Tax Credits

Debate between Eilidh Whiteford and Hywel Williams

Tuesday 15th September 2015 Commons Chamber

[Dr Whiteford]

The hon. Lady is making a ridiculous argument and once again trying to pretend that there are people on welfare and people in work whereas in reality—as illustrated by the tax credit system—many thousands and millions of working people are dependent on benefits because of low pay. That is the key issue in this debate. The Government are attacking low-paid workers, just as they have over the last Parliament, while giving tax breaks to the wealthiest people in our society. The deep cuts to the incomes of the poorest families that the Government are trying to enact today will only exacerbate the inequalities we already have in our society and push opportunities even further out of the reach of those who already lag behind.

The most bizarre claim that has been made for the Government’s austerity measures is that they will encourage people to work harder. I think that we should reject the rather insidious implication that people in low-paid jobs somehow do not work as hard as people in better paid jobs, because that is simply not the case. We must remember that those low-paid jobs are often far more physically demanding, and many people who are set to see their incomes cut under this measure are already working very long hours in exhausting and often pretty unrewarding roles.

[Hywel Williams (Arfon) (PC)]

Does the hon. Lady also reject the glib answer from those on the Government Benches that low-paid workers can somehow just take more hours, because clearly those hours are not available?

[Dr Whiteford]

In various parts of the country unemployment is still unacceptably high. Whether someone can easily pick up extra hours depends on which part of the country they live in, which sector of the economy they work in and what caring commitments they might have, whether for children or other family members. It is not so straightforward when lots of parents are chasing part-time work between the hours of 9 am and 2.30 pm, when their children are at school. A lot of part-time work needs to be done outwith those hours, when parents have real difficulties accessing childcare.

The charity Gingerbread has today pointed out that some lone parents working full time on the minimum wage with one child will, by 2020, be no better off than non-working lone parents were in 2010. By 2020 many parents working full time will have fallen even further below the minimum income standard than they are at present, but essentially they will be no better off working full time than they would have been had they been out of work five years ago. Where is the work incentive in that? If we really want to incentivise work, we should be increasing work allowances, as my party proposed in the run-up to the general election, not cutting them. That would incentivise work and cut child poverty.

Once again, we have been told today that increases in the minimum wage will compensate for those losses, but the numbers simply do not stack up. Even if the Government proposed raising the minimum wage to the level of the current living wage, which is already £7.85 an hour—well above the Government’s proposed ceiling—the calculation of the living wage is based on not only the cost of living but the assumption that low-paid families are already receiving their full entitlement to tax credits at the current rate.

The Institute for Fiscal Studies, the Resolution Foundation, trade unions and others have all pointed out that the proposed increases in the minimum wage, and indeed the increases in the personal tax allowance, will not make up for the loss of tax credits. The crucial point is that if we cut tax credits in the way the Government are proposing today, the minimum wage would have to rise substantially further, to around £11 an hour, just to keep incomes standing still in real terms.

Under-Occupancy Penalty

Debate between Eilidh Whiteford and Hywel Williams

Tuesday 5th November 2013 Westminster Hall

[Hywel Williams]

That is a good point, to which I intended to refer later. I recently tabled several questions to the Government about the use of discretionary payments, what planning had gone into them, and what amounts were to be available this year and next year. The answers were clearly wanting.

The aim of the charges—freeing up the logjam in the availability of three-bedroom houses for younger people—is laudable in the long term. However, one of my fundamental objections is that the Government are using tenants as a battering ram to free up that logjam. Tenants are carrying the burden of the charge and will have to find alternative accommodation, when there is none available. That is pernicious, and destructive of communities. That is one reason, indeed, for my opposition to the charge.

[Dr Whiteford]

My hon. Friend makes a good point about the allocation of houses, and the need for housing for families; does he agree that social housing, which is always the cheapest available, should be allocated on the basis of need, not household size?

[Hywel Williams]

That is an excellent point. The need has in some ways been artificially generated, and that is not a sensible basis for housing policy, even if people are able to move. However, some hon. Members will have read in The Independent today that 96% of people are unable to move home.

I tabled a question to the Secretary of State, asking

“what estimate he has made of the number of people in Wales who will move house as a result of the social housing under-occupancy penalty.”

The answer was quite revealing:

“The Department is not able to reliably estimate the number of people in Wales who will move house as a result of the Removal of the Spare Room Subsidy due to the small sample sizes involved.”—[Official Report, 4 November 2013; Vol. 570, c. 95W.]

That reveals a great deal, including the fact that the Government do not expect huge numbers of people to move. They expect, I understand, to make substantial savings on housing benefit. That is the reality, and the answer is something of a give-away.

Earlier in the year, I asked the Government what research they had undertaken into the private sector, and private market elasticity—the sector’s ability to respond to an increased demand for one-bedroom places. I was told that no such research had been undertaken before the measures were brought in. There would apparently be research in 2015, and reports would be published in 2016. That will be, of course, more than two and a half years after the charge was brought in—two and a half years of suffering by people who can scarcely afford to lose 12% or 25% of their benefit.

We have heard that particular groups are affected, such as disabled people, who have a legitimate need for extra space. I have constituents who have been charged extra. One such gentleman said, “I shall certainly move from my house, which has been adapted—there is a new bathroom at the back, and a stair lift—and move to a smaller place. The council can then put in a new stair lift, and a new bathroom at the back; and then I will move again.” It is folly. There are single parents without care who will take children for a day or so at the weekend, who will lose out.

More fundamentally, there is an effect on estates. We talk a lot about social life degenerating, and about things not being as good as they used to be. By the way, I was brought up on a council house estate. It was a stable area, with a mix of people from working-class and upper working-class backgrounds and those who were almost middle class, who had been there for a long time. They were the sort of people who had seen their children move on, but still lived in three-bedroom houses, and who provide for such estates the anchor and stability that we think are so important; yet the Government want them to move on. I understand that the technical term is “forced decanting”, which is very bad.

In the short time available to me, I want to point out that we might be left with a further supply of houses that are hard to let, not because they are in difficult areas or do not have basic facilities, but because they have three bedrooms. If the policy actually succeeds, that will be a potential waste of resources.

I end by referring briefly to funding for hardship. My local authority has a group—it brings in people from Shelter, the Department for Work and Pensions and Members of Parliament—to administer such funding. It has added substantially to that fund, with the result that the number of people in arrears is fairly small, and I hope that we will have no evictions. I would like to hear the hon. Member for Wolverhampton North East (Emma Reynolds), who will speak for the Labour party, pledge that the Labour Government in Wales will have a “no evictions” policy. Local authorities and housing associations are doing their best; it is time for other people to step up to the plate.

Housing Benefit (Under-occupancy Penalty)

Debate between Eilidh Whiteford and Hywel Williams

Wednesday 27th February 2013 Commons Chamber

[Dr Whiteford]

The hon. Gentleman has exposed at this early stage one of the big red herrings in this debate, namely the argument that the private rented sector is comparable to the social rented sector. We already spend significantly more on supporting people in the private sector than on those in socially rented accommodation, which is significantly cheaper. I hope to return to that point later, but it is very helpful to have been able to nip that argument in the bud at the outset of this debate.

[Hywel Williams (Arfon) (PC)]

I am glad that the hon. Lady has exposed the fundamental flaw in the argument of the hon. Member for Banbury (Sir Tony Baldry). One form of accommodation is based on size and the other on price—it is like comparing apples and pears.

[Dr Whiteford]

The hon. Gentleman makes a very important point. The key thing is that the under-occupancy penalty will hit hundreds or thousands of people in every constituency. We will all meet constituents affected by it, many of them among the most disadvantaged members of the community. Let us make no mistake: the people on the front line of this policy are the disabled and those who care for them.

Crisis Loan Funding

Debate between Eilidh Whiteford and Hywel Williams

Tuesday 19th June 2012 Westminster Hall

[Dr Whiteford]

The right hon. Gentleman makes a salient point, which backs up the point I am making.

I want to look back a little further, using information that had to be obtained from the Government under a freedom of information request by a non-profit company called Full Fact. Looking at that, we can see that, in reality, prior to 2006-07 and the start of the banking crisis, the amount spent on crisis loans was remarkably stable between 2000 and 2005-06. During that period, the gross amount spent on crisis loans did not fluctuate—up or down—by more than 5%, and spending dropped in 2003-04 and the following year. Although overall there was a slight upward trend prior to 2007, it would be misleading to compare that with the dramatic increase in applications and expenditure once people started to experience hardship, as work dried up and costs for basic foods and heating started to rise. I am concerned that we are still in that position and that we can expect demand to continue to rise for as long as the economic turmoil continues.

I am struck by briefings from Citizens Advice Scotland and others that outline the wide range of circumstances in which people try to access the social fund. Those seeking crisis loans and community care grants include people moving into independent living and those who need basic furniture to set up home after a family breakdown or a period of homelessness. They also include people with employment problems, those with complex benefits claims, who are caught in the quagmire of the system with no immediate source of money for food or heating until their claim is resolved, and those who incur unexpected travel costs due to the illness or hospitalisation of a close relative.

Those eligible for crisis loans face a wide range of circumstances, but what they all have in common are cash flow problems, compounded by an underlying low income. That is a temporary state of affairs for some, but some others, such as those who are disabled or have long-term health problems, have little financial resilience to deal with unexpected costs. They have limited means to absorb financial shocks, such as the cooker or fridge breaking down or the aftermath of exceptional events such as burst pipes or a break-in. Burst pipe problems came home to me in the past couple of very severe winters. People living in homes that are not well heated are often those who would particularly struggle if faced with having to redecorate or get a new carpet. Such events are not only a burden on those on very low incomes, but on anybody living on a modest income who has to count the pennies.

[Hywel Williams (Arfon) (PC)]

Does the hon. Lady share my despair at the report in The Guardian today and the series of reports that will come out this week? About 3.5 million families are one step away from disaster. They have no resources, no savings and are potential claimants of the social fund. The potential is enormous.

[Dr Whiteford]

The hon. Gentleman’s point is well made. There are connections to be made across a wide range of policy agendas. His point is particularly important because it acknowledges that the prolonged economic stagnation we are experiencing has eroded the savings and assets of many, not only the unemployed or disabled. For the very poorest however, things have become a lot more precarious. I am sure that many MPs here today will have cases in their constituencies and can think of people who have been living an insecure, hand-to-mouth existence for some time, because work is so hard to find in the current circumstances.

The situation with crisis loans presents us with risks and challenges. Welfare organisations have expressed marked concerns about what will happen in practice when the social fund disappears. Their chief concerns relate to ring-fencing and whether set eligibility criteria and binding policy guidance will be attached to the funding allocations. They fear that without ring-fencing and clear guidance, big disparities could emerge in different parts of the UK and that, at a time of substantial cuts in the public sector, it will be all too easy for allocated funding to be absorbed into more general social work budgets or used to plug funding shortfalls elsewhere.

Those are legitimate, serious concerns. I hope that the Government will take the opportunity today to offer reassurance that they will put in place robust measures to ensure that there is good provision across the country and to prevent wide divergences emerging.