Tax Credits (Working Families)

Debate between Jim Cunningham and Shabana Mahmood

Tuesday 7th July 2015 Commons Chamber

[Shabana Mahmood]

My hon. Friend raises an important point, and we will have to see whether we get any additional information on the impact on equalities ahead of the Budget, but we already know from what we saw over the last Parliament that women are disproportionately affected when the Government start to cut tax credits, as are black and minority ethnic communities.

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

Will my hon. Friend give way?

[Shabana Mahmood]

I am going to make a little more progress.

As I have said, we also know that a number of indicators suggest that the recovery is not feeding through to job security and pay growth for those who have to rely on tax credits. The number of jobs in low-paid sectors grew at twice the rate of those in non-low-paid sectors between the second quarter of 2010 and the second quarter of 2014. The number of working people paid housing benefit has risen by 400,000 since 2010, because working people are not bringing home enough money to pay the rent. The number of people earning less than the living wage has increased by 1.8 million since 2009. Now it seems that these same people—the strivers, the doers and the workers whom the Chancellor claims to want to put his arms around and hug close—are, having been hit hard over the last five years, going to bear the brunt again.

Labour believes the way into work and off welfare is by tackling the real causes of high welfare costs: the underlying drivers of low pay, high housing benefit costs and insecure working conditions. The Government’s failure to address these underlying causes in a meaningful way over the past five years has meant they have spent £25 billion more than they expected to spend on welfare in 2010. The welfare bill remains higher than expected for the same reason as the deficit remains high: we cannot disconnect what happens in household budgets from the economy overall, and that means we cannot remove tax credits for working people without creating the conditions that allow that to be done in a way that does not penalise workers on low pay.

We want a higher-wage economy where people are less reliant on tax credits to make ends meet. That is why we set out plans to raise the minimum wage to at least £8 an hour by 2019, and it is why we support the living wage and set out proposals in our manifesto to encourage and incentivise businesses to pay it. I strongly encourage the Government to steal our policy, and if they do steal it they should do so as a first step to embedding higher wages in the economy before they consider going ahead with any changes to tax credits.

The Government should also remember that the way in which the living wage is set assumes that families are already taking up their full tax credits entitlement. The Greater London Authority, which works out the London living wage, says:

“If means-tested benefits were not taken into account (that is, tax credits, housing benefits and council tax benefit) the Living Wage would be approximately £11.65 per hour.”

That is more than £2 higher than it is at the moment. The living wage already has tax credits priced in, and it will not be a living wage in the face of tax credit cuts. If the Government come forward tomorrow with proposals on the living wage, they will have to explain either that they are going to go for a much higher living wage than we have at the moment or why they are going to hit working people again and again.

The proposed tax credit cuts tomorrow have attracted widespread criticism across the political spectrum. Everyone agrees that people should be better off in work than unemployed, but removing or significantly cutting tax credits without having charted a course towards a high-skill, high-wage economy means that this Government are not tackling low pay, but are attacking the low paid. That is wrong; those people will be punished for circumstances outside their control as they try to do the right thing. Hon. Members from across the House should send a clear signal to the Government that that is the wrong approach and vote in favour of our motion.

Tax Avoidance

Debate between Jim Cunningham and Shabana Mahmood

Wednesday 11th February 2015 Commons Chamber

[Shabana Mahmood]

I am surprised the hon. Gentleman has not done his homework. If he were to read the debate on that measure in the Finance Bill Committee, he would know that concerns were raised about the effectiveness of the initial draft legislation put forward by the Government. In fact, the Government had to table 100 amendments to their own legislation at the last moment on Report before the Bill became law. At the time, the concern was that nobody even understood what the impact of those 100 amendments would be. That is why the Opposition took that view at that time. If all the issues relating to the 100 amendments were remedied, of course we would support the thrust of that measure, but that was a technical issue discussed in Committee. The hon. Gentleman does himself no favours by not knowing the detail, given how much of an interest he takes in Finance Bill Committees and how much I have enjoyed debating with him in those Committees.

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

I thank my hon. Friend for giving way. Has she thought that had the Government collected all the taxes due to them, rather than protecting their friends, they might not have needed to inflict cuts and could have paid off a good bit of the national debt?

[Shabana Mahmood]

I am grateful to my hon. Friend for his intervention, which goes to the central point: we need to make sure we are collecting all the tax that is owed. That is fundamental not just for trust in the system for our taxpayers and businesses, but for our public services that depend on that tax take.

Homelessness and Rough Sleeping

Debate between Jim Cunningham and Shabana Mahmood

Wednesday 18th December 2013 Westminster Hall

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Chope. I am grateful for the opportunity to hold a debate on a matter that is a growing concern in my constituency and that now accounts for an increasing proportion of my constituency case load. As Members look ahead to the Christmas break, this debate is a stark reminder that for a growing number of people in our country Christmas and the new year will not be a time to enjoy celebrations with their family and friends in the comfort and security of their own home.

I was going to set the debate in context by looking at some figures, which are obviously worrying and stark, but behind every homeless statistic is a story, so I thought that I would instead start with the story of one of my constituents, whom I met at my advice surgery only a couple of weeks ago. She did not want me to give her name or anything that might give her away, which I will respect, but she came to my surgery with her two daughters, one of whom is 15 years old and the other is five or six years old. Some months ago, she had left an abusive relationship with a partner who was prone to fits of rage and had been occasionally violent. She eventually found enough courage to decide to leave that relationship, but her journey into homelessness then began. She and her daughters unfortunately found themselves in temporary bed-and-breakfast accommodation, which was not fit for purpose, for much longer than the six-week limit. The media often talk of councils spending money on Premier Inns and hotels, but the bed and breakfast that this woman and her two daughters were in was frankly disgusting. It was mice-infested. There was grime everywhere. I was struck by the fact that her two daughters’ only request was for somewhere clean to live.

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

I thank my hon. Friend for giving way and for securing this debate. More and more people are now using food banks and does she agree that people are being driven to use them because of the bedroom tax and the rise in the cost of living? Previously, food banks were set up essentially for asylum seekers waiting for benefits, but ordinary members of the public, particularly in Coventry, are now becoming refugees from this Government and their policies.

[Shabana Mahmood]

My hon. Friend makes an important point and I will come on to the issue that he raises later in my speech.

My constituent and her two daughters were eventually moved from the awful bed-and-breakfast accommodation temporarily into a small, one-bedroom flat, which again unfortunately happens to be in a state of disrepair. The heating is not working properly and there was an issue with the water supply in the first few days. Again, it is not a particularly clean environment, and she of course does not have the means to do it up and make it a comfortable, warm, secure place for her daughters. She is still waiting to be placed in what she hopes will be permanent accommodation and a decent home for herself and her daughters.

As she was talking to me, she expressed how utterly terrified she was when looking ahead to Christmas and how the lack of security she felt from the lack of a permanent roof over her and her daughters’ heads was a ball of tension sitting in the pit of her stomach that affected her from morning until night. Every minute of every hour of every day, that is all she could think about. She feels that she has let her daughters down and that she might have been better off had she not left her former partner, because the temporary terror of the occasional rage was better in her view than the permanent terror that she now lives in.

I was moved by her story. The last thing that she said to me was that she and her daughters were alive, but they were not really living. That was a really powerful example of how just having a roof over one’s head can be the difference between being alive and actually living. It would mean her having a decent quality of life and a decent future that she could look forward to with her daughters. Despite my best efforts to help her, the lack of housing in the city and the waiting list are real problems, meaning that there is a limit on what I can do to assist her and her daughters.

Although that case was tragic, moving and upsetting for me to hear, it is not unique. In 2012-13, nearly 6,500 households approached Birmingham city council due to homelessness, which is an increase of 30% over three years. Some 4,000 were accepted as statutorily homeless, which is an increase of 17% over three years.

--- Later in debate ---

[Shabana Mahmood]

My hon. Friend is absolutely right. I will come on to some of the issues she raises later in my speech and I will use the example of SIFA Fireside, a charity in my constituency, to illustrate the pressures that homelessness services are under. Where are people supposed to go when services are being cut? I hope that the Minister may be able to provide some guidance on what I can say to my constituents when they ask me, because I simply do not have any answers for them.

In 2012-13, 922 households in Birmingham were in temporary accommodation, which is up 32% on the previous year, and 115 of them were in bed-and-breakfast accommodation. Just like my constituent, households have often found themselves in bed-and-breakfast accommodation that is not fit for purpose. When I was first elected in 2010, the majority of homelessness-related cases that came to me involved people who could be described as vulnerable, such as women escaping domestic violence, people with mental health problems and people with drug or drink issues. I had several cases of people who had left the care system without adequate support and had found themselves homeless. There were also people who had come out of prison and who may have been in and out of prison over many years. A chunk of my casework involved people with unregularised status in this country, such as the people living in a twilight world while waiting for a decision on their asylum case from the UK Border Agency, as was, or the Home Office. Such people had no recourse to public funds and were homeless as a result.

Now, however, although those groups remain well represented in my homelessness case load, I am seeing an increase in the number of people—families, in particular—who have been made homeless as a result of their private sector tenancy coming to an end and their being unable to find or afford anywhere else to live. Some months ago, for example, I met a couple who had a business a few years ago, but it had run into trouble as a result of the recession. They had lost it and could not keep up the payments on their home, so they lost their home as well. They managed to get other jobs, earning much less than before, but a job is a job. They are working hard and were renting in the private rented sector, but the rent went up and they could not afford the increase, so they found themselves homeless. They were struggling to find anywhere else to live that they could afford on their budget.

I am seeing many more cases of that nature. The end of a private sector tenancy now accounts for 22% of all homelessness acceptances nationally, a rate that I fear is likely to increase further and, in my constituency, the biggest rate of increase that I am seeing in my own case load. The two main, connected reasons are that the cost of renting is going up—since 2010, it has increased by more than twice as much as wages—and house building is at its lowest peacetime level since the 1920s. The failure to deal with housing supply is not only causing a huge strain now, but storing deep problems for us as a society for the future.

To go back to the case of my constituent, let us think about the effect on her two daughters. Even when I met them in my surgery, they were quite down and displaying a nervous disposition; their mum told me how their performance at school had dipped; and they were upset. As I mentioned earlier, I was struck by how their only ask was somewhere clean to live. The pressure on families and young people, children in particular, from always being desperate to move and never being able to put down roots causes those young people lasting harm, which will present itself in different ways in the future, whether in educational outcomes or in their level of confidence. Those are deep problems.

Homelessness is an isolating and deskilling experience for the people affected. It affects their health and well-being in a significant and often lasting and damaging way. It affects the educational outcomes of the children who find themselves homeless alongside their families. In addition, as my hon. Friend the Member for Nottingham South (Lilian Greenwood) said, the organisations that are there to help when people find themselves homeless are also under acute pressure.

If we look at Birmingham city council first and foremost, it is facing some of the largest cuts in local government history. Over the next few months, the council will have to make difficult choices that will permanently change the social fabric of the wonderful city of Birmingham. There are a number of pressures, but housing supply is key, and the waiting list for people who want to transfer to other council housing is large.

[Mr Jim Cunningham]

Does my hon. Friend agree that one of the problems is that sufficient social housing is not being built, which puts pressure on private landlords to put up rents, because of the laws of supply and demand? Is it not time that the Government got some sort of social housing programme under way?

[Shabana Mahmood]

My hon. Friend makes a powerful point, and I absolutely agree. The lack of housing supply is the key problem, including in Birmingham. We are simply not building enough homes of all descriptions, and social and affordable housing has certainly not kept pace with demand.

That major issue has been compounded by the introduction and imposition of the bedroom tax. In Birmingham, a little more than 5,000 city council tenants are affected. As of yesterday, a little more than 2,000 or so of them were in arrears as a result of the bedroom tax, while the city had only five bedsits and 54 one-bedroom flats available for some of them to move into—that is not only from the city register, but includes the properties available from the registered providers as well.

Those numbers speak for themselves. The question that I have, which I cannot answer—perhaps the Minister can—is about where those people affected are supposed to downsize to once the five bedsits, the 54 one-bed flats and the tiny number of other suitable properties have gone. How will Birmingham as a city cope if the 2,000 or so in rent arrears as a result of the bedroom tax find themselves homeless? The city simply does not have the resources to meet that level of need or the surge in demand that will come as a result of those people being homeless.