Department for Work and Pensions

Part of the debate – in the House of Commons at 5:10 pm on 26th February 2019.

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Photo of Ruth George Ruth George Labour, High Peak 5:10 pm, 26th February 2019

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.