Poverty in Liverpool

Maria Eagle Excerpts

Wednesday 24th October 2018 Westminster Hall

[Maria Eagle (Garston and Halewood) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Streeter. I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing the debate. She will see from the turnout that we are glad that she secured it and that we are keen to support her. I also congratulate her on the way she set out our basic concerns as representatives in this place of the great city of Liverpool.

The Prime Minister said something very important to her party conference: she said that austerity is over. I always like to listen to what Prime Ministers say at their party conference—it is always a very important speech. We will have the chance soon to judge the political coherence of this Conservative Government and how worthwhile or otherwise were the Prime Minister’s words at her party conference, because next week we will see whether the Chancellor acts on the declaration that austerity has ended. I can certainly say that at this time in Liverpool it does not feel like austerity has ended. If it is over, we in Liverpool will expect the Budget to deliver real relief for those in the city who are in poverty and hardship. We will expect the incomes of the poorest to improve as a direct result of the Budget measures that we will see from the Chancellor next week.

Many people in Liverpool really need the Chancellor to deliver on the Prime Minister’s promise to end austerity. Some of them are the most vulnerable people in our society—people who need the most support and who have endured eight long years of that support and their income being systemically removed and reduced by measure after measure from Governments that, from their perspective, do not seem to care about their lives or wellbeing.

I have said before that the use of food banks is an indication of a major crisis and desperation, often amounting to destitution. People do not go to food banks for fun; food banks are an indication of crisis. People are reluctant to go to food banks because they think it is humiliating and an indication of a personal failure to feed their families or to be able to live. No matter how compassionate and helpful the volunteers and staff who distribute food at those distribution points are, it does not take away the humiliation and pain felt by those who have to resort to food banks. Many of my constituents who have been in such a position have made that very clear when I have talked to them about it.

Last year the scale of the food crisis increased, as could be seen at the south Liverpool food bank and at the Knowsley food bank, which covers the Halewood part of my constituency. It is possible to extrapolate from those two centres’ figures that, just in my constituency, in 2017-18, 3,933 people were given emergency food packages to enable them to feed themselves and their families. Some 1,457 of those helped were children—the figure increased from the previous year, which itself had increased from the figure for the year before, which had increased from the year before that. There have been increases for many years.

Last year, there was an 8% rise in the number of vouchers presented at the south Liverpool food bank and at distribution points in the Liverpool part of my constituency. In the Halewood part of Knowsley, which is in my constituency, the number of people who were helped increased by more than 20%. The number of children who were helped was up by more than 50%. In my constituency alone, more people were helped in one year than were helped by food banks in the whole of the UK in 2005. That is the reality.

My hon. Friend the Member for Liverpool, Wavertree was correct to make it clear in her remarks that this should not be something that we accept as inevitable. There is nothing inevitable about having to use a food bank. It could be fixed by ensuring that people who are currently in that position have the income to look after themselves. I should make it clear that other, non-food bank, help is available in my constituency, but is not counted in the figures that I just set out. It includes organisations such as Can Cook, a charity based in Garston that provides free, freshly cooked meals to those in food poverty who need help. Although it ranges much more widely than Garston and Halewood, last year Can Cook provided 18,000 free, fresh meals to hungry people in the Liverpool city region, some of them in my constituency.

Things are worse than the Trussell Trust figures imply; the scale of the need is greater. The experience in my constituency is that the need for emergency food help, including food bank use, is increasing, and that the poverty that it represents is deepening. In a parliamentary answer to my question this week, the Government have yet again refused to take any action to begin to collect official statistics about the causes of such an increase in dependency on food banks, suggesting only that they will review existing sources of information to fill data gaps.

In my view, that is just not good enough. The Government seem to not want to know the truth, and so they do not bother to do research or collect statistics. I have been asking them for years to do that. I can tell the Minister what the main causes of food bank use are in my constituency: in the south Liverpool food bank, 49% of those who were helped said that the main cause of their food crisis was delays in the payment of benefits to which they are entitled, or changes to their benefits. Some 32% said the main reason was low income because of low wages, underemployment and not working enough hours to make ends meet at the end of the week or month. In Halewood, the figure for benefit delays and changes was also 49%, while the figure for low pay and lack of hours was lower, at 19%. Those figures are not untypical of Trussell Trust food banks around the country. When Ministers tell me, as they did in a recent parliamentary answer, that

“People use food banks for many reasons, and it would be misleading to link them to any single cause,”

they do not want to accept that the main causes of this increasing food crisis include their administration of the social security system and their austerity cuts to our safety net.

Things are about to get worse. My hon. Friend the Member for Liverpool, Riverside (Dame Louise Ellman) spoke about the roll-out of universal credit in Liverpool, which is beginning to happen. The Trussell Trust tells us that where universal credit goes live, there is an average 52% increase in food bank use over the following year, compared with a 13% increase in the areas where universal credit has been operational for three months or less. The increase is there even after accounting for seasonal and other variations. In my constituency, only 13% of the households who are to be placed on universal credit have yet been put on to it, only 10% of the children who will be in households on universal credit have yet been affected, and only 2% of the households on sickness or incapacity benefits have yet been placed in that position. That amounts to a looming tsunami of further hardship, misery, poverty and hunger that the Government are about to unleash on some of the poorest and most vulnerable of my constituents. Like my hon. Friend, I urge the Government to stop and not to roll out universal credit in my constituency. I can tell the Minister now that it will cause more poverty, hardship and desperation if they press on as they have told us they will.

Riverside, a registered social landlord that covers my constituency, has been surveying some of its tenants about the impact of universal credit roll-out. It says that 7% of its tenants are on universal credit, but that their rent arrears amount to 18% of the rental debt owed. Average arrears for universal credit tenants are £600, compared with £218 for households not on universal credit. That is yet more evidence that Government policy is imposing hardship and poverty on some of my poorest constituents through their social security policy. Universal credit roll-out creates more debt and hardship and an inability to meet the basic expenses of living. That is clear from the experience of some of my constituents, who have come to be on universal credit ahead of the roll-out. I have given examples before in this Chamber and in the main Chamber—egregious examples of real hardship and pain caused by universal credit, administrative failures and by other problems with the benefit.

The Church of England and Children’s Society’s recent report “Not making ends meet” highlighted that poverty is not being caused by universal credit alone, and I agree. The lowering of the benefit cap, restrictions on help with housing costs and sustained low income, including in-work poverty, are also increasing problems. I sometimes wonder whether Ministers understand the degree to which multiple changes to benefits, with cuts that were planned and announced years ago but are only now being implemented, and loss of support from other sources, such as the local authority, can affect already vulnerable and poor individuals and families, for whom one more blow might be the final straw. Indeed, the Joseph Rowntree Foundation report “Destitution in the UK 2018” made that point. It estimated that in 2017, across our nation, 1.5 million people were deemed to be destitute—unable to access the bare essentials to eat, stay warm and dry and keep clean. Food, clothing and heating were the most common essentials that people were without. Such destitution was found to be clustered in London and northern cities such as Liverpool, with Liverpool second only after Manchester in exhibiting the worst rates. My hon. Friend the Member for Liverpool, Wavertree also made reference to that study.

Since 2010, Liverpool has had the highest level of cuts in local authority funding. By 2020-21, almost 68% of its money will have been removed by central Government. That is £444 million-worth of cuts, despite increasing demand for the help that the city council provides for its poorer citizens. It provides a lot of help beyond the amount of money it is given by the Government to provide such help. The Liverpool citizens support scheme has seen a 5.7% increase in awards, mainly due to increasing demands for urgent needs awards. The main reasons cited were that the individual was waiting to receive a state benefit or had no funds due to an unforeseen crisis. Universal credit roll-out will increase the need hugely. I know from my own case load that if not for the Liverpool citizens support scheme, many of my constituents would have had nowhere to turn.

Similarly, discretionary housing payments have increased by 35%, and the city has to put more money in than it is given by the Government to support that. The Mayor of Liverpool tops up the money because he is unwilling to let vulnerable people go without help and have nowhere to turn and become homeless, thus imposing an even higher financial burden on the state. Universal credit roll-out could push the resources and schemes beyond the Mayor’s capacity to continue to fund them effectively. Unless we see significant measures in the Budget to alleviate poverty in Liverpool and really end austerity, the trends we are discussing will worsen. We will judge the Prime Minister’s rhetoric about ending austerity by the impact of the Chancellor’s Budget next week on the lives of our most vulnerable and poorest constituents.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)]

It is a real pleasure to serve under your chairmanship again, Mr Streeter. I pay tribute to the hon. Member for Liverpool, Wavertree (Luciana Berger) and all hon. Members who contributed to the debate. I clearly do not agree with all the points they made—I am sure they will not agree with everything I am about to say—but it is crystal clear that every one of them is driven by a passion to protect the most vulnerable people in society. We all want the same result; we just disagree about how to get from A to B. I am conscious that hon. Members mentioned lots of different issues. I am merely a junior Minister in the Department for Work and Pensions, so in the limited time I have got, I will try to cover the points about employment, income and poverty, universal credit migration and food banks. If time permits, I will also cover some of the other points that fall at least roughly within my area.

All speakers acknowledged that we have seen record employment, with 1,000 new jobs created every day, unemployment at record lows, and 964,000 fewer workless households. That is important because research statistics show that workless households are four times more likely to be in poverty. I will come to the specific points made during the debate about that.

Many of the speakers mentioned that there had been an increase in zero-hours contracts, for example. That is not the case: the number of zero-hours contracts actually fell by over 100,000 in the last year alone, and they represent only 2.4% of total employment, which is around the same level as under the last Labour Government.

[Maria Eagle]

Will the Minister give way?

[Justin Tomlinson]

Briefly, although I will not take too many interventions because I am conscious of time.

[Maria Eagle]

Can the Minister explain why 32% of those using the South Liverpool food bank said that the main reason they were doing so was low income?

[Justin Tomlinson]

As I said, I will come to food banks—a little patience, please.

We all recognise that getting people into work is important, but ultimately the question is whether it leads to real cash in their pockets. Research has shown that there are one million fewer people in absolute poverty—a record low—and 300,000 fewer children living in absolute poverty, but there is still more to do. While food insecurity has almost halved in the last five years alone—we are at 5.4%; the European average is 7.9%—there is still more to do.

[Justin Tomlinson]

We get reviewed as a signatory country and supporter of the UN’s work, and I will be speaking personally to the person coming.

Of the four current measures of poverty—relative, absolute, and before and after housing costs—three are lower than in 2010 and the other is the same. Those in poverty, who are the focus of this debate, are on average £400 better off in real terms than they were in 2010, while those in full-time work on the national living wage have seen a 7% real-terms increase in their income in the last two years alone. We have done that through a combination of increasing the national living wage—there are arguments about what the level should be, but I do not need to remind colleagues that the rate that we first set was higher than the one in the manifesto that Labour Members stood on in 2015—our income tax threshold, which has completely removed the lowest 3.6 million earners from paying income tax, which is worth £1,000 a year, and our extension of free childcare and other areas of support.

Let me turn to universal credit, which is very topical. One thing that surprised me was that nobody mentioned conversations with work coaches. I know that many Opposition Members have been to visit jobcentres—I have done my research and looked at their Twitter feeds. As a constituency MP—I have only recently been recalled as a Minister—I know that the work coaches on the frontline are very enthusiastic about the principle of universal credit. That does not mean that everything is right, but they are enthusiastic about it. For the first time, they can offer personalised and tailored support.

[Maria Eagle]

Rubbish.

[Justin Tomlinson]

The hon. Lady says rubbish, but has she been to visit a jobcentre?

[Maria Eagle]

The Minister knows very well that there have been coaches in jobcentres for many years helping people on an individual basis. He seems to be arguing that there is no problem—that food bank use is going down and that poverty is going down. I can tell him that that is not the experience in my constituency.

[Justin Tomlinson]

That is not what I am saying at all. I said I would come to food banks. The hon. Lady has not been to a jobcentre to talk to work coaches and see what they have to say. [Interruption.] I know that other hon. Members have.

The key is that the legacy benefits are not some panacea, where everything is great. As constituency MPs, we all know from our casework that legacy benefits are complex, involving three different agencies—HMRC, local government, and the DWP jobcentre—and frankly, one would need to be a nuclear physicist to deal with all three.

Over 700,000 families on legacy benefits were, on average, missing out on £285 of support that they were entitled to, worth a total of £2.4 billion. [Interruption.] The hon. Member for Garston and Halewood (Maria Eagle) is heckling from the sides again, but these are some of the most vulnerable people, and my role as the Minister is to represent them. I have seen in my casework, as a genuine local resident in my constituency, as the MP and, formerly, a councillor, that some people were overwhelmed by the legacy system. Under universal credit, they will have for the first time a named work coach who will stick with them throughout the process to ensure that they are not missing out. That does not mean that universal credit has been perfect—we have had many debates and there have already been many changes. In some cases, under tax credits and legacy benefits we had tax rates of 90%. I know that would please the Leader of the Opposition, but that is not what the decent public want. There were 16, 24 and 30-hour cliff edges, which created a barrier to people progressing in work. The legacy benefits were seeing £2.4 billion-worth of support missed. We cannot knowingly stand by and say, “We’ve got to stop universal credit,” because these are vulnerable people missing out on money.

We are conscious that we have had to make changes to the migration. We have always said that the roll-out of universal credit will be slow and steady—it is a “test and learn”. In last year’s autumn statement, we rightly announced that we would remove the seven-day waiting list, a welcome change that was called for by a cross-party campaign.

A lot of the cases brought up involve people who have not had access to money. We realised that people did not know that the system was not designed to provide advance benefits, so it is now a given that the work coach will push that information in the initial interview.

Anybody currently receiving housing benefit will now get two weeks of housing benefit in addition—no strings attached—which can then be used. We recognised that we should not presume in all cases that they should take full responsibility for paying their housing benefit, so we now offer, particularly where people’s housing benefit payments are sent directly to their landlords.

We have launched the Landlord Portal, which is very much welcomed by local government and housing associations, and we have protected the severe disability premium. In conjunction with the £3 billion-worth of transitional support in place, over one million disabled families will be on average £110 a month better off.