I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 2 to 6, 8, 9 and 11. If the House agrees to any of these amendments, I shall ensure that the appropriate entry is made in the Journal.
Before Clause 4
With this it will be convenient to discuss the following:
Lords amendment 8, and Government motion to disagree.
Lords amendment 9, and Government motion to disagree.
The Bill is a vital part of the Government’s reforms that are moving this country to a high wage, low tax, low welfare economy. It is fundamental to our commitment to end child poverty and improve children’s life chances, and to ensure that work always pays more than a life on benefits and that support is focused on the most vulnerable.
As is right and proper, the Bill’s provisions have been carefully scrutinised by both this House and the other place. Where appropriate the Government have tabled amendments to bring clarity or to remove unintended consequences, and they have made important commitments on supported housing and the social rents measure, on kinship carers and sibling adoptions under clauses 11 and 12, and on guardian’s allowance and carer’s allowance in relation to the benefit cap. The Government remain firmly committed to the aims and principles of the Bill as it left this House, and for that reason we wish to resist the non-Government Lords amendments.
Before I address each area in detail, allow me to set out the key principles that underpin our disagreement with the Lords. Our view is that the addition of child poverty income measures is unnecessary because we have already committed to publishing statistics on children in low-income families through the “Households below average income”—HBAI—publication. Lords amendment 1 would also reintroduce a failed approach to child poverty that is focused on tackling its symptoms rather than its root cause, and it would drive perverse behaviour focused on lifting people just above the poverty line, rather than on a life chances strategy that could transform children’s lives.
Income is one of many factors that impact on life chances and poverty, which is why the Government are very much focused on tackling the root causes of child poverty. I will come on to discuss that issue even further—
I know that Labour Members disagree with that, and they will soon have their chance to comment.
On the change to the work-related activity component of employment and support allowance, and to the limited capability for work element of universal credit, I stress that the Government are fully focused on helping people who can work into work. We want to end a broken system that is patently failing those it should be helping, and ensure that a good proportion of the savings are recycled into long-term practical support that will have a transformative effect on people’s lives.
“The main factor is lack of sufficient income from parental employment, which restricts the amount of earnings a household has.”
It is not just a factor, it is fundamental.
I say to the hon. Gentleman and to all Members that work remains the best route out of poverty. Moving people into work, and helping their income grow once they are in work, is exactly our focus.
My hon. Friend is absolutely right. This is the fundamental difference between our party and the Labour party in government. We are committed to supporting people to get into sustained employment, rather than consigning them to a life of dependency on benefits, which has counterproductive consequences.
The Minister is wrong, is she not? The new deal got more people into work than ever before, whereas this Government are taking money out of the pockets of working families. How can she say that she wants working people to feel the benefit when universal credit will make them poorer?
The hon. Lady is wrong in many, many ways. For a start, this Government have supported more people back into work than ever before. Our welfare reforms are helping, through universal credit and our work coaches in particular, and by giving individuals dedicated support to help them not just get into work but remain in work.
I will come back to the hon. Gentleman shortly, but I would like to make a bit of progress. Before I come on to discuss the child poverty income measures, I would like to touch on ESA. I will come back to some of the detailed questions.
When the Labour party designed the work-related activity component, it was intended to act as an incentive for people to take part in work-related activity and therefore move into work more quickly. However, with just one in 100 work-related activity group claimants leaving the benefit each month, it is clearly not working.
It is crucial to make sure we have the right support in place to help people move closer to the labour market. As we all know, a large body of evidence shows that work is generally good for physical and mental wellbeing. There is also a growing awareness that long-term worklessness is harmful to both physical and mental health. Indeed, some of the major charities that the Department is working with agree that work can be right for some people after a diagnosis, and that improved employment support is crucial to helping people with health conditions and disabilities to move into work or get closer to the labour market.
As we speak, the Government are working on a White Paper for this year, which will set out plans to improve support for people with such conditions, including the role of employers and improved integration between health and employment. I will expand on that later, but I will begin by addressing Lords amendment 1 in detail.
Lords amendment 1 is wholly unnecessary, as statistics on low income are already published in the HBAI report. That information is available for all to see, and it will continue to be so. [Interruption.]Labour Members are chuntering away. They will get their chance to speak shortly. I think they should show me the courtesy of allowing me to make my points. Ministers in both Houses have committed to the continued publication of the information contained in HBAI. I hope it is clear to hon. Members that more than adequate safeguards are already in place to secure the continued publication of low income data.
What I would say is that Macmillan has also said that many people diagnosed with cancer would prefer to remain in real work or return to their job during or after treatment. It is important that the House recognises—[Interruption.] If Owen Smith would like to intervene he is very welcome to do so, but I think he should let me finish my point before he starts chuntering away. It is essential that people suffering with cancer get the right support. Obviously, when people are in the ESA support group and are unable to work, they will remain in the support group and be supported financially.
If I may come back to the point on Lords amendment 1 —
I think Macmillan, alongside the Government, recognises that those on the support group will, rightly, not be affected. They will be supported, because they are in the support group and therefore obviously ill.
I turn to why statutory income measures failed. They are flawed as they do not drive the right action to transform children’s lives. It is worth demonstrating that with a few examples. The Government are undertaking crucial reforms to improve people’s life chances, such as introducing the national living wage and increasing the personal allowance for the hardest-pressed families. Those policies will provide support for the hard-working families who need it the most, yet, according to Labour’s failed approach to measuring child poverty, their introduction would have supposedly led to an increase in child poverty. That failed approach incentivised the wrong actions. For example, it led the previous Labour Government to tackle the symptoms of poverty through expensive income transfers, such as spending more than £300 billion on working-age welfare and tax credits between 2003-04 and 2008-09, with very little return. The strategy failed to tackle the root causes of child poverty and did not a make a long-term difference to children’s prospects.
Several hon. Members rose—
I will give way shortly.
The number of children in relative poverty remained broadly unchanged. In short, there are fundamental weaknesses in that system, which the Government are seeking to put right through our life chances measures.
The Minister would perhaps want me to remind her that child poverty fell by 1 million under the Labour Government, which is something we should be proud of. Her own advisers advised against removing the child poverty indicators, so why is she headstrong in ignoring the advice not just of the other place but her own commission, which has said that this is wrong?
We discussed this issue in Committee. I just reiterate that the Government are right in our approach: we are focused on tackling the root causes of poverty. Ultimately, as the Prime Minister said in his recent life chances speech, we are here to make sure we can tackle those long-term root causes. This is not just about measurement. The economy cannot be secure if we spend billions of pounds on picking up the pieces of social failure. Economic reform and social reform are not two separate agendas, they are connected to one another. Therefore, it is imperative that we focus our resources on how we can transform people’s lives, which is through tackling the root causes.
The path I urge the House to take is the one that will incentivise the right action, and the one that the evidence tells us will make the biggest difference to children’s life chances. That is precisely why the Government are seeking to introduce the life chances measures contained in the Bill. The statutory measures on worklessness and educational attainment, combined with the non-statutory measures in the forthcoming life chances strategy—such as family breakdown, problem debt, and drug and alcohol dependency—will drive the right actions to transform children’s lives.
I am grateful and surprised that the Minister has given way. I am sure the Prime Minister is delighted to see her back on message today, as she has not been in the past few days. She talks about the measures in the Bill. How can she go against the advice of her own Government’s commission when it says that
“it is not credible to try to improve the life chances of the poor without acknowledging the most obvious symptom of poverty, lack of money.”
When is she going to listen to the Government’s own advisers?
Let me remind the hon. Gentleman that we continue to publish data on low-income households. This information is still being published—[Interruption.] It might not be the information that the hon. Gentleman wants to know about, but we are publishing it, alongside doing something that previous Labour Governments successively failed to do—transforming lives, addressing the root causes of poverty and, importantly, ensuring that we tackle the causes that have led to child poverty in the long run.
Andrew Gwynne, who made a point about child poverty but is no longer in his place, seemed to indicate that due to the recession under the last Labour Government, child poverty fell. Does that not show the fallacy of Labour arguments and reveal that we are trying to seek the root causes of poverty rather than provide some measure that simply does not work?
My hon. Friend is right. It is absolutely clear that when children are the future of our country, it is right to focus on delivering better life chances for them. When we publish the life chances strategy in spring, we will make the biggest difference to children’s life chances now and in the future. We must seek to rescue a generation from poverty by extending life chances right across our country. We must build a country where opportunity is more equal, with stronger communities and young people who can face the world with a background of experiences and characteristics that we know are vital for their success. As my right hon. Friend the Prime Minister said, we must seek to
“transform the life chances of the poorest in our country and offer every child who has had a difficult start the promise of a brighter future.”
Did the Minister see the report published by the Centre for Social Justice last month, which set out a way of combining the life chances indicators—interesting information will be provided in them—with income indicators, so that we do not ignore income, which is so clearly a key aspect of the whole issue?
I thank the right hon. Gentleman for his intervention and his comment. We will publish the life chances strategy in the spring, and I think it will give us every opportunity to consider holistically all the factors that can lead to better outcomes for children and families. I recognise the right hon. Gentleman’s point. On the back of the remarks I have made, I urge hon. Members to support the Government motion and reject Lords amendment 1.
Let me deal now with Lords amendments 8 and 9, which as you indicated, Mr Deputy Speaker, impinge on the financial privileges of the House. These amendments would simply delete clauses 13 and 14 from the Bill. This would reverse the plan, announced in the summer Budget and endorsed by this House, to align the amount paid to ESA claimants in the work-related activity group to that which is paid to JSA claimants, and to align the amount paid to universal credit limited-capability-for-work claimants to that of the UC basic rate. Let me take this opportunity to stress the Government’s strong belief that this reform is the right thing to do. It is part of our efforts not just to improve people’s life chances but importantly to support them going into work so that they can reach their full potential. Let me explain why.
Record employment levels and strong jobs growth in recent years have benefited many, but those benefits have yet to reach those on ESA. While one in every five JSA claimant moves off benefit each month, this is true of just one in 100 ESA claimants in the work-related activity group. This Government believe that people with health conditions and disabilities deserve better and deserve more support. [Interruption.] I appreciate that Labour Members have no solutions for tackling the wider issues surrounding welfare and would rather simply continue to spend public money in an unsustainable way. We have listened to charities and campaigning organisations who say that improved employment support is key to helping people with health conditions and disabilities to move closer to the labour market and, when they are ready, into work.
I look forward to reading the Minister’s White Paper, but is she not approaching the matter the wrong way round? Should she not introduce the White Paper first and then look at making changes to ESA? What does she say to her colleague, Heidi Allen—I look forward to hearing her contribution later—who said on “ConservativeHome” this morning:
“The beauty of this intermediate WRAG group is that it is just that—intermediate, on the road to returning to work but not quite there yet”?
I rather think the hon. Gentleman makes my point for me in the sense that those in the work-related activity group need more support. Currently, they have been getting too little support. That is exactly the purpose of our reforms. We believe that we must tackle this issue, and provide—yes—the right financial security for individuals, but at the same time also look at the most effective ways to improve the wellbeing of those individuals by giving them support to get back to work. Almost half a million people in the work-related activity group get too little support to move back into work. We currently disincentivise them from doing so. As I say, they deserve better than that, and the Government are determined to take the necessary steps to transform their life chances by supporting them into work.
The Government are committed to ensuring that disabled people are able to participate fully in society, and we have set out our ambition to halve the disability employment gap. It is a duty of Government to support those who want to work to do so, and most people with disabilities and health conditions, including the majority of ESA claimants, tell us that they want to work. Some 61% of those in the work-related activity group tell us that they want to work, and we mean to put those people’s ambitions at the centre of what we do.
We have established that Macmillan Cancer Support disagrees with the Minister on this issue. Parkinson’s UK, Mind, and Rethink Mental Illness, whose chief executive wrote to all of us, say that they strongly disagree. So can the Minister tell us the name of any organisation representing disabled people that agrees with the position that the Government have taken?
What I would say to the right hon. Gentleman is that we have been working with organisations and disability groups, and we have actually been listening to them. [Interruption.] Rather than making generalised comments from a sedentary position, Labour Members should realise that we are working with those organisations as we move forward with our White Paper—
No, I will not.
The ESA system was set up by Labour in 2008 to support people with health conditions and disabilities into work. Despite being set up with the best of intentions, it has failed the very people it was designed to help. The original estimates were that far more claimants would move into work. A White Paper was published in 2008, setting out that the then Labour Government aimed to reduce the number of people on incapacity benefits by 1 million by 2015.
We have spent £2.7 billion this year on the ESA work-related activity group, but as I mentioned earlier, only around 1% of people in this group actually move off the benefit every month. I think it is fair to say that this benefit is not working as anyone intended it to work and, most importantly, it is failing claimants badly. The Government are committed to spending taxpayers’ money responsibly in a way that improves individuals’ life chances, and helps to move people off benefits and into work.
Those in the work-related activity group are given additional cash payments, but very little employment support. As the Prime Minister has recently stated, this fixation on welfare treats the symptoms, not the causes of poverty, and over time, it traps people into dependency. That is why we propose to recycle some of the money currently spent on cash payments, which are not actually achieving the desired effect of helping people move closer to the labour market, and put it into practical support that will make a genuine difference to people in these groups.
In addition to the practical support, which is part of a real-terms increase that was announced in the autumn statement, we need to reflect on how spending the £60 million to £100 million of support originally set out in the Budget will be influenced not only by Whitehall, but by a taskforce of representatives from disability charities, disabled people’s user-group organisations, employers, think-tanks, provider representatives and local authorities. So far, we have worked with charities including Scope, Leonard Cheshire Disability, the Royal National Institute of Blind People, the National Autistic Society and the Disability Action Alliance.
During the passage of the Bill, Members of this House and the other place raised concerns that we are expecting claimants who have been found “not fit for work” to be able to work. That is not the case. Claimants in the work-related activity group have been found to have “limited capability for work” and that is very different from being unfit for any work. Of course there may be limitations on the type and amount of work people in the work-related activity group can do, and they may also need workplace adjustments, but employment is not ruled out. That is the reason for the ESA permitted work rules. The distinction is important, because the misconception helps to drive people further away from the labour market, perpetuates the benefit trap, and undermines the life chances of claimants.
The Minister has mentioned fluctuating conditions. It is well known that mental health problems cause fluctuating conditions which are very hard to deal with, but 50% of the people affected by the cut in ESA have such problems. Surely that has not been built into the Government’s thinking. What analysis has the Minister made of the impact?
I have just touched on what we are doing to find extra employment support. As I have said, we are working with other organisations, and I have named only some of them. However, the issue of mental health is crucial to the way in which we connect our systems, working with the NHS. A joint working group from the Department for Work and Pensions and the Department of Health is looking into how we can help members of the ESA work-related activity group with mental health conditions, provide signposts for them, and secure treatment for them as well.
When the Opposition talk about income, what they really mean are welfare benefits. That is not what we mean when we talk about income. All the evidence shows that 75% of children in relative poverty will be removed from the poverty indicator if both parents in the household are working. There are now more children in families in which people are working than ever before: that is this Government’s record.
As for ESA, some of us have met people with significant disabilities who are working, such as the people from National Star College in Gloucestershire who are now working with EDF Energy. It is amazing to see what a difference that makes not just to their incomes, but to their overall life chances and life happiness.
My hon. Friend is right to highlight the importance of work to people who have previously been locked out of employment opportunities. We have many schemes, but Disability Confident is a very good example of how we can work with employers to deliver sustained employment opportunities for people with disabilities. The Government are doing additional work on a wide-ranging employer strategy, working with employers specifically to establish how we can address the disability employment gap and how they can give people with disabilities more structured and sustained employment opportunities.
It is important to recognise that the changes in employment and support allowance and universal credit work together, and cannot be dealt with in isolation. We have invested a significant amount in universal credit to ensure that we keep people connected and engaged with the labour market from the outset of their claims. Unlike those claiming employment and support allowance, universal credit claimants with a health condition or disability are offered labour market support, when that is appropriate, at the very start of their claim. That helps them to remain closer to the labour market, even if they are not immediately able to return to work. It also provides them with employment support, advice or training to get back into work, which, in the long run, will help them to obtain jobs.
I stress that this change does not affect those in the ESA support group or the universal credit equivalent. It also does not affect the premiums that form part of income- related ESA. Moreover, existing ESA claimants will not be affected. There will be no cash losers, and the policy applies only to those who apply for ESA and subsequently enter the WRAG from April 2017. We also aim to protect those who move off ESA to try to work. Those who were receiving the component returns to ESA within 12 weeks because they could not cope with work will be able to reclaim ESA and receive the component again. Hopefully, that will help to dispel the myth that everyone who is currently in the work-related activity group will be affected by the change. Universal credit works in a different way from ESA, but we aim to put similar protections in place.
This reform is a first and necessary step towards a wider reform package. In the autumn statement, my right hon. Friend the Chancellor announced that the Government would publish a White Paper this year that would set out our plans to improve support for people with health conditions and disabilities to further reduce the disability employment gap and promote integration across health and employment. That will include exploring the roles of employers.
Clauses 13 and 14, together with the additional practical support announced in the Budget, will provide the right support and incentives to help people with limited capability for work move closer to the labour market and, when ready, into work. In the light of those arguments, I hope that Members will feel able to support the Government.
I support Lords amendment 1, which deals with child poverty reporting obligations, and amendments 8 and 9, which relate to the proposed cuts in the employment support allowance work-related activity component and the universal credit equivalent.
Lords amendment 1 places a reporting obligation on the Secretary of State, requiring an annual report on child poverty to be laid before the House. The amendment stipulates that the report must include information on the percentage of children living in poverty as originally described in the Child Poverty Act 2010, and based on household income and material deprivation.
The Bishop of Durham, who moved the amendment in the Lords, emphasised the importance of income to an understanding of child poverty and children's wellbeing and life chances. He said that income measures would not supplant the Government's other measures relating to worklessness and educational attainment. These measures will ensure that the income-based measures of child poverty, which have been collected in the UK and other developed countries for decades, will be retained, allowing year-by-year comparisons and holding the Government to account.
Various charities, including the Children's Society, the Child Poverty Action Group and End Child Poverty, have called on the Government not to abandon the income-based measures of child poverty, as has the Equality and Human Rights Commission. In a letter published in The Times today, 177 child health academics have written in support of retention of those measures. Even UNICEF has urged the Government to retain the income-based measures that are used in the 35 OECD countries, and that allow inter-country comparisons.
As has already been mentioned, the Government’s own 2014 evidence review of the drivers of child poverty found that a lack of sufficient income from parental employment—not just worklessness—was the most important factor standing in the way of children being lifted out of poverty. Even the Minister, in a recent Westminster Hall Debate, acknowledged that
“Income is a significant part of this issue, but there are many other causes as well.”—[Hansard, 26 January 2016; Vol. 605, c. 72WH.]
The Social Mobility and Child Poverty Commission’s 2015 annual report found that 2.3 million children were living below what is currently defined as the child poverty line, and the Resolution Foundation has estimated that in 2016 alone a further 200,000 children, predominantly from working households, will fall into poverty. That is on top of the projections of the Institute for Fiscal Studies that the falls in child poverty at the beginning of the century risk being reversed. The 1% uprating of benefits alone in 2013 was estimated to have pushed 200,000 more children into poverty.
Given the Bill and the four-year benefit freeze, it is entirely probable that the increase in child poverty will rise even more steeply. A recent inquiry by the all-party parliamentary group on health in all policies into the impacts of the Bill on child poverty and health showed clearly that it could lead to an increase in the number of children facing the misery and hardship of poverty by as many as 1.5 million by 2020.
I am sure my hon. Friend will agree that there are one or two things that we cannot allow Ministers to get away with. Tax credit, for example, was introduced by a Labour Government because the Conservative Government had done nothing about child poverty in the 1990s. More importantly, the Government say they want to get people into work, but in actual fact people who do get into work get zero-hours contracts, and women cannot get child tax credits as the Government have cut that; so much for doing something about child poverty. In Coventry there are 18,000 people using food banks. The Government are doing nothing about child poverty.
My hon. Friend makes some very valid points and I am going to come on to some of them in a moment.
The implication of these measures in terms of the future health and wellbeing of children is stark. There is overwhelming evidence that child poverty has a direct causal impact on worsening children’s social, emotional and cognitive outcomes. One witness to the all-party inquiry said:
“As children’s lives unfold, the poor health associated with poverty limits their potential and development across a whole range of areas, leading to poor health and life chances in adulthood, which then has knock-on effects on future generations.”
There was unanimous agreement from those who provided evidence to the all-party inquiry that although there is a positive correlation between worklessness and educational attainment and poverty, they are not indicators or measures of poverty. Let me reiterate that two thirds of children in poverty are from working families.
My hon. Friend is making an excellent case. Does she agree with the Institute for Fiscal Studies and others who have said that the prognosis for child poverty over this decade under this Government is bleak, and that what we are seeing in amendment 1 is the Government trying to hide information about what is happening to child poverty, rather than trying to tackle the underlying causes that lead to it, and that that is disgraceful?
May I just make these points, then I will give way to the hon. Gentleman?
People on low incomes are often juggling to heat or eat, as we heard in this morning’s Westminster Hall debate on the bedroom tax. Being able to pay their rent is an increasing issue; 443,000 are currently affected. Having a secure, warm home with healthy, nutritious food are basic physiological needs. When these needs are not there, people’s health suffers both physically and mentally. This is particularly the case for children as they are developing. Being in work or well educated does not guarantee these essential needs; money does. Again, I make my key point: two thirds of children in poverty now are from working families.
The lack of evidence, to which my hon. Friend Dr Blackman-Woods was alluding, is stark. Why was there no Government impact assessment of these proposals? We should look at the evidence from the United States, for example. It has been analysing the effects of its social security reforms, and that shows that programmes that focus specifically on parental employment failed; in fact, they had no effect or exacerbated children’s health issues. Conversely, programmes focused on supplementing the income of low-income families improved health.
Indicators are exactly that; they are not things that can be tackled, whereas this Bill seeks to refocus the Government position on the underlying causes and symptoms. Does the hon. Lady agree that, rather than seeking to hide the figures that she seeks to include in this Bill, they will still be reported in the households below average income report?
The point here is about making the Government accountable for their policies that may in turn be affecting those measures.
I know Richard Graham wanted to intervene, too.
The hon. Lady is very kind. Both her party and ours are committed to ending child poverty, so the starting point is the same. The difference, in a sense, is the value of the relative indicator. She knows that one of the difficulties with the relative indicator is that quite often it will apparently improve during times of recession, but go down in times of growth. How effective does she think that is, therefore? About £300 billion was spent on benefits between 2003 and 2008. How effective does she think that expenditure was?
As a former public health academic, I will answer in the following way. We know the value of having indicators that we can compare over a long period; that is internationally recognised. They provide an opportunity for this Government and future Governments—and past Governments as well—to be monitored and to be held to account for their policies and the way in which they affect child poverty.
Does my hon. Friend agree that it is important to remind those on the Government Benches that the Child Poverty Act 2010 had four measures: a relative poverty measure; an absolute poverty measure; a persistent poverty measure; and a material deprivation poverty measure? We were not relying on one simple measure.
My hon. Friend is spot-on, and again this is what the Lords amendment is asking for: that the exact same measures be included.
I want to sum up on this point by referring to one of the witnesses, who is a clinical expert in child health. He said the Government are trying to refocus child poverty from “income-based indicators” to factors related to
“family breakdown, debt and addiction”,
“the consequences of child poverty, with the cause—a lack of material resources.”
That sums it up so well.
Let us turn now to the UK’s infant mortality rate, a proxy for the health of the nation. It is currently in the highest quarter of all EU15 countries. I was shocked when I heard that, and for under-fives we have the worst mortality rate in all of northern Europe. We should be ashamed of that. We know that infant mortality is strongly linked to poverty and material deprivation. We know from national statistics that there is a fivefold difference in the infant mortality rates between the lowest and highest socioeconomic groups. There is not a law of nature that says that children from poor families have to die at five times the rate of children from rich families.
My hon. Friend is giving a characteristically calm, evidence-based explanation of why money matters, so does she agree that it is disappointing continually to hear the myth from the Government Benches that educational attainment or poor health is what causes poverty, rather than poverty that causes those things?
This is a serious question. If the hon. Lady is saying that the evidence shows that the mortality rate of poor children in this country is worse than in the whole of the rest of Europe and the benefits that we are giving are greater than those in the whole of the rest of Europe, something is not working. What does she think needs to be done to improve that?
Again, the hon. Gentleman possibly does not have all the evidence. On spending-to-GDP comparisons, we do not do particularly well. The Marmot review of health inequalities concluded:
“One quarter of all deaths under the age of one would potentially be avoided if all births had the same level of risk as those to women with the lowest level of deprivation.”
Again, we should recognise that we are talking about people living in our constituencies. Evidence to the all-party inquiry showed that eliminating UK child poverty would save the lives of 1,400 children under 15 every year. Furthermore, good early development is strongly associated with many positive outcomes in later life, including higher educational attainment and improved employment prospects in adulthood. As another of the witnesses to the inquiry said, we are facing a child poverty crisis. Having made real progress in reducing child poverty in the UK, it is imperative that we continue to invest in our children, and protect and support the most vulnerable in our society. The introduction of the so-called “living wage”, the increase in personal tax allowances and more free childcare will not, as the Institute for Fiscal Studies has clearly shown, offset the net loss to low-income households from tax and social security changes, including those in this Bill. I therefore urge Members from all parts of the House to support this amendment—our children’s futures depend on it.
Lords amendment 8 seeks to remove clause 13 and Lords amendment 9 seeks to remove clause 14. Clause 13 seeks to abolish the employment and support allowance work-related activity component for new claimants from April 2017 and replace it with universal credit. That would mean that social security support for people with a disability, impairment or serious health condition will reduce from £102.15 to £73.10, a cut of nearly £30 a week or £1,500 annually. The Government have argued that this is needed to
“remove the financial incentives that could otherwise discourage claimants from taking steps back to work.”
The Lords rejected this on a number of grounds. First, people in the ESA work-related activity group have gone through the work capability assessment and been found not fit for work. This includes 5,000 people with progressive conditions such as multiple sclerosis and Parkinson’s—conditions that will not improve. It also includes people with cancer. A survey conducted by Macmillan Cancer Support found that one in 10 cancer patients would struggle to pay their rent or mortgage if ESA were cut. The key issue is that these people are not fit for work, so suggesting that removing financial incentives will somehow make them fit for work is ridiculous.
I am sorry but I have given the hon. Gentleman a number of opportunities to intervene.
Secondly, there is overwhelming evidence of the extra costs faced by sick and disabled people, the associated poverty they experience as a result and the clear implications for their condition. We know that 5.1 million out of the 12 million disabled people in this country live in poverty. We also know from the Extra Costs Commission that disabled people are twice as likely to live in poverty, 80% of which is due to the extra costs they face because they are poorly—because they have a disability.
Lord Low of Dalston, Baroness Grey-Thompson and Baroness Meacher’s excellent report “Halving the Gap?” expressed real concerns that the Government’s assessment of the impacts of this cut on disabled people, including the potential increase in the number of disabled people living in poverty, was inadequate. They assessed that the cut in financial support would have an injurious impact on this vulnerable group. The Equality and Human Rights Commission agreed, with its analysis being that it
“will cause unnecessary hardship and anxiety to people who have been independently found unfit for work.”
Thirdly, there is scepticism that there are employment opportunities for those sick or disabled people who may recover from their condition in the future. Approximately 1.3 million disabled people who are fit and able to work are currently unemployed, accounting for the disability employment gap of nearly 30% between disabled and non-disabled people. The Government have rightly said that we need to halve that, but they have been less open on how that can be achieved, and I agree with what Neil Gray said about the disability White Paper. There is one specialist disability employment adviser to 600 disabled people trying to get into work.
My hon. Friend is making a powerful point. Like me, she will see many of these people at her regular surgeries. It is clear to me from talking to them that the required support just is not there, and it is very expensive support that is needed. The Government talk a good game but do not deliver.
My hon. Friend is absolutely right. I was about to move on to the support that is provided for disabled people through Access to Work. Last year, only 36,800 people received such support. Although I support the Disability Confident scheme, we must recognise that, across the country, there are only 112 active employers who support that initiative. How can we encourage and help disabled people who are fit to work into work when such limited measures are on offer? It is all topsy-turvy.
Does the hon. Lady agree that the incidence of disability and the incidence of lack of work opportunities do not go hand in hand, and the problem is not evenly distributed throughout the UK?
The hon. Gentleman makes a very valid point.
The suggestion that working four or five hours a week should recoup the loss of income with the introduction of the so-called living wage has been questioned by the Equality and Human Rights Commission. The Disability Benefits Consortium, a coalition of more than 60 disability charities, has said that the proposed cut will push sick and disabled people further away from work and into poverty. It will not help, as the Government have claimed. A recent survey shows the concerns not only of disabled people—seven out of 10 of them think that their condition will deteriorate with the introduction of the ESA WRAG cut—but of the public as well. A Populus poll of 2,000 adults in January revealed that 71% think that cuts to social security will make the UK a worse place for disabled people.
This Government spend £50 billion a year supporting people with disability and health conditions. That is more than France and Germany. If what the hon. Lady is saying is true, it is not just about money, is it?
Again, we need to look at our spend as a proportion of GDP. We are 19th out of 32—[Interruption.] No, France and Germany spend more. We spend 1.3% of GDP. We are 19th out of 32 EU countries. Contrary to what this Government perpetually claim about our generosity, we are not good at all in terms of the actual spend in relation to GDP. It was 1.6% of GDP in 1960. Now it is 1.3%. It is shameful. On those grounds, I ask all Members across the House to consult their consciences and support amendment 8.
Let me move now to clause 14. Again, the Government have been more than a little disingenuous when they suggest that the reduction in social security support applies only to new ESA WRAG claimants from 2017. From this April, 492,180 people currently on ESA WRAG will start to migrate across to universal credit, which, as many people know, combines a number of benefits, including ESA, into one amalgamated benefit.
Clause 14 removes the limited capability for work component for the work element of universal credit. That means that everyone currently on ESA WRAG will ultimately be transferred on to universal credit and will also have their support cut by £29.05 a week, or £1,500 a year.
I thank my hon. Friend for his intervention. I absolutely agree with him.
What has been hidden so far is that this cut will also affect disabled people who are in low-paid work. Currently, 116,000 disabled people in low-paid work and working more than 16 hours a week receive the disabled workers element of working tax credit—about £60 a week—which they get as a result of being on disability living allowance or personal independence payments. They need that payment to cover the additional costs that they face as a result of work. Under universal credit, the limited capability for work component is the main additional financial support for disabled people in work and is meant to cover those extra costs. However, unlike the disability element of working tax credit, that is available only after working disabled people have been through a work capability assessment. If the Government go ahead and remove UC’s limited capability for work component from working disabled people, the inevitable impact will be disabled people dropping out of the labour market, thereby increasing not reducing the disability employment gap. It will have exactly the opposite effect to the one that the Government say that they want to achieve.
It should be noted that for the 43,000 disabled parents on the disability element of working tax credit, withdrawal of the measure will mean that the family do not receive any extra financial support. The all-party report clearly shows the impact of the measures on child poverty. Children are living in poverty in 40% of families affected by disability. The inquiry found that that would become worse with cuts to ESA WRAG and the limited capability for work component. For those reasons, I urge everyone to support Lords amendment 9, which seeks to remove clause 14 from the Bill.
I have discussed the effects of the measures in the Bill. I have provided evidence for my arguments, as there has been absolutely no impact assessment. We have had to find the evidence to identify the implications of the measures because, to their shame, the Government have done absolutely nothing. I remind the House that the Bill has been introduced on top of many other measures, including the Welfare Reform Act 2012, which imposes £23.8 billion-worth of cuts on 3.7 million disabled people. The independent living fund has been closed, and there is the threat of a further cut of £1.2 billion. Cuts in social care affect disabled people.
I am sorry; I am not going to take any more interventions.
Further cuts are bound to be made as the hasty consultation on the personal independent payment earlier this year is pushed through. The Government have tried to regenerate the economy on the back of the poor and disabled. Work does not protect against poverty, and the poor and disabled have been made to pay the price. This is about cuts to our social security system.
No, I will not.
Instead of denigrating claimants in our social security system we should recognise the important role that the system plays. Like the NHS, the social security system is based on principles of inclusion, support and security for all, assuring us all of our dignity and the basics of life, should any one of us become ill or disabled, or fall on hard times. Many hon. Members in all parts of the House believe that the Bill is a step too far, and I urge them to support Lords amendments 1, 8 and 9.
Several hon. Members rose—
Order. Everyone can see that a large number of hon. Members want to speak in the debate, which has to conclude at 5.36 pm. If Members can keep their speeches as brief as possible we can get everyone in.
Everything comes to he who waits—and that was a long wait, everyone will agree. I will try to be brief, as I have seen how many Members want to speak.
I want to explain why, despite some misgivings about minor details, the Lords amendments are not just wrong but a retrograde step that would make matters worse. No one in the Chamber would disagree that it is a policy failure that only 1% of WRAG claimants exit the scheme to take up employment. We should not lock that into legislation, as that policy failure is unacceptable. I see constituents who have come to my surgery because they are marooned in a no man’s land. Some have been found to have limited capability for work in the work capability assessment, and some have exhausted all avenues of appeal, but for various reasons they do not feel comfortable with transitioning to jobseeker’s allowance, even though in theory they might receive greater support to re-enter employment if they did so. I endorse the disability charities saying that we need more disability advisers in Jobcentre Plus. That is one use to which we could put the extra £100 million that the Government talk about.
I am sorry, I want to make progress so that everyone can get in.
For many people, a response in mental health terms to a sudden onset of or change in a physical health condition makes their willingness or ability to engage in the employment market that much harder. The work capability assessment has consistently failed to adapt and accommodate those individuals. I recognise that a handful of individuals may be encouraged into employment by the changes announced today, but I believe the operation of the work capability assessment will follow the age-old pattern—every time it is changed, more and more people, almost by osmosis, end up in the support group. We have seen that year on year, time and again.
Without further policy change, we could be back here in a few years discussing a sub-group of the support group. But that is a key point: we will not be back here in a few years’ time with the same policy framework. The Government are being more radical in their approach. If this were the sole policy intervention that they were aiming to make, I would share many of the concerns being expressed, but that is certainly not the case. We have recognised that the status quo is inadequate, and the Government are committed to reforming the work capability assessment. A White Paper is coming forward that will, I hope, reform employment and support allowance, which is a dinosaur of a benefit. It is unfit for purpose. It is the last remaining disability benefit that still sees disability as a matter of physical health, rather than a matter of physical and mental health. For that alone it needs to be taken to the knacker’s yard and put out of its misery. I welcome the Government’s intention to do that.
If we agree to Lords amendments 8 and 9, we will not get a £100 million fund placed in the hands of the third sector to support people with limited capacity for work to try to get back into employment. That would be a wasted opportunity. We have managed to get 339,000 more people back into employment over the past two years. Everybody in all parts of the House knows the commitment of the Under-Secretary of State for Disabled People to promoting the Disability Confident campaign. We all accept that the status quo is inadequate, and it would be the worst of all worlds to lock in a failed policy for the work-related activity group. That would benefit no one at all.
I shall briefly touch on Lords amendment 1. There is probably more consensus on how we view poverty-related issues than those on both sides of the issue would like to admit. I do not deny that levels of income have an impact on poverty levels in my constituency. Equally, I believe that there are more fundamental drivers of poverty in my constituency that also need to be addressed. As the exchange between the Minister and Stephen Timms indicated, this is not the end of the policy journey. There is to be a White Paper on how we implement our life chances strategy. There will be an opportunity to look at how we integrate into the policy package the different indicators that the right hon. Gentleman and Helen Goodman referred to, but Lords amendment 1 is fundamentally flawed. It shows a misunderstanding of how Government work. The Bill cannot place an obligation on the Government to pursue two broadly contradictory policy objectives for tackling poverty.
If we focus solely on the “poverty plus a pound” approach as the answer to the problems, and at the same time oblige the Government to look at life chances indicators, that will divide the Government’s attention and the Department’s ability to focus on what matters. Opposition Members may disagree with the life chances strategy, and they are perfectly at liberty to do so, but they cannot expect to ride both horses at once and hold the Government to account for it. The Minister has made it clear that the data will still be collected and published. The Opposition will be able to look at that information, assess it and hold us to account for it, but Lords amendment 1 seeks to ensure that the Government fail on both strategies. It would not allow us any latitude to pursue what we have an election mandate for—welfare reform. When we get the life chances strategy, I suspect it will be far more sophisticated than what has gone before.
It has always struck me as utterly perverse to suggest that the most effective and best way to reduce child poverty in this country is to somehow provoke a recession, because that will bring the income numbers down. Surely no one could say that that is the best indicator to utilise to drive change. It astounds me that the Opposition parties—for the sake of posturing, and because of what has happened in the other place—have decided that this is their chance to make a stand on the backs of the most disadvantaged once again, and to try to prevent the Government from doing something about this issue.
I am proud to support what the Minister is trying to do. We have had decades of failure on this issue under Governments of all persuasions. At last someone is trying to do something, but from the Opposition we have nothing but cant, rhetoric and opportunism.
I am glad to have the opportunity once again to set out the SNP’s opposition to this dangerous and despicable Welfare Reform and Work Bill. The SNP will vote to make these Lords amendments part of the Bill, to protect children and disabled people from poverty. In October, my SNP colleagues and I tabled a series of amendments to the Bill, which were, sadly, not successful. Today, I call on right hon. and hon. Members across the House to take this final opportunity to stand up to the Government’s regressive and punitive social security cuts.
In my contribution, I will focus on the scrapping of child poverty reporting obligations, the ending of the ESA WRAG and the universal credit disabled work element. My hon. Friend Dr Whiteford will also seek to contribute, focusing on the cut to the ESA WRAG, and my hon. Friend Dr Whitford will, I hope, discuss the report on child poverty and health by the all-party group on health in all policies.
Let me turn first to the overhaul of the Child Poverty Act 2010, which removes the income-related measures of child poverty, replacing them with an obligation to report on children’s life chances and scrapping the target to end child poverty by 2020. Scrapping that target, when child poverty is on the rise under the Government, is a disgraceful dereliction of responsibility, which serves only to highlight the lack of will on the part of Conservative Members to do anything to reverse the growing numbers of low-income families—in and out of work—who live in poverty.
Lords amendment 1, from the Bishop of Durham, Baroness Sherlock and the Earl of Listowel, would impose an additional reporting duty on the Secretary of State, requiring him to lay before the Houses of Parliament an annual report on child poverty. That report should include data on the percentage of children living in households on relative low income, combined low income with material deprivation, absolute low income and persistent low income.
The Bishop of Durham, in moving the amendment, stressed the importance of income in understanding child poverty and children’s wellbeing. He tackled criticisms made previously by Ministers by arguing that income measures would not displace other statutory measures relating to worklessness and educational attainment. Speaking for the Opposition, Baroness Sherlock supported the amendment, noting that it would cost nothing and that it would allow the Government to be held to account on child poverty.
SNP Members find it unbelievable that the Government would wish to remove all links to income in reporting child poverty. Income is fundamental to whether someone is in or out of poverty—there is simply no getting away from that fact. We have no problem with the Government choosing to report on life chances, substance misuse, family break-up and unemployment by household, but they cannot get away from the fact that substance misuse, family break-up and unemployment are not unique to those in poverty—far from it. However, by using those alternative measures in isolation and not using any income-related measures, the Government are attempting to characterise poverty as a lifestyle choice, rather than looking at the structural causes of poverty.
Of course, such issues can impact on life chances, but income deprivation always will. An alcoholic single parent may be perfectly capable, for any number of reasons, of putting food on the table, a warm winter coat on their children’s backs or keeping their house warm. That may not be possible for a set of married parents who have no substance abuse problems but who are in low-income work. That has nothing to do with family breakup, substance abuse or unemployment—it is because of low income. So why on earth did the Government choose to ignore how many children do not have an outdoor space to play in safely or a place for the family to be able to celebrate a special occasion for them, or whether they can eat fresh fruit and vegetables every day? We know that 1.7 million children live in a family who want to heat their homes but cannot. The parents of 900,000 children want to put a warm winter coat on the backs of their bairns but cannot afford to do so. These are parents in and out of work, who are married or single. What is that if it is not poverty? We have to continue reporting on those matters.
By removing the reporting obligations and targets on child poverty, the Government risk leaving themselves unresponsive to changes to child poverty rates over time, meaning that effective strategies will not be in place and the aim of eradicating child poverty in the UK will be lost. Two thirds of children in poverty live in households where there is someone in work. The new measures proposed by this Government focus on worklessness, not in-work poverty. These fundamental changes mean that we will not know how those children are suffering, and there will be no accountability on this Government, or future Governments, to respond.
The Government’s own January 2014 evidence review of the drivers of child poverty found that a lack of sufficient income from parental income—not just worklessness but low income from work—is the most important factor standing in the way of children being lifted out of poverty. I quote directly from page 6 of the executive summary on factors now making it harder to exit poverty:
“The main factor is lack of sufficient income from parental employment, which restricts the amount of earnings a household has. This is not just about worklessness, but also working insufficient hours and/or low pay.”
The evidence is there in the Government’s own reports. Income is fundamental—the main factor in driving poverty—and therefore it must be a factor in measuring child poverty.
One of the most common questions I get asked when discussing my job in this place is whether Tory MPs realise the damage this Government are doing, and will do, to individuals, families and society in general with these welfare cuts: are they so out of touch that they are ignorant, or are they aware and just do not care? To be honest, I have struggled to answer that question from my constituents and others. The briefings that we all get sent from third-sector organisations and other non-governmental organisations highlight what is at stake. I am sure that Conservative Members read them, as I do, so does their ideology simply blind them to the damage that is about to be done? This is children’s lives that we are talking about—children whose families have nothing. Of course we should measure that, of course we should want to tackle it, and of course we should set ourselves a target by which time we want it ended. Those who cannot see that—those who will vote with the Government later—should question whether their ideology is getting in the way of their moral compass.
I turn now to the Government’s desire to scrap ESA WRAG and the corresponding limited capability for the work element of universal credit, as contained in clauses 13 and 14, which Lords amendments 8 and 9 seek to remove. Several hon. Members, including me, were at the launch of the review, “Halving The Gap?”, which Debbie Abrahams spoke about so eloquently, published by Lord Low of Dalston, Baroness Meacher, and Baroness Grey-Thompson, with support from Leonard Cheshire Disability, RNIB, Mind, the MS Society, the National Autistic Society, Mencap and Scope. The report, which was published on
“halt its proposed change to ESA WRAG and instead focus on improving back to work support” for disabled people
“by ensuring it is personalised, tailored and meets individuals’ needs.”
Lord Low, in particular, made some very pertinent points during the Lords’ consideration of these matters. He emphasised that a drop of £1,500 a year would take the income of ESA WRAG claimants from £5,300 to £3,800, which would exacerbate poverty among disabled people and be catastrophic for many who are in receipt of ESA WRAG. He said that
“the claim that disabled people are more likely to get a job if their benefit is cut just does not stand up.”
As he explained, the review found that the barriers that disabled people face in seeking employment are not any financial disincentives from ESA, but, rather,
“employer attitudes, their health condition, illness or impairment, difficulty with transport, and lack of qualifications, experience, confidence and job opportunities.”—[Hansard, House of Lords, 27 January 2016; Vol. 768, c. 1302.]
Lord Low welcomed the Government’s commitment to addressing the disability gap, but said that the proposed cut would hinder people’s ability to look for employment opportunities. He also raised the issue of the need for tailored personalised support for disabled people to return to work.
We must remember that before last year’s election the Prime Minister committed to not cut benefits to disabled people. The “Politics Home” website cites an interview the Prime Minister gave to “BBC Breakfast” on
Given that the Government have emphasised time and again the importance of evidence-based policies, is the hon. Gentleman struck by the fact that there is no evidence to suggest that a reduction of £30 a week would push people towards work and off unemployment?
I welcome the hon. Gentleman’s contribution. In fact, the opposite appears to be the case. Those third sector organisations and disability groups with knowledge of this area say that the cut will actually hinder people’s ability to find work.
Baroness Grey-Thompson’s speech on
“if this measure goes through, a disabled parent who is working and qualifies as having limited capability for work will, under universal credit—the flagship element of government policy—have no extra support in work compared with a non-disabled parent in otherwise the same circumstances. What will this mean for a disabled parent? Single disabled parents working 16 hours or more, living in rented accommodation and making a new claim for universal credit in 2017, will receive about £70 a week, or
£3,500 a year, less than they would receive now on tax credits, despite the rise in the minimum wage…For hundreds of thousands of disabled people, keeping Clause 14 in the Bill will be devastating. It means that far from there being an incentive for disabled people to get into work, find work and contribute to society in the future, those with deteriorating conditions will be less likely to stay in work.”—[
Official Report, House of Lords,
What that shows is that the Government’s Work programme has been an absolute failure and that those who are on ESA WRAG take more time to get back into work and require extra support, so by cutting £30 a week this Government will cut their ability to find job opportunities, and that is shameful. I again urge Conservative Members to read Baroness Grey-Thompson’s
In October 2015, the Disability Benefits Consortium found that seven out of 10 disabled people said that a cut in ESA would cause their health to suffer. Almost a third said that a cut to ESA would mean that they would return to work later. Shockingly, a third said that they could not afford to eat on the current amount they receive from ESA WRAG.
Scope is concerned that reducing financial support for disabled people on ESA WRAG will detrimentally impact on their financial wellbeing, placing them further from work, as disabled people have lower financial resilience than non-disabled people, with an average of £108,000 fewer savings and assets, and 49% of disabled people use credit cards or loans to pay for everyday items, including clothing and food. Mencap has said that households with a disabled person living in them will be hit much harder. A third of them already live below the poverty line, and the additional reduction in income will have a devastating impact on those who are in most need of Government support.
As the WCA does not assess employment support needs, the financial support that a disabled person receives also determines their employment support. Those two things are not related, and they mean that disabled people do not get the back-to-work support that they need, in answer to the point made by Paul Scully. Evidence from disabled people’s organisations and official independent reviews have all highlighted the inaccuracies of the assessment, which means that disabled people do not get the right back-to-work support.
There is insufficient evidence, if there is any at all, for the Government’s assertion that reducing benefit support incentivises people back to work. The impact assessment contains no evidence whatever to show that reducing support to disabled people in the ESA WRAG will incentivise them into work. Reducing the financial support available through the WRAG will create a bigger distinction between the support received by jobseeker’s allowance claimants and those who are placed in the ESA support group. The IFS supported that argument by commenting that abolishing the WRAG component could strengthen the incentive for claimants to try to get into the ESA support group. Ben Baumberg, of the University of Kent, agrees with that claim. He stated that the removal of the addition could lead to an increase in the proportion of claimants who are placed in the support group, because being placed in the WRAG could be a risk to their health.
The Minister said in her speech that she had worked with and listened to the likes of Scope and Macmillan, but they still oppose the cut, and she must answer why she believes that to be the case. I was interested to read a story in The Guardian a few days ago, in which the hon. Members for Stafford (Jeremy Lefroy), for Stevenage (Stephen McPartland) and for South Cambridgeshire (Heidi Allen) were cited as possible members of a group of Tory MPs who are putting pressure on the Government on the matter. I am a less frequent reader of The Daily Telegraph, but I understand that they were also mentioned in that paper this morning. I read “ConservativeHome” even less frequently, but the hon. Member for South Cambridgeshire wrote very well there this morning. [Interruption.] On this occasion, it was a brilliant article. She said:
“What has suddenly changed in the lives of these individuals that they are suddenly fit enough or not fit enough to work? The beauty of this intermediate WRAG group is that it is just that, intermediate. On the road to returning to work, but not quite there yet. Recovering from chemotherapy, but needing to keep the heating on that little bit more. Many people who are ill are desperate to work, but need to be supported financially until their health improves. There are also structural and economic barriers standing in their way; reducing financial support only serves to create a further hurdle to be overcome. Many of these people have worked and paid in for many years before falling ill. They deserve better than this.
The voters who trusted us”— that is, Conservative Members—
“to build a fairer society deserve better than this.”
I pay tribute to the hon. Lady and her colleagues who are thinking about supporting the Lords amendments. I desperately hope that those whom I have mentioned have been working on colleagues to join us in the Lobby later.
The issues at stake regarding ESA WRAG and universal credit work allowance are the very same issues as those with the cuts to tax credits, on which many Conservative Members honourably lobbied hard. The measure will impact on low-income families and on disabled people who are looking for work. The cut will, according to the organisations mentioned, including the Equality Trust and Citizens Advice Scotland, disincentivise people from going into work.
The Welfare Reform and Work Bill may well be the best example of doublespeak outside Orwell’s texts. The fact is that the Bill, as the Government would amend it, is unfit for work. The assessment of third sector associations, Opposition parties and the House of Lords is that the Lords amendments must remain. We have seen the Government forced through the courts into a welcome U-turn on the benefit cap for carers. They have also been told by the courts that the bedroom tax is discriminatory for disabled people. The UN is investigating the Government’s welfare cuts. Disabled people should not need the High Court to tell the Tories what is right and what is wrong.
This is our last opportunity to oppose the Government’s plan to stop measuring child poverty, and to oppose their shameful attempts to slash by £30 a week support for people who are unable to work because of ill health or disability—a proposal that is vindictive and woefully lacks the evidence base to support it. I hope that Members across the House will think carefully and consider the impact that their vote will have on the lives of people up and down these isles. Having considered that, there is only one course of action open to us today—to oppose the Government’s shameful proposals and support the Lords amendments.
I rise to speak to Lords amendments 8 and 9. Reforming our welfare state was one of the greatest challenges facing the previous coalition Government and it continues to be one of the greatest challenges facing this Government. We are making phenomenal progress, with record levels of employment, and the Welfare Reform and Work Bill is unquestionably at the heart of this transformation.
Welfare needed to change. I saw the restrictions it placed on the aspirational potential of so many capable people. In my business, I had bright employees shackled to the state by the impenetrable barrier of the 16 hours of employment. I know some doubt the power of universal credit to transform lives, but as a member of the Work and Pensions Committee I have seen it operate. I am in absolutely no doubt that it marks the beginning of a new age, in which the individual and the state are partners in the future opportunities of the individual and their family.
Yet I feel an uncomfortable sense of déjà vu. Change needs to happen—but in a way for which those affected can prepare. We are debating whether we should cut the ESA WRAG allowance, which is typically provided to about 500,000 people recovering from significant illness as they transition from ill health to being fit to work. The Department for Work and Pensions talks about a White Paper that will set out its strategy of offering a different kind of support to help such people return to work, and some £100 million will apparently be made available by 2020-21. I listened intently to the Minister for reassurance about how that money will be spent. I acknowledge that she mentioned that a taskforce drawn from the Department and charities will be set up, but that should have happened before decisions were made to reduce financial support. I am uncomfortable about agreeing to the cuts until I know what the new world will look like for such people.
I do not believe mentoring and support alone will heat the home of someone recovering from chemotherapy or help the man with Parkinson’s who needs a little bit of extra help. I remain unconvinced that these people do not also have financial needs. The DWP states that many people stay stuck in the WRAG for too long—up to two years—but I would question its conclusion that they are financially incentivised to stay in that group. For me, the fact that they are stuck in that group says more about the failure of DWP processes than about claimants’ active choices. People in that group do not have an easy time of it. They must demonstrate an appetite to transition towards work, and they can be sanctioned if they do not do so. Anyone who has beaten cancer must surely burst with the desire to return to a normal life and be unlikely to want to be labelled as a cancer sufferer for any longer than is absolutely necessary.
From 2017, about 270 disabled people in my constituency of South Cambridgeshire alone stand to lose £30, or 29%, of their weekly income, if we accept the Bill in its original form and ignore the Lords. For them, I need to see more detail of the contents of the White Paper and to hear more about the financial support that will be made available before I can fully support the Government. If we do not get this right, we will damage not just the employment prospects and wellbeing of these vulnerable claimants, but our reputation and trust among the electorate. To secure my trust, I need to believe in the White Paper and that the £100 million will go some way to help those people. That is my warning shot to the Government. Today, I will not support them. I may abstain, but only for today. Let us get the detail right. Let us be a Government of sweeping strategic change, but let us also be one with the compassion and dexterity to look after the little man too.
One of the big changes in this Parliament compared with previous ones is that when we debate welfare reform there are now too many speakers, whereas in previous Parliaments the Whips had the key job of pushing colleagues in to speak. I will try to speak briefly.
I am immensely pleased to follow Heidi Allen not only because of the role she plays in the House, but because of the particular role she plays on the Work and Pensions Committee, of which I am also a member. Like her, I will speak in favour of Lords amendments 8 and 9, but I question whether the Lords are right in amendment 1.
I do so not because I think in any way that it is not necessary for us to consider more regularly whether people who are out of work in our society have an adequate level of income. Most of us would find it near impossible to live on the scale rates, as they are cruelly called, that we give to people who are out of work. The fact that millions do so is a credit to their budgeting skills, which most of us do not possess. However, this debate is about more than what the minimum income is. It is about a strategy to prevent us forever and a day debating in the House of Commons the number of people who are poor in this country.
I do not know, but it may be that the report that the Prime Minister asked me to write, “The Foundation Years: preventing poor children becoming poor adults”, will play a small part in the Government’s strategy on life chances. I argued that although income is important, merely measuring income is inadequate if we are successfully to counter the extent of poverty in our country. We ought to look at the drivers of poverty.
As soon as I embarked on that analysis, I was struck by the information that was volunteered by the reception teachers I visited in different parts of the country. They could predict within a very short space of time—within the first half term of school—where children would end up. They could say quite confidently who would be head girl, who would find it easy to fly in this world, who would struggle and who would fail. That got me thinking about whether we needed to move beyond merely measuring poverty as the great driver of poverty and to look at life chances.
Does my right hon. Friend accept that all Lords amendment 1 does is to require that income-based measures of poverty be reported alongside and on a level footing with other life chances indicators? They would not be reported instead of, but in addition to, those other indicators.
The report that I issued made that very point. It said that we should continue to publish the poverty data and that, alongside them, we should have the life chances data.
Of course, there is much more to this debate than what is on the record. Historically, there has been a big divide between those who see money as the only agent to counter poverty—it clearly makes it easier for people if they have more money—and those who ask whether money actually transforms life chances in the way we wish. That is the question that I posed. Specifically, we wanted to know, while taking account of the importance of income and class in determining life chances, whether there were drivers of poverty more powerful even than income and class. The report lists the most powerful factors when income and class are held constant—those factors that enable us to make progress even if we are not making the progress that we would like to see on a fairer distribution of income.
Again, I make a plea to the House. Although we ought to debate the adequacy of the minimum levels of income, Opposition Members and the many Government Members who are disturbed by the growing and gross inequalities in our society must not think that we will deal with those through benefit changes, important though they are. Throughout the western world, there are clearly great engine drivers of inequality that serve up to the rich—particularly to the very, very rich—rewards that are grotesque when compared with the average, let alone with those who earn the least in our communities. There is no debate about that. The debate is about where, at any given point in time, we should put taxpayers’ money. Up to now, everybody has been talking about this as though the Government have money. Governments have to tax our constituents to get money to redistribute it, and we must win people’s support for that.
The House is beginning slowly to accept that it is dangerous to have a welfare system that is more generous to those out of work than to those in work, which is why I particularly welcome the Chancellor’s strategy of moving towards a living wage and implementing that over the life of the Parliament. It is only a beginning, but it is very important. If we are successful in moving to that living wage without big unemployment consequences—I believe that we will be—that will give us more freedom to manoeuvre on where benefit levels should be set.
My plea is that we should not think that this is either one thing or the other. The Government will publish the data, and I am sure that if we had a chat to them they could do so alongside the life chances data. That is not really what the debate is about; the debate is about those who believe that the only agent of change is on the income front, and I do not wish to concede ground to anyone in emphasising the importance of income, especially for those at the bottom of the pile who are working or who are not working. We have the report on the foundation years, and if we are serious about trying to prevent poor children from becoming poor adults, we need a different strategy from the one we adopted until that point. It was all about cash transfers—important as those are—and I thought it was inadequate.
Reception teachers said that by the time children come to school they already know who is going to succeed and who will not. I also started asking other people such as health visitors whether they could tell us which children entering toddlerhood would be successful in later life. Midwives have clear views when mothers turn up for their first scan about who has drawn the short straw and who has not. If we are serious about this strategy—I make this plea to the Government because we will need powers to add these measurements once we have agreed on them—we must measure whether we are increasing life chances by having more parents who are ready for the birth of their child, whether the interventions that we make after that will be successful and see more children successfully enter toddlerhood, and above all whether more children are entering school ready to benefit from the powers of education.
Is measuring at key stage 4 when a young person is 16 so utterly after the horse has bolted that it will not make any impact? Teachers report a year’s difference in a child’s ability to communicate and learn by the time they are five, and we need to change that. No Opposition Members are talking about money or life chances; most of us are arguing for both.
The genuineness of the hon. Lady in making that point shows how the debate is changing—it was not always about that issue and I am grateful for her intervention. Let me re-emphasise her point. I was staggered when the Secretary of State said that one of children’s key life chances is at age 16, given that he has done more than anybody in the House to teach us about how crucial life chances are before age five, if we are really to change people’s opportunities and allow them to develop their best selves. I hope that when we conclude the debate, the Minister will say more about how important it is to weight those life chances before age five. By all means we should measure children at 16 and all sorts of other ages if we wish, but if we are serious about changing the life chances of the very poorest children in our constituencies, we must consider a series of life chances long before they reach school. Every reception teacher I met would say that life chances have been decided by the time that children come into school.
I welcome how the debate has developed in the past 10 years, and I hope I have stated clearly why I think the Lords are mistaken with Lords amendment 1, and how much I agree with the case put by my hon. Friend Debbie Abrahams, and by Heidi Allen who stated her support for Lords amendments 8 and 9.
Several hon. Members rose—
Ah, I did not realise the fellow had already spoken. [Interruption.] No, no, I do not think he needs to repeat his speech! He was on the list, but had not been ticked off it. Never mind. We will hear from another fellow instead, Mr Peter Heaton-Jones.
It is a particular pleasure to follow Frank Field, who speaks with unrivalled expertise on these matters. I agree with his fundamental point. I speak to oppose Lords amendment 1, which seeks to amend clause 4, as passed by this House. I do so as a member of the Bill Committee that scrutinised the Bill—during 15 sittings or so, if I recall—last autumn. Clause 4, as passed by this House, introduces a new duty for the Secretary of State to report annually on two Life Chances measures: first, the proportion of children living in workless households; and secondly, as has been mentioned, their educational attainment at age 16. In effect, therefore, it repeals most of the Child Poverty Act 2010.
The Lords amendments in effect seek to replicate the parts of the 2010 Act that relate to the measurement of the proportion of children living in poverty. In particular, their lordships’ amendments seek to require the Secretary of State to report on four specific measures: relative low income; combined low income and material deprivation; absolute low income; and persistent poverty.
However, the Bill, as passed by this House, does not mean that the Government will stop measuring and publishing such data on household income. The Government will continue to publish annually low-income data in Households Below Average Income. Those data include—Members may get a sense of déjà vu all over again—relative low income, combined low income and material deprivation. They probably ring bells, because those categories replicate almost exactly the measurements that the amendments from the other place seek to reinstate in the Bill. To put it simply, the Government are already doing it. The information is available for all to see and will continue to be so. The HBAI publication has protected status as a national statistics product and Ministers have undertaken in this House to publish the data annually. Lords amendment 1 is—I say this with the greatest respect—simply unnecessary. Its effect would merely be to replicate something the Government are already doing.
My understanding, with all due respect to the hon. Gentleman, is that there is no statutory obligation on that reporting. There is certainly no statutory obligation to eradicate child poverty by a specified time, which is crucial.
The Government have made a commitment to continue to publish the data annually. They have been very clear about that fact. When it comes to the relationship between those measurements and the eradication of child poverty, under the previous Labour Government the number of households where nobody worked doubled and in-work poverty increased: the Government missed their child poverty target by 600,000.
The Bill, as passed by this House, does not redefine poverty to exclude income, as some of its opponents often say. That argument assumes that measuring income is an effective, helpful or comprehensive way of measuring poverty in the first place. It is, in fact, none of those things. In that respect, the 2010 Act was flawed in its approach. The current income measures enshrined in the Act show that the number of children in relative poverty can actually go down in a recession and up in times of growth. That is simply perverse. Furthermore, the measures incentivise what is often known as a “poverty plus a pound” approach, where families can seemingly be moved out of poverty without any change whatever in the underlying factors that got them into the position of low income in the first place. The Act is simply not doing what it is intended to do.
It is interesting to hear my hon. Friend’s points. Does he agree that under current measures the only way completely to eliminate relative poverty would be to collapse the economy completely and make absolutely everyone poor?
It sounds like my hon. Friend has been reading the Labour party’s manifesto. The 2010 Act is flawed, and in seeking, in effect, to reinstate its provisions, the Lords amendments are similarly found wanting.
Let us look at what the Bill, as passed by this House, actually does in its current format and why their lordships’ amendments are not in my estimation constructive in seeking to reverse these measures. The Bill enshrines in legislation the Government’s commitment to end child poverty and to improve children’s life chances. It focuses on the actions that we know will make the biggest difference to the life chances of children and young people—both now and in the future. We need measures that drive the right action to tackle the root causes of poverty rather than just tackling the symptoms. That is why the Bill introduces the new life chances measures of worklessness and educational attainment.
The Government’s policies in targeting life chances importantly look at outcomes, not inputs—it is a comprehensive approach—recognising that the real route out of poverty is through work, not welfare. Some 74% of previously less well-off, workless families who found work have escaped “the poverty trap”, if one can use that phrase.
The Bill seeks to replace the wholly arbitrary measure that a household is in poverty if its income is below 60% of the median wage. That is totally arbitrary. In a recession, with all households’ income tending to reduce, it gives the completely false impression that fewer households are in poverty because their relative income is seen to rise. It is totally perverse—a recession leading to less poverty. The figures simply do not add up. It is a discredited system, and it did nothing under the previous Government to tackle the underlying root cause of childhood poverty. I therefore submit that these amendments are wrong to try to reinstate that old discredited system. It beggars belief that some people believe that we can base our strategy for improving children’s life chances on income measures that would suggest that the last recession somehow caused a significant fall in child poverty. Of course we should not do so, but that would be the effect of the Lords amendments if this House accepts them.
That is why, of course, it is important to have a package of measures, so that we can look at all aspects of how children and their families are living in poverty. We should not assess just relative low-income measures; we should include other measures such as material deprivation, which is critically important.
Material deprivation is one of the things that will continue to be measured by the HBAI statistics. It will still be included—[Interruption.] I am sure that the Minister will rise to her feet and reflect this fact; a commitment has been made that the measure of material deprivation will continue to be published annually. It will continue to be part of the official ONS Government statistics. The hon. Gentleman says that we need a package of measures, but that is exactly what we get. We get the HBAI information; we get those statistics; we get the commitment that these data will be published annually and enshrined, as I say, by the ONS. On top of that, we get what the Government suggested in the original Bill, which this House passed—further measures of attainment. We get the best of both worlds.
Order. Let me gently say to Neil Gray that he has already given us the benefit of his views for no fewer than 19 minutes, by which I assure him we are all greatly gratified, but 11 Members still want to speak. The hon. Gentleman is perfectly in order in trying to intervene, but I am trying to set out the context, and I know colleagues will want to be considerate of each other.
Thank you, Mr Speaker. I shall take what you say as a gentle reminder for me to move things on, too. I shall do so.
Moving households closer to employment is what improves the life chances of young people in the long term. That is why the Government are focusing on getting parents into work, and then getting their children into work through education. We are tackling the cycle of deprivation that has stifled the ability of too many children to reach their full potential for too long, and has condemned generation after generation to a life in which underachievement and a lack of aspiration become inevitable.
The Government are seeking to change that cycle fundamentally. We are committed to the far more effective approach of targeting the root causes of poverty, which include a lack of educational attainment and family stability. Work remains the best route out of poverty, and higher educational attainment is the best route into work. That is why the Bill that was passed in the House of Commons seeks to introduce two key measures of poverty, namely the proportion of children living in workless households and educational attainment at the age of 16. The Government are focusing on those factors because they have the greatest impact on child poverty and the life chances of children. The Lords amendments propose a reliance on spurious measures which will do nothing to tackle the problems at their sources. They are misguided, and we should therefore not support them.
Thank you, Mr Speaker, for calling to speak in this important debate. I shall be as quick as I can.
Let me begin by pointing out to Chris Heaton-Harris that we already measure educational attainment, and we already measure worklessness. It is not a question of what we should repeat; it is a question of what matters. I shall not go into detail about the hon. Gentleman’s comments about “spurious measures”. I am sure that my hon. Friend Helen Goodman will do that shortly, so I shall leave it to her.
I want to return the debate to the basics. What are we debating today? What do we mean by transparency in regard to child poverty? That is a very simple question about what we in the House believe poverty to be. Should it be defined as a measure of income, or as a measure of educational attainment or worklessness? We already apply those measures to other statistical estimates of what is going on in our country, but what does the law say about what poverty is?
I asked myself this question: does the amount of money that people have make them poor? Well, it seems obvious to me that it does. A parent—a lone parent, for instance—might not be well paid and might be unable to work many hours. That parent would not suffer from worklessness, but he or she would still be poor. A child might achieve great things at school, securing all the certificates and qualifications, and still suffer the effects of not having enough money at home. Plenty of children go to school, work hard and do well, despite seeing their parents suffer from the stress of trying to pay the mortgage or the rent, or not having enough money to put in the electricity meter so that they can wash their school uniforms. That happens to plenty of children. This is not about educational attainment or worklessness; it is about the fact that the cause of poverty is not having enough money.
Why does that matter? It matters because, in the coming years, the Tories are going to make people poor, and, specifically, they are going to make children poor. We know that, because the Institute for Fiscal Studies has told us. Families will be worse off, despite the so-called living wage—many of them will be in work—and their children will be affected, whatever the qualities of their teachers at school, which may be legion. We have some fantastic schools in this country, which help children to achieve despite poverty at home.
The next question is straightforward: what should we do about the situation? The Government have made clear that they do not think money makes a difference to life chances. I have made clear that I think it does, but why would anyone listen to me? I am a Labour politician. However, there is independent evidence. My hon. Friend Debbie Abrahams mentioned some of it in her fantastic speech, but I can add the information that Kitty Stewart and Kerris Cooper, of the London School of Economics, reviewed 34 studies of whether family incomes affected children’s outcomes throughout the OECD, and found that family income mattered. What is the point of having some of the world’s finest researchers if we do not listen to them? We know from an FOI request that of the 250 replies on the issue to Government consultations, only two agreed with their desire to forget about reporting on the income target. The vast majority of people agreed that money matters.
In conclusion, I say that this issue matters and that the Lords are right for two reasons: it matters because of the principle and it matters because of the evidence. It is possible to be poor and in work in our country, and it is possible to be poor and do well at school in our country, and it matters what those people’s lives are like. We must not forget about being transparent about the poverty in our country. It is the cause of ill health and distress, and that is why in principle it matters. The evidence says that money matters, alongside a good education and a healthy life, to outcomes. So if we do not act on money, we embed disadvantage in our country. Therefore, let us not say to those who work too hard for too little, “You don’t count.” Let us not say to children doing well at school despite poverty at home, “You don’t count.” On behalf of those families and all families and their children, I ask the Government to think again.
I would like to address Lords amendments 8 and 9 and the question of employment and support allowance and the work-related activity group, which is the group of people who currently have limited capacity for work.
I support the Government’s intention to enable more people who are on ESA to go back into work, but, as the Minister said, that is not happening, with only 1% per month of that group of nearly 500,000 people returning to work. The Government’s proposal to combat that is to remove the additional amount paid, starting from the 14th week, to people assessed as being within that group, and at the same time they wish to introduce a completely new system of support designed to help people back into work. The new system of support will be set out in a White Paper, which has not yet been published. What we do know is that the system is expected eventually to be funded at approximately £100 million a year, and I will come back to that.
That White Paper is incredibly important to the matter we are discussing, because it is the replacement for what the Government are proposing to remove. I would like to set out four things that I believe the new system of support that the Government are proposing must have within it.
First, it must ensure that people’s assessments are done much more quickly than at present. Currently, people are waiting for assessments for months, and during that time they receive just the basic assessment rate, which is the equivalent of jobseeker’s allowance, regardless of whether they eventually go into the WRAG or the support group. For those whose condition means they have additional costs to what is assumed for those on JSA—for instance, as has been mentioned, energy bills—that can mean a struggle to pay those costs. That can lead to them going into debt, regardless of whether they eventually go into the support group or the WRAG, or indeed into neither. I believe that all work capability assessments should be completed well within the 13 weeks for which claimants are on the assessment rate so, that they are not put at a disadvantage by the slowness of the system. I would like to see clear evidence in the White Paper that that is going to happen, because it would benefit not just people going into the WRAG but people going into the support group.
Secondly, the assessments themselves need to be more sensitive. That particularly applies to people with mental health conditions, who are about 50% of those in the WRAG. That is another reason for ensuring that people have their assessments rapidly. If they have mental health conditions and need support, the earlier they receive it, the better. As the noble Baroness Meacher said in the other place:
“Common sense tells us that someone with an anxiety disorder or depression will find rising debts and the prospect of eviction from their home impossible to cope with.”—[Hansard, House of Lords, 27 January 2016; Vol. 768, c. 1306.]
Thirdly, the new system of support will need to be based on clear evidence of what works for people, so I ask the Minister whether the proposals in the White Paper will be piloted to see whether they work, or whether they will be based on current best practice. If it is the former, there is little time, as they will need to be in place by April 2017.
Fourthly, the new system must include a full and accessible scheme for cash payments over and above the assessment rate to meet additional costs if people have them. I have already referred to the extra energy costs arising from people having to stay at home much more as a result of their illness or disability. There may also be costs for special diets and so on. I mention accessibility because I have seen schemes where support is available but very difficult to obtain—people have to jump through hoops to get it. Anyone who is assessed for the WRAG under the new system should therefore automatically be asked about additional costs resulting from their condition that are not covered by PIP. Those costs should be evaluated rapidly and, if accepted, met. When the White Paper is published, I will look for it to address those four points.
The hon. Gentleman has made thoughtful points. Does he not accept that the problem is that we are being asked tonight to vote to take financial support away from people, without the safeguards that he has outlined being known? It is like taking a jump in the dark, and the Prime Minister has told us that that is not a good thing to do.
It is like that, and I would have preferred to see an assessment such as I proposed in the amendment that I tabled on Report. I hoped that perhaps the Lords would take that up, because it is important. To some extent, it is an act of faith in the Government and in the White Paper, and that is why I am setting out these points now. As my hon. Friend Heidi Allen said, we hope to see action on them.
I have already talked about accessibility, which is extremely important. When somebody is assessed for a group, they should be asked about accessibility instead of being referred to somewhere they might find difficult or somewhere they do not even know. That should be part of the assessment process and run by the Department for Work and Pensions, not other Departments
When the White Paper is published, which I hope will be as soon as possible, I will be looking for it to address all those points. If it does, they system may well work better for people on ESA who can move back into work. Let us remember that this is about people who have limited capacity for work, not people who cannot work, who must continue to be in the support group and receive the support supplement.
The risks of a scheme that does not meet those criteria are considerable, first and foremost for the people involved, who may end up in limbo, neither helped into work nor able to meet even their basic living costs. They may end up in the support group long-term, which is not in their interest or the public interest.
This will cost more than £100 million per annum, which is what has been allocated—probably considerably more. But if the Government are serious about supporting people back into work, as I know they are, a good scheme that is initially more expensive will both be better for those who need support and probably cost the taxpayer less in the long run. I therefore urge the Chancellor to back such a scheme with the funding it needs, and the Minister and the Secretary of State to push for it. The status quo, as embodied in the Lords amendments, is not satisfactory, but its replacement must be an improvement for those in the WRAG—we cannot afford to go backwards.
I want to speak to Lords amendments 1, 8 and 9. When I came into the Chamber this afternoon, I did not intend to say much about Lords amendment 1, but I was so incensed by the way in which the Minister dealt with the issue earlier, and by her total lack of compassion for anyone who might be affected by the measures in the Bill, that I thought I must say something. I must point out to the House the contrast between her approach and that taken by the Bishop of Durham when he moved amendment 1 in the other place, because his approach was measured, based on evidence and full of compassion and care for the people affected. He pointed out what I think is self-evident to most of us in this Chamber, which is that
“low income is an important influence on children’s outcomes and life chances”.
In fact, we have had an often bizarre discussion today in which there is the suggestion that, somehow, child poverty is about a whole collection of measures, and nothing to do with income, which is clearly ludicrous. The Bishop of Durham said that
“the Government’s concern about the current child poverty measures is that they have encouraged an overdependence on income transfers, diverting attention from policies that tackle the root causes of poverty.”
He said that, as I pointed out earlier, Lords amendment 1
“does not seek to reassert the primacy of the existing child poverty measures: it simply requires that income-based measures of poverty be reported on alongside, and on a level footing with, other life chance indicators, such as worklessness and educational attainment, in order to acknowledge the significance of family income for children’s well-being and future prospects.”—[Hansard, House of Lords, 25 January 2016; Vol. 768, c. 1047.]
That is particularly important, because we have an assessment from the Institute for Fiscal Studies showing that the Government’s desire to close the fiscal deficit chiefly through spending cuts means that the prognosis for child poverty over this decade is bleak. We do not want a range of Government measures that make it more difficult for us to assess the impact of cuts on child poverty and the direct relationship between child poverty and low income. I have heard nothing from the Minister today to persuade me that she is following the right approach.
I hear what the hon. Lady is saying, but is she not advocating a return to the past? Does she not recognise that it is not an either/or situation, but a both situation? Reintroducing child poverty measures is, at the very least, arbitrary and could have unintended consequences.
Order. May I just point out that if Members continue in this way, and it is perfectly in order for them to do so, there will be some who will not get in? It is as simple as that. If everyone speaks for five minutes or more and takes interventions, a number of people will not get called to speak. It will be no good blaming the Chair; you will have to blame each other.
There is no way at all that we can say that the relationship between a person’s income and poverty is an arbitrary measure. I say to Mr Burrowes that I have made it very clear, for the third time now, that Lords amendment 1 is about requiring an income-based measure alongside—not instead of—other measures.
We have heard many attacks on Labour’s record this afternoon. Labour reduced child poverty by almost 1 million. The independent assessment by the Institute for Fiscal Studies and others was that it was a remarkable achievement, certainly without historical precedent in the UK, and impressive compared with other countries too. Rather than deriding our record, perhaps the Conservative party should see what it can do to build on it.
I turn briefly to Lords amendments 8 and 9. I am sure that many Members have heard from a number of their constituents about them, and I wish to talk about someone who wrote to me yesterday. She is a sufferer of multiple sclerosis. She wrote:
“I’m writing to ask you to support the amended Bill and ensure Clauses 13 and 14 remain out of the Bill when it is debated in the House of Commons. If this benefit were reduced, it could have significant implications for people who have MS and other people living with a long-term condition, in some cases making their health worse and pushing them even further from employment. Having a long-term condition such as MS is expensive. It adds extra costs to finding employment or training that people who receive jobseeker’s allowance don’t experience. These costs include things like paying for taxis to get to and from interviews.
Lord Low’s review of the proposed reductions in ESA also found no evidence to support the Government’s argument that £30 was a disincentive to work, which has been given as a rationale for these Clauses. The report also highlighted the negative impact that this reduction would have for people with disabilities like MS . Keeping clauses 13 and 14 in the Bill doesn’t make sense.”
I could not put it any better. We have received a great deal of testimony from our constituents, along with the excellent review by Lord Low and Baronesses Grey-Thompson and Meacher, which the Government have simply ignored. I ask the Minister to think again and listen to the people who know something about the possible impact of this policy.
I should like to speak to Lords amendments 1 and 8. In looking at child poverty, I am worried about the numbers for the income targets that we have discussed. My concern is that the Government are effectively just managing the situation, rather than tackling the problem. The Bill seeks to refocus our approach so that we concentrate solely on tackling the root causes of poverty, rather than wringing our hands and looking at the symptoms.
Between 2003 and 2008, the Government spent roughly £300 billion on child poverty, but the figures remained broadly unchanged. Such examples show that we need a different approach. We have heard that the reporting of incomes has had a perverse effect on child poverty. In a recession, poverty can decrease. Conversely, in periods of economic growth poverty can go up.
Let us concentrate on those root causes. The deadline for the elimination of child poverty has been discussed, but we need to think how we would meet an arbitrary deadline if we do not understand what we are trying to tackle. We need to understand the root causes of poverty, and focus on those.
The Minister has made a commitment to continue to publish the figures on low incomes in the annual report on households below average income. The report uses national statistics, so it is guaranteed on that basis. As I have said, we have heard the Minister’s commitment to publishing those figures every year. We have been asked by the Opposition if the figures can be reported alongside information on life chances. However, that reinforces the perverse consequences that can result, so it is important that we focus solely on what will help to eliminate child poverty.
Turning to changes to ESA, 61% of people in WRAG want to go back to work. The majority of people who are out of work want to go back to work, so it is important that we focus support and help people. We should offer a safety net for people who cannot go back to work, and we should do everything that we can to support people who can go back to work and want to do so. WRAG was set up with good intentions, but unfortunately it has not been effective enough. It is not right that we have a system in which only one in 100 people can find work, whereas one in five JSA claimants go back to work.
The intermediate WRAG arrangement has become a long-term waiting room, entrenching worklessness, because it focuses on the symptoms, not the root causes. That is why I am keen that we take the cash—up to £100 million a year by 2020-21—and repurpose it to address the needs of the people in that group.
I understand the concerns of colleagues about what will be in the White Paper and how the process will work, but as a member of the Committee considering the Bill I have seen the dedication of providers, disability charities and support groups, their commitment to the people they seek to help, and the skills and experience they have. That is why I know that the taskforce that is being set up will help to bring in the expertise of the charities, providers, support organisations, think-tanks and local authorities. I ask colleagues to have faith in the experience and expertise of those people, which will give us a solid basis on which to spend that money.
As the national living wage and personal allowances increase, we have an opportunity to tackle childhood poverty and bring people into work. We must make sure that work pays more than benefits, and that the system supports vulnerable people and is fair to people in work who pay their taxes.
I begin by addressing amendment 1. The Labour Government had four poverty measures when we took through the Child Poverty Act 2010—absolute, relative and persistent poverty and material deprivation. We measured all of them. Between 1997 and 2010 we cut the number of children living in relative poverty by 1 million, and the number of children living in absolute poverty by 2 million. There is nothing arbitrary about this. It is important to have those measures because they are used across the OECD. That enables us to compare our performance with that of the other countries that UNICEF studies.
Ministers want to abandon those targets because they intend to freeze benefits and cut child tax credits if there are more than three, four or five children in a family. Those measures will increase the number of children living in poverty. Because they do not want that to be evident to the whole world, they do not want to use the targets. We should not let them off the hook.
We all think life chances matter. We are all interested in the correlations between the kind of childhood people have and what happens to them later in life. No one is saying that we do not want to measure those things, but I remind the House that not being able to go on a school trip, never having a holiday, not having a birthday party—these things matter in themselves because children are not human becomings, but human beings. Childhood is a part of life. The quality of life in the early years matters just as much it matters what our lives are like or what the quality of our parents’ life is like.
On amendments 8 and 9, I want to bring into the House the voice of the people affected. Those in the ESA support group are not people who are not working out of perversity or because they have not done the arithmetic and do not know what the incentives are. They are not in work because the jobs do not exist, or because of the barriers to work. They may have problems with transport, they may be stressed, they may be exhausted or they may be struggling against extremely difficult odds. In my constituency there are 860 people in the ESA work-related activity group. I get letters from them and have meetings with them every single week.
This week I heard from a woman who wrote:
“My husband…has been in receipt of ESA-Support Group benefit…for some considerable time due to long standing health problems of both a physical and psychological nature. He has recently had to resubmit the…questionnaire and we have just had notification that he has been placed in the Support Group but this will only be until November…His last award was for three years.
Considering the…letter from the GP”— and the psychologist—
“we can’t believe the DWP think it is in any way appropriate to put my husband through this process twice within the same year…He will now spend…months worrying and becoming increasingly anxious about having to face the process again”.
She adds that he is “extremely vulnerable”. Treating this group of people in that way is not helpful. Making them poorer, not helping them to heat their homes or to eat properly, and making them anxious about whether they can pay their rent is not helpful.
The week before I received that letter, I had a letter from another constituent, who said:
“I’m petrified. Atos did my ESA medical...yet they still lied. I’d told them my disabilities and…they didn’t mention any of them…I was called by a woman from the DWP who told me my ESA was cancelled. She seemed happy (really happy) to gloat about this…I had to live on my 9 year old daughter’s £20 child benefit and child tax credit for 4 weeks. It takes a split second to stop benefits but 4 weeks to reinstate.”
She has now been told she must provide her own medical records, which will cost £500 because doctors are charging to provide them. She continues:
“I can’t afford this on £102 a week…I’ve not slept in ages”.
She adds that she has “cried a lot” because she knows what will happen to her.
That is the situation people are already in, and we absolutely cannot see them pushed down even further. I appeal to the Minister’s better nature. I appeal to her to think again about amendments 8 and 9.
Let me start with the measures of child poverty. Using measures of relative income as the main driver can have some bizarre impacts. For example, we focus on those just under the line, not those who are most in need or most desperate, and we try to get them over the line to make the numbers work. As I touched on in an intervention on my hon. Friend Peter Heaton-Jones, that approach can inspire the view that making the whole of society poorer will end relative poverty, even though no one is better off. As we heard, the bizarre outcome is that a recession is, in theory, the best news when it comes to reducing child poverty, whereas, in a boom, things would be the other way round.
That is why it is right to focus on creating real life chances. I speak as someone whose mother grew up on a council estate and whose father worked for 37 years in Devonport dockyard—he had to work hard with his hands to get what he could for his family. That is important: this is about social mobility and achievements such as those.
A Scottish National party Member noted in an intervention that it makes sense to measure these things not just at 16, but all the way through education. There is perhaps more work to be done, therefore, and I look forward to what the taskforce says, but it is important to look at what our education system turns out at the end of the day. One example that has been given is that, a few years back, more children came out of Eton with three As at A-level, allowing them to get to top universities, than came out of the entire cohort of children on free school meals in England. That really is a thought-provoking point. We may disagree about how to tackle it best, but it is certainly no great compliment to our system.
Employers with jobs want people with skills. They want to employ people and to put them into high-paid job. However, they find that people just do not have the skills or the ability to take those jobs up. That is where educational outcomes have an impact on life outcomes and on whether people stay in poverty. If people do not have the skills to move into employment, that opportunity is not there. That is why looking at the life chances side is so important in tackling poverty and preventing people from being locked into a cycle, with parents being in a low-paid job, children going into a low-paid job and grand-children going into a low-paid job.
We have had an interesting debate about WRAG. The figure regularly quoted is that every month only one in 100 of those in this group gets off benefits and into work. I cannot imagine any other policy with a success rate of one in 100 where we would be hearing furious arguments defending it. In contrast, the figure for jobseeker’s allowance is one in five, yet many people will equally have had difficulties and barriers in getting back into work, and challenges in seeking alternative employment if they have been made redundant in one industry and need to transfer to another. I could understand it being a slightly higher rate, but the fact that the figure for those leaving WRAG is a twentieth of the rate for JSA shows that things are going wrong. Some may argue that it may be partly due to whether the assessments of who should be in the support group are being done correctly. The recent investigation of this issue by the Public Accounts Committee—I am a member—perhaps partly explains the figure, but it does not go to the core of why it is a twentieth of the rate of people coming off JSA. That is not something to shout about and defend, but to condemn.
I am pleased that the Government are looking to tackle this and bring forward these measures. The details that will come from the taskforce will give us more of a plan. The current system is not working—that is starkly obvious. I am therefore prepared to support the Government in making sure that we have support systems that work in helping people back into work, as well as the right targets to ensure that people can develop their potential and that more sons of dockyard workers and school teaching assistants can end up in this place.
My concern about this change—in essence, this repeal of the Child Poverty Act 2010—is that the policy seems no longer to be about wanting to eradicate child poverty but about airbrushing it out of existence by removing the phrase, the measurements, and not just the reporting but the statutory aim of eradication. We see many measures: a benefit cap being reduced or a benefit freeze, changes to tax credits after having two children, and people in the ESA WRAG losing £30 a week. I dealt with patients like that as a breast cancer surgeon. These people are stuck at home; they do need to keep the house warm and they do need that extra bit of help. They have been classed as not yet fit to work. We have had impact assessments on some of these measures, but we have not had a cumulative impact assessment. Some families will be hit by all these measures, and the IFS is talking about losses of between £1,000 and £1,500 a year. To take that kind of money away from the poorest people will have a huge impact.
Like Debbie Abrahams, I had the honour of taking part in the all-party group investigation into the impact of these changes on child poverty. We heard evidence from the Faculty of Public Health and from many charities on the changes that we can expect in child poverty and the impact that child poverty has on health. The University of Liverpool has estimated that we lose 1,400 children a year under the age of 15 because of poverty. That number is equivalent to the size of a big secondary school. If the roof of a secondary school was collapsing every year, we would be out there doing something about it, but we do not. This is about neonatal mortality, infant mortality, accidents, violence, suicide, addiction and alcoholism, and the problem is that we think we can just ignore it.
Earlier in the debate, we talked about mental health. Children in the poorest quartile have three times the incidence of mental health problems. If their parents suffer from depression and stress, which we know is aggravated by poverty, they have a 60% increase in mental health problems. There is a five times higher incidence of infant mortality. The Marmot report estimated that the deaths of one in four children before the age of one could be prevented if their mothers had had the same nutrition, health, chances and lack of stress as the people who are most comfortable.
Five times as many children who are in the poorest quartile are likely to die as a result of road traffic accidents, while 15 times as many are likely to die as a result of a fire. Malnutrition is on the increase. There is evidence of low iodine and low folate in teenage girls as a result of poor nutrition. That leads to cretinism and spina bifida. We are going to produce generations of children who will suffer in the future. Marmot said that disadvantage starts before birth and accumulates through life.
I am not against including a measure of life chances. I do not accept that we have to choose between two separate horses. We can measure both. The only life chances that are being talked about are worklessness and educational attainment at 16, which is long after the horse has bolted. Two thirds of children in poverty have a working parent, so they will simply be dismissed. At 16, we have no chance to do something.
I accept the argument of the hon. Member for Torbay that we need to develop measures, but we also need interventions. We keep hearing that there is going to be a focus on changing these children’s lives, but how are we going to do that? There should have been a White Paper first so that we could know what was being offered to change their lives, because they will cost us throughout their lives, through failed education, worklessness, ending up in the justice system and addiction.
It makes sense to invest money in their childhood so that they are not a year behind. American research has also found that their brains do not develop to the same level as others. We need to change that, but we must not simply think that by ignoring the phrase “child poverty” it will disappear. There should be a statutory obligation to report it and we should aim, as was promised, to eradicate it by the end of this Parliament.
It is a great pleasure to be given the opportunity to speak in this debate. I consider myself to be a proud and loyal member of the Conservative party, and as such I believe it is my duty to hold the Government to account and to help them when they lose their way. I am very proud to have had a number of conversations with the Minister for Employment, who is very happy to listen and talk. She is very welcoming and tries to work with others to achieve change. I was very happy with some of the reassurances she gave me, but I am sure that Opposition Members will be delighted to know that I will join them in the Lobby when we vote on Lords amendments 8 and 9 in about half an hour, because I am not happy with all the assurances I was given by others in the Department.
I want to clarify a few things. On the ESA WRAG and ESA support group, we are talking about 500,000 people who have been defined as being too ill to work under the measures introduced by the coalition Government in 2010. They have already been assessed as needing more support to go into work.
The fact that one in 100 are leaving that group and going into work is our failure. Something has gone wrong with the back to work programme. I am not proud of that. I was very keen to support the back to work programme, and disabled constituents of mine were very happy when we introduced it, because they felt that, for the first time in their lives, they would be given the opportunity to get out there and get real, practical support to get back into work. They do not want training sessions or to be taught new skills that are of no use whatsoever to them by a company that gets paid to do so. They are interested in getting back to work, and that is what I and the Government are interested in, too, but the problem is that, although we all want the same thing, we differ on how to get there.
The ESA support group consists of people who are just too ill to work. We are effectively saying, “We’re not writing anybody off, but if you’re in the support group you don’t need to find work, we won’t really give any support and we’ll just leave you there.” I am concerned that, by abolishing the ESA WRAG for new claimants—the Minister has been clear that that does not apply to existing claimants—from April 2017, we will push more people into the support group. Someone with a progressive disease such as motor neurone disease, which is getting worse and worse, will end up being pushed into the support group as fast as possible. I have a problem with that.
The Disability Benefits Consortium has said that almost half of those in the ESA WRAG have mental and behavioural disorders, which include mental health issues, learning disabilities and autism. Before the debate, we had an urgent question about the Government providing an extra £1 billion for mental health. Almost half—248,000—of the 500,000 people in the ESA WRAG have mental health issues. With that £1 billion going to the NHS, we have to wonder what we can do to support back into work those who have learning difficulties, autism or a variety of other issues. Some employers simply do not want them. Some small businesses find it very difficult to employ them. How do we go out and find them that opportunity? How do we find them a real job, as opposed to a fake job?
Parkinson’s UK, Rethink and Mind jointly say:
“This policy is poorly conceived. It will ultimately cause unintended harm and push sick and disabled people further from employment.”
Scope has said that the changes will disincentivise disabled people from finding work and will create a greater incentive for people to want to be placed in the support group. Macmillan has said that the changes will have a significant, detrimental impact on people affected by cancer. The bottom line is that the charities with which the Government will work in the taskforce to help to deliver the changes that will be in the White Paper are very concerned about the changes and do not see how they will work.
I do not accept that £30 a week is an incentive for somebody not to go to work. Most Conservatives do not accept that. Most Conservatives consider it to be their proud duty to look after the disabled. Ideologically, we have no issue about providing a welfare system that is a safety net for those who need support when they fall on hard times, to help people back into work. My concern is that the way in which the Bill will be perceived, and its practical implications, will lead some people who have disabilities to feel as though they are being pushed into the support group or into work.
I have a technical question for the Minister, which I hope she will be able to answer later this evening or in the next few weeks. If some of the original 500,000 people in the ESA WRAG find work but cannot cope with it, will they be able after April 2017 to go into something like the ESA WRAG, which will no longer exist? Or will they just have to push themselves towards the support group? Will there be an incentive to do so?
There are lots of other points that I would like to make, but as we are running out of time I will make one quick point. We have heard that £100 million is being reinvested, but we are taking £640 million away, so £540 million is going. If we are that keen on it, why do we not reinvest the whole £640 million into helping people back into work?
I will be brief, because other Members have covered some of the points that I wanted to make. The Welfare Reform and Work Bill will create hardship across our country and push people further into poverty. Child poverty is rising, and independent projections from the IFS show that the fall in child poverty rates that we saw under Labour is at risk of being reversed. We hear from the Children’s Society that if the proposals in the Bill are enacted, we should expect child poverty to rise even more steeply.
Research by End Child Poverty identified that 4.1 million families and 7.7 million children have been affected by below-inflation rises in child benefit and child tax credit over the past three years. One in five families said that they had cut back on food and heating because benefits have been increased below inflation. The Government’s attempts to mask the impact of child poverty by removing income as a measure will fool nobody. Child poverty should be something that we all recognise and want to combat. Sadly, the Government seem to be trying to bury the effects of their social security policies on child poverty; it appears that the Government are far from taking the situation seriously.
The Social Mobility and Child Poverty Commission has indicated that 1.5 million children live in poverty because their working parents do not earn enough to secure a basic standard of living. As was mentioned earlier, the commission stated in its December 2015 report that
“it is not credible to try to improve the life chances of the poor without acknowledging the most obvious symptom of poverty, lack of money.”
I believe that the Government’s position is just not credible.
I turn to the Government’s proposals to cut ESA in the WRAG. If clauses 13 and 14 of the Bill are accepted, the financial support for claimants in that group will be cut by 25%, from £102 to £73. That will have a drastic impact on both disabled people who are in work and disabled people who are out of work. In view of the fact that the Government have committed to protecting support for disabled people, that is deeply worrying. This cut will not incentivise people, which is what the Government say they want to do. The cut has been opposed in the other place, and I hope that the Government will now listen and scrap clauses 13 and 14.
I am concerned about the impact of the assessments on people with mental health problems. The significant cut, if clauses 13 and 14 are approved, may well mean that people with mental health problems become more unwell and that they cannot spend money on support and activities that would help them to recover, which will have an impact on their ability to move closer to work. Rather than increasing the number of people in work, the cut may actually hinder recovery and push people further away from work. Currently, there are nearly 500,000 disabled people in the WRAG nationally. The largest group is made up of those with mental and behavioural disorders, which includes mental health issues, learning disabilities and autism. We know from a parliamentary review that 69% of disabled people said that such a cut in ESA would cause their health to suffer.
Finally, I believe the Government should accept Lords amendments 1, 8 and 9. I hope that the Minister will signal that she is willing to consider what action she and the Government will take to review this situation and to end the huge amount of undue worry and stress that the proposals are causing, particularly for disabled people. The Government need to show some common sense and compassion, and they should support the Lords amendments.
I will speak to Lords amendments 1, 8 and 9. Let us be realistic: we can get involved in adversarial politics on poverty, but we are all in the same business of wanting to alleviate child poverty. Whether or not Lords amendment 1 is agreed to, we need to recognise that it would not in itself transform the lives of children in poverty. Similarly, the previous Government’s focus was on income-related measures, but they were not in themselves going to transform child poverty.
The issue could be used, as it was in the speech by Helen Goodman, to parade the child poverty credentials of the previous Labour Government. We could spend our time—we have not got much time—criticising that approach and saying that it did not get to the root causes of poverty and truly transform the outcomes for those most in need.
Lords amendment 1 is about reporting data and about how to focus activity, including Government measures, on those who are most in need. We need to ask what will focus Government policy on this issue like a laser. Despite some of the lurid claims, not least those made by the hon. Lady, the policy was not in any way a device to hide cuts. Let us get rid of that idea, because that is not what this is about. This is about making a genuine attempt not so much to redefine child poverty, but to refocus attention on its root causes.
As has been seen during the long passage of the Bill, this reiteration of the policy has had cross-party support, as well as support from many NGOs involved in fighting child poverty, particularly the Centre for Social Justice, which has worked hard in this area. Frank Field, the Chair of the Work and Pensions Committee, hit the right tone. We want to ensure that we do not distract attention from what is needed to transform people’s life chances. That is what the issue is about.
I am concerned about what Lords amendment 1 would do. This well-intentioned amendment received support from many in the other place, but it would go back to and reintroduce arbitrary measures. Such points have been made—I will not repeat them—by my hon. Friends the Members for Torbay (Kevin Foster), for North Devon (Peter Heaton-Jones) and for Sutton and Cheam (Paul Scully). For example, Lords amendment 1 would risk the reintroduction of measures based on current parental income, which would take away the focus on raising attainment and on increasing life chances for disadvantaged children.
I do, however, have a way forward to propose. I cannot deal with it in relation to Lords amendment 1, which will simply reintroduce child poverty measures with all their failings, but we must look for such a way that recognises the potential opposition in the Lords. As we all acknowledge, financial poverty has a significant effect on life chances. We cannot ignore that, and Government publications on such measures have proved that point. We must therefore look at how to make reference to financial poverty, but keep the particular focus on tackling the risks to life chances.
Eventually, if the Bill goes back to the other place, I propose that consideration is given to an income measure that will act not as a focus in itself, but as a gateway to other measures, and that will ensure Government policy is directed, as it currently is, to those most in need of support. We should consider introducing a gateway measure for families based both on whether they have a low income and on life chances risk measures, with a particular focus on those in permanent poverty. It would ensure that maximum support is given to those stuck in poverty, and that the Government focus on those who are most in need.
Briefly on Lords amendments 8 and 9, I share the concerns that were well rehearsed by my hon. Friends the Members for South Cambridgeshire (Heidi Allen), for Stevenage (Stephen McPartland) and for Stafford (Jeremy Lefroy). We met the Minister together. I recognise that the Minister and the Secretary of State have a genuine commitment to this as a reforming measure.
We really need to get the White Paper out there so that the Government’s commitment to reform can be seen clearly.
I recognise that the WRAG is not fit for purpose, as only 1% are getting into work, but it does have a purpose. It has a purpose for the most vulnerable individuals, for whom the financial element of £30 really matters. The way we show our compassion is in how we treat the few, not the many. For those few people, that £30 will have a big impact on their lives. Whether we like the WRAG or not, whether we think these people should be in the support group, which they may well be moved into, or benefit from PIP, they are concerned about the loss of this payment. When dealing with those with progressive illnesses, remitting illnesses or mental health conditions—the Government’s commitment of £1 billion of investment is wonderful—what we do must be matched by careful concern.
As we move towards 2017, with the flow of new applicants, we must do all we can to reassure everyone that we are in the business of reform. We must not only enable more people to get into work, but deal with the practical elements. My hon. Friend the Member for Stafford mentioned energy costs. That is undeniably an issue that must be dealt with practically. I will support the Government tonight, but we must get the White Paper out and show our practical support in meaningful ways before 2017.
I will hold the Government to account, as will my hon. Friends, to ensure that we deliver. We must show that we are on the side of these people, we must show our compassion and we must do all we can, for example through Disability Confident events like the one that I have on Friday, to show that we are on this in a way that previous Governments have not been. We must show that we want to see people’s lives transformed through work, but also that we will support people with the safety net, which we are proud of. Even after the WRAG measures, we are more generous than the previous Government were in relation to the disabled. We must not be deflected from the task of supporting people into work and supporting people in the safety net. It is not a pull factor—let us not make that case. We want to reform the measure to ensure that it really works for people who need support and are not able to get into work immediately, but let us keep our focus, as the poverty measures will do, on those who are most in need. I will hold the Government to account over the coming months to ensure that they really mean what they say.
Earlier today, I attended the vigil outside Parliament that has been organised by Disabled People Against Cuts to draw attention to this debate and to urge the Government to listen to what the House of Lords said about the cuts to support for disabled people and to accept its amendments. I will focus on Lords amendments 8 and 9.
The proposal to reduce employment and support allowance for WRAG by about £30 a week for new claimants has been a focal point of this debate, precisely because the Government promised that they would not cut the support for disabled people and yet are doing exactly that. They have done it indirectly through policies such as the bedroom tax and the inclusion of carer’s allowance in the benefit cap, on which I am glad the courts have forced a U-turn; and they have done it directly through cuts to the independent living fund, DLA, Motability and Access to Work. Now, they are cutting direct financial support to disabled people through the measures in this Bill. They are putting sick and disabled people on the frontline of their austerity agenda, hitting the incomes of those who are already disadvantaged. These people are being asked to take the biggest hit, even though they had the least to begin with.
The first critical point that we need to understand today is that to receive ESA, a person has to be assessed as unfit for work. Believe me, the bar on that is already pretty high. People who are too sick or disabled to work are placed either in the support group, meaning that they are not expected to look for work, or in the WRAG, where it is recognised that they have only limited capacity, but could potentially undertake preparatory activity with a view to returning to the labour market at some point. So let us be quite clear: the people who are set to lose out from the Government’s £30 a week cut to ESA are people who are not able to work because of their health.
That is why the Chancellor was talking nonsense when he spoke about this measure removing “perverse incentives” in the benefits system. It is his logic that is perverse, although his choice of language is damning and revelatory. If someone is seriously sick or disabled, reducing their income will not make them better quicker. There is not a shred of evidence to support that ill-founded fantasy, but there is plenty of evidence that financial worries and the stress associated with work capability and PIP assessments have a negative impact on people’s health. A large and growing body of evidence suggests that hardship and stress slow down recovery and push people further away from the labour market.
Some people affected by the proposed cuts will have faced long-term disadvantage because of a serious health condition or disability, and they may find it difficult to access the labour market or sustain employment. In contrast to ESA, jobseeker’s allowance is for the most part a short-term benefit. Depending on the state of the economy, the vast majority of jobseekers move off JSA in a few weeks or months, but those with long-term health conditions and disabilities are far more likely to face long-term unemployment. The barriers we face are very real, and many people will have to live on extremely low incomes for lengthy periods. Many also incur extra living costs simply because of their condition or disability.
Having to get by on an extremely low income for an extended period is one factor that entrenches poverty among disabled people and those with long-term illness. People use up their savings and end up selling their assets, and they depend on others. The poverty experienced by disabled people is well documented, but it often becomes family poverty as other family members try to support loved ones financially from their own incomes, while providing unpaid care that limits their own earning potential.
The cuts to ESA will cause real hardship and are quite unnecessary. They are based on a flawed and frankly offensive misconception that people with serious long-term health conditions are malingerers who need to be prompted into work with “tough love”. A large proportion of the people who rely on ESA are those who have become disabled or developed a condition in adult life—people who have paid taxes and national insurance contributions for many years previously, with the perfectly reasonable expectation that if they become unable to work for health-related reasons, there will be a safety net for them. That safety net must take realistic account of the extra costs of living with disability, and to reduce support is callous and plain wrong. Even the Lords recognise that, and the Government must acknowledge it and think again.
The Lords also expressed concern about the implications of universal credit for working disabled people. We know that disabled people are more likely to work in low-paid jobs, and they are at higher risk of living in poverty. The disabled worker element of working tax credit currently provides support for disabled people who are in work to cover the extra costs that they incur by holding down a job—costs that in some cases would otherwise make it financially disadvantageous to be in work. With the move to universal credit, the loss of the limited capability for work element to everyone except those in the support group means that a lot of working disabled people will be around £1,500 worse off every year. Among those who will be worst affected are disabled working parents who currently receive the disabled worker’s element of working tax credit. Under universal credit, disabled working parents will lose that extra support.
Around 43,000 families in the UK with at least one working disabled parent will take a substantial drop in income when universal credit is rolled out. As Baroness Tanni Grey-Thompson pointed out in the Lords, a couple with two children and both parents working in low-paid jobs, where one parent has become disabled, could receive a massive £3,000 less in 2017. The Government say that they want to improve employment support for disabled people, but slashing the incomes of those who are already in work, and who depend on that support to keep them in work, is not the way to go about it. Surely the Government have learned lessons from the failure of the Work programme—we have heard quite a lot about that today, and I think they acknowledge that it has not worked.
Surely it is far more effective, empowering and dignified to provide extra support directly to working disabled people, so they can spend it on the transport or equipment that they need to make work viable for them. Instead, the Government seem to think that it is more effective to take money out of the pockets of working disabled people, and give it to highly paid executives and private sector companies to tell those disabled people how to stay in work, without any of the resources to back that up. It makes a mockery of the Government’s claim that they want to support disabled people into work.
The Government have based their whole argument on the notion that work is the way out of poverty, but they have conveniently ignored the fact that two thirds of children in poverty have parents in work, and that the introduction of universal credit will leave millions of working families financially worse off. The Minister’s claim that the Government want to support disabled people into work would be a lot more plausible if they had not already cut the independent living fund, mobility allowances and DLA—the very forms of support that help disabled people to get a job and stay in work. The Government now plan to cut support for working disabled people on universal credit. Their position is simply not credible.
If the Government choose to ignore the Lords today and push ahead with these measures, it will be testament to an arrogance and unwillingness to recognise the needs of disabled people that has already seen them dragged through the courts for indirect discrimination. The Lords have made eminently reasonable amendments to the Bill that would ensure that those who need support get support at perhaps the most difficult time of their lives.
I urge Conservative Members who are wondering what to do this evening to take heed of the experiences of sick and disabled people in their own constituencies—maybe even in their own families—and support the Lords amendments in this group this evening.
I place on record my thanks to my constituency neighbour, my hon. Friend Debbie Abrahams, for the work that is being done to shine a light on the Government and expose them for what is a cruel attack on the people who can least afford it.
It is clear that the Minister believes poverty is an inconvenience. On the Labour Benches, we believe strongly that poverty is an evil. What is the Government’s response? To see no evil, to hear no evil and to speak no evil. Why would the Government seek to hide the true scale of poverty, if not because they realise that, through their targeted attacks on the poor, including the working poor, poverty will increase? The Government do not want to see poverty, because to see it would be to expose it and would be a cause of guilt—if guilt is possible with this Government. That is why, through the benefits cap, communities will be displaced as towns and cities are socially cleansed.
The Government do not want to hear the truth about poverty, either, because to hear it would create a noise so loud that the country would not sit back and take it. That is exactly why they want to silence charities such as Barnardo’s and the Children’s Society with the gagging Act that is the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014.
The Government do not want to speak the truth about poverty, because to speak it would be hypocritical. They know that their actions are pushing more and more people into poverty and on to the breadline. That is precisely why they are blocking their own officials from publishing data on the number of people living in true poverty. We can talk about life chances, and we know how important education, health and housing are, but let us be honest: if you have to put the electricity or gas on, or put a uniform on the backs of your children, or make a decision about whether you or your children eat, then money is very, very important.
That evil affects too many families in Oldham West and Royton. Take the Coldhurst ward in my constituency, where more than 51% of children are growing up in families in poverty. Take Oldham as a town, where 40% of children are growing up in families living in poverty. It is getting worse, not better, under this Government. That is not surprising. Could any Member in this Chamber really live on £13 a day to cover food, heating, electricity, clothes, transport and toys for the children? There are too many mothers who go hungry just to feed their children. By 2021, it is estimated that
1 million more children will have been pushed into poverty. No wonder the Government do not want to report on how many people are living in poverty. It is a national scandal.
Research by the Children’s Society—a charity still able, at the moment, to give a voice to those who need one—highlights that 14,400 children in my constituency alone live in working households that will be affected by the freeze on benefits. As corporations such as Google laugh all the way to the bank, it is for my constituents to queue at the food bank. Not measuring how many people are in poverty is like driving a car with the instrument dashboard disconnected: you do not know how fast you are going; you do not know how long you have been going, or the distance you have travelled; you do not know whether you have enough fuel to last the distance; and you do not know if the car is overheating until it is too late. This is the real crux of the issue: the Government’s view is clearly that the welfare system is not a well maintained machine to be looked after and to last but a banger to drive into the ground and send to the scrapheap.
It has been a regular occurrence in my nine months in Parliament that we face another lamentable situation in which this Government, and specifically the Secretary of State for Work and Pensions, are called upon to think again. Opposition Members in the other place have once again provided us with an opportunity to pause for reflection.
I wish to focus my remarks on the cruel and utterly devastating cuts to employment and support allowance for those in the work-related activity group. Let me set that out in context. A cut of £30 a week would have a huge impact on nearly all affected families and individuals in this country. We have heard in previous debates about tax credits and universal credit about the kind of impacts such a drop in income would have. The amount of £30 a week is equivalent to raising council tax for a household in a band D property in St Helens by 7.5% every year for the next decade. This cut does it in one go.
Child benefit is £20.70 a week for the first child and £13.70 for an additional child. When the Government proposed to withdraw those amounts from individuals earning enough to pay the 40% tax rate, putting them among the top 15% of earners in this country, they produced huge outrage among Government Back-Bench Members. There were newspaper campaigns—
Three hours having elapsed since the commencement of proceedings on Lords amendments, the debate was interrupted (Programme Order, this day).
Division number 193