Welfare Cap

John McDonnell Excerpts

Wednesday 29th January 2025 Commons Chamber

[John McDonnell (Hayes and Harlington) (Ind)]

I hope that the Government will consider completely scrapping this debate in future years, because it has become farcical. The right hon. Member for Islington North (Jeremy Corbyn) will remember that the welfare cap was introduced because of the Dutch auction that was going on in this Chamber about who could be more brutal on the poor. The welfare cap was part of that period of debate, in which anyone claiming benefits was allegedly a welfare benefit scrounger who was not willing to work for a living. That was the atmosphere that was engendered in this Chamber. At that stage, to be frank, it was deeply worrying. In many ways, humanity almost left the Chamber.

The farcical nature of the debate is that, having introduced the cap, Minister after Minister would have to come back each year and report that the cap had been breached, because more expenditure had been forced on the Government as a result of the increasing levels of poverty. I suppose that it at least gives Members the opportunity to have some discretion over issues of poverty.

May I suggest to those on the Labour Front Bench that they should remove the cap, because it has become a farcical exercise? If we are to have a debate on poverty, there should be an annual report by the Labour Government on the poverty strategy that they are now developing. I believe that the commission established by the Labour party is now working, and it would be so much better if we had a report and did not have the farcical pantomime that we have today.

[Alison McGovern]

I thank the right hon. Gentleman for allowing me to intervene briefly to say that the child poverty taskforce’s work is ongoing, and that it regularly engages with parliamentarians and others to update them. I know that many parliamentarians have been pleased to involve themselves in that work, given the importance of tackling child poverty.

[John McDonnell]

That is a really helpful response, but it does not respond to the fact that if we are to have a focus on poverty, rather than a debate on the welfare cap, which is breached on virtually an annual basis, it might be better to have a debate on the Government’s strategy to tackle poverty overall. Then we could have a proper discussion, and even a debate with a motion that could be amended where we want to see improvements. That is what I want to get on to now.

I hope that people have seen today’s Joseph Rowntree Foundation report on overall poverty, which reflects what most of us know and experience in our constituencies. It is shatteringly depressing, to be frank, because it does not show any improvement over the last few decades. The hon. Member for Faversham and Mid Kent (Helen Whately) mentioned that the Tory Government introduced this measure when they came into power. It was during the period of austerity, and it is worth reflecting on what that meant.

The London School of Economics’ report and other independent reports say that 140,000 people lost their lives as a result of austerity; others have estimated that the figure could be up to 300,000. In part, that was because of the grinding poverty that was imposed on people, as reflected in all our constituencies—we saw it. I remember a time when there were no food banks in any of our constituencies, because they were not necessary, but now they are, as a result of 14 years of austerity.

If we are to have a proper debate on poverty, we need to highlight as individual constituency MPs where we think the Government should be going, so I will briefly do so on the basis of what we have seen in the Joseph Rowntree Foundation report. I always cite the overall figures: we have 15 million people living in poverty, including 5 million children. I think the Joseph Rowntree Foundation report says that there are 4 million people living in deep poverty, and nearly 4 million in destitution.

The statistic that always shocks me is that 1 million children are in destitution. I never thought we would use the word “destitution” again in our society; I always thought we would improve year by year and lift people out of poverty. I never thought that children would live in poverty in the way that some of my generation did.

There are groups that clearly need to be on the agenda, and my hon. Friend the Minister has mentioned some of them, thank goodness. I chair a group of unpaid carers, of whom there are 5 million in this country. If an unpaid carer is looking after a disabled member of their family, it is almost inevitable that they will be living in poverty, unless we face up to the central demand of unpaid carers, which is to address their income. It is not just about how much they can earn, which the Government have looked at recently; it is about the carer’s allowance being at such a level that people cannot survive on it.

Looking at the report with regard to families with children living in poverty, I cannot at the moment see a faster way of getting children out of poverty than scrapping the two-child limit. I am hoping that will be on the agenda as a priority when the Child Poverty Action Group reports to Parliament.

The Joseph Rowntree Foundation has identified that the poverty rate among disabled people is now 30%. The Government are about to consult again on the work capability assessment reforms because they lost in court to Ellen Clifford two weeks ago. I am pleased that the Government lost in court, to be frank. The basis of that decision was the lack of consultation on the previous Government’s reforms. I do not understand why our Government continued the appeal within the court, but they did. They have now lost and have been forced to bring forward their consultations on the reform of the work capability assessment.

I am hoping that those reforms will be done in co-production with disabled people—on the basis of the disability groups’ principle, “nothing about us without us”. My fear is that an overhanging £3 billion-worth of savings is required from the DWP on this issue. If that results in cuts to individual benefits, I think there will be uproar within our communities and across this House. What is also interesting in the Joseph Rowntree Foundation report is that the poverty rate among people who are suffering long-term health conditions is 50%. The work that the Department of Health will now do in walk-in advice surgeries, for example, and the focus on mental health, will be key.

The household benefit cap overall is iniquitous. It forces families into poverty, particularly in places such as London, because of the high rents that are hitting people. According to the Joseph Rowntree report, the poverty rate among renters in social housing is 44% and in the private rented sector it is 35%. The Government’s refusal to accept the amendment to introduce rent controls, which was tabled by a number of Labour Members, was extremely disappointing. The Government could at least devolve that power to the individual Mayors so that they can represent their communities and introduce rent controls where necessary. I believe that Sadiq Khan has expressed his support for that power to be devolved. With rent controls, we could tackle the housing crisis that we face within our constituencies.

When we talk about poverty, we need to come forward with an agenda that will tackle it at pace, and I do not think that, in our discussions in the future, a welfare benefits cap in any form will assist in bringing forward the reforms that our constituents so desperately need.