Welfare Reform and Work Bill

Neil Gray Excerpts

Tuesday 23rd February 2016 Commons Chamber

[Priti Patel]

Income is one of many factors that impact on life chances and poverty, which is why the Government are very much focused on tackling the root causes of child poverty. I will come on to discuss that issue even further—[Interruption.] I know that Labour Members disagree with that, and they will soon have their chance to comment.

On the change to the work-related activity component of employment and support allowance, and to the limited capability for work element of universal credit, I stress that the Government are fully focused on helping people who can work into work. We want to end a broken system that is patently failing those it should be helping, and ensure that a good proportion of the savings are recycled into long-term practical support that will have a transformative effect on people’s lives.

[Neil Gray (Airdrie and Shotts) (SNP)]

The Minister mentions the fact that income is a factor in poverty, but the executive summary of her own Government’s report from January 2014 states:

“The main factor is lack of sufficient income from parental employment, which restricts the amount of earnings a household has.”

It is not just a factor, it is fundamental.

[Priti Patel]

I say to the hon. Gentleman and to all Members that work remains the best route out of poverty. Moving people into work, and helping their income grow once they are in work, is exactly our focus.

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[Priti Patel]

I think Macmillan, alongside the Government, recognises that those on the support group will, rightly, not be affected. They will be supported, because they are in the support group and therefore obviously ill.

[Neil Gray]

Will the Minister give way?

[Priti Patel]

No, I will not give way. I am speaking to Lords amendment 1.

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[Priti Patel]

I thank the right hon. Gentleman for his intervention and his comment. We will publish the life chances strategy in the spring, and I think it will give us every opportunity to consider holistically all the factors that can lead to better outcomes for children and families. I recognise the right hon. Gentleman’s point. On the back of the remarks I have made, I urge hon. Members to support the Government motion and reject Lords amendment 1.

Let me deal now with Lords amendments 8 and 9, which as you indicated, Mr Deputy Speaker, impinge on the financial privileges of the House. These amendments would simply delete clauses 13 and 14 from the Bill. This would reverse the plan, announced in the summer Budget and endorsed by this House, to align the amount paid to ESA claimants in the work-related activity group to that which is paid to JSA claimants, and to align the amount paid to universal credit limited-capability-for-work claimants to that of the UC basic rate. Let me take this opportunity to stress the Government’s strong belief that this reform is the right thing to do. It is part of our efforts not just to improve people’s life chances but importantly to support them going into work so that they can reach their full potential. Let me explain why.

Record employment levels and strong jobs growth in recent years have benefited many, but those benefits have yet to reach those on ESA. While one in every five JSA claimant moves off benefit each month, this is true of just one in 100 ESA claimants in the work-related activity group. This Government believe that people with health conditions and disabilities deserve better and deserve more support. [Interruption.] I appreciate that Labour Members have no solutions for tackling the wider issues surrounding welfare and would rather simply continue to spend public money in an unsustainable way. We have listened to charities and campaigning organisations who say that improved employment support is key to helping people with health conditions and disabilities to move closer to the labour market and, when they are ready, into work.

[Neil Gray]

I look forward to reading the Minister’s White Paper, but is she not approaching the matter the wrong way round? Should she not introduce the White Paper first and then look at making changes to ESA? What does she say to her colleague, the hon. Member for South Cambridgeshire (Heidi Allen)—I look forward to hearing her contribution later—who said on “ConservativeHome” this morning:

“The beauty of this intermediate WRAG group is that it is just that—intermediate, on the road to returning to work but not quite there yet”?

[Priti Patel]

I rather think the hon. Gentleman makes my point for me in the sense that those in the work-related activity group need more support. Currently, they have been getting too little support. That is exactly the purpose of our reforms. We believe that we must tackle this issue, and provide—yes—the right financial security for individuals, but at the same time also look at the most effective ways to improve the wellbeing of those individuals by giving them support to get back to work. Almost half a million people in the work-related activity group get too little support to move back into work. We currently disincentivise them from doing so. As I say, they deserve better than that, and the Government are determined to take the necessary steps to transform their life chances by supporting them into work.

The Government are committed to ensuring that disabled people are able to participate fully in society, and we have set out our ambition to halve the disability employment gap. It is a duty of Government to support those who want to work to do so, and most people with disabilities and health conditions, including the majority of ESA claimants, tell us that they want to work. Some 61% of those in the work-related activity group tell us that they want to work, and we mean to put those people’s ambitions at the centre of what we do.

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[Paul Maynard]

I am sorry, I want to make progress so that everyone can get in.

For many people, a response in mental health terms to a sudden onset of or change in a physical health condition makes their willingness or ability to engage in the employment market that much harder. The work capability assessment has consistently failed to adapt and accommodate those individuals. I recognise that a handful of individuals may be encouraged into employment by the changes announced today, but I believe the operation of the work capability assessment will follow the age-old pattern—every time it is changed, more and more people, almost by osmosis, end up in the support group. We have seen that year on year, time and again.

Without further policy change, we could be back here in a few years discussing a sub-group of the support group. But that is a key point: we will not be back here in a few years’ time with the same policy framework. The Government are being more radical in their approach. If this were the sole policy intervention that they were aiming to make, I would share many of the concerns being expressed, but that is certainly not the case. We have recognised that the status quo is inadequate, and the Government are committed to reforming the work capability assessment. A White Paper is coming forward that will, I hope, reform employment and support allowance, which is a dinosaur of a benefit. It is unfit for purpose. It is the last remaining disability benefit that still sees disability as a matter of physical health, rather than a matter of physical and mental health. For that alone it needs to be taken to the knacker’s yard and put out of its misery. I welcome the Government’s intention to do that.

If we agree to Lords amendments 8 and 9, we will not get a £100 million fund placed in the hands of the third sector to support people with limited capacity for work to try to get back into employment. That would be a wasted opportunity. We have managed to get 339,000 more people back into employment over the past two years. Everybody in all parts of the House knows the commitment of the Under-Secretary of State for Disabled People to promoting the Disability Confident campaign. We all accept that the status quo is inadequate, and it would be the worst of all worlds to lock in a failed policy for the work-related activity group. That would benefit no one at all.

I shall briefly touch on Lords amendment 1. There is probably more consensus on how we view poverty-related issues than those on both sides of the issue would like to admit. I do not deny that levels of income have an impact on poverty levels in my constituency. Equally, I believe that there are more fundamental drivers of poverty in my constituency that also need to be addressed. As the exchange between the Minister and the right hon. Member for East Ham (Stephen Timms) indicated, this is not the end of the policy journey. There is to be a White Paper on how we implement our life chances strategy. There will be an opportunity to look at how we integrate into the policy package the different indicators that the right hon. Gentleman and the hon. Member for Bishop Auckland (Helen Goodman) referred to, but Lords amendment 1 is fundamentally flawed. It shows a misunderstanding of how Government work. The Bill cannot place an obligation on the Government to pursue two broadly contradictory policy objectives for tackling poverty.

If we focus solely on the “poverty plus a pound” approach as the answer to the problems, and at the same time oblige the Government to look at life chances indicators, that will divide the Government’s attention and the Department’s ability to focus on what matters. Opposition Members may disagree with the life chances strategy, and they are perfectly at liberty to do so, but they cannot expect to ride both horses at once and hold the Government to account for it. The Minister has made it clear that the data will still be collected and published. The Opposition will be able to look at that information, assess it and hold us to account for it, but Lords amendment 1 seeks to ensure that the Government fail on both strategies. It would not allow us any latitude to pursue what we have an election mandate for—welfare reform. When we get the life chances strategy, I suspect it will be far more sophisticated than what has gone before.

It has always struck me as utterly perverse to suggest that the most effective and best way to reduce child poverty in this country is to somehow provoke a recession, because that will bring the income numbers down. Surely no one could say that that is the best indicator to utilise to drive change. It astounds me that the Opposition parties—for the sake of posturing, and because of what has happened in the other place—have decided that this is their chance to make a stand on the backs of the most disadvantaged once again, and to try to prevent the Government from doing something about this issue.

I am proud to support what the Minister is trying to do. We have had decades of failure on this issue under Governments of all persuasions. At last someone is trying to do something, but from the Opposition we have nothing but cant, rhetoric and opportunism.

[Neil Gray]

I am glad to have the opportunity once again to set out the SNP’s opposition to this dangerous and despicable Welfare Reform and Work Bill. The SNP will vote to make these Lords amendments part of the Bill, to protect children and disabled people from poverty. In October, my SNP colleagues and I tabled a series of amendments to the Bill, which were, sadly, not successful. Today, I call on right hon. and hon. Members across the House to take this final opportunity to stand up to the Government’s regressive and punitive social security cuts.

In my contribution, I will focus on the scrapping of child poverty reporting obligations, the ending of the ESA WRAG and the universal credit disabled workers element. My hon. Friend the Member for Banff and Buchan (Dr Whiteford) will also seek to contribute, focusing on the cut to the ESA WRAG, and my hon. Friend the Member for Central Ayrshire (Dr Whitford) will, I hope, discuss the report on child poverty and health by the all-party group on health in all policies.

Let me turn first to the overhaul of the Child Poverty Act 2010, which removes the income-related measures of child poverty, replacing them with an obligation to report on children’s life chances and scrapping the target to end child poverty by 2020. Scrapping that target, when child poverty is on the rise under this Government, is a disgraceful dereliction of responsibility, which serves only to highlight the lack of will on the part of Conservative Members to do anything to reverse the growing numbers of low-income families—in and out of work—who live in poverty.

Lords amendment 1, from the Bishop of Durham, Baroness Sherlock and the Earl of Listowel, would impose an additional reporting duty on the Secretary of State, requiring him to lay before the Houses of Parliament an annual report on child poverty. That report should include data on the percentage of children living in households on relative low income, combined low income with material deprivation, absolute low income and persistent low income.

The Bishop of Durham, in moving the amendment, stressed the importance of income in understanding child poverty and children’s wellbeing. He tackled criticisms made previously by Ministers by arguing that income measures would not displace other statutory measures relating to worklessness and educational attainment. Speaking for the Opposition, Baroness Sherlock supported the amendment, noting that it would cost nothing and that it would allow the Government to be held to account on child poverty.

SNP Members find it unbelievable that the Government would wish to remove all links to income in reporting child poverty. Income is fundamental to whether someone is in or out of poverty—there is simply no getting away from that fact. We have no problem with the Government choosing to report on life chances, substance misuse, family break-up and unemployment by household, but they cannot get away from the fact that substance misuse, family break-up and unemployment are not unique to those in poverty—far from it. However, by using those alternative measures in isolation and not using any income-related measures, the Government are attempting to characterise poverty as a lifestyle choice, rather than looking at the structural causes of poverty.

Of course, such issues can impact on life chances, but income deprivation always will. An alcoholic single parent may be perfectly capable, for any number of reasons, of putting food on the table, a warm winter coat on their children’s backs or keeping their house warm. That may not be possible for a set of married parents who have no substance abuse problems but who are in low-income work. That has nothing to do with family breakup, substance abuse or unemployment—it is because of low income. So why on earth did the Government choose to ignore how many children do not have an outdoor space to play in safely or a place for the family to be able to celebrate a special occasion for them, or whether they can eat fresh fruit and vegetables every day? We know that 1.7 million children live in a family who want to heat their homes but cannot. The parents of 900,000 children want to put a warm winter coat on the backs of their bairns but cannot afford to do so. These are parents in and out of work, who are married or single. What is that if it is not poverty? We have to continue reporting on those matters.

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[Sammy Wilson (East Antrim) (DUP)]

Given that the Government have emphasised time and again the importance of evidence-based policies, is the hon. Gentleman struck by the fact that there is no evidence to suggest that a reduction of £30 a week would push people towards work and off unemployment?

[Neil Gray]

I welcome the hon. Gentleman’s contribution. In fact, the opposite appears to be the case. Those third sector organisations and disability groups with knowledge of this area say that the cut will actually hinder people’s ability to find work.

Baroness Grey-Thompson’s speech on 27 January highlighted perfectly the issues at stake, and I urge those Conservative Members who are struggling with their consciences to read it. She said:

“if this measure goes through, a disabled parent who is working and qualifies as having limited capability for work will, under universal credit—the flagship element of government policy—have no extra support in work compared with a non-disabled parent in otherwise the same circumstances. What will this mean for a disabled parent? Single disabled parents working 16 hours or more, living in rented accommodation and making a new claim for universal credit in 2017, will receive about £70 a week, or £3,500 a year, less than they would receive now on tax credits, despite the rise in the minimum wage…For hundreds of thousands of disabled people, keeping Clause 14 in the Bill will be devastating. It means that far from there being an incentive for disabled people to get into work, find work and contribute to society in the future, those with deteriorating conditions will be less likely to stay in work.”—[Official Report, House of Lords, 27 January 2016; Vol. 768, c. 1311.]

[Paul Scully]

On evidence, the hon. Gentleman suggested in an earlier intervention that WRAG was an intermediate group on the route back to work, but the fact that only one in 100 disabled people is finding work shows that it is a long-term group.

[Neil Gray]

What that shows is that the Government’s Work programme has been an absolute failure and that those who are on ESA WRAG take more time to get back into work and require extra support, so by cutting £30 a week this Government will cut their ability to find job opportunities, and that is shameful. I again urge Conservative Members to read Baroness Grey-Thompson’s 27 January speech in full before voting later.

In October 2015, the Disability Benefits Consortium found that seven out of 10 disabled people said that a cut in ESA would cause their health to suffer. Almost a third said that a cut to ESA would mean that they would return to work later. Shockingly, a third said that they could not afford to eat on the current amount they receive from ESA WRAG.

Scope is concerned that reducing financial support for disabled people on ESA WRAG will detrimentally impact on their financial wellbeing, placing them further from work, as disabled people have lower financial resilience than non-disabled people, with an average of £108,000 fewer savings and assets, and 49% of disabled people use credit cards or loans to pay for everyday items, including clothing and food. Mencap has said that households with a disabled person living in them will be hit much harder. A third of them already live below the poverty line, and the additional reduction in income will have a devastating impact on those who are in most need of Government support.

As the WCA does not assess employment support needs, the financial support that a disabled person receives also determines their employment support. Those two things are not related, and they mean that disabled people do not get the back-to-work support that they need, in answer to the point made by the hon. Member for Sutton and Cheam (Paul Scully). Evidence from disabled people’s organisations and official independent reviews have all highlighted the inaccuracies of the assessment, which means that disabled people do not get the right back-to-work support.

There is insufficient evidence, if there is any at all, for the Government’s assertion that reducing benefit support incentivises people to get back into work. The impact assessment contains no evidence whatever to show that reducing support to disabled people in the ESA WRAG will incentivise them into work. Reducing the financial support available through the WRAG will create a bigger distinction between the support received by jobseeker’s allowance claimants and those who are placed in the ESA support group. The IFS supported that argument by commenting that abolishing the WRAG component could strengthen the incentive for claimants to try to get into the ESA support group. Ben Baumberg, of the University of Kent, agrees with that claim. He stated that the removal of the addition could lead to an increase in the proportion of claimants who are placed in the support group, because being placed in the WRAG could be a risk to their health.

The Minister said in her speech that she had worked with and listened to the likes of Scope and Macmillan, but they still oppose the cut, and she must say why she believes that to be the case. I was interested to read a story in The Guardian a few days ago, in which the hon. Members for Stafford (Jeremy Lefroy), for Stevenage (Stephen McPartland) and for South Cambridgeshire (Heidi Allen) were cited as possible members of a group of Tory MPs who are putting pressure on the Government on the matter. I am a less frequent reader of The Daily Telegraph, but I understand that they were also mentioned in that paper this morning. I read “ConservativeHome” even less frequently, but the hon. Member for South Cambridgeshire wrote very well there this morning. [Interruption.] On this occasion, it was a brilliant article. She said:

“What has suddenly changed in the lives of these individuals that they are suddenly fit enough or not fit enough to work? The beauty of this intermediate WRAG group is that it is just that, intermediate. On the road to returning to work, but not quite there yet. Recovering from chemotherapy, but needing to keep the heating on that little bit more. Many people who are ill are desperate to work, but need to be supported financially until their health improves. There are also structural and economic barriers standing in their way; reducing financial support only serves to create a further hurdle to be overcome. Many of these people have worked and paid in for many years before falling ill. They deserve better than this.

The voters who trusted us”—

that is, Conservative Members—

“to build a fairer society deserve better than this.”

I pay tribute to the hon. Lady and her colleagues who are thinking about supporting the Lords amendments. I desperately hope that those whom I have mentioned have been working on colleagues to join us in the Lobby later.

The issues at stake regarding ESA WRAG and universal credit work allowance are the very same issues as those with the cuts to tax credits, on which many Conservative Members honourably lobbied hard. The measure will impact on low-income families and on disabled people who are looking for work. The cut will, according to the organisations mentioned, including the Equality Trust and Citizens Advice Scotland, disincentivise people from going into work.

The Welfare Reform and Work Bill may well be the best example of doublespeak outside Orwell’s texts. The fact is that the Bill, as the Government would amend it, is unfit for work. The assessment of third sector associations, Opposition parties and the House of Lords is that the Lords amendments must remain. We have seen the Government forced through the courts into a welcome U-turn on the benefit cap for carers. They have also been told by the courts that the bedroom tax is discriminatory for disabled people. The UN is investigating the Government’s welfare cuts. Disabled people should not need the High Court to tell the Tories what is right and what is wrong.

This is our last opportunity to oppose the Government’s plan to stop measuring child poverty, and to oppose their shameful attempts to slash by £30 a week support for people who are unable to work because of ill health or disability—a proposal that is vindictive and woefully lacks the evidence base to support it. I hope that Members across the House will think carefully and consider the impact that their vote will have on the lives of people up and down these isles. Having considered that, there is only one course of action open to us today—to oppose the Government’s shameful proposals and support the Lords amendments.

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[Peter Heaton-Jones (North Devon) (Con)]

It is a particular pleasure to follow the right hon. Member for Birkenhead (Frank Field), who speaks with unrivalled expertise on these matters. I agree with his fundamental point. I speak to oppose Lords amendment 1, which seeks to amend clause 4, as passed by this House. I do so as a member of the Bill Committee that scrutinised the Bill—during 15 sittings or so, if I recall—last autumn. Clause 4, as passed by this House, introduces a new duty for the Secretary of State to report annually on two Life Chances measures: first, the proportion of children living in workless households; and secondly, as has been mentioned, their educational attainment at age 16. In effect, therefore, it repeals most of the Child Poverty Act 2010.

The Lords amendments in effect seek to replicate the parts of the 2010 Act that relate to the measurement of the proportion of children living in poverty. In particular, their lordships’ amendments seek to require the Secretary of State to report on four specific measures: relative low income; combined low income and material deprivation; absolute low income; and persistent poverty.

However, the Bill, as passed by this House, does not mean that the Government will stop measuring and publishing such data on household income. The Government will continue to publish annually low-income data in the HBAI publication. Those data include—Members may get a sense of déjà vu all over again—relative low income, combined low income and material deprivation. They probably ring bells, because those categories replicate almost exactly the measurements that the amendments from the other place seek to reinstate in the Bill. To put it simply, the Government are already doing it. The information is available for all to see and will continue to be so. The HBAI publication has protected status as a national statistics product and Ministers have undertaken in this House to publish the data annually. Lords amendment 1 is—I say this with the greatest respect—simply unnecessary. Its effect would merely be to replicate something the Government are already doing.

[Neil Gray]

My understanding, with all due respect to the hon. Gentleman, is that there is no statutory obligation for that reporting. There is certainly no statutory obligation to eradicate child poverty by a specified time, which is crucial.

[Peter Heaton-Jones]

The Government have made a commitment to continue to publish the data annually. They have been very clear about that fact. When it comes to the relationship between those measurements and the eradication of child poverty, under the previous Labour Government the number of households where nobody worked doubled and in-work poverty increased: the Government missed their child poverty target by 600,000.

The Bill, as passed by this House, does not redefine poverty to exclude income, as some of its opponents often say. That argument assumes that measuring income is an effective, helpful or comprehensive way of measuring poverty in the first place. It is, in fact, none of those things. In that respect, the 2010 Act was flawed in its approach. The current income measures enshrined in the Act show that the number of children in relative poverty can actually go down in a recession and up in times of growth. That is simply perverse. Furthermore, the measures incentivise what is often known as a “poverty plus a pound” approach, where families can seemingly be moved out of poverty without any change whatever in the underlying factors that got them into the position of low income in the first place. The Act is simply not doing what it is intended to do.

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[Neil Gray]

That is why, of course, it is important to have a package of measures, so that we can look at all aspects of how children and their families are living in poverty. We should not assess just relative low-income measures; we should include other measures such as material deprivation, which is critically important.

[Peter Heaton-Jones]

Material deprivation is one of the things that will continue to be measured by the HBAI statistics. It will still be included—[Interruption.] I am sure that the Minister will rise to her feet and reflect this fact; a commitment has been made that the measure of material deprivation will continue to be published annually. It will continue to be part of the official ONS Government statistics. The hon. Gentleman says that we need a package of measures, but that is exactly what we get. We get the HBAI information; we get those statistics; we get the commitment that these data will be published annually and enshrined, as I say, by the ONS. On top of that, we get what the Government suggested in the original Bill, which this House passed—further measures of attainment. We get the best of both worlds.

[Neil Gray]

rose—

[Peter Heaton-Jones]

If the hon. Gentleman does not mind, I will not give way again. He has already had a couple of bites at this particular cherry—