Budget Resolutions

Stephen Kinnock Excerpts

Thursday 7th March 2024 Commons Chamber

[Mel Stride]

I thought I had already covered this point, but the reality is that the tax burden has had to go up to pay for all the support we provided around covid, and because of the inflationary pressures created by a war on European soil. The hon. Lady cannot get away from the fact that through this fiscal event, and the previous one, 27 million hard-working people, employed in businesses up and down the country, will be better off to the extent of £900 per year. Some 2 million self-employed people will be £650 per year better off. She talks about those earning less than £19,000, but those many millions of people who earn above £19,000 will have a lower tax burden than before, when we take into account the interplay of the freezing of thresholds and the cuts in national insurance.

[Stephen Kinnock (Aberavon) (Lab)]

It has been widely reported that the taxpayer is having to pick up the tab for £15,000 of legal costs and damages incurred because of the actions of the Secretary of State for Science, Innovation and Technology, the right hon. Member for Chippenham (Michelle Donelan), who is rapidly becoming known as the hon. Member for “chipping in”. Will the Minister confirm that the figure of £15,000 is correct? Will he say whether he thinks it is morally right that the taxpayer should be picking up the bill for the outrageous lack of judgment and behaviour of one of his colleagues?

[Mel Stride]

What I think will be absolutely outrageous is the taxpayer having to pick up the bill for a future Labour Government. I have just explained the record of the hon. Gentleman’s party in government.

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[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am delighted to have caught your eye in this important Budget debate, Madam Deputy Speaker. I am also pleased to follow the hon. Member for Warwick and Leamington (Matt Western), although I disagree with almost every word he said. That is the nature of this place —we are entitled to debate these matters.

I have listened to the speeches from Opposition Members today. Both they and most of the financial commentators who have criticised the Budget—I totally agree with my hon. Friend the Member for Folkestone and Hythe (Damian Collins) on this—have failed to mention that we have been through two catastrophic world shocks: namely, the pandemic and the unexpected war in Europe, in Ukraine. They have had catastrophic effects on our economy. I ask all the Opposition Members who have criticised the Budget this: would they not have spent the money on the furlough scheme or the business loan scheme? Would they not have helped people out with energy loans? Of course they would have, so they would be in exactly the same place as we are, grappling with today’s economic problems.

A number of measures in the Budget are to be warmly welcomed, and I will come to one or two of them. I am particularly pleased that inflation has come down from a high of 11.4% to 4% today, and it is forecast to be below the Bank of England’s target of 2% by the end of this year. That is the most important thing we can do for the cost of living of all our constituents, above all tax reductions or anything else. I warmly welcome that. I will turn to some of the individual measures in the Budget, before moving to public sector productivity measures. After that, as my hon. Friends on the Front Bench will not be surprised to learn, I will mention the tourist tax.

My constituents will welcome a number of measures set out in the Budget, particularly the cut in employee national insurance contributions. Taken with those of the autumn statement, they amount to £900 for the average working person in this country earning £35,000. I suggest to everybody across the House that that is a significant increase in the take-home money that our constituents will see in their pockets today. That, combined with the number of our constituents who are self-employed—a particularly important and growing sector—means £650 for someone earning £28,000, which is also warmly welcome. That will encourage our hard-working constituents to work longer hours and become more productive.

As my right hon. Friend the Chancellor said yesterday, national insurance is a double tax on working people. National insurance combined with income tax is an unfair tax arrangement for working people. If we are to start making tax cuts, which I hope we will, it must be right to try to drop one or other of them, and that is why I warmly welcome the cut in national insurance.

[Stephen Kinnock]

Will the hon. Gentleman give way?

[Sir Geoffrey Clifton-Brown]

Let me make one important point, which I hope the hon. Gentleman will consider when he intervenes. Yesterday the Chancellor said that, through our tax cuts and by raising the personal allowance, the tax on ordinary working people today is at its lowest level since 1975, and possibly since the war, although we do not have records to prove that. It is lower than in America, France, Germany or any G7 country. The ordinary working person’s tax burden through national insurance and income tax is extremely low at the present time.

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[Stephen Kinnock]

It is clear that the tax burden is actually the highest it has been in 70 years. The hon. Gentleman raised a point about national insurance contributions. I assume that he has seen the email that the Chancellor of the Exchequer sent to all Conservative party members, making it clear that the plan is to scrap NICs in the next Parliament. Does he accept that that is the Government’s plan, because it is in that email in black and white? Does he also accept that that would leave a £46 billion black hole in the public finances?

[Sir Geoffrey Clifton-Brown]

I think the hon. Gentleman is misrepresenting what my right hon. Friend the Chancellor said yesterday. I have Hansard here. I cannot look through it quickly enough to give the exact wording the Chancellor used, but he basically said that when the economy is in a fit state to so do, and when economic conditions allow, such a move is an ambition—that is not a promise or a commitment to anything at all; it is just, as my right hon. Friend said, a commitment to travel.

[Stephen Kinnock]

rose—

[Sir Geoffrey Clifton-Brown]

I will give way to the hon. Gentleman, but I hope he is not going to misrepresent what the Chancellor said. I will have to get it in Hansard, but I will give him one more chance.

[Stephen Kinnock]

As the hon. Gentleman will be aware, I am an avid reader of the Chancellor’s emails to Conservative party members. He states:

“We want a simpler, fairer tax system where you only pay tax once. If we stick with our plan that’s working, we’ll be able to make progress towards that goal in the next Parliament.”

If that is not a commitment to scrapping NICs in the next Parliament, leaving a £46 billion black hole—why do they not just own up to it, and then explain how they are going to fill that black hole?

[Sir Geoffrey Clifton-Brown]

I am grateful to the hon. Gentleman for intervening a second time, because I now have the exact words from Hansard. The Chancellor said:

“When it is responsible, when it can be achieved without increasing borrowing, and when it can be delivered without compromising high-quality public services, we will continue to cut national insurance as we have done today, so that we truly make work pay.”—[Official Report, 6 March 2024; Vol. 746, c. 852.]

I do not think it is as the hon. Gentleman is saying. I think he is misrepresenting the words of my right hon. Friend the Chancellor, and I hope he will not persist with that line of questioning.

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[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Listening to parts of this debate, I wonder what universe some Conservative Members have been occupying for the last four years. In fact, I wonder whether someone has been slipping soma, or something, into their tea. The House will recall that soma is the magic potion that is fed to the characters in the Aldous Huxley novel “Brave New World” to quell their unhappiness and blind them to the realities of life around them. That is how it feels listening to parts of this debate.

Try as they might, this Government cannot escape responsibility for the state of our economy, the cost of living crisis and the damage they have done to family budgets and to the people they have plunged into debt. In my pre-Budget survey, Selly Oak constituents were clear: 93.3% wanted the Chancellor to prioritise the cost of living crisis—he has not; 70.7% wanted him to concentrate on growing the economy—he has not; and 67.7% were against apparent giveaways followed by public service cuts—that is exactly what he has done.

This is not a tax-cutting Budget because, as we have heard, tax is still going up. The Chancellor is presiding over the highest level of tax for 70 years, and he has the effrontery to prance around pretending to be a tax cutter. He is a bit like a Prime Minister who professes a love for equality while boasting of transferring funds from poor areas to rich areas.

People are not stupid. They know that the continuing freeze on allowances means that they are paying more. People like teachers and nurses are now paying higher rate tax and, since the Tories came to power, the average income tax paid by pensioners has risen, with 1 million more sucked into the tax system in the last year.

And, of course, there are the hidden costs. A prudent Chancellor would have put something aside for the contaminated blood scandal, the victims of the Post Office Horizon nightmare, the WASPI—Women Against State Pension Inequality Campaign—women debacle and the LGBT ex-service personnel. Those are all things that he should have sorted by now but has ignored, probably deliberately. Perhaps he is planning to leave those issues for someone else.

If the Chancellor wanted to grow the economy, he would have done more to help small business. For example, Attic Brew in my constituency is a popular little business that, having weathered covid, has created about 40 full-time and part-time jobs, but it struggles with high energy bills and taxes, which hit sales of locally produced beer. I acknowledge the alcohol duty freeze, but he did nothing about energy bills or reducing duty on draught beer and cider, which would have done far more to help small independent producers. That is how to reward work and enterprise.

Growing our economy is the only way to get enough money to pay for good public services. Where in the Budget was the support for skills investment, which is essential if we are to grow and provide jobs for the future? I heard Conservative Members laugh yesterday at the idea of GB Energy, just as they used to laugh at a non-dom tax. GB Energy will allow us to take control of our energy sector and protect us from hostile powers, and will help to wean us off fossil fuel. Labour knows the value of that, because we have done it before. When we created the British National Oil Corporation, we created a structure that could have rivalled the Norwegians for providing dividends and a sovereign wealth fund for our people, had not the Tories squandered the proceeds of North sea oil receipts. They understand the needs of oil giants, but they show little understanding of, or care for, the needs of ordinary people and small business.

Finally, we have seen the classic Tory deception. The Chancellor ended his Budget speech by planting a story about something that he will probably not do. He wants us to talk about the total abolition of national insurance, an unfunded proposal worth more than the tax bonanza from the right hon. Member for South West Norfolk (Elizabeth Truss), which almost wrecked our pension funds. Of course, that assumes that he is promising to scrap only employee NI. If he were also considering employer contributions, we would be talking about a black hole of not £46 billion, but £178 billion. We can see why we need clarity from these people about what they are actually promising.

[Stephen Kinnock]

My hon. Friend is making an excellent speech. Does he think that it is extraordinary, given what happened after the so-called mini-Budget, that the Conservative party seems to have learned nothing and is still making all sorts of unfunded commitments, which could wreak havoc on our economy, just as happened last time around?

[Steve McCabe]

This is extremely serious, and I am not surprised that the Conservatives are trying desperately to get away from it, because we can all see the risks that are posed.

This is a Budget based on the kind of fantasy reality that could well have come from an Aldous Huxley novel. We have a Chancellor with nowhere to go, representing a Government no one believes. It is time to let the people decide.

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[Stephen Kinnock (Aberavon) (Lab)]

It is a real pleasure to follow my hon. Friend the Member for Easington (Grahame Morris).

We on the Labour Benches talk a lot, and rightly so, about the Conservatives crashing our economy and sending mortgages up by almost £3,000, rent up by 10%, and food prices up by 25%. We talk a lot about the fact that the Prime Minister is utterly blinkered about the truth that he has gone from being a low-growth Chancellor to a no-growth Prime Minister, with the introduction of Rishi’s recession, and that working people are paying the price in this cost of living crisis. We talk a lot about Tory waste: the fact that the Prime Minister has blown £7 billion on covid loan fraud, and £500 million on a Rwanda plan that has flown three Home Secretaries to Kigali, but not a single asylum seeker. We know that the tax burden is at its highest level for 70 years, while debt has rocketed and is still going up.

However, we should probably talk more about the underpinning mismanagement of our economy and the broken economic model that has seen Tories under-investing, turning our country into a stagnation nation. We have a record high NHS waiting list of more than 7 million people; schools that are literally crumbling because the Prime Minister cut the school building budget when he was Chancellor; 90% of crimes going unsolved, with rape victims waiting three years for their day in court; and three times as many children living in poverty today as did six years ago. The reality is that the past 14 years have been an omnishambles. As a result, nothing in this country seems to work any more, yet the British people are being forced to pay more and more for less and less.

What ideas have the Conservatives put forward to fix this mess? None whatsoever. Instead, they resort to pilfering Labour’s policies like some sort of embarrassingly bad tribute act. When the cost of living crisis hit, we knew we needed to support households through it, so we proposed a windfall tax on the excess profits of oil and gas companies. The Conservative party eventually caved in and delivered that policy, but poorly and riddled with loopholes.

This week, the Government have made a feeble attempt to mimic our policy of ending the non-dom tax loophole. Just think: if they had acted when Labour first suggested ending this loophole two years ago, they would have generated £6 billion for the policy areas we suggested. They could have delivered 3.8 million extra operations, 1.3 million emergency dental appointments and free breakfast clubs for nearly 4.5 million children. The Conservatives are followers, not leaders. They are slogan-mongers, not servants of the people. They believe in government by gimmick rather than the hard graft of governing in the national interest.

Labour, meanwhile, is taking a long-term responsible approach to get our economy back on its feet and growing again, which is why we have our five core missions. We will get businesses growing and put demand back into the economy, starting with our new house building programme for 1.5 million homes over five years, creating new jobs and getting young people and families the housing they need. We will deliver clean energy by 2030 and switch on Great British Energy. Our transition to a modern economy will deliver half a million good jobs, lower household bills and make our energy supply secure from Putin. We will get the NHS back on its feet and fit for the future, and bring down waiting times with the biggest ever workforce expansion, including 17,000 more doctors and nurses and 2 million more available appointments. We will put 13,000 police back on the streets, and halve the number of incidents of violence against women and girls. We will spread opportunity for young people everywhere by shattering the class ceiling through better early years provision and improving technical education.

Instead of the Government’s hands-off, “Not my problem, guv,” approach to the economy, we can deliver an active industrial strategy, backing our businesses to make, buy and sell more in Britain. This includes Labour’s £3 billion steel renewal fund. With that, I am urging Tata Steel to step back from the cliff edge, which would cost 2,800 people their jobs in Aberavon and Wales, and not do anything that cannot be undone before the next general election. What a disgrace it is that the Conservative Government have given £500 million to Tata to make 2,800 people redundant. We will work with industry to secure a bridge to the new economy, so that steel companies can seize the opportunities of the future and Britain can maintain its sovereign capability to make its own steel from scratch. This is a vital security issue in the dangerous and turbulent world in which we live. If we want to get Putin’s boot off our throats, we have to sustain our vital steel industry.

We on these Benches are also committed to supporting small businesses. We will legislate to tackle late payments, unlocking £20 billion in unpaid invoices. We will scrap business rates, and replace them with a system that is fairer for bricks and mortar businesses. These are the kind of growth measures we need to get Aberavon, Wales and Britain firing on all cylinders.

Last year, the Prime Minister said, “We’ve turned the corner,” and promptly plunged Britain into a recession, with an economy smaller now than when he entered Downing Street, mortgages through the roof, house building fallen off a cliff, worklessness rising, homelessness never higher, crimes going unsolved and rape victims waiting years for their day in court. We have rivers full of sewage, which is the perfect metaphor for the stench of decay that is emanating from this clapped-out Government.

Households are £870 worse off on average under Sunak’s —the Prime Minister’s—tax plan. With just 5p given back for every 10p taken from our constituents, he is giving with one hand and taking twice as much away with the other. That is not a plan; that is a scam. It is a con from this Government, who have run out of ideas, run out of energy and run out of road. We need an election this spring, and we need a Labour Government who will rebuild our public services, re-energise our economy and get our country back on track.

[Several hon. Members rose—]

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[Nigel Huddleston]

The hon. Gentleman is making an important point. I said earlier that, unfortunately, we have had taxes at a higher level than we want, but now we are in a position to reduce them. Reducing them and focusing on NICs is impactful for 29 million workers—anybody earning above £12,500. People now need to earn more than £1,000 a month before they pay any tax whatsoever.

As I said, when we came into power unemployment was near 8%, but it is now about 4%. We should not take full employment, or near full employment, for granted. We all know that every Labour Government have increased unemployment—that is not an impressive record but it is a consistent one.

I particularly want to reflect today on how our plan rewards hard-working families. The Government believe that people’s careers should support rather than undermine another important role: parenthood. That is why at last year’s Budget the Chancellor announced the biggest ever expansion of childcare from September 2025, extending the 30-hour free childcare offer to all children of working parents from nine months old. That will result in an extra 60,000 parents entering the workforce in the next four years. But to deliver on that we need to support the private sector to play its part too, so yesterday we confirmed that the Government are guaranteeing the hourly rate paid to childcare providers to deliver the free hours offer.

[Stephen Kinnock]

The Minister has not yet mentioned the Government’s damascene conversion on scrapping the loophole for non-doms, but there is a point here about what they could have generated. If they had listened to Labour and done that two years ago, it would have generated an extra £6 billion of revenue, which could have paid for free breakfast clubs for nearly 4.5 million children. So on the point of childcare, does he think that is relevant?

[Nigel Huddleston]

The hon. Gentleman gave quite a wish list earlier, which, by my calculations, could come out as being quite expensive. I do not know whether he has had conversations with the hon. Member for Leicester West, who is on his Front Bench.

On the hon. Gentleman’s point about non-doms, we will be scrapping the non-dom status, but we will be replacing the system with one that is residency based, including measures that will encourage and incentivise further investment into the UK, because we will be implementing transition measures. I did not hear the Opposition talk about them. Those transition measures are likely to encourage £15 billion of additional investment into the UK. Non-doms at the moment pay about £8.5 billion in taxes. We want to welcome people, but we recognise that those with the broadest shoulders must carry the greatest burden. None the less, we want to be internationally competitive, and the new system that we have proposed will be.

Returning to the childcare measures that I outlined earlier, this commitment would mean over £500 million of additional investment in childcare over the next two years. This will give childcare providers the confidence to invest in expanding at a crucial time, to deliver the free childcare expansion and help bridge the gap between parents’ career demands and their childcare needs.

This approach complements further changes that we are making to the tax system to incentivise parents to increase the hours they work. Yesterday, the Chancellor announced that from 6 April the high-income child benefit charge threshold will be raised to £60,000. In addition, the level at which child benefit is withdrawn completely will increase to £80,000. That was very much welcomed by many Members on the Conservative Benches, including my hon. Friends the Members for Devizes, for The Cotswolds and others. As a result, no one earning under £60,000 will now pay the charge. This will put pounds in parents’ pockets, saving nearly half a million families with children an average of £1,300 a year. According to the OBR, this change will also result in an increase in hours for those already working, which is equivalent to around 10,000 more people entering the workforce full time.

Statutory Sick Pay and Protection for Workers

Stephen Kinnock Excerpts

Wednesday 18th March 2020 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

The hon. Member for Airdrie and Shotts (Neil Gray) mentioned in passing that the Work and Pensions Committee met this morning. We took evidence from five organisations: the Royal National Institute of Blind People, Mind, Scope, Citizens Advice and the Zacchaeus 2000 Trust representing the Disability Benefits Consortium. The main purpose was to take evidence about disability benefit assessments, but of course we took the opportunity to raise some of the current issues that we are discussing in this debate. I thank the members and staff of the Committee, and the witnesses from all those organisations, for being willing to take part in that useful session this morning, despite the current difficult circumstances.

I welcome the announcements that the Government have made. As the Minister for Disabled People, Health and Work, the hon. Member for North Swindon (Justin Tomlinson), has recognised, there is going to be a good deal more to do to protect individuals through this very difficult time; that is underlined by the examples from other countries that we have heard today. I very much hope, with others, that those additional announcements will happen very soon because we need them very fast.

I want to raise a couple of issues about universal credit. I put the point to the Chancellor yesterday that somebody who is self-employed and who self-isolates very often will have to forgo their income as a result. The advice is to apply for benefits, but if people apply for universal credit, they do not get any help for the first five weeks other than a loan that has to be repaid. It seems to me that people in that position are not going to be willing to give up their income if all they are going to get is a loan.

In answering my question, the Chancellor correctly said that people can apply for the new contributory employment and support allowance. I welcome the fact that that is now available not only to people who are sick, but to people who are having to self-isolate because others in their household are sick. However, as the Minister will recognise, there are going to be quite a lot of people in that position who do not meet the contribution criteria for ESA because they have not paid 26 weeks’ worth of contributions, having earned above the lower earnings limit, within the last two years. The only opportunity those people will have is to apply for universal credit. However, if they only get a loan, many will feel that they have no alternative but to carry on working—even though they know that they really ought to self-isolate.

The attraction of the proposal made by the hon. Member for Airdrie and Shotts—and which has been made by Citizens Advice and others—is that these advances should be made as non-repayable grants for the duration of this crisis. That is something that the Department could readily do. I recognise that expecting the Department very quickly to make big changes to its IT systems for supporting universal credit may not be practical, but it could quickly make the advances non-repayable.

I am pleased to see both the Minister for Disabled People, Health and Work and the Under-Secretary of State for Work and Pensions, the hon. Member for Colchester (Will Quince), on the Front Bench. They are very familiar with the Select Committee’s concerns about the five-week delay in universal credit anyway. There is growing evidence—including a striking article published in The Lancet this month—that people are being pushed into clinical depression due to being on universal credit rather than on legacy benefits. The Trussell Trust has found that many more people on universal credit need to go to a food bank compared with those on the predecessor benefits. Looking at what it is about universal credit that is causing those problems, the only big structural issue is the five-week delay. As the Ministers know, the Work and Pensions Committee will shortly begin an inquiry on that particular topic. That is a broader issue but, for the duration of the crisis, there is a powerful case for making the advances non-repayable.

I appreciate that this will not be the case everywhere, but it is the case in constituencies like mine. There are many working families who have leave to remain in the UK but do not yet have indefinite leave to remain. They are on what is called the 10-year pathway to securing indefinite leave, which means that every two and a half years they have to apply again for leave to remain. If they are working, they obtain leave to remain, but—I do not know whether this is universal, but it is certainly the case for a lot of my constituents—the card they receive making it clear they have leave to remain and are permitted to work in the UK also says they have no recourse to public funds. They are not allowed to claim any benefits at all, which in the current circumstance puts them in an extraordinarily difficult position. They are not allowed to claim ESA or universal credit at all. If they are in a position where they should self-isolate in accordance with the Government’s guidance, they will find that they suddenly have no income at all if they self-isolate.

There is a related issue with the habitual residence test, which is often applied, perfectly properly, to make sure people are habitually resident in the UK and are therefore entitled to benefits. I wonder whether there is a case for suspending the test, at least in some circumstances, because we want those who are working to be able to self-isolate when it is important that they do so. If they do not have access to public funds for one of those two reasons, they will find it practically impossible to self-isolate. I hope the Ministers and their Home Office colleagues will look at that.

Citizens Advice has argued that there should be a temporary repayment pause for claimants, which is a strong point in the current crisis. People currently have to repay their universal credit advances, or perhaps their past tax credit overpayments, through their universal credit, so there is a case for suspending those repayments.

The Minister for Disabled People, Health and Work said in his opening speech that “Everybody will be supported to do the right thing.” He is right to underline the importance of that but, as things stand, those who do not have recourse to public funds, because they do not meet the requirements of the habitual residence test, will not be supported to do the right thing, and it is very important that they should be.

In his Budget statement, the Chancellor said he is

“temporarily removing the minimum income floor in universal credit.”—[Official Report, 11 March 2020; Vol. 673, c. 280.]

When we came to read the Budget documents, we found that the position, as the Minister set out a few minutes ago, is that the removal applies only to those directly affected by covid-19 or by self-isolation according to Government advice. I think the Government should stick with what the Chancellor of the Exchequer actually said, which is that the minimum income floor will be suspended altogether, because a lot of self-employed people—my hon. Friend the Member for Harrow West (Gareth Thomas) gave us such an example—will see a big fall in their income because of what is happening in the wider economy, not because they are directly affected, as yet, by covid-19. Universal credit provides an opportunity to increase support where their income from self-employment falls. That could work very well, I think, if the minimum income floor was suspended altogether, as the Chancellor of Exchequer appeared to indicate would be the case in his Budget speech last week. I do hope that that will be looked at again, that the caveats that have been added to that commitment since might be taken away, and that the minimum income floor will be suspended altogether for self-employed people for the duration of this crisis.

I echo the point that was made a few moments ago by the hon. Member for Airdrie and Shotts (Neil Gray) about the tax credit disregard. As things stand at the moment, if someone’s income falls by less than £2,500, their tax credits do not increase at all. There is, in the tax credit system, a mechanism that can be used to provide people with help when their income falls, but to get the full benefit of that we would need to remove that £2,500 disregard. I appreciate that that is a matter for the Treasury, rather than for the Department for Work and Pensions, but I hope that it will be done.

Statutory sick pay is a big focus for this debate. The Government consulted last summer on extending statutory sick pay to those who are lower paid—to those who are earning below the current threshold—but the Government have not yet responded to that consultation, which was carried out several months ago. Surely now is the time to act. It was proposed then that statutory sick pay should be paid to people earning less than the lower earnings limit at 80% of their wage. That, I think, was the proposal on which the Government consulted. This is surely the time to fast-track that proposal—to bring it forward and put it in place. I appreciate that it will need legislation to do that, but it is very important that it is done, and I hope that it can be picked up in the legislation that will be published tomorrow.

[Stephen Kinnock (Aberavon) (Lab)]

On this point about statutory sick pay, there are two additional points on which the Government really do need to act. One is that this should be done in advance, up front, rather than making businesses reclaim, which is putting massive pressure on them. The other is that it is vital for the self- employed. Businesses in my Aberavon constituency are really under the cosh and they need both of these measures to be included in the rethink on statutory sick pay.

Disability Support

Stephen Kinnock Excerpts

Wednesday 19th December 2018 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

Is my hon. Friend aware of the fact that in Wales 75% of PIP and 74% of ESA decisions were overturned on appeal in 2017? Does that not lead to the conclusion that this is an utterly dysfunctional and shambolic system, which is a huge waste of resources and taxpayers’ money? It is not only callous and cruel—it is not value for money.

[Helen Goodman]

My hon. Friend expresses it very well. I did not know the statistics relating to Wales. Wales and Durham are obviously having a very similar experience, which is perhaps not surprising as Wales is another area where people are coping with a heavy industry legacy.

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[Stephen Kinnock (Aberavon) (Lab)]

I congratulate my hon. Friends the Members for Oldham East and Saddleworth (Debbie Abrahams) and for Stretford and Urmston (Kate Green) on securing this important debate.

On a daily basis, my office sees at first hand the horrendous and appalling impact that the Government’s changes to the social security system have had on some of the most vulnerable people in my Aberavon constituency. Many of my constituents who come to my advice surgeries are at their wits’ end, worried that their benefits are going to be stopped and that they will not be able to pay their rent or put food on the table for their children. We have seen hundreds of vulnerable constituents put through the humiliation of shambolic health assessments that cast doubts on their physical disabilities or mental health issues. Following that humiliation is the awful uncertainty and fear of the appeals process, which we almost always win.

Some people have been awarded no points following PIP or ESA assessments, when it is quite clear that they are struggling with a disability, or when information has been inaccurately recorded. This has eroded confidence in not only the assessment process but the whole system. Universal credit has landed people in rent arrears for the very first time. Some people’s experiences are simply harrowing.

In one case, a woman who had suffered with a degenerative disc condition for 27 years, along with depression and anxiety, waited for more than a year for her ESA assessment, only to have it cancelled on the day. A month later, she was assessed, but the anxiety and stress of the wait, followed by the degrading assessment itself, led to a mini-stroke two days after the assessment. She now has high blood pressure, which puts her at risk of a further stroke. Despite all that, she was put into the work-related category. That decision was overturned following a mandatory reconsideration. She is not alone in having had to go through this process. In Wales in 2017, 75% of PIP decisions and 74% of ESA decisions were overturned on appeal. This high rate is symptomatic of the fundamental flaws in the initial assessment process. If the correct decisions were made from the outset, a lot of the misery, worry and suffering would be avoided.

When we raise these problems with the Government, we get the same response time after time: they do not recognise these big problems and will carry on regardless. They are like an ostrich with its head buried in the sand. But that is indicative of the Government’s track record: they carry on until they are shamed into doing something about it. What can be more shaming than when a United Nations poverty envoy says that changes to social security have meant that

“great misery has also been inflicted unnecessarily, especially on the working poor, on single mothers struggling against mighty odds, on people with disabilities who are already marginalized, and on millions of children who are being locked into a cycle of poverty”?

That was published in his report.

It is appalling and inexcusable that this is happening in a G7 country. Our social security system is there as a safety net for the most vulnerable people. Right now, that safety net is failing. MPs, the EHRC and the United Nations have all called on the Government to conduct a cumulative impact assessment. If the Government are so confident that they are doing the right thing, they have nothing to fear over commissioning this assessment. Ultimately, the Government must stop burying their head in the sand over this and wake up to the reality that their punitive and callous policies are causing misery and hardship to hundreds of my constituents and hundreds of thousands of people across the country.

Private Sector Pensions

Stephen Kinnock Excerpts

Monday 22nd January 2018 Commons Chamber

[Ms McVey]

Of course it is important that we have the private sector delivering an array of services, because as the world gets more complicated and more specific, we need people with specific skills to go forward and do that. That is the best way to have a well-functioning country.

[Stephen Kinnock (Aberavon) (Lab)]

The creation of the British Steel pension scheme mark 2 created fertile territory for unscrupulous pension advisers to swoop in like vultures and exploit vulnerable people. What lessons have been learned from the British Steel experience, and what will the Secretary of State do to ensure that we do not see the whole sorry tale of Carillion leading once again to the privatisation of profit and the socialisation of risk?

[Ms McVey]

What we have learned from that is that straight away, eight companies were banned from doing what they had done in any kind of pension scam. We are also going to bring together all the advice under a single body so that people are well aware of what they can and should be doing and whether they have done the right checks to ensure that they are dealing with a positive organisation for their pension.

Financial Guidance and Claims Bill [Lords]

Stephen Kinnock Excerpts

2nd reading: House of Commons
Monday 22nd January 2018 Commons Chamber

[Debbie Abrahams]

My hon. Friend makes a valuable point. I am not familiar with that particular piece of American legislation, but I will look at it and see what we can do in terms of tabling amendments in Committee.

As we have heard, the FCA will regulate claims management company activity as a regulated activity, taking over responsibility from the Ministry of Justice. The Bill is a high-level framework Bill that, thanks to our colleagues in the other place, is now in much better shape. We particularly welcome the Government’s assurances that the SFGB will work closely with the FCA and the Treasury on issues of financial inclusion. Given, however, that the Work and Pensions Committee, of which I was a member at the time, raised concerns nearly three years ago about the inadequacy of Government measures to protect pension savers, and given also the difficulties that have arisen since, I am bound to ask why it has taken so long to recognise these failings.

I am also concerned that there are no specifics on delivery channels, especially given the very large number of people currently failing to access services. It is vital that the SFGB has the autonomy and resources to make itself truly visible to the public. Given the failings in other parts of the Secretary of State’s Department, and given the complex needs and limited resources of the people who will most need its services, “digital by default” is not a mantra we want to hear from the SFGB or its sponsoring Department.

[Stephen Kinnock (Aberavon) (Lab)]

The transfer of the British Steel pension scheme into a new scheme was announced in early 2017 and was very public. When it all blew up and became fertile territory for unscrupulous pensions advisers, the FCA seemed surprised it was happening. Why did it not see that coming? What steps should the Bill take to improve the early-warning system so that regulators can see these things coming down the track and be far more proactive in getting out there? After all, prevention is better than cure.

[Debbie Abrahams]

My hon. Friend makes a very valuable point that I will come to later. This is what we are seeing: we saw it with the BSPS and are now seeing it with Carillion and the pension savers there.

Last year’s statistics from the FCA make shocking reading. Of those over 55 planning to retire in the next two years, only 10% had used the Pensions Advisory Service, and only 7% had used Pension Wise. The new SFGB will have to do much better than that. Eight million people in the UK are over-indebted, according to a Money Advice Service report from last March, and less than one in five of these individuals currently seeks advice. Many are among the most vulnerable: over half the clients seen by MAS-funded debt advice projects have had a diagnosed mental health condition. It is vital that those people continue to be supported during the transition period, and that the SFGB develops strategies to identify and reach people who do not currently use any services. The impact assessment talks about “long-term…savings” once the SFGB has been established. It is difficult to see how such savings will be made if the new body is to fulfil all its objectives, particularly its objective of ensuring that information, guidance and advice are available to those who most need them. Have the Government considered what resources the SFGB will need to identify and support those who do not currently access advice or guidance? Has the Minister considered what arrangements will be put in place to ensure that people can continue to access existing services during the transition period?

The five areas on which the SFGB is expected to concentrate include provision of debt advice, and provision of information and guidance relating to occupational and personal pensions, accessing defined contribution pots and retirement planning. We welcome the Government’s decision, at the urging of our colleagues in the other place, to make it explicit in the Bill that the information, guidance and advice will be impartial, and that it will continue to be provided free to members of the public.

The SFGB will also help consumers to avoid financial fraud and scams; give information on wider money matters, and co-ordinate and influence efforts to improve financial capability; and co-ordinate non-governmental financial education programmes for children and young people. It also has a strategic function: to support and co-ordinate a national strategy. Given the appointment of a Minister with responsibility for financial inclusion, that needs to be strengthened to a “develop and deliver” function.

We welcome the focus on the provision of financial education for children and young people, but we think that the Government should be bolder, as recommended by the House of Lords Financial Exclusion Committee report “Tackling financial inclusion”. The new body will have to cope against a backdrop of rising prices and stagnant wage growth, a fall in real incomes and saving levels that have crashed. Evidence provided to the Lords Select Committee referred to fears expressed by debt agencies about the rise in queries concerning rent arrears, energy and water bills, telephone bills and council tax.

Then there is the impact of universal credit. As I have mentioned on numerous occasions inside and outside the House, we support UC’s aims of simplifying the benefit system, making transitions into work easier and, fundamentally, reducing child poverty. However, the Citizens Advice report “Universal Credit and Debt” showed that some aspects of UC risk causing or exacerbating personal debt problems. UC clients are more likely to have debt problems than those on legacy benefits. A quarter of the people that Citizens Advice helped with UC needed help with debt. UC clients are also struggling to pay off their debts. More than two in five debt clients on UC have no spare income to pay creditors.

Citizens Advice makes a number of recommendations, which are particularly pertinent in the context of the Bill. They include the need for more funding for free, impartial debt advice to meet existing increases in demand resulting from UC. In addition, Citizens Advice wants the Financial Conduct Authority actively to monitor the roll-out of UC. Has the Minister considered the impact of UC on personal debt, and its implications for the resourcing of the new SFGB? Taking up the Citizens Advice recommendations would alleviate some of the problems caused by UC. Fundamentally, as I have said, the Government must stop the roll-out of the programme and reverse the cuts to UC, which mean that it is failing to make work pay and failing the very people it is meant to help.

The SFGB will have to cope with an increasingly complex pensions sector. The growth of auto-enrolment brings more and more people within the scope of occupational pensions. The other major change has been the introduction of pension freedoms. In that context, we welcome the Government’s commitment in the other place to the delivery of the pensions dashboards. However, given the increasing issues that pension scheme members face—including those of British Steel, and now Carillion —in addition to a much tougher pension regulation framework, I want the Government to tackle the appalling abuse perpetrated by opportunistic financial scammers, who have targeted BSPS and Carillion pension members. I will say more on that later.

Personal Independence Payment: Regulations

Stephen Kinnock Excerpts

Wednesday 29th March 2017 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

In recent months, I have had 44 PIP cases in my constituency, with dozens going to appeal. Eight have already gone to appeal, and in every single one of those cases, the decision has been overturned. Does my hon. Friend agree that that is a massive and inexcusable waste of time, money and resources?

[Debbie Abrahams]

Absolutely. It is very important to note the association between ill health and disability in former industrial areas, and as my hon. Friend rightly says, the impact of assessments that cannot be done right first time. Why is that? Why have the Government not been able to get assessments right first time?

Social Mobility Index

Stephen Kinnock Excerpts

Tuesday 9th February 2016 Westminster Hall

[Lucy Allan (Telford) (Con)]

It is a great privilege to serve under your chairmanship, Mr Percy. I am grateful to my hon. Friend the Member for Norwich North (Chloe Smith) for securing this important debate and for highlighting some of the issues arising in the report. Like her, I am proud of my constituency and of all the people who work so hard to do well by our young people.

I particularly wanted to take part in the debate because Telford has significant areas of disadvantage and underperformance of young people. In fact, my constituency ranks in the bottom decile of the Sutton Trust’s social mobility index, with a ranking of 494 out of 533 constituencies in England. Telford has pockets of significant deprivation, and there is no doubt that that affects the life chances of our young people. Only last week I secured a Westminster Hall debate to consider four of Telford’s secondary schools that were put in special measures following inadequate Ofsted ratings. Those schools have very high numbers of children in receipt of the pupil premium and serve disadvantaged catchment areas.

In that debate, I considered why the schools had failed, so that lessons could be learned for the future. The key reason for failure was the widening achievement gap for the most disadvantaged young people and a culture of low expectations in attendance, behaviour and achievement. There was also a failure in the multi-academy trust’s leadership and governance. The GCSE results in all the schools within the academy chain were below the national floor target, and two thirds of children at some of the schools in the chain were leaving without five good GCSEs including maths and English. Most worrying of all were the stats showing that of the children receiving the pupil premium—the most disadvantaged—only 20% were leaving school with five good GCSEs, including maths and English. I wanted to speak for the 80% who did not have those basic qualifications, about their life chances and the impact on their futures.

Even when disadvantaged young people in my constituency obtain qualifications, they tend not to go to university, and if they do, they tend not to end up in professional occupations. Telford ranks among the lowest areas for non-privileged graduates going on to professional occupations. Like my hon. Friend’s constituency, it is not about a lack of jobs in Telford. The figures for young people not in education, employment or training have completely dropped—they have halved in the past three years—and the number on jobseeker’s allowance has similarly fallen. The difficulty is that the most disadvantaged young people are going into low-income jobs, yet Telford has high-tech, new-economy professional jobs, and our employers say that there is a skills gap. They say that young people leaving school do not have the skills to do the jobs that are on offer. Soft skills are critical in a modern workplace, such as sociability, confidence, negotiation and influencing skills, relationships, communication skills, emotional intelligence and empathy. A good education helps a young person to develop those skills.

Despite Telford’s ranking, there are some welcome signs of improvement, particularly in the early years. We would all agree that that is where inequality starts. Equality of opportunity at the earliest stages is essential to prevent gaps in attainment from opening up. We also have some fantastic primary schools in Telford, such as Old Park Primary School in Malinslee—I thank Jayden, Keeley and Jamie, who came to work in my office before Christmas—and the very special Newdale Primary School, which is about to visit Parliament in a few weeks’ time.

We have thriving academies in disadvantaged areas, and I take up the point made by Opposition Members that poverty affects achievement, which is not always the case. We have good academies with good results for children from the most deprived areas. It is about leadership, good governance, high expectations and instilling a sense of personal responsibility, self-worth and valuing education.

[Stephen Kinnock (Aberavon) (Lab)]

The hon. Lady is making a thoughtful speech. She is talking in particular about areas with the greatest levels of deprivation, yet the Government have removed the key indicator for levels of deprivation, which is income. Does that not render meaningless the analysis that she is trying to present?

[Lucy Allan]

I refer the hon. Gentleman to Abraham Darby Academy in my constituency—the school is in a very deprived estate with the highest levels of pupil premium. His point is not correct.

In Telford, we also have organisations such as Juniper Training, which teaches employability skills, and increasing numbers of apprenticeships. I passionately believe that all young people, no matter where they come from and no matter what their background, deserve the life chances that a good education provides. A good education is an open door to future opportunity, and I urge the Minister to do everything possible to narrow educational disadvantage, so that all children in Telford can have the same opportunities and life chances.

Welfare Benefit Changes

Stephen Kinnock Excerpts

Wednesday 14th October 2015 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

I thank my hon. Friend the Member for Swansea East (Carolyn Harris) for securing this important debate.

In the political to-ing and fro-ing that surrounds the decisions taken in this place, the consequences for innocent children are all too often shunted down the list of priorities. I agree with the numerous calls from children’s charities for us to start to put children at the centre of our decision-making process.

Shortly after the Chancellor announced his Budget, I held a child poverty summit in my constituency. Participants included the deputy Children’s Commissioner for Wales, children’s charities, council officers and local groups that deal with vulnerable children. The overwhelming message that they wanted to convey was that child poverty was a growing issue, particularly in households where it had never previously been an issue—in-work households. Those are families whose incomes previously stretched to cover the mortgage and bills and to put food on the table, and still left enough to live comfortably. However, after years of pay freezes, increasing costs for fuel and food and the erosion of welfare support, those families were just one unexpected bill away from not being able to cover their costs. Many are too proud to ask for help, but we know they are suffering.

I feel that Dickensian conditions are creeping into society. One example given to me at the round table was of children being sent to school in dirty uniforms because their parents could not afford to put the washing machine on. Clothes-swap initiatives sprang up to provide them with clean clothes. In a different example, children in receipt of free school meals were going hungry during school holidays when they did not have those meals. Surely that should not be happening in one of the richest countries in the world. In my constituency 3,910 children are living in poverty and 2,407 of those are in in-work poverty. The Government’s latest round of attacks on working families announced by the Chancellor in July will adversely affect 9,400 children in Aberavon.

The Secretary of State for Work and Pensions recently defended his policy to restrict universal credit to two children as

“bringing home to parents the reality that children cost money”.

I am sure we all thank him for those words of profound wisdom, but we are not engaged in a teaching exercise; we are talking about children’s lives. Questions remain about how the system will detect, for example, fathers who have multiple children with multiple women. If each mother claims for her children, more than two of the father’s children could be in receipt of universal credit.

There are huge loopholes in the law, not just massive ethical and moral questions. I wonder what is happening to the party currently occupying the Government Benches, which claims to be a socially liberal party, in the old tradition of the term. The two-children policy might perhaps be described as government just large enough to fit into people’s bedrooms. There is nothing wrong with making work pay, but it should not be at the expense of children. If the state abandons children when they are in need, what incentive does that give them to contribute to society later in life?

I want to close with a quotation from the recent Conservative party conference:

“We must ensure that…we protect the hardest working and lowest paid.

Shop workers, cleaners, the people who get up in the small hours or work through the night because they have dreams for what their families can achieve”.

That was said by the hon. Member for Uxbridge and South Ruislip (Boris Johnson), otherwise known as the Mayor of London. I wonder whether it was simply part of some complex leadership bid. It may or may not have been; the fact is that I think many of my hon. Friends would agree with those comments.

[Rosie Cooper (West Lancashire) (Lab)]

Does my hon. Friend agree that abject failure is the only way of describing the Government’s welfare reform programme, which puts headlines ahead of the impact on children, the disabled and other vulnerable people whom society should protect?

[Stephen Kinnock]

I absolutely agree; as hon. Members have said, the issue must be about the bigger picture and the sort of society we want to build—not tomorrow’s headlines in the Daily Mail.

The Conservative party claims to be a one nation party and the party of the workers. That is high-flying rhetoric, but the reality is a story of division, attacking the most vulnerable in society while inheritance tax for the richest 60,000 is cut. The gap between the Government’s one nation rhetoric and the divisive reality of their policies is fast becoming a chasm. I urge the Minister to reconsider those policies and to close the gap.