Universal Credit (Children)
Christina Rees Excerpts(8 years ago)
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Stephen Timms (East Ham) (Lab)
I beg to move,
That this House notes that, while some aspects of the universal credit system are likely better to support families with children, some groups of children and families are particularly likely to lose out, and many may struggle with elements of the new approaches to payment and administration; further notes that there has been no revised impact assessment to take account of significant cuts to the work allowance; and calls on the Government to re-assess the effect of its policy on universal credit in light of those cuts and to ensure that the number of children in poverty, and particularly those in working families, falls as a result of the introduction of the new universal credit system.
I am extremely grateful to the Backbench Business Committee for giving us the opportunity to debate this subject. Once universal credit is in place, it is estimated that about half of all the children in the UK will be in households that are entitled to it at any given time, so it will have a huge impact on children and one that it is important for us to scrutinise.
I am pleased to see my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) and the Minister for Employment in their places. I have always enjoyed debating these matters with the Minister, but I often wish she felt as willing to disagree with her right hon. and hon. Friends on her ministerial brief as she is free to disagree with the Prime Minister about Europe. However, I fear I may be disappointed when we come to the end of the debate. I hope that the debate can shed some light on the impact of universal credit on child poverty around the UK.
The Opposition have always recognised that there are significant potential benefits from universal credit: simplifying the system, merging six different benefits into one and, in particular, making it much easier for people to work out the effect on their financial position if they were to move into work—that is difficult at the moment but under universal credit should be simpler. The former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), who of course resigned from the Government after the Budget fiasco on disability benefits, is entitled to a good deal of credit for coming up with the original idea and driving it through while he was in the Government.
Unfortunately, however, the right hon. Gentleman is not entitled to very much credit for the way that he implemented universal credit—the Department got itself into a terrible mess, and the Cabinet Office had to step in to sort out a looming IT disaster. The result is that universal credit is now running extremely late. On the original timetable, set out in 2010, transition from the old benefits system to universal credit would now be almost finished, and the whole thing would be complete by next year. In fact, implementation of universal credit is really only just beginning. According to the most recent figures, from March, 225,000 people are receiving universal credit, of whom almost 88,000 are in work.
The initial plan was hopelessly unrealistic, as was pointed out by the Opposition at the time. Unfortunately the Government ignored those warnings. We were told at one stage that 1 million people would be claiming universal credit by April 2014; two years later, we still have not reached a quarter of that number. Things are a little unclear, but it now looks as though the current plan has transition complete by 2022, which is five years later than originally announced.
Christina Rees (Neath) (Lab)
Does my right hon. Friend think it right and fair that, as a result of the piecemeal roll-out of universal credit, along with the cuts to work allowances, some families could be more than £3,000 a year worse off than they would be if they were in exactly the same financial circumstances but lived in an area where tax credits were still available?
Stephen Timms
No, I do not think that that is fair. There is now a large and growing group of people who are significantly worse off than they would have been because they have the misfortune of being in an area where universal credit is paid instead of tax credits. My hon. Friend is absolutely right to draw attention to that.
When the universal credit project started in 2011, we were told that it would be completed in six years. Today, five years later, we are being told that it will be completed in another six years, by 2022. Five years into this initiative, its expected completion has been delayed by five years. We are no nearer the end now than we were told we were five years ago.
Stephen Timms
I am grateful to my hon. Friend for raising that point, and Citizens Advice points out that this is the biggest practical problem that arises where universal credit has already been introduced. The assumption with universal credit is that people have a monthly pay cheque that will see them through the first month, and that they will receive universal credit at the end of that. However, Citizens Advice suggests that more than half of those claiming are paid weekly, not monthly, and therefore do not have a month’s pay cheque to keep them going for those five weeks. That is causing serious problems.
Will the Minister update the House on what the Government now believe the effect of universal credit will be on child poverty? Given the drastic cuts that we have seen, I believe that implementing universal credit will increase child poverty, rather than decrease it as we were told it would, and as—I have no doubt—was the intention of the former Secretary of State for Work and Pensions in introducing this radical change.
Some information on that question has been provided by the Institute for Fiscal Studies in its February report, “Living Standards, Poverty and Inequality in the UK: 2015–16 to 2020–21”, which shows relative poverty rates from 1997-98 to 2020-21. It points out that in 1997-98 relative child poverty—which was inherited by the incoming Labour Government— stood at 27%. By 2010-11 when that Government were replaced, that figure was down to between 17% and 18%. The statutory target enshrined in the Child Poverty Act 2010—which I took through the House with all-party support—was 10% by 2020, but after 2010 the level of child poverty flatlined for a number of years, and it is now starting to rise. Under the IFS projection, by 2020 it will be virtually back up to the catastrophic level inherited by the Blair Government in 1997. As the IFS states in its report
“the projected increases over the next few years simply reverse the large falls seen under Labour.”
It is interesting to contrast that with what the IFS says about pensioner poverty. Like child poverty, pensioner poverty in 1997 was at a high level—around 27%—but the policies of the Labour Government reduced that to around 17%, and that level remained fairly stable throughout the previous Parliament from 2010 to 2015. The future trajectory for pensioner poverty suggests that it will not rise and will carry on at around 17%. By contrast, child poverty will rocket back up to the levels of 1997. Under the IFS projection, the rate of child poverty in families with more than three children will be more than 30% by 2020.
The huge cuts announced to universal credit will come about by reducing the income of working families with children—a lot of families will be much worse off not only compared with what they would have received under the tax credit system, but in comparison with what they would have received if the original universal credit proposals had gone ahead. The Child Poverty Action Group highlights problems for lone parents and states that
“lone parents will be hit particularly hard, and stand to lose…around £554 per year if renting, or over £2,600 per year if not…The children of single parents are already at twice the risk of living in poverty as those in couple families, and this will exacerbate their disadvantage”.
Cuts to universal credit will drastically reduce the income of working families, and just as big a worry is that incentives for unemployed parents to get into work will be much weaker under current proposals for universal credit than originally intended. That was spelt out by the Resolution Foundation in its report, which states:
“These cuts don’t just affect incomes, they also undermine the scheme’s incentives structure… Returns to entering work are much lower than anticipated under the earlier design of UC.”
It warns that parents—particularly lone parents—will find the incentives to work more hours very weak, and many will reduce their hours for a very small income drop.
Christina Rees
Does my right hon. Friend agree that guidance from the DWP that instructs people to work an extra 200 hours a year for no extra money, to make up the thousands of pounds a year that families are set to lose as a result of cuts to universal credit, is unacceptable?
Stephen Timms
Yes, the suggestion that people can make up those losses simply by working more hours is unrealistic in many circumstances. The Resolution Foundation also points out:
“For second earners in couples the situation may be worse still, with increasing numbers potentially deciding not to enter work at all.”
The whole point of universal credit was supposed to give people incentives to be in employment—indeed, yesterday the Secretary of State reiterated that point at questions to the DWP. The problem is that as currently proposed, those incentives will not be in place when universal credit is rolled out.
Let me draw the Minister’s attention to an article that was published last month and written by Deven Ghelani, who was one of the original architects of universal credit at the Centre for Social Justice. He describes the cuts to universal credit work allowances that were introduced on 11 April as
“undermining the original intent of Universal Credit—to make work pay…The Government should maintain support for work incentives within Universal Credit…these cuts to work allowances will not help to make work pay for low earners.”
That is a deep problem with what is now proposed.
The Minister will argue that calculations of child poverty—the reduction in child poverty of 300,000 that was announced by the Government in the original impact assessment for the legislation, and the subsequent written answer estimate of 150,000—do not allow for the dynamic effects of universal credit and of encouraging people into jobs. In his article, Deven Ghelani addresses exactly that point and states:
“Lower work allowances will limit the dynamic effect of Universal Credit and…will make it harder for households to make up their shortfall by working additional hours.”
That point was also raised by my hon. Friend the Member for Neath.
Nick Thomas-Symonds
My hon. Friend is absolutely right about that. The hon. Member for North Devon wanted the broader context to be taken into account, so let us take into account the national living wage as well. A single parent who is already working full time on the national living wage of £7.20 an hour will have to work 46 extra days a year, which is more than two additional working months. How on earth can that be put forward as a reasonable proposition by anybody? It obviously is not reasonable.
The Government were warned about the problems they face today as a result of cuts to universal credit. The Social Mobility and Child Poverty Commission report released just before Christmas, on 17 December, said that the “immediate priority” had to be ensuring that the cuts to the work allowance planned for this April did not go ahead, but the Government simply did not listen. The problem that they are getting to is that their approach is starting to deny the very purposes that universal credit was set up for. The Resolution Foundation states:
“But it is also much changed as a result of the increasingly tight financial restraints placed on it over recent years. These have involved more than just a reduction in the money available under UC, they have also altered the very structure of the policy—changing the composition of winners and losers and fundamentally damaging its ability to deliver against its purported aims.”
Perhaps that explains why the Government are so terrified of publishing an up-to-date impact assessment. Perhaps it explains why they are so terrified of telling us the figures as to what they expect will happen to child poverty over this Parliament.
Christina Rees
Does my hon. Friend agree that we also urgently need an analysis of the gender impact of the Government’s policy since 2010, because the design of universal credit, like that of other Government policies, does seem to have a disproportionate impact on women?
Nick Thomas-Symonds
My hon. Friend is absolutely right about that, and we all know that the brunt of the cuts has fallen on women. That is precisely what the Government should be taking into account and they should carry out such an analysis. It is not as though it would be that difficult for the Government to come up with these figures. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) chairs the all-party group on health in all policies, whose excellent report, produced in February, made it absolutely clear that there is a danger of the progress on tackling child poverty made by the last Labour Government going into reverse as a result of what this Government are doing.
This is not, however, just about the Government’s lack of compassion on these things; it is also about their complete lack of competence. We should not forget how universal credit has been implemented. On 1 November 2011, the former Secretary of State told us in a press release that there would be no fewer than 1 million people claiming universal credit “by April 2014”, but by November 2015 the actual figure was 155,568, which, by my reckoning, is less than a fifth of the target he had set himself in 2011. The day on which the roll-out is to be completed seems to be forever going back. When I was younger, my great aunt and uncle used to own a pub, in which there was a brass plaque just above the bar saying, “Free beer tomorrow”. The problem being that every time people went in it still said, “Free beer tomorrow”. I am afraid that that is where we are getting to with universal credit: six years later, we are still waiting for it to be implemented.
This is not just about the speed of the implementation; it is also about the risks that the Government have identified. Let us also not forget the universal credit risk register, whose disclosure the Government, again, fought tooth and nail against. They were forced to disclose it; they love spending legal fees on defending the indefensible. It identified 65 open risks to the programme, including that of skilled staff resources not being in the right place at the risk time. The list of incompetence does not end there. The former Secretary of State made clear—this was the point made by my right hon. Friend the Member for East Ham about people being broadly the same on universal credit as on tax credits—the following when answering departmental questions:
“Here is the key: I have already said that those who are on universal credit at the moment will be supported by their advisers through the flexible support fund, to ensure that their status does not change.” —[Official Report, 7 December 2015; Vol. 603, c. 707.]
The idea being of course that the discretionary flexible support fund can make up the difference. I have with me the letter that the Department is sending out on this issue. I do not know whether the Minister has seen this, as the rumours are that since she declared for British exit she does not get to see all the documents in her Department—I am happy to show it to her if she has not. It sets out what the new amount of money is, but there is not one mention of the flexible support fund.
When we are talking about incompetence, it is almost as though some Department for Work and Pensions Ministers have been in competition with each other. We will have to give the top award to the Under-Secretary of State for Work and Pensions, the hon. Member for North West Cambridgeshire (Mr Vara), although I feel bad in doing so because he is only a part-timer in the Department. However, his answer on mitigating the effect of cuts was as follows:
“let us not forget, the fact that every time we fill up our tank with petrol there is a saving…because of the freezing of the fuel duty.”—[Official Report, 6 January 2016; Vol. 604, c. 342.]
If the answer in 2016 from the Tories to those who lose out is, “Go and fill up your car”, it shows how out of touch they are. I picked him out for the top spot in the incompetence league, but in recent months the Minister for Employment has become used to missing out on the top spot. [Interruption.] I will certainly carry on.
The problem is that naked politics is interfering with universal credit. Do not take my word for it; take the word of the former Secretary of State who, when interviewed on the Andrew Marr show on 20 March, said that
“it looks like we see benefits as a pot of money to cut because they don’t vote for us”.
Let us never forget that, because what it says to children in poverty is that we are only interested in their parents if they voted for us or are likely to vote for us at the next election.
What else did the former Secretary of State say about what was happening to the Government’s social security changes? He said this:
“There has been too much emphasis on money saving exercises and not enough awareness from the Treasury, in particular, that the government’s vision of a new welfare-to-work system could not repeatedly be salami-sliced.”
We heard even worse from him, including his damning criticism of the Treasury:
“I am unable to watch passively while certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest.”
Any arguments made today by the hon. Member for Gloucester that these cuts are about a reduction in our deficit were blown apart by what was said by the former Secretary of State. What he was saying is that it is all about the politics and career of the Chancellor.
Oral Answers to Questions
Christina Rees Excerpts(8 years ago)
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Stephen Crabb
I have to say to the hon. Lady and to Members across the Opposition Benches that there is a question here of responsible opposition. If they do not have a plan that is clear and fully costed—the Labour party’s policies were not—they are simply playing those women along, pretending that they are in a position to unwind the changes while sitting there knowing full well that they have no serious proposal for doing so.
Christina Rees (Neath) (Lab)
9. What steps his Department is taking to ensure that staff carrying out personal independence payment assessments act in a professional manner.
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
The Department has set clear requirements regarding the professions, skills, experience and training of the health professionals that providers can use to carry out PIP assessments. We expect the highest standards from the contractors who carry out assessments on our behalf, and measure their performance against several targets, including quality and customer experience.
Christina Rees
My constituents have reported huge inaccuracies between the information that they provide against PIP descriptors and the conclusions drawn by Capita’s staff, which causes great stress for people already in difficult circumstances. What is the Department doing to ensure that Capita’s staff are trained to take the appropriate time and care over assessments, so that they are as accurate and as fair as possible?
Personal Independence Payments
Christina Rees Excerpts(8 years ago)
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Christina Rees (Neath) (Lab)
Everything my hon. Friend says is happening in Neath. What is the Department for Work and Pensions doing to ensure that the healthcare professionals who undertake the assessments are mental health specialists, as Capita claims? What exactly does “mental health specialist” mean? Are they qualified mental health nurses, doctors or carers? In one case in Neath, a report was done by a paramedic.
Ian C. Lucas
I am sure that the Minister will address those points in his response, which I will now allow him to make. I am grateful to him for being patient while I have taken interventions.
Justin Tomlinson
No, it is the reality that every year the number of people either on DLA or PIP—as Members can imagine, people are increasingly switching to PIP from DLA—is rising and the amount being spent is rising. That is what is happening. As things stand today, 1.32 million people have gone through the PIP process. About 745,000 claimants are now on PIP, and about 1.5 million claimants remain on DLA.
Christina Rees
Will the Minister explain why people who have been in receipt of DLA for more than 10 years are no longer eligible to receive disability benefit? Why are they no longer classified as disabled under the current Government guidelines?
Justin Tomlinson
I say gently that that is a little muddled, but I will come on to explain things. Under DLA, not only was the form complicated and people did not necessarily have the medical evidence, meaning that they could be under-diagnosed, but they were not reassessed. Many Members have implied today that we should not reassess people, but the reality is that every year the condition of one in three people will change so significantly that they should be on a different level of benefit. For the majority of those people, their condition is getting worse, not better.
Under DLA, we found that people were on a lower rate than they should have had for decades. Under the PIP process, there is a lot more evidence, which we use to say, “Right, this person has a fluctuating health condition, or a degenerative health condition, that will probably get worse, and they are currently only on the standard rate, but we have an expectation that they will probably progress to having a requirement for an enhanced benefit at a certain period of time.” We flag that up in the system, and that person would then automatically come in for reassessment.
People who are already on the highest rate and have a degenerative condition are not likely to have intense reassessments on a regular basis. It may very well be that many years pass before there is a telephone call to ask, “Are conditions still the same?” That is something that the old DLA system failed—
Justin Tomlinson
The hon. Lady can shake her head, but that is why only 16% of claimants on DLA received it at the highest rate, yet the figure for PIP is 22%.
In-work Poverty
Christina Rees Excerpts(8 years, 3 months ago)
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Carolyn Harris (Swansea East) (Lab)
I beg to move,
That this House has considered in-work poverty.
It is a pleasure to serve under your excellent chairmanship, Mr Turner. This Government are failing to make work pay, and their cuts to in-work support risk increasing the number of working families in poverty even further. Over the previous Parliament, average real wages fell by more than £1,000 a year. Furthermore, 2010 to 2020 will be the worst decade for pay growth in almost a century and the third worst since 1860.
Cuts to universal credit that begin in April will make 2.6 million working families £1,600 a year worse off by 2020, making it almost impossible for families to work their way out of poverty. The Government’s advice to working families set to be hit by those cuts is to work an additional 200 hours a year to recoup the losses. That is neither fair nor practical for millions of low-paid families who are already working full time. I am delighted to have secured this debate, so that we in the Opposition can bring forward the reality of those in our constituencies who are experiencing high levels of in-work poverty and to call on the Government to scrap their cuts to universal credit before the cuts take hold in April.
We know from the Social Mobility and Child Poverty Commission that 1.5 million children are in poverty because their working parents do not earn enough to secure a basic standard of living. Four out of 10 children in working poor households live in families where parents might be expected to enter work or work more hours. Owing to high levels of in-work poverty, the commission has warned that the cuts to universal credit will—in its words, not mine—
“make many working families significantly worse off.”
The commission has recommended that the Government reverse their cuts to universal credit, saying:
“These changes would have resulted in millions of families in low-paid work who are ‘doing the right thing’ and working as much as society expects them to, seeing their annual income fall by thousands of pounds on 1 April 2016.”
Despite the fears, the cuts to universal credit are still going ahead. It will be very difficult for many affected families to increase their hours of work and hourly pay to avoid big cuts to their incomes.
Christina Rees (Neath) (Lab)
Does my hon. Friend know that 167,400 working families in Wales will be impacted by these cuts and that 134,600 of them are families with children?
Carolyn Harris
I do, and not only Wales is affected; this affects every constituency in the country.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
It is a pleasure to serve under your chairmanship this afternoon, Mr Turner, and I congratulate my hon. Friend the Member for Swansea East (Carolyn Harris) on securing this important debate.
It is hard to justify why so many people live in poverty in a country as wealthy as the UK. I believe that one of the key explanations is that the welfare state, designed to protect us all against risks such as unemployment, illness and old age, simply fails to provide an adequate income for families and others when they are unable to support themselves fully.
It is truly shocking that in 2016, in-work poverty is growing. In some areas, the number of working households in poverty is greater than the number of non-working households. Major factors appear to be low pay and part-time work, and zero-hours contracts are also a major contributory factor.
Christina Rees
It was remiss of me not to say in my earlier intervention what a pleasure it is to serve under your chairmanship, Mr Turner.
Does my hon. Friend agree that although responsibility for tackling in-work poverty in Wales is a devolved issue, the levers for tackling it lie mainly with the UK Government? He mentioned zero-hours contracts, but I add to that the minimum wage, welfare benefits and, of course, the tax system.
Gerald Jones
I could not agree more. Both the Welsh Government and local government have tried to mitigate those circumstances, but the major levers lie here at Westminster.
Mark Durkan (Foyle) (SDLP)
It is a pleasure to serve under your chairmanship, Mr Turner, and I congratulate my hon. Friend the Member for Swansea East (Carolyn Harris) on securing this important debate.
Like my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), I want to address these issues, first of all, based on the experience of people in my constituency. I represent the city of Derry—or Londonderry—which has very high unemployment. The constituency of Foyle ranks No. 1 for unemployment of all the constituencies in the House of Commons. As well as having very high long-term unemployment and very high youth unemployment, it also has a lot of underpaid employment. It is a border city, with all the challenges that that brings for our regional economy, and obviously it has suffered the impact of conflict. Every day, families and working people there contend with the same economic challenges that hon. Members throughout the House have mentioned, in an economy that has structural weaknesses. It is clear that for people in my constituency, the problem is not lack of work ethic but a lack of work. Much of the Government’s agenda and purpose, in the welfare reforms and other measures they have introduced in the last Parliament and this one, seems to be fixated on work ethic rather than availability of work.
That is why I have found myself in opposition to so many of the Government’s reforms and why, along with so many others—I was glad to see that they included Conservatives MPs—I challenged the Government’s proposals on tax credits. They would have hurt people who are in work but coping with marginal incomes given their family, work-related and other living costs. Those changes have been parked, but there has not been a complete U-turn. There has been merely a J-turn, which has gone part of the way. The Government intend to apply the same logic to universal credit, we are just not getting the early implementation of the plan for those still on tax credits. That plan will clearly increase working poverty. We have seen in the various figures that have been quoted—I will not rehearse all the figures from the Institute for Fiscal Studies and others—that there will be a real impact on the family income of people in work.
Christina Rees
As the hon. Gentleman knows, new claims for legacy benefits will cease by June 2018 and migration to universal credit will be completed by 2021. As the Department for Work and Pensions says it cannot estimate the number of people who will be on universal credit by the time the roll-out is complete, does he agree that it is difficult for us to deal with the problem in our constituencies?
Mark Durkan
I thank my hon. Friend for making that point. That is part of the conundrum that we have. On one hand, DWP tried to offer all sorts of assurances that the change had been platformed and well modelled and would be sound. On the other hand, we know that, to date, many of its assurances and plans have come to little. On other things, it says it does not have a basis for some of its contentions. We get into a circular argument, so we cannot accept its assurances or try to persuade others about them.
Let us be clear. The changes being made are not just those to work allowances, which are part of the Welfare Reform and Work Bill. The hon. Member for Neath referred to when DWP plans to roll the changes out. I will not go into all the administrative and political differences in welfare reform in Northern Ireland, but implementation there has been different so far. The decision has effectively been made to give Westminster direct rule powers on welfare reform, including on the provisions in the Bill. That will obviously have a long-term effect. Although the direct rule powers applying to Westminster include a sunset clause for the end of this year, the legislation passed under those powers will have an impact on my constituents for many long years.
On the impact of working poverty, we need to consider not just the changes to universal credit and how they will affect people who have made the transition to work and meet all the Government’s oft-quoted tests—being hard-working families, not being workshy and so on—but the fact that people will be subjected to invidious treatment in the levels of support they are allowed.
Let us consider the Government’s plans for universal credit and, in the longer term, tax credits—for example, how the two-child rule will affect working families. Let us compare that rule with what was passed in the last Parliament in a blaze of glory. The Minister was one of those who took the Childcare Payments Act 2014 through the last Parliament. The Government boasted that under Bill, parents would be able to claim up to £2,000 a child in childcare support, on the basis that it would be up to 20% of costs of up to £10,000. Let us think about what income bracket parents would need to be in if they were spending £10,000 a child on childcare and claiming up to 20% of that as childcare allowance.
That allowance was going to be bankable. People were going to have discretion to do what they wanted with it, but under universal credit they must claim the childcare element after the event and show the actual cost. They must spend the money before they get it back. That is not so for those who are better off and claiming childcare allowances, and of course they are not subject to a two-child rule. The plan is for one law for the working rich and one law for the working poor. That is why we must speak up about working poverty.
Those policy contradictions are not the only ones we need to raise with the Government. We all have a responsibility to think through the other implications for people working in our constituencies. There will be future liabilities from pension contribution changes, and student loan payments will have to be made through people’s income. The changes in the Housing and Planning Bill will have an impact on who is eligible to remain in social housing. There will be a cliff edge for families, who will face additional housing costs if they remain in employment with a certain income. All those issues will bite on family budgets and make a material difference to the worth of people’s earnings. We should address working poverty much more holistically and not on the basis of some of the more pretentious and specious claims that the Government make.
Nick Thomas-Symonds
Indeed, he would have been better off saying it quietly, because in November 2015, the actual figure was 155,568. He should be sanctioning himself, on the basis of such a performance. It shows an absolutely dreadful level of incompetence.
I congratulate my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), who drew on his experience as a county borough councillor, and set out well the measures that Labour councils in Wales are implementing to try to deal with wage levels. My hon. Friend the Member for Foyle (Mark Durkan) spoke, as he always does, with great authority on the matter. His point about the availability of work, and his quote about there being one rule for the working rich and one for the working poor, really resonated in the context of the debate. I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on her speech, which was delivered with great passion.
Let us remind ourselves of what the Chancellor—his must be the longest leadership bid in recorded history—said on the “Today” programme on 8 October 2012:
“It is unfair that people listening to this programme going out to work see the neighbour next door with the blinds down because they are on benefits.”
I fundamentally disagree with that statement. The person behind the blinds could be disabled or vulnerable. Dare I say it, they might even have just worked a night shift, although that is something that seems to be lost on the Chancellor of the Exchequer. The Chancellor has been trying to draw a division between those who work and those who do not. He is not the only one who has a problem with the language that has been used in the debate. In September, the Secretary of State said, in answer to the hon. Member for Gloucester (Richard Graham), that
“the most important point is that we are looking to get that up to the level of normal, non-disabled people who are back in work.”—[Official Report, 7 September 2015; Vol. 599, c. 6.]
Normal, non-disabled people—what kind of language is that? What does that say to somebody who is disabled? I hope that the Minister will take the opportunity this afternoon to distance herself from such shocking remarks.
Even if we accepted that distinction between those who work and those who do not, the Secretary of State is now in such a mess that he is on the wrong side of his own dividing line. It is all very well to say that work is the route out of poverty, and of course we want to see more people in work, but the kind of poverty that we are talking about affects people who have jobs, and who go out to work. As the smoke lifts from the Chancellor’s U-turn on tax credit cuts, it has become clear that he is simply going to make the same £12 billion of cuts to universal credit. No one can tell me that when the Tories were going around during the election campaign and talking about their £12 billion of welfare cuts, people such as cleaners seriously thought that they would be affected.
Let me give another couple of examples. I gave the statistics for single parents to my hon. Friend the Member for Swansea East.
Christina Rees
Does my hon. Friend recognise that lone parents are already twice as likely as two-parent families to be in poverty? Single parents are worse hit in the combined reforms; as a share of income, they lose seven times more than two-parent families. By 2021, single parents will lose £1,300 a year, on average, even after taking into account wage increases and tax concessions.
Nick Thomas-Symonds
Single parents could be forgiven for thinking that the Government have a tin ear, as far as their needs are concerned. Let me give the example of a couple who live and work together, one or both of whom have limited capacity to work, because they are disabled. Work allowance will be cut from £7,700 to £4,700 this April, which will mean a loss of income of £3,000 a year. Single individuals will essentially lose everything, with a reduction of £1,332 and a net loss to income of £865. My hon. Friend the Member for Swansea East has mentioned the Social Mobility and Child Poverty Commission; its latest report was published as part of the glut of data that the Government put out just before Christmas, on 17 December. I quote from the commission:
“The immediate priority must be taking action to ensure that the introduction of Universal Credit does not make families with children who ‘do the right thing’ (in terms of working as much as society expects them to) worse off than they would be under the current system. That means reversing the cuts to Universal Credit work allowances enacted through the Universal Credit (Work Allowance) Amendment Regulations 2015 before they are implemented in April 2016.”
The commission is asking the Government to do that, and it is precisely what they should do.
What is the Government’s answer to the claim that they are attacking working people? At least the Ministers in the team are not shy about coming forward with the odd suggestion of what people should do to help themselves. We have heard the one about working more hours. I am not entirely sure how single parents are meant to do that, but perhaps the Government will explain that to us in due course. My particular favourite was the suggestion made by the Under-Secretary of State for Work and Pensions, the hon. Member for North West Cambridgeshire (Mr Vara), in the House on 6 January 2016. When he was asked about mitigating the effects of the social security changes, he said that we should not forget
“the fact that every time we fill up our tank with petrol there is a saving of £10 because of the freezing of the fuel duty.”—[Official Report, 6 January 2016; Vol. 604, c. 342.]
In the 1980s, the unemployed were told to get on their bikes, but in 2016 the advice is to fill your car. If that is the best that the Government can offer the working people of this country, it shows the position they have reached.
The Government are in the worst of all worlds. Universal credit is the Secretary of State’s passion. The policy is his baby. He allegedly fights the Chancellor around the Cabinet table so that he can keep it going, although we might draw the conclusion that he is not doing so very effectively. We will have to wait until, I think, 2021 to see the full effects. The Secretary of State seems to be going for some kind of record for how long it takes to implement change at the DWP. The Government are in the worst of all worlds, because they lack both compassion and confidence.
Priti Patel
Tata is not a particular case study for Wales or the United Kingdom. I hope that the hon. Lady recognises that the steel industry faces huge challenges around the world. In China, people are also losing their jobs because of what has happened in the steel industry. Jobcentre Plus and the Department for Work and Pensions have been there from the outset to support people who have lost their jobs in the steel industry by helping their families at this very difficult time and supporting them to find work. The marketplace is challenging, but the hon. Lady is the Member of Parliament for a Welsh constituency and she has a duty to acknowledge the support that is being given—the work that Jobcentre Plus staff in her constituency are providing—to individuals and families who have lost their jobs.
Christina Rees
Surely the increase in jobs in Wales is down to the excellent policies of the Welsh Labour Government and schemes such as Jobs Growth Wales with EU investment.
Priti Patel
If it were not for the fact that this Government picked up the shambolic legacy of the Labour Government in 2010, rebalanced the economy and, importantly, created the right environment for the creation of new jobs, those new jobs in Wales would not exist today. We have supported lower corporation taxes and lower taxes for businesses to come to the UK to make the UK a much more competitive place.
We have heard voices from around the UK in the debate, including the hon. Members for Foyle (Mark Durkan) and for Motherwell and Wishaw (Marion Fellows). A record number of jobs have been created in Scotland and wages in Scotland are going up as a result.
Jobcentre Plus
Christina Rees Excerpts(8 years, 10 months ago)
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Christina Rees (Neath) (Lab)
It is a pleasure to serve under your chairmanship, Mr Williams. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this important debate.
Job seeking is often a stressful, unpredictable journey that is usually travelled alone. Losing a job is difficult, not only for the individual, but often for their families as well. The search for work—perhaps following redundancy, or however a job is lost—is never easy, and although for most people it is over within six months, many are left to endure cycles of short-term work and long periods of unemployment.
Jobcentre Plus has remained the single biggest gateway into the world of work for generations, with jobseekers culturally bound to the process of examining the jobs board at their local job centre, or dole office as it used to be known. However, research shows that although 75% of people claiming jobseekers allowance gain employment within six months, only about half of claimants leaving JSA are still in work eight months later.
Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under your chairmanship, Mr Williams. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this important debate.
My hon. Friend the Member for Neath (Christina Rees) sets out powerfully the statistical case relating to Jobcentre Plus. Does she agree that there has been a problem with the Government’s rhetoric, which is exacerbating the position of the unemployed, because rather than accepting that unemployment is a difficult time in a person’s life, people have been stigmatised as shirkers? That has made the atmosphere around Jobcentre Plus far more difficult than it needs to be.
Christina Rees
My hon. Friend makes a good point. I agree. The rhetoric often binds people in cultural divisions.
The process simply is not working. The world has changed since the inception of the jobcentre and, indeed, Jobcentre Plus. To be fair, the Department for Work and Pensions has implemented changes that take account of the increasingly digital way in which people access services and information. Its aim of “digital by default” ways to sign on is a clear move to base its services in the computer-centric world where many people exist.
However, the Welsh Government’s “National Survey for Wales 2013-14” confirmed that 21% of the Welsh adult population aged 18 or over does not regularly use the internet. In the local authority area of Neath Port Talbot, where my constituency is situated, that figure is almost 41%. Although 82% of people use the internet for email and 74% for general browsing, only 17% used it to look for work. Youth unemployment in Neath Port Talbot in May 2013 was 9.7%, compared with 9.0% in Wales and 7.8% for the UK as a whole, and 2% of young people had been out of work for more than six months. As those statistics suggest, there is a great need for good quality job search, support and advice in Neath, and other constituencies like it.
I wish to highlight two examples of how community-based organisations have improved the job prospects and quality of life for people in my constituency of Neath. One is in a community suburb of Neath town centre, called Neath East, and the other is in a small village called Banwen, at the top of the Dulais valley. The people of Neath East came together to try to regenerate their area, first establishing the Melincryddan Community Conference, known as MCC, and later joining forces to create the Neath East Communities First partnership. This partnership has sought, and continues to seek, the views and participation of community members in deciding on actions to regenerate the area.
One of the first needs identified was provision of advice to be available locally, which led directly to the provision of Melin advice centre. Initial consultations revealed that many claimants were being turned away from Neath Jobcentre Plus, as they lacked the necessary IT skills and/or access to fulfil the three basic criteria of day one conditionality—compiling a CV and having an email address and a Universal Jobmatch registration—and the staff at the jobcentre did not have the time to assist them.
The MCC/Communities First partnership put staff in the jobcentre to provide a two-phase approach, with funding secured in 2014 from the Jobcentre Plus flexible support grant. First, it helped claimants with the immediate task of meeting their conditionality requirements, ensuring that they navigated the systems properly and were armed with the requisite documents. Secondly, it directed claimants to its own advice centre for more tailored, in-depth advice that aimed to secure them better long-term employment prospects.
The Melin centre offers a range of services and facilities, including adult learning classes, welfare rights advice, and employment search and support. It also delivers a range of health and wellbeing activities, employing more than 15 members of staff. It is now working with between 50 and 130 people each month, all seeking support to meet the day one conditionality criteria.
MCC has succeeded in helping people in Neath East to gain employment opportunities by helping them to navigate the systems properly. That has vastly improved the services being offered by Jobcentre Plus and is therefore improving the quality of life for those in the community.
The Dove Workshop in Banwen was formed during the 1984-85 miners’ strike as a response to the need for the community to come together and share skills and solidarity. Led by women, for women, the organisation began as a way of offering adult education and skills training, so that local women were better equipped to find work during the year-long strike that saw their partners and fathers out of work and on the picket line. Although the strike came to an end, Dove Workshop did not. Instead, it grew in strength, scale and scope, working not only with women, but with all parts of the community, providing education and a range of services and projects. It has acted as a union for the community during times when not everyone worked, and it recognises that those who are working work in disparate sectors, industries and places.
Dove now employs 30 people in a community where jobs are rare. It continually supports its staff to undertake training and further education, providing a number of services associated with learning, offering opportunities for volunteering, work experience, IT drop-in services, employment support, CV writing, and much more. One project delivered by Dove is “Building Livelihoods and Strengthening Communities”, funded by the Big Lottery Fund in partnership with Oxfam Cymru. This project, together with Dove’s own advice service, works to support local people in their pursuit of good quality, sustainable employment.
As with MCC, for many years Jobcentre Plus in Neath has sent many jobseekers to Dove because Jobcentre Plus staff were unable to assist them directly, as they lacked the time and resources to do so. Dove also applied for the Jobcentre Plus flexible support grant, but was unfortunately denied funding. However, Dove has never turned away someone seeking help, and it continues to provide advice today. To me, Jobcentre Plus is a conveyor belt whose purpose seems to be to offer unemployed people the prospect of six months’ work. However, MCC and Dove cater to an individual’s needs, ambitions and quality of life, so that they can fulfil their potential and make a meaningful contribution to the community.