Taxation: Families

Lord Alton of Liverpool Excerpts

Thursday 17th January 2013 Lords Chamber

[Lord Alton of Liverpool]

My Lords, the noble Baroness, Lady Hollis, has a long-standing and well deserved reputation as someone who, both in office and out of office, has championed the cause of disadvantaged people. I share her basic proposition that the Welfare Benefits Up-rating Bill, to which she referred, is both poverty-producing and risks increasing both absolute and relative child poverty. I strongly believe that the Government need to become far more focused on the root causes of social security and tax credit demand and that their priority should be to make progress on full employment, living wages, affordable housing and support for children.

They also need to be much more aware of the impact of their policies on the vulnerable—a point that has been alluded to by virtually everyone who has spoken in this debate—and especially, I would argue, on people with disabilities. The Government should note a report that has been released today, The other care crisis: Making social care funding work for disabled adults in England, published jointly by Leonard Cheshire Disability, Mencap, Scope, the National Autistic Society and Sense. I would particularly refer them to the chapter headed “Turning back the clock on disabled people’s independence”.

When the Welfare Benefits Up-rating Bill was considered in another place, Sarah Teather MP, the former Minister for Children and Families, was courageous and right to vote against it. She was also right to say that it is the politics of the playground to paint a picture of scroungers versus strivers. Rather than caricatures, we need to ask how it can be right to promote policies that will lead to a couple with two children earning £26,000 a year losing more than £12 a week while 8,000 millionaires will be better off by an average of £2,000 a week. It is neither fair nor just, or equality of sacrifice or an equitable sharing of austerity, that, according to the Institute for Fiscal Studies, referred to by the right reverend Prelate in his excellent speech, some 7 million working families will be on average £165 a year poorer, while another 2.5 million families with no one in work will be £215 worse off. In this context, the new legislation is the last straw on top of escalating inflationary increases in the costs of food, travel, fuel and heating, and comes on the back of changes to housing benefit regulations, the Welfare Reform Act 2012 and the Local Government Finance Act 2012—all thrown at the poor like a series of hand grenades.

Two nights ago I chaired a Roscoe Lecture at Liverpool John Moores University, and I declare my interest as I hold a chair there. I had invited John Bird MBE, the founder and editor-in-chief of the Big Issue, to deliver the lecture. At the heart of his remarks on Tuesday was the proposition that the creation of a dependency culture has not helped the poor, but quite the reverse. He said that the Government have,

“created a new class of people who are outside society: workless, broken, and lost to ambition and social improvement”.

But he was not suggesting that the way to tackle this culture is to cut benefits before we have tackled the fundamental cause. Mr Bird suggested that 450,000 families are on long-term benefits. I invite the Minister to comment upon a statistic he gave, that only half of 1% of those on long-term benefits go to university or into higher education. If that is so, what can we do about it? Certainly, the disincentive of phenomenal indebtedness from student loans is a major disincentive for poorer families, kicking aside the ladder of educational advancement, with all the concomitant effects that has on social mobility.

Having been the first from my own family to experience higher education and having grown up in a home without a bathroom, and then a council flat—and then, as a student, being elected to represent a disadvantaged community in the heart of Liverpool, where half the homes had no inside sanitation or bathrooms—I have noticed some fundamental changes in the intervening 40 years. One is the disappearance of fathers from the lives of children and having any involvement in their upbringing. Some 800,000 children have no contact with their father, a point referred by the noble Baroness, Lady Massey of Darwen, in her excellent remarks a few moments ago. Many drift into gangs and drug culture. The Government need to take parenting much more seriously. I support entirely the recommendations made by CARE and referred to by the right reverend Prelate and by the noble Lord, Lord Bates.

The second change that I have seen concerns benefits. Before the 1980s very few people were on benefits. Working class families, like the one I came from, saw them as the Beveridge safety net. The 1980s and mass de-industrialisation changed all that, turning the working classes into workless classes and, all too often, into benefit-dependent classes—which is why, with 2.5 million unemployed and 958,000 NEETs in this country, people without opportunities for education, employment or training, job creation is crucial.

Where is the present approach taking us? Last year, the implementation of the Government’s policies saw a 44% rise in the number of families relying on emergency bed and breakfast accommodation after losing their homes, bringing the total to almost 4,000 people, and a staggering 79% increase in the number of people visiting volunteer-run food banks—we heard this referred to earlier on—with some 230,000 expected by the end of 2013.

This spectre should concentrate all our minds. It represents not only a catastrophic human cost but also stands to create profoundly negative economic and social effects in the long run. Considering the numerous studies linking unmanageable debt to crime, family breakdown, alcohol abuse and mental health difficulties, there are clear dangers stemming from the fact that more than one million people now rely upon payday loans to cover essential outgoings such as utility bills. Similarly, the hundreds of thousands of children growing up in overcrowded homes or going to school hungry face significantly increased risks of education and health problems, presenting obvious challenges further down the line.

In this context it is unsurprising that so many organisations working to support poor families have expressed deep concern at the virtually unprecedented set of restrictions on the welfare system, which threatens further to weaken the safety net, which has been badly holed. The chief executive of the Cardinal Hume Centre, which provides a vital lifeline to Londoners in poverty, recently said:

“Breaking the link between inflation and benefits before the effects of these changes”—

to the welfare system—

“have even been assessed, is a potentially disastrous move that could cause unsustainable hardship for many people who are already struggling to get by”.

I particularly want to ask the Minister about the effects on disabled people. The Welfare Benefits Up-rating Bill alone stands to impact upon the lives of some 1 million disabled people, adding to the pressures already generated by the Welfare Reform Act and associated cuts. One third of disabled people are living in poverty in the UK and the new legislation simply seems to add to their impoverishment. I particularly want to ask about the new personal independence payment, especially as it relates to mobility issues, about which I have a Question down for a reply during Oral Questions next Thursday. An alliance of disabled people’s organisations is extremely concerned about its effects. Can the Minister confirm the Government’s own prediction, made earlier this month, that 27% fewer working-age people will be eligible for the Motability scheme once PIP is fully rolled out? Disability organisations say that the new proposal means that 42% fewer disabled people of working age will be eligible—an average of 200 people in every constituency.

By changing the criteria for the “enhanced mobility rate” from 50 metres to 20 metres, many will lose a vital lifeline. Cars will simply be taken away, while those who are unable to drive, and use their mobility allowance for other means of transport, will be without the wherewithal to fund privately owned cars or taxis. It is sheer Janus-faced double-speak to tell disabled people to bring their gifts to society and to contribute by working, volunteering or being part of their community, and to take away their means of doing so.

I would also like to ask about the new regulations and the failure to include the existing qualifying phrase,

“reliably, repeatedly, safely, and in a timely manner”,

the criteria used to decide whether a person can carry out essential activities. Without those words, these guidelines will not be worth the paper they are written on when it comes to tribunals or appeals. I hope that the Minister will give this urgent reconsideration.

To conclude, overall, the impact on vulnerable people of many of these changes is going to be devastating. These changes are too deep, they are coming too fast and they are already undermining the most fundamental safety net through which no one should fall. It is unacceptable that through job loss, disability, illness or low pay, parents and children are going hungry and becoming homeless. But the facts speak for themselves and that is the reality for a rapidly growing number. With food banks and shelters increasingly overburdened, it is now urgent that we repair the damage being caused to families and to our society. That is why it was so right for the noble Baroness, Lady Hollis, to put this Motion before your Lordships’ House today. We are all indebted to her for doing so.