Welfare Cap

Kirsty Blackman Excerpts

Wednesday 29th January 2025 Commons Chamber

[Alison McGovern]

In the specifics of our proposal, we will publish a Green Paper on health and disability in the coming months. With regards to the financial controls, we will do all that the Chief Secretary to the Treasury set out some moments ago on allowing the Office for Budget Responsibility to perform its function. That is the best way to ensure that we take fiscal decisions within the guardrails that he set out.

The results of 14 years of failure are unfortunately only too obvious, as I said earlier. Everywhere we look in this country, we can see the impact of what the previous Government did. Too many people in far too many places were neglected and failed, starved of opportunity, and left to turn to a social security system that just is not working. Everybody in this country suffers the consequences.

[Kirsty Blackman (Aberdeen North) (SNP)]

I am not sure how long the Minister has left in her speech, but I have a question about the welfare cap. We are being asked to make two decisions: to approve the welfare cap, and to note the breach. She has made the case for how the Government are trying to get Britain working and why the breach has happened this year, but so far she has not made the case for why they are putting in a welfare cap this year and why we parliamentarians should agree to it.

[Alison McGovern]

I did make the case for the overall welfare cap and for that policy at the beginning of my speech, because it is important that we have proper controls on public spending. Fantasy economics will do absolutely nothing to support family finances and the Government are determined that we will manage public finances in a responsible fashion.

The results of failure are far too obvious; we all pay the consequences. That is why we will not stand for it. Every penny counts, but so does the future of every person in this country. That is why, in order to ensure we save every penny for the things we want to spend on in social security, we are bringing forward the biggest welfare fraud and error package in recent history. We are not just tweaking a broken system; we are going to fundamentally change the way we approach reform, starting with the principle of focusing on people.

We will tackle the root causes of unemployment—whether you are out of work because you cannot find a job or are out of work because the last Government wrote you off, everybody deserves to build a better life and fulfil their potential.

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[Dr Sandher]

I could not agree more with my hon. Friend. Ten minutes is nowhere near enough time for people to get the job support they need. It is not enough for those who are seeking help or for those seeking to give that help, especially as the economy is changing and getting a well-paid job requires more training. The country changed before with the automative revolution, and it is now changing with the artificial intelligence revolution. Those people need support and help in order to get security, but they are not guaranteed it or given it at the moment, and that is the precise intention of the changes we are putting forward. It is not easy to put forward these changes and it will not take a short time, but by starting that work today and by changing the relationship between those who are seeking to give help and those who are receiving that help, we can ensure that those who need help will actually receive it.

This is not just about those on the ground who are doing great work, or indeed about my former brilliant colleagues at the DWP. It is also about how we in this House speak about those who need help, who are in poverty or who receive social security payments. We must understand that every single person in this country wants to work and wants the dignity that comes with it, but they are too often let down because of a lack of well-paid jobs, a lack of support and a lack of dignity afforded to them by a party that sought only to demonise. That is what we seek to change in this House and, indeed, in this country. That is the choice before us, and it is why we are making these decisions: a technical breach of the welfare cap this year and a more accurate welfare cap in the years ahead, so that we can begin to provide the support that people need.

[Kirsty Blackman]

People go to food banks because work does not pay and the two-child cap, for example, means that they do not have enough money to live on or to support their families. Why is the hon. Member supporting a welfare cap that bakes in the two-child limit?

[Dr Sandher]

I do not believe that the hon. Member is correct. The welfare cap does not define future decisions; the welfare cap in future years defines the total amount that will be spent at that time. We should be clear what the welfare cap refers to. She mentioned the two-child limit in particular, and Government Members have been clear that choices have to be made in straitened times. We know that children are driven into poverty and that no child deserves to be born into such circumstances. Indeed, we know about the huge and shocking rise in child poverty and child hunger in this country. I know that Members across the House are shocked by that, but the truth is that we cannot make every such decision in this House because these are straitened times. However, I appreciate the intervention and, indeed, the good faith in which it was made. There is a lot we have to change in this country, and I am sure we will do so in the years ahead.

The choice before us today is simple. The technical breach this year and the change in the years to come are the right choices, and we are making them for the right reasons. Many in work today cannot make it pay, and that is why we will make sure that people who are in work get the training they need. That is not just about the training they need to get a better job; it is about the support they need to ensure that their healthcare, and indeed their health, is good enough to continue working.

More broadly, we must ensure that every single person in the country can have a decent job that pays enough, and we are taking action in three areas to do that. First and foremost, there is our action on the NHS and through the Darzi review, because we should not live a country where almost 3 million people are too sick to work. We have offered thousands more appointments to get waiting lists down, because people who cannot see a GP today are far more likely to end up out of work tomorrow.

Secondly, we are helping people get into work. There are the 16 trailblazer programmes to join up work skills and health support, and the £115 million to help those with complex needs get back into work.

Thirdly, we are creating good jobs for young people with the youth guarantee, so that every single young person in this country can access the training they need and the apprenticeships they require.

The fundamental reforms the Chancellor set out in her speech today are also about supporting people into work so they can contribute to our economy, and do what they need to do to get a decent life for themselves and their family. Having a decent job and earning enough to live is about more than the pound in a person’s pocket; it is about a sense of contentment and something to talk about with their mates. It gives meaning to each day.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

I agree with a number of the comments that have been made across the House today. I found myself nodding along with the right hon. Member for Hayes and Harlington (John McDonnell) there, and particularly with the right hon. Member for Islington North (Jeremy Corbyn). I just want to highlight a couple of things before I get into the meat of my speech.

We know that 38% of universal credit claimants are in work, so I am glad that the Government are talking about how to make work pay and how to get more people into work. I am glad that the Government are investing in strategies that will get young people into work, and that will get people who have been long-term unemployed, or even short-term unemployed, back into work. I am glad that they are reforming jobcentres so that they will be assisting people in a way that they maybe have not been doing in recent times. I am pleased about all of that, but we need to recognise that 38% of those on universal credit are already working. It is just that their work is not paying enough or is not offering flexible enough hours if they have childcare or other caring commitments, and therefore they need that top-up.

The welfare cap covers not only benefits and other elements of social security provided to people who are out of work, but child benefit and a huge number of different things. It is not entirely focused on people who are out of work, although I appreciate the Government’s action on that.

The right hon. Member for Islington North talked about how the welfare cap is a bit backwards. Everyone would be jumping up and down, saying, “That’s backwards,” if we said, “We are going to put a cap on the number of people who can receive chemotherapy, and on the amount spent on it, because we are going to reduce the rates of smoking, obesity and other risk factors. We are going to have a healthier population, so it is okay for us to cap chemotherapy. We are going to put all this stuff in place to ensure that we reduce the spend on chemotherapy.” We should first spend the money and solve the problem, and then the spend will reduce.

That is the whole point about the welfare cap—it is backwards. By having a welfare cap, the Government are saying that they will reduce the spend on welfare by doing all the things that they are not yet doing. They have not solved the problem. Once they have solved the problem, and once the welfare system has improved in the way they are trying to improve it, the numbers and the spend will reduce.

I am, however, not entirely convinced that everything the Government are putting in place will reduce the spend, because they are battling against a number of factors. Even if they manage to get jobs to pay better, even if they further increase the minimum wage so it is closer to a living wage, even if they ensure there are more opportunities, and even if the Chancellor’s opportunities for growth actually exist and create many more jobs, there will still be a significant number of people whom the system is not set up to support.

I have dealt with people in my constituency surgeries who are being supported by third sector organisations, which are being hammered by the national insurance changes and will not be able to provide the support they have been providing. I have dealt with individuals who are six months away from having the consistency in their lives to be able to get up at 8 o’clock every morning.

My concern is that all Governments—I am not specifically blaming the Labour Government—look for quick wins. They look for the low-hanging fruit. “Where can we try to improve things so that people who are pretty close to work anyway—who are not that far out, who have pretty stable lives and who do not have an incredibly chaotic lifestyle—can access work?”

We will be letting down those people who have chaotic lifestyles and who are so far away from being able to get into paying work—particularly full-time paying work—if we reduce the amount of disability benefits they can claim or reduce the amount of support they can receive, when they are a year away from having the stability to be able to access work.

The social security safety net is not a safety net unless it provides support to people who absolutely cannot work right now, and who will need 12, 15 or 18 months, or two years, of intensive support to get to a position where they can achieve part-time work. I do not think that support is in place, and I do not think any Government have provided enough support to ensure that people are not left on the scrapheap.

[Robin Swann]

We talk about labelling people, and we used to have that awful acronym “NEETs”—young people who are not in education, employment or training—and thank goodness we have moved away from that.

The hon. Lady is talking about programmes, and the programmes we had in Northern Ireland under the European social fund and the UK shared prosperity fund are now being withdrawn from those communities. Those organisations were crucial in helping people who were far from employment get into gainful work. It takes time to build up young people’s confidence in society so that they see the value of work. I agree with the hon. Lady that the problem requires a long-term plan, but the Government are looking for short-term plans.

[Kirsty Blackman]

It is absolutely about long-term planning. That is why we are making the case that we cannot have a welfare cap and that things are being done backwards. We should put in place all the supports that the Government are promising, and more, to get people to the position where they can get into work.

The welfare cap is an unfortunate hurdle, particularly as it bakes in some of the cuts that have been made, such as the winter fuel payment. It seems that there will not be an increase in the level of paternity pay; it would be nice to see an increase in paternity pay levels and in the number of men taking up paternity leave. On young people not in education, employment or training—a phrase that was used earlier, when somebody said NEET—it would be great if young people had more chances and choices.

Finally, on issues relating to specific geographical locations—the Minister mentioned Blackpool—hon. Members would not expect me, as the hon. Member for Aberdeen North, to avoid talking about the importance for Aberdeen of having a just transition. I mentioned doing things backwards; the Minister needs to ensure we build up renewable energy jobs before we knock down the jobs in fossil fuels. I am concerned that the Government are failing to do that in the right order, and that we will have gaps where people will become unemployed because of the UK Government’s actions.