Oral Answers to Questions

Steve Webb Excerpts

Monday 3rd November 2014 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

1. What assessment his Department has made of the effects on working families of recent changes to the level of benefits.

[The Minister for Pensions (Steve Webb)]

Since the financial crash of 2008, while average wages have risen by around 10%, working age benefits have risen by around 20%—a sign of our commitment to those who are most vulnerable, despite the black hole in the public finances that we inherited.

[Chi Onwurah]

In their relentless demonisation of those on benefits, this Government forget to say that only 3% of welfare spending goes on benefits to the unemployed, and a half of all those in poverty are in working households. In the north-east, working people are £1,800 worse off per year since this Government came to power, and a quarter of a million of them do not even get the living wage. Now the Minister decides to freeze working tax credits. Why is he balancing the books on the backs of the working people?

[Steve Webb]

It is difficult to know which of those dubious assertions to choose from that question. [Interruption.] The hon. Lady asks which one is dubious. She says that 3% of what she calls welfare spending goes to the unemployed—[Interruption]—goes on benefits to the unemployed, so she presumably counts state pensions as welfare spending. I do not.

[Andrew Bridgen (North West Leicestershire) (Con)]

I welcome the news that over the last 12 months we have seen the largest annual fall in unemployment since records began. Does the Minister share my view that the best way out of poverty is through sustainable employment and a regular pay packet—something enjoyed by an extra 847 of my constituents since January 2013?

[Steve Webb]

My hon. Friend is quite right. We know that the risk of a child, for example, being in poverty is three times as great if they are in a workless household rather than a working household. We have almost become blasé about new record falls in unemployment month after month. That is the key to our drive to tackle poverty.

[Mr Frank Field (Birkenhead) (Lab)]

I ask the Minister this week to support the living wage campaign in his own Department. Can he tell the House how many contracted-out workers outside London in his Department have yet to receive the living wage?

[Steve Webb]

The right hon. Gentleman deserves great credit for his promotion of the living wage. My right hon. Friend the Secretary of State inherited a situation in which some of the Department’s employees were not receiving the living wage. Our Department has committed to it, and we have had that dialogue with our subcontractors as well.

[Guy Opperman (Hexham) (Con)]

I also welcome the rise in the living wage announced today. The Minister will be aware that jobseeker’s allowance claimant numbers are falling across the board in every single constituency in the north-east, and by 31% in my Hexham constituency over the last year. Does he agree with me that coming off JSA and into employment is surely the way forward?

[Steve Webb]

My hon. Friend is quite right. It is entirely welcome that we are ensuring not only that more people get into work, but that work pays through the universal credit reform, which this coalition Government are proud to have introduced.

[Helen Jones (Warrington North) (Lab)]

According to the Government’s own figures, 20% of working people in my constituency earn less than the living wage, yet they will lose hundreds of pounds a year through this Government’s freeze in working tax credit. How does that possibly reward people who want to work, and how can the Minister justify that when the Government give tax cuts to the wealthy?

[Steve Webb]

The largest number of people who have benefited most from tax cuts during this Government are those who are in work and paying income tax. Under this Government, a typical basic rate taxpayer is £800 a year better off in cash terms as a result of our changes to the personal income tax allowance, and over 3.2 million individuals will have been taken out of income tax altogether.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

Harrogate borough is part of the roll-out of universal credit, and the feedback from jobseekers and employers has been universally positive. Will the Minister explain a bit more about the benefits to the UK economy as a whole when this roll-out is completed?

[Steve Webb]

My hon. Friend is quite right that the early indications from those receiving universal credit have been positive, in line with the expectations of my right hon. Friend the Secretary of State. We are designing the system to be simpler for people and to make sure that when they take work, work pays. Already those on the front line who are working with unemployed people are welcoming the new freedoms universal credit gives them to support people back to work.

--- Later in debate ---

[Lucy Powell (Manchester Central) (Lab/Co-op)]

16. What forecast he has made of the likely level of child poverty in (a) 2015 and (b) 2020.

[The Minister for Pensions (Steve Webb)]

Relative child poverty is now at its lowest level since the mid-1980s, and there are now 300,000 fewer children in relative poverty than in 2010. However, poverty projections are based on a number of factors that cannot be reliably predicted, including the median income.

[Diana Johnson]

According to the most recent figures published under this Government, 53% of children in the Orchard Park and Greenwood ward in my constituency are living in poverty, compared with 11% in the neighbouring constituency of Haltemprice and Howden. What is the Minister going to do to ensure that we do not end up with a permanently divided society?

[Steve Webb]

The fall in unemployment has happened across the country, and the risk that a child will be living in poverty is three times greater for those living in workless households than for those living in a house in work. We now have over 300,000 fewer children living in workless households, with more falls since those figures were put together. That is the best antidote to child poverty.

[Lucy Powell]

Those same figures show that Manchester Central has the fourth highest rate of child poverty in the country. That comes on top of the finding by the Government’s own Social Mobility and Child Poverty Commission that there are now 600,000 more children in working households living in absolute poverty. When will Ministers stop denying that that is a problem and do something about it?

[Steve Webb]

I was very struck by the comments of the hon. Lady’s hon. Friend the shadow Education Secretary. According to a recent article:

“Criticising the policies of the last Labour government, Mr Hunt said that the party had previously been too preoccupied with tax credits and not given enough thought to tackling social problems in families.”

We are tackling those social problems through the troubled families initiative and a whole range of initiatives, such as the pupil premium, free school meals and more help with child care for young children. Disadvantaged children will benefit from our measures.

[Sir Bob Russell (Colchester) (LD)]

Assuming that the Department for Work and Pensions supports the armed forces covenant, will the Minister indicate whether the children of any serving personnel might be brought into child poverty as a result of the Ministry of Defence’s decision in recent days, as we approach Remembrance Sunday, to jack up the rents for Army married housing?

[Steve Webb]

I take a close interest in those matters, as vice-chair of the ministerial committee on the armed forces covenant, and know that my hon. Friend has a proud record in speaking for his constituents on these matters. We have sought to benefit the children of serving personnel—for example, with regard to education if they have to move around the country—but I will be happy to raise with colleagues in the Ministry of Defence his concern about the impact of the rent increase and ensure that he receives a written response.