ESA and Personal Independence Payments

Debbie Abrahams Excerpts

Wednesday 30th November 2016 Westminster Hall

[Justin Tomlinson (North Swindon) (Con)]

It is a pleasure to serve under your chairmanship, which seems almost a daily occurrence this week, Ms Dorries, given the Bill Committee I am also serving on. I pay tribute to the hon. Member for Lanark and Hamilton East (Angela Crawley). This is an important debate and a topic that regularly comes up, particularly in this room, which shows the importance of Westminster Hall. We are fortunate that we have a Minister who is very engaged and proactive when it comes to listening—particularly when the system is not quite working as it is intended to—and when it comes to acting and working with experienced charities, policymakers and all sorts to bring us all together. What we all want, regardless of which side of the House we sit on, is a fair system that supports the most vulnerable in society. It is a pleasure to follow the hon. Member for Strangford (Jim Shannon), who, during my time as a Minister, was really proactive and constructive on this issue. I had many good meetings with him to discuss specific issues and lessons we could learn from Northern Ireland, and to share best practice.

Two issues have been raised: PIP and ESA. I gently remind Scottish National party Members that Scotland could take responsibility, certainly for PIP. During my time as a Minister, I had a good relationship with my counterpart in the Scottish Parliament. He was aware that Scotland could take on that responsibility as and when it was ready.

Some 1.8 million people have already gone through the PIP process, which is considerably better than the old DLA system, and that is widely accepted by the vast majority of charities who represent people who have been through the system. Under DLA, only 16% of claimants got the highest rate of the benefit. Under PIP, it is 23.5%. It is far better at identifying hidden impairments and fluctuating health conditions. For example—this has been highlighted in the two previous speeches—under DLA, only 22% of those who had a mental health condition accessed the daily living component, yet under PIP, 66% did. For the higher rate of mobility, it was 9% under DLA; it is 24% under PIP.

The new system is far better and more streamlined. The assessors are there to help people to fill in the forms. The fundamental problem with DLA was that it was, in effect, self-diagnosis. People would fill in a very long, complicated form. A lot of people did themselves an injustice by not highlighting all the issues they faced, often because they took them for granted. For example, they might think, “I can’t sleep at night. That’s just the way it is”, but they did not then highlight that in their forms. The forms were complicated, so people would not necessarily know which were the right bits to put down.

Even worse, 70% of claimants on DLA had an indefinite award. It is very attractive for MPs to say, “We don’t want anybody ever to go through an assessment”, but the reality was that, under DLA, 70% did not. That sounds great, yet one in three claimants’ condition changes so significantly within 12 months that they should be on a different benefit. The vast majority of people who go through the system have a deteriorating condition, so if their condition has changed, it has probably changed for the worse and it is highly likely that they would therefore go from the lower rate to the higher rate of benefit.

That was the single difference that contributed to why, under DLA, only 16% of claimants got the highest rate, and 23.5% get it under PIP. There were people who, for 10 or 20 years or more, were on a benefit below that which they were entitled to. They were unaware that they could have had an opportunity to go up. It is right, therefore, that we assess people to ensure that they are given the correct benefit.

Now, common sense kicks in. If someone is on the highest rate of benefit, they have a deteriorating condition. Unless there is some miracle cure, they are likely only to be reassessed at the end of the 10-year period, and it would probably be very light touch. In effect, someone would phone and ask, “Has there been a miracle cure?” The answer would probably be no, and they might ask, “Can you provide the GP’s evidence that there has not been a miracle cure? That’s fine. You will go through.” It is those who are on the cusp of going from the lower benefit to the higher benefit who will have another assessment. The system is programmed to say, “This person nearly meets the highest rate of benefit. I suspect they will need it in nine months’ time.” It will automatically trigger a reminder to people that there is a reassessment, so they are not left languishing. I urge hon. Members to be careful in trying to stop people having an opportunity for an assessment.

In cash terms, in 2010, DLA delivered £12.7 billion of benefit support. The combined DLA and PIP is now at £16.6 billion. When the scheme was first launched, the time until assessment was terrible. We had lots of debates here on that. I was not the Minister then, but I was warned when I first went into the role that we would have almost weekly debates. Some people were waiting up to a year for their assessment. That was unacceptable. For nearly 18 months now, it has been in a settled state, taking about seven weeks for an assessment and 13 weeks for the whole process, end to end, which is well below the initial target of about 16 weeks. Again, charities and those with a huge amount of experience accept that the system is working well. The forms have been streamlined. They are still longer than we might like, but it is always a balancing act because, if we do not capture all the information, people could miss out on the benefit they need. I repeat that the assessors are there to help the claimant. The Government set the amount of money and the points that are required, but the assessors are there to ensure that the form is completed.

I have sat through assessments, and I have seen two different extremes. I saw the assessment of a practising nurse, and the assessment was super-quick. They used lots of very long words of which I had no understanding, and they were able to breeze through. At the other extreme, I saw an individual for whom English was not his first language. He had a mental health condition and was socially isolated. If he had self-diagnosed under DLA, he would not have qualified, but the assessor spent one hour and 10 minutes teasing out and piecing together the jigsaw to make sure that all the challenges he faced in his everyday life were accurately reflected. He would have ended up getting a higher benefit than he would have received under DLA.

I urge those who criticise the assessments to go and view one, which can be arranged. They will have their eyes opened, because too many people claim knowledge based on a film that is there to make money, rather than based on the real world. Frankly, that is an insult to the huge amount of hard work that these trained professionals do to help some of the most vulnerable people. The facts are there to compare DLA with PIP.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Rather than commenting on the film, which is a dramatic portrayal, will the hon. Gentleman comment on the “Dispatches” programme? That was not fictional; it was an actual portrayal of the assessment process that people go through.

[Nadine Dorries (in the Chair)]

Mr Tomlinson, the same applies to you as applied to Mr Shannon.

[Justin Tomlinson]

I will not be long. I am glad that the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) intervened. I have a feeling that she will not let me intervene on her later, so I can link this in nicely. The “Dispatches” programme showed an isolated incident that was totally unacceptable. The individual was moved, and rightly so. That is why we have external inspectors. Remember that we are talking about 1.8 million people, and I urge her to take up my invitation to go and view an assessment. Hearsay is not the right way to hold Governments to account. This is so important that people in positions of responsibility need to invest some time in going to see what is actually happening.

[Debbie Abrahams]

That is patronising.

[Justin Tomlinson]

It is not patronising. This is an important subject.

There have been further improvements, including the removal of the 28-day rule for terminally ill people. That cross-party campaign has made a huge difference to those who are terminally ill, and it is a welcome measure. There is ongoing training, and I would like to see automatic recordings of all assessments, which would help the appeals process. That requires a change in the contract, which I understand is the intention.

It is also right that assessors now encourage people to bring somebody with them into the assessment, which is particularly helpful for people who are not necessarily articulate, for whom English is not their first language or who would not have the confidence to display all their challenges.

As the hon. Member for Lanark and Hamilton East said, the ESA and PIP assessments are not a million miles apart. I have too often heard of cases where someone has done one assessment one month and the other assessment the next month. In respect of the Green Paper, many organisations will lobby for some serious data sharing.

In conclusion, because I have focused on PIP, I will briefly address ESA. The Green Paper is a wonderful opportunity, as the charity Scope said, because disabled people need “expert, tailored employment support”. We need to focus on what individuals can do, rather than on what they cannot do. It is important to provide tailored support, to recognise that people have fluctuating health conditions and to utilise the best parts of the universal credit system to allow for flexibility and common sense, particularly in relation to voluntary work that builds confidence to get people back into work. We need to provide ongoing support, through a specific named coach, when people go into work for the first time. I will continue to pitch, as a matter of importance, the small employer pilot, which was so successful that it should be rolled out across the rest of the country as quickly as possible. We need to unleash the opportunity for disabled apprentices. Everyone agrees it is a great thing, and we have signed it off. We now need to see it making a real difference, particularly for those with a learning disability.

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It is lovely to serve under your chairmanship again, Ms Dorries. I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley) on securing an excellent debate. It has been really constructive and has brought to light more cases to show the Minister and the former Minister, the hon. Member for North Swindon (Justin Tomlinson), how people experience the cuts, how sick and disabled people experience the assessment process and the indignity they too often face. I wish Donna all the very best and I hope she continues to recover. It is the personal stories that bring this issue to life.

I thank all hon. Members who have contributed so well today—I should have started by saying happy St Andrew’s day. It is so important to understand what people are going through and to put a human face to it. The former Minister said, “Go and observe one of these assessments.” He is right that we should all try to do that, but I am sure he is aware of observational bias. We should not take our own observations as the only form of evidence. Up and down the country, we are hearing and seeing examples of what sick and disabled people are going through every day.

This is the first opportunity that I have had to discuss this issue with the Minister, and I want to focus on what the hon. Member for Airdrie and Shotts (Neil Gray) also focused on. We will not go away and this issue will not go away. We will continue to campaign on it, because it is a real injustice: £1,500 a year from the most vulnerable people, the poorest of the poor, some five million people—I will not continually repeat the statistics that we repeated in the two debates just two weeks ago.

What is so disappointing is that all the evidence—from the UN committees investigating human rights concerns and breaches of the convention on the rights of persons with disabilities, from our own Equality and Human Rights Commission, from the Government’s Social Security Advisory Committee, from a whole list of well-respected charities, such as Parkinson’s UK, Scope and so on, and even from the Government’s own Back Benchers—is being completely ignored. We heard about the Backbench Business Committee debate, when the motion was carried without contest, which is almost unprecedented.

The strength of feeling in this House has been expressed, yet what was so absent in the autumn statement was anything that sick or disabled people could grasp for how their lives would be made better. Their lives have been made a misery over the last six years and it will get worse. I know that the Minister is new in her post and she has said some very positive things. We have also heard very warm words from the Prime Minister, but when it comes to doing anything, the Government have put their hands in their pockets and turned away. We cannot have that. It needs to change.

The Government have put forward arguments about incentivising claimants and argued that cuts will incentivise people into work, which is quite disgraceful, really. It implies that people are making a choice. As we have heard, people are not making a choice to live on £70-odd a week when they have had a decent living before. They do not choose to do that. As the fifth richest country in the world, we have an obligation to treat people with dignity and respect. It is about choices.

I want to pick up on the point that other Members have made about what other discretionary funds people might be able to draw on. I was going through the Minister’s earlier speech last night, and the flexible support fund was mentioned. We need to understand some things about that fund. First of all, it was investigated recently for fraud. The former Secretary of State, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), tried to claim that it was being supplemented by £15 million a year to cover the costs. That is not the case; it is actually £15 million from 2015 alone. That fund does not go anywhere near to matching the loss that people will experience and the in-year deductions that will be made as a result of these cuts.

I will finish on a point that was raised in my constituency. We all have hundreds of different cases; my case load has gone up exponentially as people have been subjected to these increased cuts. I want to talk about John Ruane, who has a brain tumour. As a consequence, he has three to four epileptic fits a week. I was contacted by his surgeon, because John was refusing to have a life-saving operation, as he had passed his work capability assessment—how could that happen to somebody with a life-threatening condition?—and he was worried that he would be sanctioned, in the same way that we saw in “I, Daniel Blake”. John had no means of support, and it has taken us months to sort this out. He has now, finally, had his ESA reinstated, but he was scared of being sanctioned because of what had happened, and the stress that he was placed under, as well as the indignity, just is not right. That is one case; I could cite loads of others.

Within the context of ESA, we cannot ignore the work capability assessment. Again, more than two years ago the Work and Pensions Committee raised the WCA as an issue in its report on ESA:

“Simply ‘rebranding’ the WCA by taking on a new provider will not solve the problems: a fundamental redesign of the ESA end-to-end process is required”.

Very briefly, I want mention another one of my constituents, a young woman who is going through the PIP process. She was a high-flyer, in a good career, and she is only in her 30s, but she is suffering from Lipedema, Dercum’s disease, fibromyalgia and chronic fatigue syndrome. She has pain in every part of her body, but particularly in her hands. She cannot even cook or prepare her own food. She has gone through the PIP process and she feels that it is just like a slap in the face. She needs that support to enable her to recover, and she feels that she is being thwarted at every turn.

This is about choices—choices about what we do. It is about whether we as a country feel that it is right to support our most vulnerable people or to support those on the top incomes—which is what the autumn statement analysis shows that we did. We on the Opposition choose that we should protect and support the most vulnerable in our society. This is about choice, and I hope that the Government will listen and do something about it.

[The Minister for Disabled People, Health and Work (Penny Mordaunt)]

I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley) on securing this debate and all hon. Members who have contributed to it.

These are important services and they are at the heart of our nation’s values and its interests. Of the 2.5 million people claiming incapacity benefits, 1.3 million also claim PIP or DLA. A further million claim PIP or DLA, but not incapacity benefits. Many of these people will also access other support and state services, as well as support provided by partner organisations.

What we do is vital, not only to enable someone to meet their living costs and endure, but to support their ambitions. We have that dual responsibility. In addition, I am very conscious, because of the combined areas that I look after, that I have the largest budget of any Minister in any Government Department. That is a huge responsibility to the general public, who fund it, and to those whom these services are designed to help. It is a responsibility that I take very seriously indeed.

PIP and ESA are entirely different benefits, designed for different purposes, and each has its own legal criteria. ESA provides support to those who face barriers to work and looks at what work a person can do, rather than focusing on what they cannot do. Unlike ESA, PIP is non-means-tested and available to disabled people regardless of their employment status. PIP provides a contribution towards the extra personal costs arising from their disability or health condition and can be paid on top of other benefits.

The PIP assessment is designed to treat all health conditions and impairments fairly, and the assessment criteria take into account the impact of all impairments, including mental health, on an individual’s ability to carry out a broad range of everyday activities. That breadth is one of the benefits of the new system in comparison with what went before, and I thank my hon. Friend the Member for North Swindon (Justin Tomlinson), who outlined some other improvements that the system makes.

The title of this debate refers to two benefits, but understandably much of the debate has focused on people, and quite rightly so, as the hon. Member for Airdrie and Shotts (Neil Gray) said. In developing our policy and delivering our services, we need to remember that it is not just about those who have been featured in today’s debate. It is also about those who have not been featured and who rarely get a mention: those who are not on benefits and are not yet in crisis, but are financially fragile; those in ill health; those with multiple caring responsibilities who do not qualify for carer’s allowance; and those who, despite hardship, do not for a variety of reasons access the benefit support available to them. Our concern and our support should stretch beyond the reach of our benefits. What we take forward from the Green Paper and all we do in the interim must have help for those people in mind.

ESA and PIP are massive systems, and both have rightly undergone, and will continue to undergo, continual improvements. Contrary to what the shadow Minister said, we have made many changes. Recent changes include the announcement that we will stop ESA reassessments for those with severe health conditions and disabilities. In designing the changes, I have asked that we plan ahead and see whether we could have permission to share information with local government. That could enable local authorities to stop requiring those very same people to fill in forms for locally administered schemes. In his speech, the hon. Member for Strangford (Jim Shannon) outlined some of the potential benefits of doing that when he mentioned social care and other services.

With ESA, we now have clinical data to hold contractors to account. I pay tribute to the DWP’s chief medical officer and her team for the work they have done on that and on data sharing. We have trialled greater flexibility on the time given to the early stages of an application process to ensure that all the health information is available to the assessor. That is the best way to cut down on incorrect decisions being made at that early stage.

[Debbie Abrahams]

Will the Minister give way?

[Penny Mordaunt]

If the shadow Minister will forgive me, I will make some progress.

We are rolling out that trial. The past presence test will no longer apply to claims for DLA, PIP, attendance allowance and carer’s allowance with regard to refugees, people with humanitarian protection status and their families. We are extending hardship payments. The ESA appeals process has been reformed, with mandatory reconsideration clearance times down from 35 days to nine. The number of weeks and the percentage of case load having to go to appeal to get the right decision are both reducing. Huge strides have been made in identifying hidden impairments, including through training of staff.

The hon. Member for Lanark and Hamilton East spoke at length about the factors of appearance. Many people might look perfectly together and presentable but have deeply hidden issues. We have done a huge amount in training staff to recognise that, and more is planned. The Secretary of State has announced his focus on the use of sanctions with those with mental health conditions, and the Green Paper gives us the possibility of major reform to different parts of the system in unison. In that consultation, we want to examine how we might simplify and improve the assessment process and how we can use information better to effectively support people, such as sharing data—with claimant consent—with support organisations and other state services. The reform of the work capability assessment—which we have not been able to do to date because it requires primary legislation—is a focus of the Green Paper. We could separate out decisions on entitlement to employment support and entitlement to financial support.

Oral Answers to Questions

Debbie Abrahams Excerpts

Monday 21st November 2016 Commons Chamber

[Penny Mordaunt]

Yes, I do, which is why we have brought forward a Green Paper, and we will be consulting on it until February. In the meantime, where we can make progress and foster the local connections and relationships between employment support and healthcare professionals and others those individuals will need support from, we will do so, and the flexible support fund, which goes live in December, will do that.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

On behalf of Labour, I offer my congratulations to Andy Murray.

The prospect of a further £1,500-a-year cut in support to sick and disabled people found not fit for work, on top of the previous £28 billion of cuts, fills many with dread. Why is the Secretary of State touting the propaganda that the cut will incentivise disabled people to find work, when his Department’s own research says the opposite? Will he listen to MPs on both sides of the House who unanimously rejected his policy last Thursday, and stop the cut in the autumn statement?

[Penny Mordaunt]

As I pointed out at length, we will mitigate the financial cut to the WRAG group through several measures, including the flexible support fund, which will help with costs related directly to work, and through other measures to help with costs not directly related to getting into work. I have stated to the hon. Lady several times in the last week that we have to do both those things. We need to ensure someone’s liquidity and financial resilience, but we must also ensure that they have other kinds of support. We will not pause that support when it commences in April.

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[Damian Green]

I do think that the changes are fair. I also think that much of the problem with the various pieces of analysis that have been produced by a number of think-tanks is that they do not assess the effects of getting more people into work, or—I mentioned this earlier—ensuring that they make progress when they are in work. Both those actions help people’s family incomes, which is, I think, the way to give them more long-term security and to ensure that they do not just get out of poverty, but stay out of poverty.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The Government’s flagship universal credit programme has been in trouble almost since day one, which has undermined the important principle of always making work pay more than social security. Two and a half million people in low-paid work will be, on average, more than £2,000 a year worse off as a result of the Government’s cuts in universal credit work allowances. How can the Secretary of State justify his mantra that work is the route out of poverty when, under this Government, there are 7 million working families in poverty and the cut in their support will make the position worse? Why will he not honour his pledge to make work pay and ensure that the cut is reversed in the autumn statement?

[Damian Green]

I do not agree with the hon. Lady’s analysis of universal credit. The great thing about it is precisely that it does make work pay. We all remember the cliff edges that people were faced with: once they started to work more than 16 or 30 hours a week, they had to decide whether they would be better off in work or on benefits. That is a terrible choice to put before someone. The whole point of universal credit, which we are steadily rolling out, is that work always pays. People know that if they go into work, or if they work extra hours, they will always benefit from that. If she does not accept that, I am afraid that she and I fundamentally disagree about the fact that work is the best route out of poverty. She appears to be denying that fact.

Employment and Support Allowance and Universal Credit

Debbie Abrahams Excerpts

Thursday 17th November 2016 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I congratulate the hon. Member for Airdrie and Shotts (Neil Gray) on calling this timely debate. The fact that he has such a degree of support from across the House cannot be overestimated. The speeches we have heard show the House at its absolute best. We are concerned about the plight facing so many of our constituents and the impact that this additional cut in support will have on them.

Although my party wants the ESA WRAG cuts to be scrapped completely, we will support this motion calling for a postponement until the Government have been able to analyse the consultation from their Green Paper. The same points have been made a number of times: I think that only one speaker generally supported what the Government are doing, while everyone else set out the reasons why their proposals should not go ahead. The key element is that we have only just had the closing date of the Green Paper consultation. I hope that the Minister accepts these points; she will have support from across the House if she does.

Let me re-emphasise some of the points that I made in yesterday’s debate. Half the 13 million people living in poverty are disabled or live with a disabled person. The number of disabled people now living in poverty is 5 million—one in three disabled people. The situation is getting worse after a decade when the problem was in decline. According to research by the Joseph Rowntree Foundation, the figures that are officially published are an underestimate. Labour Members are concerned that the Government do not seem to recognise the link between disability and poverty. We know from extensive research that disabled people are twice as likely to live in poverty as non-disabled people. Eighty per cent. of that poverty results from the condition or disability that they experience. We have heard moving accounts from Members on both sides of the House, including the hon. Member for Stafford (Jeremy Lefroy), who gave a very eloquent description.

This is happening in the context of what disabled people are already going through; it is not just about social security cuts. The Welfare Reform Act 2012 cut £28 billion from 3.7 million disabled people, and that does not even include the cuts in social care and other health-related public services, such as the number of specialist nurses who might be available for people with a learning disability. I will not say that it is the tip of the iceberg, but it is not the whole story. Yesterday I mentioned research showing that families with a disabled adult or child have been made five times worse off than non-disabled people.

Among a number of measures in the Welfare Reform and Work Act 2016 that the Minister debated extensively with me last year, this is one of the worst. We have already heard about the cut of £1,500 a year affecting nearly half a million disabled people.

[Ms Karen Buck (Westminster North) (Lab)]

This morning I received an email from a constituent who has lost his ESA and has been put on the assessment rate. He suffers from lymphedema, an extremely painful condition that makes him almost unable to walk. He asked what advice I could give him, because the rate that he is now on means that he has to choose on a weekly basis between turning on the heat and eating. What advice should I give him?

[Debbie Abrahams]

I have a constituent with exactly the same condition, and we are going through exactly the same process with the personal independence payment as well as ESA. It is important that my hon. Friend will be representing her constituent. Sixty per cent. of people are successful in the appeals process, which shows how flawed the system is, does it not?

These are people who have been found not fit for work. There is absolutely no evidence that the cut will incentivise people. In fact, the Government’s own research, which was published earlier this year, and the Low report say that it is less likely to help disabled people back into work.

Macmillan Cancer Support has forwarded me details about a woman called Lynn, who said

“When I was ill, I had to give up work for a year. I couldn’t work—the chemotherapy knocked me for six and I just wanted to sleep all day. It was horrendous. I couldn’t pay my mortgage, my council tax. I thought I was going to lose my house. Then I got Employment Support Allowance. If they cut the ESA that would just be absolutely horrendous. I would hate to have had that done to me. Without it, we would have been homeless.”

Members across the House will have similar examples.

I again remind the Minister that the Government’s own data, which were published last year, show how vulnerable people in the group are. They are twice as likely to die as the population as a whole. That proves that incapacity benefit and ESA are good population health indicators. We hear awful language about shirkers and scroungers, but these are sick people who deserve care and support, not humiliation.

I mentioned the work, health and disability Green Paper at the beginning of my contribution. It is out for consultation, and while it seems to include some good measures, I have a number of concerns about it. I am also concerned about the reduction in employment support from £700 million to £130 million. As my right hon. Friend the Member for East Ham (Stephen Timms) said, how on earth will we reduce the disability employment gap with such reductions? The Access to Work programme is inadequate: it serves only 35,000 of the 1.4 million disabled people who are fit and able to work. It is nonsense.

I know that we are pressed for time, but I want to touch on the limited capability to work component of universal credit. It has been suggested that it applies only to new claimants, but everybody will transfer to UC at some stage, so it will affect absolutely everyone.

I also want to reflect on growing evidence of the effects that the current round of cuts are already having on sick and disabled people. They include isolation, loss of independence, reliance on food banks, homelessness, exacerbation of existing conditions and a direct link to mental health issues. They have also been associated with the deaths of claimants. It is absolutely unacceptable for policies of the state to be doing such harm, so we support the motion and call for the ESA cuts to be paused. There is a lot of support for that.

In conclusion, there is an evidence base of the effects that the cuts are having on sick and disabled people. Over the same period that the Government have cut support for them, they have given generous support to high earners and big business. Last year, the average worker’s pay of £27,645 increased by 2%, while pay for top executives on £5 million increased by 50%. The trend is getting worse and the inequalities are already being felt. We cannot underestimate the effect of those inequalities. They are not inevitable; this is about political choices. The cuts must not go ahead and we would welcome the Government moving on the issue.

Autumn Statement Distributional Analysis, Universal Credit and ESA

Debbie Abrahams Excerpts

Wednesday 16th November 2016 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

This has been a detailed and thorough debate, in which we have heard from 10 speakers. I will begin by responding to the Minister’s comments. I should state for clarity that this Government are borrowing more now than any previous Labour Government have borrowed in the past. We certainly welcome the reduction in the disability employment gap, but unfortunately it shows that the Government have simply stood still, because the situation got worse over the past year. The Minister did not answer the question that my right hon. Friend the Member for Hayes and Harlington (John McDonnell) asked about the commitment to halve the disability employment gap by 2020.

I am glad that the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) has suddenly seen the light, but why did he not do something about the issues faced by the social security system when he was Secretary of State?

My hon. Friend the Member for Darlington (Jenny Chapman) made important points about the distribution analysis and the impact on child poverty. The hon. Member for Enfield, Southgate (Mr Burrowes) made an interesting speech, but I refer him to the IFS data that show that cuts to universal credit work allowances mean that the incentives for single parents to enter into work have been significantly weakened. Similarly, the Child Poverty Action Group has described the cuts as being in direct contradiction to the policy’s stated agenda of making work pay.

I am grateful to my hon. Friend the Member for Bishop Auckland (Helen Goodman) for highlighting her constituents’ issues, particularly with the distribution analysis and the impact on the poorest, as opposed to the richest. The former Minister with responsibility for disabled people, the hon. Member for North Swindon (Justin Tomlinson), said that nobody has explained how our proposal would be funded. As my right hon. Friend the Member for Hayes and Harlington said at the beginning, the Resolution Foundation has shown that reversing the cuts to capital gains tax, corporation tax and inheritance tax would be more than sufficient.

My hon. Friend the Member for Wirral South (Alison McGovern) made a characteristically comprehensive speech. Her passionate and regular campaigning on child poverty does her and our party credit. The same is true of the hon. Member for South Cambridgeshire (Heidi Allen), who is brave to speak out on the issues so eloquently and so often.

There are 6.8 million adults in this country who are in working households but who live in poverty. Two out of three of the nearly 4 million children living in poverty are from working households. All the evidence points to the simple truth that, under this Government, work is not a route out of poverty. I contrast that with the achievements of the previous Labour Government, who reduced poverty across the board.

Our disabled people have been battered by this Government, too. Some 5 million disabled people currently live in poverty in the UK—nearly one in three—and the gains made by Labour are now in reverse. Although disabled people are twice as likely as non-disabled people to live in poverty, specifically as a result of their disability or condition, the Government cut £28 billion from 3.7 million disabled people as part of the Welfare Reform Act 2012, thereby increasing the likelihood of poverty.

As we have heard, the IFS has shown that people on low incomes have been most adversely affected by the Government’s changes to tax and social security support since 2010, and that that will continue. In other words, the rich get richer and the poor get poorer.

Landman Economics and the National Institute of Economic and Social Research estimate that poor families with a disabled adult or child have been made five times worse off than non-disabled families, through tax and social security changes. Of course that does not even factor in other spending cuts. There is ample evidence.

Several measures in the Welfare Reform Act 2016 further punish the sick and disabled, but the cuts to employment and support allowance and the related cuts to the limited capability for work element of universal credit are among the most troubling. Nearly half a million people will be affected when the measure comes in next April, losing around £30 a week or £1,500 a year—a third of their weekly income from ESA. Those are people who have been found by the Government’s flawed work capability assessment process to be not fit for work, but who might be in the future. The Minister’s argument that these cuts will incentivise sick and disabled people into work is baseless and deeply offensive. In fact, the Government published this summer their own research showing absolutely the opposite. The policy does not incentivise people; it makes the situation worse. We must stop using this “shirker” and “scrounger” rhetoric, which is harmful and wrong.

I remind Ministers that the Government’s data show that the death rate for people on incapacity benefit and ESA in 2013 was 4.3 times that of the general population; that figure increased from 3.6 in 2003. People in the support group are 6.3 times more likely to die than the general population, and people in the WRAG—the people from whom the Government will be cutting more money—are more than twice as likely to die as the general population. IB and ESA are recognised as good population health indicators, and the Government’s data prove that point.

Consultation on the Government’s work, health and disability Green Paper will barely have finished before the cuts are imposed. I am sceptical that the measure will address the issues that sick and disabled people face, and I fear that it will be just another means to get people off flow. Last year, the Government failed to produce evidence of the cumulative effect of their further cuts on disabled people living in poverty, saying that it was too difficult. Labour disagreed, as did the Equality and Human Rights Commission, disability charities and disabled people’s organisations. Reporting last week, the UN committee that investigated breaches by this Government of the UN convention on the rights of persons with disabilities also disagreed. The UN’s report concluded that “grave and systematic violations” of disabled people’s rights had been perpetrated by this Government.

In the same week as the UN published its damning report, the Trussell Trust released data on the increase in food bank use because of social security issues, and the Supreme Court ruled against the Government on the discriminatory bedroom tax as it related to disabled people and their carers. The film “I, Daniel Blake” epitomises what is wrong with the social security system, in an accurate and moving representation of what is happening in this country. Surely the Government must see red. They must do the right thing and reverse the cuts to ESA WRAG.

On universal credit, we supported the principles of the Government’s flagship programme when it was first introduced: to unify a complex system into a single payment and to ensure that work pays. However, since its inception, universal credit has gone from damage limitation to outright disaster. In particular—apart from the Government’s gross incompetence in its costly implementation—the £3.8 billion of cuts to work allowances significantly undermine the principle that work will always pay under the scheme.

Research by the Resolution Foundation showed that the cuts will leave 2.5 million working families on average £2,100 a year worse off. The Resolution Foundation estimated that the poorest 50% of households will be £375 worse off on average by 2021, while the other half will be £235 better off. Those already on UC will be hit first. House of Commons Library analysis shows that the cuts will mean that a single mother of two who works full time on the minimum wage will lose £2,400 a year. Further analysis by Liverpool Economics has shown that disabled people in work will lose £2,000 a year. The north—particularly the north-west, where UC started—has been hit first: from powerhouse to workhouse. Once again, the Government have failed to publish an impact assessment on the effects of the cuts. The Government’s cuts to UC work allowances, replacing tax credits and topping up income for people in work on low pay, are undermining the principle of making work pay. I repeat the call to reverse these cuts.

In conclusion, the Government’s arguments to justify the cuts to UC work allowances are without any evidence. In contrast, there is a clear and growing evidence base on the effects that these cuts are having on the working poor and on sick and disabled people. At the same time, there is increasing evidence that as a nation we are becoming more and more unequal. After six years, the Government have done next to nothing to curb boardroom pay, giving tax breaks to the highest earners. Last year, the average worker’s pay of £27,645 increased by less than 2%; by comparison, the average top executive pay of £5 million increased by nearly 50%. The impacts of those inequalities are already being felt. The very fabric of our society—who we are and what we stand for as a tolerant and just society—is under attack as a result of these inequalities. The Prime Minister’s warm words about tackling injustice are not enough. We need action, not just words.

Under-occupancy Charge

Debbie Abrahams Excerpts

Monday 14th November 2016 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

(Urgent Question): To ask the Secretary of State for Work and Pensions to make a statement on the Supreme Court’s ruling of 9 November on the under-occupancy charge.

[The Secretary of State for Work and Pensions (Damian Green)]

The removal of the spare room subsidy was introduced in April 2013 to all working-age claimants in the social rented sector as part of this Government’s plan to create a welfare system that is fair for those who use it and those who pay for it. Under the previous system, the taxpayer had to subsidise benefit claimants to live in houses that were larger than they needed, despite the fact that people renting in the private sector were receiving housing benefit on the basis of the number of people in their household rather than the number of bedrooms that they had, which has been the case since 1996. Since we introduced the policy, it has saved over £1.5 billion, and the number of households affected by it is going down.

We, of course, operate a number of exemptions to the policy, and they include: all pensioners; households with a dependent child receiving the middle or higher rate care component of disability living allowance; households in which an overnight carer is allowed for the claimant or partner; households in which the claimant or partner is a foster carer; and households with an adult child who is in the armed forces and deployed on operations. In addition, we provide local authorities with funding to provide discretionary housing payments to claimants whom they evaluate as needing additional support with housing costs.

Turning to last week’s Supreme Court judgment, it was welcome that the Court found in our favour in five of the seven cases. These cases related to a panic room, a claimant with mental health issues and those requiring an extra room to house medical equipment, as well as cases involving shared care and adapted properties. The Court also agreed with our view that discretionary housing payments are generally an appropriate and lawful way to provide assistance to those who need extra help. In the two cases in which the Court did not find in our favour, we will take steps to ensure that we comply with the judgment. In most cases, local authorities are best placed to understand the needs of their residents, which is why we will have provided them with more than £1 billion to offer that support by the end of this Parliament. This ensures that people in difficult situations and those who are vulnerable do not lose out.

[Debbie Abrahams]

The Supreme Court’s judgment on Wednesday clearly stated that the bedroom tax is discriminatory, as Labour Members have repeatedly highlighted. The Court upheld the claim of Jacqueline Carmichael, who is disabled and cannot share a room with her husband, Jayson; as well as that of Paul and Susan Rutherford, who care for their severely disabled grandson, Warren. I pay tribute to them, as well as to the other families, for their courage, tenacity and determination in pursuing these cases.

The ruling states that housing benefit regulations allowing claimants to have an additional bedroom when children cannot share a bedroom because of a disability should be extended to adults. Likewise, adults who need an extra room for an overnight carer have been exempt from the bedroom tax, but children such as Warren have not. Those anomalies, the judges ruled, were “manifestly without reason”.

The Department’s spokesperson indicated that the Government accept the Supreme Court’s ruling. Will the Secretary of State confirm whether his Department also unequivocally does so? Will he tell the House how much taxpayers’ money has been spent on legal fees in the attempt to defend the Government’s bedroom tax policy? How many families does the Department calculate have been affected by the Government’s unlawful imposition of the bedroom tax on disabled people and their carers? When and how will the Government inform the families affected by the judgment? How quickly will the Government comply with the Supreme Court’s judgment and revoke the bedroom tax for those families? Will such a revocation be backdated and, if so, to when? Will the Government now formally apologise for the pain and suffering inflicted on disabled people and families caring for a disabled child? Finally, will the Government undertake to look again at their policy on safe rooms for victims of domestic violence, which affects a relatively small number of incredibly vulnerable women who live their lives in fear and are being punished by the Government for heeding security advice and being safe in their homes?

[Damian Green]

I am happy to repeat what I said in my statement. We of course accept the Court’s view and, to answer some of the hon. Lady’s subsequent questions, we will take the appropriate action as soon as we practicably can. She said that the removal of the spare room subsidy was unlawful, but it patently is not, because the Supreme Court found in the Government’s favour in five of the seven cases before it. It is interesting that those involved in every one of those cases—all seven—were receiving discretionary housing payments, which are the best way to ensure that those who are affected can be helped if they need it.

Discretionary housing payments are up fivefold since 2011-12 and the Government are committed to a further £870 million over the next five years—[Interruption.] I am surprised that the hon. Lady complains about the payments, because her local authority received the best part of half a million pounds for discretionary housing payments this year, which makes it clear that people in her area find them useful. She might also be interested to know that 63% of those who are affected and unemployed have decided to look for work, which shows one of the policy’s effects.

I hope that the hon. Lady will address the basic issue of fairness. Without these measures, neighbouring households could be treated differently, which many people would regard as unfair.

On the hon. Lady’s point about those receiving disability benefits, all seven cases involved people receiving discretionary housing payments. Four of the five people involved in the cases won by the Government have a disability, so the policy is clearly not unlawful. Her basic analysis is wrong. The Government are spending £50 billion a year on disability benefit, which shows that we want a practical system that cares for people with a disability. This court case does not alter that at all.

Improving Lives: Work, Health and Disability Green Paper

Debbie Abrahams Excerpts

Monday 31st October 2016 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I thank the Secretary of State for his statement and advance notice of it. This is again kicking into the long grass the issue of support for disabled people and halving the disability employment gap. He is the third Secretary of State who has promised a plan, yet we have just talk, no action.

During his announcement today, the Secretary of State claimed he was confronting negative “attitudes, prejudices and misunderstandings”. The audacity of the statement is offensive. The Government have been more responsible than anyone for the negative attitude towards disabled people, with their shirkers grand narrative. Only this morning, the Secretary of State himself described disabled people as

“sitting at home living on benefits”.

The consultation itself demonstrates that the Government fail to understand the reality of many disabled people’s lives and the real anxiety those people feel about the coded messages in the consultation, yet further cuts are on the way.

I must challenge the Secretary of State for suggesting that the so-called reforms to social security have helped to make work pay. These claims are derisory. All the evidence shows not only that the introduction of universal credit has been an unmitigated disaster—with seven delays to date, the Major Projects Authority and the National Audit Office expressing concerns regarding the scheme’s governance, and the additional £3 billion the taxpayer is having to pay—but that cuts to work allowances signally fail to make UC help to make work pay. The Resolution Foundation has shown that, on average, 2.5 million working families will be over £2,000 a year worse off, so will the Secretary of State commit to reversing cuts to work allowances and universal credit?

On the Green Paper, if the Secretary of State is committed to helping disabled people into work, why has he cut employment support for disabled people from £700 million to £130 million? Will he commit to providing Access to Work support to more than the 36,500 disabled people who received it last year? Given that 1.3 million disabled people are fit and able to work, that is obviously a tiny proportion.

The Secretary of State referred to a review of statutory sick pay. Can he confirm that it is not a vehicle for further cuts to sick pay? Will he commit to maintaining levels of statutory sick pay, both now and in the future? On the plans to broaden the number of professionals who can provide a fit note—notes currently can be provided only by a general practitioner—will these people be appropriately trained clinicians? Given the Government’s use of so-called healthcare professionals under the work capability assessment, we know that weakening the role of the medical profession in assessment processes is an underhand tactic to force people into work before they are ready.

On changes to the WCA itself, why will the Secretary of State not commit to scrapping this discredited process completely, as I have? As it stands, this dehumanising system does great harm and is nothing more than a vehicle for getting people off flow. Will the Secretary of State explain why only employment and support allowance is included in the statement? What are his intentions for the personal independence payment? How much funding is meant to underpin the health and work programme? Will he commit to reversing the cuts in support for the ESA work-related activity group, as those cuts will do untold harm? Does he accept his own data showing that people on ESA are more likely to die than the population at large, and that some sick and disabled people will never be able to work? As a civilised society, we must ensure that these people are adequately supported and not plunged into poverty, left destitute, or worse.

[Damian Green]

I am disappointed by the hon. Lady’s tone because she seems to be completely out of touch with those who represent disabled people. Let me read her the words of the chief executive of Scope, Mark Atkinson, who said today:

“Disabled people are twice as likely as the general public to be unemployed. It is right that the Government has recognised this is an injustice that needs to be tackled. We welcome

the Green Paper’s

“publication, which recognises the need for real change and sets out some bold ideas for reform.”

Dr Liam O’Toole of Arthritis Research UK said:

“Today’s Green Paper offers a vital opportunity to better understand and then meet the needs of people with arthritis.”

The Work Foundation said:

“We have consistently advocated that good work and the benefits it brings to individuals, employers and society at large should be recognised as a positive outcome from a health perspective.”

I am afraid that her carping is out of touch with the sector comprising those who most represent disabled people.

Let me deal with some of the detail. The hon. Lady repeated her promise to scrap any kind of assessment system at all for people getting benefits. Let me quote one of my predecessors who, when the work capability assessment was introduced, said, “We want to have a system where virtually everyone who is getting benefits is doing something to prepare for a return to work. The benefits system is not there for people to stay on benefits but to help them get back to work.” I completely agree with that. It was said by Labour Work and Pensions Secretary James Purnell in 2008 when introducing the WCA. I am afraid that, again, the hon. Lady is out of touch.

The hon. Lady said a lot about universal credit and described it as a failure. Let me give her the facts about universal credit. Under universal credit, people spend about 50% more time looking for work and move into work faster. For every 100 people who found work under the old jobseeker’s allowance system, 113 universal credit claimants have moved into a job. They are more likely to be looking to increase their hours—86% on universal credit compared with 38% on jobseeker’s allowance. They are more likely to be looking to increase their earnings—77% on universal credit compared with 51% on JSA. [Interruption.] I am afraid that despite all the shouting from a sedentary position, the hon. Lady is simply wrong about the effect of universal credit.

The hon. Lady asked me to make some commitments about Access to Work. Real-terms increases in funding under Access to Work will support an additional 25,000 people each year by 2021. Last year, more than 36,000 people were helped to take up or remain in employment, including 2,800 young people. Access to Work is doing very well for tens of thousands of people with disabilities.

The hon. Lady would also, I hope, welcome our personal support package, which includes the recruitment of about 200 community partners into Jobcentre Plus to bring in expertise from the voluntary sector. One of the key things about this Green Paper is that we will work closely with the voluntary sector and use its expertise to help people with a disability.

The hon. Lady talks about forcing people into work. I hope that underneath some of her rhetoric she recognises the fact—this is now recognised increasingly by medical practitioners and clinicians—that a good job is good for people’s health. Talking about forcing people into work demonstrates the wrong, old-fashioned mindset, and I genuinely hope she has moved on from that.

The hon. Lady asked about statutory sick pay. I assure her that there is nothing in this Green Paper about cutting statutory sick pay. We want to make it easier for people to move back into work, perhaps gradually, meaning that they take a few hours’ work in the early days and months of their getting back into work. The purpose of the useful changes to the fit note, which is given by a properly qualified medical practitioner, is so that the process does not simply write someone off work, but guides them into a system that will help them to get back to work, because in the long run that is the best way to improve their lives, which is what the Green Paper is about.

Oral Answers to Questions

Debbie Abrahams Excerpts

Monday 17th October 2016 Commons Chamber

[Damian Green]

As I am sure the hon. Lady knows, no one who is already claiming ESA in that group will see a cash loss. What we are seeking to do is to make it as easy as possible for as many people as possible to get into work, because doing a job is, for most people, the best route out of poverty. The various changes announced by my predecessors were all aiming at that end, which is the best one for the vast majority of people receiving these benefits.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The Government’s climbdown regarding their discredited work capability assessment is welcome, but given that 60% of people who appeal against their WCA decision are successful, that academics estimate that between 2010 and 2013 an additional 590 suicides were associated with WCA and that the Government’s data show that the people who have been found fit for work are four times more likely to die than the general population, why will the Work and Pensions Secretary not scrap the WCA process immediately and completely?

[Damian Green]

Because the work capability assessment, which was, of course, introduced by a Labour Government, has been reviewed five times since 2010, and each time we have improved it. I am glad that the hon. Lady has welcomed the recent improvements that we have introduced. [Interruption.] I would be grateful if she waited for her next question before she asks it. One thing I would particularly take issue with her over is her implied link between suicides and the work capability assessment. I do think that that is an unhelpful use of what is always clearly a deeply tragic situation for political ends. I think she will have known that there is no direct evidence to support that, and I do not think it is a very constructive way to seek to improve the work capability assessment.

[Debbie Abrahams]

Just as a point of fact, these are academic estimates, and the Government’s data show that people have died.

Unlike with the work capability assessment, the Government plan continually to assess all disabled people for the personal independence payment, regardless of their disability or condition, regardless of the fact that 59% of PIP appeals are successful and regardless of the wholly inappropriate process. After the outcry over proposed cuts to PIP in the Budget, and having had to abandon proposals to restrict access to PIP by changing eligibility to the daily living component, the Government are looking for alternative ways to make cuts to PIP—this time by changing the guidance and making it harder for disabled people successfully to appeal PIP decisions. Are the Government not ashamed that they are putting disabled people in such dire circumstances?

[Damian Green]

I am not at all ashamed of the introduction of PIP or the fact that many more people are eligible to receive PIP than were eligible to receive disability living allowance. It is a better benefit, and most of the disability support groups recognise that it is a better benefit, so I simply do not recognise the hon. Lady’s characterisation of PIP.

Social Security

Debbie Abrahams Excerpts

Wednesday 14th September 2016 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I warmly thank the Minister for introducing the order. May I also take this opportunity to welcome him to his place? It is nice to see him there.

Although I recognise that the order principally tidies up existing legislation—as such, I will not oppose it—I want to make a few comments about articles 2 and 3, as well as about the decision not to conduct an impact assessment.

Article 2 enables the income-related benefits awarded to recipients to be adjusted to account for additional income being received through an uprating of the new state pension, without requiring Secretary of State oversight, as the Minister has explained. The arrangement applies to the old state pension and it is now being carried forward to the new one, so it is relatively uncontroversial. However, I want to push the Minister on the specific changes to entitlements for couples.

The explanatory memorandum states that, currently, where one member of a couple has reached a qualifying age for pension credit but the other has not, the couple can choose to claim either pension credit or the relevant working-age benefit. The explanatory memorandum points out that most choose to go for pension credit as, should they choose to access the working-age benefit, they will be subject to conditions that do not apply to pension credit. From 2018, it is planned to remove the option to claim pension credit, replacing it with universal credit for mixed-age couples making new claims.

What are the proposed transitional arrangements to cover those changes? Would someone covered by transitional protections who loses their entitlement to pension credit for a short period then be expected to enrol on universal credit? How do the Government plan to communicate those changes? Given the important differences in the amount awarded under pension credit compared with most other working-age entitlements, as well as the strict conditionality requirements of universal credit, I am sure that the Minister will agree that it is very important to ensure that all those affected are well informed.

Article 3 provides for a right of appeal against a decision as to whether a person is to be credited with earnings or contributions for the purposes of entitlement to the state pension. Under the old state pension, people who reached state pension age before 6 April 2016 already had a right to appeal decisions regarding whether they were eligible for credits. The order, as the Minister has explained, extends that right of appeal to the new state pension.

The explanatory memorandum states that that right should have been in place from 6 April 2016 but that it was “unfortunately overlooked”. That omission is disappointing, not least for those who might have been affected. Although the Minister has taken pains to explain that it has not affected anybody and that there are measures in place to ensure that no one will lose out, I would be grateful if he wrote to me to clarify how many people have been denied a claim since 6 April and who might have been affected. For example, were women and people on low incomes more likely to have been affected? I would also be grateful if he confirmed in writing how the situation for all those who have had applications for credits declined will be resolved?

I want briefly to touch on the related issue of take-up of national insurance credits. NI credits cover circumstances in which people are not working, and in some cases they require an application to be made. In 2013, the Government acknowledged that there was a low level of awareness and understanding of some NI credits, such as carer’s credit. They said that the low take-up rate suggested that the credits were

“not achieving their stated aim of protecting the state pension position of individuals who take time out of paid employment due to caring responsibilities”.

Of course, in many cases, those affected are women.

The Government undertook to review the system, develop a customer-focused communications strategy and work with outside agencies to encourage take-up. They said that state pension statements, which individuals have to request, would be the vehicle for providing individuals with personalised information about their entitlement. In last week’s debate on this order in the other place, the Minister for Welfare Reform said:

“There are around 400,000 eligible for carer’s credit and, in August, there were 10,900 recipients.”—[Official Report, House of Lords, 8 September 2016; Vol. 774, c. 1221.]

According to my maths, that is about one in 40, which means that a very low proportion of those who are eligible to apply have received entitlements. Do the Government have plans to review their approach and to look again at some of the recommendations made by the Work and Pensions Committee in its report, “Communication of the new state pension”?

Finally, I want to push the Minister on the decision not to undertake an impact assessment when preparing the order. The Government argue that the order has no impact on civil organisations or the private sector. Is this not a narrow interpretation of when an impact assessment should be carried out? Can the Minister reassure the Opposition that a dangerous precedent is not being set? As we know, impact assessments by this Government have tended to be rather inadequate.

Social Fund Funeral Payments

Debbie Abrahams Excerpts

Wednesday 14th September 2016 Westminster Hall

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

As always, Sir David, it is an absolute pleasure to serve under your chairmanship.

I start by congratulating the hon. Member for Belfast East (Gavin Robinson), not only on securing this debate but on the compassionate, sensitive and very eloquent way in which he put his case across. In particular, his comments about the importance of ensuring that there is dignity in death as well as in life really resonated with me, as I am sure they did with all Members here in Westminster Hall today and beyond.

There have been a number of memorable speeches in this debate. I pay tribute to my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss), in memory of her husband—our dear colleague, Harry—and the personal experience that she went through. She made a point very sensitively, in a speech that was very moving as a whole, about the worry that people experience regarding finances as well as having to come to terms with their grief. Almost across the board today, the point was strongly made that the issues around debt that people face as a result of funeral costs compound their grief. My hon. Friend the Member for South Shields (Mrs Lewell-Buck), following in the wake of her ten-minute rule Bill, very eloquently described the issues that arise.

The Government are facing some confusion around the eligibility checker for the social fund. Does it exist, or not? Will it be used, or not? Progress in this area has been disappointing and I know that the Minister will address that in her response to the debate.

There is an issue about fair funerals. An important point was made about the need for us to consider looking at regulation of funeral services, in light of some of the overcharging that has occurred.

Although the point that the social fund for funeral payments just has not kept pace with inflation is very important, I will not labour it. The hon. Member for Belfast East has already made the important point that the figure for payments is the equivalent of £495 today; it has remained static since 2003 and it does not cover the cost of the average funeral. I would be grateful if the Minister told us what plans the Government have to uprate that figure and said whether any such uprating would be index-linked and continue in the future.

In addition to the adequacy—or not—of the social fund funeral payments, there is also an issue about people’s eligibility for support; again, that point has already been made this morning. That issue must be looked at.

We heard about the approach being taken in Northern Ireland about cohabiting couples. I will cite one of my own constituency cases, involving the father of a constituent. Sadly, my constituent’s father passed away in the summer. He was given a funeral. My constituent’s dad had been living with his partner, but for various reasons his partner did not want to get involved in the funeral and was unable to pay for it. So it fell on my constituent to organise the funeral himself, at a cost of more than £2,000.

My constituent is in a low-paid job and is supported by universal credit, so he could not afford the cost of the funeral. He tried to apply for a social fund payment, but because his father had been living with his partner he was told that he was not eligible. His father’s partner had not applied for a social fund payment, but he was still told that he was not eligible for such a payment. Obviously, my constituent will appeal that decision and he has my support for that appeal.

The eligibility issue has been raised a number of times today and consideration of it was also included in a report by the University of Bath. That report said that the Department for Work and Pensions rules take no account of the status of relationships and particularly the quality of relationships. Once again, if the Minister could examine that issue I would be very grateful to her.

The other point made consistently throughout the debate is about the issue of debt, particularly for those already on low incomes. A very valid point was made—I cannot remember who made it—about the context of all the welfare reforms that are currently going through. How on earth are people meant to save for funerals given that someone might die unexpectedly? That is a real issue. There is a scandal here. We had hoped that we had put these stories behind us. We are not in Victorian days—we are the fifth richest country in the world, and there is this increase in paupers’ funerals. As I say, this is not Victorian Britain; this is 21st century Britain and the situation is quite scandalous.

There was a report in The Guardian earlier this year that a Liverpool credit union had been inundated with requests for help, as people tried to acquire cheaper credit; the alternatives were payday loans or, even worse, going to loan sharks. Meeting funeral costs is a real worry for people. Similarly, the UK Cards Association says that payment of funeral costs is the single most placed payment that people make using credit cards. I am also worried that the Government are not collecting any data on this issue and that we cannot monitor the worsening state of affairs. Again, I would be very grateful if the Minister said exactly how she intends to address these issues.

There is a silent epidemic of funeral poverty, which, as I say, has been adding to the grief of losing a loved one. Given the Prime Minister’s very welcome words about tackling the injustices in this country, could this be an area where the Government take action? We need action and not just words.

Universal Basic Income

Debbie Abrahams Excerpts

Wednesday 14th September 2016 Westminster Hall

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

As ever, it is a pleasure to serve under your chairmanship, Mr Davies. I start by congratulating the hon. Member for Inverclyde (Ronnie Cowan) on securing this debate, which is most welcome and timely. The contributions that we have heard demonstrate that we are in absolute agreement that our current social security system is not fit for purpose. It is not delivering for claimants, who frankly deserve better, in a whole range of different ways. The Minister and I have exchanged views on that in many debates in the past; the detail is there for everybody to review.

Like the hon. Member for Banff and Buchan (Dr Whiteford), I am open-minded on this issue. I want to see the evidence, and it is very early days yet. We know that the current social security system is not delivering, in particular for people in work on low incomes, who might also go from in-work to out-of-work and back into work. The system is not flexible enough. The rapidly changing labour market is not currently catered for by our social security system. The Bank of England’s chief economist, for example, suggests that 15 million jobs are at risk of automation. These are huge changes, which have been growing over the last 20 years or so. Whether or not those jobs will be replaced by new sectors, we have seen a massive change in the labour market, with zero-hour contracts and insecure, low-paid work—our social security system is just not dealing with that. It is not fit for purpose in today’s labour market and there are huge ramifications for how we adapt and develop our social security system to ensure it can properly respond to the rapidly changing circumstances that workers face, and provide them with the necessary security to build happy and fulfilling working lives.

In the light of those great challenges, the Government’s ongoing failure to implement the universal credit programme is of serious concern, and questions about that were again raised last week. Universal credit was meant to attempt to address some of the challenges around flexible working. Unfortunately, because of the way it has been pared back in recent years, as well as the difficulties with implementation—at great public expense—that has just not happened.

[Kate Green]

Would my hon. Friend accept by contrast that Labour’s working tax credit, after initial teething problems, was very effective in reaching low-paid workers, lifting families out of poverty, making work pay and responding to changing work circumstances?

[Debbie Abrahams]

Absolutely. My hon. Friend has, as ever, hit the nail on the head. I am proud of Labour’s record of lifting nearly 1 million children out of poverty as a result of that policy. It is one of which we should be justifiably proud.

We need to respond to the rapidly changing labour market. The Government’s failure to deliver on the heavily diminished universal credit project has led to considerable problems and it is right that we look at the alternatives out there.

There are, of course, different views on what universal basic income is. At its simplest, it is about all of us having a non-contributory, unconditional lump sum, which would be available to all citizens regardless of means. I would like to explore both the positives and negatives. We have already heard some of the positive arguments, such as its simplicity and the way in which it may lift people out of poverty. Currently, there is very poor take-up of income-related benefits across the country. A mere half of those entitled to income-based jobseeker’s allowance are claiming their entitlement. That might have something to do with the current Government’s sanction regime, but it is undoubtedly affecting the numbers of people experiencing poverty in the UK, which now stands at 13 million people. By offering a simple, single sum to all, UBI may go some way to tackling the poverty that so many of our citizens are facing.

In replacing our complex system of universal contributory and means-tested support with a single, simple mechanism, UBI would also allow for a greater simplification of social security administration, with subsequent savings to the Department’s budget. Again, we really need to look at that.

Secondly—this is a really important point—by offering support to everyone regardless of their circumstances, UBI could go a long way to ensuring that the British public retain trust in the social security system. Over the last six years, we have seen the complete erosion of the social security system and the denigration of claimants. Some of the language that has been used—not by the Minister but by some of his colleagues—is frankly shameful.

The recent Fabian Society report, “For Us All”, demonstrated that the Government give as much tax support to people on high incomes through the shadow welfare of tax reliefs as they do to the poorest in our society. It has been suggested that if we were to replace the Government’s tax reliefs for the wealthy with a single universal payment, the reality that social expenditure benefits us all would be much clearer. It would get us away from the Government’s divisive rhetoric of strivers and skivers. Fundamentally, Labour believes that we should value our social security system, which, like our NHS, is based on the principles of inclusion, support and security for all, should any one of us become sick or disabled, or fall on hard times.

Let me focus on some of the concerns. Alongside those arguments in support of UBI, it is clear that tension could arise between its simplicity and its adequacy in supporting people with vastly differing needs and circumstances, which the hon. Member for Banff and Buchan described. A flat rate could not possibly provide the additional costs associated with disability—approximately an additional £500 a month—which are one of the causes of disabled people being twice as likely to be living in poverty. The Government, with their swingeing cuts, have not recognised that. To allow for variations in need, UBI would need to be supplemented with additional top-ups, increasing its expense and complexity, which is where we get to some of the issues discussed earlier.

My final substantial concern is the cost. A recent report by the Joseph Rowntree Foundation suggested that realising the policy would require not only an increase in income but a considerable shift in the general public’s understanding and knowledge of what and whom a social security system is there for. We know from the British social attitudes survey’s time-series analysis that although superficially there are peaks and troughs of support, when people understand what the system is for, whom it is for and the circumstances in which people make claims, they are a lot more supportive of it, so we need to inform people and extend their understanding.

I welcome this debate and I again thank the hon. Member for Inverclyde for securing it. I look forward to further exploring the strengths of UBI, but we must make informed decisions and evidence-based policy.

[The Minister for Employment (Damian Hinds)]

It is a great pleasure to serve under your chairmanship, as always, Mr Davies. I would like to join the congratulations to the hon. Member for Inverclyde (Ronnie Cowan) on securing this important debate. I thank everybody from all parts of the House who contributed to it. I was particularly interested in the speech of the hon. Member for Oldham West and Saddleworth—

[Debbie Abrahams]

Oldham East.

[Damian Hinds]

I am so sorry.

I think she confirmed that the official Opposition are considering a universal basic income. We already knew that the Scottish National party will look into it further after their conference, and we now know that the official Opposition also see some benefits in it.

[Debbie Abrahams]

I think the Minister is running away with himself. I said it would be useful to explore it. That is not how he characterised it.

[Damian Hinds]

I am grateful for the clarification.

A universal basic income or similar systems that guarantee a minimum income to all have been debated and discussed at some length across the world. This debate has been stimulating and important, and discussing UBI and similar concepts, such as the negative income tax, which was a popular subject for academic debate before UBI, is an engaging activity. Any system that promises protection and, to quote the recent report from the Joseph Rowntree Foundation and Compass,

“freedom of choice for individuals between work and leisure”

is bound to sound appealing. It is difficult to argue with a utopian system that enables individuals to choose whether to work or to engage in leisure activities, alongside all the other valuable things that people do, such as voluntary work and caring.

However, as the Compass report suggested, the big issue with UBI is not whether it is desirable but whether it feasible. Would it be affordable, and could it be introduced in a way that prevented losses among the poorest sections in society? The hon. Member for Inverclyde said we should not turn our back on laudable aims. I could not agree more, but laudable aims are not enough. When Jack Kennedy said he wanted to put a man on the moon, he knew that just willing it would not make it happen. It had to be technically feasible.

The Citizen’s Income Trust, which the hon. Gentleman cited, and the RSA claim to have developed cost-neutral models for a scheme, but less highlighted is the fact that they could do so only by collecting huge amounts of additional tax. I can confirm that that is not everybody’s definition of cost-neutral. As the JRF and Compass report found, the additional tax revenue required to deliver a sustainable UBI would be as much as £160 billion. Such a system is clearly unaffordable, even if we assume that the introduction of a UBI would not affect individual behaviour in the labour market and that nobody would give up paid work as a result of its introduction. That assumption, of course, goes against common sense. It goes against trials that have happened in other countries, which have been referred to, and the principles of this Government and all recent Governments that I know of.

[Damian Hinds]

I think the hon. Lady has the relevant page in front of her; I do not, but I have it nearby. From memory, if she casts her eye about three lines further up above the £8.2 billion figure, she will find another figure for what the impact on income tax will be. That is where the total effect, which is so much greater, is laid out.

[Debbie Abrahams]

rose—

[Ronnie Cowan]

rose—

[Damian Hinds]

I am spoilt for choice. I give way to the hon. Member for Oldham East and Saddleworth.

[Debbie Abrahams]

I am interested that the Minister is picking on one model. We need to be clear that there is a range of different models. He needs to clarify that in his remarks.

[Damian Hinds]

I am more than happy to clarify that the report looks at five models. There are three different proposals that might be called pure UBI models, which would deliver different levels of universal income; then there are two hybrid or adjusted models. The one that the hon. Member for Brighton, Pavilion (Caroline Lucas) referred to was, I believe, model No. 5, so it was the second of the adjusted models. The other ones are more expensive. The pure UBI models are more expensive than that one.

--- Later in debate ---

[Damian Hinds]

If the hon. Lady will bear with me, the claimant count is close to its lowest for 40 years, unemployment is at the lowest rate for 10 years and pay is rising. Our reforms are working. Why would we put all that at risk by implementing a blunt policy of financial handouts that does not treat people as individual human beings, with their own different ambitions and aspirations? UBI would also make no allowance for those with additional needs—a pure UBI system has no additional payments for those with disabilities or variations in housing costs, as the hon. Member for Banff and Buchan (Dr Whiteford) highlighted. Our reforms are about supporting people to reach their full potential, treating them as individual human beings and giving them the opportunity to get on.

Universal credit lies at the heart of the Government’s commitment to reform the welfare state, as the Opposition spokesperson, the hon. Member for Oldham East and Saddleworth, rightly identified. We want a welfare state that is fairer and more affordable, tackling poverty and welfare dependency, while supporting the most vulnerable households. The Government believe that work is the best route out of poverty, which universal credit supports by supporting people into work and by making work, and more work, pay. Together with the rise in the personal tax allowance, investment in childcare and the national living wage, our reforms are ensuring that support goes to those who need it most. There is additional help to cope with essential living costs, such as housing and childcare, and we will ensure that being in work will always pay.

Universal credit is already changing people’s lives for the better. Claimants are moving into work more quickly and staying in work longer than under the legacy system. For every 100 people who would have found employment under the old jobseeker’s allowance system, 113 universal credit claimants will have moved into a job.

[Debbie Abrahams]

There is so much in that sentence, and the preceding ones, that I do not know what to pick on first. The increase in wages is slowing down, according to today’s figures. Also, will the Minister explain why millions of people will be affected by the cuts in work allowances for UC under the Welfare Reform and Work Act 2016? In effect, they will get a £2,000-plus a year cut.

--- Later in debate ---

[Geraint Davies (in the Chair)]

Order. There has been some sedentary commentary, but we have until 17.38, so if people want to ask to make an intervention, please do—obviously, it is for the Minister to allow.

[Debbie Abrahams]

Will the Minister give way?

[Damian Hinds]

indicated assent.

[Debbie Abrahams]

Three out of four people in low-paid work are still in low-paid work 10 years on. How is the system helping them?

[Damian Hinds]

Helping people on relatively low incomes to increase their incomes by moving up the hours scale or the earnings scale is of course an objective that the hon. Lady and I share. That is why we have made the childcare reforms that I alluded to and brought in the national living wage, which will affect people who were previously on the national minimum wage but will also have a ripple effect on pay grades immediately above that. The critical thing, which we come back to time and again, is that universal credit will reform the system, in which there are certain cut-off points on the hours scale, to ensure that there is as smooth as possible a transition through work.

The hon. Member for Brighton, Pavilion talked about less secure employment. It is certainly true that today’s labour market differs in several ways from the labour market of the 1960s and 1970s. Several factors are at play, including the long-term shift to the service sector and the fact that people are living longer. Yes, it is also true that people are much less likely to stay in a job or work for one employer or even in one sector for their entire careers, but it is important to note that three-quarters of the increase in employment since 2010 has been in full-time work. Only around 14% of people in part-time work would prefer to be working full time, although obviously we want to increase the opportunities for them.

Relatively few people in the economy rely on zero-hours contracts, which give people on average around 25 hours of work per week. We know from surveys that most people on zero-hours contracts are not seeking to increase their hours. Although those types of contracts clearly are not even close to being suitable for everyone, there are some people for whom they work. A lot of people on zero-hours contracts are students or people coming back into the labour market, and such contracts can be a good way in. It is absolutely right for the Government to have banned exclusivity clauses that prevent people from taking up other work.