Welfare Reform and Work Bill (Eighth sitting)
Emily Thornberry Excerpts(9 years, 1 month ago)
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Debbie Abrahams
I am grateful for that clarification and for your leeway, Mr Streeter.
I am grateful to the various organisations, charities and many individuals who have contacted me with their personal stories about how they believe these changes to ESA WRAG support will affect them. I particularly mention Parkinson’s UK, Macmillan Cancer Support, Leonard Cheshire Disability, the RNIB, the Disability Benefits Consortium, Scope, Inclusion London, United Response, Mind and the Richmond group. Collectively, those disability and health organisations represent more than 15 million people in the UK who are disabled or have a serious long-term condition.
We want to prevent the cuts to the work-related activity component of employment and support allowance. We believe it is unjust and unfair that disabled people, and people with serious health conditions who have been assessed as part of the work capability assessment process as not fit for work and placed in the work-related activity group, are having their social security support cut by nearly £30 from £102.15 to £73.10. There is compelling evidence from the independent Extra Costs Commission, which analysed the additional costs facing disabled people and found that, on average, they spend an extra £550 a month associated with their disability.
The Government’s proposed cuts affecting people in the ESA WRAG are on top of the whole host of other cuts in social security support for disabled people since 2010. The Hardest Hit coalition has estimated that, by 2018, £23.8 billion will have been taken from 3.7 million disabled people. There were 13 policy changes under the Welfare Reform Act 2012, including changes in the indexation of social security payments from the higher retail prices index to the lower consumer prices index and the 1% cap on the uprating of certain working-age benefits, which has cut £9 billion from 3.7 million people’s social security support. People on incapacity benefit have been reassessed, which has taken another £5.6 billion. The time for which disabled people in the ESA WRAG are able to receive support has been limited, cutting another £4.4 billion. The reassessment of disabled people receiving disability living allowance to determine whether they are eligible for personal independence payment means that another £2.62 billion has been taken. That is on top of the provisions in the Bill, and we should not forget the cuts to social care, which are currently up to £3.6 billion and predicted to be £4 billion by 2020. Disabled people rely very much on support through social care.
In light of the significant existing cuts, will the Minister confirm whether the Government have undertaken a cumulative impact assessment on the latest proposed cuts affecting disabled people, in light of the requirements under the Equality Act 2010 and the Equality and Human Rights Commission’s work on cumulative impact modelling?
This morning, the Exchequer Secretary mentioned the importance of controlling welfare and social security spending. The UK currently spends 1.3% of GDP on disabled people. Out of 32 European states, we rank 19th in what we provide to disabled people. I did not have the information at my fingertips this morning, but for families and children it is slightly worse at 1.1%—23rd out of 32 European countries. We are a wealthy country, and to build our recovery on punitive measures against disabled people, vulnerable children and families is appalling.
The Government’s impact assessment on the changes to the work-related component of ESA—apart from being delayed, so that Members were unable to scrutinise it before Second Reading—is very limited in its analysis. For example, although the assessment estimates that approximately 500,000 people and their families will be affected by the cut to ESA WRAG support, there is no analysis of the impact that will have on the number of disabled people who will be pushed into poverty. We know that disabled people are twice as likely to be in persistent poverty as non-disabled people and that 80% of disability-related poverty is caused by the extra costs that I have mentioned. Last year there was a 2% increase in the proportion of disabled people living in poverty, which is equivalent to more than 300,000 disabled people pushed into poverty in one year. Given that half a million people will be affected, according to the Government’s own impact assessment, and will lose 30%, or nearly a third, of their income, what is the Government’s estimate of the increase in the number of disabled people living in poverty?
Emily Thornberry (Islington South and Finsbury) (Lab)
My hon. Friend is making a very powerful speech. She has come to the Committee relatively late. I know that this is an area of expertise for her, but perhaps I can put on record the evidence that was given to us before she was on the Committee. It was essentially that if the Government are trying, as they put it, to “incentivise” people on employment and support allowance into work by cutting their benefits so that they live on the same level as JSA claimants, it will mean that they are ignoring the fact that people on ESA take longer to get into work. They may well find themselves in a crisis over the winter, when they need a new coat, because they have been unemployed that much longer. People claiming ESA are recognised by the system as not being fit for work.
Debbie Abrahams
My hon. Friend makes an absolutely pertinent point; in fact, I was going to come on to that, so she must have read my mind. On Second Reading, the Secretary of State stated that
“the current system discourages claimants from making the transition into work”.—[Official Report, 20 July 2015; Vol. 598, c. 1258.]
But what about people with progressive conditions such as Parkinson’s, multiple sclerosis or motor neurone disease? There is no chance that people with those conditions will get better, but they have gone through the work capability assessment process and been placed in the work-related activity group. Are the Government seriously saying that this measure is going to incentivise that group of people into work? How many people with progressive conditions such as those will be affected? Given that, and the fact that in 2014 45% to 50% of ESA appeals were upheld, will the Government finally accept that in addition to being dehumanising, the work capability assessment is not fit for purpose and needs a complete overhaul?
The impact assessment has estimated that, by 2021, approximately £640 million a year will have been cut from social security support to disabled people, with £100 million a year to be provided in unspecified support to help disabled people into work. If the Government are serious about supporting disabled people into work, what measures are in place? This is exactly the point that my hon. Friend the Member for Islington South and Finsbury was making.
What measures are in place to ensure that there are jobs for those disabled people who are able to work? What are the estimates of the impact on the employment of disabled people, how this will impact on the Government’s target to reduce the 30% disability employment gap—it is actually 34% in my constituency in Oldham—and how many employers will be engaged? I hope that it is more than the current 68 active employers from the Disability Confident campaign. The campaign has been going for two years and yet only 68 employers are currently active in it; 33 of those are existing disability charities. I hope it will be more than that, but why was this not included in the impact assessment process?
What exactly is the “work” bit in the Welfare Reform and Work Bill? We have heard about reporting on apprenticeships and about different aspects of reporting. But what is the link to ensuring that disabled people are able to go into jobs before they have a third of their weekly income deducted?
On the Thursday before the August bank holiday, five months after the Information Commissioner had ruled that the Government must publish data on the people on incapacity benefit and on ESA who had died between November 2011 and May 2014, the Government finally published these data. They revealed that the death rate for people on IB/ESA in 2013 was 4.3 times that of the general population, and had increased from 3.6 times in 2003. People in the support group are 6.3 times more likely to die than the general population and people in the work-related activity group—the people whose support the Government are seeking to cut—are more than twice as likely to die. The figure is actually 2.2 times more likely to die than the general population.
The Government have, regrettably, continually maligned, vilified and demonised people on disability and other social security benefits. The language around calling people shirkers and scroungers has been picked up and used in many media outlets. In 2010 the instances of use of the term “scrounger” by the mainstream press increased to 572—more than 330% from 2009—and it has stayed at this level. Language is so important, and the way that social security claimants—particularly people with disabilities—are portrayed in the media is so important. The innuendo that people with a disability or illness might be “faking it” or are “feckless” is quite frankly grotesque and belies the epidemiological data. Incapacity benefit and ESA are recognised as good population health indicators. I can say that as a former public health consultant. I have experience of this and I have worked in this field. The release of the Government’s own data, which show that this group are more likely to die than the general population, proves that point. This group of people are vulnerable and need care and support, not humiliation, from us.
Once again the cart is being put before the horse: make cuts in support and cross your fingers that something turns up for disabled people. That also applies to people on low incomes. The policy flies in the face of the Conservative party’s pledge to protect disabled people’s benefits. All last week’s warm words at the Tory party conference are just that if they are not followed up by action.
With this cut to the ESA WRAG support without anything to replace it, the Government are condemning more people with disabilities and their families to living in poverty and I predict, unfortunately, that more tragedies will undoubtedly happen. I urge the Government and all members of the Committee to think again and vote against clause 13 standing part of the Bill.
Priti Patel
Sanctions are part of the process that the claimant has with the jobcentre, in particular when it comes to the contract they have and their discussions. All the parameters are made perfectly clear to claimants coming to the jobcentres in terms of what is required of them. Those requirements are not unreasonable, given that they are work-related. In particular, they are there to help the individual to get back into work. No unreasonable requirements are placed on the individual at all.
Emily Thornberry
From my experience just of those who come into my surgery, what the right hon. Lady is saying is not in touch with reality. She has talked about the importance of listening to people and I really think that she should listen to this. For example, if someone has a mental health condition which is a variable one, they will be put on the lower component of ESA, so on the edge of being able to work, perhaps with support. If it is insisted that they go in for an interview, or that they do voluntary work or fill out CVs at a period when they are suffering depression or life is particularly chaotic, the experience of my constituents is that the local jobcentre is not sufficiently understanding and they will get sanctioned.
Priti Patel
I say to the hon. Lady that, first, sanctions are there for a purpose: they encourage jobseekers in particular to comply with reasonable requirements.
Priti Patel
On the contrary, the measure is not about removing support. It is about what more the Government are doing in terms of our commitment to supporting disabled people to get them into employment. That is down to a package of measures.
Priti Patel
I will not give way.
It is very easy for Labour Members to claim that the measure is about taking money away. It is about providing the right kind of support for people with health conditions and disabilities. It may not be the appropriate answer that the hon. Lady wants to hear. The Government are committed to supporting more employment. Of course, this is a binary argument for her. We are supporting claimants with a limited capability for work through our employment provisions, our jobcentres and the specialist disability employment advisers.
Corri Wilson
The Scottish National party has tabled the amendments to mitigate the changes and to take the pressure off responsible carers with very young children who receive universal credit. Currently, lone parents need attend work-focused interviews or work-related activity only when their children are between the ages of one and five, rather than having to actively seek work. The clause will mean that all parents will be expected to be available for and actively seeking work by the time their youngest child turns three in order to claim universal credit. We wish to stop those changes to the work-related requirements as well as roll back the work-related requirement for responsible carers set out in the Welfare Reform Act 2012.
Amendment 57 would ensure that the work-focused interview requirement for responsible carers of children aged two and three would remain unchanged. Amendments 58 and 59 would remove the changes to the work-preparation requirement. Amendments 60 and 61 would remove the changes to the work-focused interview requirement and the work-preparation interview requirement. Amendments 62 and 63 would amend the Welfare Reform Act so that claimants would be subject to no work-related requirements until their child begins attending school.
A child’s most critical and vulnerable years should be based on a foundation of support and love, which can make all the difference to a child’s confidence and educational attainment in later life, not to mention the benefits of family and social cohesion. Forcing a parent to spend more time looking for work means they have no choice if they want to spend more time with the child in its formative years. Where most parents are keen to return to work and to maximise their income, the provision will deprive parents of the choice of what is best for their child in the crucial early years of their development. Forcing parents to return to work before they are ready can be counterproductive and lead to financial instability as parents move in and out of work. That may lead to undue stress on parents, causing them to struggle with balancing work and the care of their young child.
Increasing conditionality for universal credit is simply another ideological crusade against those who are in genuine need of welfare support. It is, of course, not ideal for an individual to be receiving benefits, but for many it is nevertheless essential and can mean the difference between independence and absolute poverty. The stricter conditionality requirements contribute to making life intolerable for benefit claimants. In effect, it condemns the lives of those on the benefits that enable them to live independently, such as severely disabled people.
The extra requirements will bring with them an increased risk of claimants incurring sanctions. The effect of benefit sanctions are bad enough on individual benefit claimants, but increasing conditionality for responsible carers, which puts them at further risk of incurring sanctions, will have the knock-on effect of condemning the children they care for.
Carers UK has expressed concern over the effects of the clause on responsible carers of disabled children, partly due to the documented lack of childcare for disabled children. Carers of children in receipt of the higher or middle rate care component of disability living allowance are exempt from the requirements, but that does not protect carers of very young children with disabilities when there are difficulties in identifying them in the early years.
It is imperative that lone parents and responsible carers are supported back into work, but not forced or sanctioned while their young child needs their support at home. The difficulties that present themselves—accessing affordable childcare, finding suitable support for a child or finding a stable job that allows a parent to have the time needed with a young child—are huge. The everyday challenges that face working families and young parents are not as black and white as the Government would have us believe. I therefore urge all Members to unite today with the SNP to remove the harsh conditionality elements placed on parents while their children are young and effectively just babies.
Emily Thornberry
May I comment briefly on the SNP’s amendments? Although I applaud the sentiment behind them, and if they are pressed to a vote, the hon. Lady can rely on our support, I want to put on record that it is not completely unconditional. The reality of life within jobcentres, unfortunately—it should not be like this—is that jobcentres have to be told that their job is to get particular groups of people into work. A constituent of mine came to see me and said, “My son is four. I would like to go back to work, but when I go to the jobcentre they don’t give me any help.” We should not need to choose between the extreme proposed by the Government and nothing. It should be possible to make jobcentres know that their primary job is not just to get people off jobseeker’s allowance at all costs and to sort out the statistics as best they can, but to ensure that they are sufficiently adaptable and flexible to help people who genuinely want to work to get into work, even if it means not fulfilling a target.
There will be people—particularly single women—who want help at an early stage, perhaps because their mum lives next door and they have good childcare, or perhaps because they have a skill level that will allow them to get work relatively easily with a bit of help from the jobcentre. They should not feel that the jobcentre believes it should not look after them because they are not part of the targets. I put in that caveat because the real world is not black and white; there are people in between who may be lost by the amendments. However, that is not to say that in principle we will not support the SNP’s amendments.
Neil Coyle
I rise to speak to amendment 140, which is about the intention expressed by the Government, including the Prime Minister, to protect disabled people. We have heard how the changes to disability living allowance and employment support allowance will affect disabled people directly. The amendment is designed to protect the parents of disabled children aged three or four.
The reason for tabling the amendment is that parents and carers of disabled children aged three or four would be allocated to the all work-related requirements group if the Bill is enacted as drafted, which would require them to look for and be available for work. It would be useful if the Minister could indicate whether that is an intentional provision, or whether it is incidental or accidental. I do not think I am going to get that acknowledgement at this stage.
There is an exemption for parents of children in receipt of the highest or middle rates of the care component of disability living allowance, but it will exempt only a very small number of parents, as few receive that benefit at that level. As many Members know, it is getting harder for parents to access disability living allowance. I certainly have experience of that from my postbag and surgeries.
Many parents of disabled children choose to care for their child, and they best know their child’s needs and abilities. Those who wish to work often come up against the lack of appropriate childcare for disabled children, as we discussed earlier. As the shadow Minister indicated, it is also more expensive to access tailored childcare for disabled children.
The rationale for the amendment is based on recent policy changes that require carers of children aged five to make a return to work. However, the Bill equates parents of children aged three and parents of children aged five. There are obviously significant differences between the two ages, which means that the Government’s assumption risks harming families, not least because five-year-olds are in primary education.
There is a read-across to the Childcare Bill, in which the Government are proposing to offer 30 hours of free childcare to working parents. That could help, but the Childcare Bill as drafted does not properly account for the barriers faced by families with disabled children when accessing childcare provision. For the same reason that we discussed this morning, it would be useful to know how the Government intend to identify that parents genuinely have access to 30 hours of appropriate childcare for a disabled child. They cannot just put a statutory obligation on a council to provide it, because we know it is not being delivered.
Many providers under the three and four-year-old offer are not able to meet the needs of children with more complex needs, and the additional cost of childcare for disabled children can limit the number of hours that can actually be accessed. The combination of those issues could severely compromise a parent’s ability to meet the conditions of looking for work, which would not be taken into account as the Bill is drafted. An offer of support is not the same as appropriate support genuinely being available in practice. This concern has been expressed by disability organisations in written and other evidence submitted to the Committee. Currently, carers of children in receipt of the highest or middle rate care component of DLA are exempted from the all work-related requirements group. The amendment would extend that protection.
Department for Work and Pensions figures suggest that there are currently just 53,000 claimants of DLA for children aged nought to five years. If the amendment is blocked, many carers of severely disabled children could be subject to conditions and sanctions, as we have already discussed, despite the fact that it can take a considerable amount of time for parents and carers of disabled children to be able to access disability living allowance. I do not think that it is the intention of Conservative MPs in particular to end up with the parent of a disabled youngster turning up in their surgery who is not able to access appropriate childcare, has work-related conditions in place and ends up being sanctioned, and then has absolutely nothing coming in. I hope that that is not the intention, and I do not believe that it is. I hope that the Government will consider this amendment.
My last point is that amendment 140 should be accepted to reflect the fact that a disabled child’s needs and the specific level of support that they require may be very hard to identify under the age of five. DLA is not a brilliant basis for the exemption of carers. It is not sufficient. It can take months or years to access disability living allowance—indeed, the Prime Minister has spoken of his own personal battle when trying to apply for disability living allowance for his son. Personal experiences should be taken into consideration when pressing ahead with this legislation. The amendment proposes using additional criteria to determine whether someone is caring for a severely disabled child which go beyond a sole reliance on claiming DLA at a certain level. These include statements of special educational needs, which a small number of children under five receive; replacement education, health and care plans; those defined as children in need; and those who meet the Equality Act definition of disabled.
Emily Thornberry
I beg to move amendment 101, in clause 15, page 14, line 38, at end insert—
‘(d) Insert after section 18
“(18A) Guidance on lone parents
(1) The Secretary of State shall, by regulation, provide guidance to Jobcentre Plus setting out how it should support claimants who are lone parents in meeting the work-related requirements that they are subject to.”.’
To require the Secretary of State to set out in regulation how Jobcentre Plus should support claimant of universal credit who are lone parents meet the work-related requirements they are subject to.
The Chair
With this it will be convenient to discuss the following:
Amendment 131, in clause 15, page 14, line 43, at end insert—
‘(3) Claimants subject to new requirements as a result of the measures contained in subsections (1) and (2) of this clause must, at a time no later than three months before subsections (1) and (2) come into force, receive written notification of the lone parent flexibilities issued as guidance to Jobcentre Plus staff.’
To provide that anyone who becomes subject to new work-related requirements as a result of the measures in clause 15 must be provided with written notification of the lone parent flexibilities which the DWP issues as guidance to Jobcentre Plus staff.
Amendment 132, in clause 15, page 14, line 43, at end insert—
‘(3) The Secretary of State must, at time no later than three months before subsections (1) and (2) come into force, issue guidance on the lone parent flexibilities to Jobcentre Plus managers, such guidance must include provision on the training of Jobcentre Plus staff in advance of the new work-related requirements coming into force.’
To require the Secretary of State to issue up to date written guidance to Jobcentre Plus managers on the lone parent flexibilities, including provisions on the training of Jobcentre Plus staff.
Amendment 133, in clause 15, page 14, line 43, at end insert—
‘(3) The Secretary of State may not impose a work search requirement on any claimant in receipt of Universal Credit, who is a lone parent, in circumstances which include but are not limited to the following—
(a) the claimant’s adviser determines that there is an inadequate number of suitable employment vacancies within reasonable daily travelling distance of the claimant‘s home;
(b) the claimant is responsible for the care of a child during that child‘s school holidays, and it is not reasonable to expect the claimant to make alternative arrangements;
(c) the claimant is responsible for the care of a child during any period in which that child is excluded from school, or is otherwise not receiving education pursuant to arrangements made by a local education authority, and it is not reasonable to expect the claimant to make alternative arrangements;
(d) any child care expenses which would be necessarily incurred by the claimant as a result of carrying out the requirement imposed would represent an unreasonably high proportion of the income the claimant could expect to receive while carrying out the requirement in question;
(e) the claimant is enrolled on a course of study leading to a vocational qualification, or is otherwise undertaking engaged in vocational training;
(f) the claimant has become a lone parent within the last six months;
(g) any other circumstances in which the claimant‘s adviser may consider the imposition of a work search requirement to be unreasonable in light of that claimant‘s individual circumstances.’
To provide a statutory basis for flexibility to be applied in imposing work search requirements on lone parents in receipt of Universal Credit.
Emily Thornberry
It is a pleasure to serve under your chairmanship, Mr Streeter. I want to speak to amendments 131, 132 and 133. My hon. Friend the Member for Redcar (Anna Turley) tabled amendment 101, and to a certain extent the sentiment in that amendment is incorporated in the other three amendments, so it may not be necessary for me to speak specifically to it. In any event, my hon. Friend no longer sits on the Committee. For the sake of simplicity, I will focus on amendments 131 to 133.
Amendment 131 arises because we have noticed a couple of paragraphs in clause 15, at the bottom of page 14, which are short but not sweet. They could have been overlooked, but they should not be. They introduce sweeping changes to work search requirements placed on single parents with very young children and do so in a way that is extraordinarily unfair and poorly thought through. The Bill not only goes further than any changes introduced by previous Governments but severs the link between the time when a child starts school and the time when that a child’s parent is expected to start actively seeking work.
Successive Governments of both parties have introduced changes to expectations on parents, and the age at which a parent is expected to seek work has been progressively lowered from 16 down to 12, then to seven and most recently to five. To a certain extent, it was thought that there was a broad consensus to expect single mothers—it is usually single mothers—to work during term time while their children were at school, subject to appropriate childcare at a price they could afford and working hours that would fit in around school time. That does not seem unreasonable. That seems fine. It seems the sort of thing that very few single parents would object to and that most of the public and a lot of children would want. It is a deeply personal decision but, frankly, I think it would carry the majority of the public on what is a fair expectation of single parents.
Emily Thornberry
Good, I am glad. So, 39% of single parents are having their decisions overturned on appeal. My point is that the discretion given to Jobcentre Plus officials is not appropriate, and that it would be better, and right, to put the requirements into regulations instead, so that they are given legal standing. Discretion is not working. When nearly 40% of cases being overturned on appeal, there is something wrong with the system. That is not rhetoric, it is the evidence, and something needs to be done. The situation raises serious questions about the training of Jobcentre Plus staff and Work programme providers and their ability to make appropriate decisions. To illustrate that point I will give the Minister a few stories from single mothers. Their personal details are disguised, but their cases are real.
There is a women called Geri; she is single mother and has a nine-year-old daughter. Her jobseeker’s agreement sets out the requirements that she must meet as a condition of receiving her benefits, which are that she must apply for 21 jobs a week, either full or part-time, and be prepared to travel up to an hour each way for a job. Emma has a 10-year-old son and lives in Bristol. Her jobseeker’s agreement requires her to look for work in London, which is a 90-minute commute each way, despite the fact that the cost of a season ticket would exceed £5,000 a year. Furthermore, the extended hours of travel would make it impossible for her to take her son to school and pick him up at the end of the day.
A woman called Fiona had her jobseeker’s allowance stopped for three months because she turned down night shifts, which she had to do because she could not find suitable childcare for her daughter. Elaine was threatened with sanctions by her Work programme provider when she said that she could not attend back-to-work courses during the summer holidays. She has two young daughters whom she cannot leave on their own at home. She was offered no help with childcare costs by the provider of the voluntary work that she was supposed to be doing in order to make her fit for work.
I have heard stories of single parents being threatened with sanctions if they do not attend appointments that clash with the school run. I have heard stories from single parents who have been sanctioned for missing appointments in order to stay at home when their children are unwell. I want to point to the evidence and try to help the Minister to make the right sort of social policy, so I point out that Islington Law Centre has a 100% success rate when challenging sanctions imposed on my constituents, which I really think should give Ministers pause for thought. The centre represented, for example, a pregnant woman who was sanctioned for missing an appointment when she was so unwell with morning sickness that she was in hospital.
Debbie Abrahams
To add to my hon. Friend’s list, I have a constituent with three primary school age children, all at different schools. She was compelled to be at appointments when she was trying to get her children to those different schools—she was always given appointments that made it absolutely impossible for her to get to the jobcentre.
Emily Thornberry
Members on both sides of the House may well have examples of such sanctions from people who have come to their surgeries. In particular, single parents are being sanctioned in an attempt to push them into work that is completely inappropriate given their caring responsibilities.
I come back to the distinction between regulations and guidance, which I think is important. It may seem academic to some, but I can assure Ministers that it is not at all academic to the women who are feeling the impact of the lack of adequate flexibility within the system and the lack of understanding of what the rules really are. For our purposes as legislators, it is important to make the distinction between the legal force of regulations and of guidance. Regulations have the force of statute, as they are introduced through secondary legislation, but guidance does not. Guidance is really soft law, and these women do not need soft law.
The principle was summed up quite well in the Supreme Court judgment of R (on the application of Alvi) v. Secretary of State for the Home Department—it is known as the Alvi case—in which the distinction at issue was between immigration rules and informal guidance. Lord Clarke wrote in his judgment:
“It seems to me that, as a matter of ordinary language, there is a clear distinction between guidance and a rule. Guidance is advisory in character; it assists the decision maker but does not compel a particular outcome. By contrast a rule is mandatory in nature; it compels the decision maker to reach a particular result.”
As I say, guidance has been called soft law. As was said in Ali v. London Borough of Newham,
“the court should be circumspect and careful so as to avoid converting what is a non-binding guidance into, in effect, mandatory rules.”
We all know why we are talking about guidance and regulations. We all know that the couple of little paragraphs on page 14 of the Bill will be going to court and will be judicially reviewed, so we need to be quite clear about what the Government want to do. Our job, as Her Majesty’s Opposition, is to look carefully at what the Government intend and at what is fair. We all know that what is said in this Committee is of relevance to the future court cases that will be coming because of the manifest unfairness that will result from the clause.
Let us therefore be clear. I am sure the Minister will tell us how fair all this is, and how everyone is proceeding with good will. But we have heard that before. We had a promise that people in jobcentres would exercise discretion fairly, and so on. We have had enough of that. They have not been doing things fairly, and it has been going wrong. We would now like clear rules so that we all know where we stand—both the single mothers who are trying to balance their caring responsibilities and want to find appropriate work, and the people in jobcentres who quite often feel compelled to force women into work. Any new rules will not be properly understood unless they are made clear. If they turn out to be unfair, they can be challenged.
Under the system that we have, a single mother who puts her responsibility to her children ahead of her requirements under the claimant commitment could lose several weeks of income as a result of an unfair sanction. That means that that family—those children—will not have any money for food. That is a desperate situation, so we need to make sure that something like that is done only in extreme circumstances and that it can be properly justified. That sanction may well be overturned—as I say, if Members come to Islington Law Centre they will find a 100% success rate—but in many cases the damage will already have been done. Does the Minister not agree that regulations, which have the force of law, could protect against some of those injustices? If so, they are worth having.
I turn now to the amendments. As things stand, there are two problems. First, there is inadequate knowledge of lone parent flexibilities: it is not known what it is reasonable to expect from jobcentre staff and Work programme providers. Secondly, single parents themselves may lack knowledge of what would reasonably be expected, so it makes it more difficult to challenge the unreasonable demands that are sometimes placed on them.
Priti Patel
The hon. Gentleman is right to raise that, and obviously that is a highly relevant and pertinent point. This is why we should not undermine the autonomy of those local decision makers by putting things in binding statutory guidance. They need to be supported, and the Department needs to support them to offer that flexibility as well. We all recognise that personal circumstances and individual circumstances change. I am pleased to hear that the case that the hon. Gentleman mentioned has been resolved, but of course we want to avoid such situations in the first instance. We can only achieve that if work coaches work with the individual claimant and understand their circumstances. Obviously, the claimant needs to be very up front and say that their circumstances are changing and explain what is going on, because life is not one-size-fits-all for everybody and obviously circumstances change.
Emily Thornberry
Of course I understand that local jobcentres ought to reflect local demand, but I ask the Minister to focus on the question of what would be wrong with having it set out in the regulations that a lone parent should not be obliged to go into work or look for work if there is an inadequate number of suitable employment vacancies within reasonable daily travelling distance of the claimant’s home. The six examples that I listed in amendment 133 give flexibility and at least give a baseline of fairness and do not allow people simply to have ultimate power over small children and single parents.
Priti Patel
I will not give way. Work coaches are using their discretion to tailor appropriate requirements without the need to set the types of support in regulations or to make guidance statutory. I have touched on this already; the Department routinely upgrades guidance, advice and training, and shares those resources not just locally, but with stakeholders. We want to have the highest possible standards and we are working to achieve that. Universal credit responds to individual circumstances. Accepting the amendments would result in an unnecessary, costly and overly bureaucratic imposition. It would not enhance the individual claimant’s choice, opportunities and the support that is made available to them through work coaches. I therefore urge the hon. Lady to withdraw the amendment.
Emily Thornberry
We wish to push these amendments to a vote. I have listened carefully to the Minister and despite what she may say about local flexibilities, the national picture is that lone parents are having 39% of their sanctions decisions overturned on appeal. Therefore, the system is not fair. We want a better system in place with proper regulations that have legal standing.
The Chair
Just to be clear, amendment 101 would have to be put first. The hon. Lady could withdraw that and come to the others at the end of our deliberations on clause 15, which will only be a few moments away.
Emily Thornberry
That would probably be the best way of proceeding. We can vote on amendments 131, 132 and 133 but not on amendment 101. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Emily Thornberry
I beg to move amendment 108, in clause 15, page 14, line 38, at end insert—
‘(d) after section 24 (imposition of requirements) after subsection (5) insert—
“(5A) The Secretary of State must, by regulations, make provision to ensure that where a claimant is the responsible carer for a child who is aged under five they are subject to no work-related requirements unless it is possible to make arrangements for affordable and appropriate childcare for the claimant’s child.
(5B) The regulations in subsection (5A) must provide a definition of “affordable and appropriate childcare”.”’
This amendment would ensure that responsible carers of children aged under five would not be subject to work-related requirements unless they had affordable and appropriate childcare in place for their child.
The Chair
Amendment 93 will no longer be discussed with amendment 108. That might help the Minister in her response.
Emily Thornberry
We have begun to discuss some of the specific barriers faced by single parents who are looking for work, but we have not yet had a detailed discussion of what I, and I am sure most people, would consider to be the most significant barrier of all: childcare. It has been said that there is no such thing as a free lunch, and in many ways it is also true that there is no such thing as free childcare. Getting the universal entitlement to 15 hours, which in theory is available to all parents of children aged three and four, is often not quite as easy as it sounds. For a start, it usually is not free.
It is widely acknowledged that the difference between the rate at which the Government subsidise childcare providers and the actual cost of delivering care is substantial; substantial enough that charging for some services is the only way that providers can stay afloat. Parents know that that can happen in a range of different ways. Some are hit by hidden charges, such as being asked to pay for the cost of food or activities, while others—we have this situation in my constituency—are told that they cannot access their free hours unless they take additional paid hours as well, often at considerable cost.
The Lords Select Committee on Affordable Childcare completed an inquiry last year having heard extensive evidence. It concluded that
“parents are subsidising themselves, or other parents, in order to benefit from the Government’s flagship early education policy.”
I ask the Department for Work and Pensions yet again to look beyond the rhetoric at the evidence. The House of Lords Select Committee looked at this matter and said that it is serious.
In some cases, parents have even been told that the free 15 hours can be accessed only as part of a full-time placement. Full-time normally means 50 hours, which accounts for the early morning drop-off and early evening pick-up that is generally necessary for parents who work full time. To put in perspective the scale of the financial commitment that this could mean for parents, I looked at my local authority area in order to get a proper example. Childcare costs in Islington are among the highest in the country. A full-time place in a private nursery will set a parent back more than £18,000 a year, and what if you have two children? Let me tell Ministers that not all the low-income single parents from the Market estate have that kind of money to spare. Even if they worked full-time for the London living wage, fees at that level would exceed their pre-tax salary.
I wonder if I can save the Minister some time by anticipating some of the arguments that she is likely to rehearse in response to my concerns.
Neil Coyle
May I bring my hon. Friend back to a point about zero-hours contracts? There is a significant concern that some of the people affected will be forced to take work that does not have a consistent or guaranteed income, and that in itself acts as a barrier to being able to access childcare.
Emily Thornberry
My hon. Friend makes an excellent and important point. The fact is that the work that is likely to be available, particularly for single parents who have been out of the job market for some time and may well be vulnerable and lacking in confidence and who do not necessarily have the skills they need, is the sort of work that I illustrated my previous point with. It is likely to be peripheral work and zero-hours contracts. It is unlikely to be regular, and it is likely to be at the sort of hours when there are not a lot of nurseries open.
Jess Phillips (Birmingham, Yardley) (Lab)
Does my hon. Friend recognise that even the 15 hours of free childcare, which is to be extended to 30 hours, is only for three and four-year-olds? I had to go to work when my children were a lot younger than that. Also, the low-welfare, high-wage economy that the Government are trying to achieve—and who could argue with that?—will unfortunately not include anyone who is under 25, as they are not to be granted the living wage. So in my circumstances—I had a child when I was 22—there would have been no help available to me to pay for childcare.
Emily Thornberry
My hon. Friend makes a very good point.
I want to talk about the Government’s proposal to extend free childcare to 30 hours a week for some parents, and I will explain why I just do not buy it. To begin with, let me raise the most obvious problem with the proposal. It sounds wonderful, but how on earth do the Government intend to deliver it? How are they going to deliver 30 hours a week? There is the Childcare Bill—all four pages of it—and it offers no clue. I have looked at it—it can be read in a moment. It is the most extraordinary piece of legislation. To be quite honest, it is the Tory party manifesto on green paper. It does not have any detail to it. It does not answer any of the questions that people are understandably asking. A number of pertinent questions were put on Second Reading by Peers from all sides of the House, and they referred to it repeatedly as a “skeleton”. They are very polite in the House of Lords.
That view was shared by the Delegated Powers and Regulatory Reform Committee, which expressed the concern in its scathing report on the Bill that
“it contains virtually nothing of substance beyond the vague ‘mission statement’ in clause 1(1)”,
and concluded:
“The remarkable imbalance between the provision that appears in the Bill itself and what is to be left to regulations, and the scarcity of explanation in the memorandum, has led us to question whether Members will be in a position to contribute meaningfully to debates at Committee Stage and Report Stage.”
Leaving aside what that says about the Conservatives’ attitude to democracy, it also says a great deal about how serious they are. They seek to force lone parents back into work, on the promise that at some stage there will be sufficient childcare for them to be able to work, but they cannot even produce a Childcare Bill that means anything, or give us any details that mean anything. As I said, they are very polite in the Lords, and perhaps we should follow their example, but we do not. We say that it is absolute nonsense. It is yet another example of empty rhetoric. The Government are playing with people’s lives, and they should be held to account for it.
Likewise, we find ourselves debating the same promise now. Members of this Committee find ourselves ill prepared to judge the consequences of the proposals in clause 15, because we simply do not know whether the promised 30 hours of free childcare will be available when people go to work. It is immediately obvious when we start to scratch the surface of the 30 hours commitment that the policy is not funded to any meaningful level.
So we have a Bill that does not mean anything. Now let us look at the funding. The Government figures suggest, and the Minister has repeated in this debate—with a straight face, for which I commend her—that extending the entitlement to 30 hours of free childcare a week will cost £365 million in the first year, unless I am wrong. It seems that that is still the position. I do not know how that figure was calculated. We have a man from the Treasury here—the Exchequer Secretary to the Treasury—and I would be pleased to sit down and listen to his explanation of how all that childcare will be provided for £365 million a year. [Interruption.] For the record, no explanation is forthcoming.
Interestingly, that figure differs substantially from the estimate made by the Conservative party of my party’s quite similar policy proposal in 2013. When we said that we wanted to extend free childcare to 25 hours a week for working families, what did the Childcare Minister, the hon. Member for East Surrey (Mr Gyimah), estimate our costs would be? He did not say £365 million; he did not say £665 million; he did not say £1 billion. He said that it would cost £1.6 billion, yet the Minister has tried to persuade us today that producing 30 hours a week of childcare for so many children will cost a mere £365 million a year through her non-existent Bill. Please excuse us if we are somewhat sceptical of the Government’s promises that they can produce that childcare.
Although we can have a laugh about it, mothers of four-year-olds on the Market estate will be threatened with sanctions unless they are actively looking for work and get a job, on the promise that there will be childcare. There will not be childcare that is affordable for them on the wages that they can expect given the type of work that is available for them. That is the reality of life, and that is why policies should be made on the basis of evidence and not rhetoric. The truth is hard.
Neil Coyle
It is worse than empty rhetoric; it is empty legislation. We have seen the same thing in social care legislation. The Government committed to providing additional support for families desperately in need of social care, but when it came to implementation, there were delays. The difference in these circumstances is that many families will be left without sufficient support but with mandatory requirements and sanctions.
Emily Thornberry
That brings me back to the purpose of the amendment. If the Minister is as confident as she seems that it will cost only £365 million, not £1.6 billion —even though the Childcare Bill includes no plan for delivery and we have not heard any plan, she seems to think that it is backed up with sufficient funding and is entirely realistic—why not back our amendment? We are simply saying, “Don’t push single parents into work until there is childcare available.” If she is so confident that childcare will be available, what is the problem with supporting our amendment?
It is nonsense. In a report published last week, the Institute for Public Policy Research criticised the Government and their costing, saying that it was
“inexplicably low in comparison to other estimates, as well as to current funding.”
The inevitable outcome, the report suggests, is:
“The Government’s drastic underfunding gives rise to concerns that the hourly rates that it will give to providers to deliver this care will be too low, resulting in falling quality, poorer outcomes for children and less choice for parents as the market shrinks.”
The report also raises concerns that will be familiar to anyone who has followed debates on the issue in recent years, about the likelihood that the Government will seek to make up for the additional strain by simply loosening regulations. I have asked the Government how they can proceed with these welfare reforms without expecting families to live in cars, but I ask another question: how do they expect all those children to be looked after for such a relatively small amount of money without being put in barns? Perhaps there will be factory-farmed three-year-olds. How will the Government be able to look after all those youngsters on such a small amount of money? We have yet to see any plan for how it will be done, and we simply do not believe the Government.
Will providers be expected to relax their ratios of staff to children, spreading themselves even more thinly? It has caused some alarm among providers, to say the least, and it has caused quite a lot of alarm among parents and the wider public, unsurprisingly, given that we know about the link between the quality of childcare and low ratios of staff to children. If the Government press ahead with their proposals, even the best-qualified staff will struggle to provide an adequate standard of care.
Professor Cathy Nutbrown said in evidence to the Lords Committee last year that
“no matter how many PhDs you have, you can only hold so many babies.”
To put it simply, the Government are asking us in clause 15 simply to trust them. “Trust us,” they say, “We will provide 30 hours of free childcare. It will be available at some point in the future.” Well, we do not trust the Government on that. The Childcare Bill is not a credible piece of legislation, and the trust that we have been asked to place in the Government has not been earned. Frankly, they might as well have brought a Bill promising a land full of milk and honey, for all the credibility that the Childcare Bill has.
If I am wrong—I hope that I am—and the Minister is right, and if 30 hours childcare is about to be available free for all working parents; if everything is fine, and it is good-quality childcare that is available in the hours when people can work, then she should support our amendment. We have been discussing safeguards to prevent conditionality from being applied to parents in inappropriate circumstances, and amendment 108 provides a way to do so that is straightforward and clear. It provides simply that single parents will not be forced to look for work in the absence of affordable and appropriate childcare. If she is so confident, she should back up her confidence by supporting our amendment. There is no good reason to oppose it.
As I have outlined, there are many doubts about the promises that have been made. I understand that the Minister is leading the childcare taskforce herself, so she should be more confident than anyone else, and she should be able to say in this debate, “You’re right, Emily Thornberry. I’m going to show you just how confident I am. I’m going to instruct my Back Benchers to support the Labour amendment.” Not supporting the amendment will show that not even the Minister believes in her childcare policy.
Priti Patel
We have been very clear that to support our full employment ambition, the Government are committed to helping working families by reducing the cost of childcare and making it easier for parents to return to work and to work more hours while knowing, importantly, that their children will be well cared for. That is why we have introduced the Childcare Bill, which will increase the level of free childcare from 15 to 30 hours for all working parents of three and four-year-olds. That will be available in some areas as early as September 2016, with further roll-out from September 2017. Clearly, however, that is only one element of a comprehensive package of childcare support available to parents up and down the country.
The existing offer provides 15 hours of early years education for all three and four-year olds and for disadvantaged two-year-olds. That is in addition to the other Government support for childcare, including, as the hon. Lady mentioned, the universal credit childcare element, which will cover 85% of eligible childcare costs from April next year. Let me emphasise again to the Committee that no matter how few hours parents work, they will have their costs covered—that is 85%.
Priti Patel
I will not give way. That is expected to help about 500,000 additional families at a cost of £350 million a year—that cost is specific to the universal credit childcare element.
On top of that, parents will have the option to claim tax-free childcare, which will help up to 1.8 million families, who will be able to benefit by up to £2,000 per child per year, or £4,000 for disabled children. We have also secured additional funding to allow jobcentre work coaches to address barriers to employment and to support moves into work. The extra funding may be used in a variety of ways to pay for travel and childcare, to enable parents, such as lone parents, to undertake training, attend interviews or start work.
We recognise that we have to continue to do more, but—just to put this on the record—this Government has a proud record on childcare provision, in particular in the previous Parliament, when we increased the start-up grants to increase childcare supply in the marketplace. That totalled up to £2 million available to people to set up new childcare businesses. We now have about 32,000 good or outstanding childcare minders who have been supported and are now eligible through early education funding. We have made it simpler and easier for schools and childcare providers to work together to increase the amount of childcare available on school sites. Last week, we made the announcement of wraparound childcare. We have also legislated for the creation of childminder agencies, which will improve the support available for childminders and parents. We have simplified the framework so that nurseries may expand more easily.
On top of that, the Government are spending in excess of £5 billion in the childcare market, which is important first to increase the sufficiency of supply, and secondly to focus on quality. The quality continues to improve, with 85% of providers declared good or outstanding by Ofsted, which compares with 70% in 2010. The qualifications of early-years staff continued to improve in 2014. The National Day Nurseries Association reported that 88% of settings that it surveyed employed a graduate, up from 80%, and that 87% of staff had good A-level equivalent qualifications. Now we have the early-years foundation stage profile results for 2013-14, which show an 8 percentage point increase in the number of children reaching a good level of development by the age of five. That also applies to children from disadvantaged backgrounds.
It is fair to say, therefore, that we are not embarrassed at all. It is pretty sad to hear the Opposition, although they are entitled to their views, portray the Government as not doing enough on childcare and not supporting working families on childcare—
Priti Patel
I will not give way. The Opposition are completely wrong. The hon. Member for Islington South and Finsbury mentioned the childcare taskforce, which has been set up by the Prime Minister across the Department for Work and Pensions and the Department for Education. We are working with a wide variety of stakeholders, including childcare providers and the third sector—they are members of the taskforce. The Childcare Bill places a statutory duty on local authorities to publish information on childcare and other services available to parents locally, ensuring transparency for parents.
Importantly, funding was mentioned. Of course, funding continues to be one of the areas where more work is taking place in Government. A funding consultation is taking place, led by the Department for Education. Of course, we are working with the DFE. We made great progress in the last Parliament to increase parental employment, particularly with lone parents. The number of children in workless households has decreased.
Obviously, there is more we can do. We will continue to ensure that we provide affordable and appropriate childcare in the right settings, and that the availability is there. The Government firmly believe that we need to do more rather than less to support parents with young children to prepare for work. Childcare is one of those vital strands. Ultimately, it helps to improve children’s life chances as well. The clauses, together with our substantial investment in childcare, support that ambition. That is why I urge hon. Members to withdraw the amendment.
Emily Thornberry
I thank the Minister for her response. If I had been allowed to intervene, I would have asked her whether she could help us on a specific point, which is probably important. The commitment is to childcare once parents are working, but for many parents, particularly if we are talking about parents of a very young child, to be able to find work, it may well be that children will need to have childcare—from the 20 hours, or whatever the commitment is—so that their parents can apply for jobs, go to interviews, fill in CVs and do voluntary work to prepare for work. Will there be any childcare available for parents who are looking for work, particularly when their children are young? If she is not able to answer me today, could she write to me about that, because I am not clear from her earlier answer whether she covered that matter or not?
Neil Coyle
I thank my hon. Friend for giving way, particularly in light of the Minister’s refusal to give way to her. That was a shame, because some of the points that the Minister made are very welcome. What was frustrating was that there was no figure for the number of children. If £365 million is being provided, it would be helpful if the Government could indicate how many children that is expected to support.
Emily Thornberry
There might be another question. Although the Minister has raised tax-free childcare, it probably needs to be pointed out at some stage—perhaps I might point it out now—that tax-free childcare is available only for people not claiming tax credits. It is not of any benefit to people on low incomes.
In light of the response that the Government have given us, we will not withdraw the amendment, and I wish to put it to a vote.
Question put, That the amendment be made.
Mr Vara
It is a pleasure to serve under your chairmanship, Mr Streeter. For the sake of good order, may I refer colleagues to the Register of Members’ Financial Interests to the extent that anything therein applies and ought to be declared?
I welcome the new members to the Committee and I wish well those who served on it before, particularly the right hon. Member for East Ham, who spoke eloquently in his contributions here and will be sorely missed on the Front Bench of the Labour party.
The clauses will change the way in which claimants with outstanding mortgages receive help from income-related benefits. I will be absolutely clear at the outset. The Government remain committed to helping owner-occupiers in times of need to avoid the risk of repossession. However, we believe it is wrong that taxpayers who are unable to afford to buy a home of their own are subsidising claimants who own their own homes. Taxpayers support a significant asset from which many homeowners are able to profit. It is our intention that help towards mortgage interest payments should be taken in the form of an interest-bearing loan that will be recovered from available equity once the property is sold. In that way, we will be able to provide a better deal for the taxpayer while ensuring that claimants receive the protection from repossession that they currently enjoy.
Moreover, the amendments will ensure that we do not exclude claimants who have non-standard financing arrangements from the offer of a loan, for example where a person has entered into what are referred to as alternative financial arrangements for purchasing their property rather than a traditional mortgage.
Emily Thornberry
I am listening with care to the Minister because the change is radical compared with how things were done until now. I want to be clear about this. He has talked about the importance of protection from repossession, but can he confirm that the clause extends the period during which there is no assistance available when someone becomes unemployed from 13 to 39 weeks? Would it not make it more likely that homes will be repossessed if mortgage companies get no money at all for 39 weeks?
Mr Vara
I am grateful to the hon. Lady for giving me the opportunity to make that point. She will be aware that, before the introduction of 13 weeks in 2009, the period was 39 weeks. There was a specific reason why it was reduced by the then Government to 13 weeks: it was the height of the recession. It was very difficult to get jobs and it was felt necessary to make that adjustment. The economic climate now is a lot different from what it was in 2009. When there are record levels of employment —unemployment is very low—and when we have the prospect of an economy that is recovering, we feel the time period should be brought back to what it was previously. There was no concern when there was a 39-week period when there were better economic circumstances. With the economy picking up, we feel that, as 39 weeks was fine in the past under a Labour Government, there is no reason why it should not continue under a Conservative Government.
Emily Thornberry
The Minister says that he feels 39 weeks will be fine because it was fine under a Labour Government before the recession, but is the change to policy based on any evidence? Can the Government point us to any impact assessment or other information that will reassure us that homelessness will not be increased?
Emily Thornberry
That is why I am trying to clear this up. I was asking whether the impact assessment contains anything in particular on the effect of the changes in this clause, particularly with regard to extending the time that will be available. People will have to wait 39 weeks before they get any assistance with their mortgage. Will that increase the amount of homelessness? That is an important piece of evidence that is sadly lacking when the Government are making proposals to extend the time period.
Although the Minister talks with great glee about full employment and this and that, he is changing the legislation so that, instead of people being given assistance to pay the interest on their mortgage, which has always been the system—the assistance pays not for the equity in a property but merely for the interest payments in order to keep people safe, warm and secure in a home—people will have to take out a loan against that property. Furthermore, the Government are changing the legislation so that people have to wait for an extraordinary, scary period of 39 weeks, during which they have to keep off those who actually own the property and who have mortgaged it to them. A person who has lost their job will suddenly have to fight off those who want to repossess the property.
In the real world, we all know that there may be a grace period, but 39 weeks is a very long grace period. My concern is that it will increase the amount of homelessness. Wrapping that together with the Government’s other housing policies, which are also having an adverse effect on homelessness, will increase the amount of homelessness. That is why I asked whether the impact assessment is helpful to the Government in reassuring all of us that the measure will not increase the amount of homelessness.
On the face of it, making a mortgage company wait 39 weeks will increase the number of repossessions. Frankly, if a mortgage company hears that someone has lost their job—the person might be in their late 50s—it might make an assessment and decide that that person is unlikely to get another job. There may be areas of Buckinghamshire, London and the home counties where it is relatively easy to get a job, but there are other areas across the country where, frankly, there are no jobs. The tragedy of Redcar, of course, is that when people lose their job, the chances of their being able to get another are practically nil. They certainly will not be able to get a job at a level that will help them to continue paying their mortgage.
Debbie Abrahams
My hon. Friend has hit the nail on the head. In fact, the Money Advice Trust has made exactly the same point and has expressed its considerable concern about extending the period from 13 weeks to 39 weeks. The experience of all lenders and advice agencies is that early intervention is the key to resolving—
The Chair
Order. The hon. Member for Islington South and Finsbury has tabled an amendment that we will consider later in our proceedings on this very issue. She may not necessarily want to emphasise the point at this stage. The intervention has gone on long enough that she may want to respond to her own colleague and then perhaps give way to the Minister.
Emily Thornberry
I am grateful to my hon. Friend. I appreciate that I sound like a cracked record, but it is about evidence, evidence, evidence. What is the evidence that this change will help us? What is the evidence that this will not increase the number of repossessions? Give us evidence and we would be interested, glad and reassured to hear it.
On the face of it, if someone does not pay back any mortgage for 39 weeks, their mortgage company will kick them out. A steelworker in Redcar might have a good mortgage, a family home and a good family wage one week, but the next week, they could be made redundant and no longer be able to pay their mortgage. The Government will not give them any assistance for 39 weeks. They would have no job and no prospects, and things could suddenly turn very nasty and difficult. Thirty nine weeks is a long period. They might be able to get a zero-hours contract. All I can say to that is: good luck with paying off a mortgage on a zero-hours contract.
As we said at the beginning of these proceedings, although the Government want to use the terms of clause 1 to be able to get up and brag about full employment or the progress towards that, we know that the definition of employment seems to be any work at all. The definition of employment is not the living wage, a wage that a family can live on or a wage that people can use to pay their mortgage..
Mr Vara
I would make two brief comments. The Council of Mortgage Lenders has not said that the 39-week wait will drive repossessions. That is an eminently respected organisation, and it would have said if it felt that was the case. May I gently remind the hon. Lady that though she was not an MP at the time, the Labour Government from 1997 to 2009 maintained a 39-week waiting period? It seems ironic that what was suitable for a Labour Government for so many years is now felt to be inappropriate for this Government, particularly when our economic record is on the up and far better than it was under the previous Government.
Emily Thornberry
I was an MP in 2005, and the difference was that there was real investment going on, homes were being built and the economy was working properly as opposed to fumbling along as it currently is and seemingly being fuelled entirely by rhetoric. It is all very well for the Minister to assert until he is blue in the face that everything is well, everyone is working, everyone is getting a great wage and there are no problems, but that is not the reality of people’s lives.
Mr Vara
That is very helpful. As the Government amendment deals with houses, what I am about to say will be very relevant, particularly given what the hon. Lady said. She spoke about the huge amount of house building under the Labour Government when she was a Labour Member. May I remind her that the past five years have seen more affordable housing built than in the 13 years of the Labour Administration?
Emily Thornberry
No. I do not agree. I am grateful for the Minister’s comments about the Council of Mortgage Lenders and its statement. I counter him with a statement from the Money Advice Trust:
“We strongly support the tabled Amendment 19, which would require that the waiting period before an application for a loan for mortgage interest can be made is retained at 13 weeks, instead of the proposed 39. Lenders and advice agencies alike know from experience that early intervention is the key to resolving financial difficulty. The proposed 39 weeks will mean that claimants will be well over six months in arrears with their mortgage by the time SMI starts to be paid—by which time it will be significantly more difficult for them to resolve their financial situation.”
There are arguments both ways.
It is important that we look at what will happen. The Government have said a great deal about pensioners, about how they will look after pensions, about the triple lock and about this Government being friendly to pensioners. Is not there a problem that this measure will affect pensioners as much as it will affect anyone else? The particular difficulty with pensioners is that if they are expected to take out a loan against their property instead of getting relief on the interest, increasingly they will lose ownership of that property. As pensioners it will be even more difficult for them to work. In fact, the idea of a pensioner is that they do not work. The policy will increasingly eat away at an asset that cannot be expanded.
Is that not an asset that, as a matter of social policy, the Government expect pensioners to use in many other ways? I will not get into a detailed debate about the cuts in social care. Let us just say that I think there have been cuts in social care. I am sure that the Minister thinks that social care is marvellous so let us leave it at that. Are not pensioners expected to be paying for their long-term care out of the asset that is their home?
Many pensioners may have been tempted by the Government’s deregulation of access to pension pots. Memorably, the previous Pensions Minister said that he would be intensely relaxed if people were to take their money out and spend it on a Bugatti or whatever it was. Of course, deregulation and the access to pension pots means that people will have access to their pension funds, which they will be able to spend in advance of their pension. They will be expected to use their houses to pay for social care and if they need assistance with paying off their mortgage, that mortgage will not be available for them in any other way; they will be expected continually to take out more of a loan on the equity of the property.
It seems that pensioners are getting it from every angle, which is very far from the rhetoric we heard at the party conference about how much the Tory party is a friend of pensioners. It is interesting that this is the first—I suspect it will not be the last—occasion in which the Government are changing the game. The Government say they want to help people make the right choices. Pensioners, of all people, may be unable to make choices. They are coming towards the end of their lives and their options are limited. They are expected to take yet another charge on the one asset of value that they have—to continually take out a loan on their property, which their children may be expecting to have to help pay off their student loans or to set up in life.
We have heard that the average age for people to set up their own home now is in their 30s. Quite often, they rely on their parents to be able to help. The rules are being changed for pensioners. This is blow No.1; we will see how many other blows there are for pensioners in the future. We will certainly ensure that pensioners hear the truth, which is that, despite the rhetoric, this Tory party which claims to be the friend of pensioners, is not. This is the first step in undermining all the promises the party made in its manifesto and at the last general election.
Mr Vara
I simply make two responses. On pensioners, the hon. Lady conveniently overlooks that it is often the case that the asset is increasing in value. She also overlooks that the loan will eventually be paid when the house is sold. It is therefore a question of balance, and we have to ask whether it is fair that those who do not own a property of their own are through their taxes helping to pay others who own an asset that is increasing in value.
As for healthcare, I simply say to the hon. Lady that for many of those securing help in healthcare there is unlikely to be an overlap in terms of the equity in their property, as many of them are mortgage-free and sometimes have a second income or another income. They would not probably qualify for SMI in the first place.
Amendment 110 agreed to.
Amendments made: 111, in clause 16, page 15, line 13, leave out
“amounts secured by a mortgage”
and insert “liabilities”.
This amendment and amendments 112, 113, 118, 122, 123, 124, 125 and 126 are consequential on amendment 110 which replaces the reference to mortgage interest payments with a reference to owner-occupier payments.
Amendment 112, in clause 16, page 15, line 16, leave out
“the mortgage relates to amounts used”
and insert
“a person’s liability to make owner-occupier payments was incurred”.
Amendment 113, in clause 16, page 15, line 18, leave out from “about” to “in” in line 19 and insert “—
(a) determining or calculating the amount of a person’s liabilities;
(b) the maximum amount of a person’s liabilities”.
Amendment 114, in clause 16, page 15, line 24, after second “a” insert “mortgage of or”.
This amendment ensures that regulations under clause 16 about requiring security for a loan may make provision for situations where there is no pre-existing mortgage over the person’s home.
Amendment 115, in clause 16, page 15, line 24, at end insert
“a legal or beneficial interest in”.—(Mr Vara.)
This amendment makes clear that regulations under clause 16 about requiring security for a loan may make provision for security to be taken in respect of a legal or a beneficial interest in the person’s home.
Ordered, That further consideration be now adjourned.—(Guy Opperman.)
Welfare Reform and Work Bill (Fifth sitting)
Emily Thornberry Excerpts(9 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kate Green
Good morning, Mr Owen. It is nice to see you in the Chair and to return to the Committee for, I am afraid, my last appearance in what has been a very enjoyable Committee.
Amendment 77 would require the Secretary of State to include, in the reports that the Bill envisages, data on children living in low-income working households as part of the reporting on their life chances. We all know the damage that poverty does to children’s life chances and to their outcomes in the short and longer term. Poverty is correlated with poor health, poor educational outcomes and poor employment outcomes in adulthood. It is extremely damaging not only to the individuals who experience it, but to the whole country. The amendment is an important one in recognition of the high incidence of poverty in working households. Currently, the Bill only requires reporting on households that are out of work. Therefore, it is important to have a report on the impact that poverty could have on the life chances of children growing up in those working families.
The Government are fond of saying that work is the best route out of poverty. I absolutely agree that it should be, but while families in work do face a lower risk of poverty than those out of work, and the more work people can do and the more hours they can supply the lower the risk, two thirds of children growing up in poverty are in working households. The Government refuse to engage with that fact and the Bill, in failing to address it, continues that situation. Indeed, I would say that the Government are making the situation worse.
According to the Institute for Fiscal Studies, the measures we passed in the House on Tuesday on tax credits will take £3.4 billion annually from low-income families by 2020. Between those measures, the measures in the Bill and other measures in the summer Budget, we will see work incentives damaged. We have to be concerned, as a result, about the impact on in-work poverty. The changes that the House passed on Tuesday will come into force in April next year and will lower the level at which working tax credits start to be withdrawn from £6,420 to £3,850. They will also increase the taper rate at which tax credits are withdrawn from 41% to 48%, meaning that, for every £1 earned over the threshold, there will be a 48p reduction in the level of tax credit entitlement. As a consequence of those changes to working tax credit, the level at which child tax credit begins to be taken away is lowered from £16,105 to £12,125.
Although Labour welcomes the increase in the personal tax allowance and the introduction of the so-called national living wage, the Low Incomes Tax Reform Group has stated that any gains from those measures will not negate the impact of those tax credit cuts from April 2016. The IFS recently concluded that families will lose more than £1,000 a year on average from cuts to tax credits, while they will gain between £100 and £200 a year at most from the proposed national living wage. I recognise that some families will benefit from increased free childcare, but many still use informal care and many will still be left with a funding shortfall for childcare, even under the increased and more generous provisions in universal credit and in relation to older children.
The benefits freeze provisions in the Bill, and the provisions of the cap, will apply to both out-of-work and in-work benefits. We will expand on our concerns about those measures later, but we should be concerned about them given their impact on children growing up in working households. We are particularly worried about the freeze in housing benefit. Many working families rely on housing benefit, and the explosion in housing benefit in recent years is in no small measure due to the increased bill for those families. The way in which the Bill will create a disconnect between rents and housing benefit causes us real concern, especially in high-demand areas such as those represented by my hon. Friends the Members for Islington South and Finsbury and for Bermondsey and Old Southwark, where private rents have shown no sign of falling—rather the reverse, I expect. Our concern is shared widely outside the Committee, as we heard from our witnesses in the oral evidence sessions.
I am concerned, too, about the impact of the freeze and the benefits cap on children in working families. Child tax credit and especially child benefit are a platform that help to improve the gains from paid work. Both will be frozen for four years under the Bill. Working families with children will be hit hard, but the impact will be different for different kinds of households. In that respect, it is interesting to look at the recently published research of Donald Hirsch for the Joseph Rowntree Foundation on minimum income standards. I recognise that that is not exactly the same as poverty, or child poverty, but the research gives some interesting and helpful information about how the measures in the Bill and in the summer Budget will impact on family households differently depending on size, structure and family make-up. The figures show that lone parents and large families will be the biggest losers.
A lone parent with one child, working full time on the minimum wage, was typically just short of the minimum income standard in 2010—that lone parent would have reached 97% of the objective minimum income standard through a combination of earnings, tax credits and benefits. By 2020 the shortfall will grow to between a quarter and a third—around 71%, according to the JRF research. That is for lone parents in full-time work, but many lone parents are forced to work part time because of difficulties in finding childcare, so they will benefit less from the planned rise in the national living wage as they will not be able to supply so many hours of work. The position of lone parents has also been worsened by the rising incidence of sanctions, and many families with young children have been hit as a result.
The picture for low-income working families is complex, hit by forces of opposing, but not necessarily oppositely and equally neutralising, effects. Such families require complex policy responses, but the Government’s measures in the Bill and the summer Budget are certainly not complex or subtle, and they do not even show awareness of how the problems compound one another. It is important that we focus on how the measures impact on low-income working families and the children in those families, since we share with the Government the ambition that work should be a route out of poverty for those families and that work should always pay. Today it does not.
Working families and children in those families are suffering hardship and will suffer more hardship. It is disgraceful that the Government have created such a situation. It is notable that some Government Members were deeply concerned about the matter on Tuesday, when we debated the tax credits measures. We cannot undo any of those measures today under the clause that we are debating, but we can shine a spotlight and require a proper report on the effect on working households. That is what amendment 77 seeks to achieve.
Amendment 78 would require the report to include data on the educational attainment of children not only at key stage 4, as currently proposed in the Bill, but at key stages 1, 2 and 3. I hope the Minister will be able to explain the Government’s rationale for looking only at key stage 4. That is when a child is aged 16, which is late in their development—am I right? No doubt someone will intervene to correct me if I am wrong. Perhaps not colleagues from the Scottish National party, because I appreciate that the situation is different in Scotland. The clause would not affect the constituents of the hon. Member for Livingston. In passing, I note that when we debated the Bill on Tuesday, I pointed out that it would present an interesting little case study on English votes for English laws. Here is an example before us.
It is late in a child’s development to look at indicators only at key stage 4. I hope the Minister will be able to explain the rationale for that approach. I had hoped there might be room for some cross-party consensus on the importance of child development at a much younger age.
Emily Thornberry (Islington South and Finsbury) (Lab)
I suppose a cynic might say—I do not know whether this is right—that if there were to be a major change to child poverty, for instance that it got much worse, and we were to measure it by looking at educational attainment at key stage 4, it would give the Government many years’ grace while children adversely impacted by poverty were going through the system. We would not know how bad it was until they were 16, even if we were to assume that educational attainment at key stage 4 were sufficient to measure child poverty.
Kate Green
That is a very depressing thought, but quite possibly a fair one. It will be interesting to hear the Minister’s response. I do not think it is right in any circumstances to wait to measure the impact on children until they are 16. We know that the early years are a crucial developmental period. Action for Children, in written evidence, told us that
“the rapid brain development in the first two years of a child’s life provides the foundations for their future health and wellbeing”
and their development. Development in the early years is strongly associated with positive outcomes in later life.
Development in cognitive ability in the early years is highly predictive of subsequent achievement, with a strong relationship to educational success at school and income at age 30. By school age there are already wide variations in children’s abilities, which widen throughout childhood. The gap in attainment between the poorest children and children from better-off households, already large at age five, grows particularly quickly during the primary school years.
That points to the importance of measuring at key stages 1 and 2. Children from low-income backgrounds achieve poorer development by age five than their more affluent peers. The latest statistics from the Department for Education show that less than half— 45%—of pupils eligible for free school meals achieve a good level of development. Those children are falling behind before they start school, and the position worsens after they start school.
Closing the ability gap at age five enables children to do better later on in school. Those who arrive in the bottom range of ability tend to stay there. More than half—55%— of children in the bottom 20% of attainment at age seven, key stage 1, are still there at age 16, key stage 4. By measuring, reporting and taking action at key stage 1 would be able to tell a much better story when reporting at key stage 4, instead of waiting for the disasters to pile up.
Emily Thornberry
I am listening with care to my hon. Friend’s important speech about this vital subject. She has just touched upon the impact of cold homes on children’s respiratory health. Is it her experience that people come to her surgery who live not only in cold homes, but in damp ones? Damp homes have an effect on the incidence of children’s asthma and a number of skin conditions, particularly when children’s clothes are rotten because they are put in storage against a damp wall, carpets rot, there is insufficient air going through a property and there is overcrowding.
Kate Green
That is absolutely right. Many constituents come to my surgery particularly distressed by damp in their homes. For many parents, it is the visible manifestation of their fears for their children’s health when they live in inadequate housing. In my experience, landlords are often very reluctant—in fact, extremely hostile—to do anything about problems reported to them by low-income families.
Emily Thornberry
Is it my hon. Friend’s experience that landlords—including social landlords—will go in, wash the walls that are black and tell the family that they do not have their windows open sufficiently, and when the blackness comes back the family are told that it is somehow or other their fault? Does she have the same experience as me with house-proud women coming to her surgery, saying, “I wash the walls down once a month and the blackness still comes back. I keep the windows open as they tell me to, but we are so overcrowded that this is the reason for the dampness”?
Kate Green
I share exactly the experience in my Manchester constituency that my hon. Friend experiences in her inner London constituency. She, like me, may have parents coming to her saying that they have been told by their landlords that they should not hang up damp washing, but they do not have gardens, so where are they meant to put it to dry? They cannot afford to run tumble driers because the electricity bills would simply be beyond their reach. The cocktail of problems that mothers in poor housing have to cope with on behalf of their families is really quite distressing. I am sure that hon. Members all around the Committee will have had similar cases in their surgeries. There is a real concern about housing quality and its impact on child heath.
Inadequate incomes also compound food poverty, meaning that low-income groups consume less protein, iron, fresh fruits and vegetables, vitamin C, fish, oily fish and folate. Women who are seeking to conceive and pregnant women worry about what will happen to their unborn babies and children as they grow up. Inadequate diets are extremely concerning when we look at children’s health and wellbeing, and are a significant consequence of low household income.
Emily Thornberry
I speak from my own experience when I lived in the east end on the Lansbury estate. The local shops did not have fresh fruit and vegetables because, largely, the people living in the area were poor and could not afford to buy fresh fruit and vegetables, so the shops did not stock them. In the end, the local authority subsidised the shops to produce fresh fruit and vegetables, but they sat on the shelves and rotted.
Kate Green
What is very interesting, as well as distressing, about what my hon. Friend said is that, when we have data, we can begin to think about solutions. We can see that the problem is a lack of access to fruit and vegetables and, perhaps, a lack of confidence among parents about how to cook or use them. Perhaps there is a lack of income or good-quality transport to go to buy better-quality food.
Earlier this week we debated how important it is to have local strategies in relation to children’s poverty and life chances. What we have just heard from my hon. Friend shows how useful those local strategies can be in looking at the data, identifying the problems and creating solutions to address them. In relation to child health and its connection to poverty, having a national report and, indeed, the lower-level local strategies and reports, would be extremely helpful to improving children’s health outcomes.
Children born into poverty suffer an increased risk of mortality in the first year of their lives and in adulthood. They are more likely to be born early and small, with low birth weight, and they face more health problems in later life. Preventing low birth weight should be an absolute priority for public health officials, but efforts to achieve that will be hampered if parents have insufficient income.
If children’s life chances are to be fully considered, it should be recognised that life chances begin in the womb, even before birth.
Kate Green
And certainly not as late as 16, as my hon. Friend suggests.
There is a real correlation between poverty—particularly household debt—and the likelihood of mental disorders, including sleep deprivation, depression and anxiety, among new mothers. The effects of poverty are particularly evident among women. Indeed, I have often said that poverty is a gender issue—that women face much of the pain and hold much of the responsibility for coping with poverty in low-income households. Debt and lack of access to income are therefore particularly damaging for a mother’s health.
That means that women are often the shock absorbers of family poverty, reducing their own consumption to ensure that other family members, and particularly their children, are provided for. Even so, it is not in a child’s interests to have a mother whose health is compromised. Naturally, a mother’s instinct will be to put her child first, but the child obviously also has an interest in having a healthy mother. Household incomes are therefore important in the round.
Maternal depression as a result of poverty is itself a significant risk factor in poorer social and emotional development in children. Children from disadvantaged backgrounds are more likely to start primary school with lower personal, social and emotional development, and they are at significantly increased risk of developing conduct disorders, all of which can lead to difficulties with educational attainment, relationships and mental health throughout their lives.
There has not been much research into the impacts of adding or removing money, but, overall, the correlation between economic pressures and health is a serious concern. Children in low-income families miss out on a whole range of the conditions needed for a good-quality childhood, good psychological and physical wellbeing, and good opportunities and life chances in later life.
Amendment 80 is important in focusing action on the consequences and causes of poverty in terms of health. Monitoring and reporting will also enable the Government to make the most of the substantial investment they make in the nation’s health. It will enable us to make a more effective assessment of the impact of health spending on child development and the impact of parental awareness and education—for example, in relation to diet, breastfeeding or smoking cessation—on children’s health. It will also give us an opportunity to look at and focus local health and wellbeing strategies in the interests of improving child health. That would not cost any money, but it would lead to much clearer accountability. I commend amendment 80 to the Committee.
The other amendments are consequential on the substantive amendments in the group, so I will not speak to them. I am grateful to have had the opportunity to address the Committee on these really important amendments. We all know that the poorest children suffer the worst outcomes, and reporting on their poverty and the individual outcomes they experience is therefore the right way to get a rounded picture of child poverty and life chances, as well as of the causes and consequences involved. It will also help us to take action to introduce the strategies to address the disadvantage that poor children face.
Priti Patel
Work remains the best route out of poverty. We know that children in workless families are around three times as likely to be in relative low-income as children in families—
Emily Thornberry
The Minister is an intelligent woman and I am sure she knows what we are saying, but let me try just once more. The Government may assert that work is the best way out of poverty and may be the best way for a child to be healthy. They can assert what they want. We are asking for evidence. If a family are working, which could possibly mean two hours a week on a zero-hours contract with the children remaining in poverty, what we, the country and I am sure the Government want—if they want to do something about improving the life chances of the poorest and most marginal children—is to measure that. Let us look at some evidence so that we can have evidence-based policy as opposed to assertions made by the Government.
Priti Patel
Let me just put things into context. It is not a case of Government assertions. We are committed to reporting and have stated our commitment, in relation to earlier clauses, to report annually to the House of Commons. Perhaps the hon. Lady will allow me to get on to some of my other points about education and life chances. There is clearly a duty and obligation to report and my Department and the Government as a whole will do so in relation to various aspects of the matter. Despite the Labour party’s bluster it does not recognise root causes in addressing poverty and it fails to recognise that work remains the best route out of it. Only the Government have a committed strategy to look at life chances to overcome many of the root causes of poverty, which previous Labour Governments completely ignored.
Priti Patel
The Department for Work and Pensions will, as I said, continue to publish low income statistics as part of the households below average income report, including statistics on children living in low-income households.
Amendments 78 and 79 would expand the statutory measures to include educational attainment for disadvantaged children at key stages 1, 2, 3 and 4. The amendments seem to underline the significance already placed by the Government on education as an indicator of future life chances, but we do not think it necessary to add those additional measures. Good education, as the Committee fully recognises—points have been made to that effect—is the bedrock on which to promote individuals’ future successes and life chances. At the heart of that we are determined to promote social justice, with the commitment that every child, regardless of background, will be extended opportunities allowing them to fulfil their potential. Raising the educational attainment of all children will increase their capacity to shape their own futures, reducing the risk of future unemployment.
Emily Thornberry
The point about measuring only key stage 4, as my hon. Friend the Member for Bermondsey and Old Southwark said, is that the Government will be measuring achievement possibly made under a Labour Government. If there were to be a change of policy that had an adverse impact on children’s educational attainment, the Government would not be measuring it for many years, and any difficulties might therefore not be addressed until it is too late for an entire generation.
Priti Patel
I disagree with the hon. Lady. The Department for Education already publishes a great deal of data on how well pupils are doing by the end of primary school, in addition to how well disadvantaged pupils are doing at school. It is therefore wrong to make the assumption that there are no data and that the assessments come in at the end. Of course, key stage 4 is a vital point in a young person’s education. It represents the culmination of primary and secondary school and provides a consistent point at which to measure attainment across all young people. Successful attainment at key stage 4 underpins future life chances, and pupils who fail to achieve at the end of stage 4 are highly at risk of becoming NEET—not in education, employment or training. Other educational data are published by the Department for Education, so we do not believe that the proposed measure would add sufficient value to warrant inclusion in the life chances measures.
Emily Thornberry
I am sure the Minister understands the essential contradiction in what she is saying. If the Department for Education is publishing data for key stage 4, why does her Department need to publish it? If her Department is publishing data for key stage 4, why not for all the others? Why do we not get everything published all together so that we get a proper picture of any failure that might be about to happen as a result of Government measures? What are the Government afraid of?
Priti Patel
With respect, the hon. Lady misses the point. The data are published already across Government, so that information is in the public domain.
Priti Patel
I come back to the point that information is already being published. The hon. Lady is welcome to engage with the Department for Education to look at the data and to see how they inform the development of the Bill and the decision that we are taking.
Emily Thornberry
Does not the Minister appreciate that the way in which she is approaching the problem highlights just how much the Department for Work and Pensions is giving up on the idea of showing child poverty? Essentially, she has told us that, if we want to have a look at the impact of child poverty, we are to go to the Department for Education. What is the point of the Department for Work and Pensions in relation to the issue?
Neil Coyle
I beg to move amendment 98, in clause 4, page 5, line 10, at end insert—
‘(5A) The Secretary of State must, before the end of the period of 12 months beginning with the day on which this Act is passed, publish and lay before Parliament the first life chances strategy for England.
(5B) Before the end of the period to which the strategy relates, the Secretary of State must review the strategy and publish and lay before Parliament a revised strategy.”
This ensures that the Government must produce a life chances strategy for England.
The amendment is tabled in the name of my hon. Friend the Member for Redcar, who is unable to be here because she is speaking in a debate on steel, which is a massive issue for her. She has kindly provided some speaking notes for me.
The Bill is a disgrace. It seeks to repeal some of the most noble and courageous legislation of recent years—namely, the Child Poverty Act 2010—and the ambition to end child poverty by 2020. It shows a paucity of ambition towards tackling poverty and inequality. It flies in the face of decades of thorough and internationally recognised research into the drivers of child poverty and life chances. It seeks to hide Government failure on child poverty behind narrow, cherry-picked and less relevant reporting obligations. And crucially, to which the amendment speaks, it makes no attempt to set out a route map on how the Government intend to lift the life chances of children in this country.
What is the point in reporting on progress, unless there is a strategy that sets out what the Government will do to make that progress? The amendment would ensure that the Government produce a life-chances strategy for England and publish it before Parliament.
The Committee has received a wealth of evidence from independent experts that explores all the complex drivers of child poverty, built up over decades of professional, rigorous, evidence-based research. While issues such as worklessness and educational attainment, which the Bill measures, are important, there are many complex and inter-linked drivers, the most crucial of which is financial income, which this Government refuse to measure.
We know what the drivers of child poverty are, and we know what steps should be taken to reduce it to give children the best start in life. Under the previous Labour Government, the strategies to tackle child poverty and improve children’s life chances and to ensure that every child mattered and that no one would be disadvantaged by the postcode of where they lived included the introduction of tax credits, which transformed the help available to working individuals and families, the introduction of the national minimum wage and Sure Start centres and the Every Child Matters strategy, which allowed for an holistic examination of what the state could do to combat child poverty.
That is what a strategy on child poverty and life chances would look like from a Government serious about tackling the scourge of poverty and inequality. Would a decent Government designing a strategy for tackling child poverty, or, in this case, improving life chances, include measures such as the pernicious bedroom tax, slashing tax credits for working people, when two thirds of children growing up in poverty live in families where at least one person works, reducing the benefits cap and freezing working-age benefits, the inevitable sanctioning of lone parents struggling to manage bringing up a three-year-old, or cutting Sure Start centres?
We know what works in reducing child poverty and we know what the indicators are to measure it. They include being twice as likely to live in bad housing, with significant effects on physical and mental health and educational achievement. Children in the poorest areas weigh an average of 200 grams less at birth than those born in the most affluent areas. They are more likely to die at birth or infancy, to suffer chronic illness during childhood or have a disability or long-term health condition. Children living in the most deprived areas of England have 19 fewer years of life expectancy than those in the least deprived areas.
Emily Thornberry
Is it my hon. Friend’s experience, as it is mine, that there are parts of the constituency where, on one side of the road, people will live five, six, seven or sometimes 10 years more than those on the other side of the road, because there is a poor estate on one side and richer people right next door who will live 10 years longer?
Neil Coyle
That is absolutely my experience in Bermondsey and Old Southwark. We have a massive contrast in income inequality. People who live in areas along the riverside have a higher life expectancy, and in other areas, particularly the Grange, Rotherhithe and South Bermondsey wards, about a third of children are living in poverty.
Emily Thornberry
If the child begins badly—if they are unhealthy and there are health inequalities when they are young—the chances of their dying earlier are obviously very much higher.
Neil Coyle
Absolutely. That was the point made by my hon. Friend the Member for Redcar, and it is certainly my experience of working on these issues as a councillor and now as the Member of Parliament for Bermondsey and Old Southwark.
Children from poor backgrounds are left behind at all stages of education. Without financial income, parents cannot afford the other things that contribute to life chances: school trips, decent healthy food, or a break or holiday away from home with their family. How can the Government say they are serious about improving life chances when they will stop collecting much of this data and have no evidence-based strategy to demonstrate how they intend to reach their targets?
Although the Secretary of State for Work and Pensions told the BBC’s “Today” programme in 2014 that he would meet the current targets, we know that they will not be met. This does not make the goal of ending child poverty any less achievable than it was. We know from past and international experience that, with the right timeframe and the right political will, we can eradicate child poverty. If the Government were serious, they would not remove the child poverty commitment at all. If they were serious about actually improving children’s life chances, they would not just report on them, but would set out a strategy to show how they intend to improve them. That is the aim of the amendment.
Kate Green
Amendment 9 would leave the child poverty targets and measures, currently provided in the Child Poverty Act 2010, unchanged.
With your permission, Mr Owen, I will also speak to amendment 97 on behalf of my hon. Friend the Member for Redcar who is engaged in a debate on the steel industry in the Chamber.
With the exception of Government Members, the importance of targets and measures of income poverty to internationally agreed definitions is unquestioned. Targets, measuring and reporting on them drive action, show progress and enable comparisons to be made: comparisons of trend data over time and other similar economies with similar demographic make-up. The importance of income poverty in that context, as we heard earlier, is linked to a range of poorer outcomes, in education, health and wider societal costs.
As I have said, there is widespread international acceptance that income is key. The Government in their own evidence review last year showed that the most important factor for children’s outcomes was lack of income. That is not just income among families where no one is in work but insufficient income from earnings, too.
Other indicators are important. It is important and right to track educational, health and child wellbeing outcomes, but those are not the same as tracking poverty, as we can see clearly from the written evidence submitted by the End Child Poverty campaign.
In 2013, the Government carried out a wide consultation on whether the income poverty measurement and target regime provided for by the 2010 Act was flawed and should be replaced. Of the many responses received by the Government to that consultation, the overwhelming majority—97%—of the responses said that the measures and the targets were fine and needed no alteration.
If ever evidence of a Government who really do not care about evidence and analysis is needed, it can be found in the proposals in clause 6. One cannot help but feel that it is not evidence but fear that motivates the Government: fear that failure to meet targets, or demonstrate progress towards them, would at the very least embarrass the Government and might even raise concern in the minds of Ministers that there could be a legal threat.
Emily Thornberry
To be fair—I do wish us to be fair to the Government—those who still believe that they are compassionate Conservatives might find it difficult if measures show that they are failing.
Kate Green
That is a very charitable interpretation from my hon. Friend, but she is a charitable lady, so we should not be surprised by her generosity of spirit in Committee today.
I have spent many years looking at this territory and I know that legal challenges have been mounted in the past. I believe firmly that a challenge would not be viable against a well-intentioned, well-meaning Government who had taken purposeful action to address child poverty even if, due to external circumstances, they were not ultimately able to meet the targets they had set, especially if they were ambitious targets in the time hoped.
What we actually have is a Government who are not bothering to try to meet the targets. In the last Parliament, child poverty fell in the first two years of the coalition Government up to 2011-12. That was the result of measures introduced by Alistair Darling, the Chancellor of the Exchequer in the previous Labour Government, that had not yet been affected by the measures that the coalition Government set about introducing. Since 2011-12, while the coalition Government and the present Government have been in charge of family income strategy, child poverty has flatlined. There has been no progress at all and no strategy to improve the position of those poor families.
Welfare Reform and Work Bill (Sixth sitting)
Emily Thornberry Excerpts(9 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Hannah Bardell
Our amendments are intended to protect people from the Conservative Government’s dangerous blanket cut to benefits. The clause lowers the benefit cap set by the Welfare Reform Act 2012 and applies it to a large number of benefits. Our group of amendments would remove the new cap and ensure that the original cap remained for inside and outside London, recognising the significantly higher cost of living in London. Amendment 25 would remove the subsection that makes changes to the original 2012 Act, while amendments 26 and 27 would change the wording of the Bill so as to leave the benefit cap in the original Act unchanged. Amendment 38 is consequent on the other amendments.
The original benefit cap in the 2012 Act was introduced so that benefit claims could not exceed average earnings. The Government have not introduced such a rationale for the imposition of the new cap—the rates at which it is to be set are entirely arbitrary. Where did the figures come from? We have no information on that and we cannot understand the rationale. We must remember that the rates are not only numbers or bands, or digits on a piece of paper; those numbers represent a lifeline for hundreds of thousands of people in the UK.
The Government are not only blindly pushing ideologically driven cuts but applying the cuts with entirely arbitrary figures that have no justification. The families to whom the cuts will apply must have answers on where the figures have come from. I and, I am sure, many others have already had a stream of constituents coming to our surgeries to complain about cuts and sanctions that seem nonsensical and that they cannot understand.
Labour’s amendment 71 would maintain the link between the benefit cap and estimated average earnings that the original Act intended. Although we oppose the cap generally, we also oppose removing the link with average earnings and introducing an arbitrary cap, so we support the principle of that amendment. I commend it.
The utterly thoughtless way in which the Government are making the benefit changes is staggering. The breadth of social groups that will be affected and the depth to which they will be affected should make Ministers hang their heads in shame. The burden of the cuts will be felt not only across Scottish and other devolved Administrations, although we are doing our best to protect people, but throughout all parts of the United Kingdom.
The National Housing Federation estimated that under the £23,000 cap in London, families face a shortfall between benefit and rent of £27.79 per week; the weekly shortfall under a £20,000 cap ranges from £37.40 in Yorkshire and Humberside to £67.35 in the south-east, based on the current rent agreement. There is also danger that families and individuals living in temporary accommodation who, by virtue of their situation, are already deemed to be vulnerable by a local authority will no longer be able to manage rent payments and will find themselves homeless once again. We are making some of the most vulnerable in society even more vulnerable.
Some disability-related benefits are to be protected, which is welcome, but countless charities and lobbying groups have pointed out that disabled people and their carers sometimes also rely on a variety of other benefits that are being capped by the Bill. It is not enough to protect a few disability-specific benefits from the cap; the Government need to look at the bigger picture. Again, there does not seem to be any joined-up or strategic thinking behind the cap.
The effects of the cap will also be felt by those who have life-threatening or terminal illnesses and who require care. They and their carers will be subject to the cap. How can we possibly justify capping and cutting support for some of the most vulnerable and ill people in our society?. It seems nonsensical and the Scottish National party is absolutely opposed to it. Not only are the cuts detrimental to the ability of those who are sick and disabled to live independently, but the poverty and debt might lead to even more vulnerability.
Emily Thornberry (Islington South and Finsbury) (Lab)
It is a pleasure to serve under your chairmanship, Mr Owen. It is also an enormous pleasure to serve on this Committee, to have heard contributions such as that made by my hon. Friend the Member for Stretford and Urmston, who is departing from her current position on the Front Bench, and to hear the passion with which she gave voice to the beating heart of the Labour party and the outrage at how the Bill is being introduced and its extraordinary justification. If anyone ever questions where the Labour party’s heart is, they just need to hear her speech from before lunch.
I wish to speak to amendment 71. According to the Book of Ecclesiastes:
“What has been will be again, what has been done will be done again; there is nothing new under the sun.”
Those words have survived for thousands of years, but could almost have been written yesterday by an author scratching his head over some of the perverse measures in the Bill. I suspect that historians will one day look back on these debates and cite the benefit cap as a classic example of an increasingly prevalent phenomenon in modern politics: a solution without a problem. After all, we have had a household benefit cap for more than two years.
Kate Green (Stretford and Urmston) (Lab)
I am sorry to interrupt my hon. Friend so early. She may be about to say this, in which case I apologise for stealing her moment. As she says, nothing is new under the sun. We had a benefit cap in the 1960s when it was called the wage stop rule. Women in particular campaigned to end it, which was to the benefit of poor children.
Emily Thornberry
And of course, as we will see, those who will be hit most adversely by the benefit cap are, yet again, women.
Ministers seem to be no closer to pinning down a convincing rationale for the policy today than they were four years ago when the Welfare Reform Act 2012 was debated. To the extent that there has been an underlying theme throughout this period, however, it has been the ever-slippery concept of fairness. As the Secretary of State put it when introducing the Welfare Reform Bill on Second Reading in March 2011:
“The principle is that people who are unemployed and on benefits should not be receiving more than average earnings. It is a matter of fairness, so that those who are working hard and paying their taxes do not feel that someone else will benefit more by not playing a full part in society.”—[Official Report, 9 March 2011; Vol. 524, c. 921-922.]
It is almost quaint, with more than four years’ worth of hindsight, to imagine Government policy being drawn up with such sensitivity to people’s feelings, but the Secretary of State’s words are revealing to the extent that they disclose that the closest thing there was to a principled reason for introducing the cap was the perception of the problem, rather than evidence of one.
As I said, that has come to be a tendency over the past few years. In fact, further evidence appeared just a few days ago when the House was asked to consider the Trade Union Bill, which seems to have been designed to allay tabloid hysteria more than to deal with a real problem. When the issue in question is out-of-work benefits, tabloid hysteria is in abundant supply. Goaded by Ministers, the entire debate has become hijacked by splashy headlines that generated heat rather than light. It is time that the plane of discussion was brought back down to earth.
I said that there is nothing new under the sun when it comes to Tory welfare reform, but that is not strictly true, because lowering the cap requires an innovation that is a novel twist to the idea of fairness. The link between the household cap and estimated average earnings has been severed. That is quite a spanner in the works in terms of the Government’s efforts to prop up one of their primary justifications for the cap. The principle that working taxpayers, when they are fortunate enough not to have to claim benefits in order to survive, must be helped to feel positive about the way that the benefit system operates was always a dubious basis on which to make policy. The fact that that was supposed to have been achieved by setting the cap at the level of earnings makes clause 7(3) even more extraordinary.
Returning to the debates of the 2012 Act, the last Welfare Reform Bill, we might find the comments of the right hon. Member for Epsom and Ewell (Chris Grayling) particularly instructive. He was the poor, unfortunate Minister saddled with the unenviable task of defending the cap and attempting to provide a coherent rationale for it. Fortunately for him, he did have a link with average earnings to fall back on. As he explained:
“Our policy approach, and the Government’s clear intent, is to have a cap that bears reference to average earnings. That is necessary for the credibility of our benefit system. It is the right place to set the cap.”––[Official Report, Welfare Reform Public Bill Committee, 17 May 2011; c. 952.]
He was either right then or he was wrong, but are we not being contradicted by the changes to the law that the Government are intending now? Evidently, the new generation of Ministers take a different view. While there may be many problems that can be laid at Ministers’ feet, a fall in average earnings over the past two years is not, probably, one of them. According to the much-quoted Office for National Statistics, since the level of the cap was first established at £26,000 a year, average earnings have risen, not by much—just 0.1%, in fact—but they have risen. If wages are going up, why is the cap coming down if it is supposed to be, in any way, linked to average earnings? It is a simple question and I am sure that there will be a simple answer.
It has therefore proved necessary for the Government to take a different tack in arguing the increasingly tenuous case for lowering the cap. The alternative explanation that Ministers have increasingly relied on is that the cap is a cost-saving measure on one hand, and that it provides an incentive for people to move into work on the other. We now do not have a link to average incomes; we have the cap as an incentive to get people into work and that it will be a cost-saving measure.
Kate Green
My hon. Friend is making a compelling case. May I ask her to comment on recent evidence that emerged over the summer, which showed that although some people did move into work—Tony Wilson, in his oral evidence, told us a little bit about that—those who did not probably could not? They were either the parents of very young children, were suffering from ill health or there was a disability in the household.
Emily Thornberry
Absolutely right. Indeed, some of the evidence that we heard was that those who did move into work were not in what would be called sustainable work. For example, a single mother of many children who perhaps had been moved into 16 hours a week of work to avoid the cap, would find it impossible to sustain that work during the school holidays when her four children were back at home and she did not have childcare.
People temporarily may have been able to move into work and back out again, but we can see the continued high level of spend on discretionary housing payments to support these people. That in itself is evidence that it is not sustainable to try to push people for whom it is not possible to find work into work. Indeed, the evidence shows—I am sorry to keep harping on about evidence, but I always thought that policy was based on it—that most people who were affected by the benefit cap are not even deemed fit for work.
I will just go back. Having abandoned the idea of linking the cap with earnings, the Ministers are now relying on it being a cost-saving measure and an incentive for people to move into work. Of course, neither of those arguments stack up. I will come back to that. There continues to be a bad smell of unfairness, which will not go away. Just two days ago, the Minister was trotting out the same old argument. She said:
“The cap is a simple matter of fairness”.––[Official Report, Welfare Reform and Work Public Bill Committee, 15 September 2015; c. 144.]
However, she left us guessing, as we still are, exactly what was meant and how this could be fair as the cap seems to have been set at an arbitrary level.
Amendment 71 would remove subsection (3) and maintain the link between the level of the cap and estimated average earnings. If we are to accept the argument of the previous Minister that this connection is necessary for the credibility of the cap—a tall order, frankly—I can see no good reason for removing this requirement from the legislation. If the very concept of the benefit cap is to inspire even a shred of public confidence, it is incumbent on Ministers to explain why they propose to hand themselves extraordinarily broad powers to lower the cap at any time for any reason.
Ministers are essentially asking us to trust them to make decisions on the basis of fairness. Frankly, given their track record and given what the Minister said before the luncheon Adjournment—that she did not want to continue throwing good money after bad—it would be fair, for some people at least, to be somewhat sceptical of their understanding of fairness. To trust them to make these decisions on the basis of fairness is a slippery concept if there ever was one. The definition of the word seems in any event to be the subject of regular revisions apparently based on nothing more than political whimsy and the need of George Osborne to continue to save money.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Does my hon. Friend share the concern that some of the Government agenda is being driven by think-tanks that have done none of their own research on these issues and were unable to provide evidence to back up the assertions that they made in the witness sessions?
May I also say how much I enjoyed my lunch?
Emily Thornberry
Yes, there was an opportunity when we heard evidence. We asked the Government for evidence. We asked them again and again. I have tabled several parliamentary questions and have not had particularly good answers. We have asked questions in the House about their justification and evidence, and we got nowhere. If there is an opportunity, it would be great finally to hear from the think-tanks, which I know the Government are close to—at least some of them—and for them to come forward and give us the evidence on which the policy is based.
I was struck that, while hyperbole was in good measure, we had no evidence. We had people coming in again and again telling us the occasional story. It is as though the policy is based on the one family that was found living in Westminster with the flatscreen television and a Mercedes outside, or whatever the extraordinary example was. That is so removed from the reality of the day-to-day lives of people who are affected today by previous benefit caps and will be affected even more by further benefit caps.
The best way to make policy is on the basis of evidence. For that reason, the Labour party has made it clear what our position now is. We oppose the Tories’ reduction in the benefit cap, so we will therefore be joining the Scottish Nationalists on amendments 25 and 26. We will review Labour policy with regard to the principle of the benefit cap and we will look at evidence. It is right to say that Labour Members who represent London constituencies feel that week after week in our surgeries we see an awful lot of evidence of the adverse effect of the benefit cap and how it does not provide an incentive to get people into work, how it does not save money, and how, more than anything else, it is not fair.
We want in the next few months to put forward a good body of evidence to show, one way or the other, whether a benefit cap is right on any basis. For that reason, although we oppose the lowering of the benefit cap now, we have committed ourselves to looking carefully into the evidence, and we encourage people, including the Government, to come forward and share the evidence with us. If the Government want to give us the evidence on which they are basing this appalling policy—this cruel and nasty policy—I would be very glad to hear it and very glad to read it.
More than political whimsy is needed. If we must have a cap, we should at least make it clear that there should be an objective benchmark by which the level should be determined. I will therefore press amendment 71 to a vote.
The Minister for Employment (Priti Patel)
Good afternoon to everyone. These grouped amendments, in simple terms, are intended to counteract the changes that we are introducing to the benefit cap, as we have already heard. Amendment 25 would prevent the proposed reduction in its rate. Amendments 26 and 27 would prevent our plans to introduce a tiered structure to the cap, which will have different rates for claimants living in Greater London and for claimants living elsewhere. The two amendments would also keep the cap at its current rate with the same split between the level for lone parents and couples and the level for single people without children.
Amendment 71 would prevent us from establishing a new mechanism for reviewing the future level for the cap by maintaining the current link with average earnings. Amendment 38 is a more technical amendment that appears to attempt to direct future parliamentary procedures for introducing regulations for the cap. I will come to that amendment later. The cap was introduced in 2013 at the level of £26,000 a year with a lower rate of £18,200 a year for single people without children. Currently, the cap remains at that level.
The hon. Member for Islington South and Finsbury has mentioned why the Government introduced the cap, but I will remind the Committee that it was introduced because it was felt—and is felt—that it was not fair for out-of-work households to receive considerably more in benefits than many working households earn. That view is shared by many people across the country, with around 70% of the public supporting a cap. The cap is also a key part of the overall plan to reform not only the structure of welfare benefits but attitudes towards welfare benefits, and it was introduced to increase incentives to work and to promote fairness to those on benefits and those in work. At the time, as we recall, we were trying to address the bigger economic issues of the deficit.
Priti Patel
This is part of the wider welfare reforms. The Government are supporting people who are sick and ill. Depending on their health conditions, they are receiving support in welfare.
Emily Thornberry
Taking that a little further, would the Minister be prepared to accept that people on employment and support allowance, who are therefore deemed not fit to work, ought to be exempted from the benefit cap if it is her policy to support those who cannot work?
Priti Patel
The hon. Lady will be perfectly aware that people who are very ill, particularly those in the support group, are supported by the Government through many, many welfare measures. That covers a range of conditions.
Priti Patel
Actually, we have been very clear about safeguards for vulnerable people. [Interruption.] We have. Perhaps this is just a fault line between our two political parties, as the hon. Member for Islington South and Finsbury has already said, and the Opposition intend to vote against this come what may, but we made it very clear that protecting the vulnerable is one of the key principles of our welfare reforms. [Interruption.] I appreciate that Opposition Members want to comment from a sedentary position, but there seems to be a huge area of difference between our two parties. One of the key principles of our welfare reforms is that we will put in place safeguards to protect the most vulnerable. There will be a range of measures, including discretionary housing payments, but it is wrong just to assume that we are deliberately not looking after vulnerable people when we clearly are.
Emily Thornberry
To get to the nub of the matter, perhaps the Prime Minister put it as well as it could be put at Prime Minister’s questions:
“I say that a family that chooses not to work should not be better off than one that chooses to work.”—[Official Report, 16 September 2015; Vol. 599, c. 1039.]
Is that the essence of the Minister’s position?
Priti Patel
This Government and the previous coalition Government have been clear that many of our welfare reforms include the principle of fairness, to which incentivising work is absolutely crucial. However, this comes back to a number of principles relating to welfare reforms and not just the benefit cap. It is right that the Government do the right thing and seek to support people who are long-term unemployed to help them get closer to the labour market, while, at the same time, supporting those who are unable to work for a variety of conditions, and that is exactly the safety net that the welfare state provides.
Emily Thornberry
The central difficulty facing the Minister is that the vast majority of people who are affected by the benefit cap are not those in families who choose not to work. Those on jobseeker’s allowance who do not take up a reasonable offer get sanctioned already under current legislation. For that reason, I hope that, when we get to the next group and I press amendment 68—I will now call that the “David Cameron” amendment, because it encapsulates David Cameron’s position—all hon. Members will vote for it.
The Chair
Order. That intervention was too long, and if you are referring to the Prime Minister, please do so either by his title or his constituency.
Emily Thornberry
I beg to move amendment 104, in clause 7, page 8, line 36, at end insert—
“( ) Regulations under this section shall not be made in relation to persons—
(a) responsible for the care of a child aged below 2;
(b) responsible for the care of and in receipt of Carers Allowance in respect of, but not living with, a person in receipt of Disability Living Allowance, Personal Independence Payment or Attendance Allowance;
(c) in temporary accommodation following an incident or incidents of domestic violence.”
To provide that the benefit cap does not apply to benefit claimants who will find it most difficult to enter work.
The Chair
With this it will be convenient to discuss the following:
Amendment 67, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide for an exemption from the benefit cap for persons living in temporary accommodation into which they have been placed by a local authority which has found them to be in priority need (as defined in Part 7 of the House Act 1996 and the Homelessness (Priority Need for Accommodation)(England) Order 2002).”
To provide that the benefit cap will not apply to homeless families living in temporary accommodation after being assessed as having a priority need.
Amendment 68, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide for an exemption from the benefit cap for claimants of Jobseeker’s Allowance, including income-based Jobseeker’s Allowance (as defined in section 1 (4) of the Jobseekers Act 1995) where the claimant has not received a reasonable offer of a job.”
To provide that the benefit cap will not apply to job seekers who have not received a reasonable offer of employment.
Amendment 69, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide an exemption from the benefit cap for persons in receipt of —
(a) carer’s allowance (see section 70 of the Social Security Contributions and Benefits Act 1992),
(b) employment and support allowance, including income-related employment and support allowance (as defined in section 1(7) of the Welfare Reform Act 2007) (see section 1 of the Welfare Reform Act 2007),
(c) incapacity benefit (see section 30A of the Social Security Contributions and Benefits Act 1992),
(d) income support (see section 124 of the Social Security Contributions and Benefits Act 1992),
(e) severe disablement allowance (see section 68 of the Social Security, Contributions and Benefits Act 1992).”
To provide that the benefit cap may not be applied to anyone claiming Carer’s Allowance, Employment and Support Allowance, Incapacity Benefit, Income Support or Severe Disablement Allowance.
Amendment 70, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide for an exemption from the benefit cap for persons in receipt of Universal Credit who are not subject to all work-search requirements as set out in Section 22 of the Welfare Reform Act 2012.”
To provide that the benefit cap may not be applied to anyone claiming Universal Credit who is not subject to work-search requirements.
Amendment 107, in clause 7, page 9, line 5, at end insert—
“(5C) Regulations under this section must provide for an exemption from the benefit cap for persons in employment, as defined by the Office for National Statistics.”
To provide that the benefit cap will not apply to anyone who meets the definition of employment used by the Office for National Statistics, which states that “anyone doing one hour or more a week of paid work is counted in the employment figures”.
Amendment 72, in clause 7, page 9, line 11, leave out paragraphs (b), (e), (h), (i) and (l)
This amendment is consequential to amendment 69.
Emily Thornberry
Now that we have established that fairness is a red herring in the Government’s argument, I should like to save the Minister some time by following the line of argument to which I expect the Government to turn next: the equally spurious claim of delivering fiscal savings. Like other arguments that we have heard over the years, that one simply does not stand up to scrutiny. It was perfectly apparent even before the cap was introduced to anyone who cared to pay attention that the most pronounced effect was to increase the number of people falling into arrears, finding themselves unable to pay their rent and, consequently, to increase the number of people being made homeless and turning up to their local authority for help.
The previous Government made it clear that households made homeless as a result of the cap would not be held responsible for their situation. Making that commitment was the right thing to do. I look forward to hearing Ministers reiterate that assurance today.
Regardless of whether the benefit cap has played a role, local authorities remain legally obliged to rehouse families who are demonstrably homeless, through no fault of their own, who are vulnerable in some way, and who are in priority need of housing. However, given that genuinely affordable housing is in such desperately short supply both in London and throughout the country, local authorities are too often faced with no choice but to place families in temporary accommodation while they wait for a suitable permanent home to become available.
In essence, amendment 104 addresses the situation for a family who are homeless and in need, when the local authority is doing what it has to do under the law to rehouse them, when there is not sufficient social housing for them to be rehoused so they must be rehoused in the private sector, and when the private sector rents are so high as to be on the other side of the cap. If we are really talking about fairness—perhaps we are not any more—and savings, what savings are we making? Is it not right to exempt such a family?
We are not talking about whether or not someone has deliberately refused to take a job. We are talking about a homeless family whom the local authority is obliged to rehouse. In boroughs such as mine—Islington—and increasingly in neighbouring boroughs, there is no private accommodation left where those homeless families can be housed on the other side of the benefit cap. If the benefit cap is brought down further, it will make the situation worse.
A woman who came to my surgery a couple of days ago to tell me about her temporary accommodation. She was put into temporary accommodation when pregnant. It was about to be bulldozed, but it was temporary. It has not been bulldozed. The child is now 16 months old and she is in a bedsit. That is the nature of the housing crisis in inner London. The amendment is, within that context, unexplained.
Families are put into temporary accommodation largely in the private sector. It is well established that temporary accommodation is generally leased by local authorities from the private sector at a premium, which means that a considerable financial burden is placed on councils. Private landlords know that the benefit cap is coming down and that more families will need to be rehoused—the families are desperate and the council is desperate to fulfil its duty. Guess what? The rents go up. That means yet more burden on local authorities.
Neil Coyle
One reason, as my hon. Friend has said, for people potentially being unable to work or to work for significant hours is caring responsibilities. She specifically mentioned carer’s allowance. Is she aware that to qualify for carer’s allowance, people need to be providing a minimum of 35 hours of support a week to a disabled person or other loved one? That is a definition that the Department for Work and Pensions’ own advice suggests is a “substantial” level of support to another individual.
Emily Thornberry
So someone is supposed to give a substantial level of support to another person and yet also be working sufficiently to be exempted from the benefit cap. These are the sort of people who we rely on to keep our society going—frankly, most of them are likely to be women. Those people are carers for those who would otherwise be relying on the state to do it at a much greater cost. Instead recognising the role of such people, they are being penalised under draconian legislation.
Neil Coyle
If carers were to stop providing 35 hours of support or more a week, local authorities would potentially be asked to step in to provide some of that support to an individual. We already know what the Government’s agenda is for local authorities—what is has been for the past five years—but the average cost for care home placement is upwards of £600 a week. There could be a new cost to the Government of getting this policy wrong, particularly for carers.
Emily Thornberry
My hon. Friend puts it very well. If only we had a Government that listened. In fact, the most recent statistical release from the Department included, for the first time, a breakdown of capped households by benefit claimed. By far the largest proportion—49%—were claiming income support. In the vast majority of cases those are single mothers who are unable to work because childcare is neither available nor affordable. It is clear from the evidence that we heard last week that a lack of suitable childcare remains a substantial barrier to lone parents seeking work.
In Islington in my borough the cost of a part-time nursery place is £235 a week—one of the highest in the country and more than 30% higher than the London average. It is not just cost that is the problem here. The jobs that are likely to be available to many of the mothers in my constituency who want to find work are disproportionately likely to be short-notice working, often at unsociable hours—in other words, the times when it is most difficult to find childcare.
The Government’s promise of raising the number of free hours of childcare to 30 hours a week is welcome, but we have been down this road before. During oral evidence we heard concerns to the effect that the shortfall between the reimbursement rate and the actual costs would make it uneconomical for many childcare providers to continue their operations. Neera Sharma stated:
“The Pre-school Learning Alliance has said that, on average, the cost of childcare is £4.53 an hour; the Government contributes, on average, £3.88. When the childcare offer is doubled, nurseries could operate at a loss of £661 per child per year, so there are going to be quite significant issues for providers.”—[Official Report, Welfare Reform and Work Public Bill Committee, 10 September 2015; c. 22, Q32.]
Emily Thornberry
I am so sorry. How can it be consistent with what the Prime Minister said yesterday at Prime Minister’s questions? He said:
“I say that a family that chooses not to work should not be better off than one that chooses to work”?—[Official Report, 16 September 2015; Vol. 599, c. 1039.]
If that is the guiding principle behind the Bill, why is it that 85% of people affected by the cap are not in a position to work, and are recognised as such by the Minister’s very own Department? How is that right? I would really like an answer to that.
We should see this policy for what it is. It is just another form of financial penalty for people who the Government believe, in the absence of any evidence to support such a belief, are out of work through choice and not through simple misfortune. The figures suggest that in total, more than 90% of those currently affected by the benefit cap are out of work through no fault of their own. The Minister said during our debates on Tuesday:
“It is right that everyone who can work should work”.––[Official Report, Welfare Reform and Work Public Bill Committee, 15 September 2015; c. 144.]
Who would disagree with that? No one could disagree with that. That is the guiding principle behind the amendments, and for that reason I will press them.
I turn to amendment 107. I return to the point I touched on earlier about the evidence, or lack of it, to support the Government’s claim that the cap has been a successful tool in moving people into work. Let us probe Ministers’ oft-repeated claim that 41% of people have managed to remove themselves from the cap by finding employment. What the figures actually show is that 41% started making a claim for working tax credit, which is not quite the same thing, given that someone needs to be working for at least 16 hours a week to qualify. The Institute for Fiscal Studies explains:
“Some people may move into work but not work enough hours to be entitled to WTC”.
It goes on to say that others
“might start a WTC claim when they were in work all along, perhaps because claiming this entitlement is a relatively easy way of exempting oneself from the benefit cap.”
It is only “easy” for those who are already working.
What I find striking about the Government’s entire approach of arguing for the cap as a work incentive is their almost total complacency about the quality of work that people are moving into. Of those 41% of people now claiming working tax credit, it would be instructive to know how many of them are in temporary work or seasonal jobs, and how many have moved into work for short periods for that reason, only to fall back under the scope of the cap when work is no longer available.
It would help if we had figures on the number of people who have moved into work but who still have to claim benefits in order to pay for basic necessities, so that we know what the so-called “success” of the benefit cap is. A fact that is all too often left out of any discussion is that the majority of people claiming benefits are in work.
I certainly agree with the Government that it is not at all desirable for the state to be subsidising employers who fail to pay their staff a decent wage. The fault, however, is surely with employers and not the workers themselves. Ministers seem to have become accustomed to thinking that work is an end in itself, regardless of pay, conditions, security or anything else that matters to real people, whether they are in work or looking for it. The Chancellor of the Exchequer and the Secretary of State wrote an extraordinary article in The Sunday Times, in which they stated:
“Helping those confined to the margins of our society by giving them the security and dignity of a job is a one nation government at work”.
Whether work offers security and dignity, however, very much depends on the job in question.
That brings me to amendment 107, which would provide for an exemption from the benefit cap for anyone who meets the definition of employment used by the Office for National Statistics. We have already heard, in relation to the reporting requirements for full employment in clause 1, that there are different ways of defining employment and that many of those bear little resemblance to the traditional concept of a nine-to-five job on a permanent contract, which would pay a family wage. Details of the exact measure of employment that is to be used for the purposes of the reporting requirement have yet to be fleshed out, but Ministers have given no indication that they will depart from the ONS definition, which suits their purposes in inflating the overall numbers.
If, however, someone can be employed under the Bill by working 20 minutes every fortnight and the idea of the benefit cap is to put people into work, why can people not do that? There is a contradiction: on the one hand we talk about 16 hours, but on the other hand we talk about any amount of work being sufficient.
It is strange, therefore, that the benefit cap, which is now more than ever being spun as a means to move people off benefits and into work, should set the bar so high in terms of what “work” means that anyone working for fewer hours than 16 hours a week will fail to meet the standard. Ministers seem perfectly happy with the ONS definition when it suits their purposes, but not when it does not. What is sauce for the goose should be sauce for the gander. If we are to believe Ministers when they say that the benefit cap is intended to move people into work, and that work is an end in itself, it ought not to be so loosely defined. It is wholly inconsistent for Ministers to oppose amendment 107. They simply cannot have it both ways, so I will press amendment 107 to a vote.
I will now move on to amendment 104. We have discussed a number of possible exemptions from the cap, which Ministers have opposed despite the fact that they seem entirely reasonable to me and to so many of the organisations that have sent briefings to the Committee. Amendment 104 takes a different approach, narrowing the number of exemptions to the groups that might be classed as the most acutely vulnerable and perhaps the least able to change their circumstances. The amendment would disapply the cap to single parents responsible for children under the age of two, people with full-time caring responsibilities and victims of domestic violence living in temporary accommodation.
Even in the event that Ministers reject the broader categories of exemption that I have suggested in the earlier amendments, surely amendment 104 will be difficult to vote against. Should people with young children who are living in temporary accommodation after fleeing domestic violence be affected by the cap? In a way, I suppose, the amendment is a form of challenge to the humanity of the Government Members. If welfare reform is meant to protect the most vulnerable, surely the Conservative party should be able to vote for the amendment.
My final point is about amendment 68, the David Cameron amendment—
Emily Thornberry
I am sorry. The Prime Minister amendment encapsulates the argument made by the Prime Minister. If the Bill is really about ensuring that families who have chosen not to work are affected by the benefit cap, surely we could encapsulate that quite simply and exempt jobseekers claiming jobseeker’s allowance who have not had a reasonable offer of employment. In other words, if someone on jobseeker’s allowance is offered a job—if they are fit to work, as defined by the DWP—and they do not accept it, there will be penalties in any event. We are talking only about that group of families, and the Prime Minister seemed only to be talking about that group of families at Prime Minister’s questions, so why do we not confine the Bill simply to that group? Why can we not encapsulate the purpose of the Bill in relation to the benefit cap as suggested in amendment 68—the David Cameron amendment?
Priti Patel
I will have to come back to the hon. Gentleman on that point.
The exemptions best support the cap’s aims of increasing incentives to work and promoting fairness while ensuring that the vulnerable remain supported. The welfare reforms that we have discussed thus far in Committee are about transforming life chances and promoting fairness and opportunity.
Amendment 104 would introduce three new exemptions from the benefit cap. The explanatory statement that accompanied the amendment explains that its purpose is:
“To provide that the benefit cap does not apply to benefit claimants who will find it most difficult to enter work.”
The first exemption that the amendment would introduce is for persons
“responsible for the care of a child aged below 2”.
A blanket description that couples with children are those who find it most difficult to enter work is inappropriate. The vast majority of capped households who have found work include parents who have managed to balance their caring responsibilities with work, as millions of working households already do. By going out to work, parents are helping to improve their children’s life chances and are showing them the importance of a strong work ethic, reinforcing the principle that work is the best way out of poverty.
Turning to lone parents with young children, at whom I think this amendment is most likely addressed, we believe that work is the best route out of poverty for households. Children can have their life chances and opportunities damaged by living in households in which no one has worked for years and in which no one considers work as an option. Lone parents need only enter work at 16 hours a week to become eligible for working tax credits and so become exempt from the cap.
We already provide support to parents for the cost of childcare, which we are extending to help working parents further. The 30 hours of free childcare is just one measure, but there are many others, not least tax-free childcare, which will provide a great deal of support, in particular for families on universal credit, who will be able to claim back 70% of childcare costs. On funding for childcare rates, a Government funding review is currently under way, led by the Department for Education, so more is taking place in this area. Parents who receive help with childcare costs through working tax credits are exempt from the cap and childcare costs paid through UC are excluded from the cap. Since the cap was introduced in April 2013, nearly 8,500 lone parents have moved into work and started claiming working tax credits. In 2014, around 1.25 million lone parents were in employment in the UK.
The second exemption that the amendment would introduce is for people in receipt of carer’s allowance in respect of someone who is in receipt of disability living allowance, personal independence payment or attendance allowance with whom they are not living. We all acknowledge the important role that carers provide, but we do not accept that carers are unable to work. Although seeking work is not a condition for receiving carer’s allowance, many carers are nevertheless able to and combine work with caring responsibilities. Figures from February this year show that around 760,000 working-age claimants were receiving carer’s allowance. Of those, around 75,000 reported that they were doing work at some point while making their claim. It would therefore be inappropriate to introduce an exemption specifically on the grounds that somebody is in receipt of carer’s allowance. However, the vast majority—94%—of households in receipt of carer’s allowance who have a benefit income above the cap level are exempt from the cap, mainly because the person they care for is in the same household and is in receipt of an exempting disability-related benefit.
Emily Thornberry
If so few households are affected and if the justification is fairness—although I am not sure about that—why not allow the exemption? If it would save money, because it relates to so little money, why not exempt such people?
Priti Patel
I will carry on. I may pick up some of the points made later.
The final part of the amendment would exempt those living in temporary accommodation following an incident of domestic abuse. The effects of domestic abuse are awful and traumatic; no one could ever argue to the contrary. That is why we have introduced a series of measures to support those who have been subject to domestic abuse, including easements for prescribed periods of time from any requirements to look for or take work. We have special provisions within the cap to help those who have had to flee their homes and seek sanctuary in refuges.
Before the cap was implemented, we amended the regulations so that any housing support paid for people living in what was then termed exempt accommodation should be excluded from the cap. When concerns were raised that the definition of exempt accommodation was too narrow, we amended regulations to ensure that housing support paid to those living in a refuge, for example, as a consequence of domestic abuse would also be covered by the exclusion.
Amendment 67 would require an exemption for those living in temporary accommodation. We do not agree that the best way to help people in temporary accommodation is merely to exempt them from the benefit cap. We believe that the best way is to support people to overcome the barriers and issues that they might face, including the barriers to work. We cannot see why we would want to exclude all households in temporary accommodation from the positive effects of support to get back to work.
Emily Thornberry
Surely the best and in fact the only way of helping people out of temporary accommodation is to build more housing.
Priti Patel
I support the hon. Lady’s comment. That is exactly what the Government’s policy is, and we are doing so.
Although we recognise that rents in temporary accommodation can be high, local authorities have a duty under homelessness legislation to provide suitable, affordable accommodation where the applicant is deemed to be in priority need. Before the cap was implemented, we amended regulations so that any housing support paid for people living in what was termed exempt accommodation should be excluded from the cap. When concerns were raised that the definition was too narrow, we further amended regulations to ensure that housing support paid to those living in refuges would be covered by the exclusion.
Amendment 69 would exempt those in receipt of carer’s allowance. I have already set out the reasons why we do not think the exemption would be appropriate. The amendment also exempts those on employment and support allowance. As I have said, we have already exempted those on ESA who are in receipt of the support component, recognising that they have particular health conditions and are far removed from the labour market and less likely to be able to increase their income.
As discussed—I think that all Members have commented—the benefit cap is a work incentive. Those in the work-related activity group of employment and support allowance have been assessed and are being supported into work, which we believe is right. More recently, we have announced a funding package of up to £100 million a year in the Budget to provide the right incentives and support to enable those with limited capability but some potential to prepare for work. That relates to those within the work-related activity component of ESA.
We are currently in the latter stages of re-assessing recipients of severe disablement allowance and incapacity benefit who are below pension age to see whether they are entitled to employment support allowance and qualify for the work-related activity group or the support group. Those reforms will ensure that such individuals are supported in their engagement with the labour market, or given whatever support they need. More than 1.4 million of those on incapacity benefits have started the reassessment process since it began, and almost 750,000 of them are being supported to prepare or look for work as a result of the ESA process.
Amendment 72 is consequential on amendment 69, to which I have just spoken. The amendment would omit carer’s allowance, employment and support allowance, incapacity benefit, income support and severe disablement allowance from the list of welfare benefits. I have set out why we do not think that that is appropriate; I return to the principles of the benefit cap.
Amendment 70 relates to exempting those in receipt of universal credit without any work requirements. Before addressing this amendment, I remind Committee members that there is an exemption from the cap for those who are entitled to the universal credit limited capability for work or work-related activity element whose health conditions mean that they are further from the labour market and less able to increase their income through work.
Emily Thornberry
I do not think there is anything else I need to say. I am very disappointed by some of the responses. I will not press amendment 107, but I shall press amendment 104 to a vote.
Question put, That the amendment be made.
Emily Thornberry
I would like to talk to amendment 76, but in doing so perhaps offer a critique of the SNP’s amendments. The important thing is that there is a difference between the amendments that have been tabled so far, which would exclude groups, so that if someone is in receipt of a particular benefit, the group would be excluded, but if a particular benefit is to be excluded from the benefit cap, the cap could still hit that group in any event. Let me explain a little better. Take, for example, the bereavement allowance to be excluded from the benefit cap. It would not mean excluding that group because if someone who was bereaved had other benefits that took them on to the other side of the benefit cap, they would still be affected by the cap, despite the bereavement allowance. For my party, it is important to look at the groups as opposed to the benefits. I will throw that into relief in relation to housing benefit.
The housing benefit amendment has been tabled as a probing amendment, but in truth the reason that the cap is even considered is because of the high cost of housing. So if any benefit was to be excluded from the benefit cap, it would be housing. It is housing that causes the so-called trouble. Some people have large families. The Government want to push the benefit gap down even further, but the issue is not even about large families. It can be families that need only two or three bedrooms in some areas, and there will not be a single area in the country that will not be affected by the benefit cap, because of the amount of money that housing costs. So if any benefit were to be excluded, it should be housing benefit, because that is the essence of the costs. If we look at fairness, it really is not the fault of someone who has a larger family who needs to live in a two, three or four-bedroom flat, or someone who lives in a more expensive area. Housing costs could be taken out of the equation when it comes to benefit caps.
The Government are always saying it is not fair for someone on benefits to be receiving more than the average earnings, but of course it is not they who get the money; it is their landlords. It is because the landlords want to be able to accept more money from the state that the rents continue to go up. That is what the amendment highlights. In the end, we are talking about there not being enough affordable housing in this country, either in London or across the country. The benefit caps that have been introduced so far have adversely affected London and large families within London, but the new benefit cap suggested in the Bill of £23,000 or £21,000 will affect families throughout the entire country.
I refer the Committee to the evidence that was given to us by Shelter, I believe. Shelter said that under the new cap a family with four children would be unable to find a home with the number of bedrooms that they need anywhere in England. That is important—nowhere in England without hitting the benefit cap.
The size of the shortfall is also remarkable. The cheapest place to rent the four-bedroom home that the family would need is Bradford, where a home at the lower end of the market costs £123 a week. Even there, a family would face a shortfall of £81 a week. The problem is not only a London one. The way in which the Government are going about introducing the benefit cap and pushing it down and down will affect families throughout the country, including in the constituencies of Conservative Members.
The issue is important. Some people might have been tempted to think that there are Londoners who believe that they should continue to live in London, even though house prices are going up, and that frankly we should leave it to the Russian oligarchs to live in central London and the rest of us ought to move somewhere else. The truth, however, is that there will be nowhere else in the country where a family can live without being affected by the benefit cap—unless we take housing costs out of the cap.
If we take housing costs out and look at the needs of families, we might find that there would not be the same regional variation as we have at the moment. The reason for the variation is the varying housing costs, so the amendment probes that issue. Perhaps the Government will consider the kernel of truth, that the poorest people in this country are being penalised by the Bill and the benefit cap for something that is not their fault; frankly, it is the fault of generations of politicians, Labour and Conservative, who have not built enough affordable housing. It is not the fault of those in my constituency with a family of two living in private rented accommodation that prices are so high. It is not the fault of the family of four in Bradford that house prices will be on the other side of the cap. It is our fault for not ensuring sufficient affordable housing.
I know that the Minister will get up and tell us that the Government are building lots of affordable housing—well get on and build it! Once they have built it, they will not need to have the benefit cap, because people will be able to live on reasonable amounts of money, which will save the country a great deal of money. The time was when Governments used to spend, for every £10 spent on building homes, £1 on benefits that would assist people to live. Now the whole thing is tipped on to its head, so that for every £1 we spend on building homes, we spend £10 on housing benefit.
The answer could be, “Let’s just cut housing benefit! Let’s not let people have enough money to pay rent.” We could do it that way, but that would be draconian, inhumane, cruel and wrong. The other way to do it would be to spend the money on building affordable homes—truly large amounts of affordable homes. We need radical solutions for such a profound problem. The solution is not to turn on the poorest and most marginalised people in this country; the solution is to build more affordable homes and to go for it. If the Government were to do that, they would have the complete support of the Opposition. That is true affordable homes, not the nonsense affordable homes dreamt up for the Greater London Authority by the Mayor of London, with 80% market rent somehow or other an affordable home. We want real affordable homes that cost a reasonable amount of money and that people can genuinely afford to live in.
That in essence is the solution to the problem and what is highlighted in the amendment. I ask the Minister to address herself to the issue raised by the amendment.
Priti Patel
I will not run through the various exemptions called for in the amendments. I will come on to housing shortly, because I will basically rerun some of the points that have been made previously.
The amendments would omit various welfare benefits from those that are currently within the benefit cap. We believe that the current exemptions are the best ones to support our aims of increasing incentives to work and fairness, and to support the most vulnerable.
In our last sitting, we spoke about support for carers and about carers balancing the needs of their care and work responsibilities. I appreciate that the hon. Lady has called for a wide range of amendments to omit child benefit, child tax credit and guardian’s allowance from the benefit cap.
Emily Thornberry
I have a question for the Minister and I would be grateful if she were able to answer it, perhaps with the assistance of her officials. I believe she said that many carers combine work with caring responsibilities, but people can claim carer’s allowance only if their caring responsibilities take up more than 35 hours a week. To work enough hours to exempt themselves from the cap, they would need effectively to work 51 hours a week. If that is right, does she accept that that would be an inappropriate amount of time for people to be working in order to be exempted from the cap?
Priti Patel
I put that in the context of the some of the other benefits within the household, which would therefore exempt the carer from the benefit cap.
The hon. Lady calls for a range of exemptions. She will not be surprised—I made the point on the previous group of amendments—that we believe that, to incentivise work, the cap does not apply to those households in receipt of working tax credits. We outlined a range of exemptions in the last sitting when we discussed the previous group of amendments.
The hon. Lady touched on the only area on which there is a degree of consensus on the Bill and in the debate: the role of housing. She spoke to amendment 76, which would remove housing benefit from the benefit cap. I understand it to mean not that households in receipt of housing benefit would be exempt from the cap, but that their housing benefit payment would be disregarded from the calculation of the total household benefits to which they are subject. The removal of housing benefit from the benefits that are subject to the cap would simply undermine the principle of the cap.
Priti Patel
As the hon. Lady and other hon. Members know, housing benefit is usually the single largest benefit, therefore the cap would no longer have the intended effect of limiting high levels of total benefits.
In addition, the amendment does not refer to housing costs in relation to universal credit. It would therefore mean different treatment for households in receipt of housing benefit and those on universal credit, which is surely not the intention. The inclusion of housing benefit in the cap is specific to the principles of the cap. Obviously the Government support it through discretionary housing payments, for example. As we discussed earlier, there is now more funding for those payments. As I said, we have announced additional funding that will continue, with £800 million being made available for discretionary housing payments over the next five years. Given that, it would not be right to exclude housing benefit from the cap.
The hon. Lady was right—I am going to make the point that more is being done on building homes. That is not for the Bill, because it is not for the Department for Work and Pensions, but building homes is about the Government working with local authorities to focus on doing more in that space. There is no doubt that we all want more affordable housing. The Government have so far committed £38 billion of both public and private investment to help to ensure that 275,000 new affordable homes are built between now and 2020.
The hon. Lady pointed out that we need to get on with it. That is exactly what we are committed to do. I ask local authorities to work with us to achieve that common aim. That is fundamental to supporting people not just in respect of housing need, but in respect of giving them a quality of life. That is right and proper. It is also fundamental to dealing with the issues of rent, housing costs in general and homes standards, which have also been aired in the debate.
Because we have touched on many of the exemptions in debates on previous clauses, I will not rehearse them. Given that we have a vast number of exemptions from the benefit cap, it would not be appropriate or right to extend them to the exemptions proposed in this group of amendments, so I urge hon. Members not to press them.
Emily Thornberry
I beg to move amendment 12, in clause 8, page 10, line 22, leave out “in each Parliament” and insert “a year”.
To require the Secretary of State to review the level of the benefit cap every year to determine whether it is appropriate to change the level of the cap.
The Chair
With this it will be convenient to discuss new clause 1—Report on impact of benefit cap reductions—
“(1) The Secretary of State must publish and lay before Parliament before the end of the financial year ending with 31 March 2017 a report on the impact of the benefit cap reductions introduced by this Bill.
(2) The report must include an assessment of the impact on each of the measures of child poverty defined in the Child Poverty Act 2010.”
This new clause requires the Secretary of State to review impact of lower benefit cap after 12 months.
Emily Thornberry
Amendment 12 would leave out the provision that the benefit cap should be reviewed in each Parliament and instead state that it should be reviewed each year. The reason for that is obvious. We hear from the Government all the time about how well they are doing, how many people are getting into work and how well the economy is doing. If all of that is true, the level of inflation may well go up. For that reason, it seems entirely reasonable, responsible and fair to review the benefit cap every year. There has been a tradition of benefits being reviewed every year. The amendment would be consistent with what has been settled practice in terms of fairness in the past. If the benefit cap really is about fairness, surely there should be no problem with ensuring that the benefit cap is reviewed each year instead of in each Parliament.
That brings me to new clause 1, which states that the Secretary of State must report to Parliament by 31 March 2017 on the impact of the benefit cap reductions introduced in the Bill and that the report must include an assessment of the impact on each measure of child poverty, as defined by the Child Poverty Act 2010. That takes us back to the mantra that Ministers will hear throughout the parliamentary debate on this Bill, which is evidence, evidence, evidence. Not prejudice, not Daily Mail headlines but evidence.
If the alleged high-minded principles behind the Bill are a true ambition, the Government will not be frightened of an assessment to ensure that they are not being cruel, or randomly dishing out unfairness, but are truly pursuing the policies they claim to be trying to promote. If they are truly confident that their ambitions will be fulfilled as a result of the Bill, they will not run away from new clause 1 but embrace it. As they come up to the next general election, they will want to say, “Thanks to the Labour party, we have been able to measure the real success of our Bill. We have not been unfair on anyone. Everyone is back in work. Look at the way in which the streets of London flow with milk and honey.” Indeed, we will support them, and applaud them, if what they say they want to do really happens, but we will not know what has happened, other than from the weeping people coming into our surgeries, if we do not measure it properly.
The Government have resources to measure this properly, so why run away? Why not go ahead and measure the so-called success that will result from the Bill? If the Government are not prepared to measure it, those watching the debate will know that the reason they do not want to measure it is because they know what is really going to happen: the poor are going to get poorer. The Government are picking on the poorest in order to pay off the deficit, which is unfair.
Priti Patel
This group contains two proposals. As we have heard, amendment 12 would introduce a requirement for the Secretary of State to review the level of the benefit cap annually, and new clause 1 would require the Secretary of State to publish and lay before Parliament a report on the impact of the changes.
On amendment 12, the Bill requires the Secretary of State to review the level of the cap at least once in every Parliament, but it also provides him with powers to review the benefit cap at any other time he considers appropriate. That provides the most effective means of ensuring that the cap stays at the appropriate level while providing the stability that households on benefits require. The cap’s current provisions require the level to be reviewed annually, but that is specifically to review the relationship with average earnings, on which the level of the current cap is based. To date, there has been no need to change the level of the cap following those annual reviews.
Earlier, we touched on some of the evidence showing that households affected by the cap are 41% more likely to go into work. Our provisions already include powers allowing the Secretary of State, if appropriate, to review the cap at any time in the Parliament, which means that the Government will not be constrained from reviewing the cap, particularly in light of any significant economic events. The clause, as drafted, will therefore provide a sufficient safeguard, and the level of the cap remains at the appropriate level.
On new clause 1, during the passage of the Welfare Reform Act 2012, the Government committed to a full evaluation of the benefit cap to explore its effectiveness. The then Minister with responsibility for employment announced that DWP would publish a review of the cap after its first year of operation. The review was published in December 2014 and explored the progress from policy development to implementation and delivery. The report evaluated the effectiveness of three specific aims that underpinned the introduction of the benefit cap. These were to focus on work incentives, introduce greater fairness and, of course, to make the system more affordable by encouraging positive support for individuals who needed it, particularly in getting back to work.
The cap has been in place for about two years, and evidence shows that it has been successful. We intend to build on that success. Since its introduction, more than 16,000 capped households have moved into work. As I mentioned, capped households are more likely to go into work than those that are uncapped. This has been achieved without a legislative requirement for reports and evaluations. We do not feel that it is necessary to commit in legislation to delivering any future evaluations. We have not decided on approaches yet but, as before, an evaluation of the new cap would be most appropriate after implementation, when we can see the cap’s full effect and the behavioural changes it causes, and they can be reviewed accordingly.
The Government’s record on providing a review of the cap should be recognised. Also, a number of independently commissioned pieces of research and analysis, peer reviewed by a range of organisations, has been published. That, with the introduction of the life chances measures, means that, contrary to what is suggested in the amendment, we do not need legislation to report on the impact of the benefit cap. I urge the hon. Member for Islington South and Finsbury to withdraw the amendment.
The Chair
We will deal with new clause 1 later.
Question put, That the amendment be made.
Neil Coyle
I rise to speak to amendment 94, which is in my name; the consequential amendment 13, which focuses on the Social Security Advisory Committee and its reports; amendment 14, on the effect on discretionary housing payments; and amendment 105 on reports by the Children’s Commissioners. We support the amendments.
Amendment 94 would require the Secretary of State to assess the impact on disabled people and their carers when considering the cap threshold. This comes back to the earlier discussion about the fault-line between the parties on this issue. Our party believes that disabled people and carers should be protected, and that, as a minimum, the Government should be monitoring the impact of their policies on these significantly disadvantaged groups. Our policy comes from an evidence base, and it reflects the fact that, over the past few years, whether deliberately or by accident, the Government have penalised disabled people and carers.
I should like to give a personal example relating to the amendment before going into detail. My mum has schizophrenia. She is fortunate now, in that she is over state retirement age and so exempt, and has adequate treatment that sustains her mental health. Had this Government’s policy been in place before she was adequately treated, before adequate schizophrenia treatment was available, she might have been forced into homelessness or into being sectioned, at considerable additional cost to the state. She would have been trying to manage the side effects of poor medication, which at times caused vomiting so severe it contributed to loss of teeth. As that was happening, if this policy had been in place, she would also have been losing income and being made even more vulnerable. That is why the Government’s proposals are so dangerous and difficult for so many disabled people and their carers and families.
In the last five years, the Government have been either unaware of or uncaring about the cumulative effects of their policies on disabled people and carers. A massive grassroots movement of disabled people in particular and carers as well has put forward the WOW petition asking the Government to assess the impact of their policies on disabled people and carers. The petition secured 104,818 supporters and resulted in a debate in the House. During the debate, a previous Minister undertook to carry out several actions, including asking officials in the Department for Work and Pensions to work closely with Dr Simon Duffy of the Centre for Welfare Reform to make the independent cumulative impact assessment carried out by him as accurate as possible.
Unfortunately, since that debate, the Government have not worked with Dr Duffy to ensure that. The amendment would help address some of the frustration that disabled people and carers feel about the impact of Government policy and about not being taken more seriously. The Government’s Social Security Advisory Committee concluded that the Government could and should provide an analysis of the cumulative impact of their welfare reforms on disabled people, and the Equality and Human Rights Commission and the National Institute of Economic and Social Research recommended that Her Majesty’s Treasury
“incorporates breakdowns of the cumulative impact of tax and social security measures according to protected characteristics into its distributional analysis as a matter of course.”
The amendment would support the Government in meeting that requirement. I should add that the WOW petition is up and running again in light of the Government’s inaction, despite previous commitments, to ensure that policies are better assessed for their impact on disabled people and carers.
During the last Parliament, we saw the rise of the Hardest Hit campaign, a combination of disability, carer and advice and welfare organisations working to ensure that the Government focus better on the impact of their policies. The campaign remains active and concerned about the impact of continued Government policy and reductions in support to disabled people and carers. The Government have continued to claim that disabled people are protected. That is untrue, and increasingly untrue. Of particular concern is the fact that, from October this year, the number of people on disability living allowance being pushed through personal independence payments assessments will increase. As the Government’s objective is to remove support from about 600,000 disabled people, it will mean that those disabled people will no longer be exempt from the benefit cap, adding additional weight to the importance of the amendment.
Witnesses to the Committee, including Parkinson’s UK, have suggested monitoring the impact of further changes and have said it would be welcome. I am grateful to the Disability Benefits Consortium for supporting my contribution to this debate. The DBC consists of about 60 different disability advice and welfare organisations active on and expert in these issues. It has no ulterior motive other than ensuring that the welfare system works adequately to support disabled people and carers.
The Disability Benefits Consortium has said in briefings to the Committee:
“A third of disabled people live below the poverty line, around 3.7 million people. Furthermore, DWP figures published in June show the number of disabled people living in poverty has increased by 2% over the last year equating to a further 300,000 disabled people living in poverty.”
The benefit cap, combined with freezes and cuts to ESA for those in the work-related activity group, will reduce disabled people’s incomes significantly. It needs measuring. There are additional costs to Government of getting the policy wrong, and that also needs measuring. The impact on disabled people and carers is not only a human one. The Government must be responsible and consider that. Has a policy had the desired effect? For example, has it had consequences for local authority spending, NHS spending or mental health spending?
In addition, while those in receipt of the support component of employment and support allowance are exempt from the cap, those in the WRAG are not, which we discussed earlier today. That means that about half a million disabled people are affected, and I hope that Members are clear about who is affected and who we are talking about in these groups.
The statistics on these people are from February this year and they are the Department’s own. I will not list them all, Chair; I know that we are tight for time. But 3,420 of these people have infectious and parasitic diseases. That is who we are talking about. In addition, 770 people have diseases of the blood and blood-forming organs, and certain diseases involving the immune mechanism; 244,000 have mental and behavioural disorders, which include learning disabilities; 26,000 have diseases of the nervous system; 2,990 have diseases of the eye and adnexa, which I am sure everyone knows about; 8,110 have diseases of the respiratory system; 2,930 have diseases of the skin and subcutaneous system; and 22,000 have injury, poisoning and certain other consequences or external causes. They are the disabled people who this Government policy would affect directly; they are not protected under the Government’s current policy. All that the amendment seeks to do is to ensure that the impact on those people is at least measured and monitored.
The current impact assessment suggests that a new lower-tiered cap has been designed to strengthen work incentives for those on benefits. The Government have yet to provide evidence to back up the claim that cutting the benefits that disabled people receive will incentivise them to work.
The Minister suggested in Tuesday’s discussions that there would be additional measures. We would welcome knowing what additional measures are being considered to reassure disabled people, their organisations and their carers that the Government are focusing on their concerns.
The majority of disabled people want to work, but they face substantial barriers, including attitudinal barriers from employers and wider society. We discussed the figures the other day; 48% of working-age disabled people are in work, but only about 10% of those with learning disabilities and 5% of those with significant mental health conditions, such as schizophrenia, are in work.
I will just give a quick example. The impact assessment provides no detail about the impact of lowering the cap on disabled people who are not in receipt of DLA or PIP. That point was made by the National AIDS Trust and HIV Scotland in their briefing for this specific amendment. Amendment 94 would address this issue, and I hope that it will be welcomed by all members of the Committee.
I come to my final comments, Chair. Scope has provided analysis of the estimated higher costs of living with a disability. Baroness Campbell of Surbiton has made the point that the additional costs that she incurs are for things such as coffee, to make sure that her carers and support workers can have a cup of coffee, as well as things such as loo roll and carpet, and costs to cover wear and tear as people sit down on her sofa. Those are additional costs that disabled people have, which go well beyond the perception of disability costs as the cost of a wheelchair or medication.
I hope that hon. Members will have the Scope research in their minds when they consider the high costs of disabled people, as well as the higher incidence of poverty that already exists among disabled people, and the incidence of low income among disabled people. Low income is a direct result of not being able to work full-time hours.
In ensuring that these measures do not disadvantage disabled people further, it would be worth the Government at least describing how they believe that they are meeting their responsibilities under the Equality Act not to disadvantage these disabled people further. A failure to monitor or impact-assess this policy would be an acknowledgement that the Government know that disabled people and their carers will be made explicitly worse off by their measures.
Emily Thornberry
If one looks at clause 8 in the round, it is about the review of the benefit cap. It says:
“The Secretary of State must at least once in each Parliament review the sums specified”
and:
“The Secretary of State may, at any other time the Secretary of State considers appropriate, review the sums specified…to determine whether it is appropriate to increase or decrease any one or more of those sums.”
In deciding when to review, at some random time that he thinks appropriate, the Secretary of State can consider “other matters” he sees as “relevant”. That seems to give him absolute carte blanche to do what he likes with the benefit cap, whenever he likes and for whatever reason he likes. Does the Minister wish to give us some idea of what other matters the Secretary of State might consider relevant, what he might think appropriate or when he might decide to review the benefit cap?
Priti Patel
The clause introduces new provisions for how the Secretary of State should review the level of the cap in future and what factors he needs to take into account when undertaking such a review. The Bill prescribes that, when reviewing the level of the benefit cap, the Secretary of State must take into account the national economic situation. It also allows him to take into account any other matter he might consider relevant. The amendments would introduce a number of additional specific factors that the Secretary of State would have to take into account when undertaking that review.
On amendment 94, in the course of the debate we touched on specific aspects of support for disabled people and carers. We are mindful of the impacts of policies on those vulnerable groups, and I outlined some of the support in particular that the welfare system continues to provide to protect the poorest and most vulnerable members of society. I remind the Committee that there are exemptions from the cap for households where there is a claimant in receipt of DLA, PIP, attendance allowance or the support component of ESA. I will follow up some of the points made by the hon. Member for Bermondsey and Old Southwark and drop him a line.
Amendment 73 would require the Secretary of State, when reviewing the level of the benefit cap, to take into account the national economic situation and add average earnings, regional variations and the cost of housing. It would also omit the provision that allows him to take into account any other matters that he considers relevant. I think it is fair to say that the proposed powers drawn up are broad, but we do not think it is possible to stipulate in advance the specific economic factors and developments most suitable to set the appropriate level for the cap at the time the review is undertaken.
Emily Thornberry
The Minister admits that the powers are broad and, therefore, presumably she will concede that it is difficult for us to hold the Government to account for what they are doing. In those circumstances, it is difficult for us to be clear. For anyone who may wish to scrutinise this legislation in future, when we as Members of Parliament were scrutinising this legislation, we were unaware and not told in which circumstances the Secretary of State would change the benefit cap. I want to spell that out, because people will read the transcript and we want to be completely clear in case this matter is to go before the courts.
Priti Patel
The hon. Lady specifically mentions the benefit cap in relation to going to the courts. The Supreme Court has confirmed that the benefit cap is lawful. With regard to work required on reporting the benefit cap, the cap has been reviewed annually since its introduction as per current legislation, and those reviews found that no change was required. Obviously, a review of the national economic situation must be thorough, and regular annual reviews could result in the cap being unduly affected by a range of short-term economic fluctuations. At worst, that could lead to significant variations and cap yo-yoing, which would provide no stability for those in receipt of benefits and those who rely on that income in particular. There will be occasions when economic developments mean that a review of the cap must be undertaken more than once in a Parliament. We have seen considerable changes in recent years through changes to the economy as a whole.
Comments were made about the Social Security Advisory Committee, the long-standing and respected body that has provided an independent voice for many years and many detailed and informed reports on matters across the broad spectrum of welfare and social security. The Government value many of its opinions and the work that it undertakes. The committee already has well-established engagement with a full range of stakeholders with interests in this area on welfare reforms and it ensures that any advice that it provides encompasses a broad range of views. Obviously, we place a great deal of value on the work of the committee, but we do not necessarily think that it is right that in undertaking a review of the level of the cap, the Secretary of State has a statutory requirement to take account of the report of the committee, or that it is appropriate for the Secretary of State to be bound to consult an individual body when reviewing the cap.
Emily Thornberry
I beg to move amendment 15, in clause 9, page 11, line 32, leave out from “relevant sums” to end of subsection and insert
“are to be reviewed by the Secretary of State having given regard to—
(a) the rate of inflation, and
(b) the national economic situation.”
To subject the four year freeze in the social security payments set out in paragraph 1 of Schedule 1 to an annual review of the levels by the Secretary of State. This review will consider both the rate of inflation and the national economic situation.
The Chair
With this it will be convenient to discuss the following:
Amendment 16, in clause 9, page 11, line 35, leave out from “child benefit” to end of subsection and insert
“are to be reviewed by the Secretary of State having given regard to—
(a) the rate of inflation, and
(b) the national economic situation.”
To subject the four year freeze in child benefit to an annual review of the levels by the Secretary of State. This review will consider both the rate of inflation and the national economic situation.
Amendment 17, in clause 10, page 12, line 21, leave out from “relevant amounts” to end of subsection and insert
“are to be reviewed by the Secretary of State having given regard to—
(a) the rate of inflation, and
(b) the national economic situation.”
To subject the four year freeze in the tax credits set out in paragraph 2 of Schedule 1 to an annual review of the levels by the Secretary of State. This review will consider both the rate of inflation and the national economic situation.
New clause 2—Local Housing Allowance—
‘(1) For each of the tax years ending with 5 April 2017, 5 April 2018, 5 April 2019 and 5 April 2020, the amount paid to claimants of the Local Housing Allowance is be reviewed by the Secretary of State.
(2) In reviewing these sums the Secretary of State shall have regard to—
(a) the rate of inflation,
(b) the national economic situation, and
(c) the levels of market rent.”
This new clause requires the Secretary of State to review the level of the Local Housing Allowance annually, in light of the rate of inflation, levels of market rent and the national economic situation.
Amendment 39, in clause 9, page 11, line 32, leave out from “relevant sums” to end of subsection and insert
“is to increase in line with the consumer price index.”
This amendment would see relevant benefits increasing in line with the consumer price index.
Amendment 40, in clause 9, page 11, line 35, leave out from “child benefit” to end of subsection and insert
“are to increase in line with the consumer price index.”
This amendment would see child benefit increasing in line with the consumer price index.
Amendment 41, in clause 9, page 11, line 37, leave out subsections (3) and (4)
This amendment is consequential to the amendments 39 and 40.
Amendment 42, in clause 10, page 12, line 21, leave out from “relevant amounts” to end of subsection and insert
“is to increase in line with the consumer price index.”
This amendment would see tax credits increasing in line with the consumer price index.
Amendment 95, in clause 9, page 11, line 33, at end insert—
‘(1a) Notwithstanding subsection (1), for each of the tax years ending with 5 April 2017, 5 April 2018, 5 April 2019 and 5 April 2020, the amount of each of the relevant sum claimable by persons with a disability, as defined by the Equality Act 2000, is to increase in line with inflation.”
This amendment exempts disabled people from the four year benefits freeze.
Amendment 96, in clause 10, page 12, line 22, at end insert—
‘(1a) Notwithstanding subsection (1), for each of the tax years ending with 5 April 2017, 5 April 2018, 5 April 2019 and 5 April 2020, the amount of each of the relevant amounts claimable by persons with a disability, as defined by the Equality Act 2000, is to increase in line with inflation.”
This amendment exempts disabled people from the four year tax credits freeze.
Clause stand part.
Clause 10 stand part.
Emily Thornberry
The principle that we have such difficulties with in relation to clauses 9 and 10 can be encapsulated quite simply. For years, benefits have gone in attendance with need. The idea is that the welfare state should be a safety net, that it should be there for those who need it and that we should look first at need. I am not saying that we should have limitless amounts of benefits, but is important that those who are the most vulnerable are assisted.
Much has been said about the popularity of the measures, but if we look at public opinion, in a recent poll 88% of people upheld this British value: it is important to have a benefits system to provide a safety net to anyone who needs it. The clauses not only freeze social security benefits for a year; they do it for four years and they do it from now. We do not know what the state of our economy will be like in four years’ time. We do not know to what extent there may be inflation and who will be affected in what way. I will be brief because I am going to rely on the good sense of the Joseph Rowntree Foundation, which stated:
“While this will make a significant contribution to progress with eliminating the deficit (assuming inflation returns to the target level), it is likely to have a serious detrimental impact upon working-age households reliant upon state support to top-up their income”.
It is serious, and the Joseph Rowntree Foundation recommends:
“Retention of the annual review of benefit levels to allow the Chancellor to link strong economic performance with the maintenance of living standards at the bottom end of the income spectrum”.
If the Government really mean that no one should be left behind and that we are all in it together, we should all be in it together. If the economy picks up, why would those on benefits be four years behind? It is a simple point. They talk about fairness. Here is an opportunity to do something about it. The Chancellor should continue to have a flexible approach to uprating benefits to offset increased costs, particularly for essential goods and services. There is great concern about that.
The argument is that the welfare spend has got out of control and that we need to get back to a more sustainable type of welfare spending. Again, I rely on the Child Poverty Action Group’s excellent briefing, which points out what we all know: that in 1980 working-age welfare spending accounted for 8% of national spending, whereas now it is 13%. However, analysis by the Office for Budget Responsibility questions whether spending on social security is in fact increasing at an unsustainable rate. As the evidence shows, spending on welfare as a percentage of GDP remained reasonably steady until 2008. The OBR finds that the largest contribution to the increase since them was the uprating of state pensions, rather than working-age welfare spending.
In case anybody did not know this, the poor are getting poorer. With this freezing of benefits for four years, they will continue to get poorer. We need to go into this with our eyes open. Government Members should not support the clause without allowing an annual review, so that we can see what is fair. Are we prepared to leave the poorest and most marginalised behind, while the rest of the economy does or does not do well? We are against these two clauses.
Neil Coyle
Amendment 95 and 96 are in my name. In the interests of time, I will be as brief as possible. I hope there will be an opportunity to come back to these issues on Report if my questions are not answered. Fundamentally, this comes back to the same issue. Disabled people are directly affected by this measure—in particular, by ESA. This is about the full component, not just the £30 support group component. The full ESA payment needs to be taken into consideration, and we have concerns about those who are directly affected. The real question is about the Conservative manifesto commitment. Page 28 of the manifesto states:
“We will freeze working age benefits for two years from April 2016, with exemptions for disability and pensioner benefits”.
The amendments would help to ensure that that manifesto commitment is delivered. I hope to come back to this issue on Report if it is not dealt with sooner.
Damian Hinds
The hon. Gentleman is absolutely right that people in receipt of a number of benefits will have contributed to the system. It remains the case that we fund benefits out of current contributions. It remains the case that we have a budget deficit of 5% of national income. It remains the case that we need to get that down to start paying down the national debt. In order to do that, we need to find £12 billion of welfare savings.
The freeze has been extended to four years due to the current low-inflationary environment to ensure that it makes a significant contribution to the £12 billion reduction that I just mentioned. When originally announced as a two-year freeze, it was forecast to save £3 billion and to lead to a real-terms reduction in benefit rates of 4%. Due to the current environment, it would now save less than £1 billion. The Government have therefore extended the freeze to ensure that it generates at least the same level of savings, and more, than announced last autumn.
Emily Thornberry
Just to be clear, the Minister is not attempting to put forward a moral case. It is simply about saving money. It is about saving money from the poorest.
Damian Hinds
I am not quite sure how the hon. Lady managed to infer what she just said from what I just said. I was explaining—
Damian Hinds
I will be delighted to. I was explaining why what was originally a two-year freeze has been extended to a four-year freeze because of the current low-inflationary environment and the need to make the savings that form a substantial part of the £12 billion that we have been discussing.
While the Government have a clear mandate for the reforms, it is imperative that we protect the most vulnerable. We are protecting pensioners, with pension credit, the pension additions in other benefits, and the basic state pensions—they are all excluded from the freeze. We are also exempting benefits relating to the additional costs of disability, such as attendance allowance, disability living allowance, and personal independence payments. We have exempted the support group component of ESA, the limited capability for work and work-related activity component of universal credit, as well as additions and premiums in JSA, ESA and tax credits related to disability. Statutory payments, including statutory maternity, paternity and adoption pay, statutory shared parental pay and statutory sick pay are also all exempt. Those exemptions ensure that the most vulnerable in society are protected from the benefit freeze.
Let me speak directly for a moment to amendments 95 and 96, which seek to exempt disabled people from the freeze by ensuring that any of the relevant sums of working-age benefits and tax credits are increased in line with inflation, if they are claimed by a person who is disabled. In bringing forward our policy to freeze benefits and tax credits, we have been extremely mindful of the protections that we believe it is right to put in place to support the most vulnerable.
We are exempting all the benefits relating to additional costs of disability, as I just listed. Similarly, we are protecting the disability premiums and additions in working-age benefits, tax credits and pension-age benefits. The support group component in employment and support allowance and the limited capability for work and work-related activity element of universal credit are also protected. Those elements are paid to those with the most severe work-limiting health conditions in recognition of the fact that they are less likely to be able to increase their income by moving into work and may have additional needs as a result. Those are vital protections alongside the very acute need to make savings.
Emily Thornberry
We will not press the amendment to a vote this afternoon, but this matter will be revisited on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That clauses 9 and 10 stand part of the Bill, and that the schedule be the schedule to the Bill.
Welfare Reform and Work Bill (Fourth sitting)
Emily Thornberry Excerpts(9 years, 2 months ago)
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Hannah Bardell
I thank the right hon. Gentleman for his remarks. We have no problem with supporting the definition in the Opposition’s amendment, which supports the ambitious target for the UK of achieving the highest rate of employment in the G7—Oxfam made that comment just this month.
Amendment 106 requires the report on full employment to report on the quality of jobs—as the right hon. Gentleman said, we heard a lot about that in evidence to the Committee, both oral and written—and their distribution, and to give a breakdown of statistics for employees in those jobs. New clause 11 would put a duty on the Secretary of State to define job quality within six months of carrying out a public consultation on it—a public consultation is very important.
The intention behind our two measures is to ensure the quality of jobs created, so that they amount to decent work. According to Oxfam, the quality of work is central to alleviating poverty, particularly through the concept of decent work:
“‘Decent work’ includes fair pay, job security, mental health, recognition of overtime, work-life balance, job satisfaction and autonomy, safety, achievable work, skills development, and effective management.”
My apologies; that is not Oxfam but Unison—I would not want to misquote anyone.
It is deeply troubling that, increasingly, available jobs are not always reliable and therefore are not a long-lasting route out of poverty. As I mentioned earlier, the number and rise of zero-hours contracts, low-paid jobs with insufficient working hours, insecure contracts and often poor job progression can mean many working people are still trapped in poverty. Disabled people are more likely to be unemployed or in low-paid positions regardless of their qualifications. It is therefore vital that we measure where jobs are going and their quality to ensure we can identify gaps in employment and work to create quality full employment for everyone, to echo recent comments by the Joseph Rowntree Foundation.
It is of further concern to us that in a 2014 report, “Pay progression: Understanding the Barriers for the Lowest Paid”, the Chartered Institute of Personnel and Development reported that, as many who have contributed to our evidence sessions have said, women in particular are estimated to comprise up to 64% of low-paid workers. The measures we have tabled would help us bring forward decent work measures to identify where the Government should really direct their policy efforts to achieve full employment, deliver equality and challenge barriers at work, in order to lift the poorest out of poverty.
Unison has called for
“a commitment from the Government to encourage employers to provide decent jobs, wages and work practices”,
and has stated that that should be measured. The amendment and new clause would bring forward that vision and ensure that the Government defined their duty within six months of the Bill’s enactment. We feel strongly that having a commission to look at this issue will give us the opportunity to provide a definition. Without one, it will be hard to measure job quality. We will press the measures to a Division.
Emily Thornberry (Islington South and Finsbury) (Lab)
I found the evidence on this clause very interesting. It speaks to our modern times. In the ’70s, everyone knew what full employment was. It meant five-day-a-week of nine-to-five jobs in which it was clear what someone’s role was and they had security, with a pension and a family wage. We have moved a very long way from that.
We heard earlier from the chief executive of the Child Poverty Action Group that it is important to have child poverty figures that make sense in order to keep Government honest. I am concerned about the honesty behind the clause—what it really says and what it is really doing about making matters clear to the public. In 2015, we as a society want full employment, but what we see that as is not the vision of the 1940s or 1950s. It is a different type of full employment.
The reality is that a large number of people work flexibly. Many of them work flexibly out of choice, because it helps them to balance their work and family life, but many more work flexibly out of the choice of their employer. The increasing and unfair demand for people—particularly the young—to work on zero-hours contracts undermines our sense of security, of wellbeing and of having a place. Part of being in employment is that we feel we have a role. If someone is employed on a zero-hours contract, they are a beggar; they are there at the sufferance of their employer. They could be called to work any hours or no hours, and yet they have been bought.
Someone in “full employment” could be working a ridiculous amount. If the Government are talking about full employment as being people in jobs, and those jobs are employment as defined by the Office for National Statistics, I imagine that someone could be working 20 hours or 20 minutes a month and still be in employment. The Minister would then happily get up and tell the country that there was full employment, when many people were working hardly any hours, did not know how many hours they would work, were working with great insecurity and were bouncing along at the bottom of the employment ladder. They might work for a few hours in an ice cream van if the sun shines. If it rains, they will not work for two weeks. They will not work in the winter, and yet in some respects they would be in full employment, at least for part of it. That is not what people imagine as full employment.
I do not know who thought of this, but let us say it was George Osborne, just to pick a name off the top of my head. Let us say he was wanting to—I don’t know—manipulate things, make political points and try to fool the public. I may be wrong, and I will listen with interest to what the Minister says about this, but it might be part of the red Tories agenda to appeal to the working class. They want to have someone getting up and saying, “Do you know what, guys? We’re in full employment.”
The fact is that people will be sitting at home, looking at this and knowing that their friends and family are not in what they believe to be full employment. They are not in employment that brings home a wage with which they can support themselves, let alone their families. We know that because of the rise of zero-hours contracts. We know from friends and family that there are people in employment who certainly do not earn enough money to live. We also know that because of the rise in tax credits. The Government are dealing with the cost of tax credits not by ensuring that people no longer need to rely on them because they are in what I define as full employment, but by starving the third child. That does not seem to be entirely straightforward.
For the Bill to begin with the Secretary of State getting up and telling us all that people are in full employment when we know that they are not at all seems to lay the grounds of what the Bill is really about—it is about political posturing. It is a heartless and nasty piece of legislation. It undermines the very support of the poorest and most vulnerable, and it begins by having a laugh: it says that they are going to be in full employment, when we know they will not be.
Neil Coyle
I appreciate my hon. Friend’s hyperbole about starving the third child. There were some frowns from Government Members. Does she share my concern that there are 700 people in Southwark who are in work and using local food banks to feed their families? For those who are frowning, having those kinds of figures put in front of them will hopefully demonstrate the case and help them to understand why there is concern about the adequate measurement of income and full employment.
Emily Thornberry
My hon. Friend makes an important point. It should be written on the shaving mirror or beauty mirror of every Tory MP, so that they see it every morning, that two thirds of children who live in poverty have parents who are in work. Those parents are in full employment, and yet they are in poverty. That brings us to all sorts of ideas about what the hyperbole behind the Bill is. We are told that the best way out of poverty is to get into work, but then we ask: what work? Is 20 minutes or a couple of hours a week that someone might get working in an ice cream van work that will take their family out of poverty? No, it is not.
We all know the truth: at a time when employment is fractured, insecure and unfair, for us to be able to talk properly through statistics to the public, we should be talking about whether people in work are getting the hours they want and working sufficiently so that they do not have to depend on benefits. When I heard some of the questions asked of some witnesses in the evidence sessions, I was surprised to hear that some members of the Committee did not understand that there are people in full-time work living in central London who have to rely on benefits to make ends meet and that someone on an average wage would not be able to afford to live in central London without getting help with their rent from tax credits. Those people are not in full employment in my definition. My definition is, “You work, and you can support yourself and your family.” Anything else, frankly, is a lie.
When we talk about full employment, we should also talk about those who are inactive, as Marcus Mason from the British Chambers of Commerce rightly said. Of course, some may have been on benefits and had their lives made so difficult that either they are currently being sanctioned or, because they kept being sanctioned, they have given up and are living on their wits, their relatives or food banks. However, according to the Government, they are not unemployed because they are not claiming jobseeker’s allowance any more. That may well be because they are also suffering from mental illness and find it very difficult to cope with their situation.
People like that come into my surgery and I know that other Members see them, too. That is the reality of life. For a welfare Bill such as this to begin with a complacent statement that the Minister will get up and tell us about the fantastic employment rates we have in this country strikes me as the first of many cruel cuts made by the Government in the Bill.
Priti Patel
I take the completely opposite view to the hon. Lady. Achieving full employment is a bold ambition, which I think all right hon. and hon. Members would support, and, quite frankly, it should be a great aspiration for our nation.
It is right that everyone who can work should work and it is worth touching on the fact that many of the welfare reforms not just in this Bill but in the previous Parliament have been put in place to support people to get closer to the labour market, into work and, in particular, to sustain long-term employment. It is right that everyone who can work should work and, through measures such as universal credit, we are ensuring that work always pays.
It is a mission of this one nation Government not just to help working people to achieve security and have a long and fulfilling career, but to support and assist them in getting closer to the labour market. That is exactly what the Department for Work and Pensions is doing through many of our employment programmes. If we look at the number of vacancies in the labour market, which stands at more than 700,000, and the fact that employment has been increasing—full-time employment is up since 2010—and youth unemployment has been going down, we see that more and more people are in work and sustained employment. That should be welcomed.
Emily Thornberry
Of course, to avoid the benefit cap, people have to work 16 hours a week. As I understand it, there is an incentive, therefore, for people to get into work for 16 hours a week. Might that give us an inkling about how the Government define full employment? To work less than that meant that someone was not fully employed, so there was a need for a benefit cap to give them the incentive to work 16 hours. Does that help with the definition of full employment?
Priti Patel
With regards to the benefit cap, I remind hon. Members about the fundamental principle behind why it was brought in: there was to be a maximum level to the amount of out-of-work benefit that the Government would pay to households. The cap is a simple matter of fairness to families who make difficult choices every day about going out to work, taking up employment, where they live and how they will support themselves.
It is exactly right that that principle applies to households in receipt of benefits so that there is a strong incentive to take up sustained work and reduce long-term welfare dependency. That is absolutely our focus through universal credit, and progress towards full employment means that the UK needs to be the best place in the world to create a job—[Interruption.]
Priti Patel
The report, which, as clause 1 outlines, must be produced annually, is to illustrate progress towards full employment across the UK. It demonstrates the Government’s clear aspirations and ambition to achieve the highest level of employment in the G7.
Priti Patel
I am going to carry on where I left off.
There are many ways to support full employment and sustain people in employment. I touched on our work across Government. The Department for Work and Pensions has a big network of 700 Jobcentre Plus offices and work coaches who work with claimants to prepare them to look for work.
Priti Patel
If the hon. Lady is patient and lets me make my remarks, I will give way to her. Producing an annual report illustrating progress towards full employment across the UK demonstrates the Government’s clear intention and commitment to building a strong economy, working with businesses and ensuring that the labour market has opportunities for all, regardless of geography and where in the United Kingdom someone lives.
We will use the first annual report to set out the conceptual framework for full employment and the measures that will be used to monitor progress against that aim. We believe that the best route to full employment is through extending the opportunity to work, supporting people so that they are able to work and supporting them in accessing the labour market. I will give way and then I will come back to some points I made earlier.
Emily Thornberry
I am most terribly grateful to the Minister. Might she be able to assist us with an important point? There is a phrase that she has used many times, and many other Ministers use it too, but I have never really quite understood it and I wonder what the Government mean by it. What do the Government mean by “work”? Do they mean 20 minutes a week? Does that mean that someone works? The Minister also talks about sustained employment. Again, I would be grateful if she could give us a definition of that. I do not mind if she does not answer immediately if she needs some further guidance but I would like an answer.
Kate Green
I beg to move amendment 2, in clause 1, page 1, line 6, at end insert—
“(1A) In this report the Secretary of State must also set out the progress that has been made toward halving the disability employment gap.”
To require the report on progress towards full employment to also report on progress towards the Government’s stated aim to halve the disability employment gap.
The amendment is in my name and in that of my right hon. Friend the Member for East Ham. In it, we make the case for a requirement to report on disability employment. I believe all hon. and right hon. Members share our concern about the substantial gap in employment rate between disabled and non-disabled people. Despite efforts over many years and some progress, the gap still stands at an unacceptable 30%. That has to be a worry for everybody.
It is, however, quite unclear from the Bill how Ministers intend to narrow the disability employment gap, how doing so will contribute to the overall full employment target that we have discussed, and what timescale they have in mind for reducing that gap. We warmly welcome the ambition of, as I understand it, halving the disability employment gap, but our amendment is designed to explore the fact that that is an ambitious target, unsupported by either targets or plans.
Not only does the employment gap between disabled people and the rest of the working age population stand at an alarmingly high 30%—only around 48% of disabled people are in work—but different groups within that very low level of employment experience different employment outcomes. The employment rate for people with learning disabilities, for example, is a shockingly low 8%. For people with autism, I believe it is around 15%, and for people with mental health difficulties it is relatively high. Around one in four people in the workplace will experience a mental health problem at some point in their working life, but despite the prevalence of mental health problems, employers remain suspicious, and they are often reluctant to employ people with mental health problems. As I often say, however, in reality they probably already do, but they just do not know it. We think the Government’s aim of halving the disability employment gap is ambitious, but we think it is right. We support that aim, and we want to discuss with the Minister this afternoon the steps she can take to ensure that it is achieved.
Emily Thornberry
I have been listening with great interest to what my hon. Friend has been saying, but I might have missed something. When did the Government make that promise to halve unemployment among people with disabilities?
Kate Green
I cannot recall exactly, but perhaps the Minister will be able to enlighten us. She may even wish to intervene on me to do so. I believe that that aim was announced very recently. My impression is that that has happened since the general election, and possibly over the summer. Perhaps her officials will be able to advise her if she, like me, cannot recall the exact date.
We agree that it is important to have that ambition for the level of employment among disabled people. It is important for our economy. We are massively wasting the talents and contribution of many disabled people. In written evidence from Leonard Cheshire, the Committee was informed that the achievement of the Government’s ambition could make an immense contribution to the economy of between £13 billion and £68 billion a year. That, by any measure, is a substantial difference. Of course, it would also make a tremendous difference to disabled individuals, many of whom would love to be working but cannot obtain the work they would like. For a whole range of reasons, they experience significant barriers to labour market participation. It is, of course, absolutely right that we should work systematically through dismantling those barriers. In my opinion, disabled people should have the right to work. They should have the right to good work, and to the dignity of good work, which I think all of us in the House value. I commend Ministers on their ambition, but we will want to test them on the substance that sits behind it.
As I said, many disabled people who would like to work are not working, although they certainly have no lack of ambition to work. Indeed, their ambition to work is substantially higher than among non-disabled people who are not working. For example, among those with qualifications at level 3, 14% of disabled people who are not working would like to be working, compared with 6% of non-disabled people. That shows in just one set of statistics—many more could be pulled out—that disabled people are keen to work where that can be made possible.
However, we have many significant concerns about how the Government are approaching the delivery and achievement of their ambition. We have concerns that Government policies are playing out in a way that is not helping at all. For example, the Work programme has failed to deliver specialist employment support that meets the particular circumstances and needs of disabled people. Today it delivers employment outcomes—jobs, in other words—for only about one in 10 of those on the Work programme and on employment and support allowance. That is not good enough. At that rate of progress, it will take us a very long time to achieve Ministers’ ambition of halving the disability employment gap.
Many disabled people are not even receiving the support that they need while on ESA to take the steps that they need to enter or to facilitate their entry into the workplace. Later in our debates, the Committee can look forward to extensive discussions of the Government’s proposals on those in the work-related activity group. We know that the Government are making a case to cut the benefits of people in that group, which my colleagues and I will firmly oppose. We do not believe that taking money away from disabled people is the way to facilitate their return to work. We also know that the Government have made a broad-brush case that it will be part of a process of offering additional employment-related support to disabled people in the WRAG, but we have heard no details at all yet about what that additional support will look like.
If we cannot debate that at this point in the Committee’s deliberations, I give notice to the Minister that we will be very keen to have a full discussion of what is intended and what is in Ministers’ minds in relation to that additional support when we debate the relevant provisions in the Bill, which are very worrying with regard to the work-related activity group. They worry me, but they are causing huge anxiety to many of the 500,000 or so people in the work-related activity group.
Kate Green
I understand, Mr Streeter; you are quite correct.
It is important that the Government come forward with a report on how things are progressing and on what measures we can have to understand the nature of the progress, but I think Parliament would also welcome a report that described the steps the Government were taking, the different labour market approaches that were being used and how each of those was more or less effective for people with different health conditions or disabled people with different impairments. I am particularly interested in any report that might be prepared that properly analyses the use of self-employment for disabled people. We heard some interesting and, I think, ambivalent views from our witnesses last week, who said that it could be good and give disabled people more freedom, autonomy and choice, but that it could also be quite isolating, which would be a concern.
We heard a great deal about employer engagement. Public reporting might be one way to enthuse employers and drive up employer engagement, because it would be very much in the public domain and visible, and that would facilitate public debate.
I hope that the Minister welcomes amendment 2. I understand that, if she feels unable to accept it in full today, she may wish to reflect on it and come back with some of her own suggestions. I am open to hearing from her, but we must all agree that a focus on this issue is really important to every single one of us, and that a proper statutory report of progress would be extremely helpful in achieving the ambition that Ministers have.
Emily Thornberry
It has come to my attention that the first time we were aware that the Conservatives said that they wanted to halve the disability employment gap was in a brochure snappily entitled “Strong Leadership. A Clear Economic Plan. A Brighter, More Secure Future.” On page 17 of this book of fiction, there is the title “Jobs for all”, and following that, it is stated:
“We will fight for equal opportunity”,
and that
“the jobless rate for this group”—
people with disabilities—
“remains too high and, as part of our objective to achieve full employment, we will aim to halve the disability employment gap: we will transform policy, practice and public attitudes, so that hundreds of thousands more disabled people who can and want to be in work find employment.”
What is interesting is the context within which the Government made that promise—that solemn vow—to the country about what they would provide. They said that they would provide full employment and, if I can repeat it for emphasis,
“as part of our objective to achieve full employment, we will aim to halve the disability employment gap”.
If the Government have decided to put into legislation the solemn vow to have full employment—clause 1 states that they are going to report to Parliament to tell us how well they are doing on that—it makes complete sense, as part of that, for them to have an obligation to tell us how they are doing with halving the disability employment gap.
That is the only point I wanted to make.
Welfare Reform and Work Bill (First sitting)
Emily Thornberry Excerpts(9 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Stephen Timms (East Ham) (Lab)
Q 1 I welcome you all to our Committee.
This is probably a question for Marcus in the first instance. The Bill requires the Government to report on progress towards full employment. How do you think full employment should be defined? What is the right definition for this purpose?
Marcus Mason: I will give that a stab. We all know that full employment can be defined in different ways, with different levels of full employment in different countries. In that sense, we very much think that full employment is a moving target. Our latest economic forecast shows unemployment reaching around 5% by 2017 and flattening out to 5% in Q2 2018. As a result, we feel that a level of unemployment of around maybe 5% to 4.5% is probably the point where, if you went below that, you might start causing inflationary pressures. So that is the sense that we get from the forecast that our chief economist does at the British Chambers of Commerce.
Emily Thornberry (Islington South and Finsbury) (Lab)
Q 2 I think the important thing, though, is to look beyond the 4% or 5% unemployment as being full employment. Isn’t it important to look at how we define employment? The Office for National Statistics says that someone on a zero-hours contract, perhaps working no more than two or three hours a week, is in employment, but that is hardly a good situation for that individual to be in. If we have a reporting requirement that focuses solely on those sorts of numbers, using that broad definition, how can we really be helping ourselves? Are we not just putting forward an incentive for people to be in insecure and low-paid jobs?
Marcus Mason: Obviously you need the headline unemployment figure, because that is most sensitive to Government policy and has the most impact on inflationary pressures. Of course, you could imagine a situation where a Secretary of State reports using that headline unemployment figure, but other figures could go into that report as well.
Emily Thornberry
Q 3 But the point is that if we are not measuring unemployment further than that—I mean, should we not be measuring things such as whether people are getting the hours they want and how many of them have to rely on in-work benefits to live? Is that not a better way of measuring real full employment, as opposed to people working in a family business and not getting paid, working just an hour a week or working on a zero-hours contract? If we want real full employment, we want people to be able to live with dignity. The measures that the Government are introducing are not the sorts of measures that the public can rely on and, perhaps, can be defined as a lie.
Hannah Bardell (Livingston) (SNP)
Can I ask a supplementary to that? Following on from Emily, as has been made clear, with the baseline for recording being only one hour in the previous week, surely it would sensible to have something in the Bill specifically about quality and decent work, and have the Government define that in the Bill. Would that be sensible?
Marcus Mason: It would be sensible to think about the large number of people who are inactive, and how you account for them and incentivise them coming into the labour market. As you know, the unemployment figure does not take those people into account, so it makes sense to supplement the unemployment figure with an employment target. Who sets that target is crucial. Is it an independent voice—an independent body of experts—or is it just the Secretary of State? Ultimately, you would probably want a set of economists, perhaps the Office for Budget Responsibility, giving an annual indication of where they think full employment is given the economic circumstances at the time, which the Secretary of State can then report against.
Emily Thornberry
Q 4 I have one more question. One aim of this Bill is to lower the level of the household benefit cap. The Government are arguing that they should cut benefits in such a way as to provide an incentive for people to go into work, but they define work as being 16 hours a week. Surely we cannot have a definition of employment from the Government in the Bill saying that it is 16 hours a week, and yet measure employment as one hour a week. Do you see the inconsistency?
Marcus Mason: Yes; to be honest, there are lots of ways that you can probably refine these figures. There are lots of people who work fewer hours than the average working week, for lots of different reasons. They do not all fall in the category of people who want to work more, although I totally accept that underemployment is a big issue and increasing numbers of people would like to work more but are underemployed. It is important to pick that up in narrative reports, but once again, we think that the headline figures should focus on the unemployment rates and probably the employment rates as well.
The Minister for Employment (Priti Patel)
Q 5 I have a question for both Marcus and Rebecca. You have already touched on the point about people who are inactive, and incentivising work, which are important factors. What are your views on how the Government can work closely with employers, businesses and other organisations to drive employment and incentivise work, particularly with those who are the furthest away from the labour market?
Rebecca Plant: I do not think it is so much the hard-to-reach people. If you break up what I describe as the talent pipeline of people going into work, it is more about the middle, or what I call the lost generation of people; they are doing okay and have okay grades, but the question is what is going to happen to them. The NEET end of the market is really quite well catered for in terms of what they can do. A-level, natural routes into university and degree apprenticeships are fantastically catered for.
The million dollar question is how you get employers closer to the wealth of talent that exists. There are so many organisations and ways for employers to do it. For example, the National Apprenticeship Service is trying to bring employers online. For employers, you have to take a step back at times, because you do not actually know what route to take. In my opinion there needs to be a simplification of how employers engage with young people. Schools sometimes block that, because they are saying, “Hold on, I have too many people trying to talk to my young people.” As for parents, oh my goodness! But sometimes they still do not know the right route, so how do you get really clear, concise messages across to the people you are trying to attract? There is still a lot of work to do on that.
Marcus Mason: When thinking about those furthest away from the jobs market, one of the constant refrains we hear from our members is that they feel that the quality of the interaction with the jobcentre is often not there. Some jobcentres operate fantastic programmes and are very good at working with businesses, but in some cases our members feel that jobcentre staff can be driven by their internal metrics, and that can lead to some businesses being bombarded with applicants who are not relevant or who perhaps do not even want that particular job. Reforming jobcentres to make them more responsive to businesses needs is something that needs to be looked at.
As for the entry-level side of the equation, youth unemployment is still three times higher than average unemployment. In a narrative report that the Secretary of State would make, that might be something to highlight—how are we closing the gap between the two? The Government can encourage businesses and schools to start working together much more proactively on that. Of course, the careers company might go some way in doing that, but ultimately there needs to be much more incentive from the school side to reach out to businesses, and to promote apprenticeships and not just vocational pathways.
Similarly, we accept that businesses can do more. In one of our recent surveys we asked what they thought was the most important thing for a young person going into work; 80% of businesses said work experience, but fewer than 50% offer it. We are quite happy to challenge business as well in this space. We accept that both on the education side and on the business side, more can be done to provide pupils with work experience and the right skills for them to progress into the workplace.
Kate Green
Q 25 Can you say something about the way in which the Government should or should not track different kinds of family structure, different kinds of family background, and whether you see this legislation as facilitating that?
Neera Sharma: We believe that the Government should look at the situation of different families. For example, we know that children in certain black and minority ethnic families are much more likely to grow up in poverty. So some of the proposals in the Bill, such as limiting tax credits to two children, will impact harshly on larger families, many of whom are likely to be BME families.
Emily Thornberry
Q 26 I represent a constituency that is part of a London borough which has the sixth highest child poverty figures in the whole country, and we have already been hit very hard by the benefit cap, with many families having to move out of Islington to outer London, so children are having to commute for many hours to go to school. Can you tell us what it means for children to be uprooted from their local communities at an early age, and how their education can be affected, either by changing schools or by having to travel 20 or 30 miles to get to school each morning? How might that impact on child poverty and their life chances?
Neera Sharma: We know that children who grow up in poor families do less well in terms of their education. Uprooting those children from the communities and the support they need, as you have said, has an impact on their life chances. We are concerned that families will have less income as a result of the cap, but we are also very concerned about the mechanisms for reviewing that cap, because the Bill allows the Government to review that cap without having to report to Parliament. It is really important that there is full scrutiny and that the Government do report to Parliament, and that they ask the Social Security Advisory Committee to undertake an annual review of the cap that is reported to Parliament before any decisions are made about increasing, or decreasing—as it probably will be—the cap.
Hannah Bardell
Q 27 Following on from that, the Child Poverty Commission warned in 2014 that there was no realistic hope of meeting the targets that were already set, and that was before the cuts that were proposed in this Bill. Is there not a grave risk that, if we remove those targets, we will have no way of understanding the real impact of the cuts, at a stage when we are not meeting the targets previously set?
Neera Sharma: Yes, I agree. I think that is why it is vital to keep the provisions of the Child Poverty Act as they are, because they do set targets for Government. They set measures, but they also enable a strategy to be produced that can look at how we can tackle child poverty and children’s life chances over a longer period.
Emily Thornberry
Q 32 On the 30 hours a week that we know the Government are going to be offering, is there a guarantee that they will pay for the 30 hours a week that people may want? In some areas, the cost of childcare is much higher—in my borough, for example, it is 30% higher than the London average. Will there be a shortfall between the amount the Government are prepared to pay for the childcare and the amount it will actually cost?
Neera Sharma: That is very likely. The Pre-school Learning Alliance has said that, on average, the cost of childcare is £4.53 an hour; the Government contributes, on average, £3.88. When the childcare offer is doubled, nurseries could operate at a loss of £661 per child per year, so there are going to be quite significant issues for providers.
Emily Thornberry
Q 33 My next question is: if you are an unskilled lone parent with a three-year-old and you are trying to find work, are you likely to be able to get work available during the day, or are you more likely to get the sort of work that might be early morning cleaning, bar work or zero-hours contracts where you are expected to be available? How does that fit in with setting up a new form of childcare?
Emma Stewart: At the moment in London, the majority—over half—of part-time jobs pay below the London living wage. A high proportion of them are precarious employment-related—zero hours or shift patterns. The challenge is multiple. There is sometimes no guarantee of regular work and regular shifts. It is very difficult to organise childcare if you are working in a supermarket and you do 9 am to 12 pm for three days and then 10 am to something else for the other two days. Retail works in such a way that shift patterns are often rotated on a monthly basis, so it is very hard to align childcare with certain sectors. We know that within health and social care, there are significant issues in relation to that type of work.
The conversation about part-time work needs to focus on permanent part-time work. There are huge wins for business to consider, in terms of how it can build efficiencies in the way that jobs are done and redesigned to facilitate better retention rates and better talent attraction rates. Even within lower-paid sectors, we know that social care is facing a huge nightmare with retention issues at the moment because women are not able to sustain the kinds of shift pattern that they are having to work and it is very, very difficult to find childcare arrangements. We also know that women in retail often share childcare with their partners and families, because it is just not possible to find the right kind of childcare.
Thirty hours a week in principle is fantastic, but when and how it is made available and how it is aligned to current employment patterns is critical. A classic example is summer holidays. We know from some recent research that about one in 10 parents leave their jobs in the summer because they cannot find childcare.
Peter Heaton-Jones
Q 34 Can I pick up on the issue of the proportion of childcare costs that are covered? It is currently about 70%, but under the new arrangements it will probably be about 85%—is that right?
Emma Stewart: Yes, that is correct.
Oral Answers to Questions
Emily Thornberry Excerpts(9 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Emily Thornberry (Islington South and Finsbury) (Lab)
1. What information his Department holds on the number of people in the work-related activity group who have long-term deteriorating health conditions.
The Minister for Employment (Priti Patel)
There is no common medical definition as to what constitutes a long-term deteriorating health condition so no data on this are held within Government. The Department will be publishing data on the number of claimants on employment and support allowance with progressive conditions on Thursday.
Emily Thornberry
The answer is, according to the Work and Pensions Committee, about 8,000.
Ministers seem to have discovered remarkable healing powers over the summer break. They believe cutting benefits will help people in the work-related group who have been assessed and deemed as being unable to work to suddenly find work. It will give them an incentive, we are told. These are people who have deteriorating conditions such as Parkinson’s and MS which medical experts have said mean they will never be able to work. Which medical condition would the Minister deem might be cured by cutting benefits by £30 a week?
Priti Patel
On the contrary, this Government believe in supporting people who are able to work to get back closer to the labour market, and the Government spend about £350 million a year on employment support for those with conditions, in particular disability. I think all Members will be pleased to know that the Budget has also provided new funding from April 2017 for additional support for claimants with limited capability for work, but importantly the principle here is that those who can work and are able to work are supported by this Government in getting closer to the labour market, and we are supporting them through our jobcentres and the initiatives we have across government.
Welfare Reform and Work Bill
Emily Thornberry Excerpts(9 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Duncan Smith
One moment, please. The cap has been a huge success in getting people back to work and reintroducing fairness to the welfare system. Capped households are more than 40% more likely to go into work after a year than similar uncapped households. It is right to keep the level of the cap under review to ensure that it continues to be fair and that it provides the right incentives for people to move into work.
Mr Duncan Smith
No, I will give way to the hon. Member for Swansea East (Carolyn Harris) in a second, but I wish to make a bit of progress.
We know that around four in 10 households outside London earn less than £20,000, and the same proportion of households in London earn less than £23,000. To ensure that the cap better reflects the circumstances of hard-working families, the Bill lowers the current cap to £20,000 for households outside Greater London, and the Greater London cap will be set at £23,000. The exemptions will continue to apply to the most vulnerable, which includes people on disability living allowance and personal independence payment, those in an employment and support allowance support group and those moving into work who are entitled to working tax credits.
Mr Duncan Smith
I will make some progress, and then I will give way, but many Members wish to speak and make their own points.
We are committed to helping people who have health difficulties and who are capable of taking steps into work to do so, which is why we are putting greater support into jobcentres. For new claims, the Bill will end the disparity between what people receive on the work-related activity component of ESA and on jobseeker’s allowance. We know that the majority of people receiving work-related activity ESA payments want to work, but the current system discourages claimants from making the transition into work. People on ESA receive £30 a week more than those with a health condition on JSA, but they receive far less support in finding work: people on JSA can expect about 11 hours of work coach time per year, whereas those on ESA typically receive only about two hours per year. The Bill will help people to achieve their ambitions. Current claimants will not be affected, and new funding will be provided for additional support to help claimants to move into work.
Emily Thornberry
I was interested to hear the Secretary of State talk about the benefits cap and fairness. Is he aware that his right hon. Friend the Member for Epsom and Ewell (Chris Grayling) also talked about fairness and the benefits cap, saying that it was only fair that people’s benefits were capped at the level of the average that someone would expect to earn by working? At that point, the cap was £26,000; now, it seems that average earnings are £23,000 and £20,000. What is the reason for the difference?
Mr Duncan Smith
I just explained, I think, that there are differences between gross and net figures. Now, we are looking at lowering the cap from the original £26,000, as the hon. Lady will know if she uses her intelligence—
Mr Duncan Smith
I do not agree. If the hon. Gentleman looks at our record over the past five years, he will see that we have increased the number of jobs and that wages are now rising much faster than inflation. The last set of jobs statistics showed that every single one of those jobs was full time. All this nonsense about them being low-earning, part-time jobs is just complete and utter fabricated idiocy.
Emily Thornberry
On a point of order, Mr Deputy Speaker. The impact assessment for the Bill has only just arrived in the Vote Office; it was not here for the beginning of the debate. Surely we ought to be given the statistics in order to have an informed debate, rather than having to rely on what comes out of the Secretary of State’s mouth.
Mr Deputy Speaker (Mr Lindsay Hoyle)
We will investigate the matter. I would have thought that the hon. Lady would give me a little more warning of her point of order, but there we are.
Stephen Timms
I am glad to be able to reassure the hon. Gentleman that he will be pleased with what happens when the House divides at 10 o’clock tonight.
The Bill seeks to restrict support provided through tax credits and universal credit to families with more than two children. We will aim to amend the Bill in Committee, for example to protect families with multiple births or those whose claim arises because of exceptional circumstances. We do not support locking in a cash freeze for four years for tax credits and benefits. We recognise that reducing the deficit will require savings on indexation, but those decisions should be made annually so that actual inflation can be taken into account. We do not support the accompanying sharp reductions in income thresholds for tax credits and the corresponding cuts to work allowances announced in the Budget, which will be legislated for outside this Bill. They will be a huge setback to work incentives. The whole point of universal credit was supposed to be to improve work incentives; now it is being hobbled even before it has properly got started.
We want progress towards full employment. We want demanding targets for apprenticeships and help for troubled families. We want a household benefit cap, and to make sure that families are always better off in work. We want support for mortgage interest and reductions in social rents that will deliver savings to the taxpayer. We want better economic opportunities, and we want social security to be fairer and more affordable.
However, children who are growing up in poverty—as we have heard, the growing majority of them are in working households—need a Government committed to improving their position. People who because of illness and disability are found by the Government’s own tests to be not fit to work, as can happen to anybody, need social security to assure them of a decent basic standard of living. Families who are doing the right thing and going out to work, often when they are already struggling with low or stagnant wages and increasing insecurity and uncertainty about their future, need a Government who are on their side, not one who will pull the rug out from under them, as the tax credits announcements in the Budget will do.
These are not just matters of morality and social justice, although they most certainly are; this is also about how we secure our future prosperity and stability, ensuring that everybody in Britain can play their part, make the most of their talents and make the most of the ambitions of all.
Emily Thornberry
On a point of order, Madam Deputy Speaker. I made a point of order earlier about when the impact assessments were published, and I understand that there is an inquiry. When we heard the Secretary of State announce that they had been published, my researcher went to the Vote Office and found that they were not available. A phone call was made to the Vote Office in Members Lobby, which said that they had just arrived. This is not right, and I would like your advice about how we can hold the Government to account when they do not publish impact assessments until after the Secretary of State has got to his feet.
Madam Deputy Speaker (Mrs Eleanor Laing)
I am grateful to the hon. Lady for her point of order. If a mistake has been made by the Vote Office, I am quite sure that Mr Speaker will be annoyed on behalf of the House.
Emily Thornberry
Further to that point of order, Madam Deputy Speaker. I seek your guidance as to whether Members can be given sufficient information even if papers are provided some 10 minutes before a debate, given the nature of the impact assessments. If we are to read them properly and understand them, surely Members, if at all possible, should be given more than a few minutes’ notice.
Madam Deputy Speaker
I simply observe that the debate started at 5.34 pm and it is now 6.36 pm, so it has been under way for an hour. I appreciate that the Chair insists that Members of Parliament should take part in the debate and concentrate on the speech being made at any particular moment, but I am sure it is not beyond the ingenuity of intelligent Members to be able to participate in the debate while also looking at the papers that are now available to them. It would have been better had the papers been here earlier, but I am quite certain that this debate will go on for another three hours and 23 minutes and, if they now have the papers, Members ought to be able to multitask to the extent of listening to the debate and reading the papers at the same time. That does not mean, if a mistake has happened, that I condone it; if there has been one, it will be thoroughly investigated.
Child Poverty
Emily Thornberry Excerpts(9 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Duncan Smith
I welcome my hon. Friend to her place and her experience of running a business and trying to get people from difficult backgrounds into work. My right hon. Friend the Education Secretary is already engaged in driving schools to help inculcate and teach character resilience and key characteristics such as understanding what it is to go to work and to get up in the morning. Under this Government, average weekly earnings have been rising faster than for a considerable time.
Emily Thornberry (Islington South and Finsbury) (Lab)
The Secretary of State has told us that he will remove the current child poverty targets and replace them with a number of measures. I am uncertain, however, about whether there will be any other targets. If not, how will we be able to measure his success? Clearly, success is needed because, as he knows, 37% of London children live in poverty and unless he is successful they will continue to be poor.
Mr Duncan Smith
We are going to be very open and publish all the elements I mentioned earlier, including those relating to educational attainment, workless households, the new life chances measures and the figures for households below average income, so the hon. Lady and anybody else will be able to see them. We are not hiding from anything. We want those HBAI figures to fall and for the educational attainment and working household figures to improve. That will all be evident and if we are not achieving that, the hon. Lady can be the first on her feet to say so.
Oral Answers to Questions
Emily Thornberry Excerpts(9 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Duncan Smith
She is nodding, but that proposal only brings the benefit cap back in line with average earnings, which are £23,000.
Through the cap, the Government have delivered fairness to the system and an incentive to go back to work, and as a direct result, more people are going back to work than ever before. We are asking people to take responsibility for their lives, just as those who are working and are not within the cap take responsibility for their lives.
Emily Thornberry (Islington South and Finsbury) (Lab)
Would the right hon. Gentleman like to meet a constituent of mine whom I met last week? She has polio, she fell down the stairs and broke her leg, and now she has to have a knee replacement. She is on benefits and has two children. The rent on their property is £400, and the benefit cap is £500, which means they are living on £100 a week. Would he like to meet them?
Mr Duncan Smith
That is absolutely true. While the Opposition moan on about bits and pieces, the reality is that this Government have got on with getting more people into work, getting more stable incomes, and increasing incomes. The cost of living, petrol prices and food prices are falling, and people’s incomes are rising. This Government’s long-term economic plan is delivering a change and an improvement to people’s lives.
Emily Thornberry (Islington South and Finsbury) (Lab)
T3. Last week Maximus told me that a disabled constituent of mine, who had been waiting more than a year for her ESA claim to be processed, could not be given a date on which that would happen, because many more people had had to wait longer. That does not exactly fill us with confidence, given that Maximus is taking over the Atos contract for assessing personal independence payment claims, or could the Minister give us some meaningful assurance that things can only get better?
The Minister for Disabled People (Mr Mark Harper)
To be fair to Maximus, it took over the contract only eight days ago. I remind the hon. Lady that the company that it took it over from, which had well-published problems, was appointed by a Government of the party of whom she is a member. We have been sorting out that problem. Maximus has been in place for eight days and will improve the position, but the hon. Lady needs to give it a fair crack of the whip. It will not sort out all the problems in a week.
Housing Benefit (Abolition of Social Sector Size Criteria)
Emily Thornberry Excerpts(9 years, 11 months ago)
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Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
When the Minister spoke at the beginning of the debate, he accused the Labour party of contriving to scare. I have to say to him that that is a gross insult to my constituents, who feel very strongly about this issue. In one ward in my constituency, Norris Green, more than 1,000 tenants are directly affected by the bedroom tax, and in total 2,500 people are affected across my constituency. With all due respect to the hon. Members for Henley (John Howell) and for South Derbyshire (Heather Wheeler), to whom I listened carefully, the scale of the challenge in a constituency such as mine is completely different from what they described in their constituencies.
An interesting piece of work has been undertaken, with those directly affected by the bedroom tax, called the Real Life Reform report. It is being constantly updated, and its latest research shows that one in eight of those involved has used a food bank at least once in the past three months. One of the most concerning findings in the Real Life Reform research is that people who are having to pay the bedroom tax are spending less on food—on average, about 10% less; the typical spend on food in September 2013 was £3.28 a day, which is hardly a massive amount of money, but the latest figure is £2.79 per day. So when we say that people are confronted with the choice of paying the bedroom tax or paying for food, we know that the research is demonstrating that for a significant number of people that means spending even less on food.
Emily Thornberry (Islington South and Finsbury) (Lab)
A constituent of mine has had a row with her daughter, who has moved out, and wants the bedroom to be left available for her daughter when she comes home. In the meantime, as she waits for her daughter to come home, she eats nothing but sandwiches, because she has to pay the bedroom tax.
Stephen Twigg
I am grateful to my hon. Friend for raising that issue, and I have encountered countless examples like that in my constituency. I am grateful to the registered social landlords in my constituency—Riverside housing, Liverpool Mutual Homes and Liverpool Housing Trust—for providing me with up-to-date information ahead of today’s debate. Let me run through some of what they have told me, some of which is different from what we heard from the Minister. I accept that the impact of this policy is different in different parts of the country, but I am speaking about what I have been told by the RSLs in my constituency.
I am told that there is a significant increase in current tenant rent arrears. Riverside housing told me that those affected by the bedroom tax are twice as likely to be in arrears with the rent as those not affected by it. LMH and LHT tell me that there has been an increase in the number of empty properties—there are more void properties. They say that that is linked mostly to prospective tenants either choosing to wait for a suitable-sized property to meet their housing need or simply being unable to afford the rent if under-occupancy is applicable, given their own family circumstances. Thirdly, housing associations are struggling to let some of their lower demand properties, as applicants are unable to make up the shortfall in rent. One of the consequences, certainly in Liverpool, is that the average re-let period has increased for those two housing associations from 27 days to 40 days—in other words, properties are left empty, so rental income declines for RSLs.
On the shift to the private sector, the experience in Liverpool is very different from the figures that the Minister shared with the House. Riverside housing tells me that of those who have moved, 30% have moved from the social rented sector as a result of the bedroom tax into the private sector. As my hon. Friends have said, that is often more expensive to the public purse because the level of housing benefit paid out in the private sector is higher, as private rents tend to be higher.
I shall conclude by saying something about discretionary housing payments. Last year, Liverpool spent £2.5 million on over 9,000 DHP awards. It spent all the money allocated by the Government, and it topped it up—there simply was not enough. The same thing is on course to happen again. The scale of need in a constituency such as mine, in a city such as Liverpool, cannot be met by the amount of money provided in DHP. We have no assurance that those housing payments are there for the long term.
A much more intelligent and straightforward policy is advocated in today’s motion, which recognises the hardship that this cruel tax has created. It recognises that it has led to an increase in household debt, and that it has hit the poorest, the most vulnerable, and disabled people. I make an appeal, even at this late stage, for Government Members to come through the Lobby with us this afternoon so that we can repeal this cruel tax.