Department for Work and Pensions

Neil Gray Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Justin Madders]

I thank my hon. Friend and constituency neighbour for her intervention. I do sometimes wonder what kind of country we live in when vulnerable people feel the cards are so stacked against them that it is not even worth their while to appeal. Those are the people who come to see me. I do not know what happens to the people who are so beaten down by the system that they just give up, which I feel is the unintended consequence—or possibly the intended consequence—of this policy time after time.

We know that the cost of successful PIP appeals was £27 million last year. ESA is not included in that figure, but 74% of those claims were successful, too. Let us not forget the figures I uncovered towards the end of last year, which show that the Department is not even turning up to four in five appeal hearings. We know what would happen if my constituents did not turn up to four in five appointments with the DWP: they would be sanctioned straightaway.

I also hear from parents whose children are not eligible for free school meals because their household income is just a little too high, and they are struggling to provide their children with a school lunch because they cannot afford it. Many of these families are struggling to make ends meet.

We now come across parents who are eligible for help but who are not getting it due to the complicated application process and the long waiting times. I have constituents who, in the period before the first universal credit payment is made, are desperate for support but are told that they are not eligible for free school meals. Surely we can do this better and provide eligibility for free school meals when the universal credit application is made, rather than waiting until the first payment comes through.

Briefly, on access to benefits for people at the end of life, the current special rules for terminal illness—SRTI—exclude many people with terminal illnesses. I am meeting the Minister next week to discuss this, and I hope we have a constructive conversation, but I raise it now so that people are aware of some of the difficulties and of the money and time being wasted on inappropriate and unnecessary assessments.

Only 45% of people with motor neurone disease are claiming personal independence payment under SRTI. The majority of people in that situation are still using the standard claims route, which is inappropriate for their situation. They are required to fill in a long form, attend a face-to-face assessment and then wait weeks before the benefits are received.

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

I commend the hon. Gentleman for his speech. Is he aware of Social Security Scotland’s plans to ensure that all medical evidence is available to decision makers at the application stage, so that a correct decision can be taken without the need for often demeaning, demoralising and horrible assessment processes such as the one he describes? Will he support my call for the UK Government to follow Scotland’s lead?

[Justin Madders]

The hon. Gentleman makes a helpful suggestion. Certainly those who have, by definition, a very short time to get these matters sorted due to terminal illness should have as much of the process done at an early stage to avoid such difficulties.

It is highly insensitive that people who have been diagnosed with what can be a devastating condition that will end their life, possibly within 12 months, have to face this extra hoop-jumping when they should be focusing on spending what time they have left with their loved ones.

The majority of people with motor neurone disease are awarded the enhanced rate of PIP anyway, so we need to make it easier for them to claim through SRTI instead of the standard route, which many are currently going down. There are a number of helpful suggestions that we can discuss with the Minister next week.

My hon. Friend the Member for Wirral South (Alison McGovern) spoke passionately and eloquently about the Women Against State Pension Inequality Campaign. She rightly drew attention to the scandal, which will not go away. The WASPI women are there, and they are growing in number. She is right that, while the Tory leadership candidates continue to spaff cash up the wall with spending promises on tax cuts for the most well off in society, for big corporations and for whatever else they decide when they wake up in the morning, it is damning that not one penny has been committed in the leadership hustings to the WASPI women.

Ultimately, it comes down to priorities, and it is clear that WASPI women are not a priority for this Government and will not be a priority for the new Prime Minister, either. The hardship, the injustice and the erosion of the contributory principle that underpins the welfare state are clearly not a priority for this Government, and it is to their shame that they continue to ignore this campaign in the face of overwhelming evidence that a real injustice is being done.

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[Alex Burghart (Brentwood and Ongar) (Con)]

It is an honour to have the opportunity to talk in this important estimates day debate. I congratulate the hon. Member for Wirral South (Alison McGovern) on introducing the debate.

Record and rising employment is the central fact of the Government’s economic record. It is sometimes easy to brush over the fact that we now have the highest rate of employment in this country than at any time since the early 1970s. That is not only important on an economic level, although obviously it has wonderful economic benefits for the country, but extremely important on a social level and a personal level, because of the way it benefits families and communities and gives people opportunity and optimism that they otherwise might not have.

For four years before I came to this place, it was very much my privilege to serve as the director of policy at the Centre for Social Justice, which is a think-tank that looks at the root causes of poverty in the UK. That background is what lies behind my exchange with the hon. Member for Wirral South earlier. One can of course say that the root cause of poverty is people not having enough money. It is true that poverty is people not having enough money, but it is unquestionably the case that the reason why some people do not have any money is that they do not have a job in order to earn money, and that the reason why some people—not everybody at all—are unemployed is that something has gone badly wrong in their life, and that thing needs to be corrected with the help of public services, with the support of their family and with their own personal determination. That must always be an absolutely essential part of any welfare policy, which is why it is so important that the significant changes that have been introduced in the Department for Work and Pensions have been coupled to the work of the troubled families programme in the Ministry of Housing, Communities and Local Government. It is by helping people to overcome some of the root causes of poverty that we can help more people to move into the workplace and so help to support themselves and their families.

There is a group of people who are lucky enough and fortunate enough to come from stable homes, to get a decent education and not to suffer from addiction or any such problems, who still find it difficult to make ends meet, which is why it is extraordinarily important that any Government have an economic policy that generates jobs and drives up wages. The Government have been extraordinarily successful, without parallel, in the creation of jobs. Life has undoubtedly been harder in the generation of higher wages, but it feels like in recent months—over the past 15 months, I think—we have turned a corner on that score and, for the first time since the financial crisis in 2008, we are starting to see wages rise above inflation. Ultimately, that is excellent news for people who are moving into the jobs market and for people who are starting off on low salaries.

It must be remembered that none of that success was predicted by commentators before the 2010 general election. I remember in 2009 listening to a Bank of England economist forecast that the incoming Chancellor of the Exchequer would have to deal with unemployment of more than 5 million. In 2011, he repeated that the policies of the Conservative and Liberal Democrat coalition would unquestionably lead to record unemployment and a massive social security problem. That simply did not happen, because of the business-friendly policies that the Government adopted, which increased investment and business growth and saw employment rise in very many parts of the country.

It was a pleasure to sit and listen to the speech by my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke). I do not believe it can be an accident or a coincidence that his constituency has not traditionally had a Conservative MP, yet after seven years of Conservative employment growth in his area, it elected a Conservative. After seven years, following a major economic meltdown under the previous Labour Government, the Conservatives delivered the job growth in his area that Labour had been incapable of doing for the 13 years that it was in power. We see it not just in Middlesbrough, but in a whole range of seats from Mansfield to Stoke-on-Trent. This new era of Conservative representation in parts of the midlands and the north is a result of this policy, which has helped people to find jobs and improve their lives and the lives of their families. This has been termed the British jobs miracle, because unemployment is now at about 3.8% in the UK, compared with 7.5% in the euro area.

[Neil Gray]

I do not doubt that properly paid work is the best route out of poverty, but when will the hon. Gentleman’s so-called jobs miracle extend to children living in poverty? How can he explain what is currently going on when we see that two thirds of all children living in poverty do so in a working household?

[Alex Burghart]

The hon. Gentleman raises a very good point, but, as I have already said, we had a long period of employment, but with little or no wage increases. We have now started to come out of that period. What he will see is that, if wages and wage growth are maintained in the months and years ahead—as I have no doubt that they will be—we will start to see the number of young people in poverty go down. We will see that their parents have more money because they are in work and their wages are rising above inflation. I am sure that he would accept that point.

[Neil Gray]

Will the hon. Gentleman not accept that, while we wait, children remain in poverty? What are his Government doing? They are continuing to cut universal credit, which is supposed to help move these families away from poverty. Why is this continuing to happen? Why do they have to wait all this time for the never-never of jam tomorrow?

[Alex Burghart]

I do not believe that it is correct to say that the Government are taking money out of universal credit. I am sure the hon. Gentleman remembers the previous Budget when a considerable amount of additional money was put into universal credit. I think that he is, perhaps, slightly out of date on that score.

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

It is a pleasure to follow the hon. Member for Bexhill and Battle (Huw Merriman). May I again point him to the Scottish Social Security Agency and the way we in Scotland propose to treat people with a terminal illness? I think he will find that quite illuminating, and it has suggestions for this Government.

It is a pleasure to speak for the SNP in this debate. I congratulate the hon. Member for Wirral South (Alison McGovern) on securing it. There have been a number of interesting speeches, not least that of the hon. Lady herself. She set out very well a strong defence of the welfare state. She rightly contrasted how pensioners, other than the WASPI women, have rightly been protected, while others have not. I will develop that point later in my speech. She also mentioned the fact that austerity is a choice, and she was right to draw attention to the 1.6 million food parcels handed out by the Trussell Trust as a stark reminder of the impoverishing failure of austerity. Best of all was her stout and clear argument that lack of income is the driving force behind poverty.

The hon. Member for Copeland (Trudy Harrison) was right to welcome the Government’s cancelling the expansion of the two-child limit, but I question why she does not expect that policy to be scrapped.

I always enjoy listening to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) in these debates. She rightly asked why we do not hold the social security system in the UK in the same high esteem as the NHS. We should all ponder that, as should some in the fourth estate.

The hon. Member for Truro and Falmouth (Sarah Newton) made a thoughtful speech, but I think that my hon. Friend the Member for Glasgow Central (Alison Thewliss) made the best speech today. It was brilliant and rightly contradicted the Tory rhetoric on the two-child limit, highlighting last week’s report by the Child Poverty Action Group, the Church of England and others. I know it gives her no pleasure—it certainly gives me no pleasure—to say that the report proves that the warnings we gave at the time were correct. No mother—no parent—should have to choose between poverty and an abortion, but sadly that is the stark choice that faces some because of the two-child limit.

The hon. Member for Brentwood and Ongar (Alex Burghart) is simply wrong about universal credit. The last Budget made up for just half the cuts that the 2015 Budget inflicted on universal credit.

The hon. Member for High Peak (Ruth George) was right to highlight the non-financial problems with universal credit and other benefits. The hon. Member for Bexhill and Battle (Huw Merriman) was right to point to the DWP’s influence. Policy drives poverty—we should remember that.

Sadly, so much of the debate has been characterised by raking over decade-old ground rather than addressing the issues that we face today, and I wish that some Members had spent more of our time on the latter. The estimate for DWP spending is still driven by the policies of austerity that have ravaged the Department since 2010. The estimate may have risen by 3%, but, as the Library briefing makes clear, that is largely down to the Department’s accepting greater responsibility for spending that was previously made by other Departments—for example, taking tax credits from HMRC.

Most people who rely on social security do not see any rise in their weekly family budgets. The hon. Member for Ellesmere Port and Neston (Justin Madders) made that point well when he said that 1.9 million people were worse off by £1,000 under universal credit according to the Institute for Fiscal Studies. Family incomes have been slashed, thanks to the austerity agenda that the Tory-Liberal coalition led and the Tories continued after 2015.

Even the modest rises in the state pension leave the UK state pension as one of the most miserly in the developed world. Thousands of people in Scotland and across the UK have been hit by the benefits freeze, the two-child cap, and cuts to disability benefit and universal credit, leading to a rise in food bank use and in-work poverty. That is why we want the UK Government to think again about their budget for the DWP. It is also why SNP Members will vote against the estimate. We do not do so to deny the funding to the Department; we are using the vote as the only blunt instrument we have to protest about the way in which the Department is funded and the way in which the estimates process is scrutinised. In Holyrood, Members can amend the Budget, but that is sadly not the case here.

The Budget allocation will not allow the Department to remove the two-child cap or the benefits freeze, to fix universal credit, or to mitigate the hardship suffered by women born in the 1950s because the state pension age increased without adequate notice or lead-in time.

What is the real world result of the Government’s spending cuts to the Department? It is increased poverty and food bank use. The Trussell Trust, the largest food bank network in the UK, has reported steep rises in demand for its services year on year. In this year’s report, it points to increased food bank use among working families. That should be a stark warning to us all.

The Secretary of State was the first in her role to acknowledge the long-stated link between social security cuts and increased food bank use, but the Government have done little to put the money where it is needed and stop the cuts that hurt the most, such as the benefits freeze and the two-child cap. The investment in universal credit at the last Budget did not even cover the cuts that were inflicted by the disgraceful 2015 Budget, which cut universal credit and other social security benefits to ribbons.

Everything in the estimate before us could be moot as we are going to have a new Prime Minister, a new Chancellor and probably a new Secretary of State for the Department for Work and Pensions by the end of the month. My questions for the two remaining candidates for Prime Minister are these. What are their plans for social security? What are they going to do about child poverty? Are they going to follow the model set out last week by the Scottish Government, with the Scottish child payment? That measure alone, which will be delivered earlier than predicted to tackle the increase in child poverty perpetrated by the UK Government, is predicted to lift 30,000 children out of poverty. The Child Poverty Action Group described that as a game changer in the fight to tackle child poverty, which is quite the contrast from CPAG’s comments on the Tories’ two-child cap:

“You could not design a better policy to increase child poverty than this one”.

Whichever candidate wins, we want to know whether they will follow our example in putting money where it is needed, or whether will they continue with the pernicious cuts to social security we have seen them support since 2010.

It is unlikely that the frontrunner, the former Foreign Secretary, will have the ideological or economic space to address the problems with universal credit, as he will be spending Scottish taxpayers’ money on delivering a massive tax cut that the IFS has said would primarily benefit just the top 8% of earners. Quite how the 4.5 million UK children in poverty will benefit is anyone’s guess, but it is all a guessing game with this candidate. Indeed, yesterday I suggested it might be the Secretary of State’s final outing at DWP questions. Little did I know how prophetic that statement was. Today, we found out that the Foreign Secretary apparently wants to get rid of the DWP altogether. What an absolute farce!

I also raised yesterday the issue of child poverty. The Work and Pensions Secretary said that she saw work as the best route out of poverty. I agree, but it has to be properly paid work and the evidence shows that in-work poverty is rising. Incomes matter, which is why the new Scottish child payment is so important. So is addressing the chronic shortage of social and affordable housing, on which Scotland is leading the way. So is getting more employers to pay the real living wage, on which Scotland is leading the way. Those are just some of the reasons why Scotland has a lower child poverty figure than the rest of the UK.

Sadly, we have so much more to do. The UN special rapporteur on poverty and human rights, Philip Alston, recognised the work that is being done in Scotland to address poverty, but he also pointed to UK social security policies as driving poverty levels in Scotland. The Scottish Government, local authorities and third sector organisations are doing fantastic work to alleviate poverty, but we are pushing against the tide of UK cuts. The problems need to be fixed here.

One of the problems is the five-week wait that is built into universal credit. The waiting period is driving up indebtedness through rent arrears and commercial debt. One way of sorting it could be to use the assessment period for the advance payment of UC proper. If there is an acceptance that people need an advance at the start of universal credit, why say that that money has to be paid back? People cannot be expected to live off fresh air and they should not be expected to prolong indebtedness or financial hardship either. Advance the first payment of universal credit and stop the cycle of hardship. I have already mentioned the two-child cap and the benefit freeze, which, I think we are starting to realise, needs to get sorted. Taken with the five-week wait, fixing them would go a long way to stop the projected rise in poverty.

In terms of treating people with dignity and respect, there is an urgent need to sort out the disability assessment and to ensure there is a “do no harm” approach. Ministers will be aware of the work being done in Scotland to set up the new Scottish social security agency, which is soon to take responsibility for personal independence payments. One of the things we have confirmed we will do is to ensure all medical information about the applicant is available at the application stage, so as to avoid the need for the face-to-face assessments that so many disabled people find demeaning and irrelevant. It is hoped that by doing so we will cut the staggering appeal rights currently seen in the UK system, as we will get the decision right first time. The current Minister for Disabled People, Health and Work, the hon. Member for North Swindon (Justin Tomlinson), once said from the Back Benches that he was sympathetic to that idea. I hope he might be influential in the Department now in looking to follow Scotland’s lead in this area.

The pensions landscape still needs to be properly mapped out. I have repeatedly raised the issues faced by the 1950s-born women. I still believe that UK Ministers have an obligation to act, but we continue to be stonewalled. One issue picked up this morning, in a roundtable that my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford), my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) and I had with pension stakeholders, was lost pension assets. The Association of British Insurers and the Pensions Policy Institute analysed that relatively recently and found that there are 1.6 million lost pension pots, averaging £13,000 each. In total, about £20 billion is unclaimed. Astonishingly, those figures are for defined-contribution schemes alone. Obviously, defined-benefit schemes are harder to analyse, but the total is expected to be far in excess of the £20 billion unclaimed from DC schemes.

What I find most frustrating is that, although the industry has been trying hard to return those assets to their owners, the UK Government have not been terribly helpful in providing the necessary information to allow it to do so. I hope that changes. Phoenix, one of the contributors to our meeting this morning, spent two years researching lost pension pots and managed to reunite people with £13 million from more than 2,300 pots. Clearly, the UK Government need to look at what they can do to help the industry, as we are talking about substantial amounts of money.

We await publication of the pensions Bill. I hope there is serious cross-party work to advance key issues such as the pensions dashboard and our idea for an independent pensions commission.

Sadly, this debate has shown that although there is general consensus on the pensions scene, there is very little in other areas of social security—there are some exceptions—that we agree on across the House. However, the facts speak for themselves. When we invest in families and ensure they receive proper support, poverty drops. Poverty is policy driven, and right now UK policy is impoverishing. That is why we cannot support these estimates this evening.

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[Will Quince]

With respect, I will not give way to Members who have not been present for any of the contributions to the debate.

In terms of supporting victims of domestic abuse, we want staff to be able to better identify, refer and support those in need.

We worked with the Ministry of Housing, Communities and Local Government on the commitment to end rough sleeping through the homelessness and rough sleeping strategy and the Ministry of Justice to ensure prison leavers have access to welfare support from day one. Only last week the Secretary of State announced an extension to the UC pilot in HMP Perth and HMP Cornton Vale.

[Neil Gray]

I thank the Minister for giving way and will pass on the intervention from my hon. Friend the Member for Central Ayrshire (Dr Whitford). Will he give separate payments to women who have suffered domestic violence?

[Will Quince]

As the hon. Gentleman knows, split payments are available. I know the Scottish Government are looking at split payments by default, and that is an area I am looking at very closely indeed. It comes with huge complexities, as indeed the Scottish Government recognise, and we are working very closely with them. The Secretary of State has done a huge amount of work in this area—we would expect nothing less from a former Home Secretary who has done an awful lot of work around domestic abuse. So this is an area that I am looking at very carefully; I am conscious of it and am very happy to commit to continue to work with the Scottish Government to try to find a solution to what is a very complex issue.

Supporting the most vulnerable in society is at the very heart of our compassionate Conservative Government and my Department does exactly that.

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[Will Quince]

I have taken numerous interventions already, Madam Deputy Speaker, and I stress that the point of a debate is actually being here to take part in it.

These are the reasons that our labour market is outperforming those of many other developed countries. More people have moved into work in the UK since 2010 than in France, Spain, Ireland, the Netherlands, Austria and Norway combined.

[Neil Gray]

rose—

[Will Quince]

We are at record levels of employment and, once fully rolled out, universal credit will support another 200,000 people into work and help those already in work to increase hours. But we do not want people to have just any job; we want them to have good jobs where they are able to progress, and universal credit will enable this while providing an economic benefit of £8 billion a year to our economy and saving the Exchequer more than £3 billion annually.

But this is not “job done”. I know as well as anyone the importance of supporting people into work, particularly among vulnerable groups. That is why we have worked hard to create a safety net that not only supports people when they fall on hard times but gives them a hand up. That is vital. We are spending more than £55 billion this year to support disabled people and those with health conditions. That is more than any Labour Government did. Disability benefit spending will be higher in every year to 2023 than it was in 2010. Under universal credit, disabled claimants who cannot work will receive an average of £100 more each month than under the legacy system. So we are supporting those who have worked their whole lives and paid into our social security, and who now deserve to enjoy their retirement. We created the triple lock on state pensions, which has increased the amount of the basic state pension to almost £1,600 more than it was in 2010. We are further protecting the poorest pensioners through pension credit. This means that in total we spend more than £120 billion on benefits for pensioners in this country. As a result, pensioner poverty is now close to historic lows, which is where we want to keep it.