Welfare Reforms and Poverty

Sheila Gilmore Excerpts

Monday 13th January 2014 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

Like all other speakers, I am grateful to those who lobbied for this debate.

There is a need for some good research into what is going on—research that would very much form part of a commission. I want to give an example of research started by the previous Government that is not being conducted by this Government—in this case, research into the employment and support allowance and the work capability assessment. The last Government commissioned research into what happened to people who had been found fit for work. After three months, 22% were back in employment and 41% were on another benefit. There were still some missing people, but there was no explanation of where they were. After a year, only 23%—there was hardly any increase—were back in employment. However, 43% of those people were neither in employment nor on any other out-of-work benefits. Now 43% is an awful lot of individuals, but this research stopped so we do not know what has been going on since; we do not know whether the pattern has been consistent over the last few years. If it has been, there are a lot of unexplained outcomes in respect of people living in great poverty.

This issue is not just about people who have somehow been benefit dependent for all their lives. Professor Fothergill of Sheffield Hallam university recently gave evidence to the Work and Pensions Committee, and he pointed out that some of those most affected are couples in their 50s. Typically, people will be affected most by becoming ill at that stage in their lives, when illness really does begin to rack up and benefits for illness are most likely to be received. What happens if, say, a couple has one and a half incomes and has been comfortably off with the children grown up and a reasonable income coming in, but the main earner falls ill? There will be an immediate big loss of income because of the illness in itself. After a year, if that individual goes into the workplace activities group, which many do, they will lose even their employment and support allowance. At that stage, another £91 is lopped off their household income—and all this at a time when the costs are probably increasing because they are likely to be at home longer and have more heating bills to pay.

If this couple are council or housing association tenants, they might well have a spare room and will also be hit by the bedroom tax. The second means test applied by many councils for discretionary housing payments will probably mean that, because there is still an earner in the household—albeit probably a part-time earner—they will not qualify for discretionary housing payment. They will be deemed to have sufficient income over the absolute basic amount for them to have this extra payment. After working for 35, 40 or perhaps even more years, this couple will have experienced a huge tumble from being comfortable to being in really straitened circumstances. If they have made any savings over their working period towards their retirement, the chances are that when they reach pension age, they will have been entirely eroded, creating further problems for the future.

The irony in all this is that many of the measures introduced—I would hope that the research covered this issue—are not actually making any great savings. We have heard a lot about the bedroom tax not making much in savings, but it is not the only thing. Housing benefit payments are due to increase, which the Office for Budget Responsibility has factored into its assessment. Why? Half the expected increase—a substantial increase—is due to people in employment who will qualify for the benefit. Fewer people may be receiving jobseeker’s allowance at one end of the system, but further along the system, more will receive housing benefit. For one set of savings, there is a comparable set of costs. We have to look at that.

We are not making the savings we think we are, and I believe the same is true of the employment and support allowance. There is a big mystery here. The number of people in receipt of that benefit has gone down by far fewer than the number of people who have been found fit for work. What on earth is going on? I suspect that many people have simply come around through the system again. They were not well; they had to apply for benefit again. We are putting people through a lot of trauma and stress for very little saving.

--- Later in debate ---

[The Minister of State, Department for Work and Pensions (Mike Penning)]

Apart from a short comfort break, I have sat through the whole debate, finding it very interesting. I found the tone and manner of most of it to be exemplary, and a credit to the House and the Backbench Business Committee. I will take exception with the Opposition Front-Bench team, because if they were so determined that they wanted this they could have had this debate and pushed for this inquiry during Opposition day debates last week or later in this week. They could even have signed the motion tabled by the right hon. Member for Oldham West and Royton (Mr Meacher), but they did not; there are three names on the Order Paper, but none from the Front Bench. They have suddenly decided—[Hon. Members: “It is a Back-Bench debate.] So why did we have the debate last week? What about the business next week? They have not done it.

Let us not get into the semantics of what went on but look at what happened during the debate. [Interruption.] For someone who sits there and complains about other people chuntering from a sedentary position, I must say that the hon. Member for Rhondda (Chris Bryant) is the leading expert in it. We heard contributions from: the right hon. Member for Oldham West and Royton; my hon. Friend the Member for Monmouth (David T. C. Davies); the hon. Member for Walsall North (Mr Winnick); my hon. Friend the Member for Stafford (Jeremy Lefroy); the hon. Member for Liverpool, Walton (Steve Rotheram); my hon. Friend the Member for Birmingham, Yardley (John Hemming); the hon. Member for Derby North (Chris Williamson); my hon. Friend the Member for Worthing West (Sir Peter Bottomley); and the hon. Members for North Ayrshire and Arran (Katy Clark), for Rochdale (Simon Danczuk), for Oldham East and Saddleworth (Debbie Abrahams), for West Ham (Lyn Brown), for Llanelli (Nia Griffith), for Hayes and Harlington (John McDonnell), for Edinburgh East (Sheila Gilmore) and for Edinburgh North and Leith (Mark Lazarowicz). As I say, it is a credit to the Backbench Business Committee that it listened to the Back Benchers and tabled this debate.

The contribution from the right hon. Member for Oldham West and Royton was wide ranging. I am pleased that he did not place all the blame on the coalition Government, not least because he was aware that the work capability assessments were introduced by the previous Administration, as was the Atos contract, which we discussed at Work and Pensions questions. So we inherited the assessments that are being complained about by hon. Members from across the House today, particularly those being carried out by Atos. We are working hard to improve the situation and deal with the mess we inherited. [Interruption.] I would like to know how it is possible that we are making it worse, as the contract we are working to is exactly the one we inherited. The hon. Member for Derby North, from a sedentary position, asks why. We were trapped in this because the previous Administration signed the contract. We need to make sure that the work capability assessment works as we go forward.

[Sheila Gilmore]

rose—

[Mike Penning]

I will not give way, because I do not have time.

My hon. Friend the Member for Monmouth raised the most important issue, and I am pleased that the shadow Secretary of State is here now. The shadow Minister engaged in a rewriting of history. My hon. Friend and several others alluded to the fact that the shadow Secretary of State said that Labour would be tougher than the Tories on welfare and on welfare reforms. There was no nuance about helping more people. Labour said it would be tougher than the Tories on welfare. We have saved £83 billion on welfare spending—that is the predicted saving. I would like to know where those cuts would take place if not through welfare reform. [Interruption.] The hon. Member for Gateshead (Ian Mearns) says from a sedentary position that the cuts would come through jobs, but more than 1 million people have been placed into jobs since this Government took office. That is most important.