Autumn Statement Distributional Analysis, Universal Credit and ESA

Tommy Sheppard Excerpts

Wednesday 16th November 2016 Commons Chamber

[Tommy Sheppard (Edinburgh East) (SNP)]

One of the beneficial consequences of the recent change in Government personnel is that we are no longer subjected on a daily basis to the phrase “long-term economic plan.” We know of course from recent press reports that that is because the Government do not really have an economic plan at present, and many of the pre-existing problems in our economy are now exacerbated considerably by the decision to leave the EU. We also know, as my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) said, that it is going to get a lot worse before it gets better. The Institute for Fiscal Studies reports that pretty much every forecaster says things are going to get extremely challenging. Six months ago we could have got $1.50 for £1; today, we would be lucky to get $1.25. As those changes feed through, we are going to see a rise in prices and in inflation.

Yet at the same time we have had practically no real-terms growth in wages over the last 10 years, and that is likely to continue. Although there has been a blip in 2016 as a result of the increase in the national minimum wage, it is likely to be just that; we are not likely to see sustained growth in wages, so revenues are not going to increase as a result of increasing wages. This will present the Government with an even more challenging problem; they will be facing rising costs, and revenues not keeping pace with them, and they are going to have to take some difficult decisions.

[James Cartlidge]

The point about the currency has been made several times now. I campaigned for remain, but in terms of the cost of living, which is obviously key to this debate about poverty and living standards, the hon. Gentleman must surely recognise that our country’s economy is unbalanced and there is significant benefit from a lower pound. We need to export more if we are to have sustainable growth.

[Tommy Sheppard]

The Government are faced with a big challenge, and I think how they manage the necessary deficit in the years ahead will be the measure of this Government. The Prime Minister has talked about just-managing families; we will have to see whether or not we have a Government who, as they have to make the necessary cuts and adjustments to their plans, are prepared to protect the most vulnerable and disadvantaged. It is said that the mark of a civilised society is how it treats the worst-off and the most vulnerable; we will see in next week’s autumn statement whether the Government really believe that.

The Government have a bit of form on this question. Just last week there was a report from a United Nations committee which put the Government in the dock for the way in which their policies affect disabled people in our society. It is not the first such report; there have been many others, yet the reaction from the Government was to dismiss this out of hand in a fairly cavalier manner and say that the criticisms were unfounded. Well, these reports cannot all be wrong, and we need a better approach from the Government to these reports if disabled people in our community are going to feel with any confidence that their concerns are taken seriously.

I do not have a lot of time, but I want to spend a couple of minutes talking about the cuts to employment and support allowance. Perhaps over 500,000 people will be affected by them, including over 60,000 in Scotland and over 1,300 in my constituency. It has been said that the cut of £30 a week in this benefit, bringing it into line with jobseeker’s allowance, is being introduced to make sure that there are no incentives to be on the higher rate. Not a single one of us in this Chamber could live on £109 a week, but let us take the Government argument at face value. It is not an incentive, and the argument that it is fails to recognise the very real costs that people in this category have as a result of their illness or disability.

Over 1,300 of my constituents will be affected by this, as I have said, and I want to read into the record the testimony of two of them. The first is Dean Reilly, a single father of three children. Four years ago he was diagnosed with multiple sclerosis and had to leave his job at British Gas. Dean is currently in the work-related activity group of ESA and gets the £30 a week. He tells me in his correspondence that this money means he has more security, independence and confidence. It helps to mitigate some of the extra costs he incurs because of his health condition, and it helps to compensate for the fact that his condition prevents him from being able to function normally. One of the symptoms of his condition is that he often suffers from fatigue which can develop without warning. If this happens when he is out of the house, he has either to rely on friends or to pick up a taxi, which can be very expensive.

Dean also uses oxygen therapy to help to alleviate the symptoms of his condition and he attends the MS therapy centre in Leith twice a week and makes the suggested donation of £13 on each visit. That is what he spends his £30 a week on, and he believes that were he not to get it, his quality of life would be significantly affected. In fact, it could be even worse. Dean works a few hours a week, as he is allowed to, at the local Nike shop. He feels that if he was not getting this extra money and support, he would not be able to continue that employment, so would face a double whammy in terms of loss of income.

The second person I want to mention is Lauren Stonebanks. She wrote a long letter to me, but I will only read out a couple of the points it makes. She says the money

“helps with increased bills because I find it so hard to leave the house. Most people spend a chunk of time at work or school or university but I’m often stuck in my own house using my own gas and electricity. It also gets used on a takeaway or very, very convenient food if I am too exhausted from fighting my illness to cook. Other times it might cover a taxi if I need to get home as quickly as possible because I’ve become too unwell to be outside the house.”

She also says:

“In my personal experience, losing this money won’t incentivise me to return to work. It will demoralise me and make me feel like I’m completely worthless. £30 a week is nothing to MPs but everything to someone as ill as me…I already struggle with finances because of my condition. Financial insecurity and welfare reform wreak havoc on my mental wellbeing.”

The Minister will probably say that existing claimants like Lauren will not be affected by this change, but most of the people receiving this benefit are not doing so on a permanent basis. The whole purpose of it is to get them back into employment so that they can stand on their own two feet. If this change goes through, many people will take employment, and if it does not work out for them because of their condition, they will have to go back on ESA, at which point they will lose money.

For anyone who has a mental health condition or who suffers from stress and anxiety, making it difficult for them to go to work, what sort of additional pressure will be put upon them when they have to ask themselves, “If I take this job and it doesn’t work out, I could lose a third of my income and be much worse off?” That is a horrible position in which to put people, and I appeal to Members on both sides of the House to come together and support the motions today and tomorrow, and to ask the Government to reconsider, to postpone the changes, to stop digging and to have a think and change their mind.