Social Security

Debate between Kate Green and Stephen Timms

Monday 10th February 2020 Commons Chamber

[Stephen Timms]

I am very concerned. My hon. Friend is absolutely right. I think that the Government are making sure that the situation is not going to get worse, or at least not much worse, but they are certainly in no way putting right the damage that has been done over the last few years—indeed, over the past 10 years.

[Kate Green]

Does my right hon. Friend agree that there is a cruel lack of logic in the household benefit cap because it is a blunt instrument that takes no account of different family structures and different forms of need in different households?

[Stephen Timms]

My hon. Friend is quite right. We were given a rationale when the cap was introduced—it was an extremely blunt one, but it was a rationale—but the benefit was reduced arbitrarily after that.

I have several questions for the Minister. Does he recognise that the freeze has made life much harder for those who depend on benefits, and that they are due a better offer than simply maintaining the current diminished level of income in line with inflation in the years ahead? Does he recognise the force of the case made by the Select Committee under its previous Chair and by Citizens Advice, which is of course drawing in part on its observations from the work it does for the Department, running the help to claim service for universal credit? Does he recognise that benefits need to catch up on ground lost over the past 10 years?

I have one specific technical question. The definition of RPI is to be revised. The Treasury is going to consult on the future definition, which will replace the current definition in a few years’ time. Is it the Government’s intention to make the new RPI the default uprating amount for each year, rather than the CPI figure that is being used this year? I would be grateful if the Minister said a little about the Government’s intentions in that regard.

As has been mentioned already in this debate, there is one part of the system where inflation uprating makes no sense at all, and that is local housing allowance—determining how much housing support claimants in the private rented sector in each locality can receive. Local housing allowance was introduced in 2008 to limit the amount of housing benefit that could be paid. It was set initially at the 50th percentile of rents in a locality, so the effect was to cap housing support at the median rent locally. In 2011, it was then reduced to the 30th percentile, so housing support would cover only the cheapest 30% of accommodation in the area. Since 2016, local housing allowance has been frozen completely in cash terms, while rents have increase by leaps and bounds. That is why, as the shadow Minister, the hon. Member for Glasgow South West (Chris Stephens) and others have pointed out, Shelter and others have drawn attention to the fact that there is now hardly anywhere in the country where people can rent accommodation for the amount set by the local housing allowance. The shortfall therefore has to be made up from people’s other income, and if that is benefit income that has been has been frozen since 2015-16, so people have to pay their increasing rent by somehow reducing what they spend on everything else.

What does that mean in practice? Well, it is a very big part of the reason why so many people are sleeping rough in London this winter. I can remember—I imagine that many of us can—when nobody slept in Westminster tube station overnight. We have all seen the large numbers who seem at times to be camping out there at the moment. That is the consequence, to quite a large extent, of the extraordinary unwillingness to allow the local housing allowance to reflect what is actually going on in housing costs in London.

Last summer, I hosted a visit to my constituency by members of the Archbishop of Canterbury’s Commission on Housing. We called on one of my constituents who lived with his wife and child in a single small, squalid room above a shop on East Ham High Street. Both those parents work in the NHS part-time, but this room was all they could afford. Their four-year-old son was running around when we visited—a very lively youngster. His mother had given birth to a younger sister, but she had died. It was clear that the housing conditions in that room had contributed in no small part to her death.

That is the impact of the grinding down of housing support since 2010. Surely we can do better than that. In its report last July, the Select Committee recommended

“that the Department unfreeze Local Housing Allowance as planned in 2020/21, and restore rates to at least the 30th percentile of local market rates. Thereafter, the Department should commit to uprating Local Housing Allowance in line with rental prices.”

I want to urge that view from the all-party Select Committee on the Minister this evening.

Welfare Reform and Work Bill (Fourth sitting)

Debate between Kate Green and Stephen Timms

Tuesday 15th September 2015 Public Bill Committees

[Kate Green]

It is good to have your endorsement, Mr Streeter.

We also know that progress on tackling unemployment is not necessarily linear. Even if the Government’s programmes are entirely commendable, effective and produce very positive results—hon. Members will not be surprised to learn that we may have some questions about the efficacy of some of them—as we famously heard from our political forebears, events happen that can blow the finest ministerial plans off course. Looking at the recent history of employment figures, if we are prepared to accept that the definition of full unemployment is, let us say, an employment rate of 80%, we were nearly at full employment in 2008. Then, of course, there was a significant rise in unemployment as a result of the world financial crash.

Although we have begun to see the very preliminary shoots of recovery—it is notable that people tended to stay in work after the 2008 recession, compared with previous recessions—the progress has not been constant since the economy began to recover after the recession. The last two sets of unemployment figures we have seen—we expect some more tomorrow—show unemployment rising again, and there are particularly worrying trends in relation to youth unemployment, which has proven to be a particularly stubborn nut for the Government to crack.

Amendment 24, tabled by the hon. Member for Livingston, is really interesting. I hope the Minister will tell us why she thinks it is right to have a sunset clause. Is she trying to protect future Governments? It is very kind of her to think about protecting future Labour Governments, but we are ambitious about full employment. We were the first to speak about it 10 years ago.

[Stephen Timms (East Ham) (Lab)]

Twenty.

[Kate Green]

Twenty, my right hon. Friend says; I am too young to remember.

We would be happy for an incoming Labour Government to be held to account for full employment. It is an ambition that goes to the heart of my party; indeed, it is embedded in our name. This is an interesting amendment. I want the Minister to explain to the Committee why the Government want to put a sunset clause in the Bill. I very much look forward to the debate we are going to have.

Education Funding for 18-year-olds

Debate between Kate Green and Stephen Timms

Tuesday 28th January 2014 Westminster Hall

[Kate Green]

I very much agree with the hon. Gentleman that the impact assessment, which paints a rather puzzling picture, does not appear to support the decision that the Government have taken. It certainly attempts to paint a rosier view than the one that college principals and sixth-form college heads have painted. The Government’s somewhat thin assessment pays no attention to wider issues, such as the implications for bursary funding, and it pre-empts the outcome of the Cabinet Office review of provision for 16 to 25-year-olds.

[Stephen Timms (East Ham) (Lab)]

I am grateful to my hon. Friend for securing a debate on this very important issue. She has talked about what college principals are saying. Let me quote what the principal of Newham sixth-form college has said, describing those affected:

“These are ambitious and aspirational students who have stuck with their commitment to education. They are doing the right thing…How were they to know that the system would decide that they don’t deserve to be funded for 3 years of further education at the same rate as those students who only need 2 years?”

Is not it a very arbitrary and damaging cut that has been introduced?

[Kate Green]

It is indeed a damaging and arbitrary cut. Little attention seems to have been paid to the educational life chances of these students and why they need this additional year of full-time education at age 18.

There are also, it is fair to say, a number of flaws in the methodology used in the Government’s impact assessment. It compares 18-year-old students with all 16 to 18-year-olds, not with 16 and 17-year-olds, which means that the distinct circumstances and backgrounds of 18-year-old students and their particular needs and characteristics are obscured. It fails to do a comparison with students in school sixth forms, and so underplays the disproportionately diverse backgrounds of FE and sixth-form college students. It ignores 18-year-olds studying for between 450 and 539 hours, and it makes no mention of the disparity between the funding for five to 15-year-olds, and the funding for 16 to 18-year-olds, which the Association of Colleges has pointed out already stands at 22%.

Even so, as the hon. Member for Cornwall—I forget the exact constituency—[Interruption.] It is not all of Cornwall. As the hon. Member for St Austell and Newquay (Stephen Gilbert) pointed out, the impact assessment does acknowledge that there is a disproportionate impact on disadvantaged students. A disproportionate number of black and ethnic minority students are affected. It also recognises that the majority of students affected are undertaking vocational courses of study.

The impact assessment recognises that five out of six students affected are in FE colleges. That means in practice that the effect of the policy overall is a 5% funding cut for FE colleges, compared with a 1% cut for schools. It is likely that, in colleges, the effect will be felt not just by 18-year-old students, but by all 16 to 18-year-old students, because they are often taught together as a single group.

The impact on colleges is compounded by the lagging in their funding, which was highlighted when the Secretary of State appeared before the Select Committee on Education on 18 December 2013. That lag means that the effect of the introduction of a cut in August 2014 is that the funding received for students who have already started two-year courses will be at a rate lower than had been anticipated and budgeted for in their second year. That means that colleges are having to rethink fundamentally their budgets and business plans for next year, and their future admissions policies. I was encouraged by the fact that the Secretary of State recognised that point when it was raised with him at the meeting of the Select Committee and agreed to give it further consideration, including the possibility of delaying the cut until September 2015. I very much hope that this Minister will be able to update us today on what further thought has been given to that.

In conclusion, there are real concerns about the impact of the cut both on institutions, especially further education colleges and sixth-form colleges, and on the students they teach. The policy appears to run counter to all the Government’s ambitions to increase social mobility, to invest in vocational education, to increase the employability of young people at risk of becoming NEET, and to level the funding playing field for colleges and schools.

Of course everyone understands the scale of the challenge, given the financial settlement in the spending review 2015-16, but as has been pointed out, other spending choices could have been made. As the Chair of the Select Committee, the hon. Member for Beverley and Holderness (Mr Stuart), pointed out on 18 December, colleges are losing out, while free schools and academies are being funded for what he graphically described as “phantom students”, often in areas where there is already plenty of provision.

The Sixth Form Colleges Association points out that nine free schools for 16 to 19-year-olds established since 2011 will educate just 1,557 students when they have recruited fully in line with their plans—if they manage to do so—compared with an average of 1,687 students per single sixth-form college, so the investment in free schools certainly does not look like an efficient use of funds at a time when spending for this age group is under such pressure.

Against that background, the choice to cut funding for vocational training, and to cut funding that is more likely to reach students from less advantaged backgrounds—the very group that the system has repeatedly failed—seems at best ill informed and at worst simply perverse. That approach is likely to have a far-reaching impact on the life chances and prospects of the very group of young people for whom we should want to do most. I very much hope that Ministers will take a step back for further reflection and rethink their approach, given the widespread concerns, and I very much look forward to the Minister’s response to those concerns.

Pensions and Social Security

Debate between Kate Green and Stephen Timms

Wednesday 13th February 2013 Commons Chamber

[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.

Welfare Benefits Up-rating Bill

Debate between Kate Green and Stephen Timms

Monday 21st January 2013 Commons Chamber

[Stephen Timms]

Absolutely right—the policies of the previous Government have continued to have beneficial impacts, but as soon as this Government change the policy the numbers will rocket back up again. According to the IFS, child poverty will rise by 400,000 by 2015 and by 800,000 by 2020. On top of that, there will be an additional rise of 200,000 as a result of the Bill. That is what the Government’s policies are doing.

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

Of course, that is the figure the Government have been prepared to acknowledge in relation to relative income poverty, but they have said nothing about the impact on absolute poverty, material deprivation or persistent poverty—all measures they are signed up to in the Child Poverty Act 2010. Does my right hon. Friend agree with me that they should publish the impact on those measures of poverty as well?

[Stephen Timms]

Absolutely. That is what they have done in previous Budgets and autumn statements; in this one there was silence. I agree with my hon. Friend that the Government should absolutely return to the practice they adopted after the election.

Like the Minister in the 1980s, anybody who cares about poverty and who is looking at what is set to happen to the most vulnerable in the next few years, will be appalled. Child poverty will be growing remorselessly once again—back to the policies of the 1980s and back to their consequences, too. There is enormous public concern about the effects of clause 1 and the Bill as a whole. My hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) referred to the coalition of organisations in Scotland who have written about their concern. The Child Poverty Action Group has said:

“The Bill is a cause of great concern.”

Barnardo’s has stated:

“This policy will punish children the most by trapping them in poverty and impacting on their lives, leading to poor health, poor qualifications and unemployment.”

Citizens Advice said:

“It is imperative, particularly whilst increases to earnings from work are restricted, that support for low earners received through the welfare system is not disconnected from inflationary measures to the cost of living.”

The Children’s Society said:

“Groups which are meant to be protected (such as households with somebody with a disability) are more likely to be affected than households without protection.”

In an open letter this morning, the chief executives of Catholic charities in Liverpool, Manchester and London warned of the threat the Bill

“poses to the fundamental well-being of disabled, unemployed and low paid people, as well as their families who are already buckling under the weight of recent changes to the welfare system.”

Welfare Reform Bill

Debate between Kate Green and Stephen Timms

Monday 13th June 2011 Commons Chamber

[Stephen Timms]

If that would mean that people who are currently able to work for more than 16 hours had to give up their jobs altogether, I would not welcome it. That would be a seriously retrograde step. I accept that there is a case for supporting the cost of child care for people in mini jobs as well, but if the additional resources are not available to fund that, it would be a terrible mistake to press ahead and claw that money from people who depend on it to make work pay at the moment.

The Secretary of State set out at the seminar, at which I think the hon. Member for West Worcestershire (Harriett Baldwin) was present, some of the possible options. The Children’s Society has analysed some of the options and concluded that under one of them a family could pay out £1.56p for every additional pound earned. Ministers told us that that problem would be eliminated by universal credit, but it now appears that, if they proceed on the basis of that option, the new system will be a great deal worse than the current one, and will introduce a draconian new penalty for working parents. As I said to her, there is a good case for supporting child care for people in mini jobs, but it must not come at the expense of parents being helped at the moment.

The recent report from the Resolution Foundation and Gingerbread also underlined the point that spreading the same budget among a lot more people will mean families losing money for every additional hour they work. The Government are right to express the aspiration that it should always pay to be in work, but in this case, if they pursue the option set out in the seminar, something will be lost in translation, because families will have to pay out in order to work. The current system does a far better job; the new system that is envisaged will be a severely retrograde step, if it has the effect of taking more than £1.50 off people for each extra pound they earn. The Government appear poised, once they have finally worked out what their policy is in this area, to make work far less attractive than at the moment.

The Government have failed to come up with a policy, so our new clause 2 proposes one: it would retain the percentage of child care costs covered and the cash limits in the current system; it would ensure that work continues to pay for those for whom it pays at the moment; and it would allow the retention of the existing 16 hours’ threshold. The Government say that they cannot afford any extra spending on child care at the moment. My case to the House is that support for child care for those in mini jobs would need to wait until there is funding for it in order to ensure that jobs of 16 hours per week actually pay, as they do at the moment.

[Kate Green]

Does my right hon. Friend agree that it is disingenuous of the Government to make proposals to fund child care for mini jobs, given that the child care market is simply not designed in that way? Finding short episodes of child care for just a few hours a week is extremely difficult for parents, and could make child care provision even more financially unviable and drive providers out of the market?

[Stephen Timms]

My hon. Friend makes an important point and is absolutely right. People are worried about what the Government’s proposed changes will do to the child care market as a whole. It could make some providers uneconomical. If a large number of people currently using child care for more than 16 hours a week are forced, as a result of these changes, to give up their jobs and to withdraw from their child care places, it would put a huge dampener on, and cloud over, the whole child care market in the way she is right to fear. We feel strongly about this matter—the Government simply have not come up with a policy—so I will seek, if I can, to divide the House on new clause 2.

The Government’s failure to produce a policy on child care before the Bill leaves the House is a particularly abject failure. Ministers have not been able to turn their claims into policies. However, although child care might be the most spectacular and significant hole in the Government’s policy, it certainly is not the only one. In this group of amendments, therefore, we have tabled two further new clauses to fill the policy holes on passported benefits, such as free school meals and free prescriptions.

At the moment, people on out-of-work benefits are passported to those additional benefits, but the out-of-work benefits will be abolished, so who will be entitled to free school meals in future? Again, that is not an obscure, but a basic question and the Government have again failed to give us an answer.

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[Stephen Timms]

The hon. Gentleman has a good deal more experience in these matters, if I may say so, than some of his Front-Bench colleagues who are dealing with them at the moment. Good provision, particularly for child care support, was of course made through the tax credit system. That strong support for the costs of child care is why there was such a dramatic rise in lone parent employment under the previous Government. I supported that and I suspect from what the hon. Gentleman just hinted at that he supported it and continues to support it today. The problem is that once tax credits are abolished and universal credit takes their place, we have no idea how child care is going to be supported in the future. That is why I am—rather modestly, I think—appealing for the Government to tell us.

[Kate Green]

Does my right hon. Friend also agree that one of the real concerns we face as a result of universal credit forcing us to look at lumping all the different strands of financial support for families into a single payment is that all the eggs are in one basket, so if one thing goes wrong, the whole benefit—the whole structure of financial support for that family—could collapse?

[Stephen Timms]

My hon. Friend is absolutely right. For that very reason, the risks are great indeed. When I come on to speak to amendment 24 in a few moments, I will point out that if people go beyond a prescribed level of savings, they will lose all that help under all those headings.

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[Kate Green]

Does my right hon. Friend agree that one of the attractions of supporting self-employment is that it often particularly helps those who find it difficult to access the traditional labour market, such as women, because they need to combine work with caring responsibilities and therefore need more flexible hours, and disabled people, who may not be able to access full-time work in a structured workplace but can do some work on their own at home? We also certainly know that there is a long-standing tradition of some of our ethnic minority communities finding that self-employment is the best way for them to sustain economic independence.

[Stephen Timms]

My hon. Friend is absolutely right to say that self-employment is a crucial element of our economy for many people, including those with caring responsibilities; others who, for other reasons, are not necessarily able to commit to a full-time job; and, indeed, those who simply want the opportunity to build up a business for themselves—it is crucial that the system supports them. Tax credits have done so, but I am afraid that universal credit will not. That is a real worry and the approach being taken flies in the face of Government statements of support for self-employment.