Benefit Sanctions

Emily Thornberry Excerpts

Wednesday 16th December 2015 Westminster Hall

[Anne McLaughlin]

I represent Glasgow North East, which has the 17th highest rate of unemployment in the whole of these islands, so my constituents have got very little to cheer about today, although I hear that the Prime Minister was most gleeful about the fact that we have managed to cut unemployment a little overall.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Is the hon. Lady aware that, although more people are in work than a year ago, the number of hours that we are working as a country has gone down, which indicates the sort of jobs that people are getting?

[Anne McLaughlin]

Yes, I am aware of that, and I thank the hon. Lady for highlighting it.

I grew in the shipbuilding town of Greenock in Port Glasgow. I often tell a story about when I was at Port Glasgow high school—I am not going to tell Members what year it was. Every Monday morning in my first year at high school we had a 15-minute registration class, and the teacher would ask, “How did you get on at the weekend?” I remember a long, long period in which several people in my class—it felt like dozens, but it could not have been—said, “My dad got made redundant”, “My dad was a fitter, and he’s lost his job”, “My father was a welder” or “My mother worked in the canteen.” Not many women in those days were time-served tradespeople. For so many of my classmates, both their parents lost their jobs. For many of them, the last time they could remember their parents working was when they were 12, so they have very little memory of working parents. Where there is generational unemployment in an area in which expectations are low, surely our job is to raise people’s expectations; give them confidence and self-belief; work with them, not against them; give them additional support, not less support; and certainly not punish them.

Let me turn to what I believe lies behind the Government’s sanctions agenda. I will start with what they say lies behind it. They say it is to teach claimants that they cannot expect something for nothing. I will refer to a few of my constituents, and perhaps the Minister will tell me what each of them was supposed to learn. Sara was late—not very late—for an interview and was sanctioned. She was late because there was an accident on the road and her bus was stuck in traffic. It was not her fault. What is she to learn from that?

Another constituent was told that she had to go to an interview at the jobcentre. She was given a week’s notice, and they said, “We want you to come next Wednesday at 3 pm.” She said, “But I pick up my six-year-old from school at 3 pm.” “Well, that’s just tough”—her parents lived 100 miles away—“You either come to the interview or we sanction your benefits.” What is she to learn from that? Should she have abandoned her child at the school playground or take her child out of school? That is what she did, and her child missed an hour’s education.

I have two constituents—a couple—who live in Roystonhill. The wife went into labour—not the party; she was having a baby. [Laughter.] I do not know why I said that. The husband unsurprisingly went with her. He had no credit to phone and say that he would not be signing on that day, so he went the next day. They were sanctioned for six weeks. Welcome to the world, tiny baby; your parents are getting no money for six weeks, and not even a single milk token. What is that couple to learn from that sanction? Did they learn that the husband should have abandoned his wife and left her to it? Before anybody starts thinking that they were long-term unemployed, let me say that their daughter is two and they are both working now. They were both working up until six months before she had the baby. They are not people who do not want to work. They learned nothing from that experience, except that the Government do not care about them.

I have a constituent who has mental health problems and a visual impairment. He has severe panic attacks. A condition of his ESA is that he attends an office in the city centre either once a month or once a week. It takes him hours because he gets lost and distressed. He was asked, “What is it you do when you get there?” He said, “I just sign a bit of paper and leave.” Why? What is the point of that?

--- Later in debate ---

[Neil Gray]

I pay tribute to the hon. Gentleman for his diligence, especially after the put-down by my hon. Friend the Member for Glasgow Central: the hon. Gentleman was himself late for the debate and, had he been on social security support, he would have been sanctioned. I do not believe that many of us could survive for longer than a month or so without our own salary, never mind the £73 a week that other people have to live on. It does him no service to push this. As for our view of sanctions, we believe that there should be conditionality, absolutely, but not the punitive sanctioning that has increased exponentially under this Government and the previous one. That is our concern, not conditionality or sanctioning in general. I hope that answers the hon. Gentleman’s question.

As my hon. Friend the Member for Banff and Buchan said, the sanctions regime is causing extreme hardship and is being operated in an arbitrary and unfair way. The Crisis report she quoted shows plainly what is happening to homeless people.

[Emily Thornberry]

Does the hon. Gentleman acknowledge that the rules were changed in 2012, resulting in the much greater use of sanctions than ever before?

[Neil Gray]

Yes, absolutely, the Labour spokesperson is right. There is clear, documented evidence of the rate of sanctioning for all social security benefits such as JSA and ESA having risen since the coalition Government came to power.

Homeless people are twice as likely as others to be sanctioned, which must shock us all. I hope that the Minister will advise us of what plans she has to extend the at-risk group to those with mental health conditions and to the homeless, as I called for two weeks ago. I hope she will provide some detail on that.

[Neil Gray]

Absolutely. Two weeks ago I called for that same review, and the Select Committee on Work and Pensions has done so as well. I hope that the Minister will respond. It is little wonder that mental health of people who have been sanctioned suffers—their confidence, their ability to find work and their ability to feed and water themselves and their family are all damaged. It is little wonder that we find evidence that people’s mental health is suffering. What benefit does sanctioning give to people seeking work? Very little, if any.

In the Minister’s response to my earlier debate, she stressed the importance of sanctioning to the social security system and to getting people into work. I hope that in her response today she will provide some evidence of the effectiveness of sanctions in pushing people into work. I am genuinely interested to hear what the Department has done to get evidence of how many people have returned to work within three or even six months of a social security sanction. I am interested because there is certainly plenty of evidence to show that the system is not working.

One example of evidence is the academic research conducted by Oxford University and the London School of Hygiene and Tropical Medicine, which my hon. Friend the Member for Banff and Buchan cited. They looked at official data on sanctioning rates, employment rates and benefit off-flow between 2005 and 2014 in 375 local authority areas—a pretty comprehensive and wide-ranging study. They found that for every 100 JSA claimants who received a sanction, 42.4 no longer claimed the benefit. That sounds great until we realise that only a fifth of them actually reported having found work. So for every 100 sanctions, we get 8.5 people into work. Also, from those 100 sanctions, 34 people no longer claim the benefit but are not in work. How many of them are self-denying the support to which they are entitled and which they need because they are so scunnered and fed up with the system?

Has the Department carried out a social impact study? Has any work been done with those who have been sanctioned to find out what their experiences were, their destinations after the sanction and the impact on their quality of life? The Government have been quick to dismiss any link between work capability assessments and suicides, in spite of the study from Oxford and Liverpool Universities linking 590 suicides to WCAs. The Government have also been quick to say that the sanctions regime plays an important part in the social security system. As far as I can see, however, neither statement has so far been supported with fact. I hope that the Minister will enlighten us today.

[Emily Thornberry]

Is the hon. Gentleman aware of another statistic? If people go on the Work programme, they are as likely to get sanctioned as to get a job.

[Neil Gray]

That is a highly depressing statistic for the Government to reflect on.

I hope that the Minister will give us more detail on the yellow card sanction or early warning system. We heard that it was to be trialled in the new year, but where will the trial be, how long will it last and under what terms will it take place? I asked the same questions two weeks ago and hope that the Minister can now advise us of the answers.

Finally, will the Minister agree to the full independent review of the sanctions regime called for by the Work and Pensions Committee and by my party? With half of all sanctions being overturned on appeal, a sizeable increase in sanctioning rates and documented evidence from Oxfam, the Poverty Alliance, Crisis and many others linking sanctions to increased food bank need, now is the time for the Government finally to realise the damage that they are causing to individuals and communities and to review the sanctions regime.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Gillan.

I, too, did not expect to be back in Westminster Hall discussing benefit sanctions so soon after the previous debate. Nevertheless, I am grateful to the hon. Member for Banff and Buchan (Dr Whiteford) for securing the debate. I am also very grateful to the hon. Member for Glasgow North East (Anne McLaughlin) for speaking from the heart, for speaking the truth and for speaking so powerfully.

The debate has given us another opportunity to hold the Government’s feet to the fire. As the official Opposition spokesperson, I tend to speak second to last, before the Minister, so I do not get a chance to come back at her. We are two weeks on from the previous debate, so I will anticipate to an extent what the Minister will say this time. Perhaps that will challenge her on some of the things that I suspect will be in her speech and she might be able to answer some of the questions.

I spent a long time looking at the Minister’s previous speech from two weeks ago. It was interesting, but a number of things seemed odd. She seemed to indicate that the Government had given up even trying to persuade us that their sanctions regime is helping people into work, because she said,

“we know from claimants that there is a positive impact on behaviour” —[Official Report, 2 December 2015; Vol. 603, c. 174WH.]

and that, “sanctions make it…clear” to people that they must “follow the rules”, so they are not about jobs. As is obvious, following the rules in terms of looking for work is not the same as finding work. In fact, it has become increasingly clear that, in many cases, the rules are a set of arbitrary boxes to be ticked that are as likely to hamstring people looking for work as they are to help them.

Sanctions are a major concern in Scotland, as they are in the rest of the country, as today’s debate and the previous one show. I was struck by a case that came up at a recent hearing of the Scottish Parliament’s Welfare Reform Committee on sanctions. A man from the east end of Glasgow described his experience on the Work programme, which included being made to sit in an office from nine to five, cold calling local employers to ask whether they had any vacancies. Of course they did not, so he ended up with a string of rejections, which was deeply humiliating as well as being a complete waste of time. For the Minister to suggest that the rules are about tailoring to the needs and circumstances of the individual frankly contradicts all the evidence and experience, which is to the contrary.

The Minister spoke about the claimant commitment in our previous debate. It is worth saying a few words about that, not least because, by setting the conditions that jobseekers are expected to adhere to, it has become an inextricable part of the wider sanctions debate. What are the conditions? Like the sanctions regimes we have today, the claimant commitment was a bit of a wheeze, cooked up by the coalition Government in what seemed to be more of an effort to score political points than to help people find work. I read the two reports on universal credit published by the DWP a little over a week ago and one thing I found interesting was that only 37% of people surveyed by the Department felt that the claimant commitment set realistic expectations that would help them find jobs.

It is time for a proper evaluation of the claimant commitment. Although that was a key recommendation of the Work and Pensions Committee in its recent report on sanctions, the Government continue to refuse to do that or to give us a reason why. In her previous speech, the Minister referred to her Department’s efforts to “improve” the system by taking on board the recommendations of the two recent reports. One of them, which was by Matthew Oakley and published in July 2014, has been referred to, while the other is the Work and Pensions Committee’s report from March to which I just referred. She said that the Government have

“responded positively to the…Oakley review”,

and that they had

“accepted all 17 of the Oakley recommendations to improve the process”.—[Official Report, 2 December 2015; Vol. 603, c. 176WH.]

I found that interesting, so I had a good look into that. However, I am afraid that the Minister has been gilding the lily.

The Government actually said that that they would accept the recommendations

“wherever possible, and subject to detailed feasibility and securing the necessary resources”—

weasel words.

Effectively, they are giving no commitment at all and the reality is that, 18 months after the Oakley report was published, some of its most important recommendations have gone exactly nowhere. Recommendation 11, for example, called on the Government to pilot a system of non-financial sanctions. That seems entirely sensible, particularly for those with a strong record of meeting the requirements placed on them and who, for example, may simply have had a wife in labour.

To give another example, recommendations 12 and 14 suggested that the Government end the absurd practice of Work programme providers being required to refer people for sanctions even if the providers themselves do not believe that there has been an offence. The Government rejected that common-sense suggestion and once again gave no reason. Therefore, the Minister claims to have “responded positively” to Oakley, and to have accepted his recommendations “in full”, but, having had a good look at the reality as opposed to the rhetoric, I do not see how they match up.

Similarly, the Minister did not tell us the whole story when she described the Government’s response to the Select Committee report. She said that its Chair had

“welcomed our response and, importantly, our willingness to engage with the Committee to ensure that the conditionality system works as it should.”—[Official Report, 2 December 2015; Vol. 603, c. 176WH.]

Let us have a look at that. By far the most important recommendation was for there to be a full, independent review of the entire system. Inexplicably, the Government refuse to do that and will not give us a reason.

Another of the Committee’s particularly important recommendations was for there to be a thorough evaluation of the new approach to in-work conditionality. We all need to be mindful of what the Government are doing and what they are about to do. They are currently piloting, within universal credit, an expansion of the conditionality regime. That pilot is very shadowy. We do not know where it is, who is being put through it or how many people are on it and, when we ask, the Government do not give us any answers. In-work conditionality means that someone is working, but they are not working enough, so, as far as I understand it—if I am wrong, I would love to hear from the Minister about exactly what is going on—they are told that, even though they are working, they must look for more work and, if they do not, they will get sanctioned. If that is right, we would like to know the details.

We welcomed the recommendation of a review, not least because in-work conditionality is completely untested and unprecedented—it is a new concept within any social security system. The Government’s response to the recommendation was good. I give the Minister full marks for her response. She stated:

“We agree that individuals on Universal Credit and in work will not be subject to the full range of work-related requirements and sanctions beyond existing pilots until we have fully considered the learning from those pilots.”

Great.

However—surprise, surprise—we heard from the Chancellor of the Exchequer in the autumn statement seemingly just a few weeks thereafter that the Government will

“extend the same support and conditionality we currently expect of those on jobseeker’s allowance to over 1 million more benefit claimants.”—[Official Report, 25 November 2015; Vol. 602, c. 1371.]

I do not know whether the Minister knew that. Who are those claimants? What are the Government doing on this? We have a shadowy pilot and we are told that it will be looked at properly before it is extended, but then the Chancellor of the Exchequer says that it will be expanded to another million people and we do not know what the circumstances are. This is completely new. The current sanctions regime is bad enough and if the Minister is now to expand that to those in work, we need to know why and how.

[Neil Gray]

Does the hon. Lady share my concern that the conditionality and sanctioning regimes are just a fig leaf for social security cuts?

[Emily Thornberry]

With great respect, I think that is a simplistic argument and that it goes further than that. Those who have been subjected to a large number of sanctions lose confidence and end up “economically inactive” and, when they are asked why they have become economically inactive, we find out that it is because they have been discouraged. For many people, that means sleeping on the sofa, asking mum for a loan and begging. Many people are falling out of the system and a large number of them are very young, but that allows the Prime Minister to get up at Prime Minister’s questions and say that the number of claimants is going down. It is more cynical than cuts. Cuts is bad enough, but that takes things further.

The Government have not made clear exactly what they will do, but our assumption is that the 1 million people must include those on universal credit. I respectfully suggest that the Government saying one thing to the Select Committee and then the exact opposite in the Chamber just four weeks later does not look like the Minister’s promise to have “engaged” with the Committee in any positive way.

More troubling still are the implications of that U-turn for the future of sanctions policy. The sanctions regime is broken, but the Government will not look at it or allow an independent review. They are bashing on regardless and now they want to increase it to include those in work. During the previous debate we seemed to be fairly close to reaching cross-party consensus on the fact that it is broken. The only differences that arose were in relation to the scale of the problem. It does need fixing.

For the Government more or less out of the blue to suggest that they intend to expand the scope of sanctions is quite extraordinary. I hope that, this afternoon, the Minister will answer some of the questions rightly asked by the Opposition to hold the Government to account, because it is silly for us to have to keep coming back time and again to Westminster Hall to ask them.

--- Later in debate ---

[Priti Patel]

Let me finish my point. The report noted that

“the sanctions regime does prompt some behavioural change”.

Scottish National party Members have secured this debate; I congratulate them on that, but they have had their say. They have been giving very inaccurate reports about the sanctions regime. As I have said at least six or seven times on the Floor of the House, if individual Members want to raise their cases with me, I am happy to look into them. If they want to raise cases about jobcentres in their constituencies or the conduct of work coaches, I would like to pick those up with them. Members who have raised such cases have not done so previously, but I give them the opportunity to do so.

[Emily Thornberry]

I appreciate that the Minister has a lot to get through, so I will speak very fast. One of the Work and Pensions Committee’s recommendations was that the DWP should monitor the destinations of people leaving jobseeker’s allowance. Currently, the Department only does that on an ad hoc basis. That is one of the recommendations that the Government refused to apply.

[Priti Patel]

That, of course, is part of our ongoing work and, along with the sanctions system, it is always subject to review. We will continue to work with the system and learn from the data we receive.

To return to the Crisis report, it is not entirely clear how the respondents to the study were selected, and the conclusions appear to apply to only a subset of the overall homeless population. That is why we are quite cautious about the degree to which the views and responses included represent those of the broader population. We know that the most important priority for homeless people is to secure accommodation, and to secure support not only in getting into accommodation but in dealing with barriers to work and any particular conditions they may have. It is important to note that support is always, rightly, based on individual needs and circumstances, and is there to help homeless claimants find suitable living accommodation, which in turn helps to remove barriers to employment.

I return to the role of our work coaches. They are able to treat certain homeless claimants as meeting their job-seeking conditions if they are receiving the right support to find living accommodation. Work coaches are also able to suspend conditionality temporarily if the claimant’s circumstances constitute an emergency. We recognise that homeless claimants may not be covered by our current list of vulnerable claimants for the purposes of hardship payments, and I emphasise that we are considering expanding the list to include those who are homeless.

We understand that homelessness is highly complex, and no one should generalise about the circumstances or backgrounds of homeless individuals. It is our priority to ensure that they get the right support. That is why the Government have made more than £1 billion available since 2010 to prevent and tackle homelessness and to support vulnerable households. In the spending review, we announced an increase in the Department for Communities and Local Government’s centrally funded programmes over the next four years to tackle homelessness. I would like to think that all Members here would welcome that.

References have been made to sanctions statistics, and it has been suggested that according to the Government’s March figures, 50% of sanctions imposed have been overturned on appeal. The official statistics say something different: in the year to June 2015, only 14% of original adverse JSA sanctions and 23% of ESA decisions were overturned by decision makers. Those decisions were based on new evidence being brought forward that was not available at the time of the original decision.

European Union (Approvals) Bill [Lords]

Emily Thornberry Excerpts

Monday 14th December 2015 Commons Chamber

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I must admit that I find myself called to the Dispatch Box today in a state of some bewilderment. We are here to debate two matters. The first is whether a new position should be established within an organisation with the somewhat abstruse name of the former Yugoslav Republic of Macedonia Stabilisation and Association Council. Establishing that new position in some way facilitates the admission of Macedonia as an observer to the European Union Agency for Fundamental Rights. The second provision relates to the continuation of the tripartite social summit for growth and employment. I think that is why I am here.

There appears to be a need to update the formal basis of this summit, mostly in recognition of the fact that its function now relates to the “agenda for jobs and growth” and not the “agenda for employment and growth” as was previously the case. Will the Minister confirm that that is the case? If it is, the substance of this Bill is almost the definition of bureaucratic minutiae. Although I understand that both provisions relate to draft decisions of the European Council, which need to be approved by each individual member state as well as by the European Parliament, I find the use of primary legislation in these circumstances quite extraordinary. It comes at a time when the Government are hacking away at the social safety net via secondary legislation, on which it is frankly an uphill struggle to get Minsters to agree even to a short debate up in the Committee corridor. It suggests that the Government do not have their priorities in order.

Anyway, here we are, and I will use my time briefly to recap some of the context of these proposals, which I do not expect to be the subject of raging controversy in today’s debate. As we have heard, the first part of the Bill relates to the admission of Macedonia as an observer at the European Union Agency for Fundamental Rights. That move follows a report from the European Commission, which was published earlier this year and which set out a number of recommendations to revive Macedonia’s long-stalled candidacy for accession to the EU.

[Kelvin Hopkins (Luton North) (Lab)]

My hon. Friend will be aware that the Greeks get very upset when the former Yugoslav Republic of Macedonia is called Macedonia. Perhaps she could use the full title to ensure that we do not upset our Greek colleagues.

[Emily Thornberry]

My hon. Friend is quite right. I do apologise. I hope that Hansard will get it right even if I do not.

This process was initiated in 2005, but has been put on hold as a result of widespread concerns more recently over the country’s deteriorating record on human rights. The admission as an observer of the former Yugoslav Republic of Macedonia to the EU’s Agency for Fundamental Rights was one of a number of recommendations made in the European Commission’s recent report. As the Minister helpfully explained during the debate on Second Reading, it is hoped that

“Observer status at the agency could allow the country to have access to advice and assistance on fundamental rights issues to help to tackle its reform challenges, and provide assistance and help to the country on human rights issues.”—[Official Report, 3 November 2015; Vol. 601, c. 897.]

At the rate this Government are going—I am talking about removing the requirement to respect international law from the Ministerial Code and pressing ahead with their plan to repeal the Human Rights Act—perhaps the Minister and a few of her colleagues should join the Macedonian delegation and learn a few lessons.

The second provision relates to changes to the basis of the EU’s tripartite social summit for growth and employment. The Bill’s explanatory notes describe this summit as:

“a regular forum for meetings of representatives of the European social partner organisations, the European Commission, and the Council to enable high level discussion between the three parties of employment and social aspects of the European agenda for growth and jobs.”

Beyond those exceptionally vague generalities, further details of the summit’s role are surprisingly hard to come by. Nevertheless, any discussion of jobs and growth is hardly objectionable, and certainly not objected to by me. In fact, should representatives of the UK take part in any upcoming meetings, it might provide an ideal opportunity for Ministers to take on board some of the valuable lessons that our European friends may have to offer. At a time when our jobs market is not exactly the envy of the entire continent, the Government should welcome such an opportunity. We have, for example, a higher proportion of graduates doing jobs for which they are over qualified—at 59%—than any other country in the European Union, apart from Greece and Estonia. We have a higher rate of underemployment—with a 10th of our entire workforce working less than they want to—than any other EU country except for Ireland, Spain and again Greece. That particular problem appears to be getting worse. The most recent employment figures from the Office for National Statistics showed that, even though the number of people in work in the UK has risen, the total number of hours worked by the UK has actually fallen. Perhaps the Minister’s European counterparts could teach her a thing or two.

We do not intend to oppose this Bill. In fact, I welcome it, at least as far as it goes, as it offers a reminder of some of the things for which we have to be grateful in our membership of the EU, not least the protection of fundamental rights and freedoms, including some of the most basic rights in the workplace, which many people take for granted. At a time when the Government are undermining those rights on a number of fronts, particularly in the Trade Union Bill, we should welcome the opportunity that this debate provides to remember the positive role that the EU can play in our lives, particularly when it comes to protecting dignity and security in the workplace. It is disappointing that the Government do not seem to share those values.

Oral Answers to Questions

Emily Thornberry Excerpts

Monday 7th December 2015 Commons Chamber

[Mr Duncan Smith]

As I said before, first, people are getting back to work. Secondly, those who are on universal credit at present will be fully supported through the flexible support fund, which will provide all the resources necessary to ensure that their situation remains exactly the same as it is today.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I wonder whether the Minister has seen the figures that I have. May I take him from rhetoric back to reality? The figures show that although there has been a rise in employment in the past three months, the number of hours that we have worked as a country has fallen. It is a good thing that unemployment has gone down, but surely we need to address under-employment, particularly when there are 3 million people who say they are under-employed. I saw that over the weekend his Minister for Employment was flogging temporary part-time jobs for people to dress up as Santa Claus, but perhaps it would be better if his Department spent a bit more time trying to ensure full-time permanent well paid work for people.

--- Later in debate ---

[Mr Vara]

Both terms are applicable. May I just say that we should not get bogged down in the terminology? The important thing is to make sure that people actually have support to get them back to work. As we just heard in the quote from my hon. Friend the Member for Torbay (Kevin Foster), our long-term plan is working. We want to make sure that as many people as possible are in work so that they do not have to resort to food banks.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Is the Minister surprised that the Secretary of State has never bothered to visit a food bank? Presumably, people in his Department have spoken to people in food banks. The message we get loud and clear from people in food banks is that the most important thing the Department can do is to fix its broken system of sanctions and stop benefit delays.

[Mr Vara]

It is always helpful if, when Front Benchers say things at the Dispatch Box, they are accurate. My right hon. Friend the Secretary of State has visited food banks. As far as sanctions are concerned, may I just tell the hon. Lady that the Oakley review said that 71% of people found sanctions helpful in encouraging them to find jobs?

--- Later in debate ---

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Grow up!

[Priti Patel]

The hon. Lady says, “Grow up”. Perhaps Labour Members should put aside the disparaging comments they make every time we speak about employment opportunities and growth in the economy. Unemployment is now at its lowest level for over seven years. In addition, the number of people in work has risen by over 2.1 million since 2010.

Benefit Sanctions

Emily Thornberry Excerpts

Wednesday 2nd December 2015 Westminster Hall

[Emily Thornberry (Islington South and Finsbury) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I thank the hon. Member for Airdrie and Shotts (Neil Gray) for bringing the constantly relevant issue of benefit sanctions to Westminster Hall today. I am afraid that, in the time I have, I will barely be able to scratch the surface of trying to understand the Government’s approach to sanctions, which needs a comprehensive mauling. I do not have time to do a lot, but I will give it a try.

Before we can decide whether a system is fit for purpose —this applies to any policy—we first need to establish what it intends to achieve. The official Department for Work and Pensions line is that the system will help “motivate” people to look for work. Though Ministers insist that their approach to sanctions is backed up by evidence, it has never been quite clear where their supposed evidence is. It certainly does not come from the Department itself.

Recently, when I asked Ministers for statistics on the number of people who have moved into work after being sanctioned, they admitted that they had no idea. I refer the officials to question 11860, which I asked on 14 October and was answered on 21 October. Presumably there are therefore other reasons for their apparent obsession with the conspicuously “tough” approach brought in with the new rules, which are like sanctions on steroids. They were introduced in 2012 and our suspicions should have been raised when the DWP sent out press releases boasting of the record numbers of people being sanctioned.

In a typical release last year, the then Employment Minister, now unemployed—many in Wirral West would say deservedly—Esther McVey presented those figures as evidence that the Government were

“ending the something for nothing culture.”

If this system is about anything more than political posturing, the Government are doing an awfully good job of hiding it. After all, their own impact assessment for the 2012 changes acknowledged that there simply was not evidence to show that harsher sanctions would actually lead to more people moving into work. What we now know, thanks to a study published not by the Department but by academics from the Universities of Oxford and London in January, is that many of those who were sanctioned between 2011 and 2014 stopped claiming benefits altogether, but just 20% did that because they had found work.

Sanctions not only do not help people get into work, but make that much more difficult. That is especially true for those most in need of help with the transition from unemployment into work. People with mental health problems, for example, now make up a majority of people in the work-related activity group within ESA. In a survey conducted by Mind last year, 83% of people in that group said that the so-called help they had received, either from jobcentres or Work programme providers, had actually made their mental health worse, and 76% said that their experiences caused them to feel even less able to work than before. We have those findings on the one hand and on the other we have a sixfold increase in the number of sanctions for people on ESA.

The Government should go beyond their rhetoric and take a good hard look at the impact that these sanctions are having in the real world. Of course, most of us are already painfully aware of the reality behind that rhetoric. We have seen the evidence not just in our constituency surgeries, but in the ever-growing lines of people queuing outside our local food banks.

According to the Trussell Trust, since the new regime was introduced in 2012, 83% of food banks have seen an increase in the number of people urgently needing their help. We all acknowledge the extraordinarily valuable service that food banks provide in our local communities, especially to the most vulnerable, but that is not the only reason we have to be grateful for the Trussell Trust’s work: in recent years, it has scrupulously documented the stories people tell when they go to food banks, explaining why they need help. That has made an extremely important contribution to the wider sanctions policy debate.

The record compiled by the Trussell Trust provides the most comprehensive document we have had to date of the nastiness and ineffectiveness of the Government’s approach. Examples from food banks across the country include: sanctions in Richmond for missing appointments, despite not having enough money for the bus fare; sanctions in Birmingham for not providing enough evidence of applying for jobs online, even when the person involved told them they could not use a computer; sanctions in Nottingham for missing appointments to attend funerals and for visiting a loved one in hospital; and sanctions in Crosby for missing an appointment because the claimant was going to a job interview—an irony that seems to be lost on Ministers. If there is any logic or reason behind any of that, I simply cannot see it.

The Labour party agrees with the Scottish nationalists on this issue. It is not that we do not believe that there should be some form of conditionality behind jobseekers obtaining benefits, but frankly, the sanctions regime has gone far too far. Such stories—there are plenty of them, and plenty more where they came from—make a mockery of the Government’s claim that sanctions apply only to those who fail to “play by the rules” or who are

“wilfully rejecting support for no good reason”

as the former Employment Minister used to say.

It should now be clear to anyone capable of thinking straight on sanctions that the entire system is so fundamentally broken that it is almost beyond repair. We urgently need a root-and-branch reform, and we can do that only on the basis of evidence. We therefore ask yet again, as does the Work and Pensions Committee, for a full and independent review to consider the fundamental questions of what these sanctions are supposed to achieve, whether they are working and, even if they are, how much they are costing.

That is what my colleagues and I have pushed for repeatedly during recent debates on the Welfare Reform and Work Bill. As the Bill moved through the Commons, we tabled an amendment to it in Committee and on the Floor of the House that would have forced the Government to set up a comprehensive independent review to address those issues. Every single Member on the Government Benches voted against establishing such a review. I asked the Minister this question at the time, and I will ask her again today: if the Government are so sure of their ground when it comes to sanctions, why are they so frightened of an independent review? Exactly what are they afraid of? I am still waiting for an answer to that question, but I am not holding my breath.

[Several hon. Members rose—]

--- Later in debate ---

[Philip Boswell]

Sorry; I was cutting out large sections of my speech, but I will be more ardent in my efforts.

[Emily Thornberry]

On a point of order, Ms Dorries. I do not know if this will help with your chairing, but may I make it clear that the Labour party sees entirely eye to eye with the Scottish nationalists on this issue? There is unlikely to be anything they raise that I would want to argue with them about.

[Nadine Dorries (in the Chair)]

Thank you very much for that.

--- Later in debate ---

[The Minister for Employment (Priti Patel)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate the hon. Member for Airdrie and Shotts (Neil Gray) on securing the debate, because it not only allows all Members to reflect their reviews on this important issue, but gives us a chance to discuss conditionality alongside full employment and how we can encourage and support people back into work. The hon. Gentleman raised points that we have discussed previously. As he is a new spokesman for his party, I congratulate him on that and I look forward to working with him.

The debate has been wide-ranging, but I would like to start by restating the importance of conditionality and the role that that plays in our welfare system, and I will outline the principles behind the use of sanctions as part of the approach to help move people into employment. The hon. Gentleman and all hon. Members have made important points about the system, and I will outline some of the recent developments and the improvements that we are making following the recent report on sanctions by the Select Committee on Work and Pensions as well as the independent Oakley review.

The role of conditionality is best highlighted by the independent Oakley review, which said that sanctions are

“a key element of the mutual obligation that underpins both the effectiveness and fairness of the social security system.”

The words “effectiveness” and “fairness” are particularly relevant, because we know from claimants that there is a positive impact on behaviour. Nearly three quarters of people on jobseeker’s allowance and more than 60% of those on employment and support allowance say that sanctions play a role in helping them to understand the system. They have the claimant commitment in particular, but it helps when it comes to seeking employment and it provides a framework for them. The number of sanctions has fallen by around 40% in the last year, and ESA sanctions have stabilised as well. We should recognise the point about mutual obligation that the Oakley review describes and that sanctions can provide the right support for people to move into employment.

[Emily Thornberry]

I do not really understand what the Minister is saying. Perhaps she can help me by explaining it a little more. Is she saying that claimants say that it is helpful for them to have sanctions and that without sanctions, they would not understand what the system was?

[Priti Patel]

We know from claimants that the principle of conditionality and the claimant commitment have a positive impact on behaviour. Nearly three quarters of people on JSA and over 60% of those on ESA say that sanctions make it very clear to them that they will follow the rules, in terms of the claimant commitment and their discussions with work coaches. Those rules will also help them to gain employment, so they understand the discussions and dialogue that take place with them with regard to conditionality.

--- Later in debate ---

[Priti Patel]

As I said, a sanctions process is in place. It is a proper process that includes the claimant from the start, so the claimant is fully engaged in the process, the discussions and the claimant commitment or the action plan, which clearly states what is expected of them.

On the overturning of sanctions and appeals, I cannot comment on individual cases, but I emphasise that the claimant commitment and the action plan are undertaken with the claimant from the start. The parameters are there. The individual knows exactly what is required of them. Importantly, it is a two-way process, with work coaches and the jobcentre. They set out not only what the claimant commitment is and what is expected from the individual, but importantly, the support that they will provide to that individual.

I know that a few cases were highlighted. The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) mentioned a couple of cases. I am very happy to look into those, if she would like to share them with me after the debate, and to work through those individual cases with her. I will come on to the point made by the hon. Member for Airdrie and Shotts about individuals with particular conditions, such as mental health conditions, or with caring responsibilities or disabilities. Individuals have different circumstances, as we all recognise. It is absolutely right that individual circumstances, conditions and responsibilities are taken into consideration and that claimants are given a full opportunity to provide the good reason for not complying when a decision is made by the decision maker.

Coming back to the point about process, there is, of course, the opportunity to have a mandatory reconsideration, whereby there is a further opportunity, on an individual basis, to provide information and for more facts to be considered.

[Emily Thornberry]

The Minister is being very generous in taking as many interventions as she has. She has moved back to process, on which I wanted to ask her a question. She said that the number of sanctions is going down, but a large number of people are moving on to universal credit, and the Department for Work and Pensions does not publish statistics for those who have been sanctioned on universal credit, as I understand it. Will the DWP undertake to start publishing statistics on people who have been sanctioned who are getting universal credit?

[Priti Patel]

If I may, I will come back to the hon. Lady on that point. She will be fully aware that universal credit is being rolled out and will be rolled out fully by April next year. However, I will come back to her on the point about UC and sanctions.

I was making the point about the process and support for claimants with health conditions. In addition to looking at any other cases that Members would like to raise with me, I make the point that jobcentre staff are trained to support claimants with health conditions, and mental health conditions in particular, during their job search and have access to more expert advice if that is needed. With that, we are ensuring that safeguarding measures are put in place to protect vulnerable claimants, particularly ESA claimants, with mental health conditions. We have a process and a system whereby ESA claimants, when engaged with the jobcentre, can receive a home visit from a visiting officer, should that be required. It is also fair to make the point that, with the Work programme, providers must make every attempt to engage on a face-to-face level if they identify a claimant as vulnerable.

The debate gives me the opportunity to raise with the House the fact that for mental health claimants in particular, the Government have outlined a new joint unit, very much focused on the Department of Health working with the DWP, looking at individuals with health conditions and health barriers—mental health being one of them—and at how we can provide more tailored and integrated support to help those claimants, many of whom, it is fair to say, are on employment and support allowance and are furthest away from the labour market.

More than 60% of ESA claimants say publicly and frequently that they want to work, but we need to find the right journey and support for them to get back into work. This Government have just started that important work through the new joint health and work unit of the two Departments. That is a positive step forward, and I look forward to working with all right hon. and hon. Members to see how we can advance.

The hon. Member for Airdrie and Shotts mentioned the yellow card early warning system, which was announced in response to a recommendation by the Work and Pensions Committee in its recent report on sanctions. Its Chair, the right hon. Member for Birkenhead (Frank Field), welcomed our response and, importantly, our willingness to engage with the Committee to ensure that the conditionality system works as it should. In our response to the Committee, we announced that we would trial a sanctions warning system giving claimants a further two weeks to provide evidence of good reason before a decision is made. It is important that that will strike the right balance between fairness and conditionality. We intend the trial to operate in Scotland from March 2016 and to run for approximately five months. A full evaluation of the trial will be undertaken, and the findings will be available from autumn 2016. As I said, I am happy to discuss the findings and the roll-out as it continues.

We have responded positively to the independent Oakley review. As a result, we have worked with behavioural insight experts to enhance our engagement, our approach and the way in which we communicate sanctions. We have published a JSA sanctions fact sheet through Government channels; we are improving the clarity of the JSA and ESA hardship application process; and we are making improvements to the payment process to ensure that payments are made within three days. We are very clear about that, as we stated in our response to the Work and Pensions Committee. We have accepted all 17 of the Oakley recommendations to improve the process, and we will undertake a number of improvements to JSA and ESA sanctions. The Chair of the Select Committee made it clear that he is pleased that the Government accepted its approach and many of its comments on sanctions, and particularly our willingness to change.

Food banks have been mentioned. We are trialling the DWP working with food banks in Manchester, and we will report back on the observations from that.

In conclusion, the employment support offered by jobcentres has been based on conditionality, but it has also been personalised to help people into employment with wide-ranging provision of skills and employability support. There are clear expectations on people under the conditionality system, such as work search expectations, which we have touched on in the debate. A key part of our employment and support programme is the principle of conditionality, and we will keep our sanctions process under constant review to ensure that it continues to function effectively and fairly. We will also work with the Work and Pensions Committee, and we will take on board the views and comments that have been aired this afternoon.

Social Security

Emily Thornberry Excerpts

Tuesday 1st December 2015 Commons Chamber

[Emily Thornberry (Islington South and Finsbury) (Lab)]

It is important to be mindful throughout today’s debate of the events that have led us to this point. It is now almost a full year since the Stormont House agreement was finalised, after months of negotiation between five Northern Irish political parties, involving representatives of the UK, US and Irish Governments. Those negotiations sought to reach a lasting solution to some of the problems that have afflicted Northern Ireland not just in recent years, but throughout its history. The agreement made a substantial amount of progress on some of the most contentious issues, including flags, parades and dealing with the past, while also seeking a way forward on issues such as welfare reform and the devolution of corporation tax.

The Stormont House agreement marked a turning point, but in the longer term it has not provided a conclusive resolution to most of the issues that the parties sought to address. Divisions have remained in the 12 months since and have escalated at frequent intervals. On more than one occasion this year, it appeared that there was a genuine risk not just that the devolution settlement might collapse, but that we might see a return to direct rule for the first time in almost a decade. Whatever their disagreements, it has always been clear that none of the parties wanted that. Neither, of course, did hon. Members on either side of this Chamber.

My hope is that today marks the end of a difficult process that none of us wants to see repeated. The Northern Ireland (Welfare Reform) Act 2015, which received Royal Assent this week—together with this order, which it enabled—takes an important step towards bringing the events of the last 12 months to a close. I suspect that no one will see this order as a perfect solution. Most will nevertheless regard it as necessary at least, in so far as it paves the way for an end to financial penalties and a return to stable government. The Opposition will not, therefore, be voting against the order today, just as we did not vote against the enabling Bill, which became law last week.

We have serious concerns about many of the Government’s welfare reforms and, as the Minister knows, we have not held back from expressing them at the appropriate time. We have also, however, been consistent in our view that these debates are not the right forum for rehearsing the arguments we have been making elsewhere. We sincerely hope that, in bringing recent disagreements over welfare reform in Northern Ireland to a close, this legislation will mark the beginning of a new chapter in its history. It is hoped by many that it will pave the way for progress on long stalled issues, including the devolution of corporation tax, as I mentioned, as well as a voluntary redundancy scheme to mitigate the impact of recent civil service cuts on Northern Ireland’s workforce.

We particularly welcome the provisions made for transitional protections, extending over a number of years, to help to mitigate the impact of some of the most significant changes. These include important protections for existing claimants affected by the bedroom tax and the transition from disability living allowance to the personal independence payment. I understand that agreement has also been reached for a number of changes to be made to the way that universal credit will be implemented in Northern Ireland, which include exemptions from the requirement for single household payments, provisions to allow the housing costs element to be paid directly to landlords and protections in the sanctions regime for lone parents seeking work.

These are all welcome compromises on the part of the Department for Work and Pensions. Although they may not address all the concerns that have been raised about welfare reform in Northern Ireland, they will nevertheless go some way towards mitigating the impact on some of the most vulnerable among those affected.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Lady is rightly outlining some of the beneficial mitigating measures that will come into effect in Northern Ireland. As a Member of Parliament in this part of the United Kingdom, does she perhaps look on the package in Northern Ireland with some shades of envy for her own constituents?

[Emily Thornberry]

I appreciate that some of the compromises that the DUP have reached for Northern Ireland are not outcomes that we have managed to achieve on the mainland. Many of the policies that I see in front of me are certainly things that the Labour party has called for, so I congratulate DUP Members. Let us call a spade a spade. These are all welcome compromises on the DUP’s part. Although they may not address all the concerns, they nevertheless go some way towards mitigating the impacts on some of the most vulnerable among those affected.

We must remember that the divisions that recent negotiations have sought to heal go far beyond welfare reform alone. As such, finalising this agreement will allow progress to be made in other areas, making available additional funding for the Police Service of Northern Ireland to step up its efforts to fight terrorism. There will also be new funding for community initiatives, among them efforts to bring down the peace walls that have historically divided Northern Ireland’s communities. The compromises reached on the part of the DUP helped to get the exceptional circumstances of Northern Ireland recognised. Disagreements no doubt remain, but the settlement reached between Stormont and Westminster nevertheless presents an opportunity to draw a line under the difficult events that we have lived through in recent months.

Rent Officers (Housing Benefit and Universal Credit Functions) (Local Housing Allowance Amendments) Order 2015

Emily Thornberry Excerpts

Monday 23rd November 2015 General Committees

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I beg to move,

That the Committee has considered the Rent Officers (Housing Benefit and Universal Credit Functions) (Local Housing Allowance Amendments) Order 2015 (S.I. 2015, No. 1753).

May I start by saying what a pleasure it is to serve under your chairmanship, Mr Pritchard? There is a strange sense of déjà vu about so many of our recent debates on welfare reform, and nowhere is that more the case than when we talk about housing benefit. Sharpening his axe in the early stages of the last Parliament, the Chancellor set his sights on the growing housing benefit bill as a prime target for cuts. Despite cooking up no fewer than nine different ways to cut entitlement, the coalition Government nevertheless ended up with an annual housing bill more than £4 billion higher than the one they inherited.

How did that happen? The explanation is simple: thanks to a lethal combination of a low-wage economy and the lowest level of house building since the 1920s, the number of people claiming housing benefit has shot up. That is fuelled almost entirely by the 64% increase in the number of claims by working tenants in privately rented accommodation. It is important to make the point that housing benefit can be claimed by those in work—the poor in work. There has been a huge increase in the number of those people needing to claim housing benefit because the price of housing is so high.

Local housing allowance—or, in layman’s terms, housing benefit in the private rented sector—was always seen by Ministers as particularly low-hanging fruit. Despite the rhetoric of the emergency Budget of June 2010, which referred to “excessively generous payments” of housing benefit, the whole point of local housing allowance was to ensure that these payments would not be more generous than they needed to be.

It worked like this: in any given area, rates were set at the median of local market rents and, more importantly, they would rise or fall in line with those rents each month, ensuring that the cheaper half of the rental market in each area would always be affordable to low-income tenants on housing benefit. So, not luxury accommodation but the bottom half of the housing market would be available to those on housing benefit, including those in work and those out of work. While that system was not necessarily perfect, it seemed the fairest possible way of controlling costs and limiting tenants’ choices to a reasonable degree, while ensuring that low-income tenants would not end up getting priced out of large parts of the country—their country, where they have been brought up. That system, along with the principles it stood for, was completely turned on its head by changes introduced by the coalition.

First, the coalition Government changed the calculation of local housing allowance rates, lowering it from the 50th percentile to the 30th percentile, so that people on housing benefit could only rent from the bottom 30th percentile of properties in a particular area, which dramatically reduced the number of properties available within the limits of housing benefit. In making that change, the Government insisted that

“at least 30 per cent of private rented sector accommodation will continue to be affordable to people who depend on Housing Benefit.”

How did that go? It did not go well, and it should be obvious by now that that is absolutely not how local housing allowance reforms have played out.

The reason is that the move from the 50th percentile to the 30th percentile was only the first of many changes that, in combination, have seen housing benefit become increasingly disconnected from the actual cost of renting. Particularly damaging in boroughs such as mine, Islington, was the overall cap on local housing allowance rates. The cap means, for example, that claimants living in a one-bedroom flat can under no circumstances claim more than £250 per week in my area. If the Minister believes he could find a flat on that budget in my constituency or in any part of inner London, frankly, good luck to him.

The problem with these caps is that they seem to be set at completely arbitrary levels, with no reference whatever to the costs that tenants are actually facing. If hon. Members consider how much they are allowed to cover their housing costs for staying in central London, they might appreciate why £250 per week for a one-bedroom flat is very challenging indeed.

On top of that, the Government changed the rules on uprating, breaking completely the link between local housing allowance rates and actual rents. Instead of rising in line with market rents, local housing allowance rates were first uprated in line with the consumer prices index before increases were capped at a maximum of 1% for a period of two years. In breaking the link with rent inflation, the Government’s expectation was that the changes would

“bear down generally on rental values being met through Housing Benefit.”

If it wasn’t so sad, it would be funny. We know full well that the effect has not been to bear down on rent levels in any area. Not only has it completely failed to do that, it has not had the slightest impact on the rate at which rents are increasing. According the Office for National Statistics, private sector rents across the country rose by an average of 2.7% in the last 12 months. Given that there is no impact assessment attached to the Government’s proposals, we asked the House of Commons Library to examine some of the effects. Its analysis of the proposed freeze is that if rents continue to increase at the same rate over the next four years, the effects would be nothing short of devastating.

[Chris Stephens (Glasgow South West) (SNP)]

Has the shadow Minister read Shelter’s analysis stating that it would be virtually impossible to find a private rented home in 60 local authorities by 2019?

--- Later in debate ---

[Emily Thornberry]

I certainly have. If the Minister and the Department have not had a chance to look at it, I am sure that we could give them a copy. I am also prepared to give them a copy of the Library’s research. The Government might not know about the effects. If so, this is the moment to admit it, so we can help them and sort things out together. The alternative is that they do know. If that is the case, they should admit that they are essentially saying that unemployed people will be unable to live in private rented accommodation practically anywhere in the country without digging into other benefits to supplement the amount of housing benefit available to them, which will be not be high enough to cover their rent.

It might be the case that Shelter’s analysis has been dismissed because it is a housing-related lobbying organisation. That is why we decided to get the Library to carry an assessment, which provides an example using what it calls the outer north London broad rental market area, which in real life covers Enfield and Barnet and neighbourhoods such as Edmonton, Tottenham and Hornsey. LHA tenants in the area already face a shortfall of around £8 a week between their housing benefit and their rent. After four years of rent increases, according to the Library figures, freezing LHA could mean that a family renting a two-bedroom property in such areas could face a shortfall of more than £50 a week, or more than £2,600 a year, by 2020. That is particularly significant as many of those who have had to move to the outer boroughs in recent years have done so because they can no longer afford to live in inner London.

Many of my 1,000 constituents who have recently moved out of Islington have moved to those outer boroughs, and they will soon need to move again. They will have been put into private rented accommodation by the local authority, perhaps because they were homeless, and they will no longer be able to stay and will need to move elsewhere. Where will they go? Presumably not to Manchester, where a family of the same size would face a shortfall in excess of £1,300 a year as a result of the freeze. Not to Bristol either, where the gap between housing benefit and rent would top £1,400 a year. In fact, no area in the entire country will be unaffected by the freeze. The only variation will be in the size of the shortfall, with fewer areas remaining affordable every single year. If each of the 1.5 million private tenants claiming housing benefit moves to Gateshead or Hartlepool, which is presumably what the Government intend, there will not be enough properties left to house them.

It seems completely inevitable that the policy will lead to enormous costs—well in excess of expected savings—not just to the public purse, but in human terms. The Government have not even carried out any consultation before making these major changes to benefits. They have not had any impact assessment and are, quite simply, hiding from the evidence of the catastrophic effect that the freeze could have on families who will be caught by it.

No doubt the Minister would like to see the research of the House of Commons Library and of Shelter, and I will certainly give that to him. Perhaps, after the Government have looked at the figures and at the effect that the changes will have on real people up and down the country—people in work and out of work, who will no longer be able to afford to live in the private rented sector—they will change their mind.

Alternatively, the Government could always build some affordable housing. That would be good. If the Government are not going to build real affordable housing, people will remain dependent on the private rented sector. Everyone in this room who is an elected Member of Parliament has constituents who will directly be affected by the Government’s proposed changes.

Although I understand the Minister’s concern about the housing benefit bill, I simply cannot accept that this extreme proposal is the answer. The level of savings that the Government expect from the freeze appears to be completely out of proportion with the hardship that it will lead to. I will address the matter on the Government’s terms. Taking into account the Government’s commitment to recycle 30% of the savings into what they call the targeted affordability fund, of which we will hear more in a moment, the measures save less than £500,000 a year according to the Government’s own estimates. The more or less inevitable increase in costs associated with the rising homelessness that will be a direct effect of this change is likely to wipe out any savings that do materialise, possibly several times over. If a family is chucked out because they can no longer afford their rent, and they become homeless, there are not only human costs, but costs to local councils, which try desperately to find that family some other accommodation.

Ministers have turned a wilful blind eye to the likely consequences, refusing to carry out any consultation or impact assessment, not to mention any meaningful form of mitigation. The targeted affordability fund, to which I referred, is certainly better than nothing but in many areas it might not be very much better than nothing. As the Minister knows, despite being allocated specifically to areas with the very highest increases in local market rents, the fund nevertheless limits increases in certain rates to a maximum of 4% a year.

I do not know whether the Minister knows how much the rents went up in my constituency in the past year, and my constituency is not on its own. Rents in my constituency went up by 8% last year, and rents in places such as Oxford, Cambridge and Brighton have increased by much more than 4%. I appreciate that the Minister is likely to rely on his targeted affordability fund to excuse the measures, but it simply is not good enough. It is of little help to areas such as my constituency—to virtually any part of London, for that matter—let alone to the other areas in which there are spikes and much higher rents.

In Enfield, which has taken a significant number of private tenants displaced from central London by earlier changes to housing benefit, private rents have increased by 7% in the past 12 months. How will it work, Minister? Even the good that the TAF might do in some areas will be irrelevant for the next year, as Ministers have made clear that there will be no additional funding for the first year of the freeze. I do not understand why, apart from its being a cost-saving exercise. I cannot not see how the TAF can possibly give any succour to families who are likely to suffer as a result of this.

Inevitably and yet again, local authorities will have to pick up to the pieces but, as we know, their resources have been severely depleted. Increasing the numbers that are likely to fall through the cracks through no fault of struggling councils will make things even more difficult. Frankly, it would not be right to blame councils for the abysmal consequences of this reckless proposal and the manifest failure of the Government to get a grip on housing benefits. In the end, it is necessary to ensure that people have jobs that pay well and to build some affordable homes.

--- Later in debate ---

[Justin Tomlinson]

Let me ponder that question and come back to it.

The Government recognise that some places will see high increases in rents, so we have made provision to help those areas. Over this Parliament, 30% of the savings generated from the measure will be recycled and used to create more targeted affordability funding, which will be used to reduce the gap between frozen LHA rates and the 30th percentile reference rent in areas of the greatest rental growth, building on the £140 million already distributed since 2014.

Hon. Members may be aware that in 2015-16 we have increased 191 LHA rates by 4%, instead of the uprating limit of 1%, using the targeted affordability funding. More than half of the LHA rates in London—41 out of 70—received the extra increase. The funding has also benefited other parts of the country such as Manchester and Aberdeen.

[Emily Thornberry]

The Minister just referred to 41 areas receiving this additional funding. Is he telling the Committee that in those 41 areas, people can rent anything in the bottom 30th percentile of properties in the local authority, within the limits of housing benefit?

[Justin Tomlinson]

That is why the additional funding was provided—to make up the difference in those particularly high rental growth areas.

[Emily Thornberry]

The Minister will appreciate, however, that it did not.

[Justin Tomlinson]

I will come to the stats. I will not forget that point, as it has already been mentioned.

In 2016-17, the effect of freezing LHA rates will be the same as it would have been if rates had been uprated by CPI inflation due to the level of CPI forecast in September. As a result, LHA rates would not increase in 2016-17 but would mostly remain at the 2015-16 levels. As there is currently no inflation in the economy, no savings will be made from the freeze in 2016-17 and there will therefore be no targeted affordability funding for that year. Targeted affordability funding will, however, be available from the savings for subsequent years, up to and including 2020-21.

From 2017-18, we will use the targeted affordability funding to support areas where higher rent increases are causing a shortage of affordable accommodation. The amounts of targeted affordability funding available each year from 2017-18 and our plans for how we distribute it will be announced as part of the review of the order in future years.

In the summer Budget, the Chancellor of the Exchequer announced that an enhanced package of £800 million of discretionary housing payment funding will be made available to local authorities over the next five years to provide support to the most vulnerable claimants affected by housing benefit reform, including this measure. That was a 40% increase on what was previously offered. I can also reassure hon. Members that alongside the LHA rates, we will continue to publish the 30th percentile of market rents in each area, as we have previously, so that they can be scrutinised.

To pick up on some of the specific questions that were asked, I absolutely agree that the biggest challenge is demand outstripping supply. Addressing the lack of affordable housing is therefore a real priority. There has been a welcome announcement of an extra £1.45 billion to be spent creating an additional 43,000 affordable homes in London by 2018.

[Emily Thornberry]

I wonder if the Minister could assist us with those affordable housing statistics. Will those affordable homes be in the bottom 30th percentile? Will they be within reach of housing benefit? If we are talking about housing benefit and affordability, surely the two should be in line.

[Justin Tomlinson]

We do not control housing prices, but clearly the quicker we can get these new houses, the bigger the difference they will make. Across the country, we expect at least another 275,000 affordable homes to be built before the end of the Parliament. Through the new homes bonus, we provide additional incentives to local authorities to increase the provision of affordable homes, so they get paid more than just six times the value of the council tax. Our extension of the right-to-buy policy will also result in new housing stock being brought in.

I was asked whether the policy had resulted in rental prices falling. In some areas it has, and in some it has not. We know that 27% of landlords have been negotiating; that figure is as high as 47% in London. On the point about whether there will be ghettos and whether people will suddenly disappear, 79% of those who moved during this period moved within 5 miles, and the vast majority did so for personal rather than financial reasons. If we look at the broader picture, we see that 93% stay within their region.

There have also been behavioural changes. Two hundred people a week are coming off housing benefit because of a combination of rising wages in our growing economy, the 2 million new jobs that have been created, the negotiations that have taken place and, in some cases, the fact that rents have been reduced. Therefore, keeping the economy going in the right direction remains a key priority. In response to another point that was raised, the broad market areas take into account local amenities such as schools, shops, hospitals and transport, and there can be quite a broad range of rental prices within an area.

I commend the order to the House.

[Emily Thornberry]

Mr Pritchard, we will put the matter to a vote.

Question put.

Universal Credit (Work Allowance) Amendment Regulations 2015

Emily Thornberry Excerpts

Thursday 19th November 2015 General Committees

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I beg to move,

That the Committee has considered the Universal Credit (Work Allowance) Amendment Regulations 2015 (S.I. 2015, No. 1649).

It is a pleasure to serve under your chairmanship, Sir Edward.

The Opposition do not support the regulations. We have a number of concerns not only about the substance of the Government’s proposals, but about the way in which they have been brought forward. During the passage of the Welfare Reform Act 2012—you may remember that, Sir Edward—Ministers were fond of drawing an analogy between universal credit and a bookcase. The 2012 Act created the basic framework for the new benefit, but left most of the detail to the regulations, which would fill in the gaps, Ministers said, like books filling empty shelves. To pick up that analogy, more than three years have passed and the bookcase is now in a pretty sorry state. It has been hacked away at over the years, with no one paying much attention apart from, of course, the Chancellor of the Exchequer, who has been paying a great deal attention to it. The bookcase is now in such a precarious state that the wrong sort of book placed on the wrong shelf in the wrong order at the wrong point could cause the whole structure to collapse.

I do not know if hon. Members have had the sorry experience I have had of going to IKEA and buying and then trying to assemble Billy bookcases, which I understand are some of the best sellers. I have a number of children, all of whom have had more and more books, and putting those bookcases together is very difficult. One has to press in a little metal thing and bang away at it, and it goes too far or gets lost, so instead of four little bits of metal holding up each shelf, there may only be three, so the books have to be put on the shelves in a way that stops the bookcase falling over altogether. That has been my experience, so when reading through previous comments comparing universal credit to bookcases, I cannot help but think of the Billy bookcases in my children’s bedrooms that are in a very sorry state. That, I am afraid, is where we have got to with universal credit. The regulations we are debating today are exactly the sort of book that could turn over the whole bookcase. In a non-metaphorical way, they will put the entire structure of universal credit under such strain that it may no longer be able to bear the weight of the expectations that Ministers have given us all about what universal credit will mean.

The regulations propose significant cuts to the work allowances within universal credit. A household’s work allowance sets the ceiling for what they can earn before their universal credit starts to be withdrawn. The idea underpinning one of the main objectives of universal credit is that hard work should be rewarded. We all agree with that. In practice, the work allowance was supposed to ensure that those who moved into work for the first time would not face a financial penalty if they did so. The 2009 paper entitled “Dynamic Benefits”, published by the Centre for Social Justice, is sort of the Old Testament of universal credit—I do not know where Ministers are proposing to put this particular book on the bookcase, because it is the sort of thing that could topple the whole thing over by itself—and it said:

“For those capable of working, work should always be preferable to benefit payments as a route out of poverty. Those on low earnings, and those working part-time, should retain more of their wages. Hence, we propose increasing the earnings disregards, and reducing the highest benefit withdrawal rates.”

Well, hooray! We would all agree with that.

After the 2010 election, the coalition’s White Paper built on that theme and warmed to it, singling out work allowances as a specific example of how the new benefit would help to meet the Government’s objective of making work pay. The fact that the disregards would be more generous than those under existing benefits and tax credits was a key feature of work allowances, according to the White Paper. The argument went as follows:

“People will generally keep more of their earnings for themselves and their families than is currently the case… Universal Credit will ensure that all amounts of work will be more financially rewarding than inactivity and remove the current barriers to small amounts of work.”

So all amounts of work will be financially rewarding. That is what universal credit was supposed to be about. That is what the Old Testament said, and that is what the White Paper said. That sounds like a reasonable argument, and we would support it. However, these new regulations turn that argument completely on its head: not only do they cut some households’ work allowances almost in half, but they remove some people’s work allowances altogether. Does the Minister realise that? Is the Department aware that that is what it is doing?

According to figures compiled by the House of Commons Library, the changes will result in families in a range of different circumstances losing out, whether they are in work or not. The most startling effect will be on households with no dependent children. Whether singles or couples, they will no longer have any work allowance at all. From the moment they start working, they will lose benefits. There will be no work allowance. Is the Minister aware that that is what the regulations do? For those families, the cuts will mean immediate withdrawal of 65% of their universal credit from their first hour of work. In practice, the change is likely to cause losses of between £800 and £900 a year. If we add tax and national insurance, the figure could be 75% or even higher.

It is hard to imagine a situation more starkly in contrast with the original purpose of universal credit. Do the Government know that? Or, because there is no impact assessment, is the Minister unaware that this will happen? That is not all. Even more severe will be the impact on people—likely to be single parents—moving into work for the first time. As is so often the case with these Tory welfare reforms, single parents will be hit harder than anyone else. Single parents—by whom we usually mean single mothers—will, in some cases, have their work allowances reduced from £9,300 a year to just £5,000 a year. Under the current higher work allowance, a single mother who earns the minimum wage can work for up to 22 hours a week on universal credit before she reaches her limit. The cuts will mean that she will start to lose support the moment she works more than 12 hours a week. It is quite shocking that a single parent with two children could face losses in excess of £2,000 a year as a result of the cuts, even if she works full time and gains from the higher minimum wage.

We all want children to be brought up in households where a parent is in work, giving those children a good example, where it is practical, of the best way to live, so why are the Government making it so difficult—again—for single parents? Are they unaware that this will happen, or are they doing it deliberately? If they are doing it deliberately, what is the rationale? How can it be justified?

If this is what the Government meant by changing work incentives, the incentives are surely being changed in exactly the wrong direction. That cannot be what the Secretary of State meant when he promised repeatedly that universal credit would “make work pay.” I suggest to the Minister that

“it is one thing to wag our finger at people who are unemployed and say that they must go to work, with a sort of moral purpose to that. Of course it is quite meaningless to someone if you are telling them that and they think they are going to lose money, or certainly not gain any money”.

I could not have said that better myself, but I did not say it first. Does the Minister know who did? She must be aware. I am sure that she has a copy of the Secretary of State’s collected speeches by her bed and knows that it was he who said that in early 2011, when he was speaking about how the work allowances would improve incentives to work for low-income households.

The cuts mark a radical shift away from the principle that work should always pay. If the Minister does not want to take my word or the word of the House of Commons Library, there are others. Just a few weeks ago, witnesses from the Institute for Fiscal Studies and the Resolution Foundation made the same point when giving evidence to the Work and Pensions Committee on the Government’s tax credit cuts. The witnesses argued that

“more of the debate should be focused on what we have done to the original purpose of universal credit in these drastic cuts to the work allowances”.

They said that, because of the changes,

“the structure of what will end up as universal credit has…been fundamentally changed”.

Universal credit will not be universal and it will not make work pay, so what is the point of it? Why are the Government proposing to change it again? We share those witnesses’ concerns. It is bitterly disappointing that Ministers are pressing ahead with their plans before responding to the considered arguments of independent experts. Perhaps we should not be surprised by the Government’s reticence on the question of how work allowances can possibly be cut without affecting incentives to work. If I am honest, I do not expect the Minister to square the circle today, because she cannot. It is perfectly clear that in making these regulations the Government have wilfully failed to take notice of any evidence on their probable effects. They should have—or perhaps they have looked into it and do know the effects, and they have just not shared them with us. But we have found out from other sources.

The Social Security Advisory Committee said of the regulations that

“the impact needs to be analysed carefully and the policy about work incentives should be derived from strong evidence.”

Well, where is the evidence? The Committee was concerned that

“there may be an uneven impact on individuals”—

that is true—and expressed disappointment with the

“lack of statistical analysis to support the view that the abolition of the work allowance for several UC categories will not deter people from seeking work”.

Too right. In the House of Lords, the Secondary Legislation Scrutiny Committee was similarly unimpressed, issuing a report that said its members were

“disappointed that no impact assessment or similar statement has been provided showing how many people are likely to be affected by these changes and to what degree.”

It is not just the lack of an impact assessment that is disappointing, or the fact that the proposals have not been subject to any form of consultation, or that the Government seem wilfully to have failed to look at the evidence or, indeed, even tried to look for any—all of which are, of course, problems in a democracy. More troubling still is the way in which the Government have sought to implement these cuts by the back door. They have put them into regulations that would not be subject to a vote, or even a debate, unless they were prayed against. They have tried to slip them through without people noticing. The controversy generated by their proposed cuts to tax credits, which in many ways mirror the proposals we are discussing, ought to have made Ministers pause for thought before they moved forward with equivalent cuts to universal credit.

The Government may have won the election, but they have a majority of only 12. In my respectful submission, they should not be behaving with the arrogance of a Government with a majority of 120, but this behaviour shows that sort of arrogance. They have shown the same degree of indifference to public opinion that they have shown to evidence of the impact the proposals are likely to have on working families. Ministers may have assumed—perhaps quite correctly—that cuts to universal credit would not provoke the same level of concern as cuts to tax credits. There is, of course, less of a sense of urgency when it comes to cuts to a benefit that, for many people, may be several years away and that seems to be continually retreating into the distance, but however distant a prospect universal credit seems to us today, we should be none the less concerned about what the proposals would mean for working families on low incomes, whether the impact is felt in one years’ time or 10 years’ time.

The fact is that if—I repeat: if—Ministers are right when they say that most people in the current system will have transferred to universal credit by the end of this Parliament, all the arguments we have been having about tax credits in the past few months will no longer be relevant, and the arguments I am making today will be. We will have done a disservice to the people we represent if, in five years’ time, we look back and wonder how we let this Government get away with making such significant cuts with so little scrutiny. These cuts will not be passed unchallenged. The Opposition will be voting against them today.

--- Later in debate ---

[Priti Patel]

There is no doubt at all that universal credit will have a powerful and positive effect on labour market participation. The under-25s will benefit in due course from the increase in the personal allowance, which will mean that they keep more of the money that they earn. Those aged 18 to 21 will benefit from the new schemes that the Government are bringing in to support more work and training, and give help in getting on apprenticeship schemes. The positive choices will be out there for them to gain skills and get their foot closer to the labour market through the support of universal credit as a structure and through our work coaches, who will support them in work and will be of great benefit to them.

We can already see that universal credit is working and is changing lives across the country. It is now available in more than 500 jobcentres nationwide, covering more than 270 local authorities across England, Scotland and Wales, including the constituencies of many hon. Members on the Committee—Dudley North, Glasgow South West, Alyn and Deeside, and Islington South and Finsbury. Opposition Members will welcome the fact that universal credit is helping their constituents to look for work, to enter work more quickly and to earn more money in work.

Universal credit is a transformational system in the way it provides support, breaking down the barriers that prevent people from gaining work. Our network of trained and dedicated work coaches is transforming the relationship that we have with claimants and, importantly, that they, in turn, have with the labour market. We are supporting people from various backgrounds—including, importantly, people with disabilities and health conditions —into work by forging strong partnerships with key employers, ranging from National Grid to Barclays. We also have the Government’s Disability Confident campaign, which puts people at the heart of securing employment opportunities.

Many parents have previously cited, and currently cite, childcare costs as a specific barrier to entering the labour market. Universal credit currently covers up to 70% of eligible childcare costs, but, from April next year, we will increase that to 85%. That will make an enormous difference to people’s lives, with an increase of up to £1,368 per year for every child.

[Emily Thornberry]

I applaud the right hon. Lady’s cheerful rhetoric in the face of my questions to her. However, is it not right that single parents’ work allowance will be cut? Is it not also right that people without children will have no work allowance at all?

--- Later in debate ---

[Priti Patel]

The hon. Lady touched on tax credits, and she will, rightly, have to wait until next week’s spending review to hear what else will happen in that particular space. However, I emphasise again for everybody on the Committee, including the hon. Lady, that the incentives to move into work and to increase hours will be strong in universal credit. They are far better than the system of benefits and tax credits that they replace. Moreover, universal credit ensures that those on very low incomes are protected. The Budget changes will also need to be considered as part of the wider Government support that we have put in place for working families, much of which I have touched on. Help can be targeted much more effectively at those who face the biggest barriers to work than through a blanket work allowance for all claimants, and I am sure all Members will agree with that.

Beyond universal credit, the Government have set out a vision for a higher-wage, lower-tax and lower-welfare society. As a first step, we have raised the personal allowance to £11,000 for the next tax year, and we have pledged to increase it again to £12,500 by the end of this Parliament. We have introduced the new national living wage, which will come in next year. As we have stated previously, that is forecast to reach more than £9 by 2020, based on the recommendation from the Low Pay Commission.

We expect many universal credit claimants to respond to these changes by actively seeking more work. We will rightly support them in that. I remind the Committee that in the current welfare system more than 500,000 people would lose more than 80p for every extra £1 they earned. Virtually no one will face that level of withdrawal rate under universal credit.

[Emily Thornberry]

I am listening carefully to the hon. Lady but she is just not right. People without children will not have any work allowance at all. They will therefore be losing 65%. When tax and national insurance are added to that, they will be losing more than 70%. Some will work for £1 and get only 30p of it.

[Priti Patel]

With respect to the hon. Lady, she is wrong, because universal credit will offer real support to people in work. I have touched on the wider package of measures, many of which were announced in the Budget this year by my right hon. Friend the Chancellor. Importantly, not only will universal credit offer support into work, but it will continue to be a vital safety net for the most vulnerable in society.

The package of measures announced in the Budget ensure that welfare will be put on a sustainable footing. We acknowledge that these are wider and difficult decisions but they are the right ones that put work first, restore fairness to the welfare system and the taxpayer, and importantly will continue to provide a safety net for the most vulnerable in society.

[Emily Thornberry]

We have had no answer on whether people without children would get no work allowance, or whether the Government knew that and are prepared to press on anyway. We do not know the justification for that. We have had no answer regarding the impact on single parents and the fact that the work allowance will be halved for them. We have had no answer on whether the Government knew that or why they did not consult on it. We have had no answer on why the Government have not answered the Select Committee before pressing on. We have had no answer on why there has been no impact assessment.

We have had—and I respect the Minister for it—a great deal of cheerful rhetoric. I do admire the way she presses on and gives such a confident performance in the face of overwhelming evidence. The Opposition will be voting against.

Question put,

Oral Answers to Questions

Emily Thornberry Excerpts

Monday 2nd November 2015 Commons Chamber

[Emily Thornberry (Islington South and Finsbury) (Lab)]

The Tory-Liberal Democrat Government tried to cut housing benefit some nine times. Since May, the Government have been trying again. All this has achieved is a massive increase in the number of homeless families in temporary accommodation, the largest housing benefit bill we have ever seen, and huge amounts of discretionary housing payments being given to local authorities. I am sure that it has occurred to the Minister—he is an intelligent man—that the answer is to build more real affordable housing. Would he like to have a quiet word with the Department responsible and ask it to pull the Housing and Planning Bill, because it will simply result in the sell-off of more and more affordable social housing?

[Justin Tomlinson]

The right-to-buy policy is a deal that we have secured with housing associations to give tenants the right to buy. The homes will be sold on a one-for-one basis, which creates new, modern stock and additional jobs. People who work hard should not be blocked from a chance to own their home, which I very much support.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)]

We are working closely with Motability to put in place a package of support for those who lose their eligibility. Claimants will be able to keep their vehicles for almost two months and most claimants receive a one-off payment of up to £2,000 to maintain their mobility. In addition, we have reformed the DWP appeals process with the introduction of the mandatory reconsideration. This enables disputes to be addressed more quickly. Finally, Her Majesty’s Courts and Tribunal Service continues to focus on reducing waiting times, and I would be happy to work with my hon. Friend further to see what progress can be made.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Given the considerable disquiet in the country about cuts to tax credits, not to mention the alarm on the Secretary of State’s side of the House, where 20 of his own MPs have said that the Government are in danger of cutting a lifeline to working families, does he now regret describing tax credits as a “bribe”?

[Mr Duncan Smith]

The hon. Lady should remember exactly how the money was spent. If she looks back, she will find that in the run-up to the 2005 general election, the then Chancellor raised the spending on tax credits, strangely, by 71%. After that the rate stayed pretty flat, but before the 2010 election it was suddenly raised again by nearly 23%. I simply say to the hon. Lady that if she does the maths, she might wonder why Labour lost the 2010 election.

Welfare Reform and Work Bill (Eleventh sitting)

Emily Thornberry Excerpts

Tuesday 20th October 2015 Public Bill Committees

Brought up, and read the First time.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

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

Like housing, the cost of childcare has weaved its way through these debates, as we have considered a Bill that places significant new burdens on working families with children. The rising cost of childcare is not a new phenomenon, but it has certainly made life more difficult in recent years for working parents, who have seen their incomes largely flatline, whereas the cost of childcare has been going up.

According to figures compiled by the Family and Childcare Trust, the costs for preschool children have increased by 20% in real terms over the past decade. Between 2007 and 2013, the proportion of families who said that they found it either difficult or very difficult to pay for childcare increased from 18% to 26%. In the past five years, as prices have continued to outstrip wages, the trend has worsened to the point where the average family will pay an additional £1,500 a year in nursery fees compared with what they paid in 2010.

The impact on families with the lowest incomes, regardless of whether they work, has been particularly alarming. Children living with parents who have to pay for childcare are now a third more likely to live in poverty once those costs have been taken into account. The Bill, which attempts to redefine poverty by focusing on whether anyone in a household works, instead of on how much working households can earn, will effectively ignore the problem. That does not make it any less real, however, for real families in the real world, and it should not blind the Committee to the fact that there is a lack of consistency in the Government’s approach, which seeks to impose strict requirements on parents to support themselves solely through work while providing less and less support to cover the costs of the childcare that would make work an option.

It is significant in that context that 41% of parents who responded to a survey carried out by Citizens Advice last year said that the cost of childcare either prevented them from working at all, or, if they already worked, prevented them from increasing their hours. That will not be helped by a promise to increase the number of hours of childcare available, as long as the promise simply remains a promise and is, frankly, no more than an unfunded commitment. We have discussed that commitment at length during previous debates in this Committee and the fact that the Childcare Bill, which is currently making its way through the other place, is a four-page Bill, which does not increase the confidence of Opposition Members that this pledge is realistic.

The most obvious concerns—I will not rehearse them all this morning—are that the extension is inadequately funded; that the Government have yet to outline their plans for increasing the number of childcare places to meet any increase in demand; and that we have had no indication that any additional support will be made available for single parents who will be expected to be available for work as a result of measures in this Bill. It seems telling to us that when we put forward an amendment saying effectively that no parent should be forced to work unless adequate childcare is in place, Government Members felt it necessary to vote against such a reasonable amendment. That group of people will be hit particularly hard by the regressive four-year freeze on working-age benefits and tax credit, which clauses 9 and 10 provide for. I remind the Committee that single parents make up 56% of families receiving both working tax credit and child tax credit. If the extension of free hours is inadequately funded—I would welcome any evidence to the contrary—it is inevitable that the out-of-pocket costs parents are forced to pay will increase as sharply in the next five years as they have in the past five years.

Freezing the level of working tax credit, under which working parents can claim reimbursement for up to 70% of their childcare costs, is particularly counterintuitive if the aim is to make work pay, as the Government continue to insist it is. If we assume that childcare costs will rise at the usual pace over the four years during which the payments are frozen, the amount that working parents will be able to claim for support with childcare costs will fund fewer and fewer hours each year. In those circumstances, the only option for many parents will be to cut back on the hours they work, which would seem to be at odds with the underlying principle of the so-called Welfare Reform and Work Bill. Parents who take such a step, which the Bill as it stands would make an entirely logical choice, will leave themselves open to harsh penalties under the sanctions regime if they find themselves unable to work altogether.

New clause 8, which would require the Secretary of State to undertake an annual review of the childcare element of working tax credit, would not require that the sums involved necessarily be increased, but would simply acknowledge that a four-year freeze in all benefits and tax credits is an extreme measure that will tie the Government’s hands in all circumstances. Economic growth may, for example, significantly exceed expectations over the next four years—that seems unlikely, but it is possible. Were that to happen, the freeze might prove unnecessary and more extreme in its effects, widening the gulf between the incomes of low-income families and the costs they are expected to cover.

It might also be the case—this seems somewhat more likely—that the promised extension of free childcare will not materialise according to the Government’s plans. In that scenario, significant costs will continue to fall to parents, whether they are working or looking for work. I would like to think that, in such circumstances, the Secretary of State would be open-minded enough to admit that tax credit payments specifically earmarked to cover working parents’ childcare costs might need to increase at a level that was adequate to ensure that those costs remained affordable. If the intention behind the Bill is, as the Government say, to give people an incentive to work and to ensure that work always pays, more flexibility is surely called for.

[The Minister for Employment (Priti Patel)]

A very good morning to the Committee.

The new clause seeks to ensure that the Secretary of State would have to review the level of the childcare element of working tax credit annually, and that that review would be used to determine the maximum rate at which that element was set.

By way of background, I should say that the childcare element, like a number of other elements of tax credits, has never been automatically increased as part of an annual review, but we do keep it under review. Indeed, since its inception in 1994 as part of family credit and disability working allowance, it has increased from a starting rate of £40 per family towards the costs of childcare to its present-day level, where the Government contribute 70% of childcare costs up to £175 a week for one child or £300 a week for two or more children. Under universal credit, as the Committee has discussed, that will increase to 85% of childcare costs.

In addition, the Government have taken significant steps to increase support for childcare for working families, including by extending free entitlement to childcare for working parents of three and four-year-olds to 30 hours—an increase on the 15 hours allowed for in the last Parliament—and by providing for 15 hours of free childcare a week for two-year-olds from disadvantaged backgrounds. We also have the forthcoming introduction of tax-free childcare, which will benefit up to 1.8 million working families by up to £2,000 per year per child, or by up to £4,000 per year for disabled children.

[Emily Thornberry]

I have been sitting here processing what the Minister has said, and I believe that she told the Committee at the outset of her speech that the Government have kept the cost of childcare continually under review. If that is right, there is not a huge gap between us. Given the alarm that is spreading across the country over cuts in benefits and whether working families will be able to make ends meet, would it be a good idea to give a commitment today that the review will happen annually? We would not need to discuss the matter any further.

[Priti Patel]

We take the view that the new clause is not needed. The childcare element has never been included in formal annual uprating reviews, and the Bill does nothing to change that. The Government already keep the level of the childcare element under review, as we have said. We are committed to helping families with childcare through some of the areas to which I have already alluded. On that basis, the new clause is not needed and I urge the hon. Lady to withdraw it.

[Emily Thornberry]

This was largely a probing new clause, and I am grateful to the Minister for her response. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 10

Changes to age of eligible claimants of housing benefit

‘(1) The Social Security Contributions and Benefits Act 1992 is amended as follows.

(2) 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.”.’—(Hannah Bardell.)

This New Clause aims to ensure that any changes to the age of eligible claimants for housing benefit must be made by primary legislation rather than regulation. The Government intends to withdraw entitlement to housing benefit from 18-21 year olds and it is understood this change would be enacted by regulation.

Brought up, and read the First time.

[Hannah Bardell (Livingston) (SNP)]

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

--- Later in debate ---

[Hannah Bardell]

Indeed; what can I say?

The SNP fully supports the intention behind Labour’s new clause, and we seek to prevent any young person from being locked out of the housing system due to age. We heard our youngest Member of Parliament, my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black), speak passionately in her maiden speech about the fact that she would be the only 18 to 21-year-old in the UK who would be supported in housing under the Conservative Government’s proposals. We have already said that we will support Labour’s new clause 10, because we share the concerns of the hon. Member for Islington South and Finsbury.

The SNP is concerned that the Government’s intention to remove young people’s access to support with their housing costs could lead to an increase in youth homelessness. According to Crisis, youth homelessness is already on the rise, with 8% of 16 to 24-year-olds recently reported as homeless. In four years, the number of young people sleeping rough in London has more than doubled. In a written answer on 14 September the Government confirmed they would restrict 18 to 21-year-olds from access to housing benefit. Their rationale, which we believe is deeply flawed, was cited as a wish not to allow young people to slip into a lifetime of benefits. The Government may not realise that it is not simply a matter of people deciding to have to rely on housing benefit to keep a roof over their head; many young people are not able to live at home with their parents for a variety of reasons. The fact that the Government are already squeezing the pockets of working families and families with more children will make it even harder for parents to afford to keep their children at home for longer.

Of the 19,000 18 to 21-year-olds who will be affected by the change, 60% are in social housing, all of whom will have been subjected to the stringent eligibility test and only deemed a priority by the local authority because they are in need. The remainder of those eligible for help live in the private rented sector and receive the shared accommodation rate—the lowest rung of housing benefit, according to Shelter, barely enough to cover a room at the bottom end of the market.

We have seen the increase in housing costs across the UK, which has locked out this sector of society. That is frankly wrong. The Government have failed young people by failing to provide economic opportunities and stability in the workforce. Growing numbers of talented young people are left unemployed. The Minister cannot simply say, “Stay at home, and your parents will look after you”, because that is regressive and smacks of a lack of vision. Many young people cannot live at home and housing benefit is the only thing that stands between them and homelessness. Between 2010 and 2014 Crisis helped to create 8,120 tenancies in the private rented sector for people who are homeless or at risk of homelessness, with support from the Department for Communities and Local Government.

The SNP believes it is unfair to restrict entitlement to a benefit based solely on age rather than on evidential grounds. We support Labour’s wish for a blanket ban on the Government restricting entitlement based on age, but as the answer to a written question on 14 September confirmed, it looks likely that the Tories are intent on locking young people out of this lifeline. That is why we have tabled new clause 12, which would provide restrictions related to vulnerable people who may be impacted. I recognise that the Government have said that they will bring forward exemptions for particularly vulnerable young people, but the full details of that proposal are not in the Bill. We tabled the new clause to ensure that young people in the circumstances that I have described are protected.

[Emily Thornberry]

Does the hon. Lady agree with me that it is very important to look closely at what the Government say counts as vulnerable? One can imagine them saying that they are going to look after vulnerable youngsters, but their definition will be restricted. For example, they may include young people leaving care but not anyone else. We need to be careful, because Opposition Members’ definition of vulnerability may be different from what Ministers are trying to get away with.

[Hannah Bardell]

The hon. Lady must have read my mind. I was just coming on to the point about care leavers and those who have experienced violence or abuse. As the hon. Lady says, the categorisation of those who are vulnerable must be a unified approach. We must be in agreement on that throughout the House. Some young people may be unable to live with their parents because of relationship breakdown—for example, if they have been thrown out because of family circumstances such as a parent remarrying—or because of their own lifestyle choices or sexuality, but they might find that difficult to prove. Many young people who have found themselves homeless are currently supported into accommodation funded by housing benefit, either by a local authority or by a homelessness organisation. Without that support, those vulnerable groups will be homeless and unable to meet housing costs. Housing benefit helps those people live independently when living at home is no longer an option, and removing it could leave people choosing between returning to a destructive family home or the street.

Accepting the new clause would at least show that the Government were serious about their commitment to protect the most vulnerable, which we must have within the law. I look forward to hearing from the Minister, and I urge hon. Members to support our new clause 12 as well as Labour’s new clause 10, to ensure that vulnerable young people can access housing support to keep them off the streets.

[Jess Phillips (Birmingham, Yardley) (Lab)]

As everyone always says, it is an honour to serve under your chairmanship, Mr Streeter.

[Emily Thornberry]

She means it!

[Jess Phillips]

I really mean it. It is an honour.

As soon as I heard of the plans for the removal of housing benefit from those aged 18 to 21, I was understandably alarmed. There are many reasons why, and I have discussed with colleagues on the Government Benches. I took to my feet in Prime Minister’s questions and asked the stand-in Prime Minister, the Chancellor, to guarantee that certain vulnerable groups would be exempt from the changes. I highlighted to him then, as I do to the Committee now, that every year, Women’s Aid conducts a survey of residents to provide socio-demographic information about a sample of women residents living in refuge services in one day. Last year, on that one single day, 132 women living in refuges were aged 18 to 20. In Birmingham, women aged 18 to 21, who had been beaten and tortured, raped and belittled, made up 25% of all residents living in Birmingham and Solihull Women’s Aid refuges. Almost all will have received housing benefit to live in the refuge and stay safe. That gives an idea of the number of women in that group.

Anyone who has ever worked in supported accommodation with victims of domestic violence will know that that group—those living in refuge—represent the tip of the iceberg of those living within the community and suffering the same thing. As an example, in the last year that I worked in refuge, 800 people came through our refuge services, and 8,000 were rehoused in the community. That means that around 10% were in refuge. From those figures, we can see how many people within the community are fleeing violence. If we take the idea that 25% of those people are aged 18 to 21, the Committee will see my concern.

Up and down the country there are young people who simply cannot live with their parents, such as abuse victims, care leavers and kids whose parents have died, moved away or simply do not want them to live with them. Those are people with little or no earning power, no networks and no safety net. I want the Government to answer this simple question: where will those people live?

--- Later in debate ---

[Emily Thornberry]

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

The new clause gives hon. Members the opportunity to put the Government out of their misery and abolish the changes they believe they wish to make on tax credits. The Government claim that they have a mandate to impose massive cuts to tax credits, which will blow a hole in working families’ budgets in a few months’ time, but they have no such mandate. The Conservative party went into an election this year with a vague aspiration to reduce welfare spending by an abstract figure of £12 billion which, because of an almost complete lack of specifics, almost no one took seriously. Of course, the Prime Minister made clear that he was not going to touch tax credits, so he has broken his promise to the people. Those people will not forget.

The cuts to tax credits that the Government recently introduced undermine one of the bedrock principles of welfare reform, which we thought was shared by all the parties, which is that hard work should be rewarded. Indeed, when Gordon Brown introduced the new rules and payments, he did it so discreetly that many people probably did not even know that it was a politician that had made the decision. He discreetly redistributed income, he discreetly made it right that work should pay and that, instead of the taxman taking taxes away, the taxman would give people money in their pay packet in order to make sure that they could work, hold their heads up high and support their families. I remember speaking on the doorsteps about tax credits to many people who asked the classic question, “What did Labour ever do for me?” I would explain about tax credits and they simply thought that it was something to which they were entitled. Now they will realise that it was a political decision. When they get their letter at Christmas from the Chancellor telling them that they will be losing £1,000 or £2,000, what a happy Christmas it will be for these poor families. The letter will be care of this Government, who were not elected with a mandate to do that.

The view that hard work should be rewarded was shared by all parties. Between them, the 11 Conservative members of the Committee represent 40,000 working families with children who will be hit by the cuts. Some 4,000 working families with children will be affected in Louth and Horncastle; 3,900 working families with children will be affected in Bury St Edmunds; 4,300 working families with children will be affected in North Devon; 2,500 working families with children will be affected in East Hampshire; 4,700 working families with children will be affected in Cannock Chase; 2,600 working families with children will be affected in Hexham; 2,700 working families with children will be affected in Witham; 3,500 working families with children will be affected in Sutton and Cheam; 3,100 working families with children will be affected in Elmet and Rothwell; 5,700 working families with children will be affected in North West Cambridgeshire; and 3,000 working families with children will be affected in Faversham and Mid Kent. That is a large number of families and a large number of constituents. I ask those Members to consider that very seriously when deciding what to do this morning.

The impact will be immediate. There will be no transitional measures—the funding simply stops. As I said, families will find out over Christmas that they will suddenly lose more than £2,000 a year. We are talking about families for whom that amount of money can make the difference between keeping their head above water and not. Conservative as well as Opposition members of the Committee will find desperate families coming to see them, probably not even appreciating that they have been on what the Tories call “welfare”. They have been dependent on the state in order to ensure that their work pays. Indeed, some may even have been tempted to vote Conservative on the basis that it was a good idea for the welfare bill to be cut, not realising that they would be affected, and thinking that it would affect some other family that they know nothing about, a long way away or down at the bottom of a council estate, that they would never come across. They believe they are doing the right thing, doing what the Government expect, what their morality expects them to do and yet, nevertheless, they will be penalised. It will be down to them to help pay off the deficit and the debt caused by bankers and the international financial crisis at a time when the Government believe that their priority ought to be cutting taxes paid by the richest in order to allow them to pass on their riches to the next generation. The Government have changed the tax rates in order to give tax breaks to the richest, and they have decided that the people who should be penalised are those who can hardly fight for themselves, and who are doing their best for themselves and their families.

--- Later in debate ---

[Debbie Abrahams]

My hon. Friend is making a very powerful speech. Has she read the article in the British Medical Journal last week, which looked at the impact on child poverty? It stated that an extra 200,000 children will be plunged into poverty, but it also looked at the effect on child health. The UK already has the highest rate of child mortality for under-fives, which can be directly attributed to the additional child poverty that is faced in this country. The implications of this are really significant.

[Emily Thornberry]

My hon. Friend makes a powerful point. There are many arguments against the tax credit cuts, and although it is tempting to rehearse all of them this morning, another debate is going on elsewhere. Essentially, I cut down a long speech to a short one to make the main points.

I was talking about the policy being a failure in moral terms, as my hon. Friend illustrates well. The focus today might be down in the Chamber, but members of this Committee have the real power. They have in our hands the power to do the right thing and to put the interests of working families in their constituencies ahead of the interests of their party. They have in their hands the power to put the interests of children in some of the poorest working families first, remembering that, even as things stand, two thirds of children in poverty have a parent in work. How much worse will it be after they have suffered the cuts to tax credits?

I am sure that Conservative Members who have an interest in this field are, deep down, genuinely and gravely concerned. When we put the new clause to the vote and when their Whip holds up the piece of paper saying no, will they look aside, think about the thousands of their constituents who will be so greatly affected by the Bill and vote with their conscience, vote the right way, and stop this now?

[Hannah Bardell]

The hon. Lady has made a powerful speech. I will not drag out my comments on a painful and frankly despicable assault on our society. Much has been said about tax credits and I would like to give a bit of a Scottish flavour to the debate.

Since the election campaign and throughout this Parliament, the SNP has opposed the Bill in its entirety and the cuts to child tax credits in particular. It is important to highlight the findings of the IFS, that it was “arithmetically impossible” for families to do better with the limited increase in the living wage. We are talking about an attack on low-income families and vulnerable working families. In Scotland more than 500,000 children live in families that rely on tax credits to make ends meet; 350,000 of those children will feel the impact of the cuts as much needed tax credits are stripped away from more than 200,000 low-income families.

The austerity measures proposed by the Conservative Government are disproportionately harming the poorest and most vulnerable households while giving tax breaks to the better-off, thus increasing inequality, not closing the gap. Much has been said about families claiming benefits and families in work as if they were different people, different sections of society, but the reality is that the majority of people who will be affected by the provisions of the Bill are families in work.

The changes are regressive; they take proportionately more from low-income households and give to the richer ones. Planned cuts to tax credits increase the burden on the working poor and the children living in such households. The IFS has found that 63% of children living in poverty are in working households—I repeat: 63% of children living in poverty are in working households. The increase in the minimum wage for people aged 25 and over, which has been wrongly branded a living wage, is nowhere near enough to offset the cuts. The changes run contrary to the Government’s own policy of making work pay and they weaken the incentives to work, because the impact of cuts will fall disproportionately on low-income working families. This is not war on poverty; this is war on the poor.

--- Later in debate ---

[Priti Patel]

I will restate my point. Nine in 10 families with children were eligible for tax credits. That was reduced to six in 10 in 2010 following the coalition’s reform in the last Parliament. The present reforms will reduce that and take tax credit spending back to where it was in 2008 and not, as Opposition Members suggest, to a world without tax credits. Alongside the tax credits changes, we are introducing the national living wage, which, we have clearly heard, Opposition parties do not support. That will be worth more than £9 an hour by 2020.

[Emily Thornberry]

With great respect, the right hon. Lady is talking nonsense. Of course we support wages going up by whatever means that can be done. What we do not support is the ridiculous associated rhetoric suggesting that the proposals are somehow taking over or working on the national living wage campaign, which is based on a completely different set of statistics. It is typical of the Conservative party to try to confuse people and confabulate as it is doing. Of course we support increases in wages.

[Priti Patel]

It is typical of the Labour party to scaremonger and distort some of the facts that we have heard, as well.

The national living wage will be worth more than £9 an hour by 2020. The increase in the personal allowance is part of a single thought-out and coherent plan to ensure that people keep more of their money, rather than having more of their income taxed. The new national living wage means that someone working full time on the current national minimum wage will have a pay rise of nearly £1,000 gross next year, and about £5,000 by 2020. Of course, the personal allowance will go up from £11,000 to £12,500, which means a typical taxpayer will pay more than £1,000 less income tax by 2020.

The Opposition have given illustrations of their view, and I want to give illustrative examples of how families will benefit over the course of the Parliament when the welfare and tax changes announced in the Budget are taken fully into consideration. The income of a couple with two children where only one parent is in work on the current national minimum wage will increase by £2,480. The income of a lone parent with one child working 35 hours at the current national minimum wage will rise by £1,500. A family with two children where the parents are working 35 hours a week on the national minimum wage will see their income increase by £5,500. And a single person with no children working 35 hours on the current national minimum wage will see their income rise by more than £2,000.

There will also be a wider ripple effect in the economy, which is growing, through the national living wage pushing up wages above the current national minimum wage. As we have discussed, not just in this clause but in previous ones, we are committed to doubling free childcare for three to four-year-olds and providing £5,000 of support in childcare for working parents.

No analysis has taken into account those factors from 2016, with the wider ripple effects, which are set to benefit more than 3 million working people. On top of the uplift in the free childcare, there is the £2,000 per child that working families and parents will be entitled to through tax-free childcare.

--- Later in debate ---

[Priti Patel]

My understanding is that tax-free childcare will cover after-school clubs and school holidays, but I will get clarification—[Interruption.] Well, I will give the hon. Lady clarification.

The point I would like to make is that, as we discussed in the previous sitting, the Government have a very strong record on childcare provision, tax-free childcare and support for disadvantaged two-year-olds. The fact that we have been spending in excess of £5 billion on supporting childcare provision for working families should be welcomed by all parties. It is sad that political parties choose to point-score about childcare provision.

We are clearly going to disagree on the content of the new clause. I have highlighted how the increased personal allowance, the national living wage and the welfare changes announced in the summer Budget will provide support for working families. For the reasons I have set out, the new clause is not appropriate for inclusion in the Bill, and I urge the hon. Member for Islington South and Finsbury to withdraw it.

[Emily Thornberry]

We will not withdraw the new clause, Mr Streeter.

Question put, That the clause be read a Second time.

--- Later in debate ---

Brought up, and read the First time.

[Emily Thornberry]

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

The new clause is about having a review of the application of sanctions. Many shadows have fallen upon our discussions over the past few weeks. This particular shadow is whether there is a link between welfare reform and work. What happens to people who do not live up to the requirements imposed on them?

Too often in recent years the Government’s focus has been on a target-driven approach that has assumed that anyone out of work simply lacks willpower. The cornerstone of that approach has been the sanctions regime. The Committee might remember that the previous Minister for Employment, who lost her seat at the last election, took the view that

“people who get sanctions are wilfully rejecting support for no good reason”.

The evidence, however, had she or any of her colleagues cared to look, suggests otherwise.

As the Minister frequently reminds us, and as I am sure she will remind us again today, it is true that conditions have always been attached to the social safety net since unemployment benefit was first introduced in 1911. Nevertheless, the Government mislead the public when they fail to acknowledge that the sanctions regime introduced as part of the Welfare Reform Act 2012 marked a radical departure from the history of the welfare state and from the entire principle of evidence-based policy making.

The official justification of the Department for Work and Pensions for sanctions remains that

“they are there to encourage claimants to take reasonable steps to find employment or move closer to the labour market”,

but its own impact assessment for the 2012 changes acknowledged that there was insufficient evidence for the proposed approach achieving that. Since then, of course, extensive evidence has emerged that demonstrates that sanctions are deeply counterproductive if helping people into work is really the intention.

The number of people claiming jobseeker’s allowance has fallen since 2012, but that has coincided with a significant rise in the number of people whom the Office for National Statistics classes as economically inactive—not unemployed or claiming jobseeker’s allowance, but statistically almost non-people. Interestingly, many of those economically inactive people, if asked why they have become economically inactive, give their reason as being discouraged. So that is their reason—they have been discouraged and so dropped out of the labour market altogether. I would have thought it was important to do some work on what “discouraged” means and on the experiences of those discouraged people, because there might well be a clear link between cause and effect.

Research published in January by Oxford’s Professor David Stuckler found that, of those sanctioned between 2011 and 2014 who subsequently stopped claiming benefits altogether, only 20% said that it was because they had found work. According to the professor, all those people were sanctioned and 80% of them then stopped claiming benefits, but not because they had found work. So they are all off the jobseeker’s allowance statistics and are no longer unemployed. In some ways, therefore, perhaps there has been some success.

To the extent that increased sanctions have had an identifiable impact at all, it has been to increase dramatically the levels of hardship and poverty in recent years, as illustrated most starkly in the extraordinary rise in food bank use. I do not know how many Members were at the Trussell Trust breakfast this morning, but one of the stories I heard arose because the trust has started to give medical advice at some of its food banks. It was giving medical advice to a nurse who had a condition that meant she needed to take various pills. The nurse in her knew that she had to take the pills regularly, but the mother in her knew that, because their tax credits had been wrongly taken away and they were in great need, she had to give the food in the cupboard to her children. So she was taking the pills without having eaten anything and was causing herself more harm. There are hundreds of thousands of these stories and unfortunately things seem to be getting worse, not better. We understand that last year, a million people took advantage of food banks. One has to wonder what would happen if they were not available. According to the 2014 survey by the Trussell Trust, 83% of food banks said that the new sanctions regime had caused an increase in the number of people needing their help.

Another very odd thing about the sanctions regime, which would be addressed if the new clause were accepted, is that different towns and villages have different numbers of people going to food banks and different levels of sanctions. There is one jobcentre where in one month, 40% of people were on sanctions. If there are such extraordinary variations happening within the system, there is clearly unfairness. If individuals within jobcentres are given powers and exercise them with a wide element of discretion, that discretion will clearly be exercised differently in different jobcentres. In some areas there will be more strain on food banks, let alone on the poorest and most vulnerable who continue to be sanctioned.

[Neil Coyle]

It might surprise my hon. Friend to learn that part of the strain on the resources of the food bank in Southwark, which is provided by Pecan as part of the Trussell Trust’s network, comes from people in work. Some 10% of that food bank’s users are working, and the Government have just made that a whole lot worse with their tax credit changes.

[Emily Thornberry]

My hon. Friend is right. The range of people going to food banks is very alarming. It is not enough to say, “Oh well, it’s because people know that there are food banks now. They didn’t know about them in the past, but now they do, and they are going in because it’s free and taking a can of beans, but they don’t really need it.” That may be how some Government Members feel that people behave. There is another point of view, which is that to go to a food bank is completely humiliating. It is the worst.

I raise my own personal experience again. After my family got thrown out by the men with the bowler hats and went into social housing, I remember my mother used to get boxes of food from friends. It was embarrassing, but it was the way we kept things together; there were no food banks at that point. I remember that one of the food boxes always used to include Campbell’s meatballs. My mother kept them under the stairs and threatened us that if we did not eat what was on our plates, we were going to have to eat the meatballs instead. They may still be under the stairs for all I know. But at least those boxes of food were delivered to our door, instead of my mother having to go out to ask for food. That is humiliating for anybody, for heaven’s sake.

What the Government’s sanctions regime has brought us is increased hardship and suffering, with no tangible gains in the likelihood that those affected will move into work as a result. If we could be confident that all this suffering was resulting in something good, that there was meaning and that people were moving into work who would not have moved into work otherwise—can the Conservative party show us some real evidence of that?—that would take some of the edge off the terrible stories that we hear, which show that the sanctions regime is simply unfair. How on earth do people manage if they are living from hand to mouth, have no savings and have exhausted the support they can ask for from their families and friends, but then are sanctioned a third time and given nothing for three months?

--- Later in debate ---

[Emily Thornberry]

Might I take advantage of this moment to point out that, when my local law centre takes up appeals on sanctions, it has a 100% success rate?

[Debbie Abrahams]

My hon. Friend is absolutely right. Cases are often overturned on appeal, but for someone on ESA—that means they are not well—going through that process is traumatic and can exacerbate the condition. I will come to that in a moment.

My hon. Friend mentioned the Oakley review, which reported in July 2014. It looked specifically at the JSA sanctioning. It was an important step, but there were still many unanswered questions, which is why the Select Committee wanted to look at it in more detail.

I am aware of the dreadful circumstances of food bank use to which my hon. Friend has alluded—in my area, 60% of food bank use is attributed to sanctions. More shockingly, I am aware of the reports of accidental deaths following sanctions. Those have been included in coroners’ reports, so I do not mention them lightly. David Clapson was one particular case. He was a former soldier who gave up his job with BT to care for his mum, who had dementia. When she died, he wanted to get back to work and signed on at the jobcentre. He missed an appointment with his job adviser and was sanctioned. He was diabetic. Without the £71.70 a week from his jobseeker’s allowance, he could not afford to eat or put credit on his electricity card to keep the fridge where he kept his insulin working. Three weeks later, David died from diabetic ketoacidosis caused by a severe lack of insulin. He was 59. A pile of CVs was found next to his body. The coroner said that, when he died, he had no food in his stomach. His sister, Gill Thompson, has campaigned tirelessly to get an independent review into sanctions. The petition she started has more than 211,000 signatures to date.

David is not the only person to have died following sanctions. There have been 49 peer reviews following the death of a claimant, but the DWP is still not prepared to release the details of whether sanctioning was involved. I hope Ministers reconsider that.

The Work and Pensions Select Committee inquiry reported in March. If anything, the Opposition’s concerns from the previous inquiry worsened. The negative impacts on poverty, including child poverty, debt, physical and mental health, were reported. The Committee was given the example of a woman who had discharged herself when she was in hospital because she was frightened of being sanctioned.

There is evidence that the sanctions targets were driven by targets to get claimants off-flow, distorting the JSA figures. As my hon. Friend the Member for Islington South and Finsbury has mentioned, the team from Oxford analysed data from 376 local authority areas and found that 43% of JSA claimants who were sanctioned left JSA. As my hon. Friend said, 80% did so without having a job.

The main recommendation from the Select Committee was for a more detailed independent inquiry. Matthew Oakley said that he expected that to happen. I am at a loss as to why the Government are dragging their feet. Surely that is the very least we should do for the people who have lost their lives following sanctions and for their relatives. I hope the Committee will do the right thing and support the new clause.

--- Later in debate ---

[Priti Patel]

The hon. Gentleman is right to give those examples. What happened is not right. He mentions accessible formats. I will go away and report back to him on that, but what happened in that case is simply not right—that should not have happened to someone with a visual impairment.

The Department is considering the contents of the Work and Pensions Committee report and looks forward to working with it not just on that, but on future reports.

I come back to my point that, with all our policies, we will keep the operation of the sanctions system under review. We are focusing our efforts on continuing to improve the process on JSA and ESA to ensure that the agreed recommendations can continue to be delivered in the existing universal credit live service and embedded into the design and build of the emerging universal credit digital service. On the basis that we have a system of continually reviewing the sanctions system and are looking at it with regard to the universal credit live and digital services, I urge the hon. Member for Islington South and Finsbury to withdraw the new clause.

[Emily Thornberry]

We will press the new clause to a vote.

Question put, That the clause be read a Second time.

Welfare Benefit Changes

Emily Thornberry Excerpts

Wednesday 14th October 2015 Westminster Hall

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

I thank you for calling me a second time, Mr Pritchard. I am pleased to take part in this afternoon’s wide-ranging debate, and I congratulate the hon. Member for Swansea East (Carolyn Harris) on bringing the issues forward so eloquently. The debate has, however, presented a sorry picture of the impact of the Government’s welfare reforms across the UK. Above all, it has brought home the point that austerity is not working; the Government are simply attacking low-income families, disabled people and those with long-term health conditions, while giving tax breaks to the very wealthiest.

We have heard today that children will be among those most severely impacted by the changes to tax credits in the new Welfare Reform and Work Bill, currently undergoing legislative scrutiny, but it is important to understand that the new measures are only the latest in a long line of assaults on the most disadvantaged people in our society.

Research on the cumulative impact of the reforms that have already been enacted, published by Sheffield Hallam University in February this year, calculated that by 2018 incomes in Scotland will have been reduced by £1.5 billion a year, or £440 for every adult of working age. According to the House of Commons Library, the current round of reforms in the Welfare Reform and Work Bill will take an estimated further £900 million a year from the lowest income households, and the heaviest losses will be sustained by families with children. As my hon. Friend the Member for Central Ayrshire (Dr Whitford) said so powerfully, child poverty has long-term consequences. It cannot be fixed some years later with a magic bullet; it has a long-term impact on people’s life chances and life expectancy.

In Scotland, almost 200,000 families and 346,000 children are going to lose out because of changes to tax credits. The Resolution Foundation has pointed out that the vast majority of those children live in working families, and it expects that across the UK the changes to tax credits alone are going to push 200,000 more children into poverty by 2016, rising to 300,000 by 2020. Far from making work pay, the changes to tax credits for people already on low wages are going to entrench in-work poverty, not address it.

It is important to remember that the welfare reforms that have been implemented are having a hugely detrimental impact on thousands of people already hit by earlier reforms. We are seeing some of those effects much more clearly than we have until now—certainly more than we did at the time of their implementation.

Arguably, the most distressing symptom of the failure of welfare reform is the explosion of food bank use right across these islands. In Scotland, food bank use rose by two thirds last year alone. The Trussell Trust distributed 36,000 food parcels to children in Scotland, and that represents only some of the food banks operating in our communities. I do not think that is a sufficient or acceptable safety net for children in 21st-century Scotland —frankly, I do not know how Ministers sleep at night. It is very telling that not a single Back-Bench Tory MP is here today to defend the Government’s record. That is shameful.

The two biggest drivers for the unprecedented growth in food bank use are the changes in support for disabled people and those with long-term health problems, and, connected to that, the changes to the conditionality regime. For years now, serious concerns have repeatedly been raised about the work capability assessment for employment and support allowance. It has been an utter shambles.

According to the DWP’s own recent statistical analysis, over half of appealed fit-for-work ESA decisions are overturned. That is an unsustainable and unacceptable level of poor decision making. Moreover, it has led to protracted and costly appeal and tribunal proceedings—processes that place enormous stress on and cause real hardship to sick and disabled people and those who care for them. In some cases, they have exacerbated people’s health conditions.

The story with personal independence payments is similar, as my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) pointed out. A number of my constituents waited nearly a year for a PIP assessment, and so far, 20% of mandatory reconsiderations of PIP have resulted in a different decision being made. Under the previous contractor, Atos, the Government spent around £60 million a year on around 600,000 appeals against Atos decisions. A new contractor is now in place, but unless the Government actually change what they ask these companies to assess, and how, it is hard to see how Maximus is going to do any better than its predecessor.

A key problem has been that the complex medical histories of some claimants have not been consistently sought or considered adequately in a process that has been focused on functionality.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Given that the hon. Lady is on this point, I should briefly highlight that when there was a movement from the disability living allowance to the personal independence payment, there were instructions out that the Government expected 20% fewer people to be on PIP.

[Dr Whiteford]

The hon. Lady makes an important point. Those people still have those conditions to live with, in many cases, and their condition has not got any better. It is just that it has become more difficult for them to deal with their condition. The problem has been particularly acute for people with fluctuating conditions and mental health problems—illnesses that are perhaps not immediately visible. The Multiple Sclerosis Society has pointed out that 39% of its members who were surveyed said that their ESA assessments had not taken account of additional evidence.

I have raised this issue with Ministers many times, particularly in relation to mental health. The hon. Member for Strangford (Jim Shannon) rightly raised the tragic case of Michael O’Sullivan, following a ruling by the coroner concluding that a decision made in relation to his ESA was a major factor in his death. This man committed suicide after having been found fit for work by the Government’s assessors in 2013, but sadly this is not an isolated case.

Some time ago, I raised the case of a woman known as Ms DE, whose suicide in 2011 was the subject of an investigation by the Mental Welfare Commission for Scotland. Ms DE took her own life after scoring zero points in a work capability assessment made in the absence of an ESA50 form and without any additional information from her clinicians. The only information her assessor had about her condition was a single word, “depression”, which in her case masked a long and very complicated psychiatric history. Both her general practitioner and her consultant psychiatrist considered her unfit for work at the time of her death, even though she had worked for most of her adult life and wanted to go back to work. The distress caused by her benefits assessment may have played a role in her suicide. The investigation concluded that there was “no other known trigger” for the events that took place.

Those two cases have been properly investigated and fully documented, but they are unlikely to be isolated. I have had to learn to deal with constituents coming to me expressing suicidal feelings because of their experiences in the assessment process, and I am certainly not qualified to give them the kind of support that they clearly need. As an MP, all I can really do is point them in the direction of the appropriate services and try to help them to work their way through state bureaucracy. However, just at a human level, I do not think anyone can fail to be moved or to understand that we have a fundamental problem in this process. It is not treating people with the basic dignity that they require.

The shortcomings of the assessment system are leading directly to the problems experienced with the new sanctions regime. There has been considerable evidence for some time now that, for example, those with mental health conditions are being disproportionately sanctioned. Again, that chimes with the anecdotal evidence that I am sure many MPs here today will have seen at first hand—of very unwell people simply falling through the social safety net.

Recent figures published by the DWP on the sanctions regime show that in nearly 50% of reviewed cases, decisions are being reversed. We see a system that is not working efficiently, and again, we see horrendous social consequences for people who are ill and, in some cases, really very vulnerable. Once again, taking better account of individuals’ medical histories and getting the decisions right in the first place would prevent the stress, hardship and anxiety of sick and vulnerable people falling foul of the sanctions regime and finding themselves stigmatised, vilified and castigated simply for being unwell.

We need a root-and-branch review of the sanctions regime. In the last Parliament, the cross-party Work and Pensions Committee recognised that, as have countless external bodies representing those living with health problems. Will the Minister today please just bite the bullet, go back to the drawing board on the sanctions regime and recognise the links to the inadequacies in the assessment process?

I have already talked about the Government Benches; when I look around the Chamber, I am also struck by the number of Members who have spoken from Scotland, Wales and Northern Ireland this afternoon. I think that reflects the differential impact that welfare reform is having on the devolved Administrations. I also think it probably reflects a very different political ethos, but we will leave that for another day.

The Scottish Government have tried to protect those most affected by welfare reforms, providing over £300 million to mitigate the worst excesses of the changes; notably, that has mitigated the bedroom tax, maintained council tax benefit for half a million people and established the welfare fund. However, what we really need are economic powers and the powers over social security fully in the hands of our Parliament so that we can tackle the causes, not just the symptoms, of poverty and disadvantage.

I am sorry that so far the Government have voted against any moves to devolve really meaningful powers, betraying the promises made just over a year ago, but I hope that when we do have chance very shortly to debate these matters again, the Government will take the opportunity to accept some amendments that have been proposed, if only to reverse the damage that is going to be done to poor households through changes to tax credits.

The Government’s welfare reforms have bitten very deep already into the incomes of very poor people. It is important to remember that this Parliament has a responsibility to all its citizens—not just the rich people and those old enough to vote. We have to make sure that we do not abandon those people, because we have a responsibility to them, and we need a fairer social security system.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard.

The dynamics of this debate have said a great deal. My hon. Friend the Member for Swansea East (Carolyn Harris) spoke with huge passion and absolutely from the heart. We could hear the voice of Swansea in what she was saying, and it was important to hear an authentic voice explaining the real effects of these changes to social security and what they mean to real communities and real people. We are not talking rhetoric; we are not talking learned lines that are copied down throughout the Conservative party. We are talking about what happens to people in their homes and communities—people who, as has been pointed out, feel demeaned by what has happened to them. It is difficult for people to discuss it and, as my hon. Friend said, she wanted this to be an opportunity for the voices of victims of the benefit changes to be heard. I congratulate all hon. Members who have had the opportunity to be heard and who have spoken authentically on behalf of their communities.

We heard the hon. Member for Strangford (Jim Shannon) saying that we are punishing workers on the lowest wages and that that is unbearable for many families. We then heard from my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe), and the voice from Birmingham said that the people who are using our food banks are in work. We heard from the hon. Member for Foyle (Mark Durkan), who said we need regionalised figures to explain the impact of the changes on our communities. Then we heard from the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who gave many examples of people who had been assessed as being fit for work, including a man who had had a second stroke. He discussed those constituents’ pain and suffering and how degrading Atos assessments have been—they are degrading, inhuman and disgraceful. I congratulate the hon. Gentleman on that, because he spoke not only for people in Inverness, but for those across the country who have been assessed by Atos and feel the same.

[Margaret Greenwood (Wirral West) (Lab)]

I commend my hon. Friend the Member for Swansea East (Carolyn Harris) on securing this important debate. The Government’s study identified that more than 330,000 children from low-income families in England will be hit by the benefits cap and that a couple with two children will be priced out of being able to rent a two-bedroom property in almost all areas of the south of England and across much of the midlands too. Does my hon. Friend agree that this state of affairs will have a potentially devastating effect on the lives of hundreds of thousands of children, who may be forced out of their homes and away from their communities, and that it is likely to have a particularly severe impact on single parents, who rely strongly on the local communities around them for support in bringing up their children?

[Emily Thornberry]

My hon. Friend makes an important point. Many communities, particularly in inner London, have already been affected by the first benefit cap. We have already seen young children ripped out of primary schools and moved out of London, as families try desperately to find somewhere they will be able to afford under the benefit cap.

Introducing a benefit cap makes a profound change to the way we pay benefits. The social security system used to be, and had always been, a safety net available to everyone, but introducing a benefit cap disconnects need from the amount that we are prepared to pay. Larger families, which are in most need, will be affected most. It is not their fault that they live in inner London or that they cannot live in public rented housing because there is not enough affordable public rented housing so they must live in the private sector. The Government have introduced an arbitrary, politically motivated cap that will have a devastating effect on communities.

[Steve McCabe]

Does my hon. Friend agree that, as well as the impact on working people on low wages and the poor, another surprising aspect of Government policy is its total disregard for those with long-term, progressive, degenerative conditions such as muscular dystrophy?

--- Later in debate ---

[Emily Thornberry]

I fully understand, Mr Pritchard. Given the number of people who have not been able to speak in this debate, I made the decision that I would encourage them to intervene. There is a huge amount I would like to say, but I am reflecting many hon. Members here today who want to speak.

We heard from my hon. Friend the Member for Newport West (Paul Flynn) about increasing inequality and attempts to downgrade the welfare state, which is being attacking like a wrecking ball—I thought that was an important way of putting it. We then heard from the hon. Member for Central Ayrshire (Dr Whitford) about the difficulty of assessing people with variable conditions, and it is perhaps even worse for those with degenerative conditions.

Two thirds of children in poverty have a parent in work. That is an important point; indeed, it should be written on the shaving mirrors and make-up mirrors of every Tory MP. If we are seeing an economic miracle, why is that happening? The Government and their Back Benchers should be thinking about that.

We heard from the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) about parents of three and four-year-olds and the expected gap between the time when childcare is supposed to be delivered and the time when they will be expected to go to work. It is obviously nonsense, and the amount of money the Government have provided for that childcare is also clearly nonsense. The Childcare Bill has only four pages and says little more than the Conservative party manifesto. There is no delivery mechanism for this wonderful childcare they claim they will provide, so we wait to see whether it happens.

We heard from the hon. Member for Ross, Skye and Lochaber (Ian Blackford) about the tax credit cut. The obvious question is: why is that happening when the inheritance tax threshold is being increased and from a Prime Minister who says we have an all-out war on poverty? Ha, ha, ha. In what way does that work exactly? My hon. Friend the Member for Aberavon (Stephen Kinnock) talked very movingly about working people who used to be able to pay their mortgage and their bills generally, but who now, after years of a pay freeze, are only one meal away from disaster. He also talked about the increasingly Dickensian conditions. We then heard from my hon. Friend the Member for West Lancashire (Rosie Cooper) about how the Conservatives’ policy seems to be based entirely on rhetoric, not evidence.

The best social policy comes from looking at what is happening, how it will work and what its effect will be. The fact that we do not have an equality impact assessment for the Welfare Reform and Work Bill says it all. We know those who will be affected most: it will be women and people from ethnic minority backgrounds. Why is there not an equality impact assessment to help to spell that out? If the Government want to make proper social policy, why do they not base it on evidence? What a shame it is that we hear all these voices—it is like alarm bells going off across the country—saying, “Do not do this. Do not introduce these welfare changes. You are increasing child poverty. You are increasing poverty in this country. Stop, think, pause,” and yet there is no one in the Chamber from the Conservative party, with the honourable exceptions of the Minister and his Parliamentary Private Secretary.

Where are all the others? Is it that those who are against the Bill dare not speak out, but just want to whisper behind their hands or give unattributable briefings? Where are those who really believe that what the Government are doing is correct? Where are the troops loyally coming out and saying what a great thing this is? It is not a great thing. The Government are ashamed of themselves, but they continue to keep going, hiding behind rhetoric and their friends in the right-wing media, when those who are voices for real people in this country know that what the Government are doing is devastating this country.