Parliamentary Under-Secretary of State for Welfare Reform (Disabled People)

John McDonnell Excerpts

Tuesday 28th October 2014 Commons Chamber

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

May I say what a terrific speech we heard from my hon. Friend the Member for Heywood and Middleton (Liz McInnes)? It presaged the contribution she will make in the House.

Of course Lord Freud’s statement was a disgrace, but I am more worried about what he is doing than about what he is saying. I opposed his appointment under the previous Government, and I did so under this one. The appointment of a venture capitalist to advise on welfare benefits is bizarre.

Let me raise an issue about disabled war pensioners. In July 2012 the Prime Minister visited Camp Bastion. The hon. Member for New Forest East (Dr Lewis) quoted The Guardian. Let me balance things up by quoting The Sun:

“Wounded war heroes are to keep their disability benefits for life after the PM stepped in to halt a bid to cut them. Worried veterans—including soldiers who lost limbs in battle—had been facing humiliating re-tests that could have seen them stripped of crucial cash. But David Cameron has now slapped down the MoD bureaucrats and ruled that anyone left disabled by military service must be exempt from benefit cuts.”

In the article, the Prime Minister was quoted as saying:

“I made a promise to our forces that they will get special treatment, and I intend to stick to it.”

The Royal British Legion was quoted:

“We applaud the Prime Minister and”

the Work and Pensions Secretary

“for standing up for our wounded heroes.”

Mo Stewart, a disabled veteran and disability researcher, contacted the Cabinet Office to confirm that that was the case. The Cabinet Office said that

“the Cabinet has just agreed that War Pensioners can retain access to DLA as an acknowledgment of their service to the nation”.

At the Conservative party conference, the Prime Minister stood up and, in a warm speech, congratulated our veterans from various wars since the second world war. The problem was that, at the very same time, 80,000 veterans received a letter warning them that their access to DLA was about to be withdrawn, completely contrary to the statement made in July 2012 at Camp Bastion.

The defence personnel secretariat was in utter confusion. Its briefing said that disabled war pensioners would have access to the more generous constant care allowance, which is a supplement added to the basic pension. That was misleading and completely incorrect. It disregarded the fact that war pensioners need to demonstrate an 80% disability to access the constant care allowance. The recipients of the new armed forces compensation scheme need to demonstrate a 50% permanent disability.

There are 166,000 disabled war pensioners. Half of them—80,000—are beyond the age of 70 and will therefore retain access to disability living allowance, but the remainder will have to go through the same process as everyone else, despite the promises and assurances given by the Prime Minister and reinforced by the Secretary of State. As has been pointed out time and again by Opposition Members, that means they will endure six to 12-month waits for the assessment on PIP, the non-delivery of benefits and the cutting of benefits. Is that what the Prime Minister wanted when he congratulated disabled war veterans and honoured them for the sacrifices they have made in the interests of this country and to defend this country’s interests? I do not think it was. Either, like Lord Freud, the Prime Minister mis-spoke, or—others have accused him of this—this is a betrayal, which would be unacceptable.

DWP: Performance

John McDonnell Excerpts

Monday 30th June 2014 Commons Chamber

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

The motion refers largely to the work capability assessment and the personal independence payment, but it also refers to the disarray in other benefit programmes. I want to concentrate on the independent living fund, which the Government are proceeding to abolish.

On Saturday a group of people with severe disabilities turned up with their carers and in their wheelchairs and chained themselves together in Westminster abbey gardens in protest against the Government’s proposal to proceed with the abolition of the independent living fund. The protest was organised by a group called DPAC—Disabled People Against Cuts. They wanted to remain there for a couple of weeks to try to engage with parliamentarians and others on this issue, but unfortunately 200 police arrived and evicted them from the site, with the support of the Dean of Westminster. I wonder what happened to the sermon on the mount.

I thought that there was cross-party support for the independent living fund—that it was one of the benefits that worked. The idea was to fund carers and others who enabled people with severe disabilities to ensure that they were no longer trapped in residential homes but could live independently in their own homes and participate in wider society, and that as a result of that support some could go to work and earn their income. I thought we had cross-party agreement that it was one part of the welfare system that was working effectively, but the Government have proceeded to abolish it.

Responsibility is now being transferred to local authorities. The Government are arguing that the Care Act 2014 will enable local authorities to provide a similar level of service, but that is not the case for many of the people who already experience the services offered by local authorities. There has been a cut of £3 billion in expenditure by local authorities on social care for people with disabilities. We have already seen significant cutbacks on levels of care. People who are severely disabled are now anxious that as the money transferred to local authorities is not being ring-fenced, local authorities will cut support for people with disabilities, and that support will not be protected in future.

That is causing concern and desperation among people with disabilities and their carers—so much so that they took the Government to court because of the lack of consultation on the proposals and the lack of consideration of the equalities implications. They won in court, but only a few months ago the Government decided nevertheless to proceed with the abolition of the independent living fund. I believe that will be challenged again by a number of claimants. I hope that this time around the Government will not contest that challenge and that we can come back, discuss the policy and arrive at a consensus again about how we can support the most severely disabled people in our country. We need to do exactly what the ILF was funded to do: to provide care and support so that disability can be overcome at least in the sense that people with disabilities are able to participate in wider society.

The policy is causing extreme consternation not just among disabled people but among their families. We know what will happen: local authority cuts will fall on the individuals and care will fall on to the families themselves—I have to say that in my constituency many of those people are ageing parents—and eventually, because of the abolition of the independent living fund, people will be forced back into residential establishments. At the end of the day, that will prove even more costly than the 17,500 people who are currently receiving the benefit.

I appeal to the House and to the Government to think again on this one. It is one benefit that we all thought we had got right. In the 1980s I served on the Committee on Restrictions against Disabled People. It was the first committee to try to ensure the integration of disabled people in this country. We thought that the independent living fund was the benefit that could succeed. Everyone agreed at that time, and they should agree now.

Welfare Reform (Sick and Disabled People)

John McDonnell Excerpts

Thursday 27th February 2014 Commons Chamber

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

I beg to move,

That this House calls on the Government to commission an independent cumulative assessment of the impact of changes in the welfare system on sick and disabled people, their families and carers, drawing upon the expertise of the Work and Pensions Select Committee; requests that this impact assessment examine care home admissions, access to day care centres, access to education for people with learning difficulties, provision of universal mental health treatments, closures of Remploy factories, the Government’s contract with Atos Healthcare, IT implementation of universal credit, human rights abuses against disabled people, excess deaths of welfare claimants and the disregard of medical evidence in decision-making by Atos, the Department for Work and Pensions and the Tribunals Service; urges the Secretary of State for Health and the Secretary of State for Education jointly to launch a consultation on improving support into work for sick and disabled people; and further calls on the Government to end with immediate effect the work capability assessment, as voted for by the British Medical Association, to discontinue forced work under the threat of sanctions for people on disability benefits and to bring forward legislative proposals to allow a free vote on repeal of the Welfare Reform Act 2012.

We are making history today. This is the first time in the history of this Parliament that people with disabilities have secured a debate in the Chamber on an agenda of their choosing, so let us pay tribute to the War on Welfare campaigners. They initiated the campaign, drafted the petition that we have before us in the form of a motion, and worked hard for a year to gather more than 100,000 signatures in order to secure this debate. They are heroes and heroines who worked, many of them despite their disability, to ensure that this campaign was a success.

MPs may speak in this debate, but it is the voice of the WOW campaigners and petitioners that will be heard. What do the WOW campaigners want from this debate? They have said that they want a serious debate. They want MPs, party spokespeople and Ministers to listen, and to listen well to the statements that they have made. What do they want us to say? I have asked WOW petitioners what they want me and other MPs to say in today’s debate. They said, “We want you to get across as best you can what the welfare changes brought in over the last four years have meant to us and our families—the stark reality.” Why do they want that? Perhaps naively, they believe that if MPs and Ministers really knew what it is like, what disabled people are going through, they would not stand by and let fellow human beings suffer and be degraded in this way.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I congratulate the hon. Gentleman on securing this important debate. Ahead of the debate, the Brighton Housing Trust sent me some alarming data of 25 cases it had looked at concerning claimants of employment and support allowance. All of them won their appeal and had the decision overturned. In 72% of cases the decisions were overturned on the basis of a mental health condition, and 32% of that sample group stated that the process had caused an increase in suicidal intention. Does the hon. Gentleman agree that the implications of the policy are literally a matter of life and death?

[John McDonnell]

I agree completely. The figures in Brighton are echoed around the country and have been reported for a number of years.

We met some of the disabled campaigners this morning. One of them said, referring to Ministers, “Do they realise that many of us feel terrorised by what the Government are doing?” Another disabled campaigner said to me this morning, “Can you tell them that they call their programme fulfilling our potential, but we feel that many of us simply won’t survive this round of cuts? A generation is going to be lost.” The central demand of the petition is straightforward: the motion is, in essence, a call for a cumulative impact assessment of all the welfare changes that have been introduced by this Government. The argument that campaigners put forward is that if politicians and society only knew the full effect of all the changes on the lives of disabled people and their families, surely they would not let that happen in a civilised society. Let us see whether we can move hearts and change minds in this debate.

Let us run through some of the figures. There are 11.3 million people with a disability in the UK, 4.5 million of whom have a significant disability that entitles them to a disability benefit such as the disability living allowance or the attendance allowance. The group the welfare cuts are hurting the most is the 2.7 million people with disabilities who live in poverty.

I remember the Prime Minister’s statements in 2010 when the Government launched their austerity programme to cut public spending. In October 2010, he said that

“it is fair that those with broader shoulders should bear a greater load”,

that the greatest burden would be placed on the better off, and that the cuts would be fair. Well, the reverse is the case.

I urge Members to read at least one of the relevant reports. In “Counting the Cuts”, Simon Duffy, the director of the Centre for Welfare Reform, explains that disabled people in poverty are bearing the cuts four times worse than the average, while the burden on people using social care is nearly six times that on the average person. Other reports escalate the figure and say that the burden on people with disabilities is perhaps 20 times the average. The reason for that is that disabled people are being hit by a combination of cuts in funding for social care and support and by wave after wave of cuts—almost annually—in welfare benefits.

Let us look at the cuts in care and support. Many disabled people rely on local authority social care and support. By next month, £2.68 billion will have been cut out of adult social care budgets across the country. In 2012-13, 320,000 fewer disabled people and 37,000 fewer adults aged between 18 and 64 with physical impairments received local authority care and support than in 2005-06. The number of adults with mental health issues receiving care and support has reduced by 30,000.

[Liz Kendall (Leicester West) (Lab)]

Does my hon. Friend agree that decent social care is about not just helping people cope with their disabilities, but helping them live an ordinary life that the rest of us take for granted—being able to get up, wash, dressed and fed, spend time with their families and go out into the community, as well as being able to work, if they can? Is that not why the cuts in social care have been so devastating?

[John McDonnell]

That is exactly why people feel that the impact is so harsh. Many local authorities have changed the eligibility criteria—that is the problem—to cover only those with substantial needs, which automatically cuts out about 100,000 people from receiving any form of social care whatever.

[Chris Williamson (Derby North) (Lab)]

Does my hon. Friend agree that this is very much a false economy, because cutting back on social care will inevitably lead to people’s conditions tending to deteriorate, meaning that they will need more urgent care and that many of them will find themselves in hospital? Consequently, the cost to the public purse is substantially greater as a result of this false economy and these cuts, which are so devastating to disabled people.

[John McDonnell]

That is exactly right. There are three consequences from what is happening. First, disabled people are being forced more and more to rely and depend on care from their own family members, who are themselves, to be frank, overstretched in providing that care, especially as local authority respite care is now being cut back so dramatically. Startlingly, as we found in a previous debate, a large number of these carers are children caring for their parents. A year-long investigation by Carers UK confirmed that carers, who save this country an estimated £119 billion a year in care costs, are about to lose £1 billion in benefit cuts.

Secondly, the care needs of many disabled people are simply not being met. A recent inquiry by the all-party groups on local government and on disability found from the evidence they took that four in 10 disabled people are failing to have their basic social care needs—which my hon. Friend the Member for Leicester West (Liz Kendall) has mentioned—met.

Thirdly, as my hon. Friend has said, the withdrawal of social care and support services is cutting many people off from any form of social contact with the outside world. Many are driven back into their homes, while others are forced out of them, losing all their independence, and into residential care or even hospital care as a result.



Alongside cuts to social care, there are the mounting cuts in welfare benefits. Like most hon. Members, the vast majority of disabled people whom I have met are, like any other employed person, desperate to work and support their family with a regular wage. For some, the tragedy is that their disability is so severe that they will never be able to work and will have to rely on welfare benefits to ensure that they do not live in poverty, while others need positive and sensitive practical support to help them to get back into work or to work in the first place.

The system introduced during the past six years to support people in securing work or the appropriate benefits could not have been better designed to undermine disabled people’s ability to get into work or receive the appropriate benefits to assist them. The previous Government started the process of reassessing all those on incapacity benefit to see whether they could be assisted back into work, and if not, to ensure that they had the right level of financial support. They introduced the work capability assessment, and brought in Atos to implement it. That might have been well intentioned in theory, but in practice, thousands of disabled people have been caused untold suffering, humiliation, stress and, at times, absolute despair.

[Mrs Anne McGuire (Stirling) (Lab)]

Does my hon. Friend recognise that the introduction of the work capability assessment under our Government was phased? Part of the distress he mentions was due to the fact that the contract was renegotiated to go for a big bang of assessments and reassessments of everyone on incapacity benefit.

[John McDonnell]

The work capability assessment was flawed from the start. It stemmed from the work of the American insurance company Unum, and the so-called biopsychosocial model of disability assessment. That was exposed as an invention by the insurance companies simply to avoid paying out for claims. My right hon. Friend is, however, absolutely right that Atos was brought in and then given a contract to churn through large numbers of assessments very rapidly—as fast as possible. The staff employed in order to achieve that often had minimal medical or professional qualifications, and their expertise or experience was often totally unrelated to the condition or disability of the people they assessed.

Assessments largely disregarded people’s previous diagnosis, prognosis or even life expectancy. The recent “Panorama” programme “Disabled or Faking It?” exposed the scandal of seriously ill patients—people diagnosed with life-threatening conditions such as heart failure or end-stage emphysema—being found fit for work. The so-called descriptors, or criteria, on which assessments are based bear no relation to the potential employment available, take little account of fluctuating conditions and are particularly unresponsive to appreciating someone’s mental health issues.

According to all the Department for Work and Pensions figures, the appeals roll in—on 40% of decisions—and most appeals are now successful. The test has been condemned by the British Medical Association and the Royal College of Nursing. The report by the president of the appeals tribunal to the Government denounced the test as

“failing to coincide with reality”.

Even when someone wins their appeal, there can be a lengthy wait before their benefits are reinstated. In one period, 37,000 people were waiting up to a year to receive benefits after they had won their appeal.

[Yvonne Fovargue (Makerfield) (Lab)]

Does my hon. Friend agree that the cuts to the legal aid system—taking away the right to get legal aid for welfare benefit appeals—have caused additional distress to the sick and disabled people who are seeking an appeal?

[John McDonnell]

Interestingly, all the statistics prove that people who are represented win their appeal in vast numbers, while those who are not represented are suffering. To be frank, it is no wonder that 84% of GPs have reported that patients have presented with mental health problems, such as stress, anxiety and depression as a result of undergoing or the fear of undergoing the work capability assessment.

For all those reasons, the BMA has called for an end to the WCA “with immediate effect”, believing that it should be replaced with

“a rigorous and safe system that does not cause avoidable harm”.

Such systems are used in other countries, so why can we not use one of them here? That is why the motion calls for the WCA to be scrapped.

People assessed as capable of work and put on employment and support allowance within the work-related group now lose their contributory ESA after 12 months. Some 700,000 disabled people are losing a total of £4.4 billion as a result of the 12-month cut-off. There has been a massive escalation in the use of sanctions against people who are on ESA or jobseeker’s allowance; some 900,000 people were sanctioned last year.

[Sheila Gilmore (Edinburgh East) (Lab)]

Is it not ironic, at the very least, that the people who are most affected by the one-year cut off are those who, for instance, have a working partner or small savings—the very hard-working people whom the Government say they want to protect?

[John McDonnell]

People thought that they were contributing to a scheme that they would see the benefits from. They now find that they have contributed, but that they will no longer get the benefits. That is unjust.

One in five of the people on JSA who were sanctioned is disabled. Sanctions mean the loss of benefits altogether for weeks or even months. That is compounded, as my hon. Friend the Member for Makerfield (Yvonne Fovargue) said, by the increasing difficulty in securing advice or advocacy to appeal or challenge sanctions.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I wonder whether my hon. Friend is aware of the case of one of my constituents. He was receiving ESA, but had a heart attack during his assessment and was sanctioned as a result of leaving it. I called on the Government to hold an independent review of the inappropriate use of sanctions. They committed to do so in the Work and Pensions Committee, but are now reneging on that. Is that not a disgrace?

[John McDonnell]

Members have brought forward example after example like that one. We are simply looking for some compassion and logic in the governance of the system. The Government have ignored that, tragically.

Many people report that, as a result of sanctions, they are dependent on doorstep loans and are using credit cards for everyday items. Some people have fallen into long-term debt. Some Members met a representative of Disability UK on Monday. He described all this as a route into destitution for many people.

Disabled people who are on ESA are placed on the Work programme and offered support from Work Choice. The latest figures on the success rate of the Work programme in finding employment for disabled people show that only 5.3% of them secured employment. That is a 95% failure rate. Work Choice is meant to assist those with complex needs, but it has helped only 58 people since 2011. The forced closure of the Remploy factories under this Government has taken away the opportunity of sheltered work for many thousands of disabled people.

[Dame Anne Begg (Aberdeen South) (Lab)]

I visited my local Work Choice provider the other week. I was amazed to discover that everyone who was there to participate was on jobseeker’s allowance. They were not on a disability benefit, even though they had disabilities. I did not think that that was what Work Choice was meant to be about.

[John McDonnell]

That is exactly what is reported by constituency Member after constituency Member after their visits. I am concerned about time, so I will press on and take no further interventions, if Members do not mind.

Let me turn to the personal independence payment. Some 3.2 million disabled people receive disability living allowance. DLA is not a work benefit; it is meant to help with the additional costs caused by disability. It allows disabled people to get by and to overcome some of the restrictions that are forced upon them by their disability. From April 2013, DLA was supposed to be replaced gradually by PIP. I urge Members to read today’s National Audit Office report that assesses the roll-out. It states:

“Backlogs have developed at each stage of the claimant process. Both the Department and assessment providers have processed fewer claims than they expected”.

It states that by October,

“the Department had made only 16% of the number of decisions it expected, over 166,000 people had started new claims for Personal Independence Payment and 92,000 claims had been transferred to the assessment provider and not yet returned to the Department”.

Who is the assessment provider? After the WCA debacle, it is hard to believe that the Government allowed Atos to share the contract with Capita.

The report goes on to say:

“Claimants face delays, and the Department is not able to tell them how long they are likely to wait, potentially creating distress and financial difficulties.”

It states:

“Citizens Advice has found that claimants are concerned about paying for their care, covering housing costs and having enough money to pay for necessities such as heating, electricity and food.”

The Demos-Scope study calculates that 600,000 people will be impacted by the introduction of PIP, with a total loss of £2.6 billion.

Among the many eligibility changes, there have been changes to the eligibility for the mobility component. That means that 148,000 people will lose out on that additional benefit. It also potentially denies access to a Motability vehicle, and we know today that many people are having their Motability cars removed. The irony is that, as a result, they cannot get to work.

Disabled people are especially vulnerable to other benefit changes, and they will be disproportionately hit by the bedroom tax. Some 72% of affected households include someone with a disability or major health problem, and 420,000 disabled people will lose on average £14 a week in housing benefit. One in three disabled people is refused the discretionary housing payment. Shockingly, local councils have rejected applications from disabled people living in adapted properties who are unable to downsize. Last week, it was also revealed that the £347 million local welfare assistance fund to local councils had quietly been cut by the Government.

The Welfare Reform Act 2012 also changed the uprating of benefits basis from the retail prices index to the consumer prices index, costing some families receiving DLA and the carer’s allowance £80 a week. It has been estimated that 142,500 disabled people will be hit by the benefit cap, costing £2 billion. Universal credit looms over all of this. Research by the National Association of Citizens Advice Bureaux estimates that 116,000 disabled people could lose £40 a week; that 230,000 severely disabled people who live alone or with only a young carer will get between £28 and £58 less a week; and that 100,000 disabled children will lose £28 a week.

What do all these figures add up to? Although the Government have refused to undertake a cumulative assessment of the effect of all the benefit changes on disabled people, others have done so. The Demos-Scope study calculated that disabled people will lose £28.3 billion by 2018. Dr Simon Bamber concludes that disabled people in poverty, who make up 4% of the population, will bear 13% of the cuts and lose £4,660 a year. People using social care who make up 3% of the population will also bear 13% of the cuts, and lose £6,409 a year.

In conclusion, what do these changes mean in reality? They mean poverty for many. They mean not enough income for someone to heat their home adequately—there are nearly 1 million disabled people now in fuel poverty. They mean someone choosing not to eat so that their children can do so, and their feeling shamed and humiliated by having to rely on the generosity of others and support from the food bank. I urge people to look at the website, Calum’s List. For some it is all too much and they become another in a coroner’s report whose suicide is associated with the loss of benefits. Many of the disabled people I have met say the same thing. They tell me they feel hounded by the media, by politicians and by this Government, just for being disabled and claiming the benefits they are entitled to receive.

What the War on Welfare campaigners are demanding today is the truth. They want a cumulative impact assessment of all welfare changes, so that the truth of their plight can be revealed. They believe—perhaps naively—that if the truth is told, no decent society would allow its most vulnerable members to be treated in this way. That is why I supported the petition and tabled the motion before the House, and why I will be pressing it to a vote.

[Several hon. Members]

rose—

--- Later in debate ---

[John McDonnell]

I am sorry to spoil the Minister’s day. When the banking crisis took place, the Government —with the support of all parties in the House—found £1.3 trillion to bail the banks out. Since then, virtually every other part of society has been paying for that bail-out, other than the banks themselves. Is it not ironic that we are debating cuts affecting people with disabilities in the week when RBS is putting together a half a billion pounds pool to pay bonuses?

Time and again in the debate, we have heard about the suffering that disabled people are enduring as a result of the cuts, and to be frank, I have heard nothing today about alleviating that suffering. That is why it is important to make a commitment to carry out a cumulative impact assessment. Any good Government would want to assess the impact of their policies, so why are this Government refusing to do so? I think it is because, if an impact assessment were published, people across society would be so angered and disgusted at how people with disabilities were being treated that they would rise up in revolt.

I say to the Minister that when the Question is put at the end of the debate, I will be shouting “Aye”, and I hope that everyone in the House will do the same. If the Government say that it is too complicated for them to carry out the assessment, let us have an independent assessment. Why cannot the Government bring in the Centre for Welfare Reform, Demos and the other think-tanks and fund them to do the cumulative impact assessment that the Government are running from?

All the campaigners have been saying—as we have exposed again today—that the work capability assessment is not working. It is failing people and causing them to suffer; it is failing properly to assess their ailments and conditions; and it is failing to get them back into work. That does not mean that there should be no assessment, however. We are saying that we should scrap this one and work with people with disabilities, their representatives, the BMA and others to create a system that is fair and just. That is all that the people up in the Gallery and the 100,000-plus others who signed the petition are asking for. That is why I urge Members to shout “Aye” today, and to support the reform that is so desperately needed.

Question put and agreed to.

Resolved,

That this House calls on the Government to commission an independent cumulative assessment of the impact of changes in the welfare system on sick and disabled people, their families and carers, drawing upon the expertise of the Work and Pensions Select Committee; requests that this impact assessment examine care home admissions, access to day care centres, access to education for people with learning difficulties, provision of universal mental health treatments, closures of Remploy factories, the Government's contract with Atos Healthcare, IT implementation of universal credit, human rights abuses against disabled people, excess deaths of welfare claimants and the disregard of medical evidence in decision-making by Atos, the Department for Work and Pensions and the Tribunals Service; urges the Secretary of State for Health and the Secretary of State for Education jointly to launch a consultation on improving support into work for sick and disabled people; and further calls on the Government to end with immediate effect the work capability assessment, as voted for by the British Medical Association, to discontinue forced work under the threat of sanctions for people on disability benefits and to bring forward legislative proposals to allow a free vote on repeal of the Welfare Reform Act 2012.

Welfare Reforms and Poverty

John McDonnell Excerpts

Monday 13th January 2014 Commons Chamber

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

The question was asked earlier about how we pay off the deficit. There was a choice when the economic crisis hit: should those who created the economic crisis pay for it, or should the others? This Government decided that the poorest in our society would pay. To enable that to happen there had to be some form of ideological attack on the poorest—the latest example is the programme “Benefits Street”—that identifies a group of people and demonstrates that they somehow stand for all those people who are dependent on benefits. That is then used as a justification to cut benefits overall.

The reality, as has been said time and time again, is that some of the people suffering hardest are those who are in work. In two weeks time in this city, the BAFTAs will be hosted again at the Royal Opera House. That weekend, the cleaners will be on strike and picketing outside. I will be joining them, because they are on just above the minimum wage, not on a living wage, and cannot afford to live in the city in which they work. A whole range of constituencies outside London have been mentioned. London and the south-east have an image of wealth, with gold pavements and so on, but there is a growing underclass in London of people in dire poverty.

The anxiety and anger we have is that in two weeks the cleaners will go on strike because they have no other option. They are trying to get their employers to negotiate a London living wage, while this week the bank bonuses will be announced. Goldman Sachs has already explained that it looks like it will have a bumper year. We are back to pre-crisis bonus levels. I raised this with the Chancellor and, to give him his due, he actually said that there is an issue that we have to address. We have been told that in one company the average bonus payment is £2.7 million per member of staff. This is the contrast we have: people in work are struggling just to maintain a roof over their heads, feed and clothe their children and have a decent standard of income. At the same time, we have the profligacy and obscene levels of bonuses returning. I think the choice was made under this Government that the poor would pay for the crisis, not the rich who caused it.

Examples have been given of the range of cuts that have been made. I will be frank: I do not know how people in my constituency survive on the income they are getting. I have no idea how they can afford to live on the minimal income that they are getting. We will have a debate in a few weeks’ time about the WOW petition and people with disabilities, who are among some of the hardest hit. However, the latest statistics show that we have 13,000 children in my borough living in poverty, and it is a relatively wealthy borough. We are a working-class area with high levels of employment and, usually, not bad levels of income, but even in my constituency we are seeing child poverty on a scale that we have not seen since the second world war, with all the problems associated with that.

One of the main problems has been touched on by others: the fact that people cannot afford a roof over their heads. House prices have gone through the roof. People cannot afford them on the incomes they are getting, but what do the Government do? They increase rents in the social sector—in council housing and social housing—and at the same time cut benefits. The argument put forward by the Government—it has some logic to it—was that if they cut benefits, somehow the landlords would stop charging higher rents, but the reverse has happened. Rents have gone up in my area. Getting a three-bedroom property in the private rented sector means spending between £1,200 and £1,600 a month, and we are not talking about high standards of property. We are just talking about the roof over people’s heads.

When people go to the council, the discretionary money that has been awarded does not meet the difference between the loss of benefits and the rents they are now being charged. What is happening, therefore—this is the irony of it—is homelessness on a scale that we have not seen for perhaps two decades and children living in bed and breakfasts again. We were promised that that would never happen again, and it is happening. Children are living in appalling conditions in bed and breakfasts, and then they are farmed out round the country, which completely disrupts their education and breaks down the connections with their wider family. That destabilises whole families as well, because people under that pressure begin to implode. It is therefore no wonder that we have family breakdown increasing in many of our areas as a result of the financial pressures that people are under.

That is the result of a whole series of reforms that have been introduced as part of an incremental development to attack the poor. Those of us on the Labour Benches should say: “No more. That’s enough now.” We are the people who invented the welfare state. We introduced it—working, yes, with Beveridge, the Liberals and others. It was not just to provide a safety net; it was to give people the opportunity to achieve their life chances. This Government are destroying that opportunity for people to thrive and enjoy the life chances that we wanted to give them.

[David T. C. Davies]

Given what the hon. Gentleman has just said, does he agree or disagree with his shadow Work and Pensions Secretary, who wants to be tougher than the Tories on benefits?

[John McDonnell]

I am not sure whether the hon. Gentleman was here under the last Government, but I was one of those who argued for a massive redistribution of wealth to tackle poverty in this country, and I will continue to argue that point. I do not think that any of the parties should get into this Dutch auction about who can be more brutal towards the poor, but from the detail of the policy being advocated by the Opposition that I have heard, it is about achieving growth, getting people back into employment, ensuring a fair system of redistribution of wealth in this country and—this is the point my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) made—ensuring that people pay their taxes. At the moment we are living in a corporate kleptocracy, where corporations steal and rob from us through tax avoidance and tax evasion. If we could have some of that back, not only could we tackle the deficit, but that redistribution of wealth could take place and we could lift people out of poverty, provide the homes they need and give them back the life chances that this Government are stealing from them.

[Several hon. Members]

rose—

Mesothelioma Bill [Lords]

John McDonnell Excerpts

Tuesday 7th January 2014 Commons Chamber

[Dr Sarah Wollaston (Totnes) (Con)]

I rise first to pay tribute to the right hon. Member for Wythenshawe and Sale East (Paul Goggins) and his work in this area. I wish him well, as all hon. Members have done, and hope for a speedy recovery. I support the amendment in his name, which was moved so ably by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch).

We must not miss the opportunity to fund research into preventing the disease. One important aspect of prevention mentioned is the risk to children in schools. More than 70% of schools still contain significant amounts of asbestos. There is emerging technology for real-time testing of asbestos fibres in schools. We must continue to have a strong research base not just to relieve those who are suffering the terrible symptoms of the disease, but to research treatments and, most importantly, to look at how we prevent and protect in the workplace, so we can prevent exposure to asbestos. As all Members will know, this disease is caused entirely by exposure to asbestos, and it will be a real wasted opportunity if we do not make this funding available to advance research.

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

Obviously, I pay tribute to the work of my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). One reason he tabled the new clause and amendments was that, although we commend the insurance companies that came together voluntarily to contribute £2.5 million, there are, as has been said, 140 to 150 insurance companies, and one of his concerns was the virtual impossibility of securing an agreement across them all. I hoped his claim would be put to the test before now. Had we secured a voluntary agreement by now, we would not have required the new clause and amendments, but it has not been possible, and I doubt the feasibility of bringing all those companies to the table and securing a voluntary agreement to raise sufficient funds.

I worked in factories in the north-east when I was a youngster, and I can remember the Hebden Bridge experience and the asbestos factory there. For limited periods—tragically—I have known many mesothelioma sufferers, and the two things they want are, first, speedy compensation so that they and their families can get some compensation while they are still alive, if possible, and secondly, that no one else should go through this absolutely appalling suffering. That is why the emphasis has been placed upon seeking prevention. I agree with the hon. Member for Chatham and Aylesford (Tracey Crouch) that education is critical, and that is why some of the original funding—a limited amount, admittedly, but at least some—from the insurance companies was put towards education and, more importantly, finding treatment practices and palliative measures that would reduce the suffering and, in the short term, not the long term, finding a cure.

For those reasons, the new clause and amendments are key to the Bill. Without them, the Bill will not be as welcomed as many of us would have thought. I therefore urge Members and the Government to recognise this as a matter of urgency. We cannot wait for voluntary agreements any longer; we need legislation in place that can generate the income for prevention activities and research. Like other hon. Members, I hope that my right hon. Friend comes back healthy and spritely to engage with this matter and that this will be a tribute to all his hard work, but what better message to send to his family than to encapsulate at least some of his work in the Bill today?

[Mr Mike Hancock (Portsmouth South) (Ind)]

I apologise for not being in the Chamber at the start of the debate; I was tied up in another meeting. I also pass on my good wishes to the right hon. Member for Wythenshawe and Sale East (Paul Goggins), who is not with us today. I hope to see him back here as quickly as possible.

In my constituency, hardly a week goes by when a local newspaper does not report on the inquest of someone who has died from an asbestos-related illness, having worked either in the dockyard in Portsmouth or in one of the many industries that have served the defence industry over the past 50 or so years. Interestingly, time and time again, coroners’ reports request—virtually demand—that more action be taken to research and develop better techniques for helping sufferers of this godforsaken illness, which besets and destroys their lives and those of their families. I am therefore fully behind Members advocating that we do more.

The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) spoke very well about the problems in our schools. I have a caseload of about two dozen people affected by this disease and fighting various stages of the illness, and that includes an ex-school teacher exposed to asbestos. The only place it could have happened was in a school classroom, and it is sad to see the burden she now carries. Even though she has retired from education on health grounds and despite the effects of this appalling illness, she is working hard to keep her family together.

The British Lung Foundation says that even a small contribution from these various organisations would lead to great improvements in research and development and help all sufferers—those in the last stages of the disease and those yet to reach that point—so I urge all Members to support the new clause. I hope that the Government will see sense and recognise that it tries to do what most people in the Chamber and the country who know anybody affected by this disease want to see happen. I hope that will be the case when we vote on it later.

Pensions Bill

John McDonnell Excerpts

Tuesday 29th October 2013 Commons Chamber

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

My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) has addressed the spirit of new clause 7, which stands in my name. It may well be that we are not able to discuss amendment 37, but she has addressed the core principle behind the new clause.

Parliament has a moral responsibility that is separate from government. When Governments give promises to people, Parliament has a role in ensuring that they are adhered to. That is what new clause 7 is all about. As my hon. Friend said, on privatisation, the principle should apply across the piece.

We have discussed the background to new clause 7 before in a wider debate about what happened to the Jarvis workers when Network Rail withdrew its contracts and the company collapsed. As many involved in that debate know, the Jarvis workers, many of whom were not transferred to successor companies, suffered greatly: they lost their jobs and could not find alternative employment, and some have become nomads, circling the country trying to pick up work to bring in at least some income. In addition, they lost their pension protection, and that is what the new clause deals with.

As my hon. Friend mentioned, section 134 of, and schedule 11 to, the Railways Act 1993 enabled the Secretary of State to create a new pension scheme for the railways industry, to transfer the assets and liabilities of the old British Rail pension scheme to the new scheme and, above all, to protect the rights of members of the scheme once they became members of the new scheme. The debate was extensive. Few Members now were in the House then, but as Hansard shows, there were extremely heated, but detailed debates about the principle and detail of the legislation, particularly the protections for individual workers.

Three orders were introduced. First, the Railways Pension Scheme Order 1994 created the railways pension scheme, set out its rules and designated it as the successor industry-wide scheme replacing the British Rail pension scheme. Secondly, the Railway Pensions (Transfer and Miscellaneous Provisions) Order 1994 transferred the assets and liabilities of the British Rail pension scheme to the new railways pension scheme. Thirdly, the Railway Pensions (Protection and Designation of Schemes) Order 1994 set out the protection to be afforded to members of the British Rail pension scheme who transferred involuntarily to the railways pension scheme.

After months of debate in the House and negotiations between the Government and the sector unions, members of the British Rail pension scheme who were already pensioners or deferred pensioners were transferred to a special pensions section and had their rights guaranteed by the Crown. Their rights have never been put at risk and are not at risk, but that is not true for members still employed in the industry who were contributing at the point of privatisation. Their accrued rights were transferred to the section of the railways pension scheme applicable to their new employer, and a matching share of the assets from the British Rail pension scheme was also transferred to the relevant section, but nothing was done in those debates and negotiations, and eventually the orders, to protect their transferred rights in the event of their new employer becoming insolvent.

The actively contributing members were also given the right to participate in the new railways pension scheme on a basis that entitled them to accrued rights for future service and which was no less favourable than the basis of the former British Rail pension scheme. They have to contribute to the scheme to accrue their rights, and so must their employer, in the normal way. Active members are also protected if they move involuntarily between railway employers. In law, they must be permitted to transfer their accrued rights to their new employer’s section of the railways pension scheme and be permitted to accrue future pension rights on the same basis as before.

That also applies to involuntary transfers. As one franchise moves between companies, so do the pensions and the pension rights and responsibilities. A member who moves employer of his or her own volition retains the right to be a member of the pension scheme, but the right to accrue future service rights on the same basis is lost. So those protections were thought to be relatively robust at the time; transferring from the old British Rail pension scheme into the new scheme, and then, as the franchises moved and new employers took over the staff, their rights would transfer as well.

When a railways employer enters administration, its undertaking—the franchise—is usually transferred to another employer and, again, what happens is that the employees working for that employer are generally protected. Even when a company becomes insolvent and employees are transferred to a new company, if there are sufficient assets those are transferred and the employees are protected again. The problem we now face as a result of the Jarvis incident is what happens when an employer becomes insolvent and there are insufficient assets. That is what happened with the Jarvis workers, who were transferred to Babcock Rail or Volker Rail. Because the Jarvis section of the railways pension scheme is not in a position to transfer the accrued rights on a fully funded basis—because Jarvis never had the assets—a pension transfer could not be made at all. Instead, what the Jarvis workers now have to rely on is the pension protection fund, which does not provide what they would have gained as members of the full pension scheme.

This group of workers accepted the assurance of the Government on privatisation that their pensions would be fully protected. They have entered employment with a new employer and have paid their contributions, and they expect the same pension as every other worker around them in the industry. They are now faced with a pension that is significantly less. I think that that is grotesquely unfair. It certainly flies in the face of the promises that were given on the Floor of the House to railway workers when privatisation was being advocated and when legislation was going through the House.

[Steve Webb]

The hon. Gentleman is obviously very knowledgeable about the history of the matter. Can he point to a specific assurance that was given about what would happen in the event of the insolvency of the private employer?

--- Later in debate ---

[John McDonnell]

Let me deal with that. Incidents such as insolvency are often not predicted by Government. So what happens when a policy is advocated that involves a very straightforward commitment given by Ministers? Let me, if I may, read out a statement made by the then Secretary of State for Transport John MacGregor in May 1993 at the time of the debates on the privatisation of British Rail in response to a specific discussion on the British Rail pension scheme and its future. The Secretary of State said:

“My objective remains to preserve the security of rights enjoyed by pensioners and members while adopting arrangements to suit the new structure of the privatised industry. The proposals I am announcing today meet this objective.

I have decided that there should be set up, under the powers granted in the Railways Bill, a joint industry pension scheme for the railways. This will be broadly on the basis set out in the consultation paper ‘Railway Pensions After Privatisation’ issued in January. The governance and administration of the joint industry scheme will continue to involve both the employers and employees in the industry. We shall be discussing the detailed arrangements with interested parties…Existing employees’ rights will be protected by statutory orders made under the Railways Bill. The benefits offered to employees must be no less favourable than those in the existing scheme. There will be no penalties for involuntary breaks in employment. The present schemes under which the employer matches additional voluntary contributions made by employees…will continue subject to the existing right of the employer to withdraw matching for new or increased contributions.

Employees should be reassured by the statutory protection of these benefits…It is both natural and right that pensioners, pension scheme members and trustees should express their concerns and seek reassurance about pension arrangements in the privatised railway. The consultation document gave them the opportunity to do so: these decisions address those concerns and provide that reassurance.”—[Official Report, 20 May 1993; Vol. 225, c. 236W.]

John MacGregor was an honourable man who believed that he was giving every possible assurance that the existing pensions arrangements would be protected. Are we now saying that, just because there is no specific reference to insolvency in that statement, no such assurance was given in relation to those rights? If we did that outside this place, we would be accused of mis-selling a scheme.

--- Later in debate ---

[Steve Webb]

I thought that was what I just said. Let me be clear: we want to get this thing going. The hon. Gentleman raised the issue of the £10,000 pot size limit. Clearly I would like to go further, and we look at a £20,000 pot size limit in our consultation document, but we have to get the thing going. May I tell hon. Members who were not here at the start of the debate that he said he had sat and watched a video of a speech of mine? I commend him for that, as watching videos of me speaking shows real devotion to the world of pensions. In my speech last week, I made it clear that we see this as the beginning of a process. The pot size limit could go up and the scope of pot follows member could be increased, but we envisage beginning with auto-enrolment pots. I am clear about that, and there is no ambiguity: we are beginning with auto-enrolment pots.

The hon. Member for Brighton, Pavilion (Caroline Lucas), who is not in her place, asked when further action would be taken on fiduciary duties. For the record, in case she should happen to read it later—or watch a video—I can confirm that the Law Commission’s final report on the issue will be published in June 2014. Obviously, further debate will take place at that point.

I wish to respond to the related issues raised by the hon. Members for Hayes and Harlington (John McDonnell) and for North Ayrshire and Arran (Katy Clark). The hon. Lady asked about the important issue of the position of protected persons, on which we have consulted and on which I hope we will shortly reach a conclusion. We think that slightly more workers are involved than she suggested, but certainly tens of thousands of workers are affected. One challenge we face is that this is not just a matter for our Department. For example, if we place a cost on the energy employers through the abolition of the national insurance rebate and if we exclude their employees because they are protected persons, that has the potential to feed its way into energy bills. Her party leader has a view on energy bills, as do we, but the knock-on effect of a decision we take on energy bills has to be thought through. The same applies in the transport sector, to which the hon. Member for Hayes and Harlington referred. If railway and other employers cannot pass on through the pension scheme the costs we are imposing on them through the ending of the rebate, that will find its way through into fare increases and to consumers. So we have to think through a wide range of consequences of these decisions. That is why this is taking a while, but I appreciate the need to get on with it.

The hon. Gentleman said that there was a special case for the railway industry. His new clause 7 does not provide any protection in respect of any of the other privatised utilities; there is no suggestion that if any of those employers went to the wall pension protection should apply—it would just apply to the rail industry. If he feels so strongly about the justice of this issue for rail workers, why does his new clause not say that any protected person should be protected if the sponsoring employer goes bankrupt? I know his affiliation, and I have spoken to him in his role as leader of the group on rail workers, but if Parliament were to accept his new clause, we would have to deal with the question about why we did not do this for everybody else, too.

[John McDonnell]

I have a lot of time for the hon. Gentleman, but I find that beneath him. He knows that I have been involved in this campaign for a number of years, since Jarvis went into administration as a result of the network intervention. We faced a specific issue that could be dealt with very speedily; it does not have to await further consultation with other industries. That does not mean that I do not concern myself about other industries and other workers, but this particular campaign is related to my constituents and to a specific industry in which I have taken an interest over time.

[Steve Webb]

I know that the hon. Gentleman has taken a particular interest over time in this industry. My point is that his argument about justice—his argument that pension protection should mean not just the same terms and conditions, which was what it did mean, but protection against insolvency—should apply equally across other industries, and should not just apply to the rail industry, if that is what he believes. When John MacGregor made the promises that the hon. Gentleman quoted, he was saying that the terms and conditions of the pension scheme would be the same with the privatised employer as they were with the state employer. Subsequently, a pension protection fund was created. Jarvis paid pension protection fund levies and that is why the employees are in the pension protection fund. The three privatised railway firms paid—

[John McDonnell]

On a point of order, Mr Deputy Speaker. There comes a time when accuracy is important in this House. John MacGregor, as Secretary of State, gave assurances that when British Rail was privatised pensions would be protected. He said not that they would have the same protections as private companies but that pensions would be protected. There is a point of accuracy, so that Ministers do not attempt to mislead this House.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I am sure that nobody would deliberately mislead this House—let us clear that one up. That is not a point of order but it has certainly been corrected for the record, which will be read tomorrow.

--- Later in debate ---

[Steve Webb]

Let me reiterate: Jarvis and the other firms paid the pension protection fund levy.

[John McDonnell]

That is irrelevant—absolutely irrelevant.

[Steve Webb]

It is not irrelevant—

--- Later in debate ---

I shall not press for a Division on the amendment. However, I hope very much that the message will go out from here to another place, and that their lordships will deal with this issue, because dealt with it must be.

[John McDonnell]

I wholeheartedly support the amendment tabled by the hon. Members for Worthing West (Sir Peter Bottomley) and for Brighton, Pavilion (Caroline Lucas). I think that there are injustices in the Bill that need to be addressed, and my amendment 35 seeks to do that as well.

The amendment returns us to the issue of the commitments that were given to people on privatisation. The Minister seemed to use a “divide and rule” tactic when he asked why I was taking the issue up purely on behalf of railway workers, as opposed to workers overall. There is a railway estate in my constituency, and I have taken an interest in the industry for nearly 40 years. I know what a sense of grievance exists among railway workers. The promises that they were given on privatisation are now being torn up by the Government. I do not like that “divide and rule” tactic—I want the same protection for all workers—but we can deal with the issue of railway workers tonight if the Government are so willing.

This is what John MacGregor, the then Secretary of State, promised in 1993. He said:

“Existing employee rights will be protected by statutory orders made under the Railways Bill.”

He described those rights as “indefeasible”. He went on to say:

“There will in addition be specific safeguards, in franchise contracts, to cover the transfer of pension funds when a franchise changes hands…Orders for setting up new schemes, transferring funds and protection of existing employees will be subject to the affirmative resolution procedure in both Houses.

He gave that assurance to members of all parties in the House. He continued:

“Orders relating to schemes and funds will be the subject of statutory consultation with the trustees.”—[Official Report, 20 May 1993; Vol. 255, c. 235-6W.]

That commitment was given, in the House, to all Members of Parliament, to all members of the pension fund and to all workers in the industry, but clause 24 will tear it up. The clause will allow employers who sponsor the railway pension scheme and the Transport for London pension fund to amend the rules to increase member contributions, reduce member benefits or both, and those who will be affected are the people whom we have described as protected persons. Employers will be able to do that without the consent of trustees or scheme members, and without taking any cognisance of the views of the House. That is unacceptable.

A promise was given by Conservative Ministers to those workers and members of the pension fund, and to future members of the fund, and that promise was accepted throughout the House. It was understood that changes in circumstances might require changes to be made in pension schemes, but the promise of that added protection reassured people. John MacGregor was right to say that such additional protection was needed. He said that trustees would be consulted, that the House would then take a view and, through an affirmative resolution, would be able to reach a decision, and that the trustees’ views would be laid before the House. However, the clause enables employers to tear up schemes, increase contributions, and reduce benefits.

It is also significant that there are 106 different employers in this sector now. If one changes the scheme, what happens when franchises are taken over? What happens when employees seek to change their employment from one company to another? We are introducing immense complexity into the overall industry, which I think will undermine the pensions protections that this House gave assurances on in 1993. This is a matter of morality and honour. To introduce this measure flies in the face of every undertaking made to these workers. My amendment would at least ensure that the trustees are involved in any decisions about the future of pensions in their sector. To be frank, I do not think it is much to ask for this House to ensure, and enforce, that Governments abide by their promises.

[Gregg McClymont]

I want to speak in particular to our new clause 8 and amendment 37. We are now discussing the provisions in this Bill that relate specifically to state pensions rather than private pensions, and it might be of some significance that the issue of protected persons and protected pension schemes is emerging in this context.

We have listened to the very powerful case made by my hon. Friend the Member for Hayes and Harlington (John McDonnell), and one cannot but feel that there is a specific set of circumstances around the privatisation of nationalised industries. My hon. Friend has eloquently focused on the railways, but amendment 37 deals with the issue of former nationalised industries in the round, and there are also energy schemes and some coal schemes.

We are in a curious situation. The Minister is giving himself the power to keep the promise made to the members of those schemes, but he has not yet said whether he will use that power to honour that promise. This is a Pensions Bill and there are 50,000 or so remaining members of these pension schemes, so it is curious that he has not yet said what he intends to do. Will he do so in his reply?

Atos Healthcare

John McDonnell Excerpts

Thursday 21st March 2013 Commons Chamber

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

I should say immediately that I have been informed that the Minister of State, Department for Work and Pensions, the hon. Member for Fareham (Mr Hoban), to whom this debate is directed, has unfortunately been held up at Glasgow airport because his plane has developed engine trouble. Obviously I am sorry about that, both for him and for me, but I suspect that the speech to be delivered by his last-minute stand-in, the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey), will not diverge too dramatically from the one he would have delivered.

I am grateful for the opportunity to raise this matter in an Adjournment debate, although I very much regret that it has been necessary to do so at all. It is unprecedented in all my 40 years’ parliamentary experience for a Minister to refuse point blank to receive a delegation, on a matter of acute public interest and importance, of representatives of a major section of the population who have, in their view, been targeted extremely unjustly by Government policy.

On 31 January, I wrote to the Secretary of State asking whether a delegation could meet him in his office to discuss the reforms that urgently need to be made to the work capability assessments for disabled people. I reminded him in my letter of the debate in the House on Atos, which I initiated on 17 January. In my view, it was one of the best debates I have experienced in the House for a long time. It was free from rancour and partisanship, but it was critical, detailed, passionate and well focused on the need for reform. Nearly 30 Members spoke and, although Members on both sides of the House acknowledged that there had been some improvements, they were without exception deeply critical of the fact that the fundamental structures remained deeply flawed. That, they said, was causing profound upset, distress, indignation, anger and a real sense of helplessness, and was, in many cases, making sick people even sicker as a result of anxiety and fear.

Although many Members targeted Atos Healthcare, the French company to which the assessments have been outsourced, it was notable that not a single Member from any part of the House defended the position of the Department for Work and Pensions on the descriptors, the regulations and the guidance that had been handed down by the Government to that firm. It was for those reasons that I sought the meeting with the delegation, and it never occurred to me that it would not be readily and promptly granted by the Minister of State, the hon. Member for Fareham. Not having had a reply to my letter throughout the whole of February, however, I tabled a parliamentary question asking when the Minister was going to reply.

Within 24 hours, after waiting more than five weeks, I did receive a reply from the Minister of State. It emerged when I spoke to the Secretary of State earlier this week that he had never seen my letter. The Minister of State’s letter, which I have with me, bluntly stated that his diary did not permit him the opportunity to see this delegation, which I take to be “civil service-ese” for a flat no. Frankly, I was taken aback, so I sought out the Minister in the Lobby and, as soon as he saw me, he said: “I’m not seeing you”. When I protested, he repeated “I’m not seeing you” three times. When I insisted that this was unprecedented and totally unacceptable, he finally said, “I’m not seeing Spartacus”—and repeated that three times.

That provides the basis for my seeking this Adjournment debate today. Spartacus is a group—initially hundreds but now thousands—of sick and disabled people whose lives have been dramatically affected by the welfare changes and who have come together as a loose collective, call it what we will, to share their own narrative with a wider public. Crucially, this work, which I have read through in detail, is evidence-based, used the DWP’s own figures and reports whenever possible, and has never been challenged on accuracy either by the DWP or the wider public. Spartacus always aims to provide a calm, credible and plausible response to the Government’s proposals, highlighting where it feels the proposals will have a damaging effect on sick and disabled people and promulgating that to the wider public.

The movement crystallised initially around the so-called Spartacus or “Responsible Reform” report, which set out an evidence-based analysis showing that the DWP had misled the public by claiming broad support for the abolition of the disability living allowance and its replacement with the new benefit of personal independence payments when there was, in fact, almost no public support at all. On the launch day, literally hundreds of thousands took part and the report trended at No. 1 or 2 on Twitter all day. Since then, the report has been widely used and quoted by the Work and Pensions Committee and the Joint Committee on Human Rights, and in several parliamentary exchanges in this Chamber. I think that says enough about the auspices and credibility of this group.

In addition, the Spartacus group has produced, as I said, a detailed and lengthy review of the work capability assessment procedure based on the lived experience— set out at great length—of 70 or more claimants, with additional comments from MPs, the courts, professional bodies and medical professionals, along with the findings of several freedom of information requests.

In the light of all that, I find it inconceivable that a Minister would refuse to meet a representative or representatives from a group who have a very powerful case to make—one that is strongly supported by hundreds of thousands of sick and disabled people—and whose records show, I repeat, that they have always argued their case with evidence-based rigour and well documented analysis. It is not as if Ministers have not yet met members of Spartacus. In the last year or two, they have done so repeatedly. Kaliya Franklin, for example, one of the people I named for the delegation, met the Secretary of State at the Conservative party conference last year, and I understand that it was a productive and courteous meeting, as I would have expected it to be. Kaliya also met the Under-Secretary last year and I believe that the discussions on disability and work were fruitful.

Sue Marsh, another leading member of the Spartacus group whom I included in the delegation, discussed employment and support allowance and work capability assessments with the former Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling), for 45 minutes before they appeared on “Newsnight” together on 12 January. Both those disability activists had engaged in debate with the former Under-Secretary of State, the right hon. Member for Basingstoke (Maria Miller), numerous times on Radio 5 Live, Radio 4 and BBC TV. I simply cannot understand how the current Minister of State can conceivably, on the basis of any defensible argument, refuse this delegation.

Spartacus set out to engage with politicians. That is what it wanted to do: to create a movement with a credible voice that would be scrupulous in aiming for reasonable change, setting out reasonable demands that it believed were achievable. Yes, it does focus on the most damaging aspects of welfare reform and explain why they are harmful, as it might be expected to do, but it also offers alternatives which it believes will work and which are costed whenever possible. For the Minister to deny the engagement that Spartacus itself wants strikes me as bizarre and perverse.

Spartacus tells me that over the next few weeks it will produce a clear set of demands regarding ESA. Key to that will be the implementation of all—I stress the word “all”—the Harrington reforms now. Three years is long enough, and Harrington himself said in his year 3 review that progress had been too slow.

Of course, in trials in which all the changes are implemented, the rate of assessments falls from the current rate of between eight and 11 a day to perhaps four or five, but, crucially, this has led to nearly 100% accurate decisions. On the basis of that extremely important conclusion, I hope that Ministers will reconsider and agree to meet the delegation.

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

The Spartacus report was put together following a great deal of academic advice from my local university, Brunel. The whole purpose was to engage constructively with the Government to improve the system, and to consider basic reforms. Those people thought they would enter into a consistent dialogue with the Government. The absence of a ministerial dialogue undermines the whole exercise.

[Mr Meacher]

My hon. Friend is right. That is the whole point. The purpose is not to abuse the Government, but to engage in a rational, thoughtful dialogue in which each side listens to the other.

I realise that I could omit Spartacus from my request, but I am not prepared to do so because I do not believe that Ministers should have the right to pick and choose who is to be included in delegations they receive. It is not as if Spartacus members were rude or offensive, or did not have a powerful case to make. I would understand the Minister’s refusal in those circumstances, but they are, in fact, rational, plausible and eager to engage, and they have an extremely compelling message to which Ministers ought to listen.

I hope very much that the Minister concerned, who has displayed highly uncharacteristic defiance and intransigence, will change his mind, but if he does not, I will certainly not leave the matter where it rests at present. I will renew my request to the Secretary of State in a letter that I will personally deliver into his hands, so that this time the matter is brought to his attention.

Let me end by saying that I think it is tragic that we are having to waste time this afternoon discussing the composition of a delegation rather than dealing with the real issue, which is that hundreds of thousands of sick and disabled people have been subjected to real hardship, suffering and fear because they have been so bitterly mistreated under these regulations. They should be listened to directly, and that is the request to which Ministers should now respond.

--- Later in debate ---

[Esther McVey]

I will address that point later in this debate. What is key, and what the Minister of State felt was key, is a constructive dialogue. He has consistently said several things about the WCA since taking up his role. It has to be made clear—one would not necessarily take this from today’s debate—that he inherited the WCA from the previous Labour Government. We would not necessarily know that from listening to this debate. We have been committed to improving it. We want changes to happen, wherever possible, in collaboration with the people who know most about it and who are affected by it. The Minister of State made those points in the debate on 17 January, but it is worth reiterating them today. They are the core principles that drive much of the Department’s work on the WCA and will remain so. Since taking office we have made the WCA more sensitive and less mechanistic, successfully implementing a number of challenging reforms to it.

The independent reviews of the WCA are obviously one of our key drivers for positive change. Professor Harrington has had extensive interaction with a wide variety of stakeholders, including individuals, lobby organisations, MPs across all parties, and the staff in the Department for Work and Pensions and Atos who are affected by the changes resulting from his work. Professor Harrington listened to all of the concerns raised and made recommendations based on the evidence provided. His interpretation was that mental health conditions are difficult to assess and he recommended the positioning of mental function champions within Atos. We have listened and a network of champions is now in place to provide advice and support to other health care professionals. He also recommended that we put decision makers back at the heart of the system and ensure they are empowered to make independent and considered decisions, which we have done.

Professor Harrington spotted a gap in our relationships with clinical experts—

[John McDonnell]

rose—

[Esther McVey]

I will give way once I have finished this point, so that I can get the point across.

Professor Harrington spotted a gap in our relationships with clinical experts and concluded we were not consulting them enough on the guidance and training materials used by Atos health care professionals. We have responded by putting a process in place to engage clinical expertise. That is still in its early days but we are determined to make it work. I could go on, but I will give way to the hon. Gentleman.

[John McDonnell]

Will the Minister not just answer the question? Why not this group? What is wrong with this group? Why does the Minister of State discriminate specifically against this group?

--- Later in debate ---

[Esther McVey]

I will get to that. I have just had it confirmed that the letter was received on 5 February and the reply was set out on the date I mentioned.

[John McDonnell]

Just answer the question, for goodness’ sake.

[Esther McVey]

Actually, I was mentioning the constructive dialogue and what was important in the context of why my hon. Friend the Minister of State felt unable to meet that group. I understand that his diary was under immense pressure, but he had rescheduled things and was going to have a meeting, but he did not necessarily feel that the dialogue would be constructive because of the words used by Spartacus in this regard:

“The WCA is a statement of political desperation. The process is reminiscent of the medical tribunals that returned shell shocked and badly wounded soldiers to duty in the first world war or the ‘KV-machine’, the medical commission the Nazis used in the second world war to play down wounds so that soldiers could be reclassified ‘fit for the Eastern front’.”

Because of that wording, my hon. Friend felt that there would not be a constructive dialogue. What he was seeking from the many other people whom he had met was not just criticism—one has to take criticism on the chin—but a constructive dialogue to establish what those groups thought could be done better and how we could adjust the assessment. None of that had ever been forthcoming, for which reason—

--- Later in debate ---

[Esther McVey]

I hoped the right hon. Gentleman would reject and condemn such language so that the group can start on a clearer, more open way forward and have a discussion in a positive light with, as I said, constructive dialogue. That would be a positive place to start.

Those comments are at odds with what Professor Harrington himself has stated. He has said that, although there is more to do, the work capability assessment is the right concept and the Department can be proud of what it has achieved so far in improving the assessment. Our response to the latest independent review made it clear that we agree with his views and that we are committed to continue to improve the assessment.

[John McDonnell]

Will the Minister give way?

[Esther McVey]

All of us can see that that is a positive statement on which to move forward.

[John McDonnell]

Will the Minister give way on that point?

[Esther McVey]

I will not give way on that point. We have implemented those recommendations. [Interruption.] We took on a very poorly designed assessment from the Labour Government and we have done significant work to get it right.

Furthermore, although the Spartacus report on the work capability assessment—the so-called people’s review—reflects what are clearly strongly held views, it is a collection of anecdotal accounts. It fails to recognise the improvements made to the WCA since 2010—[Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Mr McDonnell, I know you are frustrated but you must not behave in this manner. Please allow the Minister to finish her remarks.

[John McDonnell]

On a point of order, Mr Deputy Speaker. I apologise to you for intervening in that way, but you can understand the frustration. I have never heard that sort of feeble excuse for a Minister not willing to meet people with disabilities. I think it is outrageous. I apologise for the interruption.

[Mr Deputy Speaker]

I think the House accepts your apology and hopes that the Minister will be allowed to finish her remarks in silence.

Jobseekers (Back to Work Schemes) Bill

John McDonnell Excerpts

Tuesday 19th March 2013 Commons Chamber

[John McDonnell]

I want the last words of the debate to be a thank you to two young people, because if they had not taken the Government to court, we would not have had this debate. I want to thank them for having the courage to say no when they were forced into unpaid work. I want to thank them for their courage in pursuing it through the courts, and I also want to thank them for allowing us at least to have some debate today to expose the regime that the Government have introduced.

I also want to thank the two organisations that have launched a week of action: Boycott Workfare and the Right to Work campaign. They are campaigning around the country to expose what companies are doing to exploit unpaid labour; the threats to benefits; and the harassment that people have endured. They are also coming out with a simple demand on behalf of young people across the country: they just want a job, but they want one with decent pay. I do not think that that is too much to ask in the seventh richest country in the world in 2013. I want to thank all those organisations for enabling us at least to have some form of debate on this issue today.

Question put, That the Bill be now read the Third time.

Jobseekers (Back to Work Schemes) Bill

John McDonnell Excerpts

Tuesday 19th March 2013 Commons Chamber

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

Is it not true that the Office for National Statistics has confirmed that the Government have included in their employment figures those who are not being paid for their work?

[Mr Hoban]

If the hon. Gentleman looks at the detail of the Office for National Statistics labour force survey, he will see that there are people who are on schemes who say that they are in employment, but that was the case under the previous Government. I have raised that issue with the ONS, because I agree that they should not be included in the numbers who are employed, but it rejected the argument on the grounds of international consistency. We cannot ignore the fact that, excluding those schemes and any reclassification, we have seen more than 1 million net new jobs created in the private sector since May 2010. Perhaps the hon. Gentleman should congratulate us on achieving that.

--- Later in debate ---

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

I feel proud of a whole range of speeches that have been made. They have been principled and have set out the case very clearly.

The straightforward issue is that the judgment basically said that the Government acted unlawfully. What surprises me is that there has been no word of apology from the Minister—not a single word to say, “We got this wrong, and therefore we apologise to the House.” Let us be clear what the judgment said: that the Secretary of State acted beyond his powers. He failed to provide the details of workfare schemes within the regulations and bypassed Parliament by introducing an umbrella scheme—the employment, skills and enterprise scheme. This is not a technicality. In fact—I quote from the judgment of Lord Justice Stanley Burnton:

“There is a constitutional issue involved. The loss of jobseekers’ allowance may result in considerable personal hardship, and it is not surprising that Parliament should have been careful in making provision for the circumstances in which the sanction may be imposed.”

This is a fundamental constitutional issue. The Government tried to slide through Parliament, without adequate consideration, regulations that would eventually deprive our constituents of significant sums of money. The decision found that the Government have unlawfully required tens of thousands of people to work without pay, and, if they have said no, have stripped them unlawfully of a significant amount of their benefits.

The public interest lawyers who took the case said that there are basic requirements of fairness, and those basic requirements are usually dictated by Parliament. The basic requirements of fairness in relation to anything like these regulations are to provide people with a clear explanation of what they have been asked to do, why they are being asked to do it, and what the consequences are if they fail to do it. That has simply, as a result of this judgment, not been complied with. That is what the debate is all about.

The solicitor who represented the claimants, Tessa Gregory, summed it up very well:

“The case has revealed that the Department for Work and Pensions was going behind Parliament’s back and failing to obtain Parliamentary approval for the various mandatory work schemes that it was introducing.”

There was a lack of transparency and fairness in implementing the scheme, and claimants had no information about what could be required of them under the back-to-work schemes. The Court of Appeal affirmed the basic constitutional principle that everyone has a right to know and understand why sanctions are being threatened and imposed. That is what this is all about.

It is worth referring to the cases that determined the judges’ action, and putting them on the record. It is staggering that the Government even contested them. Jamie Wilson, the lorry driver, said:

“I refused to participate in the Community Action Programme…because I objected to being made to clean furniture for 30 hours a week for 6 months when I knew it wouldn’t help me find employment. I was given next to no information about the programme, I was told simply that I had to do whatever the DWP’s private contractor instructed me to do and that if I didn’t I may lose my benefits. Being without jobseeker’s allowance was very difficult for me but I don’t regret taking a stand”.

The community action programme

“is a poorly thought out and poorly implemented scheme which even according to the DWP’s own statistics is not helping anyone get people back to work.”

He continued—this is enlightening about the nature of the people we are dealing with; they are desperate for work:

“I am now participating in the Work Programme but it doesn’t involve me working for free, I have to meet an advisor every 3 to 4 weeks who helps me look for work. I will continue to attend these sessions with my adviser regardless of whether or not I am required to attend because I want to find a job”.

That is what people want.

In the other case, Cait Reilly said:

“I brought this case because I knew it was wrong when I was prevented from doing my voluntary work in a museum and forced to work in Poundland for free…as part of a scheme known as the sector based work academy. Those two weeks”

I worked at Poundland

“were a complete waste of my time as the experience did not help me get a job, I wasn’t given any training and I was left with no time to do my voluntary work or search for”

a job. That is extraordinary. She continued:

“The only beneficiary was Poundland, a multi-million pound company. Later I found out that I should never have been told the placement was compulsory.”

The Secretary of State has been quoted as saying elsewhere:

“Does Cait Reilly think she is above shelf stacking?”

I hope that is a misquote. If he did say it, he should withdraw it because it is a disgraceful insinuation about someone’s character. Cait Reilly also said:

“I don’t think I am above working in shops like Poundland. I now work part-time in a supermarket. It is just that I expect to get paid for working.”

That is all she asked for. She continued:

“I hope the Government will now take this opportunity to rethink its strategy and do something which actually builds on young unemployed people’s skills and tackles the causes of long-term unemployment. I agree we need to get people back to work but the best way of doing that is by helping them, not punishing them. The Government ought to understand that if they created schemes which actually helped people get back into work then they wouldn’t need to force people to attend.”

That is what the young woman who took the case to court said, and I congratulate her on doing that. If she had not, we would not be in the situation of contesting what the Government are doing.

Let us be clear about the intent of the Bill. The Government have acted unlawfully. They have robbed some of the poorest people in our society of, on average, £500 of benefits, which is a lot to people living on the breadline. Now the Government are using this retrospective device to avoid paying back to those poor people money that they should not have been deprived of in the first place. The argument that paying £130 million back to poor people would damage the economy is derisory and laughable. As my hon. Friend the Member for Wansbeck (Ian Lavery) said, if the £130 million was given to the poor who need to spend the money, it would help to boost the economy. To suggest it is a threat to the economy when the bankers have been bailed out with £1.2 trillion is laughable in any Government logic. The suggestion that if we pay the money back, it must come from other claimants is the Government’s classic strategy of divide and rule in their welfare benefits policy.

As my hon. Friend said, the use of retrospective legislation simply ensures that illegality is made legal and sets an extremely dangerous precedent, but that is nothing to do with the money, taxpayers or the economy. It is about prejudice against the poor, the demonisation of the unemployed and the iron heel of a prejudiced state. It is also about the preservation of a large pool of unpaid labour for large-scale corporations to exploit. It is now estimated that the Government will put through 250,000 people on work experience, 850,000 on work programmes and more than 70,000 on the mandatory work activity. At the last calculation, that is about 60 million hours of free labour to those corporations. That is exploitation; it cannot be termed in any other way.

In the past two decades, we have seen a transformation in how unemployment is considered, discussed and viewed. Governments since the second world war had a commitment to full employment and saw as a responsibility their role to ensure full employment. There have always been sanctions within the system to prevent people from abusing it, but they were about ensuring that people were sanctioned if they refused to go for paid work, never unpaid work. Now, just when unemployment is at its highest and it is the hardest time to find a job, the attitude is that unemployment is not the fault of the system or a failure of Government or of society, but a failure of the individual. The individual is to blame, not the society that has caused the unemployment. Therefore, the logic follows that the individual must be penalised, so what the Government have successfully done in the media and elsewhere by ministerial statements is demonise the unemployed—the unemployed themselves have caused their own poverty, rather than the system that has created the unemployment. The result of that logic is what we see today: the poor and unemployed have to be harassed, pilloried, sanctioned, blamed and made to feel guilty for being unemployed.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Does my hon. Friend agree not only that the Government have shown no contrition whatever on the issue, which is a mess of their own making, but that they are trying to scapegoat those people who have been sanctioned illegally?

[John McDonnell]

It is that, but there is also a wider agenda of making people feel guilty just because they are out of work and guilty just because—temporarily, in most instances—they have to depend on some benefits. This is about scapegoating and victimising the poor and people who cannot get a job. It is about harassment and exploitation. At the heart of that is the judgment that Parliament was not properly informed of what those schemes and regulations meant. That is what the judgment said.

I make it clear that I shall vote against the Bill because it is immoral and wrong. Before we vote to render those schemes lawful retrospectively, it is important that Members are aware of what we will be supporting. Boycott Workfare is an organisation that set up— [Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. There seems to be a phone ringing somewhere. Wherever it is, we can certainly hear it.

[John McDonnell]

It is most probably someone looking for a job.

[Mr Deputy Speaker]

Let us hope that somebody answers it, then.

[John McDonnell]

Before we vote tonight, it is important we know that we will be voting to support the workfare schemes being introduced by the Government. The Bill will enable the sanctions to be continued and retrospectively made legal, because people refused to go on those schemes—I think justifiably so with regard to many of them. Let us take some examples from the Boycott Workfare website. Tesco is a classic, and one example refers to

“a fifty-six year old man who worked at Tesco for 40 hrs a week for 6 weeks for no pay.”

He was

“given the worst job, constantly filling freezers in the hope he would be taken on. After the 6 weeks were up the manager asked him if he would like to stay on for some extra weeks,”

and the man said,

“‘with pay?’”

The manager said no,

“why would he pay him when he can pick the phone up and get more unemployed people who have to work for nothing”?

That was at Tesco, and the list goes on. Poundland is a classic example of an organisation exploiting unemployed people, time and time again recruiting shelf stackers while laying off other workers. Primark is another example. One young woman who went to Primark said:

“The Jobcentre paid travel money but no lunch. I worked three days a week, 10 am to 4.30 pm or 5 pm with one half-hour break.”

Primark

“don’t pay any money. It was nearly six months, from January to June. When I finished the placement I took my CV and I asked the managers if they had any vacancies. They said, ‘Not yet—we’ll call you when we do.’ I haven’t had a call.”

[Jeremy Corbyn (Islington North) (Lab)]

Is my hon. Friend aware that there are companies that do the same, but with people who have not come through the jobcentres? People apply for a job, are asked to work for three or four weeks on probation and are then told to go and are replaced by colleagues. There are shops even in the west end using large numbers of totally unpaid staff on a permanent basis.

[John McDonnell]

The whole point of the exercise, as far as I can see—despite the arguments that it makes people job fit—is the massive exploitation of tens of thousands of people for free labour. I will not go through all the examples, but it is worth looking at the Boycott Workfare website, which gives example after example of people who have been exploited or have worked in unsafe conditions lacking health and safety, have stuck at it to try to get a job and who have never got the job. The job never materialises.

What happens if people say no or drop out? They are sanctioned. Sanctions have increased dramatically in this country. In 2009, 139,000 jobseeker’s allowance claimants were sanctioned. By 2011, the number had nearly tripled to 500,000, and it has risen again this year. Interestingly, it is private companies that recommend sanctions to the Department for Work and Pensions. The worst are Serco, Seetec, A4e and Working Links. If they do not get their pound of flesh—if they do not feel that they are getting value for money from someone who is unpaid—they recommend to the DWP that the person be sanctioned.

The irony is that despite all the pain, anxiety and suffering inflicted on unemployed people, the schemes are proven not to work, as my right hon. Friend the Member for East Ham (Stephen Timms) said. Time and time again, all the evidence—whether from the Social Security Advisory Committee, the DWP peer review, Ben Goldacre or the National Audit Office—demonstrates that not only do the schemes not work but, as others have said, they undermine wages for people in work and prevent others from getting paid jobs.

Large numbers of people are extremely angry at how they have been treated. I believe that many are now willing to stand up and say, “We’re not going to be treated in this way.” That is why the sanctions system is becoming even more rigorous, and why it is important for the Government to pass the Bill: they want to intimidate more people and force more people into work, done for free, that they do not want to undertake.

It is worth stating that this is about exploiting people. It is about ensuring that young people in particular are intimidated into unpaid work. People who were brave enough to say, “I’m not willing to take unpaid work and be exploited in this way, and if necessary, I’ll be sanctioned because of that,” have now been proven right. They were not informed of what they were getting into, but they were bright enough to understand the level of exploitation involved and they stood up against it. The Bill says to them that now they have won in court, we will try to ensure that they do not get justice. That is what it is about.

I urge Members to vote for justice. The Bill is a disgrace. It is a monument to a combination of incompetence by the Government and brutality to the poor. I look forward to hearing the Labour party consider what we are doing here today. I urge Members to vote against the Bill, because I think that people are looking to the Labour party to defend them again—to stand up for what is right and just, for the people in our society who are exploited and for those at the bottom at the moment: those who are unemployed, unable to get a job, dependent on benefits and desperate for work. Those people do not expect to be harassed and exploited by a Government using sanctions to force them into unpaid work. That is why I shall vote against the Bill, and why I urge all Members to vote against the Bill to demonstrate that someone in the House is standing up for those people.

--- Later in debate ---

[Grahame M. Morris]

My hon. Friend, who is very knowledgeable and has a background as an economist, has hit the nail on the head. The general public, my constituents and many Opposition Members do not understand why the Government do not address this problem. There is a relatively straightforward way to do so: by legislating for a general principle of tax avoidance. The Government are quite happy to use primary legislation retrospectively to deprive people who have been illegally sanctioned of £130 million, but they will not use the same route to recover moneys properly due to the Exchequer.

There is a contradiction here. Although the Government have been highly critical of what has happened, they continue to push the case for further deregulation. Just yesterday, in a Delegated Legislation Committee the statutory period of notice for compulsory redundancies for employers employing more than 100 people was reduced from 90 days to 45. This Government are still very much pursuing the Beecroft agenda.

[John McDonnell]

It is worth noting that, according to the Government’s impact assessment of that delegated legislation, employers will gain £290 million and employees will lose £250 million.

[Grahame M. Morris]

That just goes to show that we are all in this together—or rather, we are not.

I have seen the graphs and the charts showing that the poorest are being hardest hit. We should consider the effect of a 5% cut in their weekly income. Other Members have spoken about the sort of cuts that individuals are going to experience. I do not know whether the Minister, other Front Benchers or even Conservative Back Benchers know what it is like to exist on £71 a week, but it is a real struggle. Taking up to £25 a week from the poorest families, most of whom are in social housing, can mean a choice between eating or having proper heating. How can this be fair, when the Government’s priority is to make millionaires richer, to the tune of £2,000 a week? Such a tax cut is unimaginable for someone who would be sanctioned under the Work programme. In fact, the £2,000 a week tax cut for millionaires that we anticipate tomorrow equates to 28 weeks’ income for somebody on jobseeker’s allowance.

--- Later in debate ---

[Simon Hughes]

I apologise to the right hon. Gentleman for delaying his intervention. My understanding—the Minister could be helpful in this respect in her winding-up speech—is that the Court upheld the general policy principle of the employment programmes and ruled that the general principle of such employment programmes did not breach article 4(2) of the convention. The failures to be specific and to get the paperwork right meant that programmes could breach the convention. I am not disputing what the right hon. Gentleman says, but I understand that mandatory work activity is not illegal under the European convention. We need to be clear about that. Labour Front Benchers accept the principle of mandatory work activity, provided that it is decent, and accept sanctions in the benefits system.

[John McDonnell]

Lord Justice Burnton made it clear—I think I quoted him before the right hon. Gentleman arrived—that this is a constitutional issue. It is not just a matter of not informing claimants, but of not informing this House.

[Simon Hughes]

I did hear the hon. Gentleman and I accept what he said.

My fourth constituent was sent to a charity shop. He was required to carry out mundane manual lifting work. He said that he had a problem with a back injury, which meant that the work was inappropriate. He has asthma, and therefore work in a dusty environment was not great. There was a failure to provide sufficient work for people to do, including for other people who had been sent there. There was a clear breach of the rules that state that people are meant to work four weeks for five days a week from Monday to Friday. The person at the work placement said, “You have to work on a Saturday if I say so.” Clearly, that was not in the paperwork. The crude point for the Minister is that I am not sure that a graduate seeking work in finance should be sent to a charity shop to dust shelves and move boxes. This seems to be regular and routine in the current system. The Government are spending taxpayers’ money on providing schemes that should help people back to work. I am not sure, however, that there is any intelligent management of the schemes being offered.

It is entirely reasonable for somebody who has been out of work, and has extremely low qualifications, to do a relatively low-skilled mandatory work activity. It is not reasonable if they are seeking to do something else. The Secretary of State is in his place, and he has always been very courteous and helpful in responding to such issues. I ask him and his team to consider how we can significantly improve the quality of mandatory work activity, monitor it better and ensure that we do not send people to do work that, bluntly, will be of no use to them in enhancing their job prospects. Almost nobody wants to be on benefits all the time. People on benefits struggle to make ends meet and we need to do better.

Pensions and Social Security

John McDonnell Excerpts

Wednesday 13th February 2013 Commons Chamber

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

It is unfortunate that the order cannot be disaggregated, which would allow us to vote for its individual elements—supporting the increases at the rate of inflation and opposing those with a 1% increase. The breaking of the historic link between inflation and social security benefits, which has lasted over a generation on a political consensus, is a significant step, so it is important for us to judge it issue by issue in respect of the people affected by it.

I have looked at the Government’s impact assessment, which says that we are affecting one in eight households. The households most affected—those most likely to receive a cut—will be those further down the income scale, families with children and women who are heading lone parent families. I think that when we take decisions such as this, it is important to assess the position of those whose benefits are at stake and to look at their plight. The Institute for Fiscal Studies said that 2.5 million workers’ families will lose an average of £215 a year; 7 million in work will lose £165 a year; and, to reiterate what was said in previous debates, 68% of those affected by the order will be in work.

An assessment undertaken by the House of Commons Library showed that these families are already facing higher inflation because they spend more on food and utilities. Their experience of low income is quite startling. Children born in families with low incomes already have a birth weight 130 grams lower on average than children in social classes 4 and 5. These families are more closely associated with infant mortality and chronic disease later in life, yet these are the ones whose benefits and income we are cutting. Before their second birthday, a child from a poorer family is already showing a lower level of attainment than those in professional families. By six, a poorer child will already have been overtaken in terms of attainment by a child of lesser ability from a professional family. Children aged up to 14 from unskilled families are five times more likely to die from an accident and 15 times more likely to die from a fire at home than a child from a professional family. Such children also leave school with fewer qualifications.

Last year, according to the figures, 130,000 people—and they will be the people whom we are discussing tonight—including 20,000 children were fed by the Trussell Trust through its food banks. That is the reality of what is happening to the people whose benefits we are cutting tonight—for that is effectively what we are doing.

I pay tribute to Save the Children for two pieces of research that it conducted. One was a survey of parents, and in the other it talked to children directly, which I think was quite a significant thing to do. It is important for the voices of children to be heard in the House. As the survey of parents showed, what families are currently experiencing is shocking; and, as I have said, those are the families whose benefits we are cutting.

In response to the survey, well over half the parents on low incomes—more than 60%—said that they were having to cut back on food, while more than a quarter said that they had skipped meals in the last year. One in five families said that their children had to go without new shoes when they needed them. A large number of the children in poverty said that they were missing out on things that many other children took for granted, and one in five specified school trips. One in five parents in poverty said that they had had to borrow money to pay for essentials such as food and clothes in the past year. Those are the families who are in the most poverty, and they will be impoverished even further as a result of what we are doing tonight.

[Mr Russell Brown]

My hon. Friend is entirely right. Organisations such as Save the Children, Barnardo’s and the Children’s Society have produced the cold hard facts that Labour Members all know about. I should like to think that Government Members would get a grasp of the facts as well.

Does my hon. Friend recognise, as I do and as, I think, many people do, that a mother who is trying to prepare a meal and put it on the table often says that she will eat something later, when in fact she is skipping that meal in order to feed her children, knowing full well that they need food in their bellies to get through the rest of the day?

[John McDonnell]

Indeed. According to the survey, half the parents questioned had gone without food themselves at some time in the past year to ensure that their children were fed.

We sometimes forget that children have views as well, and that those views can permeate a whole family. When a family is living in poverty, the children understand what is going on. They have a glimpse of what is happening, and they realise what their parents are going through. I found the survey of children shocking as well, and quite startling. Save the Children said that

“the most striking finding from the survey is the extent to which children are aware of the financial strain their parents are under. Parents are stressed by lack of money and”

—whatever they do—

“many children are sharing this burden.”

It said:

“The majority of all children (58%) think it is getting harder for their family to pay for everything.”

Those children understand. It also said:

“Over half of children in poverty (52%) agree that not having enough money makes their parents unhappy or stressed.”

[Kate Green]

My hon. Friend is advancing a powerful case. I am glad that the Secretary of State is present. He often says that debt is a route to poverty, but is not the situation that my hon. Friend is describing proof that, in fact, poverty will drive those families into debt?

[John McDonnell]

That is true, and I shall say more about it shortly. There is a wider debate to be had, but the pressure on parents that forces them into debt eventually has implications for their children.

According to Save the Children,

“Over a third of children…say their family struggles to pay the bills….4 in 10 children… ‘agree’ or ‘strongly agree’”

—that phrase is typical of surveys—

“that their parents are cutting back on things for themselves, such as…clothes and food.”

The children witness their mums and dads not eating properly.

Let me leave the last word to the families themselves. A number of parents were quoted extensively by Save the Children. It is worth reading quite a few of those quotations, because they hit home and reveal what people are really experiencing. One parent said:

“ I regularly leave the heating off and use blankets and jackets to keep warm so that we have more money towards the food bill... I buy the cheapest brand foods so that I can afford the right amount of fruit and veg for the children. Missing a meal or two a week is not uncommon for me so that my children can eat. My children never go without what they need, but I sometimes have to.”

Brendan is 13. He says:

“I had shoes that were all broken up and full of holes. People at school laughed at me…I saved up my own money for my own shoes, but I don’t care about the brand or the make.”

They are the people who will be driven further into poverty as a result of the decisions we take tonight. We now have 3.5 million children living in poverty, and as a result of the last Budget, the autumn statement and today’s measures, we will probably have another 400,000 or 500,000 children living in poverty by 2015. We are blighting a generation.

Those children will never forgive us, and nor should they forgive us, because we are currently redistributing wealth from the poor to the rich, not from the rich to the poor so that we can tackle poverty and child poverty. That is why I wish I could vote against tonight’s orders. We are in a bind, however. If we vote against this order, we vote against the CPI increases as well. I hope lessons will be learned so that in future years we will properly consider each element of any such proposals.

Any Member who votes for this order tonight should feel a weight of guilt on their shoulders. Individuals and families are suffering greatly. The Save the Children survey findings reflect what we see in our constituencies. People say to us in our advice surgeries every week that they cannot survive on the income they have, whether they are in work because of low wages, or out of work because of low benefits, or—that dangerous combination—in work and on benefits at the same time. They cannot survive on their incomes.

Poverty is not just about income, of course. There is a range of other interventions that need to be discussed and debated, but those other interventions do not work if people cannot put food on the table. They do not work if people are cold at night and do not have shoes or a coat to put on their children. That is why we must halt this cutting of benefits.

We must instead start to look at how we can create a fairer society. We had a consensus for at least two generations after the welfare state was established that when inflation took hold, we would increase social security benefits in line with inflation, so that the poorest would be protected. I agree that we occasionally had rows in this House—both between and within parties—about what form that protection should take. I refused to support the shift from RPI to CPI. That was a debate worth having, and even under the new definition at least people on social security benefits were protected. Now we have torn up that consensus and the people who suffer will not be those who take part in party political debates, but the sort of people who were surveyed by Save the Children, and most of them will be children. That is a total disgrace.

We cannot vote against the Government tonight because of the nature of the order before us, but we can campaign against these measures, and that is what we will do. We will take our argument into our constituencies. We will mobilise people, and I think this generation of children will remember who forced them further into poverty. Any Member who votes for this order tonight will pay for it in the long term—even if they end up paying for it in history. Those Members will be taking part in the impoverishment of a whole generation—kids who cannot afford coats, school shoes and school trips and whose parents have to go without food. That is unacceptable in 2013 in the seventh richest country in the world.