Welfare Reform and Work Bill

Kate Green Excerpts

Monday 20th July 2015 Commons Chamber

[Nigel Mills]

I was not doubting that for a second. With the tax credit changes, we need to be sure that the people who are still claiming tax credits understand that they will be better off doing more hours and earning more than they would have been otherwise. That is why universal credit needs to be rolled out. Everyone will be able to see that they are better off month by month, rather than having to work out if they might have been better off a year ago if they had worked a bit less in a complex way through online calculators. That cannot be a sensible system.

On the child tax credit limit, it has to be right that people who spend a life on welfare have to take the same decisions as people who are going out to work. It is therefore right to draw the line at two children for where the welfare system stops helping. There will still be a lot of help through child benefit and the Prime Minister confirmed that we would not seek to limit that. I think that we have got the line in the right place. It should be clear to people that from 2017, if they have more than two children, there will not be more tax credits.

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

We agree that people in work and people not in work should face the same choices, but does the hon. Gentleman not accept that the proposals on limiting access to child tax credit to the first two children will affect working families and those who are out of work?

[Nigel Mills]

Yes, but clearly the principle is that people should have to make the same choices if they are claiming benefits in work or are in work and not claiming benefits. It is not entirely clear whether the Labour party supports limiting child tax credit to the first two children. It sounds like it might support it, but that it dare not quite say so tonight.

Finally, the hardest issue in the Bill is the level of welfare for people in the work-related activity group. We have to get work capability assessments right. We have to get people in the right group, and people must believe themselves to be in the right group. I have seen constituents who have been through the assessment and have accepted the WRAG as a compromise on the basis that they will get much the same as they would get in the support group, but will have some requirements put on them. However, they thought that they should be in the support group. People who ought to be in the support group, but have chosen to be in the WRAG need support to put their situation right.

We need people to get the support that they need. Those who can never and will never work again need the right support. It is not in their interests or ours to put them in a different group. Clearly, we have to get the system right so that those who are in the group where they are meant to be able to work at some point in the future have the right incentives to take the support, undergo the training and get into work, rather than trying to stay on benefits claiming the slightly higher rate. We need to see the detail of how we can get that right and make it fair, so that we do not end up with perverse incentives.

Overall, I welcome the Bill. It is an important step forward in sorting out our deficit and making our welfare system fair for those who are claiming from it and those who are paying for it.

--- Later in debate ---

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

This evening, we have seen the Conservatives breaking their promises to protect the poorest, to reward hard work, to protect disability benefits, and to address relative poverty. Parents, disabled people and millions of children will bear the brunt of the Government’s policies. Working families will be worse off as a result of measures in this Bill and in the summer Budget. As my right hon. Friend the Member for Birkenhead (Frank Field) has said, they will be worse off by as much as £1,000 per year. As numerous Opposition Members have said, including my hon. Friends the Members for Llanelli (Nia Griffith) and for Swansea East (Carolyn Harris), the new increase in the minimum wage does not compensate sufficiently for the loss of tax credits. The Budget makes a mockery of the Tories’ claim to be the party of working people.

However, there are some measures in the Bill that the Labour party welcomes. We support the ambition for full employment and we welcome the provisions to report on that and the apprenticeships reporting obligation. We will insist on an ambitious full employment target, set at a rate of 80% of the working age population. We will require the Commission for Employment and Skills to report on the quality as well as the quantity of apprenticeships, which was acknowledged by a number of Members, including the hon. Members for Norwich North (Chloe Smith) and for Enfield, Southgate (Mr Burrowes).

Although we recognise the Government’s worthy ambition to halve the disability employment gap, the reporting mechanisms must also set out progress in ensuring that disabled people gain employment and have access to apprenticeships. We also support the reporting obligations in relation to troubled families, although we will seek to ensure that they, too, are strengthened.

I turn to the household benefit cap, which Labour has supported to ensure that people are better off in work. It was Labour that first called for a regional dimension to the benefit cap to recognise high-cost areas. But the cap must operate in a way that protects the most vulnerable, including carers, those looking after young children and victims of domestic violence. The decoupling of the level of the cap from earnings means that the Secretary of State will have an alarmingly wide discretion to set the level, with little scrutiny by Parliament.

As my right hon. Friend the Member for East Ham (Stephen Timms) has said, we will be tabling amendments to address those concerns. As Parliament has both a right and a duty to scrutinise the policy, we will require the level of the cap to be reviewed every year, based on an annual report on its impact, especially on child poverty.

We also agree that those who can work have a responsibility to do so, but the changes in work requirements for parents whose youngest child is aged three or over must come with guarantees of childcare and protections for lone parents. Although we support the provisions in relation to loans for mortgage interest, we will want to examine them closely. We also want to examine the provisions on social housing rents for their impact on housing supply, including, as my hon. Friend the Member for Easington (Grahame M. Morris) said, on specialist housing provision. We will require the Government to produce a plan to ensure the supply of affordable homes and the maintenance of existing housing stock.

Those are measures we can accept and build on, but as my right hon. Friend the Member for East Ham said, other elements of the Bill present significant problems. Of course we accept the need to make savings, but we do not support a four-year freeze on benefits, which will cost 13 million families £260 a year on average, of which 7.4 million are working families losing £280 a year. Uprating should take place annually to take inflation into account.

Labour Members deplore the provisions to airbrush child poverty from the statute book and to repeal the provisions of the Child Poverty Act 2010 relating to poverty targets. The abolition of the child poverty targets is a disgraceful betrayal of millions of children by a Conservative party that previously said it was signed up both to the legislation and to the relative poverty goal, but perhaps we should not be surprised. Under Tory Governments between 1979 and 1997, child poverty doubled. Between 1999 and 2010, under Labour, the number fell by more than 1 million children. There was a further fall in the first year of the coalition Government, thanks to the continuation of measures put in place by Alistair Darling, but thereafter relative poverty has flatlined—there has been no progress whatsoever—while absolute poverty, disgracefully, has risen.

Although I can accept that there is an important set of measures relating to life chances to be looked at, it is simply wrong to overlook the importance of income poverty. Indeed, the Child Poverty Act encompasses both, with four complementary measures of income poverty and specific recognition of the need for strategies on parental employment, housing, health, education, advice, childcare and support for parenting. We will not stand by and allow the Government to turn their back on Britain’s 2.5 million poor children, two thirds of whom—shamefully—live in working families, as my hon. Friend the Member for Warrington North (Helen Jones) pointed out.

I come to the changes to child tax credit and payments for children in universal credit. My right hon. Friend demonstrated myriad unfairnesses in the provisions, including the differential treatment of children in families in receipt of universal credit and tax credits, the effect on disabled children, and the complete failure of Conservative Members to realise that child tax credit is paid to families both in and out of work. We understand that people have choices to make and are responsible for the children they bring into the world, but it cannot be right that children are penalised for circumstances over which they have no control. Furthermore, family circumstances change: few people set out to have children they cannot care for; few lone parents set out to bring up their children alone; unplanned pregnancies happen, as do multiple births or the birth of a disabled child; jobs are lost, people get sick, incomes fall, parents die or become unable to care for their children, and others step in to foster, to adopt or to offer kinship care. Child tax credit helps families in those circumstances. It is the duty of this House to ensure that children are protected, whatever their circumstances, and Labour will table amendments to ensure that that happens.

I turn to the provisions on disabled people and the work-related activity group, which were raised by the hon. Members for Stafford (Jeremy Lefroy), for Airdrie and Shotts (Neil Gray), for East Antrim (Sammy Wilson), for Enfield, Southgate, for Gloucester (Richard Graham), for Amber Valley (Nigel Mills) and for Glasgow East (Natalie McGarry), as well as my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) and many others. Let us be clear: those provisions apply to people who have undergone the work capability assessment and been found to be not fit for work—people with degenerative conditions such as cystic fibrosis, multiple sclerosis and Parkinson’s disease, people with serious mental health problems and people who are suffering from cancer. They are not well enough to work, so, rightly, they are not required to look for work. They are signed off sick by their doctor, and employers do not even want them in the workplace. The idea that such seriously sick people should be “incentivised” to work is not just offensive but misconceived. The incentive will, if anything, be truly perverse, encouraging more people to be placed in the support group.

If the Government believe that something is wrong with the work capability assessment, they should sort out the assessment process. If they believe that we should offer more support to disabled people to get back to work, we can only agree. But slashing their benefit by £30 a week is not going to help those with serious, long-term health barriers to working. It will not make them well or get them jobs; it will just make them poorer.

In conclusion, this Budget and this Bill will increase poverty, hurt disabled people and seriously damage work incentives. We ask the House to support our reasoned amendment so that we have the chance to make this a Bill that protects the vulnerable, especially children, while ensuring that work always pays. I commend our amendment to the House.