.

As I said, this is just the start. We want to build on the ingenuity and experience of local councils and civic and business leaders in an area to attract private investment to match the public investment. The city and local growth deals that we implemented in the last Parliament have transformed £7 billion of funds from central Government Departments into £21 billion of local investment. This Budget represents a golden opportunity for local leaders to repeat that success on a grander scale. Furthermore, with measures such as the creation of new enterprise zones, for which an invitation has gone out to places across the country, and the extension of the coastal communities fund, we are determined that this invitation should be extended to all parts of the country.

--- Later in debate ---

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

That is good news, Madam Deputy Speaker, for someone who is always in a rush.

This is an illusion of a Budget of which even Dynamo would have been proud. Saying that it is going to make work pay defies all the evidence. Illusion No. 1 relates to the performance of the economy. The Government are borrowing £219 billion more than they anticipated in 2010, and there is a debt to GDP ratio of over 80%, when it was only 60% after Labour recapitalised the banks. Why is the economy at this level? Basically, because it was absolutely tanked under the coalition and that is now going to be carried forward under this Government.

In 2014, population-adjusted growth was 1.4% below its pre-recession peak, and in the first quarter of 2015 it was still below it, at 0.67% of the pre-recession peak. This reflects the particular issue that the Government have had with productivity, which is the second worst in the G7. Now that we have a productivity plan, will the Minister identify the specific measures that are going to support small and micro-businesses to access finance and to deal with all aspects of late payments, which are an absolute blight on small businesses? How is he going to harmonise taxation and make the tax system more consistent, particularly for self-employed sole traders?

Since 2008, nearly three quarters of the increase in all employment has been down to the increase in self-employment. According to Office for National Statistics data, self-employment has increased by nearly 40% since then, and is now at a 40-year high. There are many benefits from being self-employed: people get to be their own boss, and can choose when and where to work, but there are issues with taxation. We also know that the average income of someone in self-employment is half that of an average employee. It has fallen by 22% since 2008. Last year, Demos undertook research to establish the reason for the sudden increase in self-employment, and concluded that the level was artificially high because there were no jobs for people to move into, and people often moved backwards and forwards between employment and self-employment. There were no real jobs about. There is also the issue of false self-employment. Many large companies in the construction industry, for instance, sub-contract rather than employing brickies, joiners and plumbers. How will the Government deal with those issues?

Another illusion is that the Budget is fair and will make work pay. We know from an analysis conducted by the independent Institute for Fiscal Studies that the poorest 20% of the population will lose proportionally more of their income from tax and benefit changes than any other income group—between £800 and £1,300 a year—and that 3 million people are set to lose £1,000.

The increase in the national minimum wage is welcome, although it is not a living wage as the Government have tried to suggest. It is something, but it does not begin to compensate for the cuts in tax credits that will be suffered by the low-paid. Let me add to the examples that have already been given by many of my hon. Friends. The income of a lone parent with two children who works for 16 hours a week will increase by £400 a year, but that will be accompanied by a tax credit cut of £860, so that person will be £460 worse off. A couple with one partner working full-time on average income will lose £2,000 in tax credits, and will not benefit from the increase in the national minimum wage. According to data published by the International Monetary Fund last month, raising the income share of the poorest 20% of the population increases growth by 0.38% over five years. What the Government are doing will harm the chances of a sustained recovery.

[Rebecca Pow]

It is interesting to note that we hardly ever hear the word “business” mentioned by Opposition Members. It is businesses that must pay the £7.20 that may rise to £9, and that will cost many of them a great deal, but they agree that it is worth it to give people better living standards. Surely we can discuss some of those issues.

[Debbie Abrahams]

If the hon. Lady had listened to my earlier remarks, she would have heard me talk about small businesses then. I have done a significant amount of work with small businesses.

The Government are trying to persuade the public, and to justify what they are doing to working people. We know that, on the whole, it is working people who will be affected. Half the 13 million people who are living in poverty are in work, and two thirds of children in poverty are in working families. The Government are trying to construct a narrative to justify the tack that they have taken—the “divide and rule” narrative about people being feckless—but it is the working people who will be affected most.

Another thing that the Government regularly do is a source of immense frustration. Although I have consulted the Ministers’ code of conduct and many other sources, I have been unable to identify a responsible use of statistics on their part. The Chancellor, for example, tried to suggest in his Budget speech that we were one of the most generous welfare-spending countries in the world. That is simply not true. It is absolute rubbish. If we compare the UK’s spending as a percentage of GDP with that of developed countries in the European Union —as my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) tried to do earlier—we find that it is ranked 17th out of 32.

[Mrs Drummond]

We are the fastest-growing economy in Europe. We are securing more jobs, we have higher employment, and our businesses are doing well. How can that be squared with what the hon. Lady is saying about the welfare state?

[Debbie Abrahams]

I dealt with that earlier in my speech.

In my constituency, more than 20,000 working families with nearly 30,000 children are claiming tax credits. That is two in three families, and three in four children. For them, tax credits mean keeping their heads above water. The changes in tax credits will be devastating for them and will undoubtedly result in an increase in child poverty, with a knock-on effect on those children’s educational attainment, health and life chances. The worsening inequalities are set to become intergenerational.

I must also mention the impact of the £30-a-week cut in additional support for people in the employment and support allowance work-related activity group, which is another punitive measure affecting extremely vulnerable people. The Disability Benefits Consortium believes that the 300,000 disabled people who are already living in poverty will be pushed further into that condition.

Finally, let me say something about housing policy, the inheritance measures and wealth inequalities, especially in the context of land and property. In 2002, it was estimated that 69% of land in the United Kingdom was owned by 0.6% of the population. In the six years to 2011, the number of landholdings had been reduced by 10%, but the size of those holdings had increased by 12%, so even fewer people owned even more land. The inheritance tax measure is but a drop in the ocean when it comes to addressing the concentration of wealth that is held by a tiny elite. Many people who are involved in housing policy emphasise that if we are to solve the housing crisis as well as building more homes, we must tackle the cost and availability of land and the volatility in the market. Given that the average house price in the United Kingdom is more than £180,000, it has been estimated that it will take 22 years for people with low and middle incomes to save up a deposit.

Tax Credits (Working Families)

Debbie Abrahams Excerpts

Tuesday 7th July 2015 Commons Chamber

[The Financial Secretary to the Treasury (Mr David Gauke)]

A fundamental part of this Government’s long-term economic plan is to support working people at every stage of their lives. We have a record we can be proud of: we are providing our children with the best start in life; we are helping millions of people to secure their first job; we are allowing people to keep more of the money they earn; we are helping families get on the property ladder; and we are providing our pensioners security in their old age. We can do that only on the back of a strong, stable and growing economy. This is the Government who have delivered sustained growth—the fastest in the G7 last year. This is the Government who drove income inequality down, reduced pensioner poverty to record low levels and, according to data released earlier this week by the Office for National Statistics, have seen living standards rise by 3.9% on the year. We now need to finish the job. We need to keep our economy secure; to run a surplus; to start paying down our debts; and to put in place the stable future that this country’s citizens voted for.

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

How does what the Minister has just said marry up with the International Monetary Fund research showing that taking money from the poorest 20% in society actually stifles growth? IMF figures show that if we invest in the bottom 20%, there would be growth of 0.38%.

[Mr Gauke]

The hon. Lady quotes the IMF, but this is the same IMF that has praised this Government’s record in turning round the economy. The head of the IMF said that she shuddered to think what would have happened had we not got to grips with the deficit. The reality is that if we want to help every part of society, which is what this Government want to do, we need to make sure that we have a strong economy, and that is what this Government are delivering.

--- Later in debate ---

[Mr Gauke]

My hon. Friend is right on both points. It was only because of the difficult decisions that we took that we were able to restore credibility to the UK as an economy and that we were able to make the progress that we made. Labour said that it is committed to closing the deficit. It voted for the Charter for Budget Responsibility, and the shadow Chancellor told us at the weekend that the Government should run a surplus in normal years. It is therefore disappointing that the Opposition have not yet set out how they will do so, because if they continue to oppose finding savings in the welfare budget they will have to explain whether they would borrow more, tax more or cut departmental spending more.

[Debbie Abrahams]

Does the Minister consider it a success that the debt to GDP ratio, according to House of Commons Library figures, is running at more than 80% whereas after recapitalising the banks and the biggest global crash in history it was running at only 60%? Is that a success or not?

[Mr Gauke]

Let me put this as simply as possible. The debt is essentially the accumulation of deficit and for the past five years every measure that the Government took to reduce the deficit was opposed by Labour. Indeed, Labour’s economic argument—its whole case—was that we were going too far, too fast in reducing the deficit and that we should have a looser fiscal policy. A looser fiscal policy means borrowing more. If we borrow more, the debt will rise more quickly. The hon. Lady cannot have it both ways. She can argue that we should have been prepared to borrow more and to allow the debt to rise because that was a price worth paying, but she cannot then turn around and say, “We want the debt to be lower, even though our policies called for higher debt.”

--- Later in debate ---

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

Thank you, Mr Deputy Speaker. In the light of that, I shall not take any interventions.

I congratulate all the Members who made their maiden speeches this afternoon. They have been fantastic and it is a privilege to follow them.

As lovely a place as Oldham is—the place where I live and which I represent—it has a very low-wage economy. One in three of the people who work in Oldham earn less than the living wage. That is significantly above the north-west average and the UK average. Associated with that there are high rates of deprivation and child poverty— 27% overall, and in some wards it is nearer one in two. We have talked about food bank use: we used not to have a food bank in Oldham, but we have one now. I undertook a fairness commission report to look at the core issues underpinning that and to set out how we could address them. It was not unique; other boroughs and cities have done a similar analysis. One of the key truths, unfortunately, is that the UK is one of the most unequal countries in the world. In its recent report, the International Monetary Fund, which the Minister did not seem to know anything about, says:

“Widening income inequality is the defining challenge of our time”.

Forty years ago, 5% of income in the UK went to the highest 1% of earners. Today it is 15%. We should spare a thought for our cousins across the water, where the figure is even higher.

This is the IMF’s second report. In the light of the work of Joseph Stiglitz and others, it found that inequalities are a drag on growth and can make growth volatile. This supports work by the OECD, which rejected the trickle-down economics so popular with Thatcherites. That idea supposed that increasing wealth at the top would trickle down to the rest of the food chain, and that policies aimed at reducing inequality would remove incentives and slow growth. Now the evidence is clear: inequalities have slowed growth, not increased it. According to this analysis, raising the income share of the poorest 20% of the population increases growth by as much as 0.38% over five years. By contrast, increasing the income share of the richest 20% by 1% decreases it.

We have a weak, stagnant economy, and the measures proposed will only make it worse. As colleagues have mentioned, over the past five years Institute for Fiscal Studies analysis has shown that the bottom 20%—the people on the lowest income—have been disproportionately affected by both tax and benefit changes. This is compounded by the cuts to public services, skewing resources away from areas of high need, and by the impact of the disastrous housing policy on housing costs. The Government justify this by saying—we can hear the mood music—“We are far too generous with benefits.” A comparative analysis of benefits spending as a proportion of GDP shows that we are 17th among EU countries. We spent 15% of our GDP on social security. That does not support the claim that we are incredibly generous.

One of the other myths that the Government are spreading is that everyone will be fine if they are in work. Again, the evidence does not support that. We have one of the highest under-employment rates in the EU, and about 80% of the increase in employment comes from self-employment. The average income drawn by people who are self-employed is less than £10,000 a year. In Oldham 20,000 working families with nearly 30,000 children are claiming tax credits. That is two in three families and three in four children. For them, tax credits mean the difference between just about keeping their heads above water or not. The Oldham fairness commission that I run has produced strong evidence of the impact of parental income on cognitive development, behaviour and health outcomes, which will have a negative effect on those children’s life chances—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

Greece

Debbie Abrahams Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is right to say that countries need to live within their means. As a Government, we have addressed that matter over the past five years, and I shall address it again in a couple of days’ time in the Budget. Mr Varoufakis has now resigned, and I shall be moving on to yet another Greek Finance Minister, but I doubt that the next one will have quite the dress style of the one we have just lost.

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

Could the Chancellor be more specific about the risks to the UK’s economic security and, in particular, about the measures that he is going to introduce to mitigate those risks?

[Mr Osborne]

The risks stem from the fact that we are the world’s largest financial centre. We are also the global centre for the trading of the euro. We are a very open economy; on most measures, we are the most open and interconnected of all the world’s advanced economies. We are therefore affected by financial conditions in Europe. We saw that a few years ago, but we are in a much stronger place than we have been in the past because we have been paying down our very large deficit, because we have been strengthening our economy, because we have been recapitalising our banking system and making sure our banks are stronger, and because we have a much better system of regulation, in which the Bank of England is in charge of regulating the banks. Those are all steps that we have taken. I do not think anyone will be particularly surprised to hear that when we assemble in a couple of days to hear the Budget, we will hear the further measures needed to reduce that budget deficit and ensure that we fix the roof while the sun is shining.

Productivity

Debbie Abrahams Excerpts

Wednesday 17th June 2015 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

I think that business will take a rather different view if Conservative Members take us out of the EU, as some of them are hellbent on doing.

I congratulate the hon. Member for Hertsmere (Oliver Dowden) and my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Harry Harpham) on their excellent maiden speeches, and you, Madam Deputy Speaker, on your election. This is the first time that I have served under your chairmanship.

Government Members talk about the difficulties in oil and gas as though they are the only reason for the low productivity in our economy, but they are not the only cause. Since the crash, we have seen weak investment in new equipment; a lack of bank lending, despite the attempts of the Treasury to boost it—or perhaps because of those failed attempts; problems in infrastructure; and challenges and difficulties in respect of skills. All those factors have played a part in the low productivity and weak recovery that we have seen, alongside a fall in living standards, since the crash.

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

Another issue for small businesses is late payments. Businesses spend hundreds of thousands of hours a year chasing late payments, but the Government did little about it in the last Parliament. I hope that they improve their record in this Parliament.

[Bill Esterson]

That is an excellent point. The uncertainty for business, which has contributed to a lack of investment and the other problems that I have touched on, is not helped by the treatment of small and medium-sized businesses by some larger businesses in the supply chain.

Royal Bank of Scotland

Debbie Abrahams Excerpts

Thursday 11th June 2015 Commons Chamber

[Harriett Baldwin]

I thank my hon. Friend for a good question that reminds us not only of the failure of the banking regulatory system under the previous Government, but of the rewards for failure. Labour allowed Fred Goodwin to walk away with an enormous pension and a knighthood.

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

I welcome the hon. Lady to her new role, but gently remind her that the current debt to GDP ratio is 80%, which is 20% higher than it was after a global economic crisis and our recapitalisation of the banks. On the current RBS share price, there would be a loss to taxpayers of £13 billion, if all the shares were sold today. Is this not incredibly insensitive to the millions of disabled people waiting for personal independence payments and to the carers who have seen £3.5 billion cut from social care and who are really struggling in this, carers week, and will she confirm that the Government will sell RBS only at a profit to the taxpayer?

[Harriett Baldwin]

The hon. Lady’s question started off very well by acknowledging the risks of high public debt. It is incredibly important for those people whom she rightly draws our attention to that we have a strong and healthy economy, and a strong and healthy financial sector is part of the solution. I am not sure, however, whether she is arguing that we should borrow more for longer by holding on to the shares for longer.