Welfare Reform and Work Bill

Helen Whately Excerpts

Tuesday 27th October 2015 Commons Chamber

[Owen Smith]

I completely agree. It is extraordinary for the Government to describe tax credits as “a bribe”. That is how successive Ministers, including the missing Secretary of State for Work and Pensions, have gone out of their way to describe tax credits for working people. They do not talk about protecting pensioners’ benefits as a bribe by the Conservative party to pensioners—and I would never say that; it is entirely just to protect pensioners’ benefits. By describing tax credits as a bribe, they are even seeking to demonise working people on low and middle incomes who are doing the right thing. That is entirely wrong.

[Helen Whately (Faversham and Mid Kent) (Con)]

I am listening carefully and I hear a great deal of criticism. What I have not heard from Labour Members are proposals on how welfare should be put on a more sustainable footing, on how they would like to see work pay, and on how they would reduce the deficit and the debt. Are they instead proposing cuts to public services?

[Owen Smith]

No, obviously I am not suggesting that for a minute. That is a nonsense thing to say. Let me walk through what the Government are proposing.

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[Dr Whiteford]

The hon. Lady makes a useful point. I am aware that Brent is one of the areas where the benefits cap will be particularly keenly felt, but all our big conurbations are affected, especially those where there is a large gap between the incomes of the wealthiest and people who are earning what in any other part of the country would be a decent wage, but in certain parts of the UK is not enough to live on.

I am glad to see that Labour Members have supported amendment 56, which I intend to press to a vote this evening. I shall also address some of the related amendments, 57 to 65, all of which would affect support for those distanced from the labour market, whether under employment and support allowance or universal credit. They would remove the provisions in the Bill that seek to reduce ESA for those in receipt of the work-related activity component.

I want to be absolutely clear that SNP MPs will oppose the proposals in clauses 13 and 14, which are an outright attack on people who are seriously sick, disabled, or living with debilitating long-term health problems. We are talking about people who are so seriously incapacitated that even the Government’s own stringent assessment process has deemed them unfit for work at present. Slashing support for sick people will not help them recover more quickly. In fact, money worries are one of the things that often slow down people’s recovery from serious illness. We have just heard a powerful speech delivered from the Government Benches about support for people who are terminally ill, but sometimes people recovering from illnesses that could go either way need a long time to recover, and they do not always get the support and the sympathy they need.

I am deeply concerned by the Government’s rhetoric on this matter. The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) hit a raw nerve earlier when she suggested that some of the Government’s language has been deeply inappropriate, but as recently as the summer Budget the Chancellor said it was a “perverse incentive” for ESA claimants to receive more than jobseeker’s allowance. When a person has been assessed as not currently fit for work, I fail to see how reducing their income by 30 quid a week will get them into work faster.

Today, the Disability Benefits Consortium has released figures suggesting that 70% of disabled people surveyed say that the cut will make their health worse, not better. There are other important considerations to take into account, however, particularly for those with long-term disabilities or health conditions that compromise their ability to work over long periods. A lifetime of disability or the development of a long-term condition already erodes the financial assets and resilience of too many people, including carers. About one third of disabled people already live in poverty, and sick and disabled people who are unable to work—many disabled people do work, of course, and hold down steady jobs—face many costs that might not be immediately evident. For example, they might need to heat their home throughout the day at a higher temperature than would be necessary for a more active and fit person. They also incur those costs over a long period. In contrast, the vast majority of people on jobseeker’s allowance are on it for fairly short periods. About 60% of people on JSA move off the benefit within six months, whereas almost 60% of people in the work-related activity group need that support for at least two years.

Let us face it, most of us could, with a wee bit of effort, cope with a very low income for a week or two, but for those who face an extended period out of the labour market because of their health, £73 a week is just not sustainable. People will be eating poorly and will be unable to heat their home and clothe themselves adequately on such sums. Any one of us in this Chamber could find our lives, or the lives of the people we love, transformed at any moment by serious illness or disability. Earlier this afternoon someone described this as a civilised society, but in my view to be a civilised society we need an adequate safety net. We need to remember that returning to employment immediately is just not an option for people who have been deemed not currently fit for work.

I agree entirely with the Labour Front Benchers that the language the Government have been using has vilified and stigmatised sick and disabled people. Talking about “perverse incentives” implies that they are malingering. That is not the case. I do not think that a perverse incentive involves being so ill that one cannot work. When this part of the Bill was discussed in Committee, the Government seemed to suggest that they planned to use the savings from the cuts to ESA to provide additional funding for tailored employment support for disabled people. God knows, that is badly needed, given the fairly woeful performance of parts of the Work programme, but the only figure I have seen mooted by the Government is an increase of £90 million in employment support, whereas the measures are expected to save in the region of £640 million. Based even on the most rudimentary arithmetic, that seems a fairly paltry portion of the savings. I am also not convinced that it is the best use of resources given the direct adverse impacts on low-income, disabled and sick people. I would welcome detail from the Government on that, because from where we are standing now it looks extremely thin.

New clause 9 and amendments 57 to 65 all seek to reverse the proposals to introduce further conditionality on parents and responsible carers of very young children. I am particularly concerned about the potential impact on one-parent families. There is quite a lot of evidence that many lone parents are already struggling to comply with the new conditionality regime. We have seen disproportionate numbers of lone parents sanctioned, for example, and in recent days we have seen a massive U-turn by the Government in acknowledging that the sanctions regime is not working. I met representatives of One Parent Families Scotland just over a week ago and was gobsmacked by some of the examples they highlighted of struggling parents being sanctioned in extenuating and extremely difficult circumstances.

Currently, lone parents of children under five do not actively have to seek work, but they do need to attend work-focused interviews or work-related activity. Under this group of amendments, parents will be expected to be available and ready actively to seek work from the time their youngest child starts school, but not before. These proposals, which were pushed in Committee by my hon. Friend the Member for Livingston (Hannah Bardell) and supported by the lone parent charity Gingerbread, take account of the very real logistical hurdles faced by those who are parenting single handed, and do not unnecessarily penalise those children who are already more likely to be poor as a consequence of their family circumstances. The Government’s proposals increase the risk of sanctions for parents of very young children, which can only be detrimental not just for them but for our society as a whole.

That leads me on rather neatly to new clause 12, which is in my name and which I also hope to push to a vote tonight. It would compel the Secretary of State to conduct a review of the sanctions regime. I have called for an independent review previously in the House. In the last Parliament, as we have already heard, the cross-party Work and Pensions Committee called for a full independent review. Earlier today, my hon. Friend the Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) eloquently called for that review, because it is manifestly clear that the new sanctions regime is just not working, as it is failing lots of very vulnerable and disadvantaged people. It is failing not just lone parents, but sick and disabled people, particularly those with invisible or fluctuating conditions such as mental health problems. We can see the fall-out from that in the explosion in the number of food banks in our constituencies and in almost all the communities that we serve.



Last week, we had tacit acknowledgement from the Government that the system is not working when they made their U-turn, announcing their so-called “yellow card” warning scheme pilot. They also showed a new willingness to consider reviewing those classed as at risk to include homeless people and those with mental health problems. I welcome those steps; they are an important change of tone in the Government’s approach, but we need action now and not in the new year—that part of winter when these problems will already have become a lot worse. We must recognise that these steps also fall far short of the independent root-and-branch review that is really needed.

If we are to move towards a more workable system, we need a solid evidence base and to understand better how sanctions have differential impacts on claimants who are disabled, those with protected characteristics such as gender and ethnicity, those with long-term health problems, including mental health problems, and those who are bringing up bairns single handed.

Finally, new clause 10 aims to ensure that any changes to the age of eligible claimants for housing benefit must be made by primary legislation rather than by regulation through the back door. New clause 11 offers protections for young people who cannot, for whatever reason, live with their parents. The Government said that they plan to cut housing benefit for 16 to 21-year-olds, but we on the SNP Benches do not think that that should be done through regulation. It is another example of a policy for which there is a very poor evidential base and which needs proper scrutiny. Some 60% of the young people set to be affected by this measure live in social housing. In other words, they are already likely to be deemed vulnerable by their local authority. Their age should not matter, but their need for support most certainly should. Again, this seems entirely arbitrary, and, again, we have seen none of the promised detail of support for those who are particularly vulnerable. I am forced to conclude that the Government have not thought through the implications of their slash-and-burn approach to our social security system.

Our amendments in this group seek to protect low income households, sick and disabled people and children. They offer the Government a way to mitigate the worst impacts of the legislation and help us all better to understand how we can genuinely improve our social security system. I hope that the Government will take some of that on board this evening.

[Helen Whately]

Over the past few weeks, the Welfare Reform and Work Bill Committee, of which I am a member, has had to make some difficult decisions, but they were decisions that the electorate showed in May that they wanted us to make. The decisions that we have had to make can be seen both in this Bill and in the summer Budget.

I do not support the Opposition’s proposed new clause 2, but its wording shows that they do recognise that these reforms are part of a broader and coherent plan. They are part of a package of measures to create the kind of economy and society that people want. I am not talking about a society in which people spend years on benefits and low pay but one in which work pays, people keep more of what they earn and everyone has a chance to be better off.

[Dawn Butler]

In the context of people earning more, does the hon. Lady believe that we should take into the consideration the Living Wage Foundation’s report on how much the living wage should be?

[Helen Whately]

When the announcement on the national living wage was made, the Living Wage Foundation supported it, and I hope that Labour Members can do the same.

[Jo Churchill]

This is only a minor point, but the hon. Member for Pontypridd (Owen Smith) said earlier that the minimum wage is £6.50, yet it actually went up to £6.70 on 1 October. Knowing how much we are paying people is the first step. A living wage is what we are driving towards so that people have more in their pocket—[Interruption.] At the moment the national minimum wage is £6.70, and we are driving it up to £7.20.

[Helen Whately]

I thank my hon. Friend for her intervention.

[Dawn Butler]

On a point of order, Madam Deputy Speaker. I think that the hon. Member for Bury St Edmunds (Jo Churchill) might be inadvertently trying to mislead the House in that the living wage is actually £9.15 an hour, according to the Living Wage Foundation.

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[Madam Deputy Speaker]

Order. The hon. Member for Faversham and Mid Kent (Helen Whately) is in the middle of her speech, and this is a debating point rather than a point of order, so can we please continue?

[Helen Whately]

Thank you very much, Madam Deputy Speaker.

Labour’s new clause calls for an impact assessment. There have already been several impact assessments, but the strongest one of all was that made by the thousands of people in May who voted for a Conservative Government on a manifesto that pledged to build a stronger economy with more jobs and lower taxes, to move from deficit into surplus, to protect public services such as the NHS, and to bring down the welfare bill. Labour Members oppose these reforms. They want to keep on taxing people and using that tax to subsidise below-the-breadline wages.

It is time to break that cycle, and these reforms will do that. They include the national living wage, from which 2.7 million people will receive a direct increase in income and at least 3 million more will get a knock-on benefit. Would Labour Members seek to delay that? If so, they would already be too late, because the benefits are already being felt. Wages are going up, and 200 companies have committed to increasing their lowest rates of pay in advance, including Sainsbury’s, Morrisons, Lidl, IKEA, Asda, and British Gas.

[Mr Anderson]

Does the hon. Lady have any idea what her Government plan to do about the people who have been left behind with pay increases—the 5 million or so public sector workers who have had their pay frozen or cut over the past seven or eight years? What do the Government intend to do to bring them up to the living wage, because they have not had a pay rise for more than seven years?

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[Helen Whately]

Public sector workers are getting a 1% pay rise. Over the past few years, private sector pay has, in the main, been frozen while public sector pay has continued to go up.

I will move on to the Opposition amendments on the benefits cap. The Government intend to reduce the cap to £20,000, or £23,000 in London. We should be clear that that is the net figure, so it would amount to a salary of about £25,000 before tax. We have heard some rather mixed messages from Labour Members. Their leader has said that he wants to cap benefits overall but not for individuals. I am sure that it will become clear today exactly where they stand on the amendments tabled by SNP Members, who I understand do not want any reductions in the benefits cap. Benefits should be a safety net. We need a benefits system that is sustainable and therefore affordable and fair. It cannot allow people to do better on benefits than in work. That creates the wrong incentives. It is also deeply unpopular and therefore unsustainable in its own right. Surely Opposition Members have had conversations with people who are just above the threshold that would allow them to receive most benefits. They must understand their legitimate anger when they see their taxes funding a lifestyle they cannot afford.

[Peter Dowd]

Is the hon. Lady aware that 70% of the money that the Treasury will save as a result of cuts to tax credits will come from working mums?

[Helen Whately]

It was pointed out in Committee that people who receive benefits also pay tax. I do not think we should try to parcel people up in different tribes or groups. This is about getting the right thing for the country, trying to help everybody make the most of their opportunities and making work pay.

I have certainly had difficult conversations on the doorsteps in my constituency, because the majority of employees in Faversham and Mid Kent are paid less than £20,000 per annum. At its current level the benefits cap has been working. More than 16,000 capped households have moved into work, and households subject to the cap are 41% more likely to get into work. We know that work is the best way out of poverty and I believe that everyone in this House wants to see people move out of poverty. We should make the benefits cap work harder. That is what this is about.

[Graham Stuart]

It is shocking that Opposition Members find themselves unable to talk about the jobs miracle of the past five years. We have created more jobs in this country than the rest of Europe combined. That is the dignity that people want. What we did not need was people who were on 16 hours a week and disincentivised from taking on any extra work because they would lose out if they did so. That is the mess that Labour left behind and we are disentangling it so that we can create a fairer society for everybody.

[Helen Whately]

I thank my hon. Friend for making his point so forcefully.

I will move on to the proposed amendments to clause 13. The Bill Committee heard evidence of the damage that a long period or a life on welfare can do to people. Our witnesses talked about people who had been out of work for a long time having their confidence destroyed, and about how they begin to feel that they are not capable of changing their lives. We were also told that 61% of people in the work-related activity group want to work, yet only 1% come off that benefit each month. I am sure that many of us know of people who find it difficult to get into work for all sorts of reasons, such as mental health problems, and need extra help to do so. The current system is not working well enough. Not only does clause 13 remove financial disincentives, but, critically, and hand in hand with that, the Government have committed new funding to help that group of people into work, which is a response to what they really want.

[Neil Coyle]

What message does the hon. Lady think she is sending to the 8,000 people with progressive and incurable conditions in the employment and support allowance work-related activity group when she says they should be working rather than receiving support?

[Helen Whately]

I had a conversation recently with the company that does the work assessments. We talked about the importance of people with progressive conditions not being put in groups that would lead to them being made to work if it is not possible for them to do so. We should not assume, however, that just because someone has a progressive condition they do not necessarily want to work and be helped to do so.

Although many people knock jobcentres and are critical of them, the Committee also heard about the effective work they do across the country in supporting people, particularly those faced with barriers, to get into work. I have heard of some great examples in my own constituency in Kent.

In summary, many important and valid points have been raised in Committee and in this Chamber. The amendments, however, propose to pull apart a package of considered changes to welfare, including tax changes such as increases to the personal allowance and access to free childcare, as announced in the summer Budget. That package of measures is about making work pay and helping people into work.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Will the hon. Lady give way?

[Helen Whately]

I am just summing up, so the hon. Lady will forgive me if I do not give way.

Opposition Members are not offering a credible alternative or, in fact, any alternative. Throughout the Committee stage and today’s debate we have heard many criticisms, but a complete absence of positive proposals to make the welfare system more effective at getting people off welfare and into work—this is an opportunity for Opposition Members to make such proposals—and to make the welfare system more sustainable and affordable.

Hand in hand with criticising the Bill, Opposition Members should say what they would do to make work pay and help people into work; what savings they would make to ensure the welfare bill is more sustainable; what cuts they might make to public services—for instance, whether they would cut the NHS or reduce its funding—and what taxes they would put up, other than raising the top rate, which they know does not raise extra revenue; or would they just keep on borrowing, which is increasing the debt for future generations?

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

Will the hon. Lady give way?

[Helen Whately]

I am just summing up, so I will not give way, if the hon. Lady will forgive me.

Coupled with that is the desire of Opposition Members to keep a welfare system that does not work and does not help enough people into work, when we now—with the economy growing, plenty of jobs and wages going up—have an opportunity to do something about it. We have a plan, and in the absence of a plan of their own, I encourage them to back ours.

[Mr Anderson]

This debate should be about people, not constitutional niceties or the economy. It is not about some faceless, inanimate objects, but real people at the sharp end. I have been asked by the Muscular Dystrophy Campaign, with which I work as the chair of the all-party group on muscular dystrophy, to raise the impact of these changes to support, which build on the cuts and challenges brought in by the coalition Government during the past five years. It has real concerns about the changes to ESA, JSA, housing benefit, tax credits and the new universal credit. It has asked me to raise the cases of real people, and that is what I will do.

I want to talk about Bill. After 25 years as a coalminer, he had to retire in his early 40s. He had long-term health problems and died at the age of 48. Joy, who as a young girl swam with Durham County, went into the world of work and then, in her early 20s, was struck down by a disease. She died at the age of 53, from heart failure. Joanne, a girl who was born with defects, spent a lifetime struggling to get on in her life. A lovely young woman, she died at the age of 42, cruelly, after suffering for a long time. Jacqueline died from a massive heart attack at the age of 40. Unfortunately, the hon. Member for Beverley and Holderness (Graham Stuart) has left the Chamber, but she was one of his constituents. Ian, a young boy who struggled through his early years, was just starting to develop, but died at the early age of 19 from a heart attack, beside a swimming pool while doing what he did best.

These five people had three things in common: they were all part of my family; they all suffered from myotonic muscular dystrophy; and, to a greater or lesser extent, they all looked for support from the welfare state. These people’s lives were happy if tough, but ultimately they were short-lived. Thank God that the people who went before them had the guts, nous and determination to build a welfare state that meant they could live a reasonably secure and stable life.

No doubt Conservative Members would say that my family were part of the dependency culture. Do you know what? They would be absolutely right. These members of my family were dependent on the state for help with the costs of medication and of care, and they were dependent on the state for day-to-day living costs, as well as for help with transport, mobility, housing and hospitalisation. If they were alive today, they would no doubt be in the direct sights of Conservative Members, so I will now use the language that has been used today.

This Government have demonised people who depend on the welfare state, and through a clear strategy of dog-whistle tactics, they have worked to convince many in this country that anyone on benefits is a scrounger. They have led people to believe that if anyone passes a house with closed curtains while on the way to work in the morning, they can safely assume that anyone inside is a bone-idle waster who needs to be ridiculed and demonised.