Welfare Benefit Changes

Steve McCabe Excerpts

Wednesday 14th October 2015 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, Mr Pritchard. It is interesting that those in the Chamber are from the Opposition Benches, although the Minister is present as well. I am pleased to see him and I look forward to his contribution. We are concerned about tax credits and such issues, but whatever we say is not meant against him—it is not a personal attack. I want to put that on the record.

I am in the Chamber because I am concerned about the impact of changes to welfare benefit—tax credits, specifically. Recently we have heard a lot about that in the news and the Leader of the Opposition asked about the issue during Prime Minister’s questions today. The news has been full of stories about tax credits so I want to touch on them; they are vital to people in my Northern Ireland constituency where, as of April 2015, 6,500 were in receipt of tax credits. Of that number, 4,500 were in work and 2,000 were not.

Such figures speak for themselves. The majority of people receiving tax credits are in hard-working families on low incomes, and they need some extra help to get by. What worries me, however, are—I will say this with respect to the Prime Minister’s reply today; he mentioned the increase in those who will be tax exempt—those in the £10,000 to £11,000 bracket. If tax credits are taken from them, they will feel the pain more than anyone.

Of the 4,500 in work and in receipt of tax credits in my constituency, 2,500 received both working tax credit and child tax credit, 1,300 received child tax credit alone and only 700 received working tax credit alone. As a clear result—this, too, was mentioned by the hon. Member for Swansea East (Carolyn Harris) in her introduction—the Institute for Fiscal Studies estimated that the number of children living in poverty increased over the past three years from 2.3 million to 2.5 million: 200,000 more children in poverty, which is massively worrying. The IFS also estimates that the reductions in tax credits will see that figure rise to 2.8 million. Think about that number of children in poverty for one minute—up from 2.3 million to 2.8 million, 500,000 more in child poverty.

Only last month, I spoke about the importance of eradicating child poverty; it now seems like an ever-intensifying and uphill battle, in particular for those struggling to make ends meet. We must also bear in mind that two thirds of children living in poverty in the UK are from working families, which makes the situation much harder, especially given that the cuts could reduce working family incomes by an average of £1,400 per year—someone today mentioned that the figure could be £1,800. Certainly there will be a large reduction in the income of such families.

I have said it before and I need to say it again: the financial changes will make a huge difference to everyday folk on the street. The number of people coming into my office to get food bank vouchers has increased so much in the past year and indicates the trend. I have always felt that food banks contribute greatly to our society, bringing people together to contribute and to help those less able to look after themselves. By that very nature, food banks are positive—I want to put that on the record—but the fact that so many people are using them is another case entirely.

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

I am told that in Birmingham the fourth largest category of people using food banks is those in work. Is it not a condemnation of Government policy that they have driven working people into the arms of charities?

[Jim Shannon]

I thank the hon. Gentleman for that. Unfortunately, that is probably the norm in my constituency as well. We are not seeing anything different anywhere else in the rest of the United Kingdom of Great Britain and Northern Ireland.

We cannot be completely in shock about the cuts, given that such benefits make up nearly 40% of welfare spending, just shy of £30 billion. To put that into perspective, that is a lot more than the £2.5 billion that the Government spend on jobseeker’s allowance. It has been estimated that the cuts will save the country £5.37 billion a year by 2019. Given the huge hole in the budget we need to try to fill, that will certainly be a start, but I must ask the Minister: are we punishing hard workers on low wages to do that? I fear that we are.

The Government and we as a nation pride ourselves on helping those who help themselves, but we must bear in mind the reality for many: although they work extremely hard, they simply do not earn enough to make ends meet. That is the sad reality and this vulnerable group in society will be hit extremely hard—unbearably hard, in many cases.

According to the Institute for Fiscal Studies, 3 million families will be £1,000 a year worse off following the new cuts. Those are the figures, so it is hard to equate that with saying, “Actually, things are going to be better,” when all those who know tell us that clearly they will not. It has been claimed that families will be £20 a week better off because of the rise in the minimum wage and the cut in income tax. However, the IFS says it is “arithmetically impossible” for families not to be hit by the cuts. The Prime Minister has already conceded that different families will be affected in different ways. Unfortunately, it seems that, for the majority, the figures will be working against them.

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[Emily Thornberry]

My hon. Friend makes an important point. Many communities, particularly in inner London, have already been affected by the first benefit cap. We have already seen young children ripped out of primary schools and moved out of London, as families try desperately to find somewhere they will be able to afford under the benefit cap.

Introducing a benefit cap makes a profound change to the way we pay benefits. The social security system used to be, and had always been, a safety net available to everyone, but introducing a benefit cap disconnects need from the amount that we are prepared to pay. Larger families, which are in most need, will be affected most. It is not their fault that they live in inner London or that they cannot live in public rented housing because there is not enough affordable public rented housing so they must live in the private sector. The Government have introduced an arbitrary, politically motivated cap that will have a devastating effect on communities.

[Steve McCabe]

Does my hon. Friend agree that, as well as the impact on working people on low wages and the poor, another surprising aspect of Government policy is its total disregard for those with long-term, progressive, degenerative conditions such as muscular dystrophy?

[Mark Pritchard (in the Chair)]

Order. Before the shadow Minister answers, let me say that there is no hard and fast rule, but it is usual to allow the Minister enough time for a full response of around 10 minutes, which will be in six minutes.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)]

It is an absolute pleasure to serve under your chairmanship, Mr Pritchard. I pay tribute to the hon. Member for Swansea East (Carolyn Harris). I recognise that this is an incredibly important debate and that hon. Members have made constructive, thought-provoking speeches, often with personal stories, so I will not give a pre-written speech, but will try to address as many of the points as possible. I am the Minister for Disabled People and if the points raised relate to other Departments, I will do my best to cover them.

I pay tribute to the shadow Minister. It was helpful of her to encourage interventions, allowing everybody here to contribute, bar the hon. Member for Sheffield Central (Paul Blomfield). That was a real shame, because he is one of the Opposition’s most effective and measured Members of Parliament and has helped to shape Government policies in the past with well argued points. It is a shame that he did not have the opportunity to contribute.

I have a soft spot for Swansea East because, as the Minister for Disabled People, I celebrate, recognise and champion the fact that Swansea is the first city to be fully disability confident. It is a credit and an honour that the hon. Member for Swansea East represents such a wonderful town. One of my first media activities was to praise it, so she can be very proud of Swansea East. Leading on from that, she raised a point about barriers to work. I recognise that issue in my role as Minister for Disabled People. We have a commitment to halve the disability employment gap. In the last 12 months alone, 226,000 more disabled people have got into work, but halving the gap will require about another million, so there is still a huge way to go. We will be doing a huge amount of work through Disability Confident and our Access to Work scheme, through which we are now close to record numbers of people being helped.

The hon. Lady raised a point about sanctions. That has come up in a number of debates that I have spoken in, and the shadow Minister from the Scottish National party, the hon. Member for Banff and Buchan (Dr Whiteford), raised the point as well. The use of sanctions has fallen by 30% in the last 12 months. The Oakley review did recognise that that was an important part of the mix; it should not be something in isolation. This is about the claimant and the work coach coming together with a contract and both sides working to give that individual the best opportunity. The use of sanctions is an important issue. I recognise some of the personal stories raised, and we shall continue to look at that, but it is an important part of the mix.

The hon. Member for Swansea East also highlighted Parkinson’s UK. The issue was raised in a previous debate. I have since met Parkinson’s UK, and we have made significant changes to some of the practices in the personal independence payment based on its expertise and advice. I am very grateful that it was able to contribute to that. I thought that the hon. Lady’s speech was important. She highlighted the need for the voice of the vulnerable, and certainly the opportunity was taken with a very powerful speech.

[Steve McCabe]

Will the Minister give way?

[Justin Tomlinson]

I am going to be tight on time. Let us see whether I can get through these pieces of paper first and then hon. Members can feel free to intervene.

The hon. Member for Newport West (Paul Flynn) raised the concern that the TaxPayers Alliance was now setting policy. Fear not: it has not taken over the leadership of our party, so do not panic.

The hon. Member for Strangford (Jim Shannon), who for the second day in a row has been detained elsewhere when I have responded to his points—hopefully he will read this—raised the point about food banks. A number of other hon. Members also talked about that. We have argued in the past that we have made them more accessible. One thing we do know is that the proportion of people reporting difficulties affecting food is down in the UK from 9.8% in 2007 to 8.1% in 2012. This is an incredibly important issue. I recognise that concerns have been raised about even people in work sometimes having had to access such facilities. We will continue to look at the issue, but we know that the number of those reporting difficulties with accessing food is falling—something that we would all welcome.

The hon. Member for Central Ayrshire (Dr Whitford) talked about fluctuating health conditions. I stress that, in the proposed changes to ESA, the support group will not change—I just want to make that clear—but we have to recognise that people have fluctuating health conditions, particularly in terms of mental health.