Employment and Support Allowance and Universal Credit

Eilidh Whiteford Excerpts

Thursday 17th November 2016 Commons Chamber

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

This debate could not be more timely, given that we are a week away from the autumn statement. It speaks volumes that the motion has been supported by Members from nine parties represented in this House. I warmly congratulate my hon. Friend the Member for Airdrie and Shotts (Neil Gray) on his persistence in pursuing this issue and on marshalling such broad cross-party support.

As we have heard, Members on both sides of the House know that it is just not right to cut employment and support allowance for sick and disabled people in the work-related activity group by almost £30 a week. It is just not right to cut the corresponding limited capability for work component for those on universal credit. It is especially not right to press ahead with these punitive cuts, which are due to come into effect for new claimants from next April, when the Government have acknowledged that their efforts to address disability employment have failed to date, and their system of employment support for sick and disabled people of working age has been wholly inadequate.

Earlier this month, the Government finally brought forward their long-awaited Green Paper on the disability employment gap, which I have welcomed and we all hope will initiate comprehensive improvements. We have heard a very different tone from Ministers in recent weeks. There have been serious attempts by senior Ministers to distance themselves from their predecessors, not least with the Prime Minister’s early commitment to a

“country that works for everyone”.

They will be judged by their actions, not their words, and that is precisely why we need to hit the pause button on these cuts to ESA and universal credit that will cause hardship and distress to thousands of people who are not fit for work. The exchanges between the hon. Members for South Cambridgeshire (Heidi Allen) and for Twickenham (Dr Mathias) captured this point succinctly when they said that we need to pause to allow the support infrastructure to catch up.

Ministers know that we in the SNP have been deeply critical of the Government’s willingness to allow the most disadvantaged sick and disabled people to bear the brunt of austerity cuts. We will continue to hold them to account for the adverse consequences of their actions—those consequences are already writ large among sick and disabled people in all our communities and constituencies—but I and my colleagues have also tried to be constructive by offering ideas, solutions and better ways forward. We will continue to do that, because it is in everyone’s interest that we get this right.

We should not forget that when these cuts were first announced, the then Chancellor argued that they were intended to remove “perverse incentives” in the system. That point has been made by several hon. Members today. I hope that the new incumbents in the DWP and the Treasury now recognise that taking away necessary financial support from sick and disabled people who have been assessed as unfit for work does not make them get better any more quickly. Quite the reverse: there is a growing body of evidence that poverty exacerbates illness, hinders recovery, and makes it harder for people with long- term conditions to secure and sustain employment.

As we have heard, what is actually perverse is to reduce the resources available for sick and disabled people that enable them to work. I hope the Government will ditch the prejudices and stereotypes that have fed the poor policy decisions of the past, and will listen not only to disabled people and those who represent them, but to MPs on their own Benches who have expressed severe disquiet about the consequences of these cuts.

I am reluctant to break the consensual tone of this debate, but I must respond to the question that the hon. Member for Edinburgh South (Ian Murray) asked my hon. Friend the Member for Airdrie and Shotts about whether he thought that the Scottish Government should plug the gap, using new devolved powers in Scotland. Unfortunately, the hon. Gentleman has not stayed for the rest of the debate, but I suspect that he knows as well as I do that both ESA and universal credit are not areas of devolved competence. They are fully reserved, despite my best efforts last year, when I tabled and spoke to amendments to the Scotland Bill that would have devolved all working-age benefits. Obviously, we failed to win the backing of the House for those proposals.

It is a wee bit rich for Members to oppose the devolution of those powers yet to demand that the Scottish Government plug the gap. The Scottish Government have already committed an extra £20 million for disability employment support, but they cannot be expected to plug every hole in the bucket of poor Westminster policy making. The hon. Gentleman should take a long, hard look to his own conscience and perhaps his own voting record.

[Kate Green]

As the hon. Lady will remember, my hon. Friend the Member for Edinburgh South (Ian Murray) pointed out that the Scottish Government were able to provide additional support in relation to the bedroom tax, so it has such a power regarding reserved benefits. His question was: would they use that power in relation to this cut?

[Dr Whiteford]

I thank the hon. Lady for her point, but she should remember that the Scottish Government’s steps to mitigate the bedroom tax have had to be paid for out of money earmarked for our responsibilities in devolved areas. We need to take a responsible approach to make sure that we get this policy right in the long term. We have committed an extra £20 million. I do not know whether she was one of the 20 Labour MPs who marched through the Lobby like the Tories’ little helpers last year to support the fiscal charter on austerity, but as the hon. Member for South Down (Ms Ritchie) pointed out earlier, we would not even be having this discussion if the Labour party had been the effective Opposition it could be. I urge Labour Members to work with all of us on these Benches to stop the austerity that is hurting disabled people, to rise to the occasion, and to be a better and more effective Opposition.

Let me come back to the main point of the debate. I want to highlight a number of reasons why the cuts to ESA WRAG and the universal credit limited capability for work component are harming people and are counterproductive. The first is that ESA should not be considered an equivalent of jobseekers’ allowance. People in the ESA WRAG are assessed as not fit for work, whereas with jobseekers’ allowance, the clue is in the name. However, the key point is that, for the most part, JSA is a short-term benefit. Most claimants come off it in a matter of weeks or months, so it is not designed to support people over long periods. By contrast, ESA is for people with serious health problems and disabilities. It is designed to cover some of the additional costs associated with serious illness and disability, and it recognises the reality that many claimants are likely to be in receipt of the benefit for a longer period—in over half of cases, for more than two years.

In my part of the world, one of the most obvious additional costs is heating for people who are likely to be at home all day, who might not be able to move about so much and who need to keep warm. People on low incomes already spend a huge proportion of their money on essentials such as energy and food. We know from the debt charities referred to earlier that a large proportion of people on ESA are already in debt, running a domestic budget deficit and living from hand to mouth. They have already experienced substantial real-terms cuts to their incomes due to austerity.

Getting by on a low income for a long time is hard. It entrenches poverty among sick and disabled people, who end up using all their savings and eroding their assets over time. Illness and disability also take a heavy financial toll on wider family members, who often find their own earning potential limited because they are providing unpaid care, and who try to support loved ones out of their own limited financial resources.

The Government are quite right to say that the disability employment gap is unacceptable, but they need to recognise that those disabled people who are in work are more likely to be in low-paid jobs and are at higher risk of in-work poverty. They also often move in and out of work more frequently than those who do not have health problems.

Less has been said in the debate about the parts of the motion relating to universal credit. The disabled worker element of working tax credit, which is due to disappear under the shift to universal credit, is the very component that actually makes work pay for many disabled workers. The loss of the limited capability for work element for everyone except those in the support group means that many working disabled people will be around £1,500 a year worse off. That will make it harder for disabled people to sustain employment, and it actively undermines efforts to support sick and disabled people into work.

The Government have pointed out in the past that these cuts will apply only to new claimants, but the reality is that people with serious fluctuating conditions often move in and out of work. That is particularly true of people with persistent and serious mental health conditions, who make up such a large proportion of the ESA case load. The fluctuations of these and other conditions that change over time are often compounded by fluctuations in the labour market and by the trend towards more temporary, fixed-term employment and zero-hours contracts.

The cuts we are debating actually create significant disincentives for those with fluctuating conditions to move into work, because if they do, they become sick again, and if they try to get back into work too early in their recovery and they relapse, they know they will be back on ESA at a significantly reduced rate. That is punitive and counterproductive.

That is at the heart of why we are calling on the Government to hit the brake on these cuts until they have had time to get their act together on the Green Paper and to come forward with more comprehensive and effective support measures for sick and disabled adults of working age. That has been a consistent refrain from Members this afternoon, who have shared moving testimonies from their constituencies.

Cuts to the already low incomes of sick and disabled people who are not fit for work or who are in precarious, low-paid employment are completely unjustifiable. They will damage the health and wellbeing of ordinary people whose lives are already hard enough because of serious health problems. These cuts will push people into deeper poverty and further away from sustainable employment.

The distress and anger of sick and disabled people can be seen and heard in communities across these islands, and those concerns are articulated clearly in the open letters published today. These people are citizens with rights, citizens with needs and people with a contribution to make. It is time that the Government started listening, and I urge them today to do the right thing.