Child Maintenance Service: Payment Recovery from Absent Parents

Mike Amesbury Excerpts

Wednesday 2nd October 2019 Westminster Hall

[Mike Amesbury (Weaver Vale) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Owen. I congratulate the hon. Member for Glenrothes (Peter Grant) on bringing the debate to Westminster Hall today, as well as the 13 Members who have contributed. When I spoke in this place a few months ago, I made the point that child maintenance does not exist in isolation. It provides essential help with the costs of raising a child—food, clothing and travel expenses. It can make a huge difference, as hon. Members on both sides of the Chamber have pointed out, to the welfare of the child and their start in life, which is crucial. Whatever the administrative challenges, and whatever the technicalities of the child maintenance system, it is important to remember that children are centre stage, as the hon. Member for Stirling (Stephen Kerr) eloquently argued.

It is crucial that children—it is often the most vulnerable—should have access to the financial support that every one of them deserves. It is equally crucial that the system should function in their favour when that support is withheld without good reason. Research shows that child maintenance alone lifts a fifth of low-income one-parent families out of poverty. We must remember that lone-parent families are particularly vulnerable to poverty. One in four lone parents is in persistent poverty—twice as many as in any other group, according to the Joseph Rowntree Foundation. The inadequacy of social security arguably makes child maintenance even more vital as a source of income for struggling single parents. However, as we have heard from across the Chamber, it is fair to say that there is a considerable distance to go to ensure that the current system of child maintenance achieves its aim.

A recent report from the charity Gingerbread has shown major problems with the payment of child maintenance through the direct pay system, for example. The Government could and should take action to assess the accuracy of the concerns. The current situation, whereby the DWP does not even track whether payments have been made, means that it cannot report on compliance in two thirds of cases. On collect and pay, Gingerbread has consistently argued that there is no evidence that charges encourage collaboration between parents. In the second quarter of 2019, 33% of paying parents in the collect-and-pay service built up arrears owing to non-compliance. The DWP’s own figures reveal that that is nearly £19 million. Furthermore, there remain continuing problems such as those highlighted today with inconsistent casework handing and follow-up—no follow-up at all in many cases—as well as poor and non-existent communication.

In my own constituency case load, as with other hon. Members, concerns have been raised time and again, and constituents believe that they will never get any money because it is tucked away through creative accounting. Like many in the Chamber, I firmly believe that collecting unpaid child maintenance should be a priority for any Government, and that the considerable toolbox of enforcement measures—many, in all fairness, the result of the 2018 review—should be applied more consistently. There has been a significant fall in enforcement activity by the DWP to recover payments that are, by definition, owed to children. According to Gingerbread:

“The hands-off approach, compounded by poor administration, places the burden of responsibility for pushing for Direct Pay enforcement onto receiving parents”.

Where direct pay arrangements break down and arrears accumulate, the CMS can assist by moving the arrangement on to collect and pay, but to use the service paying parents are charged 20% of the child maintenance plus a £20 registration fee, and receiving parents pay 4%. That introduces additional costs for already financially stretched households. Even on collect and pay, only 67% are paying something—I stress that word “something”—towards what they owe. Indeed, some of the testimonials that have been heard in the Chamber today make it abundantly clear that the current system needs to be more robust, and that the leadership of the DWP should listen and take more robust action. This is not simply a question of processes and systems; relationships and emotions are at the heart of how this approach affects those who use it.

Having listened to the debate, I have a number of questions to ask the Minister. Will he introduce monitoring of direct pay compliance, so we can have a clear picture of its effectiveness? Will he commit to introducing improved and more transparent service standards around enforcement and late payments? Will he review the effectiveness of collect-and-pay charges for receiving parents and look at the provisions that relate to the Domestic Abuse Bill around coercive relationships?

Child Maintenance Service

Mike Amesbury Excerpts

Tuesday 23rd July 2019 Westminster Hall

[Mike Amesbury (Weaver Vale) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for securing such an important debate and for his continued work on this issue.

Before I address the substantive and specific issues about the Child Maintenance Service, I want to start by recognising the timing of the debate and the context in which we are having it. This week, many schools across my constituency break up for the summer holidays, and of course, in the constituencies of Scottish Members, many have already done so. Summer holidays should be a time for fun, activities, rest and relaxation, but for far too many children, their experience—and, tragically, their future memories—will be of hunger, hardship and sadness.

A recent report from the Trussell Trust showed that food banks experienced a 20% rise in demand for emergency food parcels for children last summer. More than 87,000 food parcels went to children in the UK during the summer holidays in 2018, which was an increase of one fifth on 2017. Shockingly, the Trussell Trust is concerned that the summer holidays will be even busier this year, as overall demand continues to rise across the UK.

Whatever the challenges or otherwise of the administration and technicalities of the Child Maintenance Service, it is important to recognise, as hon. Members have argued, that it does not operate in isolation from the wider pressures and challenges on children and families. When we discuss it, we do so with the objective of ensuring that those children, who are often the most vulnerable, can access the support that every one of them deserves, as rightly argued by the hon. Member for Stirling (Stephen Kerr).

Child maintenance payments can be vital for families, especially those on low incomes, to protect children from poverty. As my neighbour, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), highlighted, research shows that they alone lift a fifth of low-income single-parent families out of poverty. We must remember that lone parents are particularly vulnerable to poverty. One in four is in persistent poverty, twice as many as in any other group, according to the Joseph Rowntree Foundation. The inadequacy of social security arguably makes child maintenance an even more vital source of income for struggling single parents.

We recognise the importance of ensuring that families and children receive what they are entitled to. However, as we have heard today, it is fair to say that there is limited evidence that the system is achieving that aim. A recent report from the charity Gingerbread has shown that there are major problems with the system of direct pay and, worse, that the Government are not doing anything to effectively address them. The Department for Work and Pensions does not track whether payments are made, which means that it cannot report on compliance in two thirds of cases.

According to Gingerbread, collect and pay charges are not sufficient to deter parents from not paying in full and on time, nor is there any evidence that it encourages collaboration between parents. Furthermore, it found that

“arrangements are prolonged by unclear thresholds for enforcement”,

with the Department experiencing a 69% decrease in the use of deduction from earnings orders,

“with inconsistent follow up from caseworkers and poor communication”,

as many hon. Members have highlighted. That is despite a previous ministerial pledge that the Department would act within 72 hours of a missed payment.

The Gingerbread report continued:

“The hands-off approach, compounded by poor administration, places the burden of responsibility for pushing for Direct Pay enforcement onto receiving parents”.

That will sound familiar to many hon. Members, who have constituents with similar stories from many other areas of the DWP’s responsibility. The fact that it feels so familiar suggests that the problem lies not with individual professional members of staff, but with the culture and leadership at the top of the Department. Indeed, some of the testimonials make it abundantly clear that the system is not working.

We must not forget that this is not simply a question of processes or systems; it is about children, relationships and emotions. A system that divorces itself from the realities, or ignores the consequences, is not fit for purpose. Parents interviewed by Gingerbread said:

“The balance of power is completely wrong. I have to basically keep him sweet so that he contributes”

and

“We had no other option…it’s just unbelievable that the child would have to pay 4 per cent out of their money when they’ve never done anything wrong.”

If the Government’s objective is to ensure that children do not become the victim, financial or otherwise, of relationship breakdown, it seems clear that that is not being met by the current approach. As we have heard, 33% of paying parents were non-compliant in the first quarter of 2019 and by the end of March 2019, cumulative arrears under the CMS were £275.3 million. That is £275.3 million that should be going to children. The cases that we have heard leave even more gaping holes in a system that should be supporting children.

We have several clear asks of the Minister. First, does he accept that the current system—not just the Child Maintenance Service, but many other aspects of social security, such as the five-week wait for universal credit, the benefits freeze and the two-child limit—is not fit for purpose and needs to change? Secondly, will he introduce tighter monitoring of direct pay compliance, so that we have a clear picture of its effectiveness? Thirdly, will he commit to introducing an improved and more transparent service so that we can ensure effective enforcement for late payments and offer hard-working staff the appropriate guidance, training and, importantly, as highlighted by hon. Members across the Chamber, resources? Fourthly, will he review the effectiveness of collect and pay charges for receiving parents?

There appears to be little evidence that the current arrangements encourage payment or communication between parents. The result is that many children end up paying a further penalty and some parents are forced to collaborate with a previous partner, which can create a toxic environment for the children.

I look forward to the Minister’s response. I very much hope that if we return to this subject in 12 months’ time, we will have an improved picture that fundamentally puts children centre stage.

Department for Work and Pensions

Mike Amesbury Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Mike Amesbury (Weaver Vale) (Lab)]

It is a pleasure to follow the hon. Member for Airdrie and Shotts (Neil Gray). I congratulate my hon. Friend the Member for Wirral South (Alison McGovern) on opening this vital debate and thank the many Members who have contributed.

Sadly, there are far too many things that Members could have chosen to focus on when considering the spending approach of the Department for Work and Pensions. Certainly, there is no shortage of examples of delivery failure, catastrophic underfunding and policy approaches that hit the most vulnerable the hardest, including 1950s-born women and citizens who are terminally ill. However, as Members highlighted, there is one area in which many of the Department’s failures come together and one group who all too often suffer the consequences of multiple cuts and changes in policy: children.

It shames us as a society that the Government have allowed children to bear the brunt in such a shocking manner. We therefore welcome this opportunity to scrutinise Department for Work and Pensions spending, and we welcome my hon. Friend’s choice of subject. When the future of some of our most vulnerable children is at stake, it is absolutely right that we should hold the Government to account for their poor decisions.

Shockingly, by 2022, the Department’s spending on social security will be £36 billion less per year than it was in 2010. Social security has become a vehicle for cuts—a political choice that saw 1.6 million emergency food parcels given out last year alone, 577,000 of them to children, and that has seen this Government dragged through the courts on several occasions. For example, 210,000 people who were underpaid employment and support allowance will now rightly receive the £920 million they are owed.

Consequently, as we have heard, the number of children living in poverty has increased by half a million to 4.1 million. As my hon. Friend the Member for Wirral South said, that figure is likely to rise to more than 5 million. In-work poverty is rising faster than employment. Absolute child poverty has also increased over the past year, showing the negative impact of low pay, universal credit, the five-week wait, the four-year freeze and the two-child limit on family income. When poverty and food bank use are rapidly growing industries, tackling and preventing child poverty is clearly not a priority for this Government. When tools that should be used to support people, such as the flexible support fund, are regularly underspent, it prompts a question about whether the Government are even trying to support those most in need through the tools at their disposal.

Even if we were to ignore all the evidence and be generous to Ministers when they say that tackling poverty is a priority, it is clear that they are not doing so with the necessary vigour, success or compassion. When they have applied new policies, they have failed. There have been persistent problems with the personal independence payment, as highlighted by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), with more than 70% of appeals against decisions to remove PIP being successful, at considerable cost to the public purse and, more importantly, with detriment to the life chances and wellbeing of people. The many thousands of families who budget down to the nearest £1 every week to make sure that they can feed and clothe their children and provide a roof over their heads could certainly teach the two candidates rutting to be the next Prime Minister a thing or two about how to prioritise and manage budgets effectively.

Of course, there are many families for whom all the budgeting and prioritising in the world is still not enough to cover the costs of the Government’s draconian cuts to social security. They are victims of the Government’s insistence on continuing to plough on with universal credit and the freeze on working-age benefits, when all the evidence shows that those cuts are causing severe hardship and poverty.

As my hon. Friend the Member for Wirral South has highlighted, poverty is poverty, and food poverty is not separate from it, but a symptom of it—a symptom of low income. It cannot be divorced from the overall effect of Government policy, or wished away by Government-supporting MPs, who think a selfie at a food bank will solve the problems or absolve the Government of their responsibility as the architects of austerity Britain.

We have heard much of the evidence today. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) mentioned a case in which a pregnant woman had universal credit denied to her—I think the phrase my hon. Friend used was “ripped away”—in her time of need. The hon. Member for Glasgow Central (Alison Thewliss) said that social security should be a safety net, but it is a net that is full of holes. She highlighted the immorality of the two-child limit. My hon. Friend the Member for High Peak (Ruth George) spoke about the insensitive assessments applied to the most vulnerable in our society.

Such stories are the real indicator of how we should view the Department and the Government’s record on poverty and their approach to social security. They are committed to the continuation of failing policies, and they would rather trumpet a jobs miracle that in reality, for many people in real communities, is nothing but a mirage; the reality is that most children in poverty live in working households. The Government’s approach has ensured that, for thousands of people, work is not a route out of poverty, given poverty wages and insecure work. That is a damning indictment of their record and of our current economic system. It needs to change.

In just three weeks’ time, we are likely to have one change at least. The leader of the Conservatives, and therefore the Prime Minister, will be someone different. Perhaps the Cabinet Minister responsible for the Department we are scrutinising today will be different too. However, given we have already had six of them in the past three years, that would be less remarkable. If the Government had shown the same willingness to change direction as they have shown to change Ministers, we might be in a different place. But it is not the changing of names around the Cabinet table that will make a difference, or even as some in the media reported yesterday, the scrapping of the Department. It is the changing of policy, the changing of attitude, and the changing of approach that will make a difference.

I ask the Minister to leave a legacy, and heed the clarion call from organisations such as the Child Poverty Action Group and the many voices in the Chamber today. Will the Minister commit himself to ending the five-week wait for universal credit, removing the two-child limit and the benefit cap, scrapping the benefit freeze, paying up-front childcare costs, and putting a stop to punitive sanctions and work capability assessments? Or, better still, let us have a general election and let the people decide.

Oral Answers to Questions

Mike Amesbury Excerpts

Monday 1st July 2019 Commons Chamber

[Will Quince]

I recognise the passion with which the hon. Gentleman raises his point, but, in terms of the five-week wait, nobody has to wait for their first payment of universal credit, as 100% of their indicative advance is available on day one. It is interest-free, repayable over 12 months—and, as the Secretary of State has said, that will in future be moving to 16 months. That is available and about 60% of people are currently taking it up.

[Mike Amesbury (Weaver Vale) (Lab)]

Given that the majority of families affected by the two-child limit are working, why did the Department for Work and Pensions make the following statement in response to the recent report by the Child Poverty Action Group and the Church of England:

“This policy helps to ensure fairness by asking parents receiving benefits to face the same financial choices as those in work”?

Could the Minister clear up this confusion for the House?

Family Law

Mike Amesbury Excerpts

Tuesday 11th June 2019 Commons Chamber

[Mike Amesbury (Weaver Vale) (Lab)]

May I first welcome the Minister to his place?

These regulations are a series of changes and clarifications designed to make it easier to collect arrears and maintenance payments under the child maintenance scheme. The Opposition do not want to obstruct the measures, and we will support them today. We agree with the Minister that it is extremely important for parents to fulfil their obligations towards paying for the cost of bringing up their children. If parents fail to fulfil this obligation and fall into arrears, it is right that Government Departments step in to pursue them—and, as a last resort, through the social security payments system. In supporting this change, we are mindful that having £8.40 a week deducted from benefits for child maintenance arrears can be extremely difficult for somebody on a low income, which may be as low as £73.10 a week if they are claiming jobseeker’s allowance.

We are also too aware of the Government’s rather chaotic approach to our welfare and social security system, and the unacceptable levels of debt, poverty and growing food bank use that are largely driven by the universal credit reforms. However, this must be weighed against fairness towards the care-giver, who has to bear the additional costs of food, clothing, school expenses, childcare and other day-to-day costs of bringing up children. Child maintenance payments can be vital to families—especially those on low incomes—and to protecting children from poverty. According to the single parent charity Gingerbread, child maintenance alone lifts a fifth of low-income single parents out of poverty.

It is important to remember the context in which separated families are living. Lone parents are particularly vulnerable to poverty. According to the Joseph Rowntree Foundation, one in four lone parents is in persistent poverty—twice as many as any other group—and the inadequacy of the current social security system arguably makes child maintenance an even more vital source of income for struggling lone parents. Austerity cuts have driven lone parents further towards the brink, with the two-child limit and the benefit cap pushing three quarters of children in lone parent households further into poverty. The value of child benefit and child tax credit has not increased since 2015 due to the benefits freeze, making it harder to cover the costs associated with bringing up and looking after children. Meanwhile, the cost of childcare grows, according to the Child Poverty Action Group. The full cost of bringing up a child for a single parent has increased by 18% since 2012. Using social security as a vehicle for cuts is a political choice—and the choice has consequences, with over 4.1 million children now living in poverty.

Although we support the Government’s intention to continue making deductions from paying parents to pay off arrears after they have no maintenance liability, as stated by the Minister, I note that there has been no impact assessment of these regulations. Will he commit to a full impact assessment, and commit to monitoring this policy to guard against any unintended consequences of the change?

[Mr Jim Cunningham]

My hon. Friend makes a point about childcare. I do not know whether he has seen the reports today about the Government paying something like £5 an hour for childcare although the costs are a lot higher than that. That means, in effect, that a lot of families are being excluded from childcare. Does he agree that the Government should do something about that?

[Mike Amesbury]

I certainly do. I thank my hon. Friend for that intervention. This case has been highlighted in the media today by the shadow early years Minister, my hon. Friend the Member for Batley and Spen (Tracy Brabin).

We agree with the regulations’ intention to extend deductions from universal credit to include cases where the paying parents’ household has earnings, but will the Minister provide clarification about the commencement of this policy? The Department for Work and Pensions consultation in December 2017 said:

“Changes to UC deductions would be implemented when UC is fully rolled out.”

However, it appears from the commencement regulation of the draft statutory instrument that the changes in respect of universal credit will take effect before roll-out has been completed. Is the Minister able to clarify that? Given that universal credit has been beset by so many problems and delays so far, will it be able to cope with yet another change to the system?

We welcome the DWP’s intention to reduce outstanding arrears. Indeed, its consultation on this issue said that its changes

“would send a clear message to paying parents that failing to pay for their children is not an option. We will recover the arrears eventually, even if we have to wait until they claim State Pension.”

However, that appears to be slightly at odds with the Department’s actions of December last year when it wrote off billions of pounds in arrears in child maintenance. Will the Minister supply an update on the progress of this arrears write-off and how many receiving parents have made representations asking for their arrears to be collected?

Alarmingly, according to the latest statistics, the level of arrears under the new CMS system appears to be creeping up, just as it did under the old system. Since the CMS began, a total of £259.2 million of child maintenance has been unpaid and should now be paid through the Collect and Pay service. That is 11% of all child maintenance due to have been paid since the service began. Although I do not doubt the commitment of the new Minister to tackling non-compliance and arrears, these figures start to make his words on the issue seem rather hollow. Does he have a performance target on the amount of child maintenance remaining unpaid?

Arrears can be compounded by the failure of enforcement in Direct Pay, where parents manage payments directly with each other. In its report on Direct Pay, published this year, Gingerbread reported complaints from parents that arrangements are prolonged by unclear thresholds of enforcement, and that there is inconsistent follow-up and very poor communication from caseworkers. It is very difficult to track enforcement in Direct Pay. Despite its being a central plank in the child maintenance system, the DWP does not track whether payments are made. As Gingerbread says, this means that the Department cannot report on compliance in 70% per cent of cases. Given its centrality to child maintenance arrangements, does the Minister not think it is now vital to track whether payments are being made under Direct Pay?

Labour Members would not contend with other measures in these regulations, including changes to information gathering—which will make things simpler and save the taxpayer money—powers of entry and the calculation change. However, I will finally raise an issue that is not dealt with in these regulations but is a major concern to separated families. Fees were introduced under the new system to encourage more family-based and Direct Pay arrangements. However, the evidence shows that, far from increasing collaboration between parents and prompting compliance, fees are deterring parents from using the CMS, and where parents do pay, it is a struggle to afford it. The Department for Work and Pensions itself has said that some parents are staying in an ineffective Direct Pay arrangement rather than moving to Collect and Pay. Does the Minister agree that it unfair to charge single parents for using the CMS system when often it is the only option available to them? Will he commit to reviewing the impact of fees on receiving parents who have experienced financial coercion and abuse? I look forward to his response.

Universal Credit and Debt

Mike Amesbury Excerpts

Wednesday 5th June 2019 Westminster Hall

[Mike Amesbury (Weaver Vale) (Lab)]

Thank you, Sir Henry; it is a pleasure to serve under your chairmanship.

[James Gray in the Chair]

[James Gray (in the Chair)]

Well, it was—very briefly.

--- Later in debate ---

[Mike Amesbury]

Very briefly.

I thank my hon. Friend the Member for High Peak (Ruth George) for securing this vital debate on universal credit, and for all that she does. The debate’s importance has been powerfully illustrated by the presence of 26 Members in this Chamber.

As my hon. Friend rightly pointed out, universal credit was supposedly designed to be the flagship policy of a reformed welfare system that would protect the most vulnerable in our society, support people into work and act as a safety net for those who needed it most. However, as hon. Members’ speeches today have shown, the experience for hundreds of thousands of our constituents has been chaos and hardship, sometimes resulting in tragic circumstances.

What was once hailed as a simplified, holistic and supportive social security reform has become nothing more than a vehicle for cuts. The political choice of austerity has taken more than £37 billion from the welfare state, while giving more than £110 billion of tax cuts to the wealthiest individuals and rich corporations. While the Chancellor looks around and claims to be blind to the poverty that many of us witnessed as we walked into Westminster this morning, the record 1.6 million emergency food parcels that were given out last year alone and the 4.1 million children who are in poverty tell a different story—one that should shame every single one of us in this House.

Riverside, a major social housing provider nationally and in my constituency, has provided me with a case study that illustrates the systemic failure of universal credit on the frontline. The couple involved, who do not wish to give their names because of the sensitive circumstances, said:

“Me and my partner have had so much Universal Credit taken off us, that we are struggling to get gas, electric and food, on a monthly basis, we have tried weekly and that was even worse, the money that we are on makes having a home difficult…so we are having to visit the food bank more regularly.”

That is just one among many cases that have been highlighted in this Chamber today. The changes and cuts to the local housing allowance have helped to drive rent arrears up to alarming levels. According to Shelter, two in five renters in the private sector are having to borrow money. Minister, that needs to change.

It would be easy for the Government to try to dismiss such cases and statistics as cherry-picking from Opposition MPs; in fact, a previous Secretary of State referred to them as “fake news”. But what about the findings of the United Nations rapporteur on extreme poverty and human rights, who last month published his third and perhaps most damning view of the Government’s welfare policies, stating that our country’s poorest residents face lives that are “solitary, poor, nasty, brutish, and short”? What about the independent End Child Poverty coalition’s finding that child poverty is the “new normal” in some of the most deprived parts of Britain, with half a million more children living in poverty now than in 2010?

The Trussell Trust has found that when universal credit goes live in an area, food bank demand increases by a massive 52%. The trust’s figures show that a fifth of all referrals to food banks last year were linked to delays in receiving benefits, almost half of which related directly to universal credit. The Minister will claim that advance payments are available to universal credit claimants, so no one should go hungry for lack of cash. However, it has rightly been pointed out in this debate that those are loans that have to be paid back, which means debt on top of debt for the 60% of claimants who are forced down that route.

The five-week delay in payments must end. The system must be reformed. Will the Minister listen to the plethora of organisations that hon. Members have cited today, such as Shelter, Mind, the Child Poverty Action Group and the Riverside housing association? The monthly payments design of universal credit does not reflect the reality of many people’s lives or how they manage their money. A Resolution Foundation study found that most people moving from employment were paid either fortnightly or weekly in their previous job. The research highlighted the fact that people who claim universal credit are often not made aware of alternative payment arrangements to help people who are struggling to manage their own money, and do not always receive them when they apply.

In January, the Secretary of State announced her intention to improve the provision of alternative payment arrangements, make it easier for private renters to have payments made directly to landlords, and test ways to make more frequent payments to more people who struggle with monthly budgeting. Will the Minister tell us what progress has been made on that?

As we have heard today, it is not just advance payments that can lead to deductions from universal credit, but other bills too. Indeed, up to 40% of the universal credit monthly standard allowance can currently be deducted for repayment of advances, utility bill debts and rent and council tax arrears. More than half of universal credit claims had a deduction; as my hon. Friend the Member for High Peak pointed out, that is 844,000 people. What assessment has the Minister made of the impact of debt repayments on levels of hardship among universal credit claimants?

According to Citizens Advice, a single person over 25 who claims universal credit can see £127 deducted from their benefits every month to repay existing debts. If the Government are determined to help people to manage their debts, why is their own Department making deductions that often push claimants into hardship?

[Mr Sweeney]

My hon. Friend makes an incredibly important point. In a recent roving surgery, I visited a constituent who was suffering so much with mental health problems that he was unable even to face opening the letters that he received. He therefore did not receive the information about his situation and was subject to severe sanctions and reductions. He could have challenged them because of his situation, but the DWP was unable even to engage with him to assess the risk that he faced. As a result, he was suicidal. It is absolutely shocking what is going on.

[Mike Amesbury]

My hon. Friend makes a very powerful contribution that shows the need for more compassion and flexibility in the system. It is clear from the evidence and from this debate that initial decisions to apply deductions follow rigid rules and rates and do not include an affordability test. Will the Minister introduce an affordability test for deductions, particularly multiple deductions, to ensure that nobody is pushed into poverty or destitution?

The Government’s stock response to criticism of their welfare policies is to deny that there is even a problem, but their talk of a jobs miracle is nothing more than a mirage to many people who struggle on zero-hours contracts or in low-paid and part-time employment, with wages not even at 2008 levels. The same attitude is on display again in the new “Universal credit uncovered” propaganda campaign, with newspaper ads—seemingly designed to look like journalism—that aim to explode what are perceived to be media myths about universal credit and set the record straight, as my hon. Friend the Member for Easington (Grahame Morris) pointed out. It is perhaps telling that one charity has already reported the campaign to the Advertising Standards Authority. As we have heard today, these are not myths. They are facts, which illustrate a social security system that is failing—a system hollowed out by cruel cuts.

In conclusion, I call on the Minister to halt managed migration in its entirety, end the five-week wait, stop punitive sanctions, introduce split payments, restore the local housing allowance to at least the bottom 30th percentile, pay 85% of childcare support up front, stop the benefits freeze and the immoral two-child limit, and properly fund a compassionate social security system.

Pension Funds: Financial and Ethical Investments

Mike Amesbury Excerpts

Wednesday 22nd May 2019 Westminster Hall

[Mike Amesbury (Weaver Vale) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I thank the right hon. Member for Kingston and Surbiton (Sir Edward Davey) for securing this vital debate. I also thank the nine Members who made speeches, as well as those who intervened.

It is not every day that I agree with the Liberal Democrats, but we certainly have common ground on this issue. We are in a climate emergency, and when we talk about moving towards a greener economy, we must be clear that the time for debate and discussion alone has passed. It is now time for clear, concrete and urgent action. As my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) so powerfully argued, we must make no mistake: this is a climate emergency; this is a crisis.

One could argue that climate change has never been so prominent in public consciousness and political discourse. Despite the Brexit-related dramas in Parliament, which still continue, between 15 and 25 April, climate change was high on the news agenda in response to Extinction Rebellion protests in London, a major BBC documentary presented by Sir David Attenborough, and the visit to London of a Swedish schoolgirl. They led the way for many of us.

Over the past 12 months, according to pollsters, the environment has risen in public concern. In a YouGov poll conducted on 29 and 30 April, 24% of people placed the environment among the top issues facing the country—about the same level as concern about the economy and immigration. That is a stunning development. We know from our postbags the levels of concern among the public about the climate emergency. Nothing short of a major transformation from fossil fuels to renewables will be good enough. Changing the ways that pension funds invest will not solve the crisis on its own; it must be part of a much wider approach—a new green deal, or a green industrial revolution. We have made some progress but, my God, we need to make considerably more if we are genuinely to tackle this emergency.

My hon. Friend the Member for Warwick and Leamington (Matt Western) highlighted the fact that the Labour-led Southwark Council has moved £450 million into passive funds that track low-carbon and fossil-free indices. It has also invested £30 million in Glennmont’s green energy fund, which invests in western European wind and solar companies. Many trade unions—I declare an interest as a member of Unison—have produced excellent and accessible guides to divesting away from fossil fuels, and I know that has been welcomed by representatives on local government pension committees and schemes up and down the country.

Parliament has started to take this issue more seriously and put its own House in order. In June last year, 11 hon. Members, including the shadow Chancellor, called for Cambridge University to remove its £377 million fossil fuel investments. In addition, 244 serving and former MPs have signed the Divest Parliament pledge, calling on the trustees to phase out investments in fossil fuel companies. The trustees are developing a climate change investment policy, but not quickly enough, as highlighted powerfully by my hon. Friend the Member for Bristol West (Thangam Debbonaire). We want that policy to commit to phasing out investment in fossil fuel companies in the earliest timeframe possible and to reinvest the money in funds aligned to the Paris agreement.

This country’s pension assets, as highlighted by my hon. Friend the Member for Warwick and Leamington, total some £2.8 trillion. Pension savings should be at the forefront of the fight against climate change. Pension savers have money invested for the long term, so it is particularly exposed to climate risks, as powerfully argued right across the Chamber. This concern is now relevant to more of us than ever.

Given the clear threat that climate change poses, we would all hope that it would be the norm for pension schemes to manage the risks. Unfortunately, research from the charity ShareAction finds that, for many, their retirement savings are unlikely to be sufficiently protected against climate risks. In a survey of some of the UK’s largest defined-contribution corporate pension schemes, just two of the 15 participating schemes had changed their default investment strategy specifically to reduce the exposure of employees’ savings to climate change risks. Although ShareAction found that a handful of schemes are considering further policy developments in this respect, the fact that a gulf exists in the strategies of schemes means that workers face a lottery from one job to the next as to whether their savings are sufficiently protected against climate change.

As the Minister stated in an intervention, the new pensions investment regulations, in force from October 2019 and to be strengthened in 2020, go some way towards addressing the issue. Scheme trustees will need to update policies to show how they take climate change into consideration as a financial risk. However, as my hon. Friends the Members for Norwich South (Clive Lewis) and for Southampton, Test (Dr Whitehead) argued powerfully, we need to go considerably further.

Financial regulators have a major part to play. Trustees in charge of managing schemes need enhanced guidance from the Pensions Regulator on how best to manage climate risks. The Financial Conduct Authority, in charge of regulating contract-based schemes, needs to provide clarity on the need for consideration of and reporting on climate risks, through both investment and stewardship, to ensure that no savers face weaker protections because of the scheme in which their employer happens to have enrolled them.

Greater transparency about the actions that schemes are taking to manage the risks should result in better decisions being made.

[Luke Graham (Ochil and South Perthshire) (Con)]

The hon. Gentleman is making a very good point about transparency. A large reform is going on in the audit industry at the moment. Does he agree that there is an opportunity for us to look at the whole of financial services and financial infrastructure and look at how we value investments, so that we value intangibles along with tangibles and ensure that our environmental and sustainability investments are getting their appropriate value? This is not just a trade-off between short-term returns and long-term investments; we can achieve both if they are valued correctly.

[Mike Amesbury]

That is a very good point, which I will come on to.

Pension schemes should be required to report on their management of climate risks in line with the Task Force on Climate-related Financial Disclosures. Transparency could also be enhanced by mandating scheme member representation—I think that my hon. Friend the Member for Leeds North West (Alex Sobel) argued for this—on the governance boards of the new auto-enrolment schemes, as well as by requiring pension schemes to consult their members on key policies.

We need to send clear signals that tackling climate change and other environmental, social and governance risks is not distinct from the core purpose of financial markets, but an integral part of it, as the hon. Member for Ochil and South Perthshire (Luke Graham) argued in his intervention. Of course, as we divest from fossil fuels, we must ramp up investment in clean and green technology. Labour has set out plans to fit 1.75 million homes with electricity-generating solar photovoltaic panels, creating thousands of quality skilled jobs across the UK. That is a Labour green deal that will shift energy generation via renewables to 85% by 2030. It will provide a major boost to an industry that is still recovering from the effects of the coalition Government’s ill thought out slashing of feed-in tariffs, which was such a blow to a growing and vital industry.

[Anna McMorrin]

Does my hon. Friend agree that to really address this issue, we need legislation like that in Wales, the Well-being of Future Generations (Wales) Act 2015, which is transforming how the public sector takes decisions? Legislation like that could and would address this very issue if we had it in the UK.

[Mike Amesbury]

I do agree with that point, which was powerfully made.

Labour will transform corporate environmental responsibility by making compliance with key environmental criteria a condition of firms listing on the stock exchange, so we will be applying that more broadly. Of course, to deliver the change needed to respond to this emergency, all parties need to show leadership.

Does the Minister agree that we are in a crisis, an emergency, and that nothing less than transformational, revolutionary change is needed? If that is the case, does the Minister believe that rolling out the red carpet for the current President of the United States, who is perhaps the most high-profile and influential denier of climate science in the world today, sends the right message? Will the Minister look at giving further strength to the ESG regulations? They are a welcome step forward, as we have already said, but we could go considerably further. Will the Minister offer Government support for the parliamentary schemes divesting from not only fossil fuels but environmentally damaging investments more broadly and doing so as quickly as possible? Finally, if the Government support the move away from fossil fuels, why do they continue to support the fracking revolution, as highlighted in their party’s 2017 manifesto? We need more than warm words. We need emergency action now.

Arthritis and Employment

Mike Amesbury Excerpts

Tuesday 21st May 2019 Westminster Hall

[Mike Amesbury (Weaver Vale) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Graham. I thank the hon. Member for Ayr, Carrick and Cumnock (Bill Grant) for securing such a vital debate, which has been informed by a number of charities, which work so hard for the benefit of people with disabilities and those who suffer with arthritis and related conditions.

As we have heard through the very powerful contributions from the 13 Members present from across the House, living with the condition can be debilitating and have a negative impact on quality of life. Arthritis and related conditions are the biggest cause of pain and disability in the UK. As a result, 28.2 million working days are lost annually. Every year, one in five people—20% of the UK population—consults a GP about musculoskeletal problems. More than half of the 17.8 million people in the UK with arthritis and related conditions live with pain every single day. My hon. Friend the Member for North Tyneside (Mary Glindon) highlighted that with the stark case of Danielle. Her condition has a huge impact on her life, slowly intrudes on everyday life, and affects her ability to work, to sustain work and to live independently.

Arthritis can also have a huge impact on an individual’s mental health, as hon. Members have highlighted. Living with a painful condition can lead to depression and anxiety, as well as placing limits on a person’s ability to keep active and to stay connected within communities and society.

We should pay particular attention to the disturbing fact that people in the most deprived areas of the UK are much more likely to report arthritis or back pain than people in equivalent age groups who live in less deprived areas. Some 40% of men and 44% of women in the poorest households report chronic pain, compared with 24% of men and 30% of women in more affluent households. There is a real social class and inequality issue here.

Versus Arthritis, the charity whose excellent work is dedicated to changing the lives of people who live with arthritis and related conditions, estimates that 10% of the UK population aged over 45 suffer with osteoarthritis of the hip, 17% suffer with back pain and 18% suffer with osteoarthritis of the knee. Many Members have highlighted the higher prevalence in their constituencies, which is also the case in mine.

This Government’s apparent antipathy and lack of regard for those who suffer with arthritis and related illnesses has been demonstrated in their limited approach to the promotion of the Access to Work scheme, which has been highlighted by Members across the House. The charity Leonard Cheshire has argued that there has been no significant extension of the programme over the last nine years.

[Justin Tomlinson]

indicated dissent.

[Mike Amesbury]

The Minister shakes his head, but that is from the Government’s own figures.

Will the Minister tell the House what plans are in place to help people with musculoskeletal conditions in the workplace? Arthritis sufferers who have applied to the Government’s Access to Work scheme said they have faced problems with how the scheme operates. In a survey of people with arthritis and related conditions carried out by Versus Arthritis in 2018, 59% had never heard of the Access to Work scheme, with many more unaware of what help was available. It is almost the best kept secret, as my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) said.

Some 25% of respondents said they did not receive all the support that was asked for, or that had been recommended by the Access to Work adviser, with a further 10% saying they did not receive any support whatsoever after applying. Will the Minister tell the House what the Government are doing to ensure that recommendations made by the Access to Work scheme are enacted?

The Equality Act 2010 placed a legal responsibility on employers to provide reasonable adjustments to support people with a disability in the workplace, so that they would not be disadvantaged. However, the Equality Act does not define what those reasonable adjustments are. As a result, it can be difficult for someone with arthritis to know exactly what their employer should be doing to help them, especially if they are not unionised, as was pointed out. Will the Minister tell the House whether the Government plan to undertake work to clarify the meaning of “reasonable adjustments”? Would he agree to work with Versus Arthritis on that?

One in eight of the working-age population has a musculoskeletal problem, but only 63% of that group are in work, compared with 81% of people with no health condition. What steps are the Government taking to close the disability employment gap for people with arthritis and related illnesses?

The Government have pledged to see 1 million more people with disabilities and long-term health conditions in work by 2027—just 100,000 people per year. Curiously, the Office for National Statistics reports that the increased number of disabled people in work has not been matched by a reduction in the number of disabled people who are out of work. We are now two years into the Government’s 10-year strategy for supporting disabled people into work. However, the National Audit Office reports that they have yet to develop a full implementation plan to achieve their goal.

Through whatever kaleidoscope of smoke and mirrors we look when measuring our employment figures, facts are facts: the disability employment gap remains stubbornly at 30% and this Government are failing to get a grip on that dismal statistic. I ask the Minister to listen to the concerns raised by all the Members here today and to commit to addressing and rectifying the unacceptable existing inequality of support for those who suffer with arthritis.

Oral Answers to Questions

Mike Amesbury Excerpts

Monday 13th May 2019 Commons Chamber

[Alok Sharma]

My hon. Friend raises a very important point. Under universal credit, up to 85% of childcare costs can be covered and, as the Secretary of State announced earlier this year, we are making the flexible support fund available so that funding can be provided up front to take care of childcare costs, which will help people get into work.

[Mike Amesbury (Weaver Vale) (Lab)]

It is welcome that the Secretary of State has finally responded to pressure and abolished three-year sanctions, but failure to scrap this punishing regime entirely means, as we have heard across the House today, that many people including children will still suffer. Six months is a long time to go without money, so will she go the extra mile and abolish punitive sanctions altogether?

[Alok Sharma]

I welcome the fact that the hon. Gentleman has, in turn, welcomed what the Secretary of State has announced—it has absolutely been the right thing to do. Sanctions are not put forward indiscriminately; a very clear procedure takes place, and right now less than 3% of those who are on universal credit and under conditionality are getting a sanction. The average sanction rate is 31 days.

Devolution of Welfare

Mike Amesbury Excerpts

Tuesday 9th April 2019 Westminster Hall

[Mike Amesbury (Weaver Vale) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Betts. It was almost a “Get the popcorn out” moment there.

I thank the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for securing such an important debate. He is on record as saying:

“Devolution has been a good thing for Scotland”

because it has

“the potential to bring power and decision makers closer to the people.”

That principle is a rare example of something that I can agree on with him. It is a historical reality that the Labour party and the late Donald Dewar were the architects of this landscape—a legacy that has strengthened the voice of Scotland and democracy in the United Kingdom. My hon. Friend the Member for Glasgow North East (Mr Sweeney) made me realise my age when he pointed out that he was just nine years old at that time.

To Labour Members, two things are clear from this debate. First, devolution of powers alone is not enough; we need an Administration willing and able to use the powers available to them, with a defining mission to reduce poverty and the political drive from the centre to get on with it and not to delay, delay and delay. Secondly, while devolution of particular policies may be a positive step, as we can all agree, it does not absolve the Conservative party, which conceived, developed and delivered a poor, failing policy here in Westminster, of responsibility for its effects elsewhere.

The Tory Government, as has been pointed out by Opposition Members, have used social security as a vehicle for cuts, with more than £37 billion taken away from UK citizens since 2010—£3.7 billion taken away from Scottish citizens. The effects and consequences of universal credit, as was rightly pointed out by most Opposition Members who have spoken, are a direct result of the Conservative party’s designing and pressing ahead with a policy that is deliberately under-resourced, cruel and unfair. That policy is causing hardship across the United Kingdom, and Labour Members are all too familiar with the effects on our constituents.

Those effects continue to be felt strongly in Scotland, but they have not been mitigated by the SNP-led Scottish Government, even though they have the power to do so. That is a cause for great regret and disappointment for Scotland’s Labour Members of Parliament and Members of the Scottish Parliament.

[Stephen Kerr]

It is a great disappointment that in a debate on such an important topic, the SNP Members—who are the Scottish Government—did not even bother to turn up. Only the hon. Member for Airdrie and Shotts (Neil Gray), their spokesman, has been here for the whole debate. They have come in and out like a magic roundabout, but they have not stayed for the debate. Does the hon. Gentleman agree that that is a shame on the SNP?

[Mike Amesbury]

The hon. Gentleman has made his point.

Mitigation is essential, and a lack of it is a cause for unnecessary hardship and continuing poverty. It certainly shames both the Westminster and Holyrood Governments that that continues. Although legal powers to run benefits in Scotland will pass to the Scottish Government in April 2020 as a result of the Scotland Act 2016, the SNP-led Administration have wilfully delayed using those powers in full until 2024.

The spend accounts for some 16% of welfare, or £3 billion. As has been pointed out by Government Members, the SNP is a party that claims it can create an independent state in 18 months. Twice, SNP Ministers have asked the Department for Work and Pensions to delay devolving social security, in 2016 and 2018, which means that, over the next five years, we will have a ludicrous situation in which SNP Ministers will, effectively, send millions of pounds down south to pay the DWP to run social security provision in Scotland.

[Mr Sweeney]

My hon. Friend makes a powerful point about the absurdity, if the DWP is so evil and malevolent, of the Scottish Government’s effectively paying it to continue to administer the system. Even after the full transition has happened under the revised timescale of 2024, severe disablement allowance will still be outsourced to the DWP and still visiting harm on the Scottish people. Surely that is an absurdity?

[Mike Amesbury]

Yes; it is another failing of fine and warm words but nothing happening in reality.

While those agency arrangements are in place, SNP Ministers are blocked from making changes to any of the benefits the DWP delivers. They are not able to intervene in aggressive debt recovery or even to change the inflation measure to uprate benefits. While the SNP dithers and sits on its hands, as my hon. Friend the Member for East Lothian (Martin Whitfield) has pointed out, thousands of families are falling into poverty every year. Both parties are concentrating on avoiding responsibility, rather than using what levers of power are available to change the failing policy.

[Neil Gray]

The hon. Gentleman rightly talks about the high poverty levels that we have throughout the United Kingdom. However, will he reflect on the fact that the poverty rate in Scotland—although far too high—is significantly lower than elsewhere in the United Kingdom, and that that might have something to do with the different policies that are being pursued in Scotland to ensure that we eradicate poverty as quickly as possible?

[Mike Amesbury]

I know the hon. Gentleman will agree that a million people in poverty in Scotland is still shameful—

[Neil Gray]

I just said that.

[Mike Amesbury]

If I may continue, when we have seen SNP and Tory politicians working together, they have done so in an alliance, preventing any significant improvements to social security in Scotland.

[Mr Sweeney]

My hon. Friend is being very generous with his time, and is making an excellent speech. We have talked about mitigating factors in the Scottish Parliament, but some of the key mitigating factors, such as mitigating the bedroom tax, were implemented only after significant and persistent Labour pressure. Indeed, John Swinney, who was finance Minister at the time, said that he did not want to let the Tories off the hook; he would rather the Scottish people suffered to make a political point.

[Mike Amesbury]

I thank my hon. Friend for highlighting the excellent record of Labour in Scotland, campaigning to change things for people on the ground.

Together, SNP and Tory politicians repeatedly voted down a £5 a week top-up to child benefit during the passage of the Social Security (Scotland) Bill and the budget process. In February, they endorsed George Osborne’s uprating cuts, blocking Scottish Labour’s move to revert to RPI uprating of the carer’s allowance. During the recent budget, the SNP refused to mitigate the two-child limit—a policy that would have supported 4,000 families and lifted 5,000 children out of poverty, and would have cost just 0.2% of the Scottish budget. After years of warm words and claims that it will build a system based on human rights, the SNP relied on the Tories to block the international covenant on economic, social and cultural rights from being included in the social security Bill.

Labour Members know the effects of Tory welfare policy all too well, wherever in the United Kingdom we represent. We have heard about those effects today: my hon. Friend the Member for East Lothian argued that we need bold action for women born in the 1950s, and was right to highlight the woeful response of the Tory Government. My hon. Friend the Member for Edinburgh South (Ian Murray) argued that in-work poverty is a major problem in Scotland, as well as out-of-work poverty, with over a million people in Scotland living in poverty. My hon. Friend the Member for Glasgow North East (Mr Sweeney) attacked the political choice of austerity, and called for a social security system that draws on the founding principles of the Attlee Government: security, opportunity and dignity. My hon. Friend the Member for Midlothian (Danielle Rowley) correctly pointed out that she needs to be the champion of women in this place, because women are disproportionately affected by that political choice of austerity—a choice made by this Tory Government.

Labour believes that the Tories’ approach to welfare is flawed and failing. It is a story of failure that begins with the Tory Government in Westminster’s cruel and unnecessary welfare policies, but has been worsened by the decision by the SNP Government in Holyrood not to use their powers to effectively mitigate those policies. As a result, it is a story of hardship and hunger, wherever in the UK a person is affected.

My questions to the Minister are simple. First, will he accept that universal credit is failing? It is cruel in design, it is under-resourced, and its roll-out needs to be halted. How about scrapping the benefit freeze, the two-child limit and the five-week wait? Hardship is hardship, wherever we are in the UK. Finally, will the Minister confirm whether the devolution of welfare to Scotland could have happened earlier, had the Scottish Government not asked the Department for Work and Pensions to delay the process twice, in 2016 and 2018? The only way we will change things is by having a Labour Government.