Welfare Reform Bill

Richard Graham Excerpts

Monday 13th June 2011 Commons Chamber

[Yvonne Fovargue]

I agree with one thing that the hon. Member for Wolverhampton South West (Paul Uppal) said, which was about taking responsibility. I therefore hope that he can support amendment 26, because it will mean that agencies can ensure that people know their rights and responsibilities following what has been described as the most fundamental change to the benefit system.

One of the first witnesses to appear before the Public Bill Committee said that although universal credit is a simplified benefit, the application for it will not be simple, because of all the different benefits that are rolled up together into it. I am old enough to remember when supplementary benefit changed to income support, and I saw the rise in demand for advice among people worried about what would happen to their income. For people who are on benefit, a small change in income means a lot.

That problem will be exacerbated in the current case, particularly given the fear of a civil penalty for a mistake or omission. People who go to advice bureaux do not want to know how to defraud the system; they want to know how to fill their form in correctly. An online application process will also worry people—particularly older people, but also some younger ones—who are concerned about filling a form out online and not seeing it until three, four or five days later. Support is needed to smooth the transition.

Universal credit will start in 2013—exactly the same time when the proposed changes to legal aid will remove help for the most complex welfare benefit cases. As my right hon. Friend the Member for East Ham (Stephen Timms) said, that is the perfect storm. Local authorities are examining every non-statutory service that they provide, and in some cases local advice agencies are losing funding. In fact, in a survey, 54% of local bureaux said that they were worried that they were unlikely to be around in 2013.

Let us scotch one myth. Local bureaux and advice agencies do not get any funding from central Government. The money goes to the central Citizens Advice, which provides a vital service in support of local bureaux. It provides information, training, support and IT services. Putting more money into local bureaux would mean that more would have to be charged for those services. It would be self-defeating. Local face-to-face advice is vital, along with the advisory telephone service. Many claimants are vulnerable, and such advice, provided locally, is of particular importance to them.

[Richard Graham (Gloucester) (Con)]

Does the hon. Lady agree that local citizens advice bureaux are probably one of the most important and good causes to whose funding local government can contribute? Will she therefore join me in applauding my city council in Gloucester for the valuable increase in funding that it has given to our local CAB, and recommend that action to other councils?

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[Charlie Elphicke]

I have not conducted a detailed survey on that. I am also unsure what the 400,000 or 430,000 who will win approximately £50 say. There will always be winners and losers, but what I like about this policy programme is that there are almost twice as many winners as losers, and they will win an awful lot more money, which helps the transition to the policy.

Let me return to the evidence of parents. The Government document states:

“Many out of work mothers, both lone and partnered, are looking for jobs that will fit in with their children’s schooling—i.e. jobs that are part-time and preferably within school hours.”

That is obvious and self-evident—any parent knows that—but it is important to have survey evidence so that the argument has an element of objectivity. The document goes on to say that out-of-work mothers

“tend to look for work that is local and flexible, so that they can be available if, for example, their child is taken ill.”

All of us parents have been there—have we not?—when our children get sick and we send them off in the morning, tying their scarves up tight and hoping that no one notices. When they do notice, we get a call. I have had to make that run—even though, as I am told, as a man I have no rights in respect of child care responsibilities. Some of us in the younger generation are new men, although I hesitate to apply that description to myself.

The document also states that those factors—locality and flexibility—

“are often seen as being more important than the type of job they move into.”

It is all about flexibility, which we need. All of us parents have been there and understand that. Child care is quite often a nightmare, and always a juggle. Half the time parents are terrified that they will get a call just when they have an important meeting to go to.

The document also states:

“A study of lone parents who had recently moved into work had overwhelmingly chosen jobs where their hours fitted with looking after their children. It was common for interviewees to be working between 16 and 29 hours per week.”

Again, there was almost certainly not the flexibility to have a mini-job. Mini-jobs are important in enabling such flexibility. It is not right for parents, particularly parents of little children, to be forced into endless hours of work, or to work for more than 16 hours. New clause 2(5) is therefore extraordinarily unhelpful, and a retrograde step.

On parental employment, what happens when children are five and six is telling. This is about the youngest tots. When children are that age, parents are just going out into work, having previously perhaps been full-time parents. Employment of lone parents of children that age is about 55%, but the employment of partnered mothers is 75%, which is the parental employment rate. We can see, therefore, that there has been a massive societal shift into joint working among couples. There has been a move away from the traditional old-style model, whereby the bloke goes off to work and the woman stays at home to mind the kid and the kitchen sink, to more economic sharing and greater equality, which is a positive thing.

[Richard Graham]

My hon. Friend is developing a powerful case for greater flexibility, which is precisely what the Bill proposes, and which the new clause would not reflect. Does he agree that there is perhaps not enough understanding in the wider world of the flexibilities in the Bill that will help single mothers to take jobs on a flexible basis?

[Charlie Elphicke]

My hon. Friend makes an extraordinarily powerful point. Part of the reason for that is that a lot of scaremongering is going on. The scaremongers deny that the Bill provides that flexibility and say that people will lose out, but we know, from the detailed figures in the Budget and the briefing document to which I have referred, that most people will be far better off under the reforms, that they will have more money, and that work will always pay.

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[Richard Graham]

It seems extraordinary that the hon. Member for Westminster North (Ms Buck), with whom I sat on the Work and Pensions Committee, does not recall the stream of anecdotal evidence from our constituents about how many women are at home on benefits because they have worked out that under the current system it is impossible to take a job and be better off. The whole concept of work paying, which drives this Bill, must surely unite Members on both sides of the House.

[Charlie Elphicke]

I would hope so. New clause 2(1) mentions

“a childcare element for claimants who are in work, except in prescribed circumstances.”

One of the problems with the current system is that 52,000 families already in receipt of tax credits are entitled to, but did not claim, the child care element in 2008-09, whereas 55,000 families were entitled to the child care element but did not claim tax credits in the same period. We need to ensure that real help is available for children. Universal credit will ensure that we do not have thousands of families who do not receive their full entitlement. That is a really important aspect of the Bill.

I am not sure that new clause 2 is the right way forward. I am concerned that it would cost the vast extra sum of £400 million in Government spending. It would be expensive, but retrograde, and it would make life harder for those who want to be in part-time work.

My other concern about the new clause is that the maximum award for the child care element is far higher than was set out in the consultation document. I can only assume that in drafting it the Opposition thought, “What high figure can we come up with that will be a substantial number so we can appear to our constituents to be much more generous in spending other people’s money?” That is not a sensible approach. The right approach is to have the consultation that the Government are having so that the book, when it is written, is slotted into the bookcase and is as effective as possible.

The Government have made a real effort to make strides on this issue and they have come up with a really great plan. They have also gone to considerable lengths to put up various options for discussion. Nowhere in new clause 2 does it canvass the possibility of a different rate for children under five, although the Government have canvassed that possibility. Nowhere does the new clause mention the differences between what people would get with 70% child care costs and with 80% child care costs: it just assumes that the figure should be 80% or 90%—figures that, on the face of it, appear to have been plucked out of the air. Nowhere does the new clause discuss the working of the hours rules, which would create great problems especially for lone parents and the parents of the youngest children who are just starting to find their way back into work. We must support them in going back into the workplace. That is the sort of discussion that we should be having, and I would hope that the Opposition would work positively with the Government to try to achieve a system that works for everyone.

These reforms are important because we need to reduce child poverty. In recent years, the figures have not been pointing in the right direction, if one includes after-housing costs. I will be challenged and told that that is the wrong figure to use and that I should use before-housing costs, but as I said in Committee people have to live somewhere. We cannot expect them to live in a garden shed or on a remote Hebridean island at very low expense where perhaps they could find shelter and the odd sheep. Indeed, the hon. Member for Stretford and Urmston (Kate Green), who is no longer in her place, nodded in Committee when I said that this was the right measure.

In 2004-05, some 3.6 million children were below the 60% median for after-housing costs and now it is 3.8 million. I regard that figure as worrying in terms of the mischief that the universal credit and new clause 2 are aimed at combating. The Government’s plans would substantially reduce child poverty. New clause 2 and the Government’s plans are presumably aimed in the same direction, but the latter would reduce child poverty by at least 50,000 in 2011-12. I see that as a positive move. I asked the Secretary of State today about the effect of universal credit on poverty and he said that 90,000 fewer people would be in poverty. That is the right direction.

The Opposition have tabled amendments 23 and 24, which propose that the prescribed maximum should be £50,000. In other words, if someone has £50,000 in the bank but their earnings are very low, they will be able to claim under universal credit. Earlier, I put an example to the hon. Member for Edinburgh East (Sheila Gilmore). If a person earns £50,000, has no savings—probably a young person—and pays tax, they will be subsidising an older person on lower earnings but with £50,000 in the bank. If we asked people in the street whether that was really justifiable, they would say no. The reason we save is to have a rainy day fund. The whole idea of such a fund is that when it rains, we should spend it—because we believe in taking responsibility for ourselves.

Today, the Leader of the Opposition gave a little speech about responsibility. He said:

“Labour—a party founded by hard working people for hard working people—was seen, however unfairly, as the party of those ripping off our society. My party must change.”

But I looked at the amendments and saw that Labour wants to give benefits to people who have £50,000 in the bank. Are we being ripped off? Is that a party that believes that hard work brings rewards and that believes in responsibility, in a messianic conversion, or is it a party that simply wants to hand out other people’s money like confetti?

I read on in the speech and I realised that the amendments had been tabled for the sake of a sound bite. The Leader of the Opposition said:

“Just take their current welfare reform bill.

It punishes people in work who save, denying them the help they currently get through tax credits.”

Well, there is saving and there is saving, and if we polled people I am sure that we would find conclusively that someone with £50,000 in the bank should not get any out-of-work benefits. They should take responsibility and seek to get back into work as quickly as possible.