In-work Poverty

Tanmanjeet Singh Dhesi Excerpts

Wednesday 28th June 2023 Westminster Hall

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

I beg to move,

That this House has considered in-work poverty.

It is a pleasure to serve under your chairmanship once again, Sir George. I am grateful to have secured this important debate on the scandal that is in-work poverty. Such a debate should not be needed in the 21st century in one of the wealthiest nations in the world, and yet here we are. I hope the debate will explore why so many people face unacceptable levels of poverty not when they are out of work, but while they are working and earning a living.

“If you work hard, you can earn a decent wage, buy a house and raise a family”—that is the promise the Government made to the country in their last election manifesto when they stated:

“We will help people and families throughout their lives by bringing down the cost of living and making sure that work always pays.”

I do not think it is controversial to say that I agree with that. People who work hard should be able to earn a decent wage, afford a home and raise a family. A job that pays, a home of their own and a family they can support are not great gifts bestowed by a generous Government; they are key indicators of a healthy and functioning society. They are our modest expectations and reasonable aspirations, and any half-competent Government should be expected to deliver them. Cruelly, over the past 13 years, this Conservative Government have not only failed to do their job and deliver for the British people; they have also, systematically, through either incompetence or intention—probably both—prevented millions across the UK from getting on in life, trapping them in an inescapable cycle of poverty and hardship.

Data from the Department for Work and Pensions shows that one in five people in the UK were in relative poverty in 2021-22. It is clear that working does not preclude a family or an individual from poverty. After housing costs, 71% of children and 57% of working-age adults who are in poverty are in poverty. In-work poverty has increased by a shocking 1.5 million people since the Conservatives took office in 2010. There are three overarching reasons why things have become so bad: earnings, housing and the cost of living. On each, the Government have taken a bad situation and made it much worse.

Wages today are at the same level as in 2005. That is the longest period of stagnation in terms of earnings in nearly 200 years. Public services have been cut to the bone, and many public sector workers have seen their pay significantly eroded by years of below-inflation rises. At the same time, there has been an explosion in the gig economy and other insecure work—a damning indictment of the Tories’ economic and political choices, which have forced ever more people to rely on the benefits system.

[Chris Stephens (Glasgow South West) (SNP)]

I congratulate the hon. Gentleman on securing the debate. He mentions the gig economy. Three of the reasons for in-work poverty are insecure work and zero-hours contracts, bogus self-employment and low wages. The Government made promises in response to the Taylor review eight years ago, but we are still waiting for that employment Bill. Does he agree that we need that employment Bill now?

[Mr Dhesi]

I could not agree more. I remember standing in this very place after I had managed to secure a debate on the Taylor review of modern working practices. In fact, some of the same Members who are here today also took part in that debate, during which we asked for the employment Bill to be introduced. It is shocking that only seven of the 53 agreed areas of legislation were enacted. Such intransigence is what leads to more in-work poverty.

For 13 years, successive Conservative Governments have sought to undermine social security in our country. Universal credit is not protecting working families from poverty. More than a third of children and working age adults in working families in receipt of universal credit are still in poverty after housing costs.

Ms Clarke, one of my constituents in Slough, is a nurse who supported the most vulnerable during the covid-19 pandemic. She is struggling to pay for the loans that she took out for her training and has to claim universal credit. For that, she must take annual leave to attend her appointments at the jobcentre. How is any of that fair or right? She is a nurse and a single mother without the support she clearly requires.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

My hon. Friend is making an excellent speech about in-work poverty. Does he agree that universal free school meals would help alleviate in-work poverty for those at the lower end of the wage spectrum? They are already available in primary schools in Scotland and Wales, and the Mayor of London has announced that they will be extended to primary schools across London. Northern Ireland has a higher earnings threshold of £14,000, which is double the England threshold of £7,400. Does my hon. Friend agree that that would provide a massive boost and really help those people in work who are in poverty, especially the lady he has just spoken about?

[Mr Dhesi]

My hon. Friend is a doughty champion for free school meals. She is known as the all-party parliamentary group queen and has organised various events, including on free school meals. I remember highlighting their importance as we served them alongside dinner ladies and gents. I thank my hon. Friend, because I will bring home that point of view later in my speech.

The punitive benefits system is driving more people to use food banks. At Slough food bank in my constituency, kind and amazing people who undertake much-needed selfless service report that six in 10 of the people they support are on universal credit, and many of them are employed. Charities openly acknowledge that they would rather not exist because they do not want a society where working people are forced to rely on food parcels to survive.

It is worth noting that in 2010 the Trussell Trust operated only 35 food banks. Staggeringly, today that number is closer to 1,300 across the UK, and between April 2022 and March 2023, they gave out 3 million emergency food parcels. That is a third more than during the pandemic and double the number before the pandemic. What a shocking legacy this Government are leaving behind.

[Stephanie Peacock (Barnsley East) (Lab)]

I congratulate my hon. Friend on securing this important debate. In Barnsley we have seen a tripling of demand for food banks. As he rightly points out, we did not have any 10 to 15 years ago. It is because of the Government that, sadly, 35% of kids in Barnsley are growing up in poverty and families are relying on food banks. They are in work but cannot afford to pay their bills.

[Mr Dhesi]

My hon. Friend has eloquently explained what the experts across our country are explaining: this is happening before our very eyes and we should not allow the situation to deteriorate any further.

As many will know, housing is a huge and growing driver of in-work poverty. Thanks to the Government’s failure to build enough new and affordable homes and new social housing, last year the gulf between price of houses and earnings in the UK was the worst since 1876. We really are back in Victorian times under this Government.

One of my Slough constituents privately rents and wrote to me for help. As many other private renters have experienced, they have been served with a section 21 no-fault eviction notice. Their partner works full time, but they themselves cannot work full-time hours because they have cancer. High rent costs mean that they cannot now find anywhere that is affordable. Although the family are on universal credit, it does not cover the basic cost of living. Even if they did find somewhere with an affordable rent, the need for a large deposit and a guarantor has erected huge barriers to finding new, long-term accommodation.

The supply of social housing has continued to plummet. The Government’s promise—cancelled, then reinstated—to build 300,000 new homes each year has not materialised. As my right hon. and learned Friend the Leader of the Opposition said at Prime Minister’s questions today, house building has collapsed and the Government are nowhere near their target, which means that more people are trapped in private rented accommodation as rents go through the roof. In turn, that means that people are taking longer to save for their first house. That is why levels of home ownership are down and private renting is up. Those who have been fortunate enough finally to buy a home after years and years of saving now face mortgage misery the likes of which we have not seen in generations or perhaps longer, thanks to this Government’s inability to get to grips with inflation.

Perhaps if Ministers were more focused on supporting those impacted by their child benefit cap than on removing the cap on bankers’ bonuses, and more focused on spending public money to invest in our public services than on giving away billions in failed personal protective equipment contracts to their mates and cronies, our economy would be in a much better place. Sadly, so many people are in dire straits. On top of stagnant earnings and unaffordable housing, we have a cost of living crisis, driving ever more people into in-work poverty. With food prices soaring and energy and utility bills going through the roof, many working people find themselves unable to put meals on the table, heat their home, pay their bills or provide for their families.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

The hon. Gentleman will not be surprised to hear that I have a slightly different interpretation of some of the issues that he has presented today. However, one thing that we certainly agree on is that a lot of public sector workers have seen real-terms reductions in their pay; I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a practising NHS doctor. Does he agree that it is particularly important that the Government implement the recommendations of the national pay review bodies about public sector pay?

[Mr Dhesi]

I thank the hon. Member for his intervention. We may disagree about certain things, but hard-hitting facts are hard to ignore, especially when the truth hits us. I agree that the work of the independent pay review bodies is very important, but even this week we have seen the Government, including the Prime Minister, not accepting their recommendations. The Government are very selective in when they agree to the recommendations of the independent pay review bodies. That must change. They should either comply with them or completely disregard them; they cannot do both to suit their needs as required.

[David Linden (Glasgow East) (SNP)]

Can I just confirm that the position of the Labour Front Bench is that Labour would implement the recommendations of the public sector pay review bodies?

[Mr Dhesi]

I thank the hon. Gentleman for his intervention. Today I am not on the Labour Front Bench, but I am sure that the shadow Minister, my hon. Friend the Member for Westminster North (Ms Buck), will highlight exactly what the Labour policy is in that regard. As far as I am concerned, I think it is very important that if we have independent pay review bodies, either they and their work are respected or we do not have them. I am sure that that will be teased out in due course.

The Office for Budget Responsibility forecast in March this year that real household disposable income per person—a measure of living standards—will fall by a cumulative 5.7% between 2022 and 2024. That would be the largest two-year fall since records began back in the 1950s.

One of my Slough constituents wrote to tell me that despite their family of five having a full-time worker and the support of universal credit, they still could not afford their children’s school lunches—an issue that my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) alluded to earlier. Imagine being a parent who has to send their children off to school knowing that they are hungry. They know that they have done everything they can to provide for them; they have worked hard, sought support and tried their hardest, but there is nothing more they can do and their children will be going hungry. It is a desperate situation for so many, and one we should not be seeing in the world’s sixth largest economy.

Child poverty in the UK is overwhelmingly related to in-work poverty. Some 67% of children living in relative poverty in our country come from working households. Households in which at least one adult is in work have seen a steep rise in poverty under the Tories. Absolute poverty has not fallen since Labour was in power. It has stagnated while the Conservatives have been in power, but, most concerningly, it has started to rise. Absolute child poverty is set to increase even more by the end of this year, meaning that another 400,000 children could be going hungry and cold day to day, or even homeless. Are the Government not ashamed?

[Mrs Hodgson]

I just want to add some further statistics to the ones that my hon. Friend is very helpfully providing us with on hungry children. On the economics of universal free school meals, PricewaterhouseCoopers did some work on the numbers and found that for every £1 invested in universal free school meals, the return on investment to the economy in savings on health, child poverty, malnutrition and all the rest is £1.71—so every £1 returns £1.71. Does my hon. Friend not think that that proves the policy would pay for itself?

[Mr Dhesi]

I defer to my hon. Friend’s expertise. I am sure that the Minister is listening and will be looking at why that is so important.

We need a Government who will focus on breaking the cycle of poverty, who will ensure that respect and dignity are once more at the heart of our social security system, who will make it easier to own a home and raise a family, and who will put an end to the soaring use of food banks. We need an economy and a system that work for everyone, not just a select few, and that do not embed poverty through low-paid insecure work, leave children without meals or homes, or see the hard-working go hungry.

[Several hon. Members rose—]

--- Later in debate ---

[Mr Dhesi]

Thank you, Sir George, for chairing today’s important debate on in-work poverty. I thank the Minister, the Labour shadow Minister, my hon. Friend the Member for Westminster North (Ms Buck), and the SNP spokesman, the hon. Member for Glasgow East (David Linden), for their responses, as well as other hon. Members who made such sobering, excellent contributions in speeches and interventions.

My gratitude also goes to the House of Commons Library for providing accurate and relevant statistics. I thank Crisis, the Trussell Trust, the Joseph Rowntree Foundation and Slough food bank for providing their analyses, as well as for the brilliant work that they do in my Slough constituency and across our country.

Ministers may want something to blame, whether that is covid, the war in Ukraine or the energy crisis, but the truth is that in-work poverty has been caused by low and insecure earnings, a high cost of living and little affordable housing. As my hon. Friends have eloquently explained, the problems are worse for marginalised communities, especially for many in ethnic minority communities.

All three of the problems that I have highlighted are consequences of Government incompetence and ideology. All three have led to stagnation and suffering. According to Crisis, one in four households who became homeless in 2022 had at least one person in work. The crisis of in-work poverty is leading to a crisis of in-work homelessness, caused by a toxic mix of low-paid, insecure work and a lack of affordable housing. That is why we have a situation in our country where many people are going into work without having a home to return to. We must be in a position whereby people in our country—or in any country—should be able to aspire to a decent wage, to own their own home and to raise and support a family. The Government must ensure that people can aspire to do more than merely survive—