Inequality and Social Mobility

Margaret Greenwood Excerpts

Wednesday 12th June 2019 Commons Chamber

[Margaret Greenwood (Wirral West) (Lab)]

I beg to move,

That this House notes the findings of the Institute for Fiscal Studies that the UK is second only to the US in terms of income inequality among the major world economies in Europe and North America, that the share of income going to the wealthiest one per cent of households has nearly tripled in the last four decades and that deaths from suicide and from drug and alcohol overdoses are rising among middle-aged people; further notes that 1.6 million food parcels were handed out by Trussell Trust food banks last year and that child poverty has increased by 500,000 since 2010; recognises that following the resignation of the entire Social Mobility Commission in November 2017 in protest against the Government’s inaction and a near year-long delay in appointing replacements, the new Commission has found that social mobility has stagnated for four years; considers that the Government’s programme of austerity has decimated social security and led to growing inequality of provision across education, health, social care and housing; further considers that the Government’s austerity programme has caused and continues to cause suffering to millions of people; and calls on the Government to end child poverty, to end the need for the use of food banks and to take urgent action to tackle rising inequality throughout the UK and increase investment in public services.

Levels of inequality in the UK are both shocking an unsustainable. The crisis in homelessness evident on our streets, the stark rise in food bank use and the millions of children growing up in poverty should sound alarm bells for this Government that something is deeply wrong. It should not have taken a debate in the House to get the Government to take note, yet sadly that is where we are today.

In December 2017, the chair of the Social Mobility Commission and all four board members, including a former Conservative Education Secretary, resigned over the lack of progress in tackling inequality. What an indictment of this Government’s social policy! It is the commission’s job to monitor progress towards improving social mobility in the UK and to promote social mobility in England. The chair, Lord Milburn, said in his resignation letter:

“Whole communities and parts of Britain are being left behind economically and hollowed out socially.”

He added that he saw little evidence of the Prime Minister’s rhetoric being translated into meaningful action. In 2018, the commission’s report confirmed that view, finding that social mobility had been stagnant for the past four years.

[David Hanson (Delyn) (Lab)]

I thank my hon. Friend, with whom I share a constituency border, for giving way. Does she agree that one thing we do not need at this time to tackle social mobility is a tax cut for those earning between £50,000 and £80,000 a year?

[Margaret Greenwood]

My right hon. Friend is absolutely spot on. I wholly agree.

Of course, it is not just the commission that is seriously concerned. In May, the Institute for Fiscal Studies launched a five-year study on equality, reflecting growing concern about the deep divisions within our society. In the same month, the final report by the UN special rapporteur for extreme poverty and human rights said that

“key elements of the post-war ‘Beveridge social contract’ are being overturned”

and highlighted that

“British compassion has been replaced by a punitive, mean-spirited and often callous approach”

by the Government. The Secretary of State for Work and Pensions has attacked what she called “the extraordinary political nature” of the report and the Chancellor, too, has brushed aside the evidence that Professor Alston presented—as if none of it mattered; as if the devastated communities and the lives of people ground down by poverty are of no concern. What sort of a Government are they who fail to see that the impact of their policies on people’s lives is always political? And what sort of a Government are they who can have such disregard for the suffering of their people? One of Professor Alston’s conclusions was that the

“Government has remained determinedly in a state of denial”

about the impact of their austerity policies. How right he is.

The next Labour Government will do things differently. Last Saturday, my colleague, the shadow Education Secretary, announced that Labour will create a new independent social justice commission to replace the current Social Mobility Commission. That is in line with the recommendation of the Education Committee, which called for a new commission to drive forward work across government to tackle social injustice. We believe that social justice is the right goal to pursue, rather than social mobility. Social mobility focuses on how easy it is for individuals to escape poverty. That is, of course, important, but it does not address the wider issue of tackling the causes of poverty and inequality. Our goal has to be the delivery of a fair and just society.

The Government’s own figures tell a shocking story. In 2017-18, 14 million people in the UK were living in poverty, 1 million higher than in 2010; 2 million pensioners were in poverty, 400,000 up on 2010; and 4.1 million children were growing up in poverty, an increase of half a million since 2010. Of course the impact of child poverty can continue throughout life. Children in poverty are more likely to die suddenly in infancy, to suffer acute infections and to experience mental ill health. The disadvantage they suffer can affect their progress at school or in work. By the age of 11, only 46% of pupils entitled to free school meals reach the standards expected for reading, writing and maths, compared with 68% of all other pupils. Only 16% of pupils on free school meals pass at least two A-levels—less than half as many as all other pupils.

[Stephanie Peacock (Barnsley East) (Lab)]

Only 9% of kids on free school meals in Barnsley go on to university. Does my hon. Friend share my view that that is absolutely outrageous and that we need such things as the education maintenance allowance back under a Labour Government to change that?

[Margaret Greenwood]

My hon. Friend makes an absolutely crucial point and it is important that young people in Barnsley get the support that they need.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

The most shocking statistic that I have heard since I have been in this House was when we did an inquiry with the UK Faculty of Public Health, which said that 1,400 children a year under the age of 15 die as a direct result of poverty. If it was the roof of a high school, we would be doing something about it.

[Margaret Greenwood]

The hon. Lady is absolutely right; she raises a shocking example and highlights the importance of this issue. We know that 4.1 million children growing up in poverty is leading to such disadvantage and we have talked about the mental ill health and the effects on children’s educational attainment.

[John Redwood (Wokingham) (Con)]

Will the hon. Lady give way?

[Margaret Greenwood]

I will not give way any further, because a lot of people have put in to speak.

Even graduates who have been on free school meals earn 11% less than their peers five years after graduating. The Joseph Rowntree Foundation reported that 1.5 million people were living in destitution in 2017, including—shockingly —365,000 children.

The last Labour Government understood the importance of tackling child poverty and set statutory targets for reducing it based on household income, with a co-ordinated strategy across government that took 1.1 million children out of poverty. Despite that, the Government abolished those targets and only continued to publish figures for poverty at all after pressure from Labour and voluntary organisations. Will the Secretary of State assure us that the Government will wake up to the crisis in child poverty rather than wasting time by coming up with alternative criteria and trying to dispute the figures, as they have done so far?

We know from the Trussell Trust that Government policy has played a key role in the sharp rise in food bank use. In 2018-19, it distributed around 1.6 million emergency food parcels, of which nearly 600,000 went to children. Low incomes, delays in benefit payments and changes to benefits were the key reasons that people turned to the trust for help. It has made the link clear between universal credit and increased food bank use and it is campaigning, alongside other voluntary organisations such as Citizens Advice, for Government action to end the five-week wait for an initial universal credit payment. It is absolutely right to do so.

[John Redwood]

rose—

[Margaret Greenwood]

As I explained, I am short of time so, unfortunately, I am not going to give way.

Leaving people to wait for over a month without any income at all, when many may not have any savings, is simply callous, so will the Government end the five-week wait? The Joseph Rowntree Foundation has identified cuts to social security, low pay and high housing costs as key reasons for rises in poverty since 2011. It has said that the benefits freeze, which affects 14 million people on low incomes, is the single biggest driver of rising poverty levels. By the time the freeze is due to end in April next year, the JRF estimates that it will have increased the number of people in poverty by 400,000, but of course, the cuts to social security did not begin or end with the benefits freeze alone. By 2020-21, the Government will be spending £36 billion less each year on working-age social security than they did in 2010.

[Marsha De Cordova (Battersea) (Lab)]

Will my hon. Friend give way?

[Margaret Greenwood]

Apologies—I am short of time so I will not.

That lower spending includes a cut of £5 billion in support specifically for disabled people. The Institute for Fiscal Studies identified the two-child limit as a key reason for the increase in child poverty to a predicted 5.2 million by 2021-22. The Government must wake up to that reality and understand that as a country we have no option: child poverty must end.

When we consider social justice and disabled people, the picture is bleak. A report by the Social Metrics Commission shows that nearly half the 14 million people in poverty live in families with a disabled person, yet the basic disabled child element in universal credit is worth less than half that in child tax credits and there are no disability premiums. The equivalent support under universal credit for people who receive severe disability premium is around £180 a month lower than under legacy benefits.

Research by Scope demonstrates the inequality in living standards that disabled people face, driven by the additional costs that they face for essential goods and services. Social security support should ensure that disabled people can meet these costs and participate as fully as possible in wider society.

The Secretary of State said in a speech in March that she recognised that disabled people often feel on trial when claiming social security, yet she simply proposed merging personal independence payment and employment and support allowance assessments. The MS Society has likened that to

“harnessing two donkeys to a farm cart and expecting it to transform into a race chariot.”

Will she commit to scrapping the existing system of assessments, and replace it with a supportive environment that responds to people’s needs?

The Government repeatedly say that work is the best route out of poverty, yet this is not borne out by the statistics. About two thirds of people living in poverty live in a working household. The UK is second only to the United States in income inequality among the major world economies in Europe and North America. An IFS study in May found that average chief executive officer pay among FTSE 100 companies in the UK in 2017 was a staggering 145 times higher than the average salary of the worker, up from 47 times higher in 1998. This points to a huge social injustice. It cannot be right that those at the top earn so much more than the vast majority of working people.

All too many people are trapped in low-paid, insecure work, unable to pay the bills. In 2018, in-work poverty increased faster than employment, and 4 million workers were in poverty, a rise of over 500,000 over five years. About 840,000 people are on zero-hour contracts in this country, and women and young people in particular are more likely to be in insecure work. Research by the TUC shows that only 12% of people on zero-hour contracts get sick pay, while 43% do not get holiday pay, and they have average hourly pay over £4 lower than those not on zero-hour contracts, yet this Government still refuse to ban zero-hour contracts.

To make matters worse, under this Government employment support is based on the punitive sanctions regime, despite the fact that there is no evidence that it leads to people finding work that lasts and lifts them out of poverty. Shockingly, over 1 million sanctions have been imposed on disabled people since 2010, but there has been little progress in closing the disability employment gap, which is currently at 30%. Are we meant to believe that disabled people deserve this treatment? Clearly, disabled people are being punished by this Government, rather than supported. Young people are more at risk of being sanctioned, but again there is a real question mark over the effectiveness of the employment support they are being offered through the youth obligation.

I now turn to the high cost of housing. It has long been assumed that younger generations coming through would do better than their parents, but that is no longer the case. Millennials are half as likely to own their own home by the age of 30 as baby boomers, and the Office for National Statistics has estimated that about a third of young adults were living with their parents in 2017. How can they forge their own futures and start families of their own in these circumstances?

This Government have decimated the provision of social rented homes. Since 2010, the number of new social rented homes has fallen by over 80%, and the number of people in the private rented sector has increased by over 1 million households. The evidence of a crisis in housing is all around us. Rough sleeping has more than doubled since 2010, and over 120,000 children are recorded as homeless in temporary accommodation. What kind of a start in life is that?

Research has shown that greater equality has a positive impact on wellbeing for all, yet in the UK we see widening inequality and lack of social justice having a devastating impact on individuals, families and communities. We see a failure of this Government to tackle the most serious social problems that successive Labour Governments have sought to address—poverty, homelessness, disadvantage and destitution. This Government’s austerity programme has decimated social security and led to inequality of provision across education, health, social care and housing.

There can be no excuses. We on these Benches call on the Government to end child poverty, invest in social housing and public services and take urgent action to tackle rising inequality and the suffering of millions.