Welfare Reforms and Poverty

Part of the debate – in the House of Commons at 8:17 pm on 13 January 2014.

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Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley 8:17, 13 January 2014

These debates are important in highlighting matters of detail. I am pleased to have signed the motion for this one, which calls for an inquiry into the effects of the benefit system. The biggest detail involved in all this is of course the deficit. When this Government took over, the country was borrowing £150 billion a year, which was added on to the debt each year. If we reduce that too quickly, however, it will cause economic dislocation, so it will have to be reduced relatively gradually. That is why it is surprising that the Opposition are criticising the Government for not reducing it to zero straight away. Obviously, we cannot do that sort of thing.

Another important detail is universal credit. I am very supportive of universal credit because it goes down the route of creating an environment in which people can benefit by being in work. There are people who abuse the benefit system, but the majority of people who receive benefits need support from the state in order to live. It is important, when we are dealing with the people who are abusing the system, that we do not throw out the baby with the bathwater.

I have been doing some work with the 6 Towns credit union. One issue with universal credit is that people will receive a sum of money each month then have to pay their costs out of it. The reason for doing that is to ensure that people who go back into work and are paid monthly do not suddenly find themselves unable to cope financially. There is no doubt that that prospect often makes people frightened of taking a job. The motivation of paying universal credit on a cash-flow basis is a good one, because it is designed to create an environment in which it is easier for people to get into work.

To achieve that, however, there must be ways for them to manage their cash flow, because not everybody is good at that. That is why I am pleased that the 6 Towns credit union has expanded its modus operandi and its common bond to include a lot of Birmingham, including my constituency. When universal credit comes in, my constituents will now have a service towards which the Government have put some money, because they have put money towards credit unions generally.

Specific issues need to be looked at. I always worry about the debate on food banks, for example. If we do not look at individual cases and work out why people are depending on food banks for three days, we cannot identify the problems in the system. The Trussell Trust was created in 2000, so in 1999 there was no Trussell Trust and no food banks. There were schemes then—people would go to supermarkets and get stuff that was out of date; there were all sorts of ways in which people found emergency food support. The fact that we have good organisations with good volunteers offering a good service does not mean that suddenly everybody who is using that service is doing so as a result of changes in Government policy. We have to review this in detail and look at the individual cases.

One of the general sorts of cases I am concerned about involves people transferring off employment and support allowance and then not being informed enough to claim jobseeker’s allowance. I believe that the Government are working on dealing with that. A number of constituents have come to me with those cases when they are destitute. My top priority is to ensure that people are not destitute. We see that happening from time to time and we need to identify those cases. Sometimes when I tell people that we can give them a voucher for the food bank they tell me, “I cannot afford to cook the food, so there is no sense in me having anything from the food bank.” It is important to prevent people from being destitute, and I have raised this issue directly with the Minister and in a ten-minute rule Bill.