Pensions and Social Security

Kate Green Excerpts

Wednesday 13th February 2013 Commons Chamber

[Steve Webb]

In responding to the hon. Lady, I occasionally lose count of the logical flaws in her argument. However, I will take one in particular. The Government have made available for this coming year, 2013-14, an additional £100 million to help local authorities to dampen down the effect of the council tax benefit changes. Many local authorities have reduced the subsidy given on empty homes and on second homes—which are not generally associated with poverty, I would add—and many have damped, or reduced to zero, the impact on council tax. Some Labour authorities have chosen not to do that, which is an unfortunate political decision.

I remind those who might consider voting against the order—the interventions that we have heard suggest that the Opposition are considering it, or perhaps they want to give that impression—that they would be voting against an above-inflation increase in the state pension, a full increase in line with CPI for disability benefit, and any increase in any benefit this coming April.

[Kate Green (Stretford and Urmston) (Lab)]

I am sure that the Minister will be reluctant to penalise with his uprating measures people who are in employment, so why is statutory maternity pay encompassed within the 1% freeze? Has he seen the letter in The Guardian today from six mums who have written to complain about this measure and point out that having a new baby costs families money?

[Steve Webb]

Statutory maternity pay applies to those who are leaving work to have a baby and who often return to work, and for those in work our income tax cut in April will be a very substantial benefit. It is true that the 1% figure applies to SMP. It also applies to in-work benefits such as tax credits, which are not within the scope of the order. That is a consistent approach, particularly given that many people in work, such as those in the public sector, are also getting a 1% increase.

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[Stephen Timms]

My hon. Friend is absolutely right. That does surprise me very much because in opposition the Minister’s party used to champion reducing child poverty. In government, however, it has surrendered and is cutting in real terms the incomes of the poorest in what is frankly a craven surrender to the Tory party at its worst. It is implementing policies that even Mrs Thatcher did not dare propose.

[Kate Green]

My right hon. Friend is right. This order will simply make poor people poorer. Is it not absolutely cynical that, rather than face up to the fact that more children will be in poverty as a result of these miserable measures, the Government decide instead to change the definition of child poverty?

[Stephen Timms]

That appears to be what they are going to do, and it was striking that the impact assessment for the Welfare Benefits Up-rating Bill did not tell us what the impact on child poverty would be. After the election, the Minister and his colleagues started well and said, “Yes, we are serious about tackling child poverty; here are the figures.” They have stopped that now and it is difficult to get an answer out of them even with a parliamentary question. My hon. Friend is absolutely right—they apparently want to change the definition of child poverty, but they will not get away with it because we will be able to tell what is going on.

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[Stephen Timms]

It would be particularly interesting to see a revised child poverty forecast from the Institute of Fiscal Studies, which I expect to appear before the Budget. We now know—as I say, these figures had to be dragged out of reluctant Ministers—that this order plus the Welfare Benefits Up-rating Bill will increase the number of children growing up below the poverty line by 200,000, including 100,000 in working families.

[Kate Green]

I am grateful to my right hon. Friend for allowing a further intervention. When Government Members say that the uprating of benefits is in line with the uprating of wages, including in the public sector, are we not talking about the exactly the same people who are facing a double whammy? Those receiving the 1% benefits uprating are the same as those receiving the 1% pay uprating.

[Stephen Timms]

My hon. Friend is absolutely right, and we are talking about a large group of people. Indeed, the hon. Member for Eastbourne and I were on the radio together when somebody rang in whose total income was £71 a week. She was going to get an increase of 70p a week as a result of this order and she asked, “How am I supposed to manage?” To their credit, the hon. Gentleman and his friend from the Conservative party, the hon. Member for Camborne and Redruth (George Eustice), could not give her an answer.

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[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.

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[Mr Brown]

We are taking one vote, and the Minister knows that.

[Kate Green]

Is not the problem that there is a single order dealing with the uprating of a whole range of benefits, including disability living allowance, which is going up by more than 1%, and other working-age benefits that are limited to only 1%? The problem is that a single order is dealing with a combination of benefits within it.

[Mr Brown]

Exactly, and that is the difficulty we face this evening.

I have raised the point about the 1% freeze on benefits before. I have asked Ministers in both the Department for Work and Pensions and the Treasury what kind of impact assessment has been done and what consultation there has been between the two sets of Ministers, but I have never had a straight answer. What we will be witnessing over the three-year period, according to the Government’s figures, is almost £6 billion being saved or, as I would put it, £6 billion being taken away from the lowest income households. The Minister must surely know that that £6 billion would have been spent in the local economy.

When I first arrived in this House, in 1997, the then Labour Government decided to introduce a national minimum wage, which effectively put money into people’s pockets. The impact assessment at the time was based on £1 million being given to the poorest households, which clearly would then be spent in the local economy. For every £1 million spent in the local economy, 40 jobs were created.

If the Minister is able to do his work—I think that he is an intelligent man—he will see that taking £6 billion out of local economies over three years will have a detrimental impact. My hon. Friend the Member for Edinburgh East (Sheila Gilmore) is telling me that yet another high street outlet is on the brink this evening, so more jobs might go.