I beg to move,
That this House has considered the effect of social security changes on equality.
It is a great pleasure to serve under your chairmanship, Mr Hollobone. When the benefits system was established, it had a couple of main aims: to provide a safety net for people in work if they lost their jobs, and to provide a springboard back into employment. Surely no one could argue with those aims; they both remain relevant today. To listen to Government rhetoric, hon. Members would be forgiven for thinking that all was fine and well, but there are two other principal aims of the system that I believe should also be considered. One is surely to give comfort and dignity to those who are unable to work for themselves, and the second is to use the levers of government to reduce inequality and make ours a more equal society.
I start by asking the Minister this: is it this Government’s view that it is their role to use the tax and benefits system to achieve a more equal and less extremely divided society? Taxation can be used to raise revenue and to nudge citizens’ behaviour—through, say, taxes on alcohol, tobacco or even sugary drinks—but also to level off the harshest divides by supporting those who cannot support themselves. For all this Government’s rhetoric, the UK is at best as unequal now as it was at the start of this decade, and according to the Institute for Fiscal Studies, it is likely to become more unequal towards the end of the decade. Perhaps that is acceptable to the Government. If the Minister concedes that equality is not a top priority, that is fine; we can accept his honesty and have a difference of opinion.
We have heard that the recent Budget will impact women most harshly, and there is still no fair transitional pension settlement for the 1950s women affected by pension changes. Young people are excluded from housing benefit and from the so-called national living wage—although, to be fair, as it is not actually a living wage, that is not much of an omission. Scandalously, state support for those affected by contaminated blood transfusions is being slashed. However, with your permission, Mr Hollobone, I will focus on the combined impact of changes to the benefits system on people with disabilities.
The Government have sought from the outset to justify cuts to benefits by demonising claimants, introducing a them-and-us atmosphere and creating a stark but false division between—in the Prime Minister’s words—shirkers and strivers. Or was it skivers and strivers? I cannot remember the exact words, but the sentiment is the same. Let me make it clear that I have absolutely no time for those who can work but do not, relying on everyone else’s work but not contributing themselves. They should be dealt with individually. However, those people are a tiny minority. Around 0.3% of the total benefits bill is spent on out-of-work benefits to those who could be working—the real shirkers or skivers—yet the Government have tarred all claimants with the same brush. I believe that they have done so deliberately, to make cuts to support for disabled people more palatable to the general public.
Nobody chooses to have a disability. Nobody chooses to have a long-term debilitating illness. I can guarantee that every single one of the people whom we are talking about would rather not be in the situation that they are in. People have disabilities for a variety of reasons, including genetic defects, pre-natal or ante-natal complications, serious illness and accidents. However, one common factor runs through all of those situations: blameless misfortune, or bad luck. It is surely the duty of the modern, compassionate state not to compound that bad luck, but to compensate for it.
Scope’s extra costs commission estimates that disabled people face average extra costs of £550 a month due to their disability. The personal independence payments system introduced to address those additional needs is failing. The extra costs are not being met, claimants are routinely being turned down, and 60% are being reinstated on appeal, but in the meantime, their worry and debt are growing exponentially.
This week I spoke to a constituent of mine, Kevin, whose wife has kidney failure and is on dialysis, as she has been for several years. It is unclear why she has kidney failure, though it could be linked to complications at the birth of her children. She receives dialysis in the morning, has something to eat and then goes to bed and sleeps until the next day. There is no possibility that she could hold down a job, and the support that she receives from the state is essential, yet when she applied for PIP after moving over from disability living allowance, she was turned down. My constituent is appealing the decision, which of course takes months. In the meantime, she and her family are being driven further into poverty, and probably into debt.
That brings me to my next main point. When PIP was introduced in the Welfare Reform Act 2012 to replace disability living allowance, we were told that it was to ensure that benefits were focused on those who needed them most. Indeed, the impact assessment for the 2012 Act said that under PIP, the number of claimants would fall by 500,000. I understand that it was designed to deliver a 20% cut to the total cost.
The Prime Minister expressed surprise and disappointment when the former Secretary of State, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), resigned this year. Does my hon. Friend not think that if the former Secretary of State believed in what he was saying about disabled people being affected, it would have been more appropriate for him to have resigned when he introduced PIP to begin with?
That certainly would have prevented a lot of heartache and difficulties for those who have been affected. My hon. Friend, who sits on the Select Committee on Work and Pensions, is an expert in this area, so I will take his word for it.
On his recent appointment, the new Secretary of State immediately used the justification of focusing benefits on those who need them the most. I admit that even previous Labour Governments have used that as an excuse. However, I believe that it is a bogus argument, and a sham to give cover to further cuts. Why should a disabled person placed in the group of greatest need when PIP was first introduced suddenly be deemed not to be in the greatest need, just a couple of years later? Are the Government seriously suggesting that someone with a lifelong disability or chronic illness can be cured of that disability? Why is my constituent who is on dialysis with double kidney failure suddenly considered not to require PIP, when there has been no change in her condition and she has not yet received a transplant?
The situation does not only economic harm by forcing the vulnerable into even greater poverty, but psychological harm by increasing their stress, and their worry that their lives will be further impoverished by reductions. My constituent Lynda Hesketh, who is wheelchair-bound and who runs the Chester People Have Abilities group, describes to me her terror—that is her word—whenever a brown envelope drops through her letterbox; she worries that it is announcing a further cut to her support.
Of course, many people with disabilities want to work and are capable of doing so, but they face cultural or physical barriers. The Government have made some progress in helping disabled people into work, but the disability employment gap has nevertheless widened slightly in recent years.
Does my hon. Friend agree that having listened to the debate about quiet cities, we should listen to the quiet man, the former Secretary of State for Work and Pensions, who was scathing about the current Government’s policies in this developing area?
We should listen to him. As my hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle) mentioned, it might have been more help if he had spoken up a little sooner, but none the less, better late than never. The advice that he gives is absolutely valid.
Of the 12 million people in the UK living with a disability, impairment or chronic illness, around 7 million are of working age. We know that 47% of working-age disabled people are in work, compared with almost 80% of working-age non-disabled people—a disability employment gap of more than 30%. That is important because it indicates not only the waste of the potential talent of disabled people who want to get into work but the fact that those forced off PIP and other benefits will have far less opportunity to make ends meet through their own efforts than through benefits. I welcome the Government’s determination to address those issues in the forthcoming White Paper, and I hope that the Minister might be able to give us a sneak preview today if at all possible.
I turn to employment and support allowance. The Government’s stated aim was to ensure that work became a way out of long-term illness and that benefits were focused on what a person can do as opposed to what they cannot do. That is all very laudable, of course, but again the reality was detached from the rhetoric. As the Work and Pensions Committee recognised, the focus on a return to work in such a short time was not appropriate for many claimants, and the work capability assessment failed to provide an accurate assessment of a claimant’s individual health-related employment barriers or distance from the labour market.
Through announcements by Lord Freud, the Government have now moved to make additional cash available to help disabled people return to work. That indicates that they accept that there was and remains a problem. Indeed, the Government’s intention to produce a White Paper, which I have just referred to and which is keenly if nervously awaited by disability charities and campaign groups, demonstrates that there is still a way to go.
Chester was one of the first areas to move to universal credit. We now hear that further cuts to the universal credit rate are likely to be coming down the line, to make up for the cost of the Government’s U-turn on tax credits. Such cuts will inevitably have a still further impact on those at the bottom of the pile. Indeed, from its inception, universal credit included the abolition of the severe disability premium of £61.85 a week, which was a massive and largely unpublicised cut in the benefit levels of the most severely disabled people, although, to be fair, it was mitigated by a degree of transitional protection for existing recipients. Consequently, many of the effects of the changes to universal credit are yet to be seen.
That brings me to my main point. With the combination of the changes to PIP, universal credit, ESA and other benefits, disabled people in particular are experiencing increasing insecurity and inequality. The effect on them and their friends and families is becoming tangible. We talk about the cutting of individual benefits, but when a combination of cuts falls on individuals or families, that has a greater effect. I therefore make one further request to the Minister, which is that the Government consider instituting a cumulative impact assessment to evaluate the overall combined consequences of the many different changes.
I will finish with two brief quotes. The first is somewhat truncated and is from July 2009:
“I do believe that you judge a society by the way it treats its most vulnerable… together we can create a society we are all…proud of.”
That was said by the then Leader of the Opposition, who is now our Prime Minister. Sadly, those pre-election words have come to nothing, as shown by my second quote, which is from Richard Atkinson, a disability rights adviser at DIAL House, which is Chester’s disability rights centre. He says:
“What we do know though, is that the barrage of cuts and their accompanying media offensive—orchestrated and encouraged by the government—have had a real effect on the security, self worth and confidence of millions of disabled people. Here at DIAL West Cheshire, we see people every day who have become frightened and apologetic about their disability. They say to us, ‘I’m not one of these scroungers but...’, and they are afraid of being judged, reassessed and found wanting. I myself have MS and can’t walk well—but can and do cycle albeit on a tricycle. As well as being apprehensive about being transferred from DLA to PIP, I have had to become inured to comments like, ‘Why’s he carrying a crutch if he can cycle—to get benefits!’”
It is time for Government rhetoric and philosophy to change, to create the caring society that the Prime Minister claimed he wanted to see. It is time to treat disabled people with a dignity not currently afforded to them either in the benefits system and the process for accessing benefits or in the wider cultural context in which they live and we operate. It is time to take away the sword of Damocles that is dangling above people who live every day with a disadvantage simply because they have been unlucky in life.
We now have until 6.14 pm. When we get to the Front-Bench speeches, the recommended time limits for an hour-long debate are five minutes for the Scottish National party, five minutes for the official Opposition and 10 minutes for the Minister.
It is a pleasure to serve under your chairmanship, Mr Hollobone.
I had not intended to speak in this debate, but unfortunately my hon. Friend the Member for Glasgow South West (Chris Stephens) was called away and he has left me a pile of unreadable notes here, which was his speech. So I am sorry that I will not be able to read what he wanted to say—
They could be in any language—I am not quite sure.
This opportunity to speak about the effect of social security changes on equality gives me the chance to mention something that I have mentioned several times before in the House, which is the impact on women of the proposed benefit changes, with particular reference to the two-child policy in tax credits and the rape clause that the Government have proposed. I have raised the two-child policy on several occasions; I am not sure whether I have yet raised it directly with the Under-Secretary of State for Disabled People, who is here today, but I am certainly yet to have an answer from the Government on it.
The two-child policy in tax credits perhaps sounds like a reasonable idea—people should not have unlimited access to benefits, and they should have the children that they can afford. However, that is not actually how life works or how families work. The policy does not really take into account the fact that someone may have had three or four children at a time when they could well afford them, but then real life gets in the way and they lose their job or their partner dies or takes ill. There is no means of recognising such a change in circumstances within the tax credit system. The system simply says that the benefit is calculated on the first two children somebody has, which, as I said, does not take into account how real life works.
With regard to equality, the policy does not take into account the impact that there might be on people of particular faith backgrounds, for whom larger families would be the norm. Those people may choose to have larger families because of their religious beliefs, and the policy has not been tested in that regard either. The Government have not done an impact assessment of the policy’s effect on people of a particular religion—be they Orthodox Jews, Catholics or Muslims—who may wish to have larger families for historical reasons. They have not taken that issue into account.
I also believe that the two-child policy does not take into account our obligations under the UN convention on the rights of the child, because it does not treat all children within a family equally. It says that the first two children in a family are somehow of greater value to the Government than the others. I believe that we should support all children within a family and make sure that each of them has enough to live on.
On the subject of the inequality of treatment under the two-child rule, does the hon. Lady note the contrast between what is happening on tax credits and the childcare element of universal credit, which are to be limited to two children, and what is happening on childcare allowances? The latter are to be paid for as tax allowances of up to £2,000 a year, or up to 20% of £10,000 costs. They will go to better-off families, will not be limited by a two-child rule and will be bankable allowances, unlike what people will get under the childcare element of universal credit.
I absolutely agree with the hon. Gentleman. There are a great many inconsistencies within the policy and a great many unanswered questions about it.
The rape clause puts particularly vulnerable women in an extremely difficult position, because the Government do not seem to realise that rape can happen within marriage as well as outside marriage. A woman may be in a relationship where she cannot tell the police about a rape, and no proof that she was raped can be found, but the Government somehow expect her to nip down to the benefit office and say, “Oh, this third child that I’d like to claim benefit for came about as the result of rape.” That is not something that many women would want to do, and I do not think that the issue has been fully thought through. There is also a problem if, as soon as the woman goes and claims that money, the man in the relationship, who has the power, knows that she has done so. Again, that will put her in a vulnerable position.
There is a similar situation with household payments under universal credit. The Government say that women can request split payments instead of the single household payment, but if a woman makes that request at her local Department for Work and Pensions office, the man will know it almost instantly, when the money that he is expecting does not come in. That woman will then have to suffer the consequences of that. Should she then leave that abusive relationship, if she has more than two children the tax credits system has no means of taking that into account. The system will not see that she could do with some extra support because she has left an abusive relationship. She may be in financial hardship, and she may have to put up with working extra hours or cutting her hours to look after her children. There are no means within the system to take into account that woman’s change of circumstances.
I appeal to the Government to consider the matter more carefully. It is an issue of inequality. Women are already not being treated equally under the system, and they are being further punished by the circumstances they are in. I urge the Government to take account of the religious aspects and the impact on women of their changes to benefit policy.
It is a pleasure to be called to speak in this debate, Mr Hollobone. First, I congratulate the hon. Member for City of Chester (Christian Matheson) on securing the debate. In Northern Ireland, we are shortly to come into the PIP system, and I will make some comments about that. It is always a pleasure to see the Minister and the shadow Minister in their places. I look forward to their comments.
When the new Secretary of State for Work and Pensions took over, he said that he wanted
“to start a new conversation with disabled people, their representatives”—
that is us in this room, councillors, Assembly Members, Members of the Scottish Parliament and so on—as well with healthcare professionals, who are the people who know best, and employers, in order to shape future policy. He also wanted
“to take time to reflect on how best we support and help transform people’s lives.”—[Official Report, 21 March 2016; Vol. 607, c. 1269.]
With that in mind, the conversation started a long time ago. The Minister knows the respect I have for him and I know he is interested in this matter, and I know that we will have a full and detailed response to our concerns. I honestly believe that his concerns are our concerns too.
Most of my comments will relate to my knowledge of the system and its shortcomings. It is unfortunate that in debates such as this we sometimes have to say what is wrong with the system, but the fact is that as elected representatives, people do not necessarily come to our advice centres and say, “You’ve done a great job. Have a nice day. How’s the football?” They come in to make their complaint. We have to put serious complaints to the Minister and make him aware of what is happening.
One concern that I have about the work capability assessment for ESA—I do not know how this happens—is that some of my constituents have to fill in ESA forms up to three times a year. My goodness me, how does the Department expect someone’s health to deteriorate or get better within four months? It is illogical. The assessment has to happen between three and six months before, so why does that happen? I stand to be corrected, but I am not aware of anyone who was receiving incapacity benefit in my constituency who was not turned down automatically when they were moved to ESA. I see that happening all the time. After being turned down automatically, they go to appeal and win it. There almost seems to be a presumption that individuals should not have been getting incapacity benefit and they certainly should not get ESA. I have to express that concern.
Another thing that comes to mind is the number of claimants with serious health conditions or disabilities who are found fit for work. I have one staff member who works full time on benefits cases. The role of the advice centre in my office has changed—its role was once about housing and planning, but now benefits are right up there next to those issues. I am sure that situation is replicated in the office of every Member. One problem is the number of people who are found fit for work or placed in the wrong ESA group due to deficiencies in the descriptors used or the assessment process. How can we do better on that?
The focus on returning to work within a relatively short period of time is not appropriate for many claimants. In England, 36% of all fit for work decisions in a given period were appealed against, and 52% of those appeals were won. We cannot ignore that fact. I make these points not to be aggressive or adversarial; I am trying to raise issues in a constructive fashion. There are deficiencies in the process, and other Members will no doubt speak about them.
As the Minister knows, this matter is devolved to Northern Ireland. The Northern Ireland Assembly has set aside £500 million for a further series of supplementary payments to carers, people suffering from ill health and families on low incomes. We have recognised that a number of issues have to be addressed. Will the Minister give his thoughts on that? Some 50,000 people in Northern Ireland receive the mobility component of the disability living allowance, and they are worried about the impact of PIP. Honestly, I sometimes wonder whether anyone sees the emotional effect that such things have on people. If they did, they would say, “The system needs to be changed.”
DLA will end in Northern Ireland on 20 June, and PIP will take over. The same contractor that looked after the system on the UK mainland will be taking over in Northern Ireland. I say this very respectfully, but we seek an assurance that the contractor is fit for purpose, fit to do the job in Northern Ireland and fit to do the job better. How will that company be monitored?
Families that include disabled people are more likely to be in receipt of state benefits than families with no disabled people. That fact should be recorded. The Government have announced further welfare measures that will affect disabled people, including a four-year freeze on most working-age benefits, changes to tax credits and universal credit and the abolition of the work-related activity component for new ESA claims from 2017. I am trying to be constructive, but can we have some assurance for those who are disabled? They are very worried about what will happen.
In Northern Ireland, more than 200,000 people receive disability living allowance. In a population of 1.8 million, that means that one in every nine people are receiving DLA. That compares to a figure of one in 20 on the UK mainland.
I know that the hon. Gentleman is entirely sincere in registering his concerns, but they are contradicted by the fact that his party voted in the Assembly for a legislative consent motion that endorsed all the clauses of the Welfare Reform and Work Act 2016 as originally tabled. He and his colleagues also voted down amendments to the Northern Ireland (Welfare Reform) Bill when we proposed them in the Chamber. Those amendments would have addressed exactly these issues.
I thank the hon. Gentleman for his intervention—at least, I think I thank him. We know how the system works. We have made some changes to the system in Northern Ireland and made some concessions. If we want to change it more, we have to pay for it. I am sure that he can tell us where the money would come from. We need to make those decisions as well, and in Northern Ireland, those decisions are made by those in government who are responsible. They must make decisions that do not run us into debt or extra problems. We agreed to that legislation because we cannot change everything that comes across from Westminster. The things we can change we do change—I will not comment on them now.
Kevin Doherty, the chief executive of Disability Action, has said that the growing number of people in receipt of DLA should be a sign to the Government that better services are needed. He stated:
“Disability Action would strongly recommend that the Government take heed of the rise in DLA recipients and continue to implement adequate and sustainable services that enhance the lives of disabled people.”
The number of people in receipt of DLA—or PIP, as it will be from 20 June—will continue to rise, and the number is greater in Northern Ireland than anywhere else in the United Kingdom. That cannot be ignored.
Some people have argued that people take advantage of the system, but from my experience, I can confirm that all those who come to my office needing help with DLA forms are genuine and deserving individuals, and DLA and PIP are intended for those people. I am honestly not aware of anyone who has come to my office who did not deserve support, and my staff work very hard to ensure that those who need it get it. I am ever mindful that we are nobody’s judge in this world. We are here to help anyone who comes to our offices, and we do that.
It is important to say that the Northern Ireland Assembly has set aside money out of its block grant, money that we all agreed to—or at least the parties with responsible minds in Government agreed to it—so that we could look after those hit by the bedroom tax or the spare room subsidy, which is completely discriminatory towards those most genuinely in need. Where did that money come from? The direct budget. We set that money aside because we are a responsible Government, which is why, looking forward to the elections on 5 May, the Democratic Unionist party can honestly say, with no fear of contradiction, that we are building a better future for everyone in Northern Ireland. We are doing that through responsible governance, paying our way and looking after the vulnerable, those on low incomes and in poverty, and the disabled. We are doing our best to ensure that they are looked after. I am sure that, when they respond, the Minister and shadow Minister will accept those points.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for City of Chester (Christian Matheson) for securing this important debate and congratulate him on having done so. I listened with a sense of admiration to the dignified way he made his case this afternoon. I know that he is a son of An t-Eilean Sgitheanach—for the non-Gaelic speakers, that means a son of the isle of Skye—and he very much conducts himself in the manner of a highland and island gentleman, if I can put it that way.
The hon. Gentleman discussed the use of taxation to create a more equal society, which is something with which the Scottish National party would very much agree. He asked the Minister whether he agrees; I must say that the evidence from the Government is that they certainly do not believe in the kind of things many of us do. My hon. Friend the Member for Glasgow Central (Alison Thewliss) has been fastidious in highlighting the rape clause. I think she did so on Budget day last year when it came up, and I congratulate her on how she has pursued that case. She also addressed the issue of support for all children.
The hon. Member for Strangford (Jim Shannon) spoke passionately about the failings of ESA and PIP and the percentage of people who have won their appeal. There are real questions for the Minister to answer there.
I thank the hon. Gentleman for that intervention and agree wholeheartedly with what he said. The Government must address not only the issue of those who are on benefits using food banks, but the fact that those in work are having to rely on them as well.
As the hon. Member for City of Chester said, it is noteworthy that the Resolution Foundation said last night that inequality in the UK has been falling recently but is projected to rise over the Parliament. That is a direct consequence of the Government’s policies. It is little wonder that the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) said, in the letter he sent to the Prime Minister to resign as Secretary of State for Work and Pensions:
“I hope as the government goes forward you can look again…at the balance of the cuts you have insisted upon and wonder if enough has been done to ensure ‘we are all in this together’.”
That is exactly the point. Social security should lift people out of poverty and give the disadvantaged equal opportunities. That is what the Opposition are asking for. Instead, the Government have created a system that breeds inequality and institutionalises unfairness. The relentless attacks on sick and disabled people show how callous the Tories have become. As we say in Scotland, we are fair scunnered at the policies of this Government.
I am glad that my friends in Northern Ireland use the same words. We use other words as well.
Families with disabled people are more likely to be in receipt of state benefits than families with no disabled people. In 2013-14, 83% of families in the UK with at least one disabled adult and no disabled children were in receipt of state support, and 38% claimed an income-related benefit. Almost 75% of families with a disabled child and no disabled adults received state support, and 37% received an income-related benefit. Some 46% of families with no disabled adults or children received state support, and 12% received an income-related benefit. We can see exactly how those who are looking after either disabled children or disabled adults rely on the state’s support; it is necessary.
It is little wonder that there is widespread fear among those in the disabled community about their vulnerability to an assault on social security, which often provides recipients with a level of dignity that the Government seem to want to undermine. The arbitrary £30-a-week cut to ESA is a regressive measure that is part of this Government’s continued attack on disabled people. The Government continue to peddle the line that such cuts will incentivise disabled people to work. That is a cruel and completely misjudged justification. A review conducted by the House of Lords in December 2015 found no evidence that such cuts will incentivise work, and surveys by the Disability News Service and Mencap show that cuts will force sick people backwards and further away from getting back to work. Social security should lift people out of poverty and give the disadvantaged equal opportunities. Instead, we are breeding inequality and unfairness.
The Resolution Foundation recently called universal credit
“a post-code lottery on steroids”
because it has continued to be cut while similar cuts to tax credits have been scrapped. Universal credit will now be less generous than the benefit that it replaces. Where someone is in the country will determine whether they are eligible for universal credit or the existing system.
As my hon. Friend the Member for Glasgow Central has said, women have been bearing the brunt of Tory welfare cuts, as they are twice as likely as men to rely on income from social security payments. Since 2010, £26 billion has been taken away from benefits, tax credits, pay and pensions, 85% of which has been taken from women’s incomes. That disgraces all of us.
Because of the time constraints, I will cut my remarks short, but I want to refer to the different agenda that we have in Scotland. The Scottish National party has pledged to restore housing benefits to 18 to 21-year-olds, giving back to Scotland’s young people what the Tories have taken away. That will protect 2,000 unemployed single people under 21. The SNP is also committed to treating disabled people with dignity and respect. Responsibility for disability benefits will be devolved to Scotland in 2018, and the SNP has pledged to chart a different course. The SNP’s compact with disabled people will treat everyone with fairness, respect and dignity. We will abolish the bedroom tax and increase carer’s allowance. We will continue the £52 million independent living fund, which was scrapped by the Tories. We will support disabled people into employment with a £20 million fund. We will maintain disability benefits when they are devolved to Scotland, not cut them. That is the difference that a caring Government who are on the side of the people will make. The Government in London must go back to the drawing board on social security to protect the disadvantaged and build a system based on equality, dignity and respect—all currently sadly lacking.
I sincerely congratulate my hon. Friend the Member for City of Chester (Christian Matheson) on securing the debate and his excellent contribution, and all Members on their contributions on such an important topic.
The hon. Member for Ross, Skye and Lochaber (Ian Blackford) mentioned the Resolution Foundation paper that was published yesterday. I used to work on inequality and there are a variety of ways of measuring it. He was probably talking about the Gini coefficient, which has been relatively flat over the past decade or so, but other data, such as those on the extremes of wealth in the top 1% compared with the bottom 1%, vary considerably. I will look at those data in a moment, but they show inequalities that hark back to the Victorian age. In fact, the International Monetary Fund has said that income inequality is
“the defining challenge of our time.”
In the UK, 40 years ago, 5% of income went to the highest 1% of earners; today, 15% does. But this issue is about not just income but wealth. If we think back a few weeks to when the Panama papers were published, they revealed the shocking extent to which the assets of the richest are kept in offshore tax havens, where tax is avoided and evaded. According to the Equality Trust, another good source of data, in the past year alone the wealth of the richest 1,000 households in the UK increased by more than £28.5 billion. Today, their combined wealth is more than that of 40% of the population, which is equivalent to 10.3 million families—so, the wealth of 1,000 families is equivalent to that of 10.3 million families. While the wealth of the richest 1% has increased by 21%, the poorest half of society saw their wealth increase by less than a third of that. I could go on, but I have set the context.
Looking over the past six years at the regressive Budgets of this Government and the previous coalition Government, we should not be surprised. As the Institute for Fiscal Studies has shown, last month’s Budget left people on low and middle incomes proportionately worse off as a result of tax and social security changes, which is what we are discussing today. Regressive economic policies that mean that the total tax burden falls predominantly on the poorest, combined with low levels of public spending, especially on social security, are key to establishing and perpetuating inequalities. In particular, those on low incomes, the sick and the disabled have been hammered by this Government.
Since the Welfare Reform Act 2012, according to analysis by Demos and Scope, 3.7 million sick and disabled people have had approximately £28 billion in social security support cut. That does not include the cuts that we have seen to social care, access to transport and support for disabled children in schools—right across the piece, disabled people have been hammered. The Welfare Reform and Work Act 2016, which has only just been given Royal Assent, will compound the effects of those cuts. The cut of £1,500 a year for people on ESA WRAG—the work-related activity group—and the UC equivalent who have not been found fit for work is an anathema.
There is clear evidence from the Extra Costs Commission, as we have heard, that sick and disabled people face additional costs—estimated at £500 a month—because of their condition. The effect of further cuts in support will be to plunge even more sick and disabled people into poverty. We know that 5 million sick and disabled people are already living in poverty; what we do not know is how many more will be pushed into poverty as a result of those measures, because the Government have not assessed that. It is shameful that the Government have not done so, or even looked at the implications for people’s condition.
I am sure that the Minister will respond by saying that the Act is about incentivising sick and disabled people into work, but again we have contradictory evidence from various reports. In connection with the disability employment gap, which remains stubbornly high, only 124 employers signed up to the Disability Confident campaign—
That is the latest figure from the website. Also, last year, fewer than 37,000 disabled people received support from Access to Work, out of the 1.3 million disabled people who are fit and able to work. Much, much more needs to be done. It does not stop there. Other cuts have included the bedroom tax, cuts to supported housing through the local housing allowance and the 1% cut in housing benefit—there has only been a reprieve for the next 12 months. I could also mention other cuts and policies such as sanctions. Those are all having and will continue to have an adverse effect on the sick and disabled.
This is the first time that the Minister and I have debated since the recent change in leadership at the Department. The new Secretary of State made sympathetic overtures in his statement to the House, and I welcome the Government’s U-turn on the cut to the personal independence payment proposed in last month’s Budget, but as the Channel 4 “Dispatches” programme a couple of weeks ago showed, the PIP assessment process is clearly not fit for purpose. According to a number of my constituents—if I have time, I would like to mention a couple of them—
Order. The hon. Lady does not have the time. She has already gone well over her five minutes. I know she only has a page and a half to go. If she wants to quickly go through that, that will be fine, but she will have to draw her remarks to a close pretty quickly.
Order. We are finishing at 6.14 pm. I have to work within the recommended time limits given to me by Mr Speaker. In an hour-long debate, the limit is five minutes for the SNP Front-Bench spokesperson, five minutes for the Opposition Front-Bench spokesperson and 10 minutes for the Minister. The hon. Lady has now had the same time as the SNP Front-Bench spokesperson, who went over. If she can draw her remarks quickly to a close, that will be fine.
I am grateful, Mr Hollobone, and will take your comments on board.
I would be grateful if the Minister could respond to the details I have sent him in writing regarding an inquiry to investigate the qualifications, training and behaviour of assessors; just how widespread the appalling behaviour we witnessed on that Channel 4 programme is; the validity and efficacy of the assessment tools—the Royal College of Psychiatrists was dismayed at the inappropriate standards and tools being used—particularly for people with chronic, fluctuating and mental health conditions; and the performance monitoring of contracts, not only in terms of activity levels but to ensure ethical standards of practice.
I have met many sick and disabled people since I was elected in 2011. Some are barely surviving and are hanging on by their fingertips. I genuinely fear for them. Of course, we know that many have not survived and have taken their own lives or just faded away.
Governing is about choices. The revenue lost to the Exchequer every year as a result of tax fraud is equivalent to what we spend on disabled people through DLA and PIP—£16 billion. If the Government truly believe in fairness and in addressing the real inequalities in this country, they need to reflect that in their policies. They need to clamp down on tax fraud and ensure that our most vulnerable in society are looked after properly, not plunged into poverty or worse. The Government should not just talk the talk, but walk the walk.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I pay tribute to the hon. Member for City of Chester (Christian Matheson), who I know is widely respected in his local community. He is very passionate about this issue and raised a number of powerful points, as did many of the other hon. Members who contributed to what has been a good, constructive debate. In true tradition, I have not brought a pre-written speech but will do my best in 10 minutes to respond to as many of the points raised as possible.
I will start with PIP. A lot of the issues raised cut across many different Ministers’ areas, so I will spend the majority of my time on the areas for which I am responsible. PIP is my area. Time and time again, hon. Members say that life would have been better under DLA. The fact is that under DLA, 16% of claimants qualified for the highest rate of benefit. Under PIP, it is 22.5%. We are getting money to those who are most in need. That figure is even more stark if we look at things such as hidden impairments, including mental health issues. Under DLA, 22% of claimants with a mental health condition would expect to get the highest rate. Under PIP, that figure is 68%.
We continue to work with stakeholder groups and those with front-line expertise in order to continue improving the PIP assessments. It is fair to say that when PIP was introduced, Ministers were often in this Chamber explaining why things were not going right, but we have now been in a settled position for about a year. Currently, someone would be looking at an average of seven weeks to get an assessment, and 13 weeks end to end. That is widely respected as a settled and positive position. To put into context the extent of the improvement, there has been a three-quarter reduction since June 2014 in the time waiting for an assessment. Improvements are ongoing. I regularly meet with stakeholder groups and policy teams and am very much engaged with them.
Not unreasonably, Members have raised the issue of high appeal rates. That was one of the very first questions I asked when I became a Minister. On day one, I said, “Clearly there is something wrong, given the high appeal rates. Everybody down tools immediately and analyse what has gone wrong.” The vast majority of successful appeals, which account for only 2% of total claimants under PIP, are due to additional late submitted evidence, either written or oral.
When we send out a communication to tell somebody that they have not qualified for the level of benefit that they perhaps thought they were entitled to, we try to set out why very clearly. In some cases, those claimants realise that they have not submitted a piece of evidence. We then give them two further opportunities to submit that evidence: one is the mandatory reconsideration, and if they are still unhappy, there is the independent appeal process. We try to be as clear as we can be.
In a utopian world we would have a big supercomputer —a former Labour Government tried their best to deliver this; unfortunately, from our perspective, that did not work—and a claimant would phone and give their national insurance number, and we would have access to all of their medical records. We would not have to rely on late submitted evidence. We are trying to improve that; we have just announced that assessors will get an additional 10 working days to help claimants gather that evidence.
I also gently remind Members that, under the DLA, 70% of claimants were given an indefinite award. That sounds good, but the reality is that the condition of one in three claimants changes significantly within 12 months. If they are on an indefinite award, they may not necessarily pick up the phone and ask for a review. We were seeing more and more people staying on a lower rate of benefit indefinitely, because that is the point at which they entered, when in fact they were entitled to a higher rate. That is another reason why we are seeing the difference between the 16% and the 22.5%.
We all support the principle of halving the disability employment gap. Giving those with a disability the opportunity to work is good for them. On my visits with stakeholder groups—particularly with young ambassadors —I say, “You are the Minister for the day. What would you like to do?” Time and again they want the same opportunities that their friends take for granted. We are making progress: 152,000 more disabled people are in work in the last year, and 292,000 in the last two years. There is still a significant way to go.
We have secured additional funding for access to work, which helps about 36,500 people a year; we have funding to help a further 25,000 per year. That is the Government contributing to remove barriers to help people with disabilities into work. We are doing a lot of work at the moment on how we can promote the scheme, particularly to small and medium-sized enterprises that are often too busy to notice Government initiatives. I want to see a lot more business engagement, so that they understand the importance of this. We are keen to make sure that that money is well utilised. There are further opportunities. A lot of emphasis is going into providing jobcentre staff with additional training, particularly with things such as the hidden impairment toolkits, which the stakeholder groups are helping to design.
The hon. Member for City of Chester used the phrase “waste of talent”. That is absolutely spot on. Businesses that are struggling to fill skill gaps are missing out. I say this as somebody who benefited directly from employing disabled people in my former life, when I ran my own small business. The White Paper is a real opportunity to make some of those significant differences.
Many Members have raised concerns about the ESA work capability assessment. That is not directly my responsibility, but I understand the points raised. As it stands today, typically 1% of those on ESA will come off the benefit every month. That is the same for this Government as it was for the coalition Government, and the Labour Government who introduced it in the first place. There is no way of describing that as anything other than unacceptable, and the White Paper is a real opportunity for us to look at that. I was asked if I could give a sneak preview; I genuinely cannot.
We want to work with those stakeholders. The new Secretary of State has made it very clear that they will be at the heart of what we do. I personally know from my regular meetings with them that they have fantastic policy teams. There is no point in reinventing the wheel when often they have some very good, constructive ideas. The themes that we will be building around are those localised solutions, tailored to the individual, and recognising that everybody has their own unique challenges and opportunities.
From my perspective, we need to make sure that we do not forget that we need businesses to engage. It is one thing getting the individuals looking for work to play by the rules and engage in the different work programmes, but if there are not job opportunities at the end they will continue to loop through the system, attending yet another 12-week programme, during which their enthusiasm will further wane.
Many Members touched on universal credit. Again, I think there is accepted support for the principle. It is simplified—someone would have to be a nuclear physicist to navigate the current complex array of benefits that they might or might not be entitled to. We all know through our casework that individual constituents often miss out.
However, the area that most excites me is that for the first time ever, people will have a named coach. Time and again, people are frustrated that they have to go and explain their challenges to another person, which creates further frustration and reasons not to engage. That named coach will be there to provide support, helping people to navigate not only their opportunities to get into work, but other challenges that they might have—such as accessing child care, additional support and dealing with issues such as personal debt—and signposting them through to additional training. For the first time ever, that named coach will continue to support people when they go into work. If someone goes into their first job, perhaps on the national living wage, and keeps turning up and doing the right thing, the named coach might say, “Do you want me to speak to the supervisor to see if you can get promoted to other roles?”—doing things that we would often take for granted and helping people with opportunities.
We all quote different papers with figures that suit our argument, but the Office for Budget Responsibility has said that households will be £100 billion a year better off by 2020. We have introduced the national living wage. I know that some hon. Members will question—perhaps tongue in cheek—whether that is genuinely a national living wage, but we are anticipating it to be more than £9 by 2020. I seem to recall from my opponent’s election leaflets that he was advocating just over £8, so it is £1 higher than the Opposition proposed.
Rightly, we have been increasing the personal allowance. It will go up to £11,500 by April 2017 and will continue to rise to £12,500. We have legislated that it will then follow inflation. Living standards reached their highest ever level in 2015 after growing at their fastest rate in 14 years. Living standards have improved by 2.6% over the last year and employment has gone up by 2.4 million since the 2010 election.
I am very short of time, and I want to deal with a few more specific points that Members have raised.
I pay tribute to the hon. Member for Ross, Skye and Lochaber (Ian Blackford) because, although we may disagree on many of the points raised, he makes very clear alternative suggestions. It is one thing to criticise the Government but, to his credit, he sets out how his party would do things differently. I have always said that I will look very closely at what our friends in Scotland do. If something works there, we will be first in the queue.
The hon. Member for Glasgow Central (Alison Thewliss) made a very powerful point—and has done so consistently for a period of time—to do with rape. Lord Freud has said that he is going to look further at that, and I pay tribute to the hon. Lady for making powerful points in that area.
On the points made by hon. Members about women, I would say that tax-free childcare for working families— 30 hours a week of free childcare for three and four-year-olds—will make a significant difference. Two thirds of the 2.8 million people who have directly benefited from the national living wage are women, and, on the increased personal allowance, 59% of the people who have been taken out of paying any tax at all are women. These are key issues.
There is still much more to do. My door is always open to Members who have constructive suggestions and ideas on how we can make improvements. I want finally to pay tribute to the hon. Member for Strangford (Jim Shannon); he has often taken up that opportunity and those are the sorts of things that shape the way in which the Government are helping to support the most vulnerable in society.
I thank the Minister, the shadow Minister and all hon. Members for having taken part in the debate. I confirm to the hon. Member for Ross, Skye and Lochaber (Ian Blackford) that my grandfather was indeed from Skye, so I am a proud grandson, at least, of Skye.
I am grateful to the Minister for his response. My one concern, which I ask Members to dwell on as we close, is that the system does not take into account how real life works, as the hon. Member for Glasgow Central (Alison Thewliss) mentioned. The hon. Member for Strangford (Jim Shannon) talked about the fact that he sees nobody coming into his constituency surgeries or his constituency office who is somehow a bogus claimant. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) mentioned problems in the assessment procedures and qualifications for assessment.
In thanking the Minister for his response, I ask him to ensure that the reality on the ground matches the aspirations that he has set out in his speech today, and which, as hon. Members have mentioned, often does not match the hopes that Ministers have. I am grateful to you for your chairmanship, Mr Hollobone, and I am most grateful to hon. Members for their participation today.
Question put and agreed to.
That this House has considered the effect of social security changes on equality.