Welfare Benefit Changes

Jim Shannon Excerpts

Wednesday 14th October 2015 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, Mr Pritchard. It is interesting that those in the Chamber are from the Opposition Benches, although the Minister is present as well. I am pleased to see him and I look forward to his contribution. We are concerned about tax credits and such issues, but whatever we say is not meant against him—it is not a personal attack. I want to put that on the record.

I am in the Chamber because I am concerned about the impact of changes to welfare benefit—tax credits, specifically. Recently we have heard a lot about that in the news and the Leader of the Opposition asked about the issue during Prime Minister’s questions today. The news has been full of stories about tax credits so I want to touch on them; they are vital to people in my Northern Ireland constituency where, as of April 2015, 6,500 were in receipt of tax credits. Of that number, 4,500 were in work and 2,000 were not.

Such figures speak for themselves. The majority of people receiving tax credits are in hard-working families on low incomes, and they need some extra help to get by. What worries me, however, are—I will say this with respect to the Prime Minister’s reply today; he mentioned the increase in those who will be tax exempt—those in the £10,000 to £11,000 bracket. If tax credits are taken from them, they will feel the pain more than anyone.

Of the 4,500 in work and in receipt of tax credits in my constituency, 2,500 received both working tax credit and child tax credit, 1,300 received child tax credit alone and only 700 received working tax credit alone. As a clear result—this, too, was mentioned by the hon. Member for Swansea East (Carolyn Harris) in her introduction—the Institute for Fiscal Studies estimated that the number of children living in poverty increased over the past three years from 2.3 million to 2.5 million: 200,000 more children in poverty, which is massively worrying. The IFS also estimates that the reductions in tax credits will see that figure rise to 2.8 million. Think about that number of children in poverty for one minute—up from 2.3 million to 2.8 million, 500,000 more in child poverty.

Only last month, I spoke about the importance of eradicating child poverty; it now seems like an ever-intensifying and uphill battle, in particular for those struggling to make ends meet. We must also bear in mind that two thirds of children living in poverty in the UK are from working families, which makes the situation much harder, especially given that the cuts could reduce working family incomes by an average of £1,400 per year—someone today mentioned that the figure could be £1,800. Certainly there will be a large reduction in the income of such families.

I have said it before and I need to say it again: the financial changes will make a huge difference to everyday folk on the street. The number of people coming into my office to get food bank vouchers has increased so much in the past year and indicates the trend. I have always felt that food banks contribute greatly to our society, bringing people together to contribute and to help those less able to look after themselves. By that very nature, food banks are positive—I want to put that on the record—but the fact that so many people are using them is another case entirely.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I am told that in Birmingham the fourth largest category of people using food banks is those in work. Is it not a condemnation of Government policy that they have driven working people into the arms of charities?

[Jim Shannon]

I thank the hon. Gentleman for that. Unfortunately, that is probably the norm in my constituency as well. We are not seeing anything different anywhere else in the rest of the United Kingdom of Great Britain and Northern Ireland.

We cannot be completely in shock about the cuts, given that such benefits make up nearly 40% of welfare spending, just shy of £30 billion. To put that into perspective, that is a lot more than the £2.5 billion that the Government spend on jobseeker’s allowance. It has been estimated that the cuts will save the country £5.37 billion a year by 2019. Given the huge hole in the budget we need to try to fill, that will certainly be a start, but I must ask the Minister: are we punishing hard workers on low wages to do that? I fear that we are.

The Government and we as a nation pride ourselves on helping those who help themselves, but we must bear in mind the reality for many: although they work extremely hard, they simply do not earn enough to make ends meet. That is the sad reality and this vulnerable group in society will be hit extremely hard—unbearably hard, in many cases.

According to the Institute for Fiscal Studies, 3 million families will be £1,000 a year worse off following the new cuts. Those are the figures, so it is hard to equate that with saying, “Actually, things are going to be better,” when all those who know tell us that clearly they will not. It has been claimed that families will be £20 a week better off because of the rise in the minimum wage and the cut in income tax. However, the IFS says it is “arithmetically impossible” for families not to be hit by the cuts. The Prime Minister has already conceded that different families will be affected in different ways. Unfortunately, it seems that, for the majority, the figures will be working against them.

[Mark Durkan (Foyle) (SDLP)]

The hon. Gentleman has referred several times to the Institute for Fiscal Studies and its observations on the overall impact. It has not given a regionalised profile of the impact, but it would do so if asked. My party has proposed at the Stormont House talks for it to be asked to provide exactly those projections on the situation in Northern Ireland. Given that he is so committed to quoting the IFS, will he encourage his party leadership for once to support that request, so that, when we discuss welfare reform, we can know what we are talking about? It is not enough for him to say that he opposes welfare reform here when his party colleagues vote for it in the Assembly on the basis that “a big boy made me do it.”

--- Later in debate ---

[Jim Shannon]

I am quite happy to go into the political decisions. My party is in the Stormont House agreement and, since the hon. Gentleman brought the matter up, I will reply to that. The Stormont House agreement—[Interruption.]

[Mark Pritchard (in the Chair)]

Order. I gave some latitude to Mr Durkan, but I do not want to encourage discussion of that point any further. That is a Stormont issue rather than a Westminster one.

[Jim Shannon]

I am happy to reply to the IFS question. I have no difficulty with this. My politics are well known in this House. I am left of centre; I am interested in the person who needs help. That is my politics; that is where I come from and who I am. For me it is no bother whatever to ask the IFS to give those figures and I will make it my business to do so. I am as committed to opposing these austerity measures as the hon. Member for Foyle (Mark Durkan). However, my party has a realistic outlook and keeps that in mind.

How can I stand in this House today and not be an advocate for those in need in my own constituency? I am aware that there are those who take advantage and play the system, but I am also aware that a great number do not. It is for those people that I stand here today.

Cuts to tax credits are not the only problem that people on benefits face. There are a great many others that I have mentioned before. In my office I have a number of members of staff specifically trained to help people fill in forms for the disability living allowance, which is soon to change to the personal independence payment. I see those people every day and I am aware of their difficulties. They have benefits for a good reason. There are people who need extra financial help to pay for carers or more bedding and other resources while they cater for the day-to-day needs of their family, which they need help to do as well. It is not a matter of living it up and not working; it is a matter of just living. Sometimes it is a matter of being ill and needing help. We have a responsibility to these people and I thought that was what being part of the United Kingdom meant. That is what I thought it was to be British.

I am conscious that I need to allow time for others to speak, but in concluding I want to mention the tragic case of Michael O’Sullivan—we all know it. He killed himself after being found fit for work by the Government’s disability assessors. That case has briefly cast a welcome spotlight—if I can say that—on the utter disgrace that is the work capability assessment in relation to people with mental health problems. Despite providing reports from three doctors, including his GP, stating that he had long-term depression and agoraphobia and was unable to work, Michael O’Sullivan was taken off employment and support allowance and placed on jobseeker’s allowance. At the inquest last year, it was found that he killed himself as a direct result of that decision. According to the coroner, Mary Hassell,

“the intense anxiety which triggered his suicide was caused by his recent assessment by the Department for Work and Pensions as being fit for work and his view of the likely consequences of that”.

That cannot be allowed to happen again.

I fear that cuts that affect the people who are most in need could cause real difficulties for an even larger number of people. With that in mind, although I respect the Minister’s position, I have to put on record my honest, sincere issues and concerns with tax credits on behalf of my people in Strangford, who also share those concerns.