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Poverty: In-work Households

Volume 633: debated on Monday 18 December 2017

5. What assessment he has made of trends in the number of in-work households living in poverty. (902982)

It is clear that work is the best route out of poverty, as the rate of poverty in working households is one third of that among workless households. Latest data shows there are 1.9 million working households in relative low income.

One of the real impacts of increasing levels of in-work poverty will be in the changes that the roll-out of universal credit will bring. In a written parliamentary answer I received today from the Minister for Employment, I was told that universal credit will be rolled out in my Ogmore constituency in March next year, which is incorrect. According to the House of Commons Library, universal credit will be rolled out in March, June and November. How can the public have any trust in what the Government are doing with universal credit if they simply do not know the dates of roll out in particular constituencies when they answer MPs?

We will certainly look into that information. It is important to point out that we know that work is the best route out of poverty, and that universal credit is helping people to move into work quicker, to progress through work faster and to stay in work longer. The smooth taper rate gives incentives to take on more hours because, unlike the old system, people see more money in their pocket for every extra hour they work.

Does the Minister agree that one of the ways we can help those in work and on low pay is by introducing and increasing a national living wage, by increasing the personal tax allowance so that people keep more of the money they earn, and by helping with childcare costs? Is that not precisely what the Government are doing?

I could not have put it better myself. There are 300,000 fewer working-age adults in absolute poverty now than in 2010. As my hon. Friend says, we are making sure that work pays through the national living wage and lower taxes. The lowest earners have seen their wages grow by almost 7 percentage points above inflation over the past two years.

On behalf of my party, may I add my condolences to those already expressed in this Chamber? I am sure that all our hearts go out to Mr Deputy Speaker’s family.

One of the biggest problems facing in-work households living in poverty is fuel poverty. Altnaharra, which is in the middle of my vast constituency, is the coldest place in the UK every year, so fuel poverty is a colossal problem for my constituents. Will the Minister have meetings with the Scottish Government to take forward ways of tackling this terrible problem, particularly in the remotest and coldest parts of the UK?

I associate myself with the hon. Gentleman’s comments about Mr Deputy Speaker.

The hon. Gentleman makes a good point about fuel poverty. The Government have been doing so much to ensure that people are aware that they can cut down on household energy bills by switching, and we have been making it easier for people to switch. We also know that the Scottish Government have devolved powers to support people more with their benefits, if that is what they decide to do, and they are free to develop their own approaches to addressing poverty.

Is it not time to have a grown-up conversation about the measure of poverty? Under the relative measure, thousands would be lifted out of poverty by a recession, by a significant number of job losses or by a reduction in the median level of household income. Surely that cannot be the best measure and it is right that we look to work as the best route out of poverty.

My hon. Friend is absolutely right to raise this matter. If we look at progress since 2010 across all four of the most commonly used measures of poverty—relative, absolute, before housing costs and after housing costs—without cherry-picking any of the statistics, we see that people are no more likely to be in poverty today than they were in 2010. Indeed, on three of the measures the likelihood of being in poverty has reduced, and the incomes of the poorest 20% have increased in real terms by more than £300.

20. CPI—consumer prices index—stands at 2.8%, food inflation is at 4.2%, its highest for four years, and the big six energy companies have announced price increases of between 8% and 15% this year. That comes against a backdrop of freezes on working age benefits, so is it surprising that people are having to go to food banks? (902997)

The Government are committed to building an economy that works for everybody, which is why we have committed to raising the national living wage—we are talking about an increase of 33p. This will be equivalent to a 9% increase in the national living wage since its introduction in 2016. It represents an increase to a full-time minimum wage worker’s annual earnings of more than £600.

On behalf of Labour Members, I would like to express our condolences to Mr Deputy Speaker. Our thoughts are with him and his family.

Disabled people are twice as likely to live in poverty as non-disabled people because of the extra costs they face. The Equality and Human Rights Commission recently estimated the cumulative effect of Government cuts since 2010 at £2,500 a year for a disabled adult, but when the Government discovered that they had underpaid approximately 75,000 disabled people who transferred on to ESA support between 2011 and 2014, they announced in last Thursday’s written statement that they would only be repaying claimants from October 2014. How many of the 75,000 disabled people will receive an arrears payment? Given that attempted suicide rates among ESA claimants doubled between 2007 and 2014, what estimates have been undertaken on the impacts on claimants’ mental health as a result of this Department for Work and Pensions error?

I am sure that I can write to the hon. Lady with the details on that. As well as being very mindful of the impact on people’s mental health and wellbeing, we must apply the law. We have to value disabled people in our workplace, which is why the Government are making sure that many, many more disabled people are able to access work and get into work.

Recent data shows that 8 million working families are living in poverty. Despite Government rhetoric, work is not the route out of poverty.; four out of five people who are in low-paid work now are likely to be in low-paid work in 10 years’ time. But in his interview on yesterday’s “The Andrew Marr Show”, the Secretary of State failed to mention that, under universal credit, sanctions have escalated and are being applied to people who are actually in work. The Public Accounts Committee and the National Audit Office have both raised concerns about the impact of sanctions on debt, rent arrears and homelessness. So why is the Secretary of State intent on punishing people in low-paid work by sanctioning them?

Sanctions are applied only as a very last resort and there are mitigations in place to support people when this is done. The hon. Lady is wrong to say that people in work are more likely to be in poverty; a key driver of in-work poverty is the part-time work that people were trapped in when her party was in government—people were trapped working fewer than 16 hours a week. The Labour Government were literally paying them to stay poor, whereas our reforms are about supporting people to progress in work and keep more of the extra money that they earn.