Department for Work and Pensions

Jim Cunningham Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Alison McGovern (Wirral South) (Lab)]

I thank the Backbench Business Committee for allowing me to lead this debate on the Department for Work and Pensions public spending estimates. In so doing, I shall explain what I think are the purpose and principles of the Department; where I feel that, unfortunately, it is currently failing; and what needs to happen to change that.

Today is about public spending. Most people in the House will know that the Department for Work and Pensions is the largest spending Department of all; it spends around a quarter of the Government’s money. However, although this is an estimates day debate, we should not focus on the money. The money is interesting really only in so far as it is for something—in so far as we spend it for a purpose and we carry out that purpose in accordance with our principles.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend has probably noticed that there is nothing in the estimates to help the women born in the early 1950s who lost out on their pensions. Does she agree that there will be a round of estimates coming up shortly, and we would like to know from the Minister what the Government are going to do about that, and whether the Department will include it in its estimates to the Chancellor for a future Budget?

[Alison McGovern]

My hon. Friend makes an effective point—which I will come to—about the position of the WASPI women, born in the 1950s. They dealt with challenges in the labour market that I have never faced. They fought for the changes that my generation benefited from, and at their point of retirement the Government undermined them. I will say why I think that is contrary to the principles on which we operate the welfare state in this country and I thank him for that appropriate intervention.

Before I come to the principles, I shall address the purpose. What is the purpose of all the money spent by the UK’s biggest spending Department? What is it for? The spending has a simple principle—and Beveridge articulated it in his report, which really commenced the modern welfare state in the UK—and that is to smooth incomes. The idea is that we spend to allow people to take money from the system when their income is low and to pay in when their income is high. It is very simple. If we allow people to smooth their potential for getting wages and income over their lifetimes, on average people will be richer than if they have to cope alone in the hard times. If we allow people to use social insurance to smooth their income, we are all better off. We pay in when we can, we take out when we need; that is how it works. It has a simple purpose. How does the system do that? It operates by some simple principles. It is a huge amount of money, but our welfare state adheres to a straightforward and simple principle—the contributory principle, one that any student of Beveridge will know all about. The idea is that we all pay in when we can and we are all entitled to take out when we need.

Why have I made those points about the simple purpose and principles of the welfare state? I do not think that very much has changed since Beveridge’s time when it comes to the fundamental way that the labour market operates and the risks that people face in their lives that will make them poorer if we do not have an effective welfare state. We are still fighting the same evils that Beveridge identified, and the reasons people might not have enough to get by are fundamentally the same as they were when he wrote his report. The one that we all know about is old age, as my hon. Friend the Member for Coventry South (Mr Cunningham) has already mentioned. That is why it is right that, in the 10 years since the crash, the incomes of pensioners in our welfare state have—by and large, with one notable, shameful exception—been protected. We have seen pensions keep pace with earnings and with the general movement of our economy. When the economy is growing, pensioners’ incomes have kept pace. We know that the uprating, the increase in spend on pensioners, has protected them from the possibility of poverty. No one wants to see people who have worked hard all their lives go without and struggle with poverty in their old age.

Of course, the WASPI women are an exception to that. The principle that they have paid in and that they should be able to take out in an equitable way has been undermined for them. For the reasons that have already been mentioned, that is shameful and must be changed.

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[Alison McGovern]

The hon. and learned Lady will know that I believe in the pooling and sharing of resources across the United Kingdom. If the Scottish Government have found evidence that there is a way of aiding children that can work, I will be learning the lessons, but I firmly believe that the way the United Kingdom’s welfare state pools and shares resources is the most powerful tool that we have with which to tackle the child poverty that worries me today.

We know that the projections for child poverty over the next few years are a disgrace. We will see it rise to record highs, and if we do not make a decision and do something about it, it could affect more than 5 million children by 2024. I do not know about you, Madam Deputy Speaker, but I am not prepared to stand by and see the welfare state that this country has built over many years fail at that level. I am not prepared to see the contributory principle that says that we pay out to people in need so that they can pay in when they can, become fatally undermined by the growing wound in our country that is child poverty.

I should like all Members who are present today to ask themselves a simple question. On the basis of the purpose of the welfare state and the principles by which it operates, is the DWP’s current spending a success? We all know the answer to that question. It stares us in the face when we think about what is going on in our own constituencies, and the people whom we see in our surgeries. It stares us in the face when we walk through the doors of the House of Commons and see the destitution, and when we know that a person died on our own doorstep. It stares us in the face when we hear from the Trussell Trust that last year it handed out 1.6 million food bank parcels.

My right hon. Friend the Member for Birkenhead (Frank Field) made exactly the right point. Do we think that there were 1.6 million incidences of fecklessness? Do we think that there were 1.6 million incidences of people being so unable to deal well enough with their lives that they had to turn to food banks and beg for help? Do we think that there were 1.6 million incidences of error, or mistake, or confusion? Quite clearly not. What we have seen are 1.6 million incidences of injustice and unfairness.

[Mr Jim Cunningham]

I thank my hon. Friend for giving way yet again; she is being very generous.

One of the main contributions to poverty is poverty wages, as a result of which people have been driven to food banks. A couple of months ago, I visited a food bank in my constituency. Think about it: in a semi-rich city like Coventry, 22,000 people used a food bank last year. Does that not tell us a story?

[Alison McGovern]

My hon. Friend has made his point well. We all know that the DWP is failing because we see it every day, but why is that failure happening? I think it is pretty obvious from the DWP’s policies that it has radically misunderstood poverty. While its aims and objectives in dealing with poverty are all absolutely worthwhile and worthy, they will never get to the root cause of it.

The DWP’s policy paper sets out its next steps for action on poverty. It wants to help through the troubled families programme, and it wants to identify people with complex needs. It talks about addiction, and it talks about education. The problem is that while those are factors in people’s lives that are associated with poverty—of course lower educational achievement is a risk for people who grow up in poverty, and of course addiction is a problem in communities that have less wealth—it is possible to do very well at school and still be poor, and it is possible to be poor and not addicted to anything. It is possible for people to have excellent family relationships, to look after each other and be able to take care of their families, but still to suffer the consequences of low incomes, because the root cause of poverty is not any of those other things; it is not having enough money. What my hon. Friend the Member for Coventry South said about poverty wages was right, and that is why the DWP must change course.