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Welfare Reform

Volume 607: debated on Monday 14 March 2016

1. What assessment he has made of the effect of his Department’s welfare reforms on low and middle-income households since 2010. (904050)

As a result of our reforms, the number of people in work is at a record high; income inequality is lower than it was in 2009-10; the number of workless households in the social rented sector is also at a record low; the number of children living in workless households is at a record low; youth unemployment is at the lowest level in a decade; and the employment rate for women is also at a record high.

I am grateful to the Secretary of State for his answer, but the question was not about work—it was about low income. It is one thing being in work, but it is quite a different matter if people are in work that does not pay them enough to earn a living. Is he concerned about reports at the weekend that the latest changes to the personal independence payment system will adversely affect 640,000 people by 2020, making it difficult or impossible for them to live independent lives? Does he not accept that welfare changes that start with a target saving before any consideration is given to the impact on vulnerable people are always going to go wrong?

The hon. Gentleman talks about my answers to him about low and middle-income people and work, but the point to make is that work is the best route out of poverty, and it is by getting people back to work that we are getting people out of poverty. It is worth reminding him that the poverty figures show that poverty has fallen, both for adults and for children, and that is the critical bit. The reforms we are making are helping people to help themselves to get beyond dependency and back into full-time work.

Will my right hon. Friend confirm that the latest low-income statistics show that the percentage of individuals and children in relatively low-income circumstances is at its lowest level since the 1980s?

Yes, and it is also worth noting that income inequality is now lower than it was in 2009-10. It is worth reminding ourselves that, for all the complaining from the Opposition, income inequality rose under Labour to the highest levels it had ever been.

But the Secretary of State will know that research analysis from the House of Commons Library shows that three in four people who are currently receiving tax credits will see that in-work support reduced when they are naturally migrated over to universal credit. What does he have to say to those millions of workers whose in-work support will be revised downwards?

As we have made clear on a number of occasions, anybody migrating across from tax credits will see no change to their income—the Institute for Fiscal Studies has made that clear publicly and we also make it clear. It is also worth reminding the hon. Gentleman, because his party seems to have opposed the advent of universal credit, that in the latest IFS-supported research universal credit claimants are seen to be much more likely to go into work than they would be under jobseeker’s allowance, they move into work faster, they stay in work longer and they earn more money. Those are major positives for people who are trying hard and working, whereas the last Labour Government penalised anybody who wanted to go to work.

A report published yesterday by the Women’s Budget Group highlighted that this Tory Government’s policies are predicted to be more regressive even than those of their coalition predecessor. The report highlighted that single parent women and single female pensioners will see their standard of living reduced by an average of 23% by 2020. The Secretary of State’s Department’s policies are having a negative impact on gender equality. Will he go back to the drawing board to create a social security and pensions system that is fair and equitable?

There have been many forecasts and most of them have been absolutely wrong—even the IFS forecast about child poverty has been wrong. It is worth reminding the hon. Gentleman of our reforms: the national living wage will give a boost of £900 to full-time workers who are currently on the national minimum wage; the personal tax allowance rising to £12,500 helps those on low income; and general childcare provision is available. That brings me to his point about lone parents, because universal credit, coupled with the incredibly generous childcare provision, now makes lone parents better off in work than they ever would have been before. That is why more people are going to work.

That answer will not provide a crumb of comfort to those being hammered by social security cuts up and down this country. Today I have written to the Chancellor, highlighting the devastating impact that the cuts to employment and support allowance and to universal credit will have on disabled and sick recipients. These cuts are predicted to save £1.4 billion, yet just £100 million appears to be set aside for the long-awaited, much vaunted White Paper on health and work. Does the Secretary of State agree that the White Paper must be properly resourced in order to provide direct financial support to the sick and disabled people who are seeing their support cut? Will he today finally confirm when that White Paper will be published?

The White Paper will be published well before the summer break. It is worth reminding the hon. Gentleman of two things. First, and really importantly, half the spending on welfare and public services still goes to the poorest 40%, as it did in 2009-10. Secondly, it is also important to note that we expect no change in the proportion of spending projected to be received by the lowest and middle quintiles between 2010-11 and 2020. I also say to him that it is a bit rich that the Scottish Nationalists, who are in Government in Scotland and who now face a £15 billion deficit, which would have racked them had they gone for independence, have not once referred to the tough choices that they might have to make to reduce that deficit.

Politics is always about choices, about priorities and about values. This past weekend, we saw the values and priorities of the current Government laid bare in their decision to implement a so-called welfare reform that will see £1.2 billion cut from the incomes of disabled people to pay for—we are told—a tax cut for top-rate taxpayers. Will the Secretary of State come back to the Dispatch Box and honestly describe that as a welfare reform, and then justify those choices?

The changes that have been announced on personal independence payment are about changing, reforming and improving what goes to those who most need it in this disability allowance. The key point about this, which has been made by the Under-Secretary of State for Disabled People, my hon. Friend the Member for North Swindon (Justin Tomlinson), is that we put out a consultation long before the Christmas period. The Opposition had an opportunity to make their submissions, which they did, and we listened to all the submissions that came back. As a result, we are not implementing any of the first four options. It is right to continue to recognise aids and appliances and all the activities, as we previously did, but with a change to activities 5 and 6, changing the points numbers from two to one. That brings them into line with activity 3, in which one point has always been awarded for aids and appliances. Finally, activities 5 and 6 are less reliable indicators of additional cost. This all came on the back of an independent review published just after the last election, asking us to look again at the way those indicators are used. We have done that and, in fairness, this is the right way to go and will improve the lot of the worst off.

For the benefit of the House, may I translate what the Secretary of State has just said? What he means is that he will take away £1.2 billion, completely eroding access to personal independence payment for 200,000 people, and cutting it by a third, from £70 to £50, for a further 450,000 people—people who are quite often unable to use the toilet or get dressed unaided. That comes on top of the cuts to ESA that went through the House last week. Before I came to the Chamber this afternoon, I asked disabled people what question they would like to put to the Secretary of State. One answer stood out. It was quite simply, “How does he sleep at night?”

I remind the hon. Gentleman that, under this Government, spending on sickness and disability benefits has risen every year. We spend more than £50 billion, which is more than any other OECD country of equivalent size, such as Germany. I am proud of that, and, even with these changes, we will continue to see spending on PIP rise every year all the way to the end of this Parliament. As I have said, I am proud of that, because our reforms ensure that those most in need get full support and that the way that we do it is fair to everybody. I am also proud of the fact that this represents 6% of all Government spending, because, by reforming the economy and reforming welfare, we can get the money to those who most need it. By contrast, when Labour was in Government, we had a lot of promises, a broken economy and cuts all round.