Welfare Reform and Work Act

Debate between Neil Gray and Margaret Greenwood

Wednesday 21st March 2018 Westminster Hall

[Neil Gray]

rose—

[Margaret Greenwood]

I will not give way, because I am short of time. I refer the hon. Member for Inverness, Nairn, Badenoch and Strathspey and others to the excellent speech made by my hon. Friend the Member for Glasgow North East (Mr Sweeney) that showed clearly and in detail how Labour has led the fight for a social security system that supports people in their time of need.

--- Later in debate ---

[Margaret Greenwood]

The Welfare Reform and Work Act 2016 is having a profound impact on the lives of many of the most vulnerable in our society—the disabled, single parents, pensioners and children growing up in poverty—through a range of policies, accompanied by severe reductions in social security introduced in the 2015 Budget and what we are seeing with the roll-out of universal credit. There is the cut to employment and support allowance for disabled people, which is falling by £30 a week to the same level as JSA, leaving them with just more than £70 a week. There is the abolition of the family element of child tax credit and the equivalent in universal credit, which is worth up to £540 a year for new claimants.

We have a cut in the level of the benefit cap; the four-year benefits freeze; the abolition of targets to tackle child poverty, which Labour had introduced; the two-child limit on new claims for child tax credit and the child element of universal credit; the change in support for mortgage interest from a benefit to a loan that will be particularly hard on pensioners and disabled people; and the cuts to work allowances in universal credit in the summer Budget of 2015, which we call on the Government to reverse. So we see that the claims that the Act rewards hard work and is fair to working households simply do not bear scrutiny.

[Neil Gray]

Will the hon. Lady give way?

[Margaret Greenwood]

No, I am going to make some progress.

In-work poverty has risen to record levels: 8 million people, including 2.7 million children, are in poverty, despite being in a working family, and 67% of working-age adults and children in poverty in the UK are in working households. Many people are stuck in a low pay, no pay cycle, where they may pass from employed to unemployed and back again several times in the course of a year.

A study of in-work poverty published by researchers at Cardiff University found that

“those in working poverty are three times more likely to become workless than people living in non-poor working households.”

It also found that not everyone who finds work progresses to better paid employment. The reports states that

“one quarter of those families where somebody finds work, exit worklessness only to enter in-work poverty. Lone parents are over-represented in this group, as are families with three or more children.”'.

I recommend the report to the hon. Member for Redditch (Rachel Maclean).

The cumulative impact assessment by the Equality and Human Rights Commission published last week, which several Members have rightly referenced, states that the measure that has the most impact on households on low income is the four-year benefits freeze introduced in April 2016. When the benefits freeze began in April 2016, inflation was 0.3%. Despite a fall in inflation last month, it is still at 2.7%, and food prices went up by well over 3% in February compared with the year before. So it is little wonder that the chief executive of the Financial Conduct Authority has warned of increasing household debt built up simply by trying to cover basic household bills.

The Resolution Foundation estimates that by 2019 a lone parent in work with one child will lose £420 a year as a direct result of the freeze alone, and a couple with a single earner and two children will lose £570 a year. If the Chancellor was justified in his claims in his spring statement for improvements in the public finances, will the Government abandon the benefits freeze that is pushing households into poverty?

Housing benefit was first cut in 2011 and is also one of the benefits now frozen by the Act, but private sector rents have continued to rise rapidly. Between 2011 and 2018, private rents in the UK increased by more than 15%—and by more than 12% even if London is excluded. The Act also severely cut the levels of the benefit cap so that it is now hitting the whole of the country, and the cap in practice operates through a cut in housing benefit. The benefit cap is supposedly designed to incentivise work by exempting people who start claiming working tax credits. However, 45,000 households that had their housing benefit capped in November 2017 were single-parent families, and 35,000—

[Neil Gray]

Will the hon. Lady give way?

[Margaret Greenwood]

No, I am really short of time.

Thirty-five thousand of the single-parent capped households had at least one child aged under five, including 15,000 with a child aged under two.

The Act also requires the main carer of a child to look for work once their youngest child turns three, rather than five as previously. Many parents of very young children would actually like to work, but it can be almost impossible for them to find affordable childcare or work that fits around caring for young children. That brings me to one of the most contentious parts of the Act: the abolition of the targets to tackle child poverty set by the previous Labour Government in the Child Poverty Act 2010.

The previous Labour Government lifted 1.1 million children out of poverty through a cross-Government strategy that included Sure Start centres and year-on- year increases in social security, which went hand in hand with employment support targeted at specific groups such as lone parents. There was no thought that people should be left trapped on welfare, as the then Work and Pensions Secretary termed it when the Welfare Reform and Work Bill was being debated.

Labour’s policies achieved results. Between 1997 and 2010, the employment rate for lone parents with dependent children in the UK increased from 45% to 57%. That cross-Government approach has long since been discarded by the Government. The Child Poverty Unit set up to oversee it has been dismantled, and renaming the Social Mobility and Child Poverty Commission “the Social Mobility Commission” in the Act, thus excluding child poverty, says much about the purpose of that Act.

All four members of the board of the Social Mobility Commission stood down in December in protest at the lack of progress in creating a fairer Britain, including Baroness Shephard, deputy chair of the commission and a former Conservative Education Secretary under John Major. Will the Minister tell us his Department’s assessment of what contribution the Act has made to social mobility?

In February, the End Child Poverty coalition published new figures that showed that more than 50% of children in some constituencies are growing up in poverty and that 4 million children are in poverty after housing costs are taken into account. The Government claim their figures show that child poverty is actually decreasing, but they do not have up-to-date figures. The End Child Poverty coalition figures compiled by Loughborough University are for 2017-18, yet the Government’s official figures, to be published tomorrow, will cover only the year before, 2016-17. That time lag is important because, although the benefits freeze came into effect in April 2016, other parts of the Act that are likely to lead to an increase in child poverty, such as the two-child policy, were introduced only in April 2017, and so we have yet to see the full impact of them.

[Neil Gray]

Will the hon. Lady give way?

[Margaret Greenwood]

No.

The main provider of food banks in the UK, the Trussell Trust, has highlighted that food bank referrals have risen by 30% in areas after the full service has been introduced. The EHRC report published last week estimated that 1.5 million children will be living in poverty by 2021-22 as a result of tax and benefit changes, and the Institute for Fiscal Studies predicted in November that the proportion of children growing up in poverty is expected to rise from 30% in 2015-16 to 37% in 2021-2022. It really is time the Government listened to the informed opinion that is available out there.

The two-child limit on new claims for child tax credit and the child element in universal credit is one of the most controversial and, to my mind, one of the most offensive parts of the Act. The idea behind it seems to be that people claiming social security should have to think twice before having larger families, but in the real world unplanned pregnancies happen to people, and people might be unexpectedly made redundant having planned a larger family. Moreover, we should value children and not see them as a burden.

Faith communities are especially concerned about the two-child policy because, for many people of faith, reproduction, use of contraception and family size are determined by beliefs. The policy would originally have also covered children born as a result of rape. The Government were forced to back down, but the exemption still requires a woman to disclose sexual violence, which we know many women understandably find extremely difficult because of, for example, the trauma that they have experienced, a need to protect themselves and perhaps their children, and a fear of the perpetrator.

Someone claiming the exemption must also not be living with the person responsible for the sexual violence. Again, we know that women can be at severe risk at the point when they leave an abusive relationship. It should be the woman who has suffered abuse who decides when that should be. She should not be pushed into doing so at the wrong time by the DWP. The Government have not told us how many people have been affected by the two-child policy or how many have claimed exemptions, even though the policy has been in operation for almost a year now. Will the Government publish those figures and abolish the rape clause, which requires women who want to claim the exemption to prove that they have been a victim of sexual violence? Will the Government abandon the disgraceful policy that treats one child as though they were somehow worth less than another?

In a little over a fortnight, support for mortgage interest will be turned from a benefit into a loan. The Government have left it so late to contact people claiming SMI that at the beginning of March more than half of claimants—53,500 out of 110,000—had still not received a follow-up phone call to the initial letter sent out by the DWP. The delay echoes the fiasco of the pension changes affecting women born in the 1950s, where again people were not given enough time to prepare. Forty-one per cent. of people claiming SMI are pensioners. Turning it into a loan risks pushing them into poverty.

[Neil Gray]

rose—

[Margaret Greenwood]

The Government have made it difficult to trace the overall impact of the Act with all its complexity because they have failed to publish a cumulative impact assessment.

[Neil Gray]

rose—

Women and Low Pay

Debate between Neil Gray and Margaret Greenwood

Wednesday 18th November 2015 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Brentford and Isleworth (Ruth Cadbury) on securing this important Westminster Hall debate. I welcome her noteworthy and impressive contribution, as well as the contributions from other Members who have spoken.

The hon. Lady said that there has been a focus on high-paid jobs. It is important that women are given equal representation in high-paid jobs—and in boardrooms, political parties and Government Cabinets—so I can understand why she makes the point, but I think it is important that we focus on both high-paid and low-paid jobs. She highlighted the fact that three out of five jobs in minimum wage work are held by women. I have to admit that I was not aware of that startling figure, but I am glad that she raised it. That is why sorting equal pay claims from councils across the country is so important.

The hon. Lady highlighted the issue of the damaging branding of the Chancellor’s minimum wage premium as a national living wage. It is not national—it is only available to over-25s—and it is not a living wage; it falls way short of the Living Wage Foundation’s independently set living wage, which is calculated based on the cost of living. She mentioned that having a gender pay gap is bad for business. The statistic that she used to highlight that is absolutely correct and it is worth sharing it again: if we were to equalise the gender pay gap, we would boost productivity by an estimated £600 billion in this country. Frankly, that is astonishing. I thank her again for securing the debate.

The hon. Member for Worsley and Eccles South (Barbara Keeley) raised a number of very important points about problems with pensions, particularly for women born in the 1950s. Those issues were discussed just yesterday in a Westminster Hall debate secured by my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford). The hon. Member for Coventry South (Mr Cunningham) made very important points during that debate, as well as during this one. The hon. Lady, on behalf of the WASPI campaign group, made some very important points, which I welcome and which are supported by SNP Members.

My hon. Friend the Member for Lanark and Hamilton East (Angela Crawley) made a typically powerful speech. She made the point that gender equality is not a dream and should not be a dream. It needs to be a reality. She also said that women get paid two months short compared with their male counterparts.

[Margaret Greenwood]

Some years ago, I was fortunate enough to have a job teaching on a “women back to work” programme. The vast majority of the women were divorced. It was a really fantastic experience for me to see how quickly they improved their skills and educational base in a very short space of time. Does the hon. Gentleman agree that it is very important to provide training and educational opportunities for women—not just women in employment, but those who are unemployed, so that they can get back to work and generate the kind of economic activity that will boost their life chances?

[Neil Gray]

Absolutely. There is nothing that I can disagree with in that intervention, and I will come to some of those issues later in my speech.

Returning to the contribution from my hon. Friend the Member for Lanark and Hamilton East, the gender pay gap still exists even in what would be traditionally or stereotypically described as “female jobs”. That is still wrong and needs to be addressed. No man wants to see his daughter suffering a gender pay gap—that is absolutely right. I speak as a the father of a one-year-old daughter who I hope will go on to employment where she will earn the same as her male counterparts, so I stand here today on that basis.

The hon. Member for Coventry North East (Colleen Fletcher) effectively highlighted the issues of gender inequality in her city of Coventry. Again, I highlight the contribution made by the hon. Member for Coventry South, who, as I said, also made noteworthy contributions to the debate on pensions yesterday.

It is disappointing that in 2015 we are still discussing matters of gender equality. Nevertheless, it is important to take cognisance of the fact that a real pay gap between men and women remains. Low pay affects women disproportionately. In 1999, the gender pay gap for full-time employees in Scotland stood at 16.7%, but by 2014 it had been reduced to 9%, and it is 9.4% in the rest of the UK. This year, the Scottish Government launched the Partnership for Change programme, wherein public, private and third-sector organisations make a voluntary commitment to work toward a 50:50 gender balance on their boards by 2020. As of 9 November, 160 organisations and businesses have signed up, which I am delighted to see, although more work is clearly needed. On this year’s equal pay day, 9 November, First Minister Nicola Sturgeon pledged to do everything she can to advance equal pay and gender equality in Scotland as part of the Fawcett Society’s pay gap pledge campaign. The First Minister has been leading the way on the issues, starting clearly and publicly with her 50:50 gender balanced Cabinet.

Many women shoulder a disproportionate amount of childcare or family responsibilities, and they are unable to take up promotion and other opportunities because they do not have alternative care arrangements. The Children and Young People (Scotland) Act 2014 provides further assistance to women and young families by providing that all three and four-year-olds and the most disadvantaged two year-olds are entitled to 600 hours of early learning and childcare. By the end of the next Parliament, the Scottish Government will have doubled the hours from 16 to 30 per week. Increasing childcare will not only improve outcomes for children, but support more women into work.

The Scottish Government have also provided Skills Development Scotland with additional funding as part of a wider £3 million allocation in 2014-15 to develop a range of equality activities, including tackling gender segregation. The Scottish Government are doing all they can with the tools on offer to provide tangible improvements.