I raised my concerns about the Government’s Welfare Reform Bill when it was debated in the House of Commons on 9 March. I highlighted that levels of incapacity benefits and health data are an indication of the health of the population as well as the need for sustained economic growth as a driver for bringing down worklessness. I also raised my concerns about the lack of flexibility in the payment of universal credits and the risk that they will exacerbate child poverty. You can read the entire speech below and the remainder of the debate here.
I shall be brief, as I know that other Members still wish to speak. We have heard useful contributions from Members on both sides of the House. There is cross-party consensus that the welfare system needs to be reformed, and there is even common ground on the reasons for the reforms, such as making work pay, and on what we need to do about the problem, such as simplifying the benefits system.
I want to put on the record the fact that there have been some unhelpful and unhealthy remarks, particularly statements that equate the reforms on making work pay with, if not a kick up the backside for people who are deemed to be workshy, then its equivalent. I found that particularly objectionable. I began to make a list of the Members concerned, but I ran out of space.
I want to dispel some of the myths perpetrated about worklessness, which includes unemployment and incapacity, whether the result of illness or of disability, and to explain why the Bill not only fails to address key issues such as the taper of the universal credit but, in conjunction with the disasters of the Government’s economic and employment policies, risks increasing both child and pensioner poverty and inequalities, as well as creating a new underclass. We also know that there will be consequences for the health outcomes of the population as a whole.
On unemployment, constituents are coming to my surgeries having either had their jobs threatened or just lost their jobs, and it is insulting that we should consider some of them to be making lifestyle choices. Unemployment is not a lifestyle choice. There is clear evidence that unemployment has profound negative effects on the physical and mental health of not only the people who are directly affected, but their families. Studies suggest that there will be an increase in all-cause mortality as a result of unemployment, so we need to be very mindful of that.
Indeed, if we compare the level of incapacity benefits with health data, we find that it is a good indicator of population health. It is reliable, legitimate and not an indicator of malingering. There is overwhelming evidence that the driver that brings down worklessness is a high level of sustained economic growth, but the current fitful recovery will not help to get people back into work. Given the Government’s cuts, nothing will help those people.
In addition to the Bill’s appalling timing, it lacks an understanding of the importance of appropriate welfare to work programmes and fails to distinguish between job-ready and long-term claimants. That will again hinder people from getting back into work.
My final general point is about the Bill’s direction of travel. When we compare different international systems, we find that those with highly decommodifying state support packages—where state support ensures that a basic standard of living is maintained—have fewer income inequalities, a host of social benefits and no negative impact on health outcomes, as measured in particular by infant mortality.
Welfare systems also have an intergenerational effect. In the US we have seen that evidence, and I see patterns associated with what we have been introducing, and that effect also occurring here. Children inherit their parents’ poverty, and we cannot allow that, so I recommend that we look again at the detail of the Bill.
On the Bill’s specific measures, I have already mentioned concerns about the taper, and I hope that the Government will commit to an annual review of the rate and introduce it at 55% rather than at 65%. In addition, the payment of the universal credit needs to be more flexible, as many of my hon. Friends have said, so that we do not exacerbate child poverty any further.
I would also welcome some clarity about the earnings disregard—the amount a household can earn before they lose their entitlement—to ensure that work pays for all. Members have already mentioned the reduction in the child care costs that the working tax credit covers, and I hope that we can look again at that. Save the Children estimates that some families could lose more than £1,500.
Free school meals are another important source of support to low-income families, and I am concerned that the Bill does not describe how they will be maintained under the universal credit. The withdrawal of employment support allowance after a year is absolutely disgraceful, and again we should learn from other countries. We have seen what has happened in the States, and the effect on families has been absolutely appalling.
Finally, the conditions, sanctions and penalties associated with the universal credit must be reasonable, take account of specific barriers to work and ensure that work does pay.
So, I will not be supporting the Bill—