[Relevant Documents: Twentieth Report of the Work and Pensions Committee, Universal Credit: managed migration, HC 1762; and the Government response, HC 1901; Twenty-first Report of the Work and Pensions Committee, Universal Credit: support for disabled people, HC 1770; Twenty-third Report of the Work and Pensions Committee, Two-child limit, HC 1540.]
Motion made, and Question proposed,
That, for the year ending with
(1) further resources, not exceeding £880,517,000 be authorised for use for current purposes as set out in HC 1966,
(2) further resources, not exceeding £170,914,000 be authorised for use for capital purposes as so set out, and
(3) a further sum, not exceeding £1,334,611,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Rebecca Harris.)
I am pleased to be bringing this debate today, and I thank colleagues from across the House who have supported it and who are here to speak. The spending of the Department for Work and Pensions is the highest of any Department and represents almost a quarter of all Government spending. It is therefore important to scrutinise that spending, especially as the 10.7 million people who rely on our welfare state are those who usually have no other place to turn.
The welfare state in Britain was set up by the 1945 Government in order to defeat the giant of want and to create a country fit for heroes, but 70 years later, across Britain we are seeing an increase in situations that we think of as part of the bygone era of the 1930s. Even around our Parliament today, we are seeing people sleeping rough on our streets, dying in the freezing cold. Across the country, we are seeing families queueing up for food banks, and disabled people left isolated without the care that they need.
Poverty rates are rising, especially among children and people in work. The Joseph Rowntree Foundation’s annual analysis of poverty tells us that 14.3 million people—more than one in five of our population—now live in poverty. That includes 4.1 million children, a rise of 500,000 over the last five years. It also includes 4.6 million people living in persistent poverty—the poverty trap that lone parents especially are unable to escape. And shamefully, 1.5 million people, including 365,000 children, now live in destitution, unable to afford even the basic necessities. In the fifth richest country in the world, those bare facts should shame us all.
The Government rightly tell us—as I am sure the Minister will do today—that the Department’s spending is rising. It has risen by £31 billion, or 20%, since 2010. But alongside real wages falling for a decade, housing costs rising much faster than inflation, especially in areas of very high housing shortage, and cuts to so many of the local services that people rely on, our welfare safety net is in danger of not working. That is why I am particularly pleased that we are having this debate to look into the reasons for the seeming anomaly of rising spending and rising poverty, and so that we have the opportunity to suggest some answers for the Department to consider.
We know that £27 billion of that £31 billion increase in the Department’s spending relates to the state pension, with the triple lock and the single-tier pension delivering increased prosperity for most pensioners. That is good to see, but, as with many aspects of DWP spending, it does not tell the full story. While the state pension has increased, pensioner poverty has also increased. The rate of pensioners in poverty halved in the decade to 2013, but since then it has risen by 330,000 to 16% of pensioners. That change was partly due to reductions in pension credit, which now supports a million fewer pensioners, but also due to housing costs, which is a serious problem for the Department across the full range of benefit claimants.
The situation is worse for those who are not pensioners. The Institute for Fiscal Studies stated after the Budget that we will still see cuts of £4 billion a year to welfare spending on in-work age groups in the years to come. It is the particular and persistent focus on reducing spending that has played a major role in the increase in poverty, and destitution in particular. The emphasis on making welfare spending fairer to working people ignores the fact that the majority of claimants of state support are already in work. In the 2015 Budget the then Chancellor claimed that benefits should be frozen for four years because average wages had risen by only 11% while benefits had increased by 21% since 2008 due to high levels of inflation. The argument that real-term falls in wages should equate to even larger falls in the benefits on which so many in-work families rely fails to recognise the realities of life on low pay.
I thank my hon. Friend for giving way. We have seen changes over the past few years, including increases in some pensioner benefits and in the national living wage, but the group of people who stand out more than any other are those on benefits. It is utterly unacceptable that we can even consider maintaining the benefits freeze for one final year. It has to go.
I thank my hon. Friend for that intervention and pay tribute to her campaigning for people on benefits. I agree with the sentiment of her intervention, because over 10 million people are affected by the reality of the four-year freeze. When it was announced in 2015, inflation was just 0.4%, but it has been 2.3% and 2.6% in the past two years. Since the freeze’s introduction, the cost of living for people on low incomes has risen by £900 a year. In real terms, the income received by a single person on jobseeker’s allowance or income support of just £77 a week will fall by over £5 a week by 2020—a drop of £267 a year. When people on such benefits have less than £10 a week to spend on food, the loss of £5 makes a huge difference. Someone can just about eke out £10 a week for food, but eating for £5 a week is impossible. It is no wonder we are seeing such growth in the use of food banks.
For families, the freeze bites even harder. If it continues, low-income families are likely to lose out on an extra £210 a year due to inflation. If we see inflation rise because of disruption to trade or food tariffs or shortages, inflation for people on low incomes will be far higher. If the benefits freeze ended a year early, that would provide an essential income boost to over 10 million people struggling on low incomes and reduce poverty for 200,000 people, so I strongly urge the Government to look at doing so as soon as possible.
Of course, welfare is in the process of being reformed, especially through universal credit. I worked for USDAW—the Union of Shop, Distributive and Allied Workers—for almost two decades, so I know just how vital in-work benefits are to millions of families who struggle to get by on low pay and often low hours. I know that UC was designed to fix such problems to ensure that work always pays, and I applaud that aim, but the stark reality is that universal credit has led to a 30% increase in referrals to food banks where it has been rolled out. I see families in my surgeries facing eviction, and I give credit to the thousands of people who are organising food banks across the country to help people who cannot afford enough to eat, but that is not good enough. Food banks cannot cover the whole country—I know that from my rural area—and they should not have to, either.
I pay tribute to fellow members of the Select Committee, which has made recommendations to the Government on universal credit, and to members of the all-party parliamentary group on universal credit which, with me as chair, is producing a report on a whole range of universal credit issues—I am pleased that the Secretary of State has already committed to meeting us about it.
I thank the Government for the improvements they have already made to universal credit, and I welcome those changes, but we are still seeing problems. Some 5.1 million people in working families will see their income reduced, on average, by £2,300 a year, and 1.3 million people in out-of-work families, with even lower outcomes, will see those outcomes drop by £1,400 a year. At a time when persistent poverty and destitution are rising, the Government’s flagship policy should not be looking to take over 10% of our population even deeper into poverty.
I was asked to take 10 minutes, so I will have to wrap up soon. I am sure my hon. Friend will get a chance to speak.
I ask the Government to look urgently at three issues with universal credit. First, the five-week wait for payment puts people into debt right at the start of their claim, and the levels of universal credit are simply not enough to enable them to escape that debt. Secondly, the multiple deductions: people receive an advance, and they might have debts on top of that from tax credits, housing arrears or utility bills, and they end up with an income that they simply cannot live on. Thirdly, the support for children and adults with disabilities. This Government are proud of saying that they like to support the most vulnerable people but, as one of my constituents says, “If a six-year-old boy who is bedbound is not one of the most vulnerable and does not deserve support, who does?”
We need a system that treats people like human beings. Yes, it is down to money and, yes, it is down to support, and I welcome the Secretary of State’s commitment to personalised support, but that support needs people to implement it, not computers that simply say no and not processes like the one I raised in a Westminster Hall debate on carer’s allowance where carers are being taken to court under the Proceeds of Crime Act 2002 and are being forced to sell their homes because they have made an error.
We want to see investment in jobcentres and DWP staff so that they can deliver the personal support that they want to deliver, that this Government want to deliver and that we all want to see. This Department covers a huge range of people and complex issues. We all need to have trust that our welfare safety net is still there. It is the hallmark of a civilised society, and I look forward to this debate helping us to bring it in together.
Order. I thank the hon. Lady for her brevity, but it will be obvious to the House that we have little over an hour and a half left in the debate and that a great many people want to speak, so we have to start with a time limit of six minutes.
It is a pleasure to speak in this debate on the spending of the Department for Work and Pensions. I thank Ruth George for leading the debate and for her speech.
I understand the issues that the hon. Lady raises, but, as a Conservative Member, I want to try to make a case for the positives since 2010. In doing so, I would not want it to be thought that I do not have constituents who have been let down by the system. We must always strive to do more and to learn from such issues, but the situation has existed for years under every Government—it has not only existed under this present Government.
I will touch on employment, universal credit and our work to help those with disabilities, sicknesses and impairments, all of which are so important because the Department is responsible for a quarter of all Government spending. A vast £215 billion is spent on benefits and pensions.
Employment is the greatest success of the Government that I have been supporting since 2010, as the unemployment rate has halved since then. The most important thing to me in my role of being an MP is to help people to find work, find hope over despair, find something to feel proud about and find something where they really contribute. It is about taking them from being people who rely on the benefits system when they do not want to do so and giving them a position where they are paying in to help others.
This has been a great success: we now have the highest numbers in employment since records began; we also have an unemployment level at 4%, which is as low as it has been since the early 1970s; youth unemployment has halved; female unemployment is at its lowest rate; and wages are now growing at their joint fastest rate in a decade.
I am particularly proud that our unemployment rate is half that of Eurozone countries. It is important to say that every Labour Government have left office with unemployment higher than when they took office. The unemployment rate rose from 2.1 million in 1997 to 2.5 million in 2010, whereas it has now fallen to 1.36 million. Although there may still be matters that need addressing, this Government have reduced unemployment by 1 million and helped those people to find work and hope, so there is not that much of a stick to beat us with.
Let us look at universal credit, because it is part of our mantra of helping people into work.
The evidence states that those on UC are more likely to find work and to increase their earnings—that has been found as well. The whole idea of course is that work pays. [Interruption.] The very fact that unemployment has gone down by 1 million suggests that UC is helping people into work. If the hon. Gentleman does not believe that helping people into work is the right thing to do and that we should keep people on benefits, we have indeed failed, but I happen to believe that ours is the right way forward.
There is something I do not understand here. Not only is there the five-week starting period, but what is now evident is that there is an 11-week starting period. Someone who is moving but staying in accommodation provided by the same social landlord will end up with 11 weeks when they get none of their housing benefit paid, and they are in debt from the very beginning. That has happened to dozens of my constituents. How does that possibly help people to get into work?
I will not give way, because I am taking quite a lot of time. The reality is that UC is designed to mirror the world of work. In the world of work, 75% of people get paid monthly, and so the benefits system is designed to do that, because everybody on benefits is supposedly able to find work and this system mirrors the world of work. It is the right system to help people.
Another aspect of UC is universal support. It used to be the case that when someone was on benefits they were languishing on benefits, no one cared about them and they did not get the tailored support that UC gives. Now if anyone chooses to go to their jobcentre, as I do regularly, they will find a completely different approach—one where there is compassion and tailor-made support. The work coaches—[Interruption.] It is all well and good Maria Eagle chuntering from the Benches, but if she had spent time with her work coaches, seeing the passion that they have in getting their people into work, she would see that they have more effect in doing that than she has by sitting there chuntering away.
My view is that UC works, and 82% of those on UC believe it works, too. It is all well and good for MPs to knock it for political purposes, but if they wanted their constituents to be helped, they would get behind this system, rather than constantly knocking it for political ends.
Yes, of course, because we should always strive for 100%, as I said right at the start. But when we hear Opposition Members talking, we might think that the figure is at zero—it is not. I spend the time with those delivering the support and those receiving the support, and they are happy with it. Let me compare that with the previous system of tax credits. They were rushed in so fast by the Labour party that we ended up seeing overpayments of £7.3 billion and people pursued through the courts to get that money returned. Where does that leave the party of compassion? A success rate of 82% is high when one considers the challenging circumstances of people on universal credit.
In my remaining two minutes, let me turn back to those on disability support. I find that many of those who have been assessed for PIP and ESA have been let down by the system. I say to my Front-Bench colleagues that we need to continue to look to do more to help them through the assessments. I recognise that they are very much tailored benefits that take account of the cost of a disability. By their very nature, there will be challenges, but universal credit is absolutely a challenge that we should meet.
Again, I come back to the employment figures: we have got many more people with disabilities into work than the Labour party did. Anybody with a disability should be told that they are just as able to find work, and that they have the support the Conservative party to do so, as those who are not disabled. Failure to do that is complete discrimination. I am really proud of the support we offer. My office is a Disability Confident office: we want to make sure that we give people the exact same opportunities. I am proud of our position with regard to those with disabilities. The fact is that we are now spending an extra £10 billion to assist people, compared with 2010.
When it comes down to it, we are helping people to get into work—[Interruption.] Marsha De Cordova says we are not, but I have just said that there are an extra million people in employment under this Government compared with under her party’s Government. The statistics do not—[Interruption.]
Thank you, Madam Deputy Speaker.
It is notable that we can deliver rhetoric, shout and talk about the individual cases, which of course we should, but the statistics show that this Government have got more people into work and are spending more money helping people on benefits. This Government have a record to be proud of, and I am only sorry that more of my colleagues are not willing to stand up and say so.
There has been a huge change in the debates that we have about poverty in this country. When I first came into the House, there were these rather distant debates in which we talked about what the poverty line should be and whether the Government’s benefits were adequate. We now face a situation—certainly in my seat and in the constituencies of others—that is a matter not simply of poverty and people being hard-pressed but of destitution. We cannot be surprised by that, because although the Government have rightly increased the national living wage and personal allowances, most of the cuts in public expenditure to rid us of the deficit have fallen on families and poor families on benefits. If one message goes out from this debate to the Chancellor, I hope that it is that enough is enough. The Prime Minister has talked about our now being through the austerity period; if we are, the first groups who should feel the relaxation of the whip of austerity should be the families who have been so badly hit by the cuts imposed on them to try to balance the books.
There have been seven main cuts, and I wish to remind the House of how extensive they are. They are not cuts that affect pensioners: all affect those who are of family age—families with children. The first is the freeze, which my hon. Friend Ruth George talked about. I congratulate her on securing the debate and on her contribution. Such a freeze is almost unheard of in our terms. In 1953, Harold Macmillan made the decision on behalf of the whole country that, as living standards rose, poorer people would benefit from those rises. Ever since then, Governments have tried to hold to that commitment. They have had varying degrees of success, but their intent has been that the poor should share in rising living standards.
Since 2011, we have had a freeze on benefits that means that the least advantaged—if I can put it in a sarcastic way—have suffered. For example, a single parent who is out of work and has one child has lost £888 of what their income today would be had the freeze not taken place. A single earner couple with two children have suffered the amazing cut in their living standard of £1,845. That alone, I hope, will get the alarm bells ringing in the Treasury, so that when the Chancellor makes his statement come the spring, we will see some change on banning the freeze for the final year.
I am glad that the Chair of the Select Committee has raised the benefits freeze. Our research through the Library shows that this final year of the benefits freeze is due to raise an extra £1.2 billion in savings for the Treasury, because of increased inflation. Does he not agree that, as a result, this Government should scrap the final year of the freeze?
I hope that long before the Chancellor rises at the Dispatch Box—the position that the Minister will be in when he replies to this debate—he will have made the decision that there will be no more freeze. He will say, I hope, that the freeze will be lifted, and I hope that, from this debate, we will build a movement in the country that convinces him and his Cabinet colleagues that that is the one overriding priority.
There are, however, six other cuts of which I wish to remind the House. The first of those six is the cut in council tax benefit. A total of 4.4 million families have been affected by this cut—of not paying council tax in full—with an average weekly loss of £3.
Let me turn now to sanctions, on which the Select Committee, the House and the Government quite properly indulge in debates. Three million people have been sanctioned since 2012. We know now that a person can be in work and sanctioned. I challenge the Minister to answer this when he replies to the debate: as a person can be sanctioned for not getting a higher income, even though they are in work, will he tell me how many work coaches in DWP have been sent for interviews by their colleagues because, given the amount of benefit that they draw as a result of the wages that they gain from DWP, they will now be sanctioned if they do not improve their income. Sanctions, therefore, form the second cut.
Another cut has come in the form of the lowering of the local housing allowance. Since 2013, 1.4 million of our fellow citizens have suffered an average loss of £50 a week. We are not talking about our salaries; we are talking about people who are earning very, very modest incomes from the benefits system.
On the bedroom tax, 704,000 of our constituents have suffered, on average, a weekly loss of £15 a week. A total of 197,000 households are affected by a benefit cut of between £63 and £73. Then there is the two-child limit, which affects 70,000 households, but which is likely to increase to 600,000, with an average weekly loss of £53. Any one of those cuts causes mayhem to the budgets of poorer people who have no savings—whether they are in work or not in work. I have witnessed in my constituency, as other Members have witnesses in their constituencies, an issue now not of poverty, but of people who struggle with all their might to maintain a roof over their heads.
I wish in a way that, at the time, I had been able to defend the courage of my good friend Huw Merriman. He is right that employment is up, but for the parts of the country that my right hon. Friend the Chair of Select Committee and I have seen on our tour—I hate that word because it sounds like a holiday—of food banks, what we saw were people who were utterly on the edge. With the greatest respect, universal credit is not built to deal with people who have no financial resilience at all. They are the people that we are talking about, and these cuts have absolutely cut them to the bone.
And beyond. Families know they are finished as a family if they lose their homes, so the fight is to keep the roof over their heads. They go without food; they go without heat; and they go without basic necessities. This debate is, for me, the first time that we have in this House to confront the system for those of our poorest constituents who face not just poverty, but destitution. They are the ones who have paid the most to bring down the budget deficit, and they should be first in the queue, as far as the Chancellor is concerned, to get relief when he makes that spring statement.
It is an honour to be able to speak in this estimates day debate. I congratulate Ruth George on starting us off. It was a pleasure, for the first part of this Parliament, to serve on the Work and Pensions Committee with her, Frank Field, and the hon. Members for South Cambridgeshire (Heidi Allen), for Glasgow South West (Chris Stephens) and for Bermondsey and Old Southwark (Neil Coyle).
I will turn to some of the work we did together on the Committee in a moment. Before I do so, I want to return to the absolutely essential point that must always frame the current debate on benefits. A few years ago, before I entered this place, I was lucky enough to be the director of policy at the Centre for Social Justice, which looks at the root causes of poverty in the UK. One of the things that our research showed time and again, and that the research of my predecessors had shown, was and is that there is a human cost to worklessness that sits alongside the financial cost. The effect of being out of work for an individual, for a family and for large numbers of people in a given community is substantial. It affects people’s self-worth, mental health, and family stability. In itself, alongside the monetary troubles that they have, it affects their resilience.
That is why I am so proud of the fact that it is under a Conservative Government that we now see record employment, and that under this Government we are finally starting to see wages rise. This makes an enormous difference to individuals, families and their communities. It is very difficult to put a monetary value on that, but very easy to see the value of it when we meet those individuals and families and go into those communities. It is a great legacy, because we now have 637,000 more children growing up in working households than we did in 2010. The long-term effect on those young people’s future lives is enormous, because we know the cost and effect of children growing up in workless households, in entrenched worklessness. This is a real achievement.
Sitting alongside that, we have the welfare reforms that the Government have been bringing in since 2010, which are nothing short of revolutionary. I think that everyone across the House agrees on their aims. Everyone agrees on where we would like to be—that is, with a welfare system that actively assists, encourages and helps people to get into work, to sustain work, to take more work, and to become more self-reliant in order to be able to provide more easily for their families and for themselves. There is no doubt that universal credit is the mechanism to do that. There is also no doubt that this is a system in evolution.
I have been pleased, with the Select Committee and as a Tory Back Bencher, to work alongside the Government in helping a number of reforms to come through, such as the improvement in the taper rate and the improvement in work allowances. It was very good to see the Joseph Rowntree Foundation publish on
I would like to begin by congratulating my hon. Friend Ruth George on the way in which she opened the debate. The context set out for us by the Chair of the Work and Pensions Committee, my right hon. Friend Frank Field, of the cuts since 2010 should be borne in mind during the debate. The House of Commons Library estimates cuts of £37 billion to working-age social security since 2010 and £4.8 billion to disability benefits.
I want to talk about a couple of cases, one of which relates to decision making in personal independence payment cases. I was interested that Huw Merriman raised the issue of PIP being a bit of a problem. I have seen numerous instances of very poor-quality decision making in PIP cases, particularly when people are migrated from DLA to PIP. These are people with multiple and severe disabilities, often with lifetime awards under DLA, with fluctuating yet deteriorating conditions and usually with the higher rate mobility component entitling them to a Motability vehicle, but they simply lose that when assessed for PIP and consequently lose their cars and their mobility—the one thing that makes their lives a little easier.
In a recent written answer, the Government admitted that 44%, or a staggering 157,740 people, who were previously getting the higher rate mobility component under DLA had been reassessed and lost their eligibility to the equivalent rate. No doubt some people’s entitlement has been raised—I accept that—but a lot of disabled people have lost their access to a vehicle and had their lives upturned and made much harder, often wrongly. These decisions, many of which are perverse, have come to my advice surgery. They are inevitably overturned when they finally get to an appeal, but that takes months. When they do get to appeal, 70% of cases are overturned, and people get their higher rate mobility back.
People do not get any of that additional money during the months that they have to wait for an appeal. The Government say, “Yes, but if you do win the appeal, you get the money back,” but for people who are short of money and on the breadline, this can mean many months of lost income.
The hon. Gentleman is correct. For people waiting, it may as well be never. The Courts and Tribunals Service tells me that on Merseyside the average waiting time for an appeal is 38 to 42 weeks—10 months.
I have a constituent whose mother came to me in despair for help. She is a young woman of 29 years but has serious and worsening immune conditions, which are baffling her doctors and causing her health to deteriorate. She has so many conditions, and I will not go through them all, but she can hardly walk at the best of times and sometimes is in a much worse state. She often has to visit four different hospitals, sometimes with two or three appointments a week, and has been using a Motability car to do so. However, she does not have her Motability car any more because it has been taken away. She had a lifetime award of higher rate mobility under DLA, but when she was migrated to PIP, she was only awarded the lower rate. She appealed for a tribunal hearing last May and is yet to receive a date for it. She was recently told that she is likely to have to wait another six months, but my office is trying to get that hearing expedited.
The young women’s mother came to see me because the car had to be returned and the first trip to hospital without it cost the family £17.50 one way. Her parents are low-paid workers and cannot afford to make such payments. The family were considering having to choose which hospital appointments to go to, which is a shocking situation. Fortunately, the Mayor of Liverpool has a hardship fund. I have referred her to that, which is now paying for the family’s taxi trips, but she should not have to rely on that kind of assistance when she is entitled to the payments; I have no doubt that she will get her car back when she finally gets an appeal heard.
I want to raise another benefits issue affecting disabled young people who have special educational needs. It is about a difference between the rules for ESA and the rules for universal credit that seriously affects a small number of young people with special educational needs. My constituent Antony Hamilton has autism and developmental co-ordination disorder. He is in receipt of PIP and has an education, health and care plan, which required him to complete two years of specialist post-16 education provision before going on to do A-levels. As a consequence, he is a bit older than the typical A-level student, and he turned 20 at the beginning of the second year of his A-level course last October. The child tax credits and child benefit his father received for him ended at that time, but he still had most of a year of full-time education to go.
Under the legacy working-age benefits, Antony could have applied for non-contributory ESA to cover the financial loss, which is £170 a week. Under universal credit, however, there is no such option. He has been told he would have to apply for universal credit, undergo a work capability assessment and be required to work or search for it, which is something he cannot do because he is in full-time education. It is Catch-22 for people like Antony. He is working hard to achieve in educational terms, but his parents are having to spend their small savings to help him to be able to finish his A-levels. The letter his father got from the DWP said:
Will the Minister please enlighten us about who is setting this policy, and about what he is going to do to help Antony?
When it comes to problems with the Department for Work and Pensions and its policies, it is actually quite difficult to know where to start. The people who depend on this Government Department often depend on it absolutely, and it absolutely is not working. It is not working for those on universal credit, assessments for personal independence payments are not fit for purpose, and the benefits freeze has been described by the Joseph Rowntree Foundation as the “biggest policy driver” of poverty in this country.
Perhaps universal credit might work if the Government had not taken £3 billion out of the budget back in 2015—it might then fulfil its original and admirable brief of simplifying the system and helping people get back into work—but they did, and now it is not doing so. They did put half of the money back, but it still is not enough. I do, however, applaud the Secretary of State for her acknowledgment that the problems with universal credit have contributed to the frightening and unacceptable growth in the use of food banks by families in this country. We are also seeing late payments, increased stress for people who are often already suffering from stress or mental health issues, and a growth in homelessness.
Let us put this into context. The DWP will spend £184 billion on benefits and pensions this year. That is a quarter of all public spending. More than half of that, £105 billion, is on pensions, mainly the state pension. Only £22 billion is spent on working-age benefits, and a further £21 billion on housing benefit. As MPs, we have a duty to be careful with our language and to help change the story people in this country hear about the relationship between benefits and poverty.
The DWP should exist to help families break free from poverty, to support people into work who are able to work and to provide security in old age, but that is not what the story of current policies reflects or tells people who are listening out there. Policies such as the five-week waiting time for universal credit reinforce the feeling among claimants that the Department does not actually want to help them, at least not right away. What they see is a delaying tactic—putting off payments for as long as it possibly can. Meanwhile the Government have spent £370 million last year, and advance payments just paper over the cracks.
I beg the hon. Gentleman’s pardon.
In my constituency of Edinburgh West, we are only just learning at first hand about the problems of universal credit, which was rolled out in the constituency at the end of November. We are much better acquainted with the problems caused by PIP assessments and inequities in the changes to the state pension age for women. Every week, I have people come through my door who have been refused PIP, often for the most inexplicable reasons. One constituent, who has had a Motability car for years, was told she did not need it because, if she could drive, she could obviously walk.
I tried to intervene on the point about universal credit. I do not believe that I voted on universal credit, because it was voted for prior to 2015, when I was first returned to the House. The policy that the hon. Lady is talking about was delivered by a Lib Dem-Conservative coalition, so it is actually her party’s own policy.
Yes, it was our policy, and if it had been delivered with the amount of money that was originally intended, it might have worked. However, in 2015 the then Chancellor took £3 billion out of the budget, leaving the policy crippled.
I will continue, if the hon. Gentleman does not mind.
The constituent I mentioned was told that she did not need her mobility car, because if she could drive, she could walk. However, the car was specially adapted for her disability—a disability she was born with and for which she wears callipers. She cannot walk any distance. It was nonsense.
If the Department wants to save money, it should get more of these assessments right the first time, and bring assessments in-house to help it to do that. In 2015-16 the Ministry of Justice spent £103 million organising ESA and PIP appeal hearings, not including the costs to the DWP of defending them, yet two thirds of those hearings went in favour of the claimant. Meanwhile, the Government spent £370 million a year on contracts to Atos, Capita and MAXIMUS to conduct those assessments. That money could be much better spent. Surely it would be cheaper and fairer for the DWP to invest properly in trained professionals to carry out these tests.
Perhaps the most important thing the Government could do—as we have heard, this is the starkest omission from their estimates—is to end the benefits freeze. According to the Joseph Rowntree Foundation, that is the biggest policy driver behind the expected rise in poverty by the end of this Parliament. It estimates that ending the freeze a year early would cost £1.4 billion, reducing the number of people in poverty by 200, 000. It is absurd that the Government have been unwilling to accept that, given that they had the money to spend but instead put it to use by giving a tax cut to higher-rate taxpayers. Surely it is morally wrong to attempt to balance the books on the backs of the most vulnerable. The Government should use the spring statement to scrap the final year of the benefits freeze, and finally make the DWP work for the people it is intended to work for.
I want to raise one topic, which has already been touched on by my hon. Friend Ruth George in her excellent speech opening the debate: namely, the current five-week delay between claimants applying for universal credit and being entitled to their first payment. Like Christine Jardine, I welcome the change of tone from the Secretary of State and her frank acknowledgment of the fact, long denied by her predecessors, that the roll-out of universal credit has increased demand at food banks.
The theory of the five-week delay was explained to us by Mr Duncan Smith during the coalition period. He explained that people leaving a job will have their last monthly pay cheque in the bank, which will keep them going for a month. In addition to the normal waiting days, which have always been part of the benefits system, that results in a delay of five or six weeks.
There are some obvious problems with that justification. For example, what about those who are paid weekly? Huw Merriman told us that 75% of people are paid monthly—that may well be right; I think it is about right—but what about the 25% who are not? According to the latest annual survey of hours and earnings, 16.2 % are paid weekly and 2.9% are paid fortnightly. What are those people supposed to do during this five-week gap? The Government’s justification for the five-week gap clearly does not apply to them.
I have repeatedly pressed Ministers on this subject. They are not capable of providing a justification for the five-week delay for people who are not paid monthly. I do not blame them, because there is no justification. I confidently predict that we are not going to hear a justification that works for them when the Minister winds up this debate. What about people on zero-hours contracts? They cannot be confident of having had a monthly pay check when they left their last job either. Even more starkly, the five-week gap will also apply to the millions of people about to be transferred from legacy benefits to universal credit.
On zero-hours contracts, does it alarm the right hon. Gentleman that someone on universal credit who comes out of a zero-hours contract job could be sanctioned, whereas if they were on a legacy benefit, they would not be sanctioned?
The hon. Gentleman is absolutely right. On JSA, people could not be sanctioned for that and on universal credit they can. I agree with him that that is wrong. That was revealed in a very recent written answer.
Another written answer to a question I asked last week told us that 57% of new universal credit claimants are taking an advance. The proportion of those applying for universal credit who have a month’s savings, as the policy assumes, is less than half. Most applicants have to go into debt to the DWP and take an advance to stay afloat in the first five weeks. Having been forced into debt in that way by the Department, far too many people find it impossible to get out of it. That is why we have seen the big increase in demand for food banks.
The Secretary of State suggested that the problem was temporary, because of early glitches in the roll-out of universal credit. No doubt it is true that the extraordinary delays that were experienced at the start of the universal credit roll-out did make things even worse, but the fact that over half of applicants are forced into debt by taking an advance, because they do not have the money in the bank that the policy assumes they will have, is why so many people have to use food banks and why so many get into arrears with their rent. This problem is hard-baked into the Department’s current policy.
The Trussell Trust made the point that it found the increase in referrals to its food banks was 52% in areas where universal credit had been rolled out for 12 months or more, compared with a 13% increase for areas where it was, at most, three months since universal credit had been rolled out or it had not rolled out at all. In other words, when universal credit is well-established and has been there for at least 12 months, the increase in referrals to food banks is greater than when universal credit has just been introduced. The Trussell Trust has been pointing that out for a considerable length of time.
Another change of tone I welcome came in another written answer last week. It told us that the Department is now working with the Trussell Trust to see if it is possible to develop—I think this is how it referred to it—a “shared conclusion” about the impact of universal credit on food bank demand. I shall certainly be very interested to see that shared conclusion when it is published. The Trussell Trust briefing for this debate highlights the five-week delay as among the
“urgent problems causing significant hardship”.
It goes on to say that Trussell Trust food bank referrals due to benefit delays are increasingly driven by this initial wait. It is a huge problem that needs to be fixed.
I pay tribute to my hon. Friend Ruth George for her excellent opening remarks.
The social security system was designed to be a safety net, but it has now become so threadbare and the holes so wide that many people are slipping through it. One key reason is that, although DWP spending has increased since 2010, we are supporting a larger pensioner population. There is also the introduction of universal credit, which replaces the previous system under HMRC. The generosity of many other support payments is decreasing. The changes and cuts to social security add up to savings of £30 billion for the Exchequer this year. That is going to rise to £36 billion in 2021 and £38 billion by the end of 2023-24, and this is in the context of Brexit.
The Government have sought to save money from changes to benefit rules, and we have heard about the freeze. There are the £4.8 billion cuts affecting disabled people; disabled people need that extra support because of the extra costs that they face, but that seems absolutely to have escaped the Government. The other thing is penalising children and children not being supported, as they have been in the past, and, of course, restricting women’s eligibility for the state pension by pushing the state pension age up.
My hon. Friend has to remember that this is against a background of the £12 billion cuts that the present Government fought general elections on. They have no mandate for it, so this all falls into place. However, she raises a very important point that is still a very live issue—women born in the early ’50s being denied their pension. The Government have just shut the door in their faces. I think that it is a disgrace given some of the problems that these women experience now. Some are on the poverty line as a result of all this. Does my hon. Friend not agree?
I totally agree. I have visited my hon. Friend in Coventry and many of the women from the so-called WASPI group who have been campaigning vigorously on this.
Although we did see a welcome increase in spending on UC in last year’s Budget, at the same time, the disability benefits and benefits for carers went down. Even though there were changes to universal credit last autumn, 3 million people will still be worse off under universal credit. Nine out of 10 low-income disabled households will not benefit from the Budget increases, alongside 640,000 self-employed households and 475,000 working lone-parent households. The effects of these social security cuts in the context of a rising cost of living are there for everyone to see. We have heard about the rise and rise of food banks. I never had a food bank in Oldham until this Government came in.
There has been the increase in personal debt and rent arrears. Eight million—the highest level ever—working households are in poverty. Two thirds of the 4.1 million children living in poverty are from working households. Four million sick and disabled people are living in poverty. Over 300,000 more older people are living in poverty since 2010. Our life expectancy is stalling—this is in the context of an increasing state pension age—and infant mortality, for the first time in 100 years, is increasing. Four babies in 1,000 will not see their first birthday.
The austerity agenda has not helped the economy one iota. Analysis used in the Office for Budget Responsibility’s model has shown that the independent effects of austerity have been to stifle economic growth by at least £100 billion in the last year alone—that is £3,600 per household. However, it is not just about that—the human toll as a result of these cuts cannot be underestimated.
Last week, we heard about Jodey, who took her own life after she was found fit for work following her work capability assessment. The DWP failed five times to follow its safeguarding rules in the weeks leading up to Jodey’s suicide, although it knew that she had a history of mental health issues. We learnt about 52-year-old Jeff, who won his appeal against his work capability assessment saying he was fit for work seven months after he had died. A few days earlier, we heard about 64-year-old Stephen Smith, whose emaciated six-stone body was photographed by the Liverpool Echo in a hospital bed. He had also been found fit for work. In my Oldham East and Saddleworth constituency, one of the worst cases I ever had involved a man who had a brain tumour. He was refusing to have the life-saving surgery that he needed because he was scared that he was going to get sanctioned. His medical team contacted me, pleading with me to intervene on his behalf.
I have a whole list here of different constituents and the struggles that they have had with the DWP, whether that is with PIP, the work capability assessment or UC. I want to particularly thank my team for the work they have done; without them, I could not do my job.
We are the sixth richest country in the world, and it is reprehensible for us to treat our citizens in this way. We must never forget that, like the NHS, our social security system should be there for all of us in our time of need, providing security and dignity in retirement and the support needed should we become sick or disabled or fall on hard times. It is a vital weapon in our fight against poverty and inequality—and one of which we should be proud, not ashamed.
It is strange that but a couple of handfuls of Members are here to discuss one of the largest budgets that the Government dispose of. We never analyse the expenditure very closely as it goes through Parliament; personally, I feel that a new system of assessing expenditure—more like a proper budgetary process in a local authority, frankly—is long overdue.
I will speak primarily about acquired brain injury, which may not come as a surprise to many Members. I know that people think that it looks as if I have had a brain injury of my own of late—it looks far more dramatic from behind than it is on the inside, but I am enormously grateful to people who have commented.
I want to talk about the issue because all too often an acquired brain injury, which might have come about through a road traffic accident, carbon monoxide poisoning, a stroke or a whole series of other means, may not be visible to the naked eye when we meet somebody. I have said this before in the Chamber, and it is true: the person standing in front of us in the queue, who is being difficult and seems drunk, might have a brain injury. All our judgmental attitudes may say more about us than about the person standing in front of us.
When somebody is being assessed by the Department for Work and Pensions for benefits, it is really important that the assessor has a full understanding of brain injury, for a multitude of reasons. First, such judgmental attitudes might be of no assistance whatever; and secondly, because the person’s condition may vary—not only across time, but from day to day or at different times of the day.
One of the most common symptoms of an acquired brain injury, even a relatively mild one that may have followed concussion, is chronic fatigue. I do not just mean feeling tired, as we might from day to day in the normal course of things, but real debilitating fatigue that means that we simply cannot get out of bed—not through laziness, but through utter fatigue at the core of our being. The Department for Work and Pensions has found it very difficult to cope with assessing somebody in that situation without resorting to language of, “Pull your socks up, chap!”
I know that the Minister is keen to see whether there are ways for us to work this out better, and I, along with the all-party parliamentary group on acquired brain injury, am really keen to make sure that every single assessor has some understanding, at least, of acquired brain injury—and, if they are not sure, the ability to refer the individual to another person.
There is another element to the issue. Fatigue is one of the most common elements of an acquired brain injury, so someone with one needs to harness all the energy they do have to strengthen their brain and recuperate. That requires a superhuman effort. I have spoken to individuals who have been through major road traffic accidents. They know that all the stuff they do with their doctors and clinicians—all the neuro-rehabilitation—is about how they strengthen their brain. But the benefits system is so complicated that it makes them feel like a number rather than a person; they find that they are using their energy just to deal with that, rather than making themselves better.
There could be a real advantage if there were a grace period of four or five years for people who have had a brain injury, so that once they had their first assessment they would know they would not have another for a set period. This is not about spending money; it is simply about enabling people to resuscitate and revitalise their own brains.
There is an additional problem which is known as the frontal lobe paradox. People may present extremely well and do well in tests, but some of the other elements of their executive function simply do not work as well as they might. That is why it is so important for us to have a system that can respond to individual needs. I hope very much that in the coming months we will be able to develop the system further, and that Ministers will work onside, to ensure that we can address those needs.
Like others, I pay tribute to our colleague Ruth George for securing this important debate.
In the limited time available, I want to concentrate on a couple of elements of universal credit in which technical failings still cause real difficulty for individuals who receive it. I am aware that the new Secretary of State has been in listening mode, has taken on board some of the criticisms that she has heard in the House, and has improved and applied the suggestions that have been made. I hope that the Minister will give some feedback on these specific issues, so that the Department can improve the position.
When people who are moved on to universal credit already have a medical condition or disability, they are immediately placed in an assessment period similar to the one that in which they were placed when receiving employment and support allowance. The problem is that the period can be as long as 14 weeks, during which time their incomes can be cut by as much as £200, £300 or even £400 a month. If people on low incomes must wait 14 weeks for the result of an assessment that they have already undergone to receive ESA, that is clearly an anomaly in the universal credit system, which I urge the Minister to examine, respond to, and fix.
There is a second element of universal credit that involves an anomaly. When someone who has been receiving a severe or an enhanced disability allowance—which is only received by those with very significant impairments—moves on to universal credit, that person will automatically lose the additional money. The point of the enhanced disability allowance, which has existed for a long time, is to help people with severe disabilities to receive that little bit of extra money which enables them to function and lead secure and independent lives. I ask Members to imagine immediately losing up to £300 or £400 a month. It would catastrophically damage one’s income. I should be grateful if Ministers revisited and fixed both those anomalies.
Let me finish with a couple of real stories of the kind that we all encounter in our constituencies. They concern tribunals. My senior casework manager, Scott Stevens, is an outstanding advocate for disabled people. During both my times in Parliament, I have always done my best to ensure that he, or one of my team, represents disabled constituents at tribunals as their advocate. I pay tribute to Scott: he has a success rate of about 85%. When disabled people come to me in connection with tribunals and we are able to support them, we win 85% of those cases.
“Win/lose” is rather inappropriate language in this context, and I will explain why. We won a case at a disability tribunal on Monday. Again, Scott was there, acting as an advocate. What did we win? This was an individual who has between three and five epileptic episodes daily, both during the daytime and in the evenings. She had received the personal independence payment for a long time, but was knocked off it 10 months or a year ago, so we had to go to the tribunal to enable her to be put back on to it. I repeat that this is someone with an epileptic condition experiencing three to five episodes a day, yet she was considered not suitable to receive PIP. Members in the Chamber will not be surprised when I tell them that she was restored to 11.5 points so she now gets her PIP entitlement. That is just wrong: it is wrong that she has had to wait 10 months—and we can imagine the amount of debt my constituent is in because obviously she has not been receiving the full entitlement for 10 months. So I pay tribute to Scott Stevens for winning that case and I pay tribute to my constituent and I am glad she has got her PIP entitlement back, but I really do think the DWP has to revisit this so people do not keep having to go to tribunals.
I am pleased that the House is having this debate today because it has given Members an opportunity to highlight how the DWP is not being resourced properly. The DWP has the single largest departmental budget, yet it finds itself under-resourced when it comes to dealing with the consequences of the Government’s welfare reforms.
The Government’s welfare reforms, be it universal credit or the personal independence payment, have disproportionately hit the poorest and most vulnerable in our society. Just look at what has happened to those claiming income support and jobseeker’s allowance; both benefits are based on the principle of supporting those already in, or seeking, employment, yet the Government’s decision to include both benefits within the benefits freeze is undoubtedly having the opposite effect. There has been a real-terms decrease in the basic rate of income support and JSA, falling from a high of £78 in 2012 to £72 in 2019. The Trussell Trust highlights that low income was the main reason behind 31% of referrals to its food banks from April to September 2018. That highlights to me that the Government’s benefit freeze is creating a crisis of in-work poverty—a crisis which the DWP is currently not equipped to address. I urge the Government to bring an end to the benefits freeze now. Prices are rising and the DWP should be properly resourced to support low-income households—households which are currently set to lose £200 this year because of the benefits freeze.
That brings me to the issue of sanctions. I have consistently called on the Government to bring an end to the cruel sanctions regime. There were over 15,000 sanctions taken in April 2018, with the clear majority being implemented against UC claimants. This is despite an admission in a DWP report in October 2018 that there was no evidence that sanctions encourage claimants to get into work or increase their earnings. I was disappointed that the Government chose to reject calls from MPs to ease the burden of sanctions on some of the most vulnerable claimants, including single parents and those with disabilities. There should be a maximum period for which a sanction can apply and greater understanding that some claimants will miss appointments because of issues around health, childcare, finances and even local transport failures.
Members from across the House agree that there are real problems with UC and that the DWP has not been properly resourced to deal with them. The most glaring issue with UC is the five-week wait. The DWP has tried to take steps to address that, but those measures are either time-limited or do not go far enough in supporting those transitioning on to UC. With 1.6 million people expected to transition onto UC this year, it is vital that the Government act now to equip the DWP to deal with this problem.
More than 70% of PIP appeals found in favour of the claimant between January and March 2018. This represents a 17% increase in successful PIP appeals since January to March 2015, and we have to ask why the DWP has spent £108.1 million since October 2015 to fund legal professionals and their staff to fight these appeals while claimants are left to shoulder the costs of their appeal as a result of this Government’s cuts to legal aid. The Labour party wants to bring back legal aid.
I stood with the DWP staff in Coatbridge when it closed its office in 2017, but, sadly, we lost that fight. The building is still empty; why not reopen it and bring back the resources to Coatbridge?
I congratulate my hon. Friend Ruth George on opening the debate and setting the scene for us. I want to talk briefly about the position in Gateshead. My constituency is wholly contained within the local authority area of Gateshead and I want to touch on various points. We are seeing many of the worst problems occurring in my constituency. We had the full roll-out of universal credit in October and November 2017, so many of my constituents did not benefit from the tweaks that we had later. That clearly does not apply now, but there were some problems earlier on. Yes, people who have applied since the changes have seen the benefit of the roll-over of two weeks’ housing benefit, but many have been left in a difficult situation.
The housing company that manages the housing stock across the Gateshead Council area is the Gateshead Housing Company. According to up-to-date information, there are currently 3,087 tenants on universal credit who even now, collectively, have arrears of £1.8 million. That is an average of £583 each, up from an average of £283 before universal credit. I am told that this is caused by the delays in receiving payments. I am also told that 41% of the tenants of the Gateshead Housing Company have been put on alternative payment arrangements, which is a much higher proportion than either the Government or the company expected. This is not a case of the authority or the housing company leaving people to the worst of the system; this is happening after people have had help.
This builds on existing issues resulting from the bedroom tax, or the under occupancy tax—whichever you want to call it, the problem is the same. It involves those who do not have a chance, whatever they might want to do, to move to a smaller property. There were 1,579 people affected by that, and we can see a cumulative effect building up. The roll-out figure for people going on to universal credit has been much greater than expected. As I say, this is not an area in which people have been left to struggle, but there is still a problem with the housing revenue account.
I want to speak briefly, and quickly, about a report commissioned by Gateshead Council into the impact of universal credit. These are the headlines. First, those claiming universal credit found the experience complicated, difficult and demeaning. Secondly, the consequences of waiting five weeks for their money—and in many cases up to 12 weeks, with an average wait of 7.5 weeks—pushed many people into debt, rent arrears and hardship. For many of them, this included going without food. Thirdly, the staff supporting claimants found the system to be inconsistent, with inaccurate advice being given and difficulty in correcting what were clearly mistakes. Fourthly, universal credit is not working for vulnerable claimants, and it significantly adds to the workload of the staff supporting those claimants. I could go on, but I do not have time to do so.
We have also heard about the difficulty for people moving from the disability living allowance to the personal independence payment, with many people having their benefits reinstated on appeal. It cannot be right that the system allows people to go through all that agony, only to then reinstate their benefits. We have to get that right. Finally, I want to mention one of my constituents, Rev. Tracey Hume, who has said:
“I volunteer with a food bank. I am also a Methodist minister who has had to find benevolent funds to pay for gas and electricity while people wait five weeks for their first payment. We cannot expect people to live like that.”
A few hours ago, our city bid goodbye to Kane Walker. He was a young man who died on our streets in the cold of January. A man gone; a man who should still be with us; a man who, together, we have failed to save. And yet Kane Walker was not the only homeless man to have died in Birmingham. More than 70 homeless people have died on the streets of our city over the past four years. That is why I say to the Minister that the core of the debate today is not numbers or statistics but the moral emergency of homelessness that is now out of control because the safety net has been shredded around people who are only a couple of twists of fate away from the pavement.
When the National Insurance Act 1946 was passing through Parliament, creating the Minister’s Department, Clem Attlee himself moved the Second Reading. He was absolutely determined to see a social security system in this country that would deliver freedom from fear of want. He wanted to slay the five giants of injustice that Beveridge identified back in 1944. However, look at the evil giant of unemployment today. In Birmingham, youth unemployment has shot up by 23% over the past year, with 15,000 more young people now out of work. When Beveridge launched his report, he talked about the giant of disease. Today, disability is knocking more people into poverty than ever before, and yet 33,000 people in our region have been stripped of their right to PIP over the past few years, plunging them into a poverty from which it is difficult to recover.
When Beveridge talked about his five giants, he talked about freedom from want, and yet nearly 60,000 people in our region last year had to rely on food banks—a third of them children—which is a rise of nearly a third over the past few years. The giants of injustice that Beveridge identified now hunt and haunt us on the streets because of the collapsing safety net, and it is the crisis of universal credit that is that the core of the problem. I was amazed to discover in an answer to a written question yesterday that the Mayor of the West Midlands has not written to the Government once in the past year to express concerns about universal credit.
In my last minute I will rattle through the many different problems that Birmingham MPs have identified. There is wholesale confusion about eligibility for housing benefit and universal credit. Huge variations exist in the deductions made for advance payments. The self-employed experience long waits for correct payments. Sanctions are issued against those who are too ill to attend interviews. Those who challenge the inappropriate use of sanctions face huge benefit delays of up to five months. Constituents are forced to travel across the city to access IT to fill out online forms. Constituents with mental health problems are denied the right to face-to-face support. There are process delays and confusion about getting link codes to connect to childcare components, and the same applies to entitlements. There is total confusion about those moving from non-UC areas into UC areas. More confusion exists around eligibility for free prescriptions. Finally, there is complete confusion for our EU neighbours who have to pass the habitual residence test once again. In one of the richest countries on earth and in a city like mine, how can it be that homelessness has spiralled by 1,000% in five years? The system is in crisis, and this Government need to put compassion back into the system where it belongs.
It is a pleasure to follow the impassioned, articulate and erudite speech by Liam Byrne and to speak from the Front Bench for the SNP. It has been a good debate, and I commend the speeches from the hon. Members for High Peak (Ruth George), for Oldham East and Saddleworth (Debbie Abrahams), for Edinburgh West (Christine Jardine), for Rhondda (Chris Bryant) and for Blaydon (Liz Twist), Stephen Timms and the many others who made fantastic speeches. I agree with the Chair of the Finance Committee, the hon. Member for Rhondda, that this debate is far too short and that it is no way for us to scrutinise the spending of the largest-spending Department.
While I agreed wholeheartedly with all that was said by Frank Field, the Chair of the Work and Pensions Committee, he listed a number of problems and areas that require improvements, and the Scottish Government are already acting on two of them. I hope that he will reflect on the fact that the Scottish Government have maintained council tax benefit and fully mitigated the bedroom tax, and we can see the difference in the child poverty in Scotland as a result.
Alex Burghart, who is not in his place, was right to say that work is the best route out of poverty, but while the nations of the UK have record employment levels, child poverty rates are still rising. We know that the Government are about to publish some very damning child poverty statistics, so Conservative Members cannot ignore the need for greater state intervention in this area. It cannot just be about work.
In the limited time available to me, I will raise a number of topics that expand on some of the things that have already been said by others. First, I want UK Ministers to look in greater detail at the benefits freeze, which was introduced in the 2015 Budget—a Budget, of course, that attempted to obliterate the social security system in these isles. The freeze has seen the value of the benefits affected drop by 6.1% over a four-year period, which has hit households hard and is seen by many groups as the key driver of rising child poverty. The Resolution Foundation said this month that child poverty is projected to rise by a further 6% by 2023-24, which would mark a record high.
Billions of pounds of savings have been made through the benefits freeze on the backs of the lowest-income families. In the final year of the freeze, the Exchequer is set to achieve even greater savings than anticipated. The higher than anticipated inflation rate means that the freeze will save over £1.2 billion more next year than the £3.5 billion that had been targeted.
When we know that the freeze is contributing to higher rates of poverty and that the Treasury is about to save more money than even it had targeted, surely the final year of the freeze needs to go. The Secretary of State for Work and Pensions has already said that she does not want to see the freeze continue any longer. She is acknowledging the difficulties it has caused, so why do she and others not go one step further and stop the final year? The spring statement would be the ideal opportunity for that to happen.
I turn now to an area that the Government do not want to be debated. I have called for a debate and a vote on this issue on three occasions, and other Members across the House have, too, but we are being ignored by this Government. UK Ministers want to enact a piece of legislation that is seven years old—it was brought in two Governments and two Parliaments ago—to cut pension credit entitlement. It will mean that mixed-aged couples will no longer be entitled to pension credit and will have to claim universal credit if one member of the couple is under state pension age. It has been estimated that this will cut £7,000 from the incomes of affected households.
When the measure was passed in 2012, we were in a very different political and economic landscape. Pensioner poverty was decreasing, but now we know from the Joseph Rowntree Foundation that pensioner poverty could be on the rise again. It is clear that this Government need to seek a new mandate for the cuts. They need to test the will of the House on what it has inherited and see whether it is still the right thing to do.
Staying with pensions, we know that a number of those who will be affected by the cuts to pension credit will be some of the 1950s women who have been ripped off on their state pension entitlement by this and previous Governments. The UK Government must do more to help the WASPI women, and they must listen to some of the suffering that cutting their state pension entitlement has caused. Despite the rises we have seen via the triple lock, it is worth pointing out that the UK state pension remains one of the most miserly in Europe.
An area where the new Secretary of State has shifted ground is on the two-child policy. She has accepted that rolling out the two-child policy to children born at any time, not just those born after the policy was introduced, would be unfair. We appreciate the small steps the Government have taken in some areas of universal credit, including the two-child policy, but they are clearly not enough. Given that the Secretary of State has accepted the injustice of one aspect of the two-child policy, surely she does not have far to travel to accept that limiting social security payments to two children is morally and socially wrong in its entirety. I urge her to rethink this disastrous policy, which is already forcing more children into poverty.
There is also a growing campaign, as we have heard again today, for the Government to do more on the five-week wait for universal credit. They have taken some steps to assist people moving from the legacy system to universal credit, but they have not gone far enough. A good place to start would be to use the assessment period for the advance payment of UC proper. If there is an acceptance that people need an advance, why say that the money needs to be paid back? People cannot be expected to live off fresh air, and they should not be expected to prolong indebtedness or financial hardship.
The pressures of UC do not stop at those who are receiving it. We heard yesterday that the Public and Commercial Services Union members who are working at service centres in Walsall and Wolverhampton have balloted to strike over changes to workload, recruitment and staff consultations. On top of the problems in UC, ongoing scandals are facing the personal independence payment, employment and support allowance, which was debated yesterday, and the withdrawal of disability premiums—even with some transitional provisions from this Government, this is letting disabled people down.
Meanwhile, the Scottish Government are building a social security system based on dignity and respect, one that garners the confidence of those who need it and the buy-in of taxpayers who pay for it. We have created a carers allowance supplement, to uplift payments by £442 a year, better to reward carers for the incredible job they do. We have introduced the best start grant and baby payment in Scotland, which expands on the UK’s maternity grant by providing eligible families with £600 on the birth of a first child and £300 for subsequent children, without a cap on the number of payments made. What the Scottish Government have done already, and plan to do with new announcements soon, shows this Government what is possible.
In conclusion, while the problems I have listed with the UK system persist, we cannot be expected to agree with the Department for Work and Pensions estimate. The Government need to do more and come back having built a system based on dignity and respect, as we see starting in Scotland. This Secretary of State, the sixth I have faced, is taking steps in the right direction. She has admitted that there are problems with the two-child policy and finally admitted that there is a link between this Government’s social security policies and the rise in food bank use, but they must go further. I know she is pleading with the Treasury for the resources to go further, and we hope we can hear of that at the spring statement.
It is a pleasure to follow Neil Gray. I congratulate my hon. Friend Ruth George on securing such an important debate, and of course thanks go to the 14 Members from across the House who have contributed to it. They made very powerful speeches indeed. This is my first experience of closing an estimate’s day debate for the Opposition, but, sadly, it is certainly not my first experience of a debate in this Chamber that highlights the chaos, unfairness and even sheer inhumanity of our current social security system under this Government. Debates such as today’s have been a depressingly familiar occurrence during my short time in this Chamber. They have been depressingly familiar for those of us who are debating and highlighting these issues, but of course the position is far worse and far more serious for those experiencing them, as was illustrated by my hon. Friend Debbie Abrahams. This system is dehumanising and frightening, and it is, on too many occasions, a tragedy.
As we have heard today, report after report from the Work and Pensions Committee, the National Audit Office and the Trussell Trust has offered major warnings about the Government’s direction of travel. Their findings have been echoed throughout this Chamber once again today. It is troubling enough to hear yet more accounts from right hon. and hon. Members of the human cost of this Government’s approach, in contributions such as that from my hon. Friend the Member for High Peak, who spoke about the rising child poverty evidenced by the Joseph Rowntree Foundation, and that from my right hon. Friend Liam Byrne, who spoke about the human tragedy that is homelessness and youth unemployment, but what is worse is that despite some of the spin, the warm words and the change in mood music, there is still no systematic evidence that this Government are acting in a coherent manner to address the problems that Members have highlighted today.
Universal credit has caused severe hardship for hundreds of thousands of people, yet the DWP is still failing to address the key issue of the five-week wait for an initial payment, as stated by my right hon. Friend Stephen Timms. In the past year, 57% of new universal credit claimants have received an advance payment. It is a debt. That is a clear indication of the dire need people are experiencing. Make no mistake: just because 57% received a loan—an advance payment—that does not mean that the other 43% had no problems with the service at all. For many of them, the reality was not a good experience. Their experience was delay, debt, hunger and food banks.
Recently, the Secretary of State finally admitted what no one before her would admit but almost everybody in this Chamber already knew: the growth in food banks is linked to universal credit. It is belatedly welcome that the Government are finally, partially, waking up to the truth, but accepting it is not enough: action is needed. All too often, the only action from this Government is to press ahead.
Despite all we have heard, the Government are intent on seeking parliamentary approval for a pilot of managed migration to universal credit for some people, to start in July this year. The Secretary of State claims to have listened to charities and Opposition Members when we have evidenced the chaos and hardship that unmanaged migration will bring to 2.78 million people. Let me be clear: that chaos and hardship for 2.78 million people will now be chaos and hardship for 10,000 people. We are calling for a halt to the process altogether.
To add insult to injury, the Government claim that nobody will be worse off as a result of the changes, but, as evidenced by many of the contributions today, that really is not the case. Their belated, forced and haphazard approach to protecting severe disability premium claimants, some of whom were set to lose £178 per month, suggests a Government without a full understanding of how their own policy will affect people. There remain circumstances in which people will lose transitional protection—for example, when they become a couple or if they separate. How can a party that once claimed to be the champion of the family implement a policy that makes people think twice about formally entering a relationship because of the financial cost or, even worse, condemns people to staying in one that is not working and that is not safe, because they cannot afford to leave?
Were someone without prior knowledge or experience of what we are debating to have sat in the Chamber today, they would have heard these stories and asked a simple question—why? Although it is true that backgrounds to stories can be different and the reasons multiple, there is a simple answer to that simple question: austerity. The Library estimates that cuts to spending on social security and working-age tax credits will mean that some £37 billion will have been cut from social security by 2021-22, compared with 2010. Meanwhile, the richest corporations, including those in the financial sector that should shoulder some of the responsibility for austerity, have had tax cuts of more than £110 billion pounds. That is not fair, right or just.
Child poverty is up, with a massive 4.2 million children in need; in-work poverty is up, and now affects 8 million people who are in work; and wages have not recovered to 2008 levels. This Government have spent nine years using social security as a vehicle for cuts; meanwhile some of their friends in the financial sector and in the banks have received bonuses and unjustifiable tax cuts. Ministers may claim a jobs boom, but the reality for thousands and thousands of our constituents is zero-hours contracts or fearing for their jobs, as more and more of our manufacturing and retail base faces mounting insecurity and instability.
Despite all that, the Department for Work and Pensions supplementary estimates show that the Department did not bid for additional 2018-19 funding from the Treasury. Austerity is not over, and there appears to be little or no attempt from the Department for Work and Pensions to make it so. The Resolution Foundation has estimated that the fourth year of the benefit freeze alone saves the Exchequer £1.5 billion in 2019-20, making a total of £4.4 billion over the four years. That has meant that the poorest and most vulnerable people are falling further and further behind. The record shows us that when it comes to social security, this is a Government who do not change course.
It is a pleasure to respond to this debate—a vital discussion on how this Government, and our Department in particular, support people across society. I wish to pay tribute to Ruth George. We have not always agreed on every single issue, but it is clear that she is a tireless campaigner in this area. Her speech was particularly measured. She highlighted some genuine concerns that she has been pushing on in the years since she was elected. She should be proud that, in some of those areas, she has already effected change, and I know that she is an incredibly valuable member of the Work and Pensions Committee. I had the pleasure of joining her for about four weeks. Securing this debate is a tribute to her efforts.
There have been some very good speeches. In the limited time that I have, I will not be able to cover all of them, but I and my ministerial colleagues have taken note of everything that has been said and, where relevant, we will make direct contact.
Last year, the Department supported 20 million people—more than half of the adult population. We spend somewhere in the region of £190 billion, slightly more than a quarter of Government spending, and the equivalent to the GDP of Portugal. We have always been proud to share the proceeds of our growing economy with, often, some of the most vulnerable people in society.
My hon. Friend Alex Burghart made a powerful point about the impact on workless households and what an enormous difference that work can make. My hon. Friend Huw Merriman said that, probably, the Government’s greatest achievement is our record on employment. Since 2010, the employment rate has increased to a joint record high. Youth unemployment has almost halved; the female unemployment rate is at a record low; and nearly 1 million more disabled people are in work than in 2013.
Last year, wages grew at their fastest rate in a decade at 3.4%. We are going further to support those in work, with the introduction of the national living wage, which is worth £2,000 a year. The changes to the income tax threshold are worth £1,200 a year. We have seen the doubling of free childcare and the extension of childcare cost support through universal credit. Money being spent on childcare support has risen from £4 billion in 2010 to £6 billion today—a 50% increase. However, this jobs miracle is not a given. Our labour market is outperforming many other developed countries: more people have moved into work in the UK since 2010 than in France, Spain, Ireland, the Netherlands, Austria and Norway combined. What a stark contrast that is to the previous Labour Government, and every other Labour Government who have always left office with higher unemployment.
Many of the speeches have understandably focused on universal credit. We are creating a welfare system in which it pays to work. It simplifies a complex legacy benefits system that too often thwarted opportunities to work. I was heartened that my hon. Friend the Member for Bexhill and Battle highlighted the huge amounts of great work done by individual work coaches. One thing that most impresses me when I go on visits to jobcentres is the enthusiasm that work coaches have for universal credit, giving them, for the first time in a generation, the tools to provide personalised and tailored support. For the first time, claimants have a named work coach who helps them navigate the support for housing, training and childcare, leaving up to 50% more time for them to find work. In addition, they get the support of universal support partnerships, which responds in real time. This contrasts with the legacy benefits, which were hugely complex, with six different benefits across three different agencies: Her Majesty’s Revenue and Customs, DWP and local authorities. We saw from our own pieces of casework just how some of the most vulnerable people fell through the system. It is estimated that £2.4 billion of financial support was left unclaimed a year.
I will not take interventions just yet, as I need to make a bit more progress. A total of 700,000 of some of the most vulnerable claimants have missed out, on average, on £230 a month. These are some of the people where £5 either way makes a real difference. We have removed the 90% tax rate for some, and the hated 16, 24 and 36-hour cliff edges.
However, it is right to say that improvements are needed. Many of the Members who have spoken powerfully today have helped to change universal credit since its inception. There is still much more to do, but we all welcome the additional £4.5 billion-worth of investment into universal credit set out over the last two Budgets, which means that we will be spending £2 billion more on universal credit than under the legacy benefits.
I will give way shortly.
We have seen changes to advanced payments. We introduced the two-week run-on for housing benefit for existing claimants and, in April 2020, an additional two weeks for ESA, JSA and income support claimants as they migrate over. We have scrapped the seven waiting days. Rightly, the Secretary of State is putting a real focus on looking at alternate payments, whether that is paying direct to the landlord or paying more frequently. We have increased the work allowance by £1,000, worth £630. We have extended the exemption for the minimum income floor for the self-employed. We are continuing to listen to these debates to make further improvements.
I have constituents who were housed by Rhondda Housing Association. They were on the old benefits, but because they have been moved by the housing association to new properties, still with the same housing association, they have been moved by the DWP on to universal credit and have to start from the very beginning. The bulk payment system and the payment directly to the housing association means that they have lost out on 11 weeks of housing benefit and, consequently, are suddenly in arrears having done nothing wrong. Will the Minister please make sure that this is put right for my constituents?
The hon. Gentleman is absolutely right—we have to make the transition as smooth as possible, where possible sharing data and working with support organisations.
That brings me neatly—this is why I was right to take the hon. Gentleman’s intervention at that point—on to the key point. Many of the people who will be in the benefits system are incredibly vulnerable. They do not have the family support—the network—that can help them to deal with life’s challenges as they come towards them. My ministerial colleagues and I work closely with charities, stakeholders, Members from all parties, and the Work and Pensions Committee. We also work with those with genuine, real-life experience, because they will not only raise, with their experiences, what needs to be improved, but can help with the training and guidance of our frontline staff.
I know this is a small point in the overall scheme of universal credit, but I mentioned my constituent Antony Hamilton and the issue he has in doing his A-levels while being a bit older because of his special educational needs. I would be grateful if the Minister could confirm whether anything could be done to help Antony.
The hon. Lady made a powerful point about Antony, and the relevant Minister will contact her to discuss it further.
The key for us is partnership working. On domestic abuse, we are rightly working with Women’s Aid and Refuge to help with training and guidance, and to strengthen our ability to identify, refer and support. We are working with organisations such as Barnardo’s and the Children’s Society to strengthen opportunities for care leavers. Ex-offenders are working closely with the Ministry of Justice to make sure that their universal credit claim is in place before they leave prison so that no people are falling between the gaps. On homelessness and rough sleeping, we are working with a number of organisations. Only today, Crisis said that over the past two years the Government have been showing drive and energy.
I am sorry but I do not have time to give way. The duty to refer change that was brought in in October will be addressing the points that the right hon. Gentleman made.
This party is committed to supporting the most vulnerable. Household incomes have never been higher. Income inequality has fallen. Risks of low income and material deprivation for children and pensioners have never been lower. The incomes of the poorest fifth are up by £400 in real terms, with 300,000 fewer children in absolute poverty. We are now spending £50 billion a year in supporting those with disabilities and long-term health conditions—£4 billion higher than in 2010. We, as a Government, are determined to help the most vulnerable. This is what drives me and many Members across the House who are here today. This Government are determined to get it right for the people who need the most support.
I thank the Minister, the shadow Minister and all those who have made powerful speeches. Members across the House raised the issue of PIP appeals and the impact of some terrible cases. My right hon. Friend Stephen Timms talked about the five-week wait. The Chair of the Work and Pensions Committee, my right hon. Friend Frank Field, raised the benefits freeze, which came on top of a three-year freeze to tax credits and the three-year 1% cap introduced under the Welfare Benefits Up-rating Act 2013. That must be a priority.
I was pleased to hear from the Minister that the Government are looking to do more. My colleagues on the Select Committee are working on two reports on natural migration to universal credit and the welfare safety net. I hope the Government will read and respond to those, as well as the report being compiled by the all-party group on the many issues that remain with universal credit, many of which do not require additional funding but, if solved, will help people to be supported by a personalised system.
Question deferred (
The Deputy Speaker put the deferred Questions (