Finance (No. 3) Bill

Debate between Debbie Abrahams and Peter Dowd

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

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

Before I speak to my new clause 18, I want to gently chastise the hon. Member for Gloucester (Richard Graham). He is not in his place at the moment, but I am sure that someone will respond to this for him. He very inappropriately raised quite selective data on inequalities, a subject that I spent nearly 20 years working on before I came to this place. He should know that we are the seventh most unequal country of the 30 developed countries in relation to income inequality. By some measures, we do worse than others, but overall, economic equality is not just about income; it is also about pay and wealth. We need to be mindful of this fact, and selectively reporting data is not a practice that we should be indulging in.

I should like to declare an interest as the chair of the all-party parliamentary group for health in all policies and as a fellow of the Faculty of Public Health, following more than 20 years of national and international work in this field prior to becoming an MP. It is lovely to see you in the Chair, Madam Deputy Speaker. New clause 18 would require the Government to commit to undertaking an assessment of the effects of the personal taxation measures in the Budget—including changes in the personal allowance and the higher rate threshold—on poverty, on the public’s health, including their life expectancy and healthy life expectancy, and in turn on public services.

The reason I have tabled this new clause is that, over the past eight years or so, I have seen the gains made under the previous Labour Government being totally reversed by this Government. Those gains included the reduction in the number of children and older people living in poverty and the improvements in health including an increase in our life expectancy and reductions in health inequalities. As the UN’s special rapporteur on extreme poverty and human rights, Philip Alston, said on Friday, the cuts and reforms introduced in the past few years have brought misery and torn at our social fabric. He went on:

“British compassion for those who are suffering has been replaced by a punitive, mean-spirited and callous approach”.

As I mentioned in my point of order earlier, I am afraid the Under-Secretary of State for Exiting the European Union, the hon. Member for Spelthorne (Kwasi Kwarteng) demonstrated this exact point in his comments on the “The Andrew Marr Show” yesterday. The lack of humanity he showed in his response to the plight of Emily Lydon, who is being forced to sell her home because of issues with transitioning on to universal credit, shamed not only himself and the Government of which he is a Minister, but this whole House.

[Peter Dowd]

Does my hon. Friend agree that the massive cuts in the public health budgets that are now controlled by local authorities have simply made matters considerably worse in the public health field?

[Debbie Abrahams]

My hon. Friend is totally right. Those budgets were ring-fenced to start with, but they are now absolutely emaciated. This is stopping us doing the prevention work that we should be doing. We made massive investments in public health, and they were having a real impact in terms of health gain. I am afraid that that is now going by the bye.

We know that there are 14 million people living in poverty in the United Kingdom, 8 million of whom are working—the highest level ever. It is fine for Conservative Members to speak on a positive note about employment rates, but they should be asking themselves why we have such high levels of in-work poverty. That, too, brings shame on us. Two thirds of the 4 million children living in poverty are from working households. How on earth are young people expected to learn and to excel at school if they are constantly hungry?

Welfare Reform and Work Bill

Debate between Debbie Abrahams and Peter Dowd

Tuesday 23rd February 2016 Commons Chamber

[Debbie Abrahams]

Again, we need to look at our spend as a proportion of GDP. We are 19th out of 32—[Interruption.] No, France and Germany spend more. We spend 1.3% of GDP. We are 19th out of 32 EU countries. Contrary to what this Government perpetually claim about our generosity, we are not good at all in terms of the actual spend in relation to GDP. It was 1.6% of GDP in 1960. Now it is 1.3%. It is shameful. On those grounds, I ask all Members across the House to consult their consciences and support amendment 8.

Let me move now to clause 14. Again, the Government have been more than a little disingenuous when they suggest that the reduction in social security support applies only to new ESA WRAG claimants from 2017. From this April, 492,180 people currently on ESA WRAG will start to migrate across to universal credit, which, as many people know, combines a number of benefits, including ESA, into one amalgamated benefit.

Clause 14 removes the limited capability for work component for the work element of universal credit. That means that everyone currently on ESA WRAG will ultimately be transferred on to universal credit and will also have their support cut by £29.05 a week, or £1,500 a year.

[Peter Dowd (Bootle) (Lab)]

Does my hon. Friend agree that there is a stark difference between the warm words of the Minister for Community and Social Care earlier on, when he talked about parity of esteem for mental health, and the proposals to penalise people with acute and chronic mental health problems?

[Debbie Abrahams]

I thank my hon. Friend for his intervention. I absolutely agree with him.

What has been hidden so far is that this cut will also affect disabled people who are in low-paid work. Currently, 116,000 disabled people in low-paid work and working more than 16 hours a week receive the disabled workers element of working tax credit—about £60 a week—which they get as a result of being on disability living allowance or personal independence payments. They need that payment to cover the additional costs that they face as a result of work. Under universal credit, the limited capability for work component is the main additional financial support for disabled people in work and is meant to cover those extra costs. However, unlike the disability element of working tax credit, that is available only after working disabled people have been through a work capability assessment. If the Government go ahead and remove UC’s limited capability for work component from working disabled people, the inevitable impact will be disabled people dropping out of the labour market, thereby increasing, not reducing, the disability employment gap. It will have exactly the opposite effect to the one that the Government say that they want to achieve.

Welfare Reform and Work Bill

Debate between Debbie Abrahams and Peter Dowd

Tuesday 27th October 2015 Commons Chamber

[Debbie Abrahams]

The hon. Gentleman makes my point for me: that is why we need the independent review. There was enough evidence to leave real concerns about this matter. The Select Committee thought that the Minister had agreed to a review, but as paragraph 100 of the report states, unfortunately he reneged on that promise. In addition to these serious ethical issues, there were, and still are, concerns about a number of people affected, particularly in the case of ESA claimants, and about the meteoric rise in the use of sanctions.

[Peter Dowd (Bootle) (Lab)]

Does my hon. Friend recall that in the summer the Department for Work and Pensions was forced to admit to having invented quotes from fake benefit claimants, which meant that its sanctions leaflets had to be withdrawn pretty quickly?

[Debbie Abrahams]

My hon. Friend makes a valid point. That is one of the reasons why we need an independent review to investigate such matters.

Welfare Reform and Work Bill (Tenth sitting)

Debate between Debbie Abrahams and Peter Dowd

Thursday 15th October 2015 Public Bill Committees

[Debbie Abrahams]

Absolutely. The language used is sometimes unfortunate; it leads to a misconception that is commonly put out to the public arena. We all have an obligation to not mislead the public.

Extending the right to buy, which was mooted in the Tory party manifesto and set out this week in the Housing and Planning Bill, may increase homeownership —we all want to encourage homeownership—but without building more social housing, the extension will just reduce the supply of affordable homes for people on low income to rent. What will happen then? The average house price in the UK is more than £180,000. In London, it is more than £460,000. It has been estimated that it would take 22 years for people on low and middle incomes to save for a deposit.

I remind the Government of all the warm words from last week’s Tory party conference about helping people in poverty and with low incomes. There is a practical measure that the Government can take to do something about that, and I challenge them to do so. Housing is one of the biggest costs families face, and the Government’s plan will make the situation worse. Many young people, but not exclusively young people, are living with their parents or renting—the so-called “generation rent”. Inequalities are unfortunately increasing, not only in income but in wealth and assets, such as housing and land. Those inequalities, including the cost and availability of land, are key to addressing the housing crisis.

In addition to the effects of the plans on the building of affordable homes, there will undoubtedly be an impact on housing repair and regeneration programmes. The Local Government Association estimates that the loss in income from rent is equivalent to 60% of all local authorities’ total housing maintenance budget. That is significant. Ultimately, there will be an impact on both the integrity and the condition of the stock, and on maintaining decent home standards.

[Peter Dowd (Bootle) (Lab)]

Is my hon. Friend aware of any Government assessment of the medium to longer-term impact of the policy? If they denude associations of cash now, it saves the Government their £250 million or £300 million, but in the longer term, trying to claw back the lack of investment and denuding of the infrastructure might cost double or triple that.

--- Later in debate ---

[Debbie Abrahams]

My hon. Friend makes a valid point. People whom we should be supporting after their service to our country are unfortunately finding themselves without a roof over their head. I say “unfortunately”; there are means to prevent it. The measure will stop the roll-out of the affordable homes programme and have an impact on armed forces personnel and people leaving care, who are more likely to need affordable homes. A whole host of people will be impacted.

What assessment has been undertaken of the viability of registered social landlords? I know that we will debate that when we come to a later clause, but given the risks that people already face, for example from the introduction of universal credit and the lowering of the benefit cap, housing associations have a genuine concern about how they will measure it in practice. I refer to one of my own local housing associations. I mentioned the £15 million reduction in income from rent; it will have to deal with that, including through redundancies and by rowing back on some of the programmes by which it hoped to upgrade accommodation. What assessment has been made of the risks being shifted to housing associations?

Amendment 21 would compel the Secretary of State to produce a plan within 12 months of the provision coming into force to offset the impact of the reduction in rent, so that the building of affordable homes is not affected. We are asking the Government to say within 12 months how they will stop the building of affordable homes being pared back, as the LGA and the NHF anticipate.

[Peter Dowd]

I am sure that my hon. Friend is not aware of this; I do not know whether the Minister is aware, but it would be interesting if my hon. Friend could check it out in due course. Riverside Housing Association, which is one of my local housing associations, estimates that the rent reductions will require an additional internal subsidy of £12,000 per home built for rent, and an additional internal subsidy of £12 million for the current programme—a 50% increase. Are the Government aware of the implications for building when they take that much money out of the system in one fell swoop? Do they seriously believe that that will not have an impact on housing in the medium term?

[The Chair]

Order. Before I ask the hon. Member for Oldham East and Saddleworth to continue her speech, may I say that the Minister will be on his feet later, so if Back-Bench Members wish to ask him aw question they will be able to do so directly?

--- Later in debate ---

[Peter Dowd]

Does my hon. Friend agree that Government policy on parity of esteem for people with mental health problems, which is trumpeted in relation to health, is not only about health, but about a range of social services, including housing? The Government proposal potentially directly affects parity of esteem for people with mental health problems.

[Debbie Abrahams]

Absolutely. My hon. Friend makes a powerful point. Those housing providers provide housing and support to a very vulnerable group, including people with mental health conditions. The measure will affect their opportunity and ability to live independently and well.

The impact on accommodation for homeless people with support needs demonstrates how damaging the change would be for supported housing as a whole. Over 90% of residential homelessness services rely on housing benefit as a key funding stream. One homeless organisation in the north-east of England has modelled the impact of the change on the 300 beds of supported accommodation that it provides, which accommodate 1,400 disadvantaged people a year. The impact of the 1% rent reduction, assuming that other costs increase by 2% or 3% a year, is that 50% of its accommodation projects will be financially unviable in 2016-17. It is absolutely imminent. That is key. The pace of the clause’s implementation means that we will be facing problems in the next few months and I hope the Minister responds appropriately. It gets worse, I am afraid: the organisation has mentioned 100% financial unviability by 2017-18. What will happen to that vulnerable group of people?

A second organisation, St Mungo’s Broadway, provides accommodation support to 3,800 people each year across London and the south-east of England. I have visited the project here and in the midlands. St Mungo’s estimates that the 1% annual rent reduction requirement will result in it losing £1.25 million in rental income by year 4—between £250,000 and £300,000 each year. Taking into account the rental income that the organisation anticipates over that period, the overall impact on its finances over the four-year period is a loss of £4 million. That loss of income will force some projects to close, resulting in the loss of accommodation for homeless and disadvantaged people.

Mr Owen, I expect that you have experienced an increase in rough sleeping in your constituency. I was shocked recently, in the last month or so, when I arrived back in Manchester from Parliament late one night. Every 50 metres there was somebody sleeping rough. The fact that the measures will affect organisations such as St Mungo’s is serious. I have mentioned the groups of people supported by those housing providers. The providers have estimated who will be affected in percentage terms. They expect that people with learning disabilities and physical health problems, people who have slept rough and people with a history of offending, and people with alcohol, drug and mental health problems who have been accessing their services for support needs, will be affected.

As has been mentioned, the measures will have an enormous impact on services working with other disadvantaged people. A large national provider of supported housing has estimated that the change will lead to the loss of 104 schemes, removing 1,969 support spaces for clients, including 228 spaces for people experiencing domestic violence. A small specialist learning disability provider will have its operating margins reduced to 0.2% and will be forced to cancel all proposed development of learning difficulty schemes. A large national organisation will be forced to reduce planned development of extra care by 400 units, including units specifically to help people home from hospital. Such organisations reduce the pressures that our beleaguered NHS is experiencing—the measures will have a direct impact on the NHS.

There is a precedent. The principle of treating supported housing separately from other social housing for welfare reform purposes was recognised in the previous Government’s proactive decision to keep housing costs for specified accommodation out of universal credit and the benefit cap calculations.

Welfare Reform and Work Bill (Ninth sitting)

Debate between Debbie Abrahams and Peter Dowd

Thursday 15th October 2015 Public Bill Committees

[Debbie Abrahams]

This is my first opportunity to say that it is lovely to see you in the Chair today, Mr Owen. I will speak more fully on the clause when we discuss the Opposition amendments, but I will comment on this first group of amendments. With respect to the Minister, the Government have tabled 42—I have just counted them—amendments, so we can hardly say that they have done their homework. I am afraid that that reflects the nature of the Bill as a whole, which has been made up on the hoof. There has been no thorough assessment. I will go through my concerns about the lack of assessment and the evidence we have heard about today on the impact the Bill will have not just on the viability of housing associations but on their ability to provide affordable housing.

The Minister quoted the National Housing Federation. Housing associations have been working incredibly hard to ensure that they have a going concern and are able to afford to invest in the development of affordable housing. One issue with the clause is that it would threaten their viability and ability to borrow at low interest rates. Moody’s, the credit rating agency for the 44 social landlords, has said:

“A traditional credit strength of English [housing associations] has been the predictability of the policy environment…This stability has been eroded by the sudden removal of the rent-setting formula, which was preceded by limited consultation.”

If anything, the measure will make it even harder. I will speak more fully on the implications, not just for housing associations.

[Peter Dowd (Bootle) (Lab)]

My hon. Friend referred to the fact that this 1% reduction will have a significant effect. Is she aware that Riverside Housing Association has estimated it will lose £3.9 billion nationally?