“continuation of the public sector pay gap is…a kick in the teeth for hard-working public sector workers.”

The Scottish Council for Voluntary Organisations said that the Budget was an attack on the poorest and most vulnerable communities by an “economically illiterate” Chancellor who has admitted that this is not about tackling the deficit, as he said that it was part of his push for a low tax, low welfare society. In SCVO’s view, he was

“demonstrating a cruel disregard for the impact this will have on hundreds of thousands of people’s lives.”

Barnardo’s has stated that renaming the Child Poverty Act 2010 the “life chances Act” sends the message that eliminating child poverty is no longer an aim of this Government. It is clear that the Bill will push more children, families and vulnerable people across Scotland and the UK deeper into poverty. Rebranding child poverty plans as “life chances measures”, and completely removing any legal obligation to meet those targets, only proves how badly this Government are failing our society on welfare. As indicated by the House of Commons Library, the Social Mobility and Child Poverty Commission’s “State of the Nation” report from October 2014 stated:

“Modelling for the Commission illustrates the scale of the challenge. It projects that—based on current OBR forecasts for employment and wage growth—relative poverty (before housing costs) will rise to 21 per cent by 2020, 11 percentage points above target, and absolute poverty will rise to 24 per cent, even further behind the target of five per cent. This is likely to be an optimistic view as it ignores the impact of the further cuts to welfare benefit entitlements that are pencilled into current plans for deficit reduction in the next Parliament.”

Those plans are no longer pencilled in; they are in black and white for all of us to see. It is crystal clear to me that the Conservatives cannot meet their targets or fulfil their promises to folk across the UK, so instead they will just rebrand and repackage swathes of cuts to make it sound as if we are getting a better deal. It simply will not wash.

Another genius rebranding exercise by the Tories has been the introduction of the so called “living wage”—which, in reality, is a small increase in the minimum wage, up to £7.20 and to £9 by 2020—and the Chancellor has blatantly stolen the terminology used by the Living Wage Foundation that has set the living wage rate at £7.85 outside London and £9.15 in London. Rhys Moore, director of the Living Wage Foundation said:

“Is this really a living wage?...The Living Wage is calculated according to the cost of living whereas the Low Pay Commission calculates a rate according to what the market can bear. Without a change of remit for the Low Pay Commission this is effectively a higher National Minimum Wage and not a Living Wage.”

He went on to say that, to add insult to injury, the current calculation is based on workers receiving tax credits, which are also being cut.

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Let us move on to tax credits and universal credit. The four-year freeze starts in 2016 and will affect around 577,000 families in receipt of child benefit in Scotland, and an overlapping 468,000 in receipt of housing benefit. More than a third of a million households in receipt of tax credits will also lose out. The Conservatives claim to be the workers’ party, but that claim could not be further from the truth as they lower the total amount that a household can receive in benefits to £20,000 outside London, and £23,000 in Greater London. In the words of charity Barnardo’s:

“This will significantly reduce the income of some very poor families.”

Worse still, in the Trade Union Bill—yet to be debated by this House—the Government plan to introduce standards for unions when voting for a strike that not even we as politicians are required to meet.

Let us consider the proposals for lone parents and other “responsible carers” in receipt of universal credit. We know that they are not currently subject to “work preparation” requirements until their youngest child reaches the age of three, and they do not have to be available for and look for work until that youngest child reaches five. The Bill reduces the age thresholds for work preparation to two, and for full work-related requirements to three. Let me be clear: the SNP is abjectly opposed to the capping of benefits such as carer’s allowance, child benefit, child tax credits, severe disablement allowance, and widow’s pension. The people who receive those benefits are some of the poorest and most vulnerable in our society, and it is abundantly clear that there is no level to which this Conservative Government will not stoop as they attack those vulnerable groups.

Instead of considering how we can properly protect and support folk who have already faced significant challenges in their life, we have a Government who cannot see past reducing a deficit, and will do so at all costs. This is an “at all costs” attack on the sick, the poor, the disabled, the elderly, and the many families who are working and trying their best to get to the end of the month without getting into debt. This Government’s cuts will affect the working poor, so that instead of being supported to better themselves, those in work will be further marginalised and have their benefits cut. Barnardo’s has noted that:

“A lone parent working full time on the minimum wage for 37 hours a week with two young children would lose £1,200 a year as a result of changes introduced from April 2016, even after accounting for the increase in the minimum wage.”

Alison McGovern (Wirral South) (Lab): The hon. Lady is making an important point. Does she think that all lone parents are able to work 35 hours a week?

Hannah Bardell: I believe we must have benefits that are suited to the situation, and the Conservative proposals will not do that.

Simon Hoare: Will the hon. Lady give way?

Hannah Bardell: I will not; I will make some progress.

I am one of those children from a single parent family. My own mother worked all the hours in the day to provide for my brother and I, at a time when single parents were demonised by the Thatcher Government.

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Angela Crawley: At the moment, 1 million more children are expected to grow up in poverty by 2020 across the UK. That would mean 5 million children in poverty in one of the world’s richest nations. Does my hon. Friend agree that those children need support, not savage cuts to the security of their families?

Hannah Bardell: I could not agree more.

As I was saying, there was limited support for single parents, and although my mother held a good job in academia, finances were always close to the edge. I recall Lady Thatcher famously saying not long after she left office:

“It is far better to put these children in the hands of a very good religious organisation, and the mother as well, so that they will be brought up with family values.”

She told the audience in the Commonwealth convention centre in Louisville, that the spread of illegitimacy

“devalues our values and our community”.

She said that Governments had made things worse by providing social security benefits for single mothers, and it feels to me as if this Bill and the Conservative proposals are taking us back in time. We have come a long way since the dark days of the Thatcher Government: please do not let us return. All Opposition Members should be uniting against these pernicious Tory cuts—perhaps even a few progressive Government Members will join us to say no to a Second Reading.

Let me turn to the two-child policy. This part of the Bill makes changes to universal credit and tax credits, including a two-child limit for new claims and births after 2017. The Budget documents say that there will be protections in cases of rape and exceptional circumstances such as multiple births, but there are no details in the Bill. The limit will reduce the value of tax credits for future claimants with three or more children. There are currently 50,000 households in Scotland with three or more children receiving tax credits. Many of them are in Livingston and I have heard already from a number of constituents who are deeply worried about the impact that this measure will have on their finances.

To suggest for a moment that a woman who has been raped will have to justify herself to a member of the DWP is as sickening as it is unworkable. I have to hope that this grave error in policy making is a matter that the Conservatives will rethink and completely remove from the Bill. Either it is a deeply insensitive afterthought, or it is a proposal that shows utter disregard for a woman’s privacy and basic human rights.

How on earth can that policy work? What criteria will be applied to women justifying whether or not they have been raped? Will the criteria require a conviction—numbers of which, as we all know, are notoriously low—and what if a woman’s first or second child was the result of a rape? Will she be asked retrospectively to justify herself if she goes on to have a third child? What kind of training will staff have in dealing with women who have been raped? I simply do not want to believe that anyone in this House would want a woman to be subjected to this kind of regime. Asking a woman to relive such an abhorrent crime, simply to get enough money to keep a family going, is surely one of the most ill-conceived policies any Government have ever proposed. We deplore this policy and ask the Government to

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rethink it as a matter of urgency. As Sandra Horley, the chief executive of domestic violence charity Refuge, said:

“Women experiencing domestic violence are often completely controlled by their partner, including their access to birth control. Some women are also raped and sexually assaulted on a regular basis. Will this tax credit exemption mean vulnerable women who have been raped are forced to re-live their ordeal to prove they deserve support?”

We need detail and a rethink on this policy urgently. Similarly, for people who have had multiple births, the details and parameters of this policy are not clear. Much more clarification is required.

I will turn now to other aspects of the Bill, including the abolition of the employment and support allowance work-related activity component. Under the Bill, employment and support allowance for claimants in the work-related activity group will see their payments reduced to jobseeker’s allowance rates for new claims from April 2017. People affected are therefore set to lose up to £1,500 a year under current rules.

My hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) described eloquently the pernicious nature of the changes to housing benefit for young people when she highlighted the fact she was now the only 20-year-old in the country the Chancellor would be helping with her housing bill. We now know that, from April 2017, those out of work aged 18 to 21 making new claims to universal credit will no longer be entitled to the housing element.

Anne McLaughlin (Glasgow North East) (SNP): Listening to my hon. Friend talk about women having to prove they have been raped and about 18 to 21-year-olds having to move back in with their parents when housing benefit is removed reminds me of when I was a welfare rights officer in the late ’80s and the Tory Government decided that 16 and 17-year-olds were no longer entitled to any benefits unless they had exceptional reasons. I had to advise a frightened 17-year-old girl sitting in front of me that, yes, if she wanted to stay in her own not very nice house, which was at least safe, she would have to tell a stranger that her dad regularly raped her. What does my hon. Friend think of progress under Tory Governments?

Hannah Bardell: I thank my hon. Friend for her intervention. It is very clear from her experiences that these cuts are pernicious and unfounded, and we must, must oppose them.

The Scottish Government are protecting people from Westminster cuts. To be properly supported to live a full and meaningful life, be that in employment or otherwise, we have to look at a different way of doing things. In Scotland, the Scottish National party Government are providing £104 million in 2015-16 to protect as many people as possible from the damaging impact of the welfare reforms imposed so far by Westminster. That includes £35 million to mitigate the bedroom tax and the council tax reduction scheme, which has protected 500,000 Scots.

Nia Griffith (Llanelli) (Lab): Does the hon. Lady agree that the changes on conditionality to three and four-year-olds are an interference with Scottish and Welsh Government policy? They impose an obligation

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to provide some form of childcare for those policies to be in any way humane. That is above and beyond the way in which a UK policy should affect Welsh or Scottish Government policy.

Hannah Bardell: I agree with the hon. Lady wholeheartedly. We will certainly have to look at that. The Joint Ministerial Committee met today. Hopefully, it will have discussed this matter and we will hear further information on it.

The SNP believes that having socially progressive policies is the key to unlocking our society’s potential. That is why our First Minister, Nicola Sturgeon, wrote in yesterday’s Sunday Herald:

“The UN General Assembly in New York will provide the backdrop for national governments to agree the 17 Sustainable Development Goals (SDGs). The Sustainable Development Goals themselves offer a vision of the world that I believe people in Scotland share. From ending poverty to combating inequality, the aims set out by the UN form an agenda for tackling some of the world’s greatest problems.

I am delighted to confirm that Scotland has become one of the very first nations on Earth to publicly sign up to these goals and provide leadership on reducing inequality across the globe.”

Michael Green, from the Social Progress Index, said:

“The term Gross Domestic Product is often talked about as if it were ‘handed down from god on tablets of stone.’ But this concept was invented by an economist in the 1930s.”

He says that we need a more effective measurement tool to match 21st century needs: the social progress index. We absolutely agree that GDP is the internationally recognised benchmark, but we have to take into consideration much wider aspects. Michael Green asserts that economic growth has lifted hundreds of millions out of poverty and improved the lives of many more over the last half century, yet it is increasingly evident that a model of development based on economic progress alone is incomplete. Economic growth is not enough. A society that fails to address basic human needs, to equip citizens to improve quality of life, to protect the environment and provide opportunity for many of its citizens, is not succeeding. We must widen our understanding of the success of societies beyond economic outcomes. Inclusive growth requires achieving both economic and social progress. If we focus solely on GDP and reducing the deficit at all costs, we will store up significant problems for the future.

The SNP was very clear in its manifesto proposals about the aspects of policy that could be introduced to help bring people out of poverty. We want a vote for child tax credits and child benefit to be uprated in line with the consumer prices index and to support an increase in free childcare up to 30 hours a week by 2020. We propose an increase in carer’s allowance to bring it in line with JSA, which would see more than 100,000 unpaid carers in Scotland better off by almost £600 a year. We support increases in the personal tax allowance, but will back an increase in the work allowance—the amount people are allowed to earn before their benefit is cut at 20%.

The Bill is an attack on civil society. It is an attack on our poorest families. It is a regressive Bill that takes us back in time with cuts that will hit women and children the hardest. It will stigmatise and marginalise women who have been raped, and put conditions on the most needy in our society. At a time when we should be looking

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outward and forward, when we should be progressive and look to give our people a bright future and something to hope for, this Government are instead looking inward to attack their own people and turn them against each other in a way that even Thatcher’s Government would not have dared. The people of Scotland will not stand for this and neither will its democratically elected politicians. If the Bill and the Budget succeed, going our own way in Scotland and building a society that is progressive and for everyone, not just the rich, will be increasingly attractive. I urge the House to reject the Second Reading of the Bill.

7.6 pm

Mr David Burrowes (Enfield, Southgate) (Con): As a member of the workers’ and one nation party, I am very proud to support the Welfare Reform and Work Bill.

Chris Stephens (Glasgow South West) (SNP) rose

Mr Burrowes: No, we have heard enough from the SNP for now.

Unlike the previous speaker, I am going to talk about the Bill. It shows the Conservative party and the Government full of head and heart. We care passionately about mobility and aspiration. We also care about security and solidarity, helping the vulnerable and the disabled. Our head says that we have to live within our means. Finally, we are grasping the nettle and recognising that we have to live within our means. The welfare budget has to be sustainable. What the Chancellor has said has to be said again: we have 1% of the world’s population, 4% of the world’s GDP and 7% of the world’s welfare spend. We have to deal with that to make sure we can help the most vulnerable and ensure they have a sustainable future.

This is the Welfare Reform and Work Bill, but as the Secretary of State said, it could also be described as the “Catch you when you fall” Bill or the “Lift you when you can rise” Bill. That is what it is all about. We are spending more than £33 billion on welfare for the sick and the disabled. That will continue. What does that mean? Compared with the previous Labour Government, we have spent £7 billion more on disability benefits. We will continue to spend just shy of £7 billion more than the previous Labour Government on disability and sickness benefits. That matters.

The hon. Member for Livingston (Hannah Bardell) prayed in aid Margaret Thatcher. In 1979, Margaret Thatcher said:

“Our aim is to provide a coherent system of cash benefits to meet the costs of disability, so that more disabled people can support themselves and live normal lives.”

The hon. Lady was right when she said the Government are following in the tracks of Margaret Thatcher, because disability payments increased under her Government by 21%. This Government are continuing to increase disability benefits, despite the £12 billion in welfare cuts. The difficult cuts to the work-related activity group payments represent one twenty-fourth of the welfare cuts that are being made. We are protecting the disabled. We heard all the scaremongering, particularly from Labour during the election, about our plans to cut carers’ allowances savagely and to means-test and tax disability benefits, but the Bill shows that that is not happening.

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Michael Tomlinson (Mid Dorset and North Poole) (Con): Does my hon. Friend agree that, while the most vulnerable must be protected, welfare must be a safety net rather than a lifestyle choice?

Mr Burrowes: I agree that it is a generous safety net, and that will continue under this Government. Despite the challenging decisions that have to be made, it is clear that we will have a generous safety net.

However, we need to act with great care. Clause 13 deals with payments for those in the work-related activity group—the WRAG. The proposed reduction of £30 will be significant for those who are assessed as not yet fit for work, and we need to deal with that issue with care. Disabled people and those who are sick have additional costs. Macmillan Cancer Support says that 83% of people living with cancer are £570 a month worse off. One in five in the WRAG have a mental health condition, and 50% of those with one of a number of characteristics will have a mental health characteristic. We have to deal with those people with care.

The Bill must be a reforming measure. Much has been made of the need to cut costs, with cuts of £450 million rising to £620 million by 2020, but it needs to be a reforming measure. The problem is that far too few disabled people are getting into work—only 1% per month. That is a scandal. We must ask ourselves whether the WRAG is really fit for purpose. Rather than just looking at the spend, let us look at the outcomes. We want more people to get into work. We have a system with nine-month delays in assessing people, and we agree that the system has to be improved. It is also not good enough that 58% of people are still in the WRAG after two years. Those people are getting an average of only 130 minutes’ coaching a year to help them to get work, compared with 710 minutes for those on jobseeker’s allowance. That disparity will not be bridged by this reforming measure.

We must ensure that the fit-for-work services and the access-to-work mental health services come on stream now. I welcome the fact that there will continue to be support for that group of people, but when we consider the £60 million of investment in 2017-18, going up to £100 million, we must ask whether there will be a gap now.

Dr Philippa Whitford (Central Ayrshire) (SNP): Does the hon. Gentleman agree that, when dealing with the work plan and Jobcentre Plus, the most difficult-to-place people with disabilities are unlikely to have time spent on them, because the payment is designed for those who are easy to return to work? We need to re-orientate the support and the finance to get them into work, but the jobs just are not there in most parts of the country.

Mr Burrowes: The hon. Lady makes a valid point. This is about outcomes and about giving tailored support. We must recognise the concerns about the loss of payment, but those who are not yet fit for work but who are on that journey should be encouraged to cut that journey short. One per cent. per month is not good enough. We need to provide tailored support through Jobcentre Plus, but we also need to consider the many other organisations, particularly small businesses, that do not use Jobcentre Plus.

We all need to be involved in Disability Confident events and to take up this cause in our constituencies to ensure that tailored support can be provided to those

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hard-to-reach groups that are finding it difficult to get work, whether through the WRAG or in other ways. We need to provide tailored packages of support to ensure that this reforming—and cost-cutting—measure really works for that particular group.

I look forward to hearing the Minister and others say that we are very much on the side of those people, and that we are pretty much keeping up the overall spend on disability. However, we need to get more people back into work. That matters to all of us. I look forward to hearing the Minister say that she is deeply committed to investing in tailored support for those people, to show that this is a one nation Bill encompassing two traditions: that of Margaret Thatcher but also that of Winston Churchill. We often pray in aid Winston Churchill in our speeches, and he said that we must have an ambition to have the best social ambulance in the world when it comes to welfare support for people with disabilities. The Bill meets that ambition for us to have the best social ambulance in the world.

7.14 pm

Frank Field (Birkenhead) (Lab): Madam Deputy Speaker, if I leave the Chamber shortly after my speech, I shall come back immediately afterwards to listen to the rest of the debate. I know that there is a huge amount of interest in the Bill.

We now have a more political Chancellor than any I can remember in the whole of my time in the House of Commons, and he has laid traps for us in the Bill. I make a plea to my very hon. Friends not to fall into them. The Government have, however, exposed their soft underbelly in one respect, and we should attack them in that spot. There is a huge difference between giving notice that the terms of a contract will be changed at some point in the future and changing the terms for people who have already bought into it. In the long build-up to the election, as well as during and after it, we heard that the one group of people about whom the Conservatives, as a party and as a Government, cared most were the strivers, yet it is the strivers who will feel the worst effects of the Bill.

In tonight’s debate, I want us to unite and launch an offensive against part of the Bill that the Government will not be able to carry in the country. By doing so, we can change the debate on welfare, on work, on productivity and on all the other parts of the Government’s programme. There are more than 3 million people in this country who are in work but whose income is being supplemented by tax credits. They are among the strivers in our society who are going to be walloped by the Bill. Many of them will be a minimum of £1,000 a year worse off. Some will be much worse off than that. We should not be at sixes and sevens in voting for the various amendments tonight. The one message we need to hammer home is that the Government use one language outside the House and a different one to enact legislation inside it. They talk about strivers outside, but the Bill will affect 3 million in-work strivers and make them worse off.

Worse still, it is going to be difficult for us to vote against that particular measure in the Bill, because the Government could well try to enact it by means of a statutory instrument upstairs. If they dare to take the cuts against 3 million strivers outside this main Chamber, I hope we will all learn from the new contingent from Scotland, who do not accept the conventions of this

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House, and that we will crowd into that Committee Room and make it very difficult for them to get the measure through. We must send a message to the rest of the country that we are united in our opposition to this unbelievably vicious move against people who have responded to the Government’s plea to become strivers, who are in work and who will find themselves much worse off as a result of the Budget.

My plea to my very hon. Friends is this: please do not have what Aneurin Bevan might have called an “emotional spasm” and try to feel better by simply voting against this, that or the other. The one message tonight is that we must get behind the reasoned amendment tabled by the Leader of the Opposition. Later, we can discuss all the other disadvantages that the Government have put into the Bill, and we can vote against them if we wish to do so. The one message that must go out from the Chamber tonight is that the Government talk loudly about supporting strivers but, when it comes to it, they are proposing to make that group worse off without a second thought. It will be difficult for us to oppose what I see as by far the worst measure in the Bill, but I hope that we can send a united message and not be at sixes and sevens voting to our hearts’ content on all different aspects of the Bill. That is my plea. I shall return to the Chamber as soon as I can to listen to how others develop their own themes on the way in which the Government are making strivers worse off.

7.19 pm

Chloe Smith (Norwich North) (Con): It is always a pleasure to follow the right hon. Member for Birkenhead (Frank Field), who, despite many of his remarks being concerned with his own team, as it were, made an important point.

I wish to refer to six measures in the Bill that I welcome because they are about work. First, I welcome the proposal for an apprenticeship levy. We are setting out the right ambition to create 3 million more apprenticeships in this country, and it is right to take a look at quality as well as quantity as we do that. Although the details are yet to be fleshed out, I welcome measures to encourage higher quality apprenticeships. I look forward to discussing with businesses in my constituency—I am sure Ministers will be doing the same up and down the land—ways to achieve that goal and the goals set out by others, such as the noble Baroness Wolf of Dulwich in the other place.

Secondly, I wholeheartedly welcome the provision on full employment. The task of selecting the measure to be used will follow later, but none the less I welcome that, because it marks out the kind of ambition that we should all have and that my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) rightly mentioned.

Michael Tomlinson: My hon. Friend is the chairman of the all-party group on youth employment, the name of which was recently changed from “youth unemployment”. Does she, like me, welcome the title of the Bill, with its emphasis on work?

Chloe Smith: I do, and I thank my hon. Friend for that point. It is important to reflect on what we can do to help people be in work rather than rely on welfare.

Thirdly, I turn to the measures in the Bill about work and disability and a point that my hon. Friend the Member for Enfield, Southgate made. Let this not be a taboo topic that we find too difficult to deal with. There

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is a case for making the best of everybody’s talents in this country. My right hon. and hon. Friends on the Front Bench are right that we all ought to be disability-confident, and we should all encourage businesses in our constituencies up and down the land to be disability-confident. Why should we do that? According to Mind, the mental health charity, the Royal College of Psychiatrists and many other reputable sources, work can be extremely beneficial to a person’s health—in the case of those two organisations, mental health. The measures in the Bill range from mental health to other aspects of health, but let us understand that we can and must offer chances to everybody in the country. We can all look at ways to do that in our constituencies.

Patricia Gibson (North Ayrshire and Arran) (SNP) rose

Chloe Smith: I am afraid I will not give way. Out of fairness to other Members, I must finish and then allow others to speak. I have already taken one intervention.

As my hon. Friend the Member for Enfield, Southgate said, we need to ensure that the support provided in jobcentres is proportionate to the distance claimants have to go to find work, and to the height of the barriers in their way. That is the right thing to do.

Fourthly, I turn to the measures on child poverty. I referred earlier to the comments of the right hon. Member for Birkenhead—I think in his absence, I am afraid to say. He noted that the definition of poverty, and everything that is needed for someone not to be regarded as poor as defined by academics and politicians, can be utterly bewildering. I agree with that, and we are right to attempt to improve on a measure that the Institute for Fiscal Studies, the Social Mobility and Child Poverty Commission and others readily say is unattainable. It makes no sense to press on with something that is unattainable when we have the opportunity to improve the situation and do better for children by referring to educational attainment and being in work.

Fifthly, a measure connected to the Bill is the national living wage, which is a crucial part of serving the strivers in this country. No doubt the right hon. Member for Birkenhead knows far more than I do about the difficulties of encouraging high pay at the same time as the Government are effectively subsidising pay with a high welfare net. Nevertheless, I support the measures in the Bill and the Budget for turning Britain into a higher wage economy and a lower tax society, and for creating a more reasonable approach to welfare.

Finally, my constituents in Norwich, where the gross median income is £23,000, will welcome the measure in the Bill to reduce the welfare cap one step further to £20,000 outside London. That is the right thing to do and will support work over welfare.

7.25 pm

Tim Farron (Westmorland and Lonsdale) (LD): We are very clear: we cannot and will not support the Bill. If it did what it said on the tin, there might be much to commend it, but it does not. The Government pledge a living wage that even they know is not one, they want a welfare state that is anything but good for our country’s welfare, and they use the guise of economic necessity to cover up ideologically driven cuts. Tonight, we will vote

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against the Bill because we know that the depth and character of the proposals are unfair, unwise and inhuman, and anything but economically necessary.

In truth, the Government do not have to take £12 billion from the poorest families in the country, mostly working families, but are choosing to do so. No amount of political spin will protect the individuals who have to live with the reality, not the words. Calling something a living wage when it is not does not make it a living wage, calling housing affordable when it is not affordable does not make it affordable, and labelling the Bill as progressive does not make it progressive. In the end, the consequences of these actions for Britain will speak louder than the Chancellor’s attempts to change the definition of his words.

The proposals on employment and support allowance—support designed to help people who, through no fault of their own, face more barriers to work than most—will not help into work people with depression, fluctuating conditions, schizophrenia or physical conditions that make more difficult the ordinary tasks that many of us take for granted. In fact, they will act as a ridiculous disincentive. Almost 500,000 people will see their vital support cut by one third once they apply to the new system, meaning that if they are on the existing support, they will lose it as soon as they get a job, even on a short-term contract. It is a disincentive to work and will trap people on welfare, not liberate them.

The Chancellor has chosen to implement a counterproductive policy that demonises people with disabilities and mental health conditions. I am disappointed by Labour’s confusion over the Bill. To give in to the narrative that the answer to our country’s needs is to pit the working poor against the temporarily-not-working poor is shameful. Cutting tax credits, tightening the benefit cap and ramping up the right to buy is not just morally wrong but economically wrong; widening inequality is not just against British decency but economically stupid.

Greg Mulholland (Leeds North West) (LD): Of course, we accepted some of the changes to welfare in the last Parliament, but this goes too far. Does my hon. Friend share my concern about the effect on young people who, through no fault of their own, find themselves in need of housing benefit? Why should they be excluded from the same rights that any other citizen in this country has if they have need of the safety net?

Tim Farron: My hon. Friend makes an excellent point. In many ways, young people are the biggest victims of the Bill. I think of young people being supported by housing benefit—for example, in the location of a Foyer, such as the wonderful Foyer in Kendal—and who thereby have access to work, training and further development opportunities. Taking housing benefit away from young people is not just morally wrong but utterly counterproductive, because it will prevent them from accessing work and other life opportunities.

We will stand for the thousands of people in work and yet in poverty, and for the millions of people who might not be personally affected but who do not want to see inequality grow in Britain. Instead, we want a direction for the country that combines economic credibility with truly socially progressive policies, which is why we

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will continue to make the case for using capital investment to build houses and strengthen our economy for the long term, and for a welfare system that understands the needs of people with mental health conditions and helps them back into work, rather than putting them under the kind of pressure that simply makes them worse.

The reduction in the incomes of poor families in work comes at the same time as the Government are giving inheritance tax cuts to millionaires, cutting corporation tax for the richest firms and refusing to raise a single extra penny in tax from the wealthiest people—for example, through a high-value property levy. We will continue to speak for the millions of people who are young, who suffer from mental health problems, whose parents have no spare rooms or spare income, who do not have parents at all, or who have more than two children. The Liberal Democrats will stand up for families, whether they are hard working or just desperate to be hard working. We will not let the Conservatives through choice, or the Labour party through its silence, unpick our welfare system.

7.29 pm

Oliver Dowden (Hertsmere) (Con): Let me take this opportunity to welcome the vision of welfare reform that has been set out by the Government, and by my right hon. Friend the Secretary of State in particular. I think we all agree—certainly those on this side of the House—that we have a problem with the amount of money spent on welfare. When Gordon Brown first became Chancellor and introduced tax credits, he promised they would cost £2 billion. They now cost £30 billion, which is a fifteen-fold increase. We have been in a ludicrous position: people have been in work, on the minimum wage, and paying tax, only for those tax payments to be recycled through the welfare system and returned to them in the form of welfare payments.

Patricia Gibson: According to the Government’s rhetoric, work is the best route out of poverty, but is this not the reality of their proposals: it does not matter how hard those who live in poverty work; their poverty will remain stubbornly present in their lives owing to cuts in child tax credit and low pay? Is this not about ideology rather than necessity? Is it not about rolling back the frontiers of the state?

Oliver Dowden: No, it is not about rolling back the frontiers of the state. The points that the hon. Lady has raised are addressed by our introduction of universal credit, which gives people who are in work a progressive route out of poverty by helping them, as they earn more, not to have all their benefits removed. Moreover, by introducing a national living wage, we are ensuring that everyone who is in work and has a low income will be given a pay rise.

Faced with the current problem, a Government might be tempted simply to salami slice benefits across the board. However, this Government have set out a coherent vision of welfare, which has a number of elements. First, if we are to move from a low wage, high tax, high welfare economy to a higher wage, lower tax, low welfare economy, we must deal with the tax problem. The last Government, with their coalition partners, set about massively increasing the amount of money people could earn without paying tax. We are continuing that agenda, so that as people earn more they keep more

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Secondly, we have grasped the problem of people who are in work but do not earn a sufficiently large wage, which is why, for the first time, we are able to increase the minimum wage significantly. Our increase is far greater than any increases that were made by the Labour party when it was in power.

Peter Grant (Glenrothes) (SNP): I am grateful to the hon. Gentleman for his honesty. Having claimed, as his colleagues have claimed, that this is a living wage, he himself has now used the phrase “national minimum wage”. Is it not the case that all the Government are doing is increasing the minimum wage without making it enough for full-time workers to live on?

Oliver Dowden: I do not accept that. I hope that Members will forgive my slip of the tongue. The increase in the current minimum wage, which is less than £7 an hour, to a minimum wage of well over £9 an hour by the end of this Parliament is huge. It is not in line with the standard increase in the minimum wage. This is a step change that reflects the introduction of a national—

Anne McLaughlin: Will the hon. Gentleman give way?

Oliver Dowden: I will give way once more, but I am subject to the time limit.

Anne McLaughlin: I assume the hon. Gentleman knows that the Institute for Fiscal Studies has noted that it is “arithmetically impossible” for the increase in the minimum wage to

“provide full compensation for the majority of losses experienced by tax credit”

—and universal credit—


Is it the members of the IFS who need to go back to school, or is it the hon. Gentleman?

Oliver Dowden: I invite the hon. Lady to note the analysis showing that the income of a typical renting household receiving tax credits, consisting of two people working full time with two children, will increase by 12%. That is exactly what we are seeking to achieve.

The third element comes into play once we have ensured that wages are higher—and I should point out that we are able to do that only because our welfare reform programme has been so successful that it has brought about a massive cut in unemployment. Because 1 million fewer people are receiving unemployment benefit and 2 million more people are employed, the labour market can withstand a significant increase in wages. Had it not been for those developments, the whole package would have fallen apart. Our measures reflect a more coherent vision.

Once those first two elements are in place, it is only right for us to consider reducing welfare benefits. There is a clear principle behind this. People in my constituency, and in many other constituencies, face tough choices, and those choices should also be faced by those people who are receiving welfare benefits. For example, one of my constituents will have to decide whether he or she can afford to have another child; we are saying that, similarly, child tax credits should, in due course, reflect what is appropriate for a family with two children.

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Nia Griffith: Will the hon. Gentleman give way?

Oliver Dowden: I am afraid that I cannot, because I am subject to the time limit.

We concluded that it should not be possible to earn more on welfare than a person who had gone out and worked every single day could earn after tax. We also concluded that it should not be possible to leave school and immediately start claiming benefits. I think that those are fair principles, and I think that principles are better than mere salami slicing.

All this has given rise to a need to change the measure of child poverty. It was absurd when Gordon Brown spent huge amounts of time and money showing people one side or the other of an arbitrary line. We are looking at more fundamental principles and measures of what drives poverty. Living in a workless household is one of the biggest drivers of poverty, and I think it right to take account of the massive reduction in workless households that has taken place under our Government. Lack of educational attainment is another huge driver of poverty. I know that such opportunity-based measures are dismissed by Opposition Members—including, as was clear from his speech,. the right hon. Member for East Ham (Stephen Timms)—but I think that they are vital if we are to establish whether we are merely putting a sticking plaster over poverty, or addressing the fundamental causes.

Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP): Will the hon. Gentleman give way?

Oliver Dowden: I have some time left, so I will.

Drew Hendry: That is very gracious of the hon. Gentleman.

In my constituency, 3,900 working families will have lower incomes as a result of the Government’s changes, and 7,100 children will be pushed into poverty. Can the hon. Gentleman tell me how that encourages people to think that working is a good idea?

Oliver Dowden: First and foremost, we are introducing a national living wage, which will deal with the current problem and give people a massive pay rise. Ultimately, however, there is a wider point to be made. Opposition Members are decrying every single measure in the Bill, but if they oppose our welfare reform measures, they must be able to tell the House and their constituents what measures they themselves plan to introduce. Which other welfare costs do they intend to cut, and which other taxes do they intend to increase—or do they intend to continue to borrow, thus forcing our level of national debt ever higher?

That is the contrast between Labour and the Conservatives, who are willing to make difficult decisions. None of us enjoys making those decisions, but we make them in a principled fashion that sets the economy and the country on the right track.

7.38 pm

Helen Jones (Warrington North) (Lab): I listened with great interest to the Secretary of State’s attempt to reinvent himself as the workers’ friend. In fact, the Bill contains hugely regressive measures that will make many working families much poorer. It is no wonder that they include measures that will effectively repeal the Child

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Poverty Act 2010. From now on, there will be no income-based measure of child poverty; instead, the Secretary of State will have to report on worklessness and educational attainment, although two thirds of the children who are in poverty come from families who are in work. The problems to which the Secretary of State has referred, such as family breakdown and addiction, are indicators of poverty, but they are not a measure of it. Those problems can occur across the whole income spectrum.

As for educational attainment, the Secretary of State knows, or ought to know, that the biggest predictor of failure in education is poverty. It is not family breakdown, addiction or anything else; it is pure, material poverty. He should not confuse indicators and measurements.

Secondly, this Bill will make many working families much poorer. We have already heard that the increased minimum wage that the Chancellor is introducing is not a living wage, and many people will be excluded even from that increased wage: 21 to 25-year-olds. These people are adults and may have families, but under this Government they will pay a penalty for being poor and working. Where is the incentive to work in that?

As a result of this Bill’s measures, 13 million families will lose £260 a year or £5 a week. That might not sound much to those on the Government Benches, but for families on the margins it is the difference between getting through to the end of the week and not getting through.

The measures to restrict child tax credits and the child element of universal credit to two children are based on the assumption that people are always on tax credits or on benefit, whereas in fact there is a revolving door.

Richard Graham: Will the hon. Lady give way?

Helen Jones: No, I am afraid I do not have the time.

Life does not proceed in a straight line. Let us take the example of a family with three children. They are doing all right; they can afford it. Then one partner falls ill or dies. The other partner might have to work, and take a part-time or low-wage job. Under this Government’s proposals that third child becomes superfluous—one that they should not have had. Not every child matters under this Government.

Let us say a family improve their prospects and get more hours or get a better job. If that job lasts for more than six months and they have to make another claim, that is treated as a fresh claim and they lose the credits for their third child. Where on earth is the incentive to work in that?

We have also heard about what might happen in cases of rape, and I hope the Minister will be able to answer that point when she sums up. Many women do not report rape for reasons that we understand. When they do report it, the prosecution rate is very low and the conviction rate is even lower. What will be taken as proof—reporting, prosecution or conviction? How will a DWP official, not trained in investigation or used to dealing with rape cases, decide on that? Not since Mao Tse Tung has there been a proposal to limit families that is more degrading to women.

This Bill is a purely regressive Bill. It will make millions of families in this country worse off. That is why I will not support it in the Lobby tonight.

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7.43 pm

Michael Tomlinson (Mid Dorset and North Poole) (Con): There are many measures in this Bill, but I shall discuss just one or two aspects of it.

I am the vice-chairman of the all-party group on youth employment and I am delighted that under the chairmanship of the hon. Member for Norwich North (Chloe Smith) its name has been changed from “youth unemployment” to “youth employment”, showing a more positive outlook. Likewise, this Bill is called the Welfare Reform and Work Bill, which also shows a welcome direction of travel.

Clause 1 has the welcome ambition of reaching full employment and a reporting obligation to ensure that we here in Parliament are regularly updated on progress. Over the past two and a half years I have had the pleasure to run a jobs club in my constituency, from the Pilot pub in Canford Heath, and I pay tribute to its landlady, Lisa Ballet, for being so community spirited and permitting that jobs club to exist.

The claimant count in Mid Dorset and North Poole is down to 312. Of course I do not claim credit for that entirely, but I do welcome the ambition to lower the claimant count in my constituency. Although I would ordinarily guard against targets and a target culture, if this is simply an ambition, then I welcome it, and I look forward to the numbers in work in my constituency increasing over the coming Parliament.

Simon Hoare: Does my Dorset constituency neighbour agree that we have to view alongside the tax allowances measures the increase in the minimum wage with the aspiration of going to the living wage? For areas such as those in Dorset that we represent where median or average wages are quite low, those are real incentives to get back into work.

Michael Tomlinson: I agree with my hon. Friend and constituency neighbour.

Clause 3 sets out the reporting obligations for the troubled families programme and I pay tribute to that programme in Dorset, which is aimed at the hardest-to-reach families. There are potential long-term cost benefits because these are the families that cost the country the most, but more importantly these are the families that are most likely to benefit from this measure, and I welcome it.

Opposition Members have from the outset expressed concerns about scrapping the current child poverty measure, and they have done so again this evening. However, scrapping that measure is not the same as scrapping the route out of poverty; it is quite the opposite in fact, as that child poverty measure was flawed and did not provide a proper test of whether children’s lives were improving. For example, in the aftermath of the recent recession the number of children in poverty went down significantly under the old measure; in one year it fell by 300,000. Does that mean that those children’s lives were really altered in such a way as a result of the recession? Of course not; a shrinking economy is not the way to raise children out of poverty.

A second example, which was mentioned by my hon. Friend the Member for Hertsmere (Oliver Dowden), is the arbitrary line introduced by the last Labour

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Government. Does tipping a family that falls just below an arbitrary line up above it really mean poverty has been alleviated? Of course not.

I encourage Opposition Members to support this Bill, as it is aimed at the real causes of poverty. It addresses family breakdown, school attendance and attainment and levels of work within the family. It focuses on ways to make a real improvement to children’s lives rather than offering illusory measures.

As I have said, the most vulnerable must be protected. There must be a safety net but, by removing disincentives to work, introducing a living wage and reducing the benefits cap, this Bill will encourage more people away from a life on benefits and towards the real benefits of getting into work—better health, greater wellbeing and the self-esteem that comes from being in work. Work really is the best way out of poverty.

7.48 pm

Sammy Wilson (East Antrim) (DUP): We support many of the measures in the Bill, which will be important in the debates we will have on it, but my role today is to highlight the things that cause us concern.

This Bill probably spells the end of the Northern Ireland Assembly, because the current welfare reform measures have not been introduced, which has left a £600 million hole in the budget. I say to the Members from Scotland who are keen to have welfare reform devolved, that there is a cost in that because every measure that is not introduced means money is taken off the block grant. People should be aware of that. It is significant that Sinn Féin, who are not here, will probably claim that they will block these measures.

Peter Grant: Does the hon. Gentleman not understand that the very firm view in Scotland is that those additional costs are a price well worth paying if they give us the fair and just society each and every one of us was elected to deliver?

Sammy Wilson: My point was that there is a cost. How people decide to distribute it is another matter. The one thing I do know—

Alex Chalk (Cheltenham) (Con): Will the hon. Gentleman give way?

Sammy Wilson: No, I will not give way.

The one thing I do know is that the people who will complain most about this measure in Northern Ireland—Sinn Féin—are not even here to defend the vulnerable, whom they will claim they wish to protect.

Government Members have talked about the measurement and recording of child poverty. I would have thought—indeed, the DWP review indicated—that the most important source of short-term child poverty, and of the length of time people are in such poverty, is the level of income. It stands to reason: you don’t have to be a genius to know that if you don’t have money, you’re poor. If you want to lift people out of poverty, what do you do? You ensure that they get more money. If we remove that as a measure, we ignore the most fundamental aspect of what causes poverty and what puts children in poverty. Yes, in the longer run, as the review says, educational qualifications, family stability

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and so on are important, but in the long run, as Keynes said, we are all dead. If we want to deal with the problem now, we cannot ignore the level of income.

Members from all parts of the House should be concerned about the way in which the Bill divides the cap into two. But that is not the end of the matter, because the Bill makes it clear that the Secretary of State can review the caps at any time. All he or she has to consider is “the national economic situation” and

“any other matters that the Secretary of State considers relevant”.

Then the Government can introduce changes by regulation.

Mr Nigel Dodds (Belfast North) (DUP): I am very grateful to my hon. Friend for his point about the difference in the cap on welfare and benefits between London and the rest of the country. That measure is very clearly the thin end of the wedge, and, if we are not careful, what will eventually happen with benefits and public sector pay will be the introduction of regionalisation.

Sammy Wilson: Indeed. The Policy Exchange think tank, which prepared the welfare manifesto for the Government, talked about the introduction of a two-tier cap, stating:

“The first stage in creating a regionalised system would be to create two levels of Benefit Cap, one for London and the South East where average incomes within the UK are highest, and one for the whole of the rest of the UK.”

The measure before us is the first step towards regionalisation, and we ought to be aware that in this Bill is contained the embryo of further cuts to the poorest regions of the United Kingdom, because that is where we are likely to find the pressure to try to reduce the welfare bill further.

On tax credits, I support the Government’s desire and objective to get people into work—to make work pay, to give people an incentive. That is why the proposals on apprenticeships, full employment reporting and so on are all good. But the change in universal credit, the freezing of benefits and the change in tax credits are, as the right hon. Member for Birkenhead (Frank Field) pointed out, an attack on aspiration. It is an attack on people who are in work.

Heidi Allen: Will the hon. Gentleman give way?

Sammy Wilson: I am running out of time. I would be happy to give way if I could get an extra minute out of it.

As has been pointed out, many people will not even be subject to the safeguard of the higher national living wage. Many of those who are in work will still find that the reduction in their benefits and tax credits is not compensated for by the increase in the national living wage, so the Government will not achieve what they are seeking to achieve. We are talking about people who are already on low wages and who are not in the best employment.

My final point is on the changes in employment support allowance and the work-related activity group. There are many people who do require support, but if the Secretary of State is right, he is not going to create an incentive for those people to get back into work. In response to the shadow spokesman, the right hon. Member for East Ham (Stephen Timms), the Secretary

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of State said, “We’ll put those with Parkinson’s and MS into the support group.” The idea may be to get people into the work-related activity group and to give them the support they need to get into work, but, if the Secretary of State says, “No, we’re going to move them to the support group”, they will not get the support they need to get into work, and he is defeating his own objective.

There are contradictions in the Bill which need to be teased out. While there may be things in it that we can support, there are many aspects which I believe will be detrimental to our constituents, which will have a disproportionate impact on regions of the United Kingdom and which, therefore, should be voted against.

7.55 pm

Richard Graham (Gloucester) (Con): Thank you for calling me to speak in this important debate, Madam Deputy Speaker. I shall start by focusing on one or two comments that Members made earlier and then return to a central issue—getting those with disabilities back into work.

The right hon. Member for Birkenhead (Frank Field) said that 3 million strivers will be hammered. I am a great fan of his—he is the Chairman of the Select Committee of which I am a member, and I am sorry he is not in the Chamber to hear this—but his gloom tonight was focused on two things. The first is the big problem of unity and what approach to take to welfare and work within his own party. The second is an underlying belief that the only way to help the poor is ultimately to increase benefits from taxpayers, and that the only way out of poverty is to grow a tax credits bill that is already, at £30 billion a year, far greater than in the similar populations of France or Germany, and is, in the words of the former Chancellor, previously the right hon. Member for Edinburgh South West,

“subsidising lower wages in a way that was never intended”

when it was first introduced by the Government of the right hon. Member for Birkenhead.

The reason the right hon. Gentleman and his party are discombobulated on the issue is that they rightly feared a reduction in benefits before an increase in wages and did not expect that my party, the party of compassionate conservatism, would implement precisely that: a national living wage considerably above that mooted by their former leader, plus an expansion of the tax-free allowance that will take the amount one can earn without paying income tax to almost double by 2020 the £6,500 allowance of 2010. They know that higher wages, lower tax and less welfare is the right way forward, because there was no social justice in spending over £170 billion more than we received in tax revenues, leaving the interest on Labour’s debts alone—the interest alone—costing us more than the entire education budget. There is no social justice in spending more on benefits—on the interest on all that debt—than on helping our children with education and giving them the chance to attain and to go on to good jobs.

Some of Labour’s leadership candidates have realised that point and seen that there are no more sweeties in the sweet bag and no credible alternative to this overall philosophy of higher wages, lower tax and less welfare—

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unless one believes that living within one’s means is always for someone else and not for us, and one wishes to follow an anti-austerity programme that has led a country like Greece to the brink of disaster. That is a political option, but it is not one that the city of Gloucester would ever want this country to follow.

I turn briefly to the second part of my speech. The Chancellor promised in his Budget speech that we would always support the elderly, the vulnerable and the disabled.

Jeremy Quin (Horsham) (Con): Our hon. Friend the Member for Enfield, Southgate (Mr Burrowes) said that £30 billion a year is being spent on disability living allowance and on similar allowances. Does my hon. Friend agree all Government Members welcome that?

Richard Graham: My hon. Friend is absolutely right to point out that the current welfare bill is unsustainable, but he is also right—I have heard him say this in Select Committee meetings—to say it is vital that we support the elderly, the vulnerable and the disabled. It is true that the Work programme has been far more successful for those on JSA than for those on ESA. The question therefore is: how do we help those people with disabilities who are currently not getting a job and not benefiting from the Work programme in the same way as those on JSA?

Some 61% of those in the ESA work-related action group say that they want to work, and the evidence is that they do. I have heard from charities and from people with disabilities in my constituency how passionately they want to have the same working opportunities as the rest of us, so what can we do to help them? The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for North Swindon (Justin Tomlinson), in his role as the Minister for disabled people, has the ambitious task of halving the number of people with disabilities who are out of work. He will need some innovative thinking to help him, so let me make a couple of suggestions.

Dr Whitford: Should the hon. Gentleman not recognise that if these people want to work, it is the lack of support and the lack of jobs that is preventing them from getting into work. Why punish them by taking money away? It is like removing the crutches from someone who has just lost a leg before we give them the new limb. Let us get them into work—then they will not need the support.

Richard Graham: The hon. Lady raises a perfectly valid point. There is a philosophical difference here: do we take the difference between what they currently get on ESA and JSA and use that money to help give them the greater support that should get them into jobs, or do we just carry on as we are, knowing that the current programme is not that successful? We have to do something different. We have to do more in the Work programme to make it more likely that people with disabilities will get jobs. The jobs are there; all the statistics tell us that more jobs are available than there are people looking for them, but those with disabilities are not getting them at the moment. They need more help with resilience and confidence—the things that make a difference when people go to an interview. They need employers who understand, so the Disability Confident programme is important. They need—we need—providers to understand

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that they must do more to help, and in return we probably need to give more cash up front, rather than depending solely on payment by returns for those in the ESA category. We MPs need to do our bit. When we hold job fairs, how many of us focus on those on ESA? It is time to tilt our jobs fairs away from those on JSA and towards those with disabilities and on ESA. We can do that, with the help of the Department for Work and Pensions.

There is much to be done, and I believe Ministers are aware that when they review the Work programme they will have to innovate to make sure that those with disabilities and on ESA stand a better chance of winning jobs in a competitive marketplace. We need to do more to help employers realise the importance of this. All of us need to do more as Members to inspire our residents and our businesses to apply for those jobs and to help them win them. That will be vital in reducing the working age welfare cost from 13% of all public spending at the moment to a more reasonable figure.

Hannah Bardell: Will the hon. Gentleman give way?

Richard Graham: I regret that there is no more time.

Above all, we need to inspire those with disabilities into a job. The Leonard Cheshire Disability charity said:

“We believe that disabled people should have the freedom…to contribute economically and to participate fully in society.”

I believe that all of us agree with that. Now we must do our bit to make sure it happens.

8.3 pm

Helen Goodman (Bishop Auckland) (Lab): It is a pleasure to follow the hon. Member for Gloucester (Richard Graham). Unfortunately, the £640 million that is being saved on ESA is not going to go to work-related activities; it is going to go to the Chancellor of the Exchequer.

In the last Parliament, I had the privilege, along with my right hon. Friend the Member for East Ham (Stephen Timms), who made a characteristically excellent speech, to take the Child Poverty Act 2010 through, and we had all-party support at that time. It is therefore very disappointing that this Government are abandoning that Act and even the aspiration to end child poverty. Furthermore, it is ridiculous of them to attempt to airbrush the whole concept from the statute book.

I do not believe this Government have a mandate for the changes they are making in this Bill. Throughout the election campaign the Tories refused to say how they were going to save £12 billion from the welfare bill, because they knew that the measures would be unpopular and it would hit them in the ballot box. Indeed, the Prime Minister went on national television to say that he would not be cutting tax credits. In any case, the truth of the matter is that 9 million people did not vote Tory on 7 May. The most obnoxious part of the Bill is the proposal to cut tax credit support for families with more than two children. When we were in government, Labour had a principle that Every Child Matters, and I believe that was the right principle.

Heidi Allen: Will my hon. Friend give way?

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Helen Goodman: I will. [Interruption.]

Heidi Allen: We are friends, I believe. I think we are all friends in here—I hope we are.

Mr Deputy Speaker (Mr Lindsay Hoyle): Absolutely.

Heidi Allen: Thank you. I do not have children, so I often tread carefully in these sorts of debates because I do not want people to point the finger and say, “Well, you don’t understand.” But I am certain of one thing: a choice between one, two or three children is a choice. If you cannot afford it, why should the taxpayer subsidise you? Can she answer that? [Interruption.]

Helen Goodman: As my hon. Friend the Member for Warrington North (Helen Jones) described, people’s circumstances can change. People do not have a complete and perfect forecast of how their life is going to pan out, which is why we need a safety net. The problem is that a child living in a family with more than two children is 50% more likely to be living in poverty than the average. Some 35% of the children in this country who live in poverty live in those families, so these measures are precisely targeted at those children. The measures will increase the number of children affected and deepen the poverty they face.

Richard Graham: Does the hon. Lady recognise The Children’s Society’s comments? It said it supports plans to add additional reporting requirements on parental employment and educational attainment as these are important in contributing to children’s welfare. I know she would say that these were additional, not a substitute, but does she recognise that they are important measures to study?

Helen Goodman: I used to work for The Children’s Society and it does some excellent work. What I am concerned about tonight is that rather like a child who has broken a toy and hides it under the bed, the Chancellor tried to hide the impact of this Budget by not presenting the distribution tables in the normal and proper way after the Budget. Fortunately, the IFS told us the truth, which is that people at the top are losing 0.2% of their income and people at the bottom are losing 7% of theirs. This is a phenomenally regressive Bill and a very regressive Budget. It will take £10 million out of the local economy every single year in my constituency. As hon. Members have said, one of the worst things about the tax credit cuts is that they affect in-work families, who are struggling in low-paid jobs to do their very best for their children. They are being given what my hon. Friend the Member for Nottingham East (Chris Leslie) has called a “work penalty”. The Bill worsens work incentives. A top-rate taxpayer who earns an extra pound can take home 55p whereas a lone parent on tax credits can take home only 25p.

The Chancellor believes that his rabbit—a rise in the national minimum wage—solves the problem. Of course we all welcome that increase, but it does not solve the problem. It does not compensate by the right amount, it does not compensate enough people and it does not compensate at the right time. Overall, 13 million people are losing from these measures. Some 3 million are losing £1,000 and 2.7 million people will gain from the national minimum wage. The mismatch is shown by

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chart B3 on page 208 of the report by the independent Office for Budget Responsibility. It says something that surprised me and is very pertinent:

“around half the cash gains”—

from the increase in the minimum wage—

“may accrue to the top half of the household income distribution”.

It shows that people at the bottom gain less than £600 and those at the top gain more than £1,000. Furthermore, in evidence to the Treasury Committee last week, it told us that only 14% of people in the bottom decile receive the national minimum wage.

I have concentrated on the issue of children and tax credits, but I have also had many messages from carers, sick and disabled people, and lone parents who are worried that the 30-hour condition is coming in before the extra childcare provision is in place. There are so many serious issues here, and it is a shame that we do not have time to address them.

Recently, Professor Amartya Sen said:

“Democracy should be about preventing mistakes through participatory deliberations, rather than about making heads roll after mistakes have been made.”

He is right. I have been in this House for 10 years, and I have never voted against my party’s Whip. I think that my right hon. Friend the Member for East Ham made a good case for the Front-Bench amendment. I shall vote for the amendment, but there are so many issues in this Bill that are deeply worrying that I cannot avoid going into the No Lobby against it tonight.

Several hon. Members rose—

Mr Deputy Speaker (Mr Lindsay Hoyle): I will try to get everyone in, but I now have to reduce the time limit to four minutes. Let us stick with it. Interventions, if we must have them, must be short.

8.11 pm

Amanda Milling (Cannock Chase) (Con): I am grateful for the opportunity to speak in this important debate. I wish to pick up on a few points relating to employment and apprenticeships.

First, I was pleased to see that in June we had another fall in unemployment in my constituency. As I mentioned in last week’s Budget debate, it is clear that the measures we have taken and continue to take, such as the benefits cap, the national living wage and the changes to the personal allowance, are encouraging people back into work and making work pay.

Apprenticeships play a key role in ensuring that our young people get into work and, importantly, acquire the skills they need to progress in life. In the previous Parliament, 2 million apprenticeships were created, 5,000 of which were in my constituency. In the past year alone, 11,000 apprenticeships have been created across Staffordshire. I am very much looking forward to attending the first apprenticeship graduation ceremony this Wednesday. I welcome the target of 3 million apprenticeships, as promised in our manifesto, which is now set out in clause 2 of the Bill.

There are three key points that I wish to make. First, we need to promote apprenticeships. As I said last week, I welcome the local campaign Ladder for Staffordshire. On its first day alone, it created 50 new apprenticeships.

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From my own experience, I know that we need to be better at connecting businesses, training providers and apprentices to ensure that all their needs are met and to mitigate any risks of an apprenticeship not working. Sometimes when such a partnership works, it happens by default rather than by design, with businesses stumbling across the right training providers and apprentices rather than using co-ordinated services, so there is more that we can do in this area.

I also feel that we need to do more in schools to direct young people to apprenticeships. It is important that vocational qualifications are seen to be as valuable as academic ones. We need to ensure that young people are directed to the right qualification for them. I note that the 3 million apprenticeships target is for England only. I would be interested to know what the targets are in Scotland, Wales and Northern Ireland, how they are faring and what we in England can learn from their experiences.

I welcome the annual reporting periods proposed in clause 2(3), and I hope that figures will be provided at a national, regional and constituency level, as they were previously. Although I appreciate that the reporting mechanisms in the Bill are intended to support the apprenticeship target, I feel that it would be valuable for them to continue beyond the end of this Parliament. After all, creating high-quality apprenticeships should be an aspiration for the long term and not just for the next five years.

I welcome the move to create more apprenticeships, as set out in the Bill. I will continue to meet businesses, training providers, schools and young people to understand their needs and ensure that they are represented. In the autumn, I will be looking to launch my own campaign to promote apprenticeships. I will be doing my bit to help us reach the 3 million target in this Parliament.

8.15 pm

Huw Irranca-Davies (Ogmore) (Lab): Welfare reform is needed, but if it is badly thought through it will hurt people, including low-paid workers. The Bill cannot be supported without major changes, so I say to the Government, think again. If the benefits and social security regime is not subject to sensible and proportionate reform, popular support for it across society will fracture, and the case for giving assistance to those in need will be undermined. That in turn will give those who are politically or ideologically opposed to providing assistance to the vulnerable, the temporarily jobless, the low-paid in expensive private sector housing, those with life-changing disabilities, carers and others the opportunity to destroy a social contract that has been steadily constructed and refined over decades.

The support regime must of course be refreshed and renewed for each new generation, and to fit prevailing social and economic conditions. Those who argue against any change are doing real harm to the durability of that social contract. But those changes must be carefully considered and evidenced, proportionate and progressive.

The Government are opening themselves up to accusations that their intentions may not be entirely pure and may not be focused on good and appropriate reforms. We can look at the rush, and at the dismissal of critical analysis of the consequences of tax and benefit

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changes. There is a seemingly cavalier and careless attitude to negative impacts on low-paid working families, carers, some people with disabilities, and absolute and relative child poverty. All those things suggest that the honourable and high ambitions of some Government Members—to reform the regime to help people out of poverty—risk being bound together with a lower and less honourable ideological fixation with urging the poor to sort themselves out.

I have long been in favour of sensible, progressive and radical welfare reform. Most people, including Labour party members and supporters, want those reforms focused on conditionality, which is not limited only to funds, to help people back to work. They want support for those who genuinely cannot work, and help for carers that gives them dignity, not a begging bowl. They also want a continuing commitment and specific policies to target and remove poverty. Those are all marks of a decent society and decent government. Yet I cannot and will not vote for the Bill today, despite the need for reform, because it risks making life more miserable, desperate and unforgiving for some of the most financially exposed and vulnerable people in our society. The full-throated proponents of the Bill do not seem to see that, or perhaps they do not want to see it.

The core mission of government surely has to be to help make the lives of people better, or, at the very least not to make them worse. That is why I urge all Government Members, including well-meaning supporters of the Bill, to think long and hard before swallowing it whole. The digestion of the contents by their constituents back home will be long and bitter, compared with the short-lived, sugary-sweet taste of a brief political moment in Westminster. I say to them: do not punish low-paid workers, when the IFS shows clearly that the combined impact of the tax and benefit reforms will do exactly that; do not further impoverish children, when groups such as 4Children, which are not against reform, call for changes to be made sensitively and intelligently; do not shoot the messenger by dismissing authoritative organisations and individuals who point out the flaws in the Government’s proposals.

The Bill as it stands will not have my support today, and unless it is changed to take into account the valid concerns that have been raised, it will not have my support in future. In the light of all the dangers contained in it, I call on the Government to think again.

8.19 pm

Jeremy Quin (Horsham) (Con): It is a pleasure to follow the thoughtful and interesting speech of the hon. Member for Ogmore (Huw Irranca-Davies). He showed huge sincerity in his opposition to the Government, but during a couple of sections of his speech, I thought he might be joining us in the Lobby this evening, and I am disappointed that on this occasion he will not. I draw his attention to the words of my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) and other hon. Friends who have pointed out that this is, in fact, the Welfare Reform and Work Bill. I thought the hon. Gentleman was getting there—surely we all support systems that work; surely we all want annual reports to the House on progress on full employment, troubled families and apprenticeships. There must be much in the Bill that hon. Members on both sides of the House can agree on.

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The last Labour Government spent £170 billion in tax credits between 2004 and 2010. It is not unreasonable to ask whether that £170 billion, or at least some of it, could not have been better spent on measures that would change recipients’ life chances. That is particularly true since we know we have to live within our means, as my hon. Friend the Member for Gloucester (Richard Graham) stated so eloquently—far more eloquently than I put it in my intervention on him. Between 2010 and 2015, the welfare reform that we achieved made savings of £60 billion, helping to halve the deficit and restore confidence in our public finances. In the same period, employment increased by no less than 2 million. In my constituency, the number of people who are unemployed has fallen by a third, and I am sure that similar statistics could be quoted by hon. Members throughout the Chamber if they chose to reel them off.

The best way to tackle poverty and reform welfare is to ensure that everyone who can work has that opportunity. That is the best way to tackle poverty both in this generation and in the next. Under this Government, 387,000 fewer children are being brought up in workless households. That is hugely positive in enhancing the life chances of all our people. I am delighted that the Government are not only targeting full employment but ensuring, through the introduction of the national living wage and the targeted reduction of tax, that those working in lower-paid jobs get a fairer reward.

The proposal to reduce the welfare cap is right for two reasons. It will support a culture in which people know that work will always pay, and that it is the best way to maximise income and support a family. It is also right to redirect our support to enhancing life chances. The funds saved will go towards increasing the number of quality apprenticeships—I take the point made by the shadow Secretary of State that they must be quality apprenticeships, and I am sure that is what we will get. I know that enabling young people to achieve their ambitions is close to the hearts of all of us, on both sides of the House. I agree with my hon. Friend the Member for Cannock Chase (Amanda Milling) that that is an exciting feature of the Bill, which we should all support. The Government have overseen the creation of 2 million apprenticeships, delivering more apprenticeships in two years than Labour delivered in five. The Bill will take the aspiration further, with a target of 3 million apprenticeships.

I acknowledge much of what the hon. Member for Ogmore said, but there are great differences across the House in how we achieve our aims. We believe—

Mr Deputy Speaker (Mr Lindsay Hoyle): Order.

8.23 pm

Hywel Williams (Arfon) (PC): I speak on behalf of Plaid Cymru.

So, we have another round of cuts to social protection and a Government unrestrained by the alleged compromises of coalition. I note that the new leader of the Liberal Democrats has already left us. The Government are unrestrained in slashing the social safety net, shrinking the state and allegedly balancing the books, and doing this, they say, to put the public finances in order—indeed, claiming that it is in the interest of working people.

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They no longer talk about “hard-working families”; it is just “working families”. The election is over; the election is won; now it is the Government’s turn to be hard.

Government supporters say, “Aha! We have introduced the national living wage.” We saw the jubilation of the Secretary of State for Work and Pensions when that was announced—his ugly triumphalism at having got one over on the poor old Labour party—except it is not a living wage at all, and when combined with cuts to tax credits and a host of freezes and other cuts, people will be worse off overall, as respected bodies such as the IFS and the Resolution Foundation have made clear. I welcome any rise in the minimum wage, but a genuine living wage would provide a decent living and bring down the in-work benefits bill. What we are getting is the rebranding of the higher minimum wage, while a large chunk of tax credits is cut out—giving with one hand and taking much, much more with the other.

Look at the Government’s appropriation of the term “living wage”. They steal the language of social justice and talk about full employment, but there is a crisis of under-employment, low wages, insecure employment and precarious self-employment. Without proper measures to tackle those problems and boost the UK’s woeful productivity, the foundation is not firm and a dip in the global economy could swiftly push up unemployment again here and especially in Wales. Outside the headline figures, large areas of the UK still suffer from persistently high unemployment and levels of economic inactivity—areas on the so-called periphery. I live in Caernarfon, which is in no way peripheral to the people who live there, so what does peripheral refer to? It is areas out of the sight and out of the mind of the economic and governing elites. In my constituency of Arfon, the economic inactivity rate is 23.5%—almost a quarter of all people of working age are economically inactive.

The restriction of child tax credits to only two children seems to answer the question so often posed by Government Members: why should parents get support for more than two children when others cannot afford to have more children? However, it fails to answer a more fundamental question: why should any child be denied support through no fault of its own? It is a perverse logic that ignores a child’s inability to control their parents’ reproductive abilities, then punishes them none the less.

Heidi Allen: Will the hon. Gentleman give way?

Hywel Williams: I will not. The hon. Lady should have been here from the start.

That is the reasoning of the tyrant, from one-child China to Ceausescu’s Romania. Most grim of all are the tortuous complexities involved in demonstrating that the third child is the result of rape.

We sorely need a system that pays a fair wage for a fair day’s work, and a top-up when the Government’s minimum wage policy fails to provide an adequate living for families with children.

8.27 pm

Maggie Throup (Erewash) (Con): The Bill marks a true revolution in how the Government administer welfare, with the roles and responsibilities of the state, business and individual citizens clearly defined for the first time.

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Those who pioneered the welfare state at the turn of the last century intended it to be a short-term safety net for those in society who, for whatever reason, found themselves thrown on hard times. We Conservatives have long believed in the one nation principle of a hand up, not a handout when it comes to welfare, so through this reform Bill we seek to return Britain to a country that, once again, lives within its means and encourages aspiration among working people to get on and do well in life.

I am pleased to say that in Erewash we have bucked the national trend, with unemployment falling again this month to just 2.4%. Youth unemployment also continues to fall, and is now a third of what it was in May 2010. We have some fantastic employers in Erewash, such as FC Laser, which I recently visited. It is now investing in apprentices, helping our young people to earn while learning new skills on the job. That type of training is vital if we are to achieve a healthy, balanced economy, as it ensures a skilled workforce with a strong work ethic, making it less likely that they will need to rely on benefits or be out of work for an extended period.

Turning to social mobility, in Erewash we have a proud history of hard graft, whether in the manufacturing of Nottingham lace, Stanton Ironworks castings or railway wagons. Today, many of my constituents are still employed in a broad spectrum of industries that supply the country, and indeed the rest of the world, with top-quality goods and services. Put simply, they are hard-working people who do an honest day’s work.

Constituents often ask me why someone on benefits can get the same amount of money for doing nothing, and in some cases more, as they do for going to work day in, day out. I consider that to be unfair, and so do the Government, who have introduced a welfare cap to make the whole system fairer. Social mobility and a low welfare bill can be achieved only if going to work is an attractive option. We need to break the cycle of those who believe that it is okay to exist on benefits. We need to strengthen the links between businesses and schools to ensure that the example we set our children is that work is the right path for getting on and succeeding in life.

When I rose to deliver my maiden speech a week ago, I said that we needed to be bold in our vision for this country and that I would stick my head above the parapet for the good of my constituents, even if at times those decisions might be unpopular with some. I believe that the Government have a duty to support the most vulnerable in our society, but that we should also give working-age people the means and incentive to stand on their own two feet, independent of the state. By introducing measures such as the new national living wage and increasing the number of apprentice opportunities, we are doing just that. That is why I will support the Bill in the Division Lobby this evening.

8.30 pm

Ms Margaret Ritchie (South Down) (SDLP): Unlike the hon. Member for Erewash (Maggie Throup), I will not support the Bill tonight, because it is an ideological attack on in-work parents, children, disabled people, carers and, generally, society. Lest the Government forget, people do not choose to be on benefits; they are in receipt of benefits because they might not have the

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necessary access to work. That is the case for many people in Northern Ireland. As a former Minister with responsibility in this area, I can well recall that for many people achieving employment was impossible, even though it was what they most desired. It was what would have given them self-esteem, a position in society and a status.

Notwithstanding that, the Bill is clearly an assault on ordinary working people. It will deprive them of their necessary benefits. It will attack families with more than two children, and there are many such families in Northern Ireland. It is attacking the fundamental basis of civic society. For that reason, along with everything else, I cannot support it.

I want to look at one aspect of the Bill, the impact on child poverty. Due to parity in Northern Ireland, this legislation will eventually be ushered in there. Children’s charities have warned that the cuts will push more young people into poverty. Recent figures show that one in four children in Northern Ireland are living in poverty, while the UK average is one in six. In fact, the Northern Ireland Commissioner for Children and Young People wrote to the United Nations in June, along with the other UK Children’s Commissioners, to warn of the impact of cuts on young people if the Government insist on the proposals set out in the Budget and in this Bill. The commissioner said that levels of poverty are higher in Northern Ireland and that cutting in-work benefits would have a detrimental impact on the lives of young people, as 61% of children growing up in poverty across the UK live in families where at least one parent is working. The Bill is an assault on in-work parents.

It is imperative that the Government abandon the Bill and ensure that tax credits are maintained at the current levels to continue to provide assistance to working families who are largely dependent on them for their financial stability. The Government must also spell out the impact that a reduction in funds for tax credits and the refusal to provide for third and subsequent children will have on child poverty and on the wider economy, because there is no doubt that the implications of an attack on in-work benefits will be counterproductive for our economy, sucking money out and undermining it. For those reasons, I and my party will oppose the Bill tonight.

8.34 pm

Alex Chalk (Cheltenham) (Con): I am sure that all of us in this House believe in social justice, but I support this Bill because it recognises that the most effective tool to achieve social justice is encouraging work for all. It is work that provides dignity, security and life chances. It is work that improves general wellbeing and sets an example to the next generation. Work is at the centre of the Bill. It is a Bill that pivots our society from high tax to low tax, from low private sector wages to high wages.

It is worth noting that there are 2 million more people in employment now than in 2010. That means that, as has been said before but bears emphasis, there are now 370,000 more families with positive role models. Previously, one in five households had no one working. There is no social justice in that, as there is no social justice in unemployment. We should go further and I am glad this Bill agrees. Nothing less than achieving full employment should be our goal. That is why the imposition of a duty to report on progress to full employment is right.

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So it is with apprenticeships. The coalition Government generated 2 million apprenticeships in the last Parliament. Our ambition now is to generate 3 million more. That is bold, but I am pleased that the Bill imposes a duty to report on progress so that this issue gets the attention it deserves. That should go hand in hand with ensuring that opportunities are made available to people, and children in particular, from all backgrounds—hence, the duty to report to Parliament on obligations to address life chances.

On welfare, it is correct to say that tough decisions have had to be made, but it is worth considering the context. Between 1997 and 2010 welfare spending rose by 60%. Tax credits, a measure originally expected to cost £600 million, which was the only reason Gordon Brown was able to sneak it under the nose of Tony Blair, now cost £30 billion. To place that in context, the defence budget is only about £35 billion. It is not right that this measure should effectively subsidise low wages in the private sector. It is unaffordable. But there is a question of resilience as well. Just before the 2007 financial crash Greece had a debt to GDP ratio of 100%. It meant that the cupboard was bare when the storm hit. Now in the UK we have a debt to GDP ratio of 80%. It means that we are spending £33 billion a year in debt interest.

It is also right to recognise that the bottom 3 million taxpayers have been taken out of tax altogether, and a further 26 million people have benefited from tax cuts. That is part of the context as well. The richest 1% now contribute 30% of the tax take. That is quite right. The richest 20% contribute 80% of the bill. That is right and it is progressive.

Finally, this is not just about social justice; it is about generational justice too. We owe it to our children and grandchildren to bequeath to them a country that can pay its way. Just as important, we must leave a country that can care for the next generation of vulnerable people. Thirty years from now, a young man or woman yet to be born will approach the state seeking help, having fallen on hard times. Our generation owes it to him or her not to leave the cupboard bare.

8.38 pm

Natalie McGarry (Glasgow East) (SNP): Ours is a disabling society. Some are born impaired, some acquire impairments. Some of those are visible, some invisible. All of us will, in time, feel the invisible agency of a society that is organised for the convenience of able bodies, a society which for too long has approached the mental wellbeing of its people with silence, embarrassment and denial. It is society that disables. It inscribes its exclusionary assumptions everywhere—on pavements, on buildings, in interview panels, in bleak ATOS assessment rooms.

The Government propose to abolish the employment and support allowance work-related activity component, which was originally envisaged as a way of supporting people with limited capability for work as a result of sickness or disability. It sought to recognise the barriers that people with disabilities face in seeking work, the disabling attitudes, the disabling environments, and the additional costs that disabled people bear, day to day, leading their lives. Employment and support allowance extended a small measure of recognition of the inequality that our society generates, and now even that small

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gesture is to be torn away. Paul Farmer, the chief executive of Mind, is reported as saying:

“People being supported by ESA receive a higher rate than those on JSA because they face additional barriers as a result of their illness or disability, and typically take longer to move into work. Almost 60 per cent of people on JSA move off the benefit within 6 months, while almost 60 per cent of people in the WRAG need this support for at least two years.”

Anne McLaughlin: Someone close to me who has bipolar disorder used to use her employment and support allowance to pay for things when she found it impossible to face the world. She would employ somebody to take her child to school and someone to provide talking therapies and things that improved her mental health. Does my hon. Friend agree that sometimes mental disabilities can be just as financially costly as physical ones?

Natalie McGarry: I thank my hon. Friend for that very well-made point.

According to the House of Commons Library, in November last year 492,000 claimants fell within the employment and support allowance work-related activity group—people assessed as being capable of undertaking some work—almost 250,000 of whom are classified by the Government as suffering from mental and behavioural disorders. Under the Bill, these people will see their payments slashed, at a saving to the Exchequer of £640 million a year by 2020. Affected claimants will receive up to £1,500 a year less than under current rules. A recent study by Scope found that disabled people spend an average of £550 more in disability-related expenses than non-disabled members of the population. These are not extravagances, they are not luxuries, and they are certainly not lifestyle choices.

Angela Crawley: Child tax credits will be paid only to families with up to two children, even if the third is disabled. Does my hon. Friend agree that if there is a disabled child in a family, they should be exempt from this cap?

Natalie McGarry: I absolutely and fundamentally agree.

While £30 a week may seem like small change to the Secretary of State, for whom it is a breakfast, for too many disabled people it is the difference between hunger and malnutrition—between turning on their fire or sitting shivering in the dark, or between booking a cab to take them for their one day out a week or sitting at home alone, excluded from society. We will not tolerate that. Disabled people are not passive victims. This Government see the poverty they inflict on disabled people, on their loved ones and on their children as someone else’s problem. They talk a good game on getting disabled people into work, but dismantle the best tools we have for doing so. They have used traditional tools: cynical innuendo about disabled people, with baseless assertions that they are workshy, idle, and disincentivised by employment and support allowance from seeking work. Knowing the price of everything and the value of nothing, they assume that everyone organises their lives according to their cynical standards. This is a Government determined to ignore the social barriers they are even now erecting.

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Tonight the conscience of this Chamber will be tested. Hubert Humphrey, in his last speech, said:

“The moral test of government is how it treats those who are in the dawn of life, the children; those who are in the twilight of life, the aged; and those in the shadows of life, the sick, the needy and”

those with disabilities. The Minister’s hand signed the paper, but this Government, who would rather parrot empty slogans than address the real needs of our people, have no tears to flow. Yet the tears flow of my constituents, and yours and yours. If you vote for this Bill or abstain, go home to your constituencies and prepare your explanations.

8.43 pm

James Cartlidge (South Suffolk) (Con): We hear that there is something of a quandary among Labour Members about how to vote, perhaps characterised as a decision on whether they go for political pragmatism or principles of social justice. Let me assure them that they need not worry. If they vote with us, they will be voting for social justice, because, as my hon. Friend the Member for Cheltenham (Alex Chalk) said, this Bill is based fundamentally on social justice.

I want to highlight the three key principles that show that this Bill is about social justice. The first and most important relates to the dependency culture. There is an idea among Labour Members that if benefits are reduced, that will be it: people will be static and will never be able to go out into the workplace and improve their situation. We have to accept, however, that those benefits are far too generous—£30 billion a year is huge—particularly the individual awards to workers.

I have run a small business and have seen what it is like. People earn £13,000 from work and a similar amount from tax credits. In that situation, benefits are permanent. How can someone in that position ever reduce their benefit take when the amount they need to earn from work in order to overcome it is so big? That represents a massive extension of the dependency culture, and taking the tough decisions to row it back is a socially just agenda, which I support.

The second key principle relates to fairness to taxpayers. After all, the working population have to pay for these benefits. I strongly support the benefits cap. There is a great social injustice when people in work earn less than those on benefits. That may not happen in a large number of cases, but we should never accept it. It should be a key principle of our welfare system always to seek to reduce the benefits bill and increase in-work wages. That is our agenda, which will come through in the national living wage.

The third principle is the move towards full employment. I want to focus on a point that the right hon. Member for East Ham (Stephen Timms) made several times in his speech. He said that the measures attack work incentives, but I am afraid that that simply does not stack up in the real world. I am talking not just about my experience; every other employer to whom I have spoken who, like me, has had staff on tax credits, finds it difficult. That is particularly the case with part-time staff who are on tax credits: they do not want to work any more hours and often do not even want to take pay rises, because of the dependency system. That is what we are up against.

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Stephen Timms: I wonder whether the hon. Gentleman has reflected on the fact that in 1997 the employment rate among lone parents was less than 45%, whereas today it is getting on for 65%. Those who have looked at the matter have confirmed that that dramatic improvement is largely thanks to the additional incentive from tax credits.

James Cartlidge: The employment statistics are very much on the side of the agenda we have been pursuing: employment is now at a record high. The fact is that this Bill is socially just because it will enable people to stand on their own two feet and to support themselves through their wages, not rely on the state. That is a sound Conservative principle.

Heidi Allen: I want to reiterate two of the points my hon. Friend has made. First, I am also an employer and have lost count of the number of times part-time workers have turned down wage increases or further hours—when I know that their households are short of money—purely because of tax credits. On the flipside, just this Friday I was visited in one of my constituency surgeries by a young married lady with three autistic children—it is a very sad case—who was scared to accept payment for the precious hours she worked as a volunteer teacher, for fear of having her benefits taken away.

James Cartlidge: My hon. Friend corroborates my point. I repeat that this is not a fantasy: every employer to whom I have spoken is wrestling with this situation. Tax credits can work as disincentives. I accept the point made by the right hon. Member for East Ham about lone parent employment, but to be completely honest I do not have that statistic to hand. The general statistics on employment are extremely strong.

Our agenda is one whereby we will reduce benefits but raise wages. Real wages are now increasing sharply. Obviously, after the credit crunch there was a period when wages were static. It was very difficult to follow that financial shock with a strong recovery, but we have achieved economic stability. The next stage is to share our prosperity more widely and the key to that is not the benefits system or dependency, but higher wages and people supporting themselves. That is a sound Conservative agenda, but it is also socially just.

8.49 pm

Neil Gray (Airdrie and Shotts) (SNP): The Bill’s title is one of the finest examples of doublespeak I have seen outside of Orwell’s own texts. The Bill is not about welfare reform; it is about welfare cuts. As for being about work, I repeat what I said last week in my maiden speech: this Government must realise that they cannot threaten, demonise or sanction people into work.

It is absolutely clear that the best route out of poverty is work, but we must keep open the safety net of the social security system for those who cannot work permanently or temporarily. The Bill cuts away many of the links in that safety net and will leave people to fall through into poverty. For example, removing the work-related activity component of ESA just punishes those who are sick or temporarily unable to work through no fault of their own.

ESA is supposed to be available for people identified as having a “limited capability for work” as a result of sickness or disability. According to the House of Commons

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Library briefing, there were just short of 500,000 ESA claimants in that group in November 2014. Of those, 250,000 suffer from mental ill health or behavioural disorders. Under this cut, claimants will receive £1,500 less than they do now, which is an absolute scandal.

The chief executive of Mind, Paul Farmer, has said:

“People being supported by ESA receive a higher rate than those on JSA because they face additional barriers as a result of their illness or disability, and typically take longer to move into work. Almost 60 per cent of people on JSA move off the benefit within 6 months, while almost 60 per cent of people in the WRAG need this support for at least two years. It is unrealistic to expect people to survive on £73 a week for this length of time.”

I could not agree more. This cut does nothing to encourage people into work. It just forces them into poverty, and will ultimately push people with mental health issues and illnesses, which have held them back from work, further to the margins of society.

Yet again, we have heard welfare described in this debate as a lifestyle choice, which is utterly shameful. I say to the hon. Member for Mid Dorset and North Poole (Michael Tomlinson) and his colleagues, “There by the grace of God go I”. We never know when mental illness will affect us, our friends, colleagues or family members. It does not happen by choice; yet this Government have chosen to cut the support available to help them to return to work. It is disgraceful.

Gavin Newlands (Paisley and Renfrewshire North) (SNP): My hon. Friend mentioned sanctions. As reported in today’s Paisley Daily Express, my constituent Colleen Duncan has had her benefits stopped erroneously not just once, but twice. The first time was for not attending a meeting that she actually attended. The second sanction was for missing a back-to-work interview when she was actually securing a job by attending a job interview. Does he agree that we cannot trust the Government to implement fuller welfare reform when they cannot run the current system properly?

Neil Gray: My hon. Friend makes a point that any SNP Member could have made, and he makes his point well on his constituent’s behalf. I hope that the Minister for Employment was listening.

The four-year benefits and tax credits freeze will reduce the real terms value of benefits received by most working-age recipients. The IFS has estimated that 13 million families across these isles will lose an average of £5 per week as a result of the freeze. That includes 7.4 million families in work, whose incomes will drop on average by £280 per year. That £5 may be a cheap lunch for some Conservative Members, but £5 a week could be the difference between heating or eating, new school shoes for the kids or getting transport to their work. Taking money from those in low-income jobs does not make work pay; it just pushes them closer to the breadline.

SNP Members came into politics to pursue progressive policies and social justice and if we are to stay true to that—I am looking at Labour Members—we cannot do anything other than oppose the Bill. As the IFS has pointed out, when the measures are taken in the round with other Budget measures, we can see the real winners and losers. The poorest four income deciles will see their annual net income cut by between 3% and 8%, or a drop of between £600 and £1,300. The higher up the income

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deciles, the smaller the income decline until the ninth decile, the second richest in society, who are to receive a net income rise.

What happened to the social solidarity Scotland was promised last year? What happened to the pooling and sharing of resources? What happened to the promises that our social security system would be safe with a no vote? They are all nailed to the wall, with this Bill and the Budget, as being utter fabrications, myths and untruths. The Bill, along with the Budget, is part of this Tory Government’s ideological, social-engineering agenda. They are punishing the poor, the disadvantaged, the sick and low-income working families for economic failings that are not of their doing. Hon. Members should see that this Bill will take our society backwards and vote against it.

8.54 pm

Jeremy Lefroy (Stafford) (Con): The Welfare Reform and Work Bill has to be seen in the context of the announcements on the living wage and the increases in tax allowances. The overall theme of increased pay, full employment, lower tax and reduced reliance on the state is one that I support. I particularly welcome the commitment to apprenticeships and the support for troubled families. At the same time, it is vital that support is maintained for those who cannot work or who need help to get into work. It is therefore right that the DLA and PIP are excluded from the welfare cap and the freeze on benefits, and that, contrary to some pre-Budget reports, they will not be taxed.

I shall address some of the details of the Bill, but before doing so I want to highlight one part of the interplay between pay, tax and benefits that must be addressed, and that is savings. One of the great advances of the 20th century was the growth of various kinds of social insurance to guard against or smooth out the risks of everyday life. In the UK, the NHS is our health insurance, and our free primary and secondary education system is our insurance against the school fees that most parents in the world have to pay. The question is how to insure against the other basic costs of life, such as food, housing, energy and transport. The benefits system is designed to do that, but it is increasingly at the level of a safety net, as many Members have said. Benefits provide a minimum and are expected to be a stopgap until someone is able to return to work.

That being the case, we need to support people to make additional provision for the times when they are out of work, for whatever reason. That is why I believe that we should look closely at lifetime savings accounts that provide substantial incentives for people to save and that can be drawn down in times of need to supplement benefits.

I shall now look at points in the Bill or relevant to it that constituents have raised with me. There are many, but I shall focus on five. First, I would like to see clear action on making the use of sanctions fair and consistent. Benefits are, as I have said, a safety net and if that safety net is withdrawn, albeit temporarily, the situation becomes unsafe. Sanctions must therefore be used only where there is a deliberate and repeated failure to comply with conditions.

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Secondly, we need to know more about the conditions surrounding the removal of housing benefit from the under-21s. Although that proposal is not covered in the Bill, the rules may be brought forward in the near future. I know that the Department is working closely with young people’s housing providers to ensure that vulnerable young adults are protected. My major concern is over reaching a fair and workable definition of “estrangement” for situations where young people can no longer live with their parents because the relationship has broken down. We must ensure that proper provision is made for their housing in such circumstances.

Thirdly, we need to examine carefully the proposed removal of the work-related activity component of ESA and the equivalent in universal credit. It was my understanding —others have said the same—that the component was designed to meet the additional costs that someone who has a health condition may need to pay. I do not understand what has changed.

Fourthly, the replacement of the child poverty measures with the life chances indicators means that there is no clear assessment of the position of families who are in work but on low incomes. I welcome the additional measures on worklessness and educational attainment, but we also need a realistic income-based indicator for those who are in work.

Finally, we have to appreciate the impact that the reduction in rents will have on the building of additional social housing. Perhaps we need further capital investment by the Government to offset that.

A combination of higher wages, lower taxes, incentives to save and a lower dependence on welfare, with proper support, is the right way to go, but, as always, the details are essential, as is the phasing of the measures.

8.58 pm

John McDonnell (Hayes and Harlington) (Lab): I make this clear: I would swim through vomit to vote against the Bill, and listening to some of the nauseating speeches tonight, I think we might have to.

Poverty in my constituency is not a lifestyle choice; it is imposed on people. We hear lots about how high the welfare bill is, but let us understand why that is the case. The housing benefit bill is so high because for generations we have failed to build council houses, we have failed to control rents and we have done nothing about the 300,000 properties that stand empty in this country. Tax credits are so high because pay is so low. The reason pay is so low is that employers have exploited workers and we have removed the trade union rights that enabled people to be protected at work. Fewer than a third of our workers are now covered by collective bargaining agreements. Unemployment is so high because we have failed to invest in our economy, and we have allowed the deindustrialisation of the north, Scotland and elsewhere. That is why the welfare bill is so high, and the Bill does as all other welfare reform Bills in recent years have done and blames the poor for their own poverty, not the system.

On Friday I brought together at a poverty seminar welfare advice agencies, local churches and religious groups to talk about why people in my constituency are poor. They are poor because rents are so high. People struggle to keep a roof over their heads. The welfare cap

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in the Bill will remove £63 a week from those families who are simply trying to keep a decent home over their children’s heads.

The second reason people are poor is low pay. People in my constituency depend on tax credits to live. Parents choose whether they or their children eat, and the Bill will take £6 a week from every one of those families. The other reason for poverty in my constituency is that people have disabilities—they struggle to work but cannot do it. The Bill will take £30 a week from people with disabilities who are in the work support group and desperately trying to get work. Those are the reasons for poverty in my constituency, and I find it appalling that we sit here—in, to be frank, relative wealth—and are willing to vote for increased poverty for people back in our constituencies.

Some of the benefit cuts will be appalling. One measure not in the Bill but being sneaked through by the Government is a 30% cut in support allowances for asylum-seeker children. We are about to ensure that we push some of the poorest children in our society into further poverty.

We need an honest discussion about the reasons for that poverty and how we can invest to ensure that we lift people out of poverty. It is about some of the things that have been mentioned tonight, such as lifting wages. To come along and describe a derisory increase in the minimum wage as a living wage—we know that a living wage in this country is at least £10 an hour—is a disgrace to English rhetoric if nothing else. It is also rubbing it into the faces of the poor.

Tonight we have seen yet another way in which we blame the individual for the failings of our society. We need a proper debate about how we go forward investing in housing, lifting wages, restoring trade union rights and ensuring that we get people back to work and do not have high pockets of deprivation in areas such as mine and around the country.

Tonight the debate has not served the House of Commons well, but I say to Labour Members that people out there do not understand reasoned amendments; they want to know whether we voted for or against the Bill. Tonight I will vote against it.

9.2 pm

Marcus Fysh (Yeovil) (Con): In 2003 the former Member for Kirkcaldy and Cowdenbeath was spending 0.9% of GDP on tax credits. Under his stewardship that rose to 1.9% of GDP in 2010. By 2020, this Government will have brought that down again to 1.2%, which will still be one third more than the highest levels of spending on tax credits under Labour from 1997 to 2003.

I support the Government’s desire to focus our welfare spending on those who are particularly vulnerable, and to make the system encourage work and people doing better at work. Welfare should be a safety net, not a net that ensnares those it is meant to help. People understand that welfare must be reformed, and even some Labour Members know that the system needs to change and that Gordon Brown’s attempt to create a client state was wrong. His use of tax credits to flatter his relative poverty measure was disingenuous.

People in Britain find abuse of welfare distasteful. A week ago a constituent who has been diagnosed with a terminal illness came to me. He may have a more

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difficult time under these measures, but he said, “I’m so glad that you are tackling this because the level of welfare is completely unfair on people who work.”

The Bill is full of positive steps such as measuring the root causes of poverty and rightly emphasising the positive intent in calling the measurement process “life chances”.

Helen Jones: Does the hon. Gentleman accept that the measures in the Bill do not recognise the fact that two-thirds of children in poverty are from families in work, and that the number of poor children in families in work, as a proportion of all children in poverty, has been increasing? It increased under his Government from 54% to 63% and he is not even going to measure that.

Marcus Fysh: We need to enable more people to get better work, and that is what my Government are focused on doing.

There are other very good measures in this package, such as keeping financial support for people in difficulty with their mortgages, and ensuring that people who claim benefits now face the same choices as people in work. We need to ensure that a job always pays better than welfare and turns life chances around.

It is telling that the Opposition are so divided on these issues, tabling conflicting amendments and saying they will come up with more later. Who knows what they will support in the end? What we do know is that the Liberal Democrats have for now, by their blanket opposition, moved further to the left than the Labour party and into the same basket as the SNP. No longer do they seem to have any intention of balancing the budget and rebuilding our finances.

I commend the Bill to the House.

9.6 pm

Melanie Onn (Great Grimsby) (Lab): The Bill as it stands will hurt some of the most vulnerable people in our society. I cannot support a Bill that abolishes the target for the Government to reduce and eradicate child poverty.

Lifting children out of poverty should be one of the primary duties of any Government. I am proud that the previous Labour Government made this issue a priority, introducing the Child Poverty Act 2010, and helping 1 million children out of relative poverty and 2 million children out of absolute poverty. We must be able to measure and monitor levels of child poverty. Progress has stalled in the past five years and it is outrageous that the Government want to scrap the child poverty targets just to save themselves the embarrassment of missing them.

During the previous Parliament, we saw support cut for families on low incomes, many of whom are in work. Cuts to tax credits hit households with children the hardest, with families losing thousands of pounds. Figures from The Children’s Society show that 15,000 children in Grimsby were adversely affected by below-inflation rises in child benefit and by reductions in tax credits. Now, more than one third of children in my constituency are in poverty. In the East Marsh ward, the figure is close to one in two. Constituents, teachers and social workers in the town have reported to me

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increased numbers of children arriving at school hungry and without school equipment, and whose school dinner is the only expected meal of the day.

It is not acceptable to balance the books off the backs of the poor; nor is it acceptable to backtrack on the work done in the past two decades to reduce deprivation while 2.3 million children are still living in poverty. I cannot support the removal of child tax credits from families with more than two children, and I cannot support a Bill that will remove protection from the most vulnerable young people. When I was 17, I needed assistance from the state because I did not have anywhere to live. The Bill will take away the very assistance from young people—very vulnerable young people—that I benefited from. Protections are not in place, and if Ministers had been in the position I was in, I doubt they would be proposing these changes.

Again, Labour has a record to be proud of on this issue. The previous Labour Government more than halved homelessness during our time in office. Since 2010, however, homelessness has gone up by 25%. I fear that removing housing benefit from under-21s could drive young people who have nowhere else to go on to the streets.

There is a driving narrative among Ministers and those on the Conservative Back Benches that people on benefits are making a lifestyle choice, and that when 18-year-olds leave school they make a choice between going to university, getting a job or going on benefits. The reality is that many young people find themselves in incredibly difficult circumstances, and they need to be supported. Whether they have fallen out of education, had to leave home because of a breakdown in a family relationship or been let down by the care system, we should not turn our backs on them. A Government who remove support from anyone in those circumstances are not, by any stretch of the imagination, a one nation Government. I urge them to think again about the effects the Bill will have on some of the most vulnerable people in our country, and to accept that the Bill needs to change.