Department for Work and Pensions

Part of the debate – in the House of Commons at 3:53 pm on 2nd July 2019.

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Photo of Neil Gray Neil Gray Shadow SNP Spokesperson (Work and Pensions) 3:53 pm, 2nd July 2019

It is a pleasure to follow Huw Merriman. May I again point him to the Scottish Social Security Agency and the way we in Scotland propose to treat people with a terminal illness? I think he will find that quite illuminating, and it has suggestions for this Government.

It is a pleasure to speak for the SNP in this debate. I congratulate Alison McGovern on securing it. There have been a number of interesting speeches, not least that of the hon. Lady herself. She set out very well a strong defence of the welfare state. She rightly contrasted how pensioners, other than the WASPI women, have rightly been protected, while others have not. I will develop that point later in my speech. She also mentioned the fact that austerity is a choice, and she was right to draw attention to the 1.6 million food parcels handed out by the Trussell Trust as a stark reminder of the impoverishing failure of austerity. Best of all was her stout and clear argument that lack of income is the driving force behind poverty.

Trudy Harrison was right to welcome the Government’s cancelling the expansion of the two-child limit, but I question why she does not expect that policy to be scrapped.

I always enjoy listening to Debbie Abrahams in these debates. She rightly asked why we do not hold the social security system in the UK in the same high esteem as the NHS. We should all ponder that, as should some in the fourth estate.

Sarah Newton made a thoughtful speech, but I think that my hon. Friend Alison Thewliss made the best speech today. It was brilliant and rightly contradicted the Tory rhetoric on the two-child limit, highlighting last week’s report by the Child Poverty Action Group, the Church of England and others. I know it gives her no pleasure—it certainly gives me no pleasure—to say that the report proves that the warnings we gave at the time were correct. No mother—no parent—should have to choose between poverty and an abortion, but sadly that is the stark choice that faces some because of the two-child limit.

Alex Burghart is simply wrong about universal credit. The last Budget made up for just half the cuts that the 2015 Budget inflicted on universal credit.

Ruth George was right to highlight the non-financial problems with universal credit and other benefits. Huw Merriman was right to point to the DWP’s influence. Policy drives poverty—we should remember that.

Sadly, so much of the debate has been characterised by raking over decade-old ground rather than addressing the issues that we face today, and I wish that some Members had spent more of our time on the latter. The estimate for DWP spending is still driven by the policies of austerity that have ravaged the Department since 2010. The estimate may have risen by 3%, but, as the Library briefing makes clear, that is largely down to the Department’s accepting greater responsibility for spending that was previously made by other Departments—for example, taking tax credits from HMRC.

Most people who rely on social security do not see any rise in their weekly family budgets. Justin Madders made that point well when he said that 1.9 million people were worse off by £1,000 under universal credit according to the Institute for Fiscal Studies. Family incomes have been slashed, thanks to the austerity agenda that the Tory-Liberal coalition led and the Tories continued after 2015.

Even the modest rises in the state pension leave the UK state pension as one of the most miserly in the developed world. Thousands of people in Scotland and across the UK have been hit by the benefits freeze, the two-child cap, and cuts to disability benefit and universal credit, leading to a rise in food bank use and in-work poverty. That is why we want the UK Government to think again about their budget for the DWP. It is also why SNP Members will vote against the estimate. We do not do so to deny the funding to the Department; we are using the vote as the only blunt instrument we have to protest about the way in which the Department is funded and the way in which the estimates process is scrutinised. In Holyrood, Members can amend the Budget, but that is sadly not the case here.

The Budget allocation will not allow the Department to remove the two-child cap or the benefits freeze, to fix universal credit, or to mitigate the hardship suffered by women born in the 1950s because the state pension age increased without adequate notice or lead-in time.

What is the real world result of the Government’s spending cuts to the Department? It is increased poverty and food bank use. The Trussell Trust, the largest food bank network in the UK, has reported steep rises in demand for its services year on year. In this year’s report, it points to increased food bank use among working families. That should be a stark warning to us all.

The Secretary of State was the first in her role to acknowledge the long-stated link between social security cuts and increased food bank use, but the Government have done little to put the money where it is needed and stop the cuts that hurt the most, such as the benefits freeze and the two-child cap. The investment in universal credit at the last Budget did not even cover the cuts that were inflicted by the disgraceful 2015 Budget, which cut universal credit and other social security benefits to ribbons.

Everything in the estimate before us could be moot as we are going to have a new Prime Minister, a new Chancellor and probably a new Secretary of State for the Department for Work and Pensions by the end of the month. My questions for the two remaining candidates for Prime Minister are these. What are their plans for social security? What are they going to do about child poverty? Are they going to follow the model set out last week by the Scottish Government, with the Scottish child payment? That measure alone, which will be delivered earlier than predicted to tackle the increase in child poverty perpetrated by the UK Government, is predicted to lift 30,000 children out of poverty. The Child Poverty Action Group described that as a game changer in the fight to tackle child poverty, which is quite the contrast from CPAG’s comments on the Tories’ two-child cap:

“You could not design a better policy to increase child poverty than this one”.

Whichever candidate wins, we want to know whether they will follow our example in putting money where it is needed, or whether will they continue with the pernicious cuts to social security we have seen them support since 2010.

It is unlikely that the frontrunner, the former Foreign Secretary, will have the ideological or economic space to address the problems with universal credit, as he will be spending Scottish taxpayers’ money on delivering a massive tax cut that the IFS has said would primarily benefit just the top 8% of earners. Quite how the 4.5 million UK children in poverty will benefit is anyone’s guess, but it is all a guessing game with this candidate. Indeed, yesterday I suggested it might be the Secretary of State’s final outing at DWP questions. Little did I know how prophetic that statement was. Today, we found out that the Foreign Secretary apparently wants to get rid of the DWP altogether. What an absolute farce!

I also raised yesterday the issue of child poverty. The Work and Pensions Secretary said that she saw work as the best route out of poverty. I agree, but it has to be properly paid work and the evidence shows that in-work poverty is rising. Incomes matter, which is why the new Scottish child payment is so important. So is addressing the chronic shortage of social and affordable housing, on which Scotland is leading the way. So is getting more employers to pay the real living wage, on which Scotland is leading the way. Those are just some of the reasons why Scotland has a lower child poverty figure than the rest of the UK.

Sadly, we have so much more to do. The UN special rapporteur on poverty and human rights, Philip Alston, recognised the work that is being done in Scotland to address poverty, but he also pointed to UK social security policies as driving poverty levels in Scotland. The Scottish Government, local authorities and third sector organisations are doing fantastic work to alleviate poverty, but we are pushing against the tide of UK cuts. The problems need to be fixed here.

One of the problems is the five-week wait that is built into universal credit. The waiting period is driving up indebtedness through rent arrears and commercial debt. One way of sorting it could be to use the assessment period for the advance payment of UC proper. If there is an acceptance that people need an advance at the start of universal credit, why say that that money has 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 either. Advance the first payment of universal credit and stop the cycle of hardship. I have already mentioned the two-child cap and the benefit freeze, which, I think we are starting to realise, needs to get sorted. Taken with the five-week wait, fixing them would go a long way to stop the projected rise in poverty.

In terms of treating people with dignity and respect, there is an urgent need to sort out the disability assessment and to ensure there is a “do no harm” approach. Ministers will be aware of the work being done in Scotland to set up the new Scottish social security agency, which is soon to take responsibility for personal independence payments. One of the things we have confirmed we will do is to ensure all medical information about the applicant is available at the application stage, so as to avoid the need for the face-to-face assessments that so many disabled people find demeaning and irrelevant. It is hoped that by doing so we will cut the staggering appeal rights currently seen in the UK system, as we will get the decision right first time. The current Minister for Disabled People, Health and Work, Justin Tomlinson, once said from the Back Benches that he was sympathetic to that idea. I hope he might be influential in the Department now in looking to follow Scotland’s lead in this area.

The pensions landscape still needs to be properly mapped out. I have repeatedly raised the issues faced by the 1950s-born women. I still believe that UK Ministers have an obligation to act, but we continue to be stonewalled. One issue picked up this morning, in a roundtable that my right hon. Friend Ian Blackford, my hon. Friend Mhairi Black and I had with pension stakeholders, was lost pension assets. The Association of British Insurers and the Pensions Policy Institute analysed that relatively recently and found that there are 1.6 million lost pension pots, averaging £13,000 each. In total, about £20 billion is unclaimed. Astonishingly, those figures are for defined-contribution schemes alone. Obviously, defined-benefit schemes are harder to analyse, but the total is expected to be far in excess of the £20 billion unclaimed from DC schemes.

What I find most frustrating is that, although the industry has been trying hard to return those assets to their owners, the UK Government have not been terribly helpful in providing the necessary information to allow it to do so. I hope that changes. Phoenix, one of the contributors to our meeting this morning, spent two years researching lost pension pots and managed to reunite people with £13 million from more than 2,300 pots. Clearly, the UK Government need to look at what they can do to help the industry, as we are talking about substantial amounts of money.

We await publication of the pensions Bill. I hope there is serious cross-party work to advance key issues such as the pensions dashboard and our idea for an independent pensions commission.

Sadly, this debate has shown that although there is general consensus on the pensions scene, there is very little in other areas of social security—there are some exceptions—that we agree on across the House. However, the facts speak for themselves. When we invest in families and ensure they receive proper support, poverty drops. Poverty is policy driven, and right now UK policy is impoverishing. That is why we cannot support these estimates this evening.