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Neil Coyle: The National Audit Office has suggested that as a result of the incompetence of the coalition Government and the Secretary of State for Work and Pensions, £140 million was wasted on the early stages of universal credit. Is my hon. Friend aware that that could have helped 108,000 people who are now being punished for that failure and face the withdrawal of tax credits, or 21,500 people over the course of the current Parliament? Should the money not have been better spent?

Owen Smith: That is a brilliant point, and extremely well made. There are myriad examples of waste and incompetence in the handling of our DWP budget under this Government, not least the enormous increase in housing benefit.

Ms Karen Buck (Westminster North) (Lab): Does the Conservative party not fail to understand what tax credits are all about? The tax credit policy was successful in that it moved people into work, and, in particular, underpinned the major progress that was made when single parents were allowed to move into work. When we talk about saving money, should we not see that in the context of the tax credit policy’s success in moving people from worklessness into sustainable employment?

Owen Smith: My hon. Friend speaks with enormous experience and expertise, and she is completely right. As I said earlier, tax credits are a policy success. In 1997, 43% of single parents in Britain went out to work; today, the figure is 65%. There has been a 50% increase in the number of single parents who are in work, and that is a measure of the success of tax credits.

Craig Williams (Cardiff North) (Con) rose—

Owen Smith: I will give way in a moment to the hon. Gentleman, who represents a great city—a working-class city—but before I do so, I ask him to reflect on the views of one of his colleagues, the hon. Member for Plymouth, Moor View (Johnny Mercer), who said last week that

“it would be remiss of me not to recount the extraordinary levels of feeling in Plymouth last weekend. This bright, vibrant, exciting and…blue collar city, where in the last general election we saw lots of new and first-time Conservative voters, has serious objections to the tax credit reforms.” —[Official Report, 20 October 2015; Vol. 600, c.882.]

The hon. Gentleman knows, and I know, that that stands for his constituency in Cardiff too, and I hope he will reflect on it when he addresses the House.

Craig Williams: The hon. Gentleman has talked about policy success. Cardiff truly is a working people’s city. Will he comment—so far, he has not done so—on the Government’s leadership on the national living wage? What would he say to the staff of Morrisons, Costa Coffee, Sainsbury’s, Lidl, British Gas and IKEA, who are already benefiting from those companies’ attempts to follow the lead taken by this Conservative Government and match the living wage?

Owen Smith: I know that the hon. Gentleman is relatively new to the House, but he really ought to be present for the beginning of debates. I said at the start of my speech, and indeed on two other occasions, that I

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welcomed the Government’s moves. I applaud them for what they are doing in increasing the national minimum wage, although I repeat that it is utterly bogus to describe it as a national living wage. It is not a national living wage, which is why the Living Wage Foundation will not describe it as such. I wish that the Government would give us a true national living wage, in London and elsewhere.

The hon. Gentleman has, in his wealthy, leafy part of Cardiff, more than 3,000 constituents who benefit from tax credits. I ask him to look into his heart and reflect on whether it is right, for whatever purpose—ideological or economic—to ask those hard-working families to pay this bill. It is not fair, it is not just, and I do not think that it should go ahead.

Dr Murrison: I am listening carefully to what the hon. Gentleman has to say. I would be extremely sympathetic to a credible case based on proper transitional arrangements and mitigation, but, as I am sure Lord Lawson would admit, it has to be paid for. I wonder whether the hon. Gentleman can shed any light on how we can close the gap in relation to the £4 billion that has been cited. All that I have heard from him so far is polemic; I have not heard any credible proposal that would enable us to square the finances.

1.45 pm

Owen Smith: The hon. Gentleman could, of course, start by deciding not to do what the Government did this week when they offered an inheritance tax cut for properties worth more than £1 million. That would provide about £1 billion. He could decide to reverse the 50p tax rate cut for millionaires; that would provide another £3 billion. He could choose to do what the Chancellor has already chosen to do in the past, and delay the point at which the Government get the budget into surplus. He has moved the goalposts once; why does he not do it again? He is very good at it. He has practised. He has already had one crack at it.

Ian Lavery: My hon. Friend has been asked numerous times what the Labour party would do about the £4.2 billion. Will he now explain, categorically and in the simplest terms, that we would not do what the Government are doing, which is taking £4.2 billion from the lowest paid in society? People are losing £1,300 a year, and 200,000 kids are being pushed into poverty. That is not what we are going to do.

Owen Smith: I am delighted to say that I agree 100% with my hon. Friend. Let me be really clear: our view today is that the Government should repeal these measures. Our view is that it is wrong to seek to balance the books, in this or any country, on the back of the working poor—those with low and middle incomes who are doing the right thing. This is the wrong thing to do, and we will not do it.

Let me end by reflecting a little on what this whole unedifying spectacle means for the public, and to the public. I think we can agree that politics has been held in pretty low esteem in this country in recent years. People feel that we, as a political class, are not straight with them. They feel that we do not keep our word, or say what we mean.

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Jeremy Quin (Horsham) (Con): Will the hon. Gentleman give way?

Owen Smith: I will not give way again.

The problem with this change is that it will simply compound that fundamental mistrust. Before the last election, the Prime Minister said, on live national television, that he was not going to cut child tax credits, but he is going to do so. That was a fundamental misleading of the British public. Other Ministers also made categorical statements. When asked whether the Conservative party would cut tax credits, one of them said:

“"No; we are going to freeze them for two years; we are not going to cut them.”

That was a fundamental untruth, and the country knows it.

Unfortunately, when that is added to the Government’s smoke and mirrors and what they say about how they intend to offset the impact of these cuts, it is clear that we as a group—and the Conservatives as a political party—are deepening what is already a profound mistrust in our politics. For the Conservatives to describe themselves as the workers’ party is laughable. Theirs is the party that is cutting the incomes of the workers of Britain, and they should be ashamed of that. They should stand up today and vote with us for new clause 1, and repeal the tax credit cuts.

John Redwood (Wokingham) (Con): Prosperity, not austerity: that is what we want. My consistent advice to Ministers dealing with economic matters and benefits is that they should always have at the forefront of their minds the need for everything they do to promote less austerity and more prosperity for the many, because we wish to have a more prosperous people. The outlines of how we do that are clear, and I fully support the Government’s vision and objectives.

The first thing to do is promote work. We need to make sure that people come out of unemployment and into work; that people who are working part-time but want to work full-time have the opportunity to go on to work full-time; and that people in full-time work that is not well paid have the chance to be promoted into a better-paid job, and to get better skills and training and work with their employer so that they can have a more productive and better-paid job. In that area, this Government and the predecessor coalition have been so much more successful than the Labour Government of 2005 to 2010. We know how austerity for the many is created: by following the Labour Government’s policies of 2005 to 2010, when they increased borrowing and spending, and combined that with over-lax regulation of bank capital and cash, which I warned them about prior to the crunch. When they put those three things in a heady mix, they brought the economy down, a large number of people lost their job altogether, a large number had to take a pay cut to keep their job and most people lost their bonuses or their opportunities to work overtime because the great recession that was unleashed on this country did so much damage. The first thing, therefore, that the British people want is to be secure in the knowledge that the economic policies being used are prudent and sensible, so that there is more chance of more people working and of people having better- paid jobs.

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Ms Buck: The right hon. Gentleman makes a good point about the importance of allowing people to keep more of their money when they work longer hours. How does he square that commitment with the fact that the changes coming in next April will increase the tapers on higher earnings so that people will be subject to 80p in the pound withdrawal rates when they do work extra hours?

John Redwood: The problem with welfare reform, as all who have wrestled with it well know, is that we either have a large number of people facing a moderate rate of withdrawal or we have a more limited number of people facing a high rate of withdrawal. All the time that we have means-tested benefits—our system is still riddled with them—means that we will have to make that difficult choice about whether there is a fast move off benefit when people’s income goes up or a slower move. That will mean we either have fewer or more people affected by the taper. Labour never solved the problem of the taper. The Labour Government had lots of difficult tapers and high marginal rates of tax and benefit withdrawal.

That brings me to the second fundamental pillar of the Government’s strategy, which I support, after the promotion of work and better-paid work: taxing people less, particularly those on lower incomes. Both the coalition and this Government have worked away at that, by trying to get more people out of paying income tax. As my right hon. Friend the Chancellor thinks about his pre-Budget judgment and his autumn statement judgment later this year—he is rightly in listening mode—I trust he will think about the tax element in his policy mix, because the more he can do to take people out of tax or to lower the tax rate upon them, the more he will succeed in promoting prosperity and the more he will offset the impact of benefit changes.

Hywel Williams: The right hon. Gentleman talks about prosperity, but he will know as well as I do that small businesses are one of the chief drivers of it. How does he square that with the cuts to small businesses and single earners’ income from their self-employment?

John Redwood: The Government are trying to encourage people to earn more in self-employment—that is the whole point of the policy. The idea is to create better incentives so that it is worth while people working more and longer hours if they have not had sufficient hours of work and not a sufficient income, and they keep more of the money they make by being in self-employment. That is true for them as well as for people in employment.

Barbara Keeley (Worsley and Eccles South) (Lab) rose—

Hywel Williams rose—

John Redwood: The hon. Gentleman has had one go and I am sorry he messed up his question.

Barbara Keeley: I have raised in this Chamber a number of times the issue of the almost 700,000 carers who are working but can work only 16 hours at the minimum wage. Many Conservative Members in this debate and in earlier debates have talked about people increasing their hours, but some sets of people cannot

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increase their hours—my Front-Bench colleague the hon. Friend the Member for Pontypridd (Owen Smith) has mentioned them and I mention them. What does the right hon. Gentleman say to almost 700,000 working carers who cannot give themselves more hours, are not allowed to earn more than £110 a week and will be hit badly by this cut to working tax credits?

John Redwood: Yes, some people cannot increase their hours or, for good reason, do not want to increase them because they are already working long hours. I have already described the actions they or their employers can take, and that the Government can encourage. We want these people to have better opportunity and more skill, and to work with their employers to raise productivity to justify pay rises. The Government, with the full support of the Opposition, are using the force of the law to increase minimum wages, as part of the policy of driving wages upwards. But the only way we can succeed in getting wages in this country up to levels we would all find acceptable is through a productivity revolution. It has to come by working smarter and better, not necessarily by working longer hours or by working harder, with the right investment and the right back-up from employers, so that people can earn more and justify higher earnings.

Owen Smith: Does the right hon. Gentleman accept that we are talking about two tribes here? It is not necessarily people who are on working tax credits who are on the minimum wage—indeed, the overlap is only about 25%, so an increase in the minimum wage will miss 75% of those tax credit recipients.

John Redwood: I do not think it is very nice to say that people belong to “tribes”; we are in one country and we are trying to promote the greater prosperity of the many. I am surprised by that lapse of language, but the hon. Gentleman is right to say that some people who will face a reduction in tax credits are not going to benefit from the minimum wage because they are already earning more than that. That is clearly true.

Owen Smith: It is 75%—

John Redwood: If the hon. Gentleman would listen carefully, he would know that that is why I say I support a strategy for prosperity that first promotes more people into better pay. I am not just talking about those who are currently on a low wage; I want someone on a better wage also to have the opportunity for more pay. Some of my constituents do; they will be promoted, they will work for smart employers in smarter ways, and they will get pay rises, although not all will. The more the Government can do to help, encourage and support, so that many more people can get those opportunities of better pay, the more we will like it. I hope the Opposition parties will agree that that is the best way to greater prosperity. It is also the best way to better jobs. If someone goes to work every day thinking that next year they might have a better job, a pay rise or a bonus they can benefit from, they will go with more of a spring in their step than if they are going to a low-paid job with a bad employer who is not giving them any options and not giving them a break in life. [Interruption.] I see that some Opposition Members think that that is a funny idea, but I hope they would join me in recommending this approach to employers in their constituency as well

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as in mine, as that is how we create a more prosperous society. I am just trying to stress that we also need to get taxes down.

That deals with the second pillar of this excellent strategy. We need better work and more better-paid work, and less tax on that work so that people are more prosperous. We then come to the difficult bit, which is the point of the row today, all of last week and probably all of next week, by the looks of how Parliament is going at the moment. The issue is: at what rate do you withdraw the benefits support as people become more prosperous because they are in work, not out of work, because they are in better-paid work and because they are paying less tax? There are difficult judgments to be made, and I am very pleased that my right hon. Friend the Chancellor is in listening mode. I look forward to his autumn statement—unlike the Labour party, I will be looking at all three elements of the package. I will be looking at pay and tax, as well as benefit withdrawal.

Perhaps unlike Labour, I want to end up in a world where far fewer people are on benefits, because their pay and the tax cuts are sufficient to give them a better lifestyle. We will then have a more affordable welfare system that enables us to run an economic policy more likely to deliver better prospects, more jobs and more success for business. As some of my Conservative colleagues have sought to point out, the problem the Opposition face is that no answer is coming from them. We know that they were able to overspend, over-borrow and crash the economy. We are now waiting to hear from them about how they would get the money under control, were they to be trusted again with government. We know that they do not want to cut non-benefit expenditure, so surely they have to accept the case I am making: that we need to get more people out of benefits altogether, and that requires a combination of the good things—promoting work, promoting better pay and lower taxes—and the not-so-good things, such as actually having to make some difficult choices on benefits.

Naz Shah (Bradford West) (Lab): What answer do I give my constituents? They have a spring in their step because they are getting all these promotions and things the right hon. Gentleman talks about, yet 34,000 children in my constituency who are on tax credits will be thrown into poverty. Can he explain that?

John Redwood: We have just been talking about how we can avoid that. We have been talking about how we can get those people out of poverty and into prosperity and how we can promote, in the hon. Lady’s constituency and elsewhere, more jobs, better businesses and lower taxes, which must be the medium to long-term answer.

2 pm

We are now talking about the pace of change and the detail of the tapers, the timing and so on, and there is clearly an important row going on about these difficult and sensitive matters. I am sure that my right hon. Friend the Chancellor will be looking at all these matters, because we do not want people to be badly damaged by a premature reduction in their benefit payment before the other things are working for them, which could result in their having too little money and then having recourse to the hardship fund and all the other things that will be in place. It is therefore in our mutual interest

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that the transition is done smoothly, but it cannot be done by ignoring the problems and pretending that the welfare bill is fine and that there are no disincentives in the system.

I am sure that the hon. Member for Bradford West (Naz Shah), like me, does not wish to see hard-working people taxed more to subsidise employers who have the capacity to pay better wages. I am sure that she does not want to see perverse incentives in the system, with tax credits sending a message to some people that they should not work more or, if they are self-employed, do more because that would adversely affect their tax credit rewards. We need to get that balance right. It clearly has not been right, because the tax credits bill has gone up too much and, until recently, there was far too much unemployment in the economy. It is certainly clear that tax credits built up very rapidly during a period of big redundancies and a big squeeze on pay. We now see those patterns reversing, with people coming back into the workforce and pay rising, in nominal and real terms, so now is the time to look at the pace of change in benefits.

Owen Smith: I am grateful to the right hon. Gentleman, who is being gracious in giving way. He talks about us all wanting to avoid a disincentive to work extra hours, but does he not accept that that disincentive will be increased by reducing the lower earnings threshold and increasing the taper, thereby increasing the amount of money that is taken away for every extra hour worked and every extra pound earned?

John Redwood: I have already been quite honest in saying that Governments face a difficult choice in this regard: do they want fewer people facing a sharper taper, or more people facing a gentler taper? There are no easy answers. I look forward to hearing the Government’s judgment when they have completed their listening and thinking. Again, the Opposition are refusing to see all three parts of the package. It is not possible to answer the hon. Gentleman’s question as simply as he would like, because working out whether people are better off or worse off, and by how much, depends on what else happens with taxation, rates of pay, inflation and all the other things that are going on.

My advice to the Government is that their strategy is absolutely right: get more from pay, more from tax cuts and then cut the benefits, because people will not need them as much. They must listen carefully to criticisms, for example if their changes are going too far and too fast, or if they catch some people we do not want to catch. I am sure that my right hon. Friend the Chancellor will want to return to those points in his autumn statement and tell us his thinking. However, the direction of travel must not be simply to make big increases in benefits again; it must be to find other answers so that more people can enjoy prosperity from work, earnings and lower taxes.

Helen Hayes: I wonder whether the right hon. Gentleman would like to comment on two issues. First, is there any legitimacy or authority in the Government’s approach to cutting tax credits, given that the Prime Minister repeatedly denied that he would do so in the run-up to the general election? Secondly, there is unequivocal evidence from the Institute for Fiscal Studies and others

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that the maths on the issue simply do not add up, and that asking people to work harder for less is, quite simply, an unacceptable proposition.

John Redwood: I agree with the hon. Lady’s latter point, because I do not want people to have to work harder for less. I have just described the world I want to live in, and how I want that world, which some of my constituents enjoy, to be available to many more. I want people to work smarter and with more skill so that they can earn more because their companies can afford to pay them more. With regard to the Prime Minister’s promise in the run-up to the general election, I heard him rule out cutting child benefit, and I understand that there are no proposals to cut child benefit.

When I was asked about welfare in the run-up to the general election, I made it clear that I wanted the total welfare bill to come down and that I expected to see welfare reform, including some reductions in welfare payments and eligibility. Personally, I do not think that I have anything to answer on that score. I was entirely honest with my electorate, and they kindly trusted me with the job again, and with a bigger majority. There are many people in this country with a grown-up view about welfare, who do not want it to penalise those who really need it but who think it is high time we reformed it so that we depend much more on work and tax reduction on lower and middle levels of pay than we have done in the past.

Therefore, I urge my right hon. Friend the Chancellor the preserve the spirit of his reforms but to look very carefully at the detail, because we do not want to see bad cases of the type that Opposition Members have been conjuring out of thin air without proper facts. Above all, we do not want to go back to Labour’s boom-and-bust economy, where generous welfare, far from creating more jobs and prosperity, helped bring the whole thing down.

Neil Gray (Airdrie and Shotts) (SNP): I rise to speak to the amendments in this group tabled by the Scottish National party. We also support new clause 1, which the shadow Minister moved earlier. Let me pay tribute at this stage to the efforts of my hon. Friends the Members for Ayr, Carrick and Cumnock (Corri Wilson) and for Livingston (Hannah Bardell) who worked so assiduously on the Bill Committee on behalf of the SNP, and to my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) for her work on these matters in the Work and Pensions Committee.

My wife has always suggested to me that it provides context and depth to a speech if it includes a quote early on. On this occasion, and in relation to tax credit cuts, I have a quote that was timeously delivered in the past few days:

“It’s not acceptable. The aim is sound, but we can’t have people suffering on the way… The idea that there’s a cliff edge in April before the uptake in wages comes in is a real practical human problem and the Government needs to look again at it again”.

Who is that quote attributed to? That was said by Ruth Davidson MSP, leader of the Conservative party in Scotland, as she called on this Government to have some movement on the issue by the autumn statement.

After last night’s vote in the other place, it is time for the Government to rethink these outrageous proposals. They have managed to unite a considerable swathe of

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political and civic society against the plans. In fact, after last night the Chancellor really stands alone in continuing to push for the cuts. If the Chancellor, the Prime Minister and this Government will not listen to Opposition Members, if they will not listen to charitable and third sector organisations, and if they will not listen to anyone else, surely they should listen to the leader of their own party in Scotland.

The SNP is completely opposed to the UK Government’s continued attack on low-income families, and we support Labour’s amendment to repeal the regulations, which will affect 350,000 children in 200,000 families in Scotland. Let me say this loud and clear: the SNP will oppose these ideological, regressive and utterly punitive tax credit cuts with every opportunity open to us today and every day, because we realise the damage they will cause to working family incomes, to levels of poverty across these isles, including child poverty, and to social cohesion in every community in the United Kingdom.

The amendments that my colleagues and I support in this group would bring about the repeal of these tax credit regulations and overturn the proposed cuts. However, should the Government decide to press on with the cuts in the face of hostility across this Chamber, and from Conservatives up the road, they must consider forms of mitigation. They must act to protect vulnerable families with a delay and a fully implemented transitional period, as is covered in our new clause 8, which we will be pushing to a vote. In the light of last night’s vote in the other place, I expect that is already being considered by the Government.

New clause 8 would mean that the measures in the Bill and in the 2015 tax credits regulations relating to the award of tax credits and the relevant entitlement within universal credit would not take effect until the Secretary of State had implemented a scheme for full transitional protection for a minimum of three years for all families and individuals currently receiving tax credits before 5 April 2016, and such transitional protection should be renewable after three years with parliamentary approval.

The transitional arrangements are important, as none are put in place by the Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015. This means that the tax credit cuts will be implemented immediately in April 2016. In fact, tax credit recipients will apparently be getting an unwelcome letter detailing the cuts to their award just weeks before Christmas. This will give working families no time to plan effectively for an average cut of £1,300. For families living wage packet to wage packet, utterly dependent on tax credits to keep them above the breadline, the cut will be devastating and impossible to plan for in such a short time.

Amendments 49, 50 and 52 would ensure that relevant benefits, child benefit and tax credits increased in line with the consumer prices index. Amendment 51 is consequential, while amendments 53 and 54 would ensure that the current child tax credit arrangements remained in place. Amendment 55 would remove changes to the entitlement to the child element of universal credit. These amendments were pushed by my colleagues in Committee. The Government did not accept any of them, but they pledged to come back with more information, which has not yet materialised.

Why on earth have the Government decided to rush the Bill from Committee, which only finished on Thursday, to this final stage today? If they are serious about

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introducing more detail and explaining the expected mitigation measures, why not flesh that out? The rush suggests that the cuts are purely about making savings and therefore ideologically driven. The changes are fundamentally regressive. They disproportionately target those in low-income households and punish them for the Government’s ideological obsession with austerity—an obsession that is failing socially and economically.

The SNP stood on a manifesto that was fundamentally anti-austerity but which also plotted a more responsible path to reducing the deficit. We have argued for a 0.5% increase in departmental spending per year for this Parliament, which would have released £140 billion to invest in capital projects to boost growth and narrow income inequalities. Our plan would also have resulted in a budget deficit of just 2% by the end of the Parliament, and it was backed by an International Monetary Fund report in June that highlighted how reducing income inequality not only reduced poverty but boosted growth. By extension, the policy of cutting tax credits and thereby increasing income inequality will drive more of our citizens into poverty and harm growth and therefore harm the Government’s apparent aim of reducing the deficit. So, as well as being socially destructive, this policy is—to extend the IMF’s thinking—economically incompetent.

Ian Blackford (Ross, Skye and Lochaber) (SNP): Does my hon. Friend agree that the SNP has come up with a responsible approach to delivering sustainable growth that will drive up wages and employment, by contrast with what the Government have done over the past five years and what we see going forward? The Bank of England, with its £375 billion of quantitative easing, has had to bail them out with monetary policy because, quite simply, they have not delivered on fiscal policy.

Neil Gray: I welcome my hon. Friend’s contribution. As we are talking about affordability and sustainability, let me say that the Government think it feasible to press ahead with apparently £167 billion of Trident nuclear weapons, which is shocking and deplorable, while seeing fit to find £4.4 billion of cuts in tax credits. They are taking an ideological wrecking ball to our social security system in the name of a budget surplus by scandalously waging a war on low-income households.

Paul Scully: Does the hon. Gentleman agree that the cost of Trident is over the lifetime of the project, whereas he is talking about an annual savings figure?

Neil Gray: By anyone’s estimation, £167 billion is a vast sum of money, but it would also amount to £3 billion per year, which would go some way to squaring the circle on the tax credits cuts.

2.15 pm

Just to add to this omnishambles, there was no mention of wholescale cuts to tax credits in the Conservative manifesto. There were just two references to tax credits, but neither mentioned anything like these proposals. This is the central plank of the Chancellor’s first Budget since the election, and he has based all his sums on the back of it. One would have thought, therefore, that it merited at least a passing reference—a hint perhaps—yet

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the only hint during the election campaign came in a “Question Time” debate when the Prime Minister hinted at his opposition to cuts to tax credits. Now, either the Chancellor has convinced him to make a pretty major U-turn, or he was telling porkies that night to Mr Dimbleby and the electorate. A subsequent “Question Time” programme, a week past on Thursday, sadly showed a Conservative voter devastated at what the Government were proposing. She felt let down and misled—and I bet she is not the only one.

This all demonstrates that the Government do not have a mandate to push these changes through. They were not in the manifesto, and, when explicitly asked about the matter, the Prime Minister—to give him the benefit of the doubt—was at the very least deliberately obfuscating. A similar obfuscation came in the Chancellor’s summer Budget, when he suggested that these cuts to tax credits would be compensated for by his rise in the minimum wage. The reality is that the full rise in the minimum wage will not come into effect until 2020, four years after the tax credit cuts start, and even when the full rise comes in, it still will not mitigate the tax credit cuts.

Why, then, did the Government decide to undermine and sabotage the real living wage campaign by labelling their minimum wage rise as such? Next year the minimum wage rise will be 65p short of the real living wage, and by 2020 the living wage is forecast to be closer to £10 per hour and therefore still higher than the projected minimum wage rise announced by the Chancellor. Besides, the real living wage is calculated taking tax credits into consideration, so the Chancellor is going to be even further behind the curve when the revised living wage is announced. It is a myth that raising the personal tax allowance will mitigate the effects of the cut because many tax credit recipients do not earn enough to reach either the old or the new tax threshold. This is a £1.4 billion tax cut that disproportionately benefits the rich. And no, free childcare will not compensate either, as less than 10% of tax credit recipients receive under-5s childcare support.

These cuts will leave many families much worse off. Yesterday, Paul Johnson, the Director of the Institute for Fiscal Studies, giving evidence to the Work and Pensions Select Committee, said there was no way to mitigate the cut to tax credits other than by amending the cut itself—a point of view shared by the Resolution Foundation. The House of Commons Library has calculated the cumulative impact of the summer Budget on a single-earner couple with two children, where that single earner works 35 hours per week and earns the minimum wage. That independent analysis shows that in 2016-17—the year the changes will take effect—such a family will be more than £1,500 worse off, and that by 2020-21 they will be more than £2,000 worse off per annum. How on earth can that be described as anything like making work pay?

The various attacks on low-income working households fly in the face of the UK Government’s own rhetoric and rationale about making work pay and employment being the best route out of poverty. It has been estimated that almost 60% of the children living in poverty in Scotland come from working families. The latest statistics show that 65% of children in the UK living below the relative poverty line are living in families in which at least one parent works.

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As shameful as it is, I am not surprised that the Bill attempts to repeal most of the Child Poverty Act 2010 and weakens the UK Government’s commitment and obligations on child poverty. Let us be absolutely clear that the measures in the Bill are without doubt going to plunge many more children into poverty. It is shameful that it has taken a vote in the other place to perhaps shame this Government into providing an independent report on the impact of these cuts, especially on children living in or close to poverty.

In regard to taking action on these matters in Scotland, the Smith commission recommended that tax credits remain reserved to this place. In Scotland, we will clearly use the powers we are due to receive to the best of our ability and we will always use our powers to do our best to protect the poorest and most vulnerable in our society. We have a good track record of mitigating the worst of the UK welfare cuts where we can, such as by providing £100 million to ensure that no one pays the bedroom tax, and by investing £40 million in local government to ensure that council tax benefit was not cut in Scotland when it was in England. But when 85% of welfare and 70% of taxation remain reserved, it will be hard to fully mitigate the UK Government’s plans. Scotland must therefore have full control over all universal credit if we are to pull children and families out of poverty, and that must be devolved with the appropriate resources.

Our amendments in this group also address the two-child limit for child tax credits. According to the Institute for Fiscal Studies, this measure will impact 872,000 families, who receive on average £3,670-worth of support for third and subsequent children. I struggle to see how this policy could be seen as anything other than social engineering, as it hints that having more than two children is a luxury reserved for the rich. Also, I would appreciate it if anyone on the Government Benches could explain how an exemption for rape victims will work. Will there need to be a conviction? Will DNA evidence be required? Will a tax credit claimant need to provide a police statement with their claim form? This proposal is totally and utterly absurd. It highlights the absurdity of the two-child rule and the tax credit cuts in general.

I shall end with another quote. These will now be familiar words for the Government after the hon. Member for South Cambridgeshire (Heidi Allen) delivered them so eloquently last week. She said:

“A constituency does not function—a country and its economy does not function—if the people who run the engine cannot afford to operate it. We need every teaching assistant, care worker, cleaner and shop worker to secure this economic recovery. To pull ourselves out of debt, we should not be forcing those working families into it. The Prime Minister has asked us to ensure that everything we do passes the family test. Cutting tax credits before wages rise does not achieve that. Showing children that their parents will be better off not working at all does not achieve that. Sending a message to the poorest and most vulnerable in our society that we do not care does not achieve that, either. I believe that the pace of these reforms is too hard and too fast. As the proposals stand, too many people will be adversely affected. Something must give.”—[Official Report, 20 October 2015; Vol. 600, c. 876.]

I agree. It is time that the Government gave in and scrapped these tax credit cuts. Conservative Members who agree with the hon. Member for South Cambridgeshire, or with their party leader in Scotland, cannot just vote

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these cuts through and hope that mitigation will follow. Voting them down is the only answer, and we need that to happen today.

I should really declare an interest before I sit down. In my constituency of Airdrie and Shotts, 11,300 children in 6,100 families are currently in receipt of tax credits. The child poverty rate currently sits at more than one in five in my constituency. The statistics for my constituency will not be the worst, but they are utterly shameful none the less. I am not here to accept cuts that will make matters worse, and neither should any other MP, but that is what will happen if these tax credit cuts are accepted by this House. An average of £1,300 will come out of the household budgets of the lowest income families in this country.

Perhaps you and I could cut our cloth to suit, Madam Deputy Speaker, but the very definition of qualifying for tax credits means that the recipients do not have enough to get by and do not have the resources to accept this level of cut without severe ramifications. That will be on the conscience of every right hon. and hon. Member who votes to accept the cuts. They will have to accept that choosing between heating and eating is a price worth paying. They will have to accept that food poverty is a price worth paying. And ultimately, they will have the lives of disadvantaged families the length and breadth of this country on their conscience. Please support the amendments tabled in my name and those of my hon. Friends.

Several hon. Members rose—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. At last, Members have risen to show that they want to speak. It is very confusing for the Chair if you do not stand up at the beginning of the debate, because I cannot tell how many people wish to speak. At the moment, I can see approximately eight people—

Tom Brake rose—

Sammy Wilson (East Antrim) (DUP) rose—

Madam Deputy Speaker: You see! Why can’t people just stand up? It is not difficult. Schoolchildren do it. Just stand up when you want to speak! I can now see a significant number of people wishing to speak. I cannot impose a time limit at this stage in the proceedings, but we have less than half an hour left in this debate, so I appeal for brevity: perhaps three or four minutes.

Oliver Dowden: I shall speak briefly against new clause 1. We as a nation need to be clear about the scale of the challenge that we face. The budget deficit has been halved, but it is still enormous and we are spending far more than we earn. Against that backdrop, the increase in welfare spending is an important element that must be addressed. The amount of spending on tax credits has risen from £6 billion when Gordon Brown first introduced them to £30 billion now. That money is being borrowed in order to pay for welfare. I do not think that borrowing money to pay for welfare expenditure is a sensible idea.

Catherine West (Hornsey and Wood Green) (Lab): Let us look at the totality of welfare spending as though it were a cake. Is it not the case that the failure of the

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Government over the past five years to address the high cost of housing or to bring down the housing benefit bill is the key to solving your problem?

Madam Deputy Speaker (Mrs Eleanor Laing): Order. It is not my problem. It is somebody else’s problem.

Oliver Dowden: We need to be clear about the problems with tax credits. Let me offer the House three facts. The first is that, under the last Labour Government, 1.4 million people remained on out-of-work benefits for almost the entire period. Secondly, the number of workless households doubled, and thirdly, the level of in-work poverty rose by 20%. So there has been a massive increase in expenditure on welfare and on tax credits, but it is not delivering the reduction in poverty that we all desire.

Neil Coyle: Does the hon. Gentleman not agree that tax credits have played a role in tackling in-work poverty?

Oliver Dowden: This is precisely the point that I would like to get on to. Despite the increased expenditure on tax credits, we continue to see these dreadful statistics on poverty, and that is because this is a flawed model that is based on taxing people on the minimum wage who can barely afford to pay tax, recycling that revenue through the welfare system and using it to top up low pay. That is not a sensible way to proceed.

Ian Blackford rose—

Oliver Dowden: I will give way once more, but I am aware of Madam Deputy Speaker’s injunction.

Ian Blackford: We understand, from survey after survey, that millions of people in this country are going to be worse off as a result of these measures. What is the hon. Gentleman going to say to his constituents who come to him after next April having lost on average £1,300 of their income?

Oliver Dowden: I would say to those people that this Government have a clear and coherent plan for helping people on the lowest incomes that consists of three elements. The first is to increase the amount of money people can earn without paying any tax; by the end of this Parliament that will be increased to £12,500. That is lifting people working 35 hours a week on the minimum wage out of tax entirely. Secondly, we are introducing a national living wage which by the end of this Parliament will increase wages to £9 an hour. Thirdly, we are introducing a number of other measures such as free childcare which will help those in most need of it. That is a far better model—to move from a low-wage economy with high tax and high welfare to a higher wage, lower welfare and lower tax model.

2.30 pm

I say to Opposition Members that because we have record high levels of private sector wage growth—4.4% according to the latest figures—because unemployment continues to fall, because growth remains strong, and because we are introducing a national living wage, we have a moment where we can reform tax credits. If we do not seize this opportunity, future generations will not thank us for continuing to saddle the economy and taxpayers with £30 billion-worth of subsidies for low

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wages. The moment is now ripe. These proposals form part of a coherent vision, whereby we cut taxes for those on the lowest pay, increase their pay through a national living wage and help them access childcare by providing free childcare.

Opposition Members are opposing this change wholesale. If they wish to remove £4.4 billion-worth of public spending savings, which is what new clause 1 proposes, they have to be able to tell their constituents how they will afford that. Do they propose to put up taxes on hard-working people? Do they propose to cut spending on health, education or defence, or do they intend to carry on borrowing? The signals from both Labour and the SNP are that they want to carry on borrowing. Every pound we borrow in this generation is a pound future generations have to repay. That is why I urge all Members to grasp this opportunity to reform welfare and reform tax credits as part of a comprehensive package which helps those on the lowest wages. If we fail to do so, those Members on the Opposition Benches should justify to their children and grandchildren why we have saddled them with such high debts.

Sammy Wilson: We will be supporting the new clause—not because we are opposed to all welfare reform. Our voting record in this House and the fact that against the odds we have tried to drive through sensible welfare reform changes in Northern Ireland indicates that we do not take the blanket view that welfare reform is bad, full stop. Some of it is necessary, but some of it is wrong-headed, and this change is wrong-headed for a number of reasons.

First, I do not believe that the proposals will achieve what the Government want. We hear time and again—we have heard it today—that the Government want to make work pay and that those who go out every day to employment must have a reward for that and there must be an incentive. All the indications and assessments are that these proposals, because of their timing and their scale, will not make work pay. In fact, the OBR has said they will be a disincentive to work, because the rewards are being taken away from people but the mitigation will not be added quickly enough. Therefore, the objectives that the Government are setting out to achieve will not be achieved.

The second point is that in most cases we are not dealing with people who have a large buffer either of savings or additional income which can help them overcome the timing difficulty. We are talking about people on low wages and probably every penny that they earn goes on their living expenses. We have heard again today that as the tax credits come off, there will be tax cuts, additional childcare support and reductions in rent, and that all those things will mitigate the changes—and that on top of that there will be an increase in the national living wage. However, the tax credit cuts are coming in immediately, whereas the other things will be brought in over a period of time.

Catherine West: Does the hon. Gentleman agree that one way of bringing down the entirety of the welfare bill is to build more homes, so that we do not spend £60 billion in a Parliament on housing benefit?

Sammy Wilson: I agree, although that is not a short-term answer either. That is a long-term answer and it is certainly not going to deal with the issue facing us today.

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The tax reductions will not affect all the people who are on low wages because they will not all hit the threshold. The childcare changes will affect only a fifth of the people whose tax credits will be cut. The national living wage increases will not apply, for example, to people under 25. So there is a whole swathe of the population who will not benefit from the other changes. Many of them will have families as well, of course. The Chancellor has said that the principal way in which the issue will be addressed is an increase in the national living wage, yet a whole swathe of the population will not be affected by that. For that reason, many people will be worse off. Even when all the changes are added together—the tax credits being removed, the tax thresholds being increased, the childcare element, the housing element, which does not apply to people in the private rented sector of course, and the national living wage—it is estimated that people will still find themselves on average a third worse off. This will affect many of our constituents.

Conservative Members should be very thankful that those in the House of Lords swapped their red Benches for red flags last night. That has probably done the Conservative party a favour. Many of the people who will be affected by these changes are the natural supporters of the Conservative party; they are the strivers of society, the people who want to do better, who want to improve themselves, and who probably look to some of the Government’s other policies. They will be hit hardest. I suspect that the Government have got off the hook, therefore.

The Government’s measures should be overturned by the House tonight and the Government should have a complete rethink. If they are serious about having a rethink, they should be supporting the amendments, to enable a radical rethink rather than a tinkering with the policy, which will be detrimental.

This question is rightly asked: what is the alternative? There are many alternatives. The changes represent less than 1% of total Government spending. Surely to goodness across Departments two thirds of 1% in savings can be found to finance dropping the changes. Over the life of this Parliament we can then work towards a sensible rebalancing, where employers pay proper wages and the state has to pay less in subsidies.

Suella Fernandes (Fareham) (Con): We all share a belief in the welfare state, and in a civilised country like ours it is right that we offer help to the most needy, but the amendments are myopic and ill thought out because they forget about sustainability and fairness. Our welfare system is immensely unfair in its discrepancies. The clauses that would be amended—clauses 9 and 10—together freeze the main rates of most working age benefits, child benefit and certain elements of working tax credit and child tax credit for four years, starting from 2016-17, with important exemptions to protect the vulnerable, such as pensioners and those who are disabled, reflecting compassion and proportion.

Why are we doing that? Because since 2008 wages have risen by 12%, but for most working age out-of-work benefits the rise has been 21%. How can it possibly be fair or justifiable that the amount that people receive on benefits is increasing at a faster rate, and is more, than people receive in work? The freezes contained in clauses 9 and 10 go to the heart of reversing that damaging trend.

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I want to make three key points about clauses 9 and 10. They support the original concept of welfare, as designed and intended by its father, Beveridge. In 1942, when the Beveridge report was published, he enshrined the key principles of what welfare should stand for—to help those who found themselves in occasional exceptional need. It was to help people cope with unexpected and temporary afflictions of sickness and unemployment.

Catherine West: Is the hon. Lady aware that the Government’s proposals would affect 740,000 families in which there are children with disabilities?

Suella Fernandes: What I am aware of is that the reforms are part of a package that includes an increase of free childcare to 30 hours, which is worth about £5,000 and will help working families combine work and childcare. That is how we are going to help children. Work, not benefits, is the route out.

Beveridge’s guiding principles were clear—the individual has to take greater responsibility, alongside the state establishing a national minimum standard to ensure that the most vulnerable are looked after and that the system is sustainable. The main problem with the existing welfare system is that it has allowed businesses to act in a way that is both unpalatable and bad for the economy. It has facilitated the underpayment of workers, which has allowed chronic under-training and under-investment in staff. The problem is simple. If a business or an employer knows that low wages will be topped up by the state, what is the point of investing in its workforce? What is the point of investing in training or promotion?

Alan Brown (Kilmarnock and Loudoun) (SNP): Does the hon. Lady think it is fair that businesses will get a taper on the increase in wages? She complains that tax credits subsidise businesses, yet the poorest in society will not get a taper—their income will be cut right away in April. How is that fair?

Suella Fernandes: The Government are pragmatic and sensible, and they will be responsive. They will make announcements in the autumn statement that will deal adequately with that issue. [Interruption.] I have limited time and I want to make progress. It is important that we make work pay by stopping businesses underpaying their staff.

My next point is that we need to ensure that everybody keeps in mind the fact that the reforms are part of a package. The new measures on free childcare, the rise in the personal allowance, the tax lock on income tax, VAT and national insurance, and the welcome introduction of the national living wage will all ensure that household incomes rise over the course of this Parliament. People will be able to keep more of the money that they earn, rather than pay it in tax, which would just go to more Government expenditure.

Finally, the manner in which the Opposition have behaved is shameful. Prior to the election, there were suggestions that they would back our welfare reforms, acknowledging that welfare had become unsustainable and costly. They equivocated and suggested support. Even in July the right hon. and learned Member for Camberwell and Peckham (Ms Harman) was clear in her support for the reforms. What we have seen now is opportunism and the politicisation of an issue on which

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consensus is required. That is shameful and underlines the Opposition’s lack of integrity and decency, when we need cross-party support on this difficult issue. I support the clauses as drafted and expect the Opposition to do so too.

2.45 pm

Hannah Bardell (Livingston) (SNP): I welcome my hon. Friend the Member for Airdrie and Shotts (Neil Gray) to his position as I move across to the business brief. From his speech earlier, I am sure the social justice team has a very talented member.

I shall speak to amendments in this group tabled by my colleagues, particularly amendments 53, 54 and 55, which clearly state the SNP’s opposition to the Government’s two-child policy. The SNP wholeheartedly condemns the Tory Government’s intention to restrict tax credits to two children, which by definition excludes many of the poorest children in society from our social security system, going against the very principles for which it was set up. The Government’s proposals also stray into an area of policy making that I never thought I would see suggested by any Government who had a shred of compassion for their people. Hidden away in the Red Book were the words:

“The Department for Work and Pensions and HMRC will develop protections for women who have a third child as the result of rape, or other exceptional circumstances.”

No detail was provided. How much disrespect can this country take?

Alison Thewliss (Glasgow Central) (SNP): Does my hon. Friend agree that it is appalling not only that that appeared in the Budget statement, but that during the consideration of the Bill there has been no explanation of how that will work in practice?

Hannah Bardell: I could not agree more. The two- child policy will hit more than 872,000 families who receive support for third and subsequent children. The Government’s own national child poverty strategy recognises that the risk of poverty is much more significant in larger families than in smaller ones. Currently a third of children living in poverty live in families with three or more children. Perhaps that is why the Tory Government seek to airbrush child poverty from the statute books.

It is easy for this Tory Government to espouse theories and claim that reducing financial support to just two children will make poorer families rethink their “financial choices”. That is based on the falsehood that all children are planned and that it is possible to financially plan for children. I am sure we are aware that that is not the case. What if a second pregnancy turns out to be twins or even triplets? What about the many families who are supported or led by kinship carers? Perhaps the Tories need a biology lesson, or a simple lesson in humanity.

Such eventualities cannot be planned for, so are we telling families across these nations to stop having children, just in case? I have raised many times in Committee, and many of my colleagues have raised on the Floor of the House, the sensitive issue of children resulting from rape and the insensitive Government plan to make women justify their children in front of DWP caseworkers. Many domestic abuse charities have expressed grave concerns, and Rape Crisis Scotland has warned that the

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plan is “inherently unworkable”. It has asked how DWP workers will prove whether someone has or has not been raped, and said that many women would find explaining that situation extremely uncomfortable. Many women do not report to the police that they have been raped, or go years without reporting it or speaking about it, so they cannot be expected to explain it to a DWP worker.

What training will a DWP worker have to deal with rape victims? It is clear that this is an unrealistic, ill thought out and unhelpful proposal. In evidence before the Select Committee on Work and Pensions, stakeholders described it as “unpalatable”, and the hon. and learned Member for Holborn and St Pancras (Keir Starmer) wrote in The Guardian recently:

“A rape test for welfare is a chilling way to save money”.

I could not agree more. It just goes to show that at the height of the Tories’ insensitivity, they will quite literally leave no vulnerable group untouched in their scramble to, as they put it, balance the books. The policy will ultimately result in a complete abuse of rape victims’ privacy, leading to potentially serious emotional damage for children should they become aware that they are a child resulting from a rape. The SNP amendments would see the policy abolished, and we urge the Government to remove the two-child policy from tax credit and universal credit to ensure that no victim or child goes through the torment associated with having to justify a third child due to such an horrific crime being inflicted—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. I am sure that the hon. Lady is about to conclude.

Hannah Bardell: If we as parliamentarians are in this place to legislate for those we represent, let us legislate well and with compassion and good conscience. The proposals do not make good legislation. They are wrong for our society and wrong for this generation, so I ask Members to think again and vote with us.

Marcus Fysh (Yeovil) (Con): I spoke the other day about how tax credit reform is part of moving to the higher wage, higher productivity, higher opportunity economy that the Government are building. I have been talking to the Chancellor behind the scenes about welfare reform for many months, and he is listening. Welfare reform is, however, an essential part of the broad package of reform that is helping to return our nation and its people to a sound financial future. The Opposition offer no alternative.

In my professional life before becoming a Member of this House, I was involved in the pensions and savings industry. I know how important saving is in building people’s future and their economic resilience. I believe that reforming national insurance contributions and entitlements is a good way to further incentivise work, deal with the hurdles to advancing at work caused by high marginal tax and benefit withdrawal, and provide scope in the budget for transitional arrangements. That could address the impact of tax credit reform on those with the lowest regular income.

Insurance businesses work by taking premiums from people and investing them over long periods, usually in dividend-paying and other shares that grow substantially

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in value over time to generate returns that are then available to those who need to claim on the scheme. Unfortunately, our national insurance contributions are not invested in the same way but are spent year in, year out on the claims of those using the NHS or the state pension, or are lent out to other Departments for their spending. We should add major savings reform to what we are doing, by reforming national insurance to create a genuine low-cost defined-contribution investment scheme that people can use to supplement their entitlements under the state pension system and that can be made available, under certain circumstances, ahead of retirement age. Credits could be offered to the lowest paid even if they did not meet the threshold for payment of traditional national insurance, to kick off their contributions and get them used to saving. They could also be used to supplement some payments by employers or to provide transitional funds, which could be substantial.

The investment scheme could also be available to others who wanted to make a contribution. I believe that it should be accompanied by tapering the threshold for the payment of traditional national insurance contributions, and the rate, to make the marginal incentives to work more efficient while letting people keep more of their earnings. That could be paid for by tapers on the higher limit and rate of national insurance obligations and entitlements for those on the highest incomes, particularly the entitlement eligibility of very high income retirees. I note that the principle is already established that state pension entitlement cannot pass in its entirety from spouse to spouse, and that entitlement to state pension is not an asset. I believe that that measure could make available several billion pounds.

Tax credit reform is not an option, but is essential in moving to a higher wage economy that will better provide for the future of all of us. Reform of national insurance is a neat solution that is not inconsistent with our manifesto. Nor is reform of the working tax credit system, as part of our overall package of reform.

Tom Brake: I support new clause 1, although it is still not entirely clear to me what the Labour party’s position is on this question. In this place Labour has tabled new clause 1, which is in effect a fatal motion, whereas in the other place Labour would only support transitional protection. I assume that the Labour party is now fully opposed to the tax credit cut.

Owen Smith rose—

Tom Brake: I will not give way, as I have to finish at 2.57 pm.

Tax credit cuts will hit 4,000 families in my constituency and 7,000 children. Collectively, some £4 million will be lost. The cuts will hit hard-working families who are struggling to make ends meet and, perhaps most importantly from the Government’s point of view, the changes will reduce the incentive to work, which I thought the Government favoured. Contrary to what the hon. Member for Sutton and Cheam (Paul Scully) said, I do not think that tax credits are a pat on the head. They are essential in supporting families.

Paul Scully rose—

Tom Brake: I will give way briefly.

Hon. Members: Typical.

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Paul Scully: The right hon. Gentleman said that he was going to talk about this, but does he not agree that when I spoke about a pat on the head I was talking about the original tax credits, which were received by nine out of 10 families, including those with salaries up to £60,000 and not just low income families?

Tom Brake: Indeed, and changes were made to tax credits to take that into account. However, tax credits are now needed to support people who are in low-paid work and will not suddenly see their salaries rise dramatically to compensate them for the loss of those tax credits. The cuts are regressive and should be opposed by the House. I hope that that will happen in the vote that is about to take place on new clause 1.

Damian Hinds: I start by welcoming the hon. Member for Airdrie and Shotts (Neil Gray) to his new position and I wish the hon. Member for Livingston (Hannah Bardell) well in her new role.

These amendments intend to prevent the Government from making future changes to control welfare spending and we cannot support them. The Government’s approach is clear: our mission is to get wages up, taxes down and welfare under control. New clause 1 seeks to revoke the 2015 tax credits regulations and new clause 8 seeks to delay the introduction of the regulations unless and until the Government put in place a scheme of transitional protection for existing tax credit claimants for a minimum of three years. The House will recall that the Government tabled the regulations for a vote on the Floor of the House on 15 September, rather than their being scrutinised upstairs in Committee, to allow wider discussion on the regulations and to allow all hon. Members the opportunity to debate and vote on the issue. This House voted in favour of the regulations.

The House further discussed the regulations in the Opposition day debate on Tuesday 20 October and again voted in favour of them. However, as the House will also be aware, last night unelected Labour and Liberal Democrat Lords voted against tax credit regulations, raising constitutional issues that the Prime Minister will address.

Dr Eilidh Whiteford (Banff and Buchan) (SNP): Is the constitutional issue that politicians should not lie to people in their manifestos?

Damian Hinds: I can only guess that the hon. Lady is making a strange reference to the Conservative manifesto. We were very clear in our manifesto that we are still only halfway through the job of getting the deficit down to zero. It stands at £3,300 for every household in the United Kingdom and we said very clearly during the election campaign that, as part of that, we needed to make £12 billion of welfare savings. What was not in our manifesto was the national living wage.

The Chancellor has said that he has listened to concerns from colleagues in this House and will come forward with proposals in the autumn statement to achieve the goal of reforming tax credits, saving the money needed to secure our economy while helping with the transition through the changes. I do not believe that the new clauses are therefore appropriate for inclusion in the Bill.

I now turn to amendments 49 to 52, which intend to prevent the freeze for four years of working age benefits, child benefit and tax credits. The freeze of the main

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rates of the majority of working age benefits, child benefit and tax credits will, in total, contribute some £3.5 billion of savings by 2019-20, and will help us to achieve our objective of deficit elimination. It will put welfare on a fairer and more sustainable footing so that we can continue our investment in our national health service and our schools, even as we get the national finances back into balance.

As my hon. Friend the Member for Fareham (Suella Fernandes) pointed out, there is an imbalance in a system that has seen a rise in average earnings of 12% since 2008, and in working age benefits, such as jobseekers’ allowance, of 21%. The individual element of child tax credit has risen by 33%. The freeze will help reverse that trend, helping earnings to grow faster than benefits, which will strengthen the incentives to work, and deliver the savings necessary to bring down the overall welfare bill. None the less, the Government will continue to offer protections to the most vulnerable. We know the best way to support people is to help them move closer to the labour market, but of course we realise that that is not possible for everyone. That is why we have made many important exemptions to the four-year freeze. We have exempted pensioner-related benefits, personal independence payment, disability allowance and attendance allowance relating to the additional cost of disability as well as statutory payments, carers’ allowance, the support group component of the employment and support allowance and disability elements in tax credits.

Simon Hoare (North Dorset) (Con): The list that the Minister has just given to the House underscores entirely the compassionate, one nation Conservative approach that we are taking to these issues in sharp contradistinction to the Opposition parties, which seek to lecture but which have no remedy.

Damian Hinds: My hon. Friend is right, and it is right that those exemptions are made.

Neil Coyle: Will the Minister be absolutely clear that the half a million disabled people receiving ESA in the work-related activity group will not be protected under the measures that he has just outlined?

Damian Hinds: People who are in the work-related activity group are, by definition, people who are to be helped to move closer to the labour market. What I have said in the list of exemptions that I have read out is that the amounts that are specific to the additional costs of disability are protected, which is something that we discussed in Committee.

Ian Lavery rose—

Damian Hinds: If the hon. Gentleman will forgive me, I will not give way, because it is 3.2 pm and I need to stop by 3.5 pm.

Amendments 53 and 55 seek to remove clauses 11 and 12 from the Bill, and amendment 54 seeks to retain the payment of the family element of child tax credit for all persons who are responsible for a child or a qualifying young person born before 6 April 2022.

The Government want to ensure that the system is fair both to those who pay for it and to those who benefit from it. Currently, the benefit system adjusts

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automatically to family size, but many families who are only in receipt of income from work would not see their budgets flex in the same way when they have more children. The Government want to encourage those families who are in receipt of benefits to make the same financial choice about the number of children they have as those families who are supporting themselves solely through income from work.

3 pm

Mark Durkan (Foyle) (SDLP) rose—

Damian Hinds: If the hon. Gentleman will forgive me, I will not give way.

That is why the Government have proposed changes to child tax credit and to the child element of universal credit, as set out in clauses 11 and 12 respectively. The Government will look at the important issues around exemptions through secondary legislation, which is a better way of dealing with these matters. Indeed, we discussed when that could be done in Committee with proper reflection and working together with stakeholders and experts.

I also wish to make it clear that the changes will not affect families already receiving the child and family elements before 6 April 2017 and who remain on benefit after that date, including such families who subsequently leave universal credit for a period of less than six months, and families who make a new claim to universal credit and who have been in receipt of tax credits for more than two children or qualifying young persons in the past six months. In addition, the Government will continue to support larger families through child benefit, which is paid for all qualifying children in a household, and paid at a higher rate for the first child.

In conclusion, the amendments oppose our clear mandate to find £12 billion of welfare savings and to restore fairness to the system by ensuring that work always pays. In making these changes, we have balanced the vital task of bringing spending under control while ensuring that the support is there for those who need it most. I therefore urge hon. Members to withdraw their new clause.

Question put, That the clause be read a Second time.

The House divided:

Ayes 281, Noes 320.

Division No. 94]

[

3.

4 pm

AYES

Abbott, Ms Diane

Abrahams, Debbie

Ahmed-Sheikh, Ms Tasmina

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Anderson, Mr David

Arkless, Richard

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bardell, Hannah

Barron, rh Kevin

Beckett, rh Margaret

Betts, Mr Clive

Black, Mhairi

Blackford, Ian

Blackman, Kirsty

Blackman-Woods, Dr Roberta

Blenkinsop, Tom

Blomfield, Paul

Boswell, Philip

Bradshaw, rh Mr Ben

Brake, rh Tom

Brennan, Kevin

Brock, Deidre

Brown, Alan

Brown, Lyn

Brown, rh Mr Nicholas

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Burgon, Richard

Burnham, rh Andy

Butler, Dawn

Byrne, rh Liam

Cadbury, Ruth

Cameron, Dr Lisa

Campbell, rh Mr Alan

Campbell, Mr Ronnie

Carmichael, rh Mr Alistair

Champion, Sarah

Chapman, Jenny

Cherry, Joanna

Clegg, rh Mr Nick

Clwyd, rh Ann

Coaker, Vernon

Coffey, Ann

Cooper, Julie

Cooper, rh Yvette

Corbyn, Jeremy

Cowan, Ronnie

Cox, Jo

Coyle, Neil

Crausby, Mr David

Crawley, Angela

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cummins, Judith

Cunningham, Alex

Cunningham, Mr Jim

Dakin, Nic

David, Wayne

Davies, Geraint

Day, Martyn

De Piero, Gloria

Docherty, Martin John

Dodds, rh Mr Nigel

Donaldson, rh Mr Jeffrey M.

Donaldson, Stuart Blair

Doughty, Stephen

Dowd, Jim

Dowd, Peter

Dromey, Jack

Dugher, Michael

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Elliott, Tom

Ellman, Mrs Louise

Esterson, Bill

Evans, Chris

Fellows, Marion

Ferrier, Margaret

Fitzpatrick, Jim

Flello, Robert

Fletcher, Colleen

Flint, rh Caroline

Fovargue, Yvonne

Gapes, Mike

Gardiner, Barry

Gethins, Stephen

Gibson, Patricia

Glass, Pat

Glindon, Mary

Godsiff, Mr Roger

Goodman, Helen

Grady, Patrick

Grant, Peter

Gray, Neil

Green, Kate

Greenwood, Lilian

Greenwood, Margaret

Griffith, Nia

Gwynne, Andrew

Haigh, Louise

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harpham, Harry

Harris, Carolyn

Hayes, Helen

Hayman, Sue

Healey, rh John

Hendrick, Mr Mark

Hendry, Drew

Hepburn, Mr Stephen

Hillier, Meg

Hodge, rh Dame Margaret

Hoey, Kate

Hollern, Kate

Hopkins, Kelvin

Hosie, Stewart

Howarth, rh Mr George

Hunt, Tristram

Huq, Dr Rupa

Hussain, Imran

Irranca-Davies, Huw

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Kane, Mike

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Kerevan, George

Kerr, Calum

Kinahan, Danny

Kinnock, Stephen

Kyle, Peter

Lamb, rh Norman

Lammy, rh Mr David

Lavery, Ian

Law, Chris

Leslie, Chris

Lewell-Buck, Mrs Emma

Lewis, Clive

Lewis, Mr Ivan

Long Bailey, Rebecca

Lucas, Caroline

Lucas, Ian C.

Lynch, Holly

MacNeil, Mr Angus Brendan

Mactaggart, rh Fiona

Madders, Justin

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marris, Rob

Marsden, Mr Gordon

Maskell, Rachael

Matheson, Christian

Mc Nally, John

McCabe, Steve

McCaig, Callum

McCarthy, Kerry

McDonagh, Siobhain

McDonald, Andy

McDonald, Stewart Malcolm

McDonald, Stuart C.

McDonnell, John

McGarry, Natalie

McGinn, Conor

McInnes, Liz

McKinnell, Catherine

McLaughlin, Anne

Meale, Sir Alan

Mearns, Ian

Miliband, rh Edward

Monaghan, Carol

Monaghan, Dr Paul

Morden, Jessica

Morris, Grahame M.

Mullin, Roger

Murray, Ian

Nandy, Lisa

Newlands, Gavin

Nicolson, John

O'Hara, Brendan

Onn, Melanie

Onwurah, Chi

Osamor, Kate

Oswald, Kirsten

Paisley, Ian

Paterson, Steven

Pearce, Teresa

Pennycook, Matthew

Perkins, Toby

Phillips, Jess

Phillipson, Bridget

Pound, Stephen

Powell, Lucy

Pugh, John

Qureshi, Yasmin

Reed, Mr Jamie

Reed, Mr Steve

Rees, Christina

Reynolds, Emma

Reynolds, Jonathan

Rimmer, Marie

Ritchie, Ms Margaret

Robertson, rh Angus

Robinson, Gavin

Robinson, Mr Geoffrey

Rotheram, Steve

Ryan, rh Joan

Salmond, rh Alex

Saville Roberts, Liz

Shah, Naz

Shannon, Jim

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheppard, Tommy

Sherriff, Paula

Shuker, Mr Gavin

Siddiq, Tulip

Simpson, David

Skinner, Mr Dennis

Slaughter, Andy

Smeeth, Ruth

Smith, rh Mr Andrew

Smith, Angela

Smith, Cat

Smith, Jeff

Smith, Nick

Smith, Owen

Smyth, Karin

Starmer, Keir

Stephens, Chris

Stevens, Jo

Streeting, Wes

Stringer, Graham

Tami, Mark

Thewliss, Alison

Thomas, Mr Gareth

Thomas-Symonds, Nick

Thompson, Owen

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Turley, Anna

Turner, Karl

Twigg, Derek

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Watson, Mr Tom

Weir, Mike

West, Catherine

Whiteford, Dr Eilidh

Whitehead, Dr Alan

Whitford, Dr Philippa

Williams, Hywel

Williams, Mr Mark

Wilson, Corri

Wilson, Phil

Wilson, Sammy

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Woodcock, John

Wright, Mr Iain

Zeichner, Daniel

Tellers for the Ayes:

Vicky Foxcroft

and

Angela Rayner

NOES

Adams, Nigel

Afriyie, Adam

Aldous, Peter

Allan, Lucy

Allen, Heidi

Amess, Sir David

Andrew, Stuart

Ansell, Caroline

Argar, Edward

Atkins, Victoria

Bacon, Mr Richard

Baker, Mr Steve

Baldwin, Harriett

Barclay, Stephen

Baron, Mr John

Barwell, Gavin

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Berry, James

Bingham, Andrew

Blackman, Bob

Blackwood, Nicola

Boles, Nick

Bone, Mr Peter

Borwick, Victoria

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brokenshire, rh James

Bruce, Fiona

Buckland, Robert

Burns, Conor

Burns, rh Sir Simon

Burrowes, Mr David

Burt, rh Alistair

Cairns, Alun

Cameron, rh Mr David

Carmichael, Neil

Carswell, Mr Douglas

Cartlidge, James

Cash, Sir William

Caulfield, Maria

Chalk, Alex

Chishti, Rehman

Chope, Mr Christopher

Churchill, Jo

Clark, rh Greg

Clarke, rh Mr Kenneth

Cleverly, James

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Costa, Alberto

Cox, Mr Geoffrey

Crabb, rh Stephen

Crouch, Tracey

Davies, Byron

Davies, Chris

Davies, David T. C.

Davies, Glyn

Davies, Dr James

Davies, Mims

Davies, Philip

Dinenage, Caroline

Djanogly, Mr Jonathan

Donelan, Michelle

Dorries, Nadine

Double, Steve

Dowden, Oliver

Doyle-Price, Jackie

Drax, Richard

Drummond, Mrs Flick

Duddridge, James

Duncan, rh Sir Alan

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Mr Nigel

Evennett, rh Mr David

Fabricant, Michael

Fallon, rh Michael

Fernandes, Suella

Field, rh Mark

Foster, Kevin

Fox, rh Dr Liam

Francois, rh Mr Mark

Frazer, Lucy

Freeman, George

Freer, Mike

Fuller, Richard

Fysh, Marcus

Gale, Sir Roger

Garnier, rh Sir Edward

Garnier, Mark

Gauke, Mr David

Ghani, Nusrat

Gibb, Mr Nick

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, Chris

Green, rh Damian

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Halfon, rh Robert

Hall, Luke

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, rh Matthew

Hands, rh Greg

Harper, rh Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Haselhurst, rh Sir Alan

Hayes, rh Mr John

Heald, Sir Oliver

Heappey, James

Heaton-Harris, Chris

Heaton-Jones, Peter

Henderson, Gordon

Herbert, rh Nick

Hinds, Damian

Hoare, Simon

Hollingbery, George

Hollinrake, Kevin

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Howarth, Sir Gerald

Howell, John

Howlett, Ben

Huddleston, Nigel

Hunt, rh Mr Jeremy

Hurd, Mr Nick

Jackson, Mr Stewart

James, Margot

Javid, rh Sajid

Jayawardena, Mr Ranil

Jenkin, Mr Bernard

Jenkyns, Andrea

Jenrick, Robert

Johnson, Boris

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kennedy, Seema

Knight, rh Sir Greg

Knight, Julian

Kwarteng, Kwasi

Lancaster, Mark

Latham, Pauline

Leadsom, Andrea

Lee, Dr Phillip

Lefroy, Jeremy

Leigh, Sir Edward

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Liddell-Grainger, Mr Ian

Lidington, rh Mr David

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Lumley, Karen

Mackinlay, Craig

Mackintosh, David

Main, Mrs Anne

Mak, Mr Alan

Malthouse, Kit

Mann, Scott

Mathias, Dr Tania

May, rh Mrs Theresa

Maynard, Paul

McCartney, Jason

McCartney, Karl

McLoughlin, rh Mr Patrick

Menzies, Mark

Mercer, Johnny

Merriman, Huw

Metcalfe, Stephen

Miller, rh Mrs Maria

Milling, Amanda

Mills, Nigel

Milton, rh Anne

Mitchell, rh Mr Andrew

Mordaunt, Penny

Morgan, rh Nicky

Morris, Anne Marie

Morris, David

Morris, James

Morton, Wendy

Mowat, David

Mundell, rh David

Murray, Mrs Sheryll

Murrison, Dr Andrew

Neill, Robert

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

Offord, Dr Matthew

Opperman, Guy

Osborne, rh Mr George

Parish, Neil

Patel, rh Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penning, rh Mike

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Philp, Chris

Pickles, rh Sir Eric

Pincher, Christopher

Poulter, Dr Daniel

Pow, Rebecca

Prentis, Victoria

Prisk, Mr Mark

Pritchard, Mark

Pursglove, Tom

Quin, Jeremy

Quince, Will

Raab, Mr Dominic

Redwood, rh John

Rees-Mogg, Mr Jacob

Robertson, Mr Laurence

Robinson, Mary

Rosindell, Andrew

Rudd, rh Amber

Rutley, David

Sandbach, Antoinette

Scully, Paul

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Simpson, rh Mr Keith

Skidmore, Chris

Smith, Chloe

Smith, Henry

Smith, Julian

Smith, Royston

Soames, rh Sir Nicholas

Solloway, Amanda

Soubry, rh Anna

Spelman, rh Mrs Caroline

Spencer, Mark

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Stride, Mel

Stuart, Graham

Sturdy, Julian

Sunak, Rishi

Swayne, rh Mr Desmond

Swire, rh Mr Hugo

Syms, Mr Robert

Thomas, Derek

Throup, Maggie

Timpson, Edward

Tolhurst, Kelly

Tomlinson, Justin

Tomlinson, Michael

Tracey, Craig

Tredinnick, David

Trevelyan, Mrs Anne-Marie

Truss, rh Elizabeth

Tugendhat, Tom

Turner, Mr Andrew

Tyrie, rh Mr Andrew

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Wallace, Mr Ben

Warburton, David

Warman, Matt

Watkinson, Dame Angela

Wharton, James

Whately, Helen

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, rh Mr John

Wiggin, Bill

Williams, Craig

Williamson, rh Gavin

Wilson, Mr Rob

Wollaston, Dr Sarah

Wood, Mike

Wragg, William

Wright, rh Jeremy

Zahawi, Nadhim

Tellers for the Noes:

Sarah Newton

and

Simon Kirby

Question accordingly negatived.

27 Oct 2015 : Column 240

27 Oct 2015 : Column 241

27 Oct 2015 : Column 242

27 Oct 2015 : Column 243

27 Oct 2015 : Column 244

More than two hours having elapsed since the commencement of proceedings on consideration, the proceedings were interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Questions necessary for the Disposal of business at that time (Standing Order No. 83E).

New Clause 8

Tax credit reforms

“The measures in this Bill and (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015 relating to the award of tax credits and the relevant entitlement within Universal Credit shall not take effect until the Secretary of State has implemented a scheme for full transitional protection for a minimum of three years for all families and individuals currently receiving tax credits before 5 April 2016, such transitional protection to be renewable after three years with parliamentary approval.”—(Neil Gray.)

Brought up.

Question put, That the clause be added to the Bill:—

The House divided:

Ayes 285, Noes 319.

Division No. 95]

[

3.18 pm

AYES

Abbott, Ms Diane

Abrahams, Debbie

Ahmed-Sheikh, Ms Tasmina

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Anderson, Mr David

Arkless, Richard

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bardell, Hannah

Barron, rh Kevin

Beckett, rh Margaret

Betts, Mr Clive

Black, Mhairi

Blackford, Ian

Blackman, Kirsty

Blackman-Woods, Dr Roberta

Blenkinsop, Tom

Blomfield, Paul

Boswell, Philip

Bradshaw, rh Mr Ben

Brake, rh Tom

Brennan, Kevin

Brock, Deidre

Brown, Alan

Brown, Lyn

Brown, rh Mr Nicholas

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Burgon, Richard

Burnham, rh Andy

Butler, Dawn

Byrne, rh Liam

Cadbury, Ruth

Cameron, Dr Lisa

Campbell, rh Mr Alan

Campbell, Mr Ronnie

Carmichael, rh Mr Alistair

Champion, Sarah

Chapman, Douglas

Chapman, Jenny

Cherry, Joanna

Clegg, rh Mr Nick

Clwyd, rh Ann

Coaker, Vernon

Coffey, Ann

Cooper, Julie

Cooper, rh Yvette

Corbyn, Jeremy

Cowan, Ronnie

Cox, Jo

Coyle, Neil

Crausby, Mr David

Crawley, Angela

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cummins, Judith

Cunningham, Alex

Cunningham, Mr Jim

Dakin, Nic

David, Wayne

Davies, Geraint

Day, Martyn

De Piero, Gloria

Docherty, Martin John

Dodds, rh Mr Nigel

Donaldson, rh Mr Jeffrey M.

Donaldson, Stuart Blair

Doughty, Stephen

Dowd, Jim

Dowd, Peter

Dugher, Michael

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Elliott, Tom

Ellman, Mrs Louise

Esterson, Bill

Evans, Chris

Ferrier, Margaret

Fitzpatrick, Jim

Flello, Robert

Fletcher, Colleen

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Foxcroft, Vicky

Gapes, Mike

Gardiner, Barry

Gethins, Stephen

Gibson, Patricia

Glass, Pat

Glindon, Mary

Godsiff, Mr Roger

Goodman, Helen

Grady, Patrick

Grant, Peter

Gray, Neil

Green, Kate

Greenwood, Lilian

Greenwood, Margaret

Griffith, Nia

Gwynne, Andrew

Haigh, Louise

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harpham, Harry

Harris, Carolyn

Hayes, Helen

Hayman, Sue

Healey, rh John

Hendrick, Mr Mark

Hendry, Drew

Hepburn, Mr Stephen

Hillier, Meg

Hodge, rh Dame Margaret

Hodgson, Mrs Sharon

Hoey, Kate

Hollern, Kate

Hopkins, Kelvin

Hosie, Stewart

Howarth, rh Mr George

Hunt, Tristram

Huq, Dr Rupa

Hussain, Imran

Irranca-Davies, Huw

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Kane, Mike

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Kerevan, George

Kerr, Calum

Kinahan, Danny

Kinnock, Stephen

Kyle, Peter

Lamb, rh Norman

Lammy, rh Mr David

Lavery, Ian

Law, Chris

Leslie, Chris

Lewell-Buck, Mrs Emma

Lewis, Clive

Lewis, Mr Ivan

Long Bailey, Rebecca

Lucas, Caroline

Lucas, Ian C.

Lynch, Holly

MacNeil, Mr Angus Brendan

Mactaggart, rh Fiona

Madders, Justin

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marris, Rob

Marsden, Mr Gordon

Maskell, Rachael

Matheson, Christian

Mc Nally, John

McCabe, Steve

McCaig, Callum

McCarthy, Kerry

McDonagh, Siobhain

McDonald, Andy

McDonald, Stewart Malcolm

McDonald, Stuart C.

McDonnell, John

McGarry, Natalie

McGinn, Conor

McGovern, Alison

McInnes, Liz

McKinnell, Catherine

McLaughlin, Anne

Meale, Sir Alan

Mearns, Ian

Miliband, rh Edward

Monaghan, Carol

Monaghan, Dr Paul

Morden, Jessica

Morris, Grahame M.

Mullin, Roger

Murray, Ian

Nandy, Lisa

Newlands, Gavin

Nicolson, John

O'Hara, Brendan

Onn, Melanie

Onwurah, Chi

Osamor, Kate

Oswald, Kirsten

Paisley, Ian

Paterson, Steven

Pearce, Teresa

Pennycook, Matthew

Perkins, Toby

Phillips, Jess

Phillipson, Bridget

Pound, Stephen

Powell, Lucy

Pugh, John

Qureshi, Yasmin

Rayner, Angela

Reed, Mr Jamie

Reed, Mr Steve

Rees, Christina

Reynolds, Emma

Reynolds, Jonathan

Rimmer, Marie

Ritchie, Ms Margaret

Robertson, rh Angus

Robinson, Gavin

Robinson, Mr Geoffrey

Rotheram, Steve

Ryan, rh Joan

Salmond, rh Alex

Saville Roberts, Liz

Shah, Naz

Shannon, Jim

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheppard, Tommy

Sherriff, Paula

Shuker, Mr Gavin

Siddiq, Tulip

Simpson, David

Skinner, Mr Dennis

Slaughter, Andy

Smeeth, Ruth

Smith, rh Mr Andrew

Smith, Angela

Smith, Cat

Smith, Jeff

Smith, Nick

Smith, Owen

Smyth, Karin

Starmer, Keir

Stephens, Chris

Stevens, Jo

Streeting, Wes

Stringer, Graham

Tami, Mark

Thewliss, Alison

Thomas, Mr Gareth

Thomas-Symonds, Nick

Thomson, Michelle

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Turley, Anna

Turner, Karl

Twigg, Derek

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Watson, Mr Tom

Weir, Mike

West, Catherine

Whiteford, Dr Eilidh

Whitehead, Dr Alan

Whitford, Dr Philippa

Williams, Hywel

Williams, Mr Mark

Wilson, Corri

Wilson, Phil

Wilson, Sammy

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Woodcock, John

Wright, Mr Iain

Zeichner, Daniel

Tellers for the Ayes:

Marion Fellows

and

Owen Thompson

NOES

Adams, Nigel

Afriyie, Adam

Aldous, Peter

Allan, Lucy

Allen, Heidi

Amess, Sir David

Andrew, Stuart

Ansell, Caroline

Argar, Edward

Atkins, Victoria

Bacon, Mr Richard

Baker, Mr Steve

Baldwin, Harriett

Barclay, Stephen

Baron, Mr John

Barwell, Gavin

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Berry, James

Bingham, Andrew

Blackman, Bob

Blackwood, Nicola

Boles, Nick

Bone, Mr Peter

Borwick, Victoria

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brokenshire, rh James

Bruce, Fiona

Buckland, Robert

Burns, Conor

Burns, rh Sir Simon

Burrowes, Mr David

Burt, rh Alistair

Cairns, Alun

Cameron, rh Mr David

Carmichael, Neil

Cartlidge, James

Cash, Sir William

Caulfield, Maria

Chalk, Alex

Chishti, Rehman

Chope, Mr Christopher

Churchill, Jo

Clark, rh Greg

Clarke, rh Mr Kenneth

Cleverly, James

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Costa, Alberto

Cox, Mr Geoffrey

Crabb, rh Stephen

Crouch, Tracey

Davies, Byron

Davies, Chris

Davies, David T. C.

Davies, Glyn

Davies, Dr James

Davies, Mims

Davies, Philip

Dinenage, Caroline

Djanogly, Mr Jonathan

Donelan, Michelle

Dorries, Nadine

Double, Steve

Dowden, Oliver

Doyle-Price, Jackie

Drax, Richard

Drummond, Mrs Flick

Duddridge, James

Duncan, rh Sir Alan

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Mr Nigel

Evennett, rh Mr David

Fabricant, Michael

Fallon, rh Michael

Fernandes, Suella

Field, rh Mark

Foster, Kevin

Fox, rh Dr Liam

Francois, rh Mr Mark

Frazer, Lucy

Freeman, George

Freer, Mike

Fuller, Richard

Fysh, Marcus

Gale, Sir Roger

Garnier, rh Sir Edward

Garnier, Mark

Gauke, Mr David

Ghani, Nusrat

Gibb, Mr Nick

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, Chris

Green, rh Damian

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, rh Robert

Hall, Luke

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, rh Matthew

Hands, rh Greg

Harper, rh Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Haselhurst, rh Sir Alan

Hayes, rh Mr John

Heald, Sir Oliver

Heappey, James

Heaton-Harris, Chris

Heaton-Jones, Peter

Henderson, Gordon

Herbert, rh Nick

Hinds, Damian

Hoare, Simon

Hollingbery, George

Hollinrake, Kevin

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Howarth, Sir Gerald

Howell, John

Howlett, Ben

Huddleston, Nigel

Hunt, rh Mr Jeremy

Hurd, Mr Nick

Jackson, Mr Stewart

James, Margot

Javid, rh Sajid

Jayawardena, Mr Ranil

Jenkin, Mr Bernard

Jenkyns, Andrea

Jenrick, Robert

Johnson, Boris

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kennedy, Seema

Knight, rh Sir Greg

Knight, Julian

Kwarteng, Kwasi

Lancaster, Mark

Latham, Pauline

Leadsom, Andrea

Lee, Dr Phillip

Leigh, Sir Edward

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Liddell-Grainger, Mr Ian

Lidington, rh Mr David

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Lumley, Karen

Mackinlay, Craig

Mackintosh, David

Main, Mrs Anne

Mak, Mr Alan

Malthouse, Kit

Mann, Scott

Mathias, Dr Tania

May, rh Mrs Theresa

Maynard, Paul

McCartney, Jason

McCartney, Karl

McLoughlin, rh Mr Patrick

Menzies, Mark

Mercer, Johnny

Merriman, Huw

Metcalfe, Stephen

Miller, rh Mrs Maria

Milling, Amanda

Mills, Nigel

Milton, rh Anne

Mitchell, rh Mr Andrew

Mordaunt, Penny

Morgan, rh Nicky

Morris, Anne Marie

Morris, David

Morris, James

Morton, Wendy

Mowat, David

Mundell, rh David

Murray, Mrs Sheryll

Murrison, Dr Andrew

Neill, Robert

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

Offord, Dr Matthew

Opperman, Guy

Osborne, rh Mr George

Parish, Neil

Patel, rh Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penning, rh Mike

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Philp, Chris

Pickles, rh Sir Eric

Pincher, Christopher

Poulter, Dr Daniel

Pow, Rebecca

Prentis, Victoria

Prisk, Mr Mark

Pritchard, Mark

Pursglove, Tom

Quin, Jeremy

Quince, Will

Raab, Mr Dominic

Redwood, rh John

Rees-Mogg, Mr Jacob

Robertson, Mr Laurence

Robinson, Mary

Rosindell, Andrew

Rudd, rh Amber

Rutley, David

Sandbach, Antoinette

Scully, Paul

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Simpson, rh Mr Keith

Skidmore, Chris

Smith, Chloe

Smith, Henry

Smith, Julian

Smith, Royston

Soames, rh Sir Nicholas

Solloway, Amanda

Soubry, rh Anna

Spelman, rh Mrs Caroline

Spencer, Mark

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Stride, Mel

Stuart, Graham

Sturdy, Julian

Sunak, Rishi

Swayne, rh Mr Desmond

Swire, rh Mr Hugo

Syms, Mr Robert

Thomas, Derek

Throup, Maggie

Timpson, Edward

Tolhurst, Kelly

Tomlinson, Justin

Tomlinson, Michael

Tracey, Craig

Tredinnick, David

Trevelyan, Mrs Anne-Marie

Truss, rh Elizabeth

Tugendhat, Tom

Turner, Mr Andrew

Tyrie, rh Mr Andrew

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Wallace, Mr Ben

Warburton, David

Warman, Matt

Watkinson, Dame Angela

Wharton, James

Whately, Helen

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, rh Mr John

Wiggin, Bill

Williams, Craig

Williamson, rh Gavin

Wilson, Mr Rob

Wollaston, Dr Sarah

Wood, Mike

Wragg, William

Wright, rh Jeremy

Zahawi, Nadhim

Tellers for the Noes:

Simon Kirby

and

Sarah Newton

Question accordingly negatived.

27 Oct 2015 : Column 245

27 Oct 2015 : Column 246

27 Oct 2015 : Column 247

27 Oct 2015 : Column 248

New Clause 2

Assessment of tax credit and benefit reforms on working families

The measures in this Bill shall not take effect until the Secretary of State has laid before both Houses of Parliament an assessment of the cumulative impact and an equalities impact of tax credit and benefit reforms announced in Summer Budget 2015 on working families.”—(Debbie Abrahams.)

Brought up, and read the First time.

27 Oct 2015 : Column 249

3.30 pm

Debbie Abrahams (Oldham East and Saddleworth) (Lab): I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Natascha Engel): With this it will be convenient to discuss the following:

New clause 3—Personal independence payment: timing of payment—

‘(1) Schedule 10 of the Welfare Reform Act 2012 is amended as follows.

(2) In paragraph 1(1), at start insert “Subject to paragraph ( ),”

(3) At end of paragraph 1(1), insert the following new paragraph—

“( ) Where a person in receipt of disability living allowance meets the requirements of section 82 of the 2012 Act his or her entitlement to disability living allowance shall terminate immediately and entitlement to personal independence payment shall commence on the same day.”’.

This New Clause aims to enable claimants of DLA who are transferred to PIP due to terminal illness to receive their first PIP payment immediately after being transferred. Currently claimants must wait four weeks from their final DLA payment to be made and then another four weeks to receive their first PIP payment.

New clause 4—Review of application of sanctions—

‘(1) The Secretary of State must before the financial year ending 31 March 2016 provide for a full and independent review of the sanctions regimes attached to working-age benefits, including but not limited to Jobseekers Allowance, Employment Support Allowance and Income Support, to determine whether they are effective and proportionate for meeting the Government’s objectives.

(2) The terms of reference for the review must include consideration of—

(a) the application of sanctions to lone parents with dependent children;

(b) the application of sanctions to claimants who are disabled;

(c) the effectiveness of sanctions in moving claimants into sustained work; and

(d) any other matters which the Secretary of State considers relevant.”

To provide for a full, independent review of the operation of the sanctions regimes attached to out of-work benefits, to determine the effectiveness of sanctions in moving claimants into sustained work as well as any adverse impacts on particular groups.

New clause 5—Report on impact of benefit cap reductions—

‘(1) The Secretary of State must publish and lay before Parliament before the end of the financial year ending with 31 March 2017 a report on the impact of the benefit cap reductions introduced by this Bill.

(2) The report must include an assessment of the impact on each of the measures of child poverty defined in the Child Poverty Act 2010.”

This new clause requires the Secretary of State to review impact of lower benefit cap after 12months.

New clause 7—Changes to the benefit cap—

Changes to the Benefit Cap shall not be made until the Secretary of State has carried out an assessment of the impact on its effect on poverty and laid a report before the House of Commons, The Scottish Parliament, The Northern Ireland Assembly and the National Assembly for Wales.”

New clause 9—Universal credit and carers—

Claimants in receipt of universal credit who are responsible carers for children are not subject to work focused interviews or work preparation requirements until their youngest child starts school.”

27 Oct 2015 : Column 250

New clause 10—Changes to age of eligible claimants of housing benefit—

The Social Security Contributions and Benefits Act 1992 is amended as follows. After section 130(1) insert—

‘(1A) The Secretary of State shall not make provision about eligibility for housing benefit in respect of the age of a claimant except by primary legislation.”.”

New clause 11—Entitlement to housing costs element of universal credit for 18-21 year olds—

‘(1) Entitlement to the housing cost element of Universal Credit shall not be restricted for those 18 to 21 year olds who fall into the following categories—

(a) those who have previously been in work;

(b) a person who lives independently;

(c) those with a disability or mental health problem receiving Employment Support Allowance or Income Support;

(d) those with dependent children;

(e) pregnant women;

(f) those who are owed a rehousing duty under—

(i) section 193 of the Housing Act 1996;

(ii) section 9 of the Homelessness etc. (Scotland) Act 2003;

(iii) section 73 of the Housing (Wales) Act 2014;

(g) those who are homeless or at risk of homelessness who are being assisted by local authority housing teams;

(h) those who are living in statutory or voluntary sector homelessness accommodation;

(i) those who have formerly been homeless and have been supported by voluntary or statutory agencies into accommodation;

(j) those who have formerly been homeless between the ages of 16 and 21;

(k) a person without family or whom social services have found that a home environment is not suitable for them to live in; care leavers and

(l) those leaving custody.

(2) Within three months of section [Entitlement to housing costs element of universal credit for 18-21 year olds] of this Act coming into force, the Secretary of State must, by regulation, provide definitions of—

“a person who lives independently”;

“risk of homelessness” and

“a person without family”.”

New clause 12—Review of application of sanctions—

‘(1) The Secretary of State must on commencement of this bill, commence a full and independent review of the sanctions regimes attached to working-age benefits, including but not limited to Jobseekers Allowance, Employment Support Allowance and Income Support , to measure the impact on—

(a) to lone parents with dependent children;

(b) claimants who are disabled;

(c) moving claimants into continuous work;

(d) homeless;

(e) protected characteristics;

(f) long term health conditions;

(g) claimants with mental health disorders and

(h) any other matters which the Secretary of State considers relevant.”

Amendment 35, in clause 6, page 8, line 39, leave out subsection (2)

Amendment 36, in clause 7, page 9, line 2, leave out “£23,000 or £15,410” and insert “£26,000 or £18,200”

27 Oct 2015 : Column 251

Amendment 37, page 9, line 3, leave out “£20,000 or £13,400” and insert “£26,000 or £18,200”

Amendment 38, page 9, line 15, leave out paragraph (a)

Amendment 39, page 9, line 17, leave out paragraph (b)

Amendment 40, page 9, line 19, leave out paragraph (c)

Amendment 41, page 9, line 21, leave out paragraph (d)

Amendment 42, page 9, line 27, leave out paragraph (f)

Amendment 43, page 9, line 39, leave out paragraph (k)

Amendment 44, page 9, line 41, leave out paragraph (l)

Amendment 45, page 9, line 44, leave out paragraph (n)

Amendment 46, page 9, line 46, leave out paragraph (o)

Amendment 47, page 9, line 48, leave out paragraph (p)

Amendment 48, page 10, line 1, leave out subsection (6)

Amendment 56, page 14, line 15, leave out Clause 13

Amendment 29, in clause 13, page 14, line 26, at end insert—

‘(3A) The Secretary of State may not lay an order under section 31 to bring the provisions of subsections (2) and (3) into force until he has laid before both Houses of Parliament a report giving his estimate of the impact of those provisions on persons who would otherwise be entitled to start claiming the work-related activity component of employment and support allowance.

(3B) No order bringing subsections (2) and (3) into force shall be made unless a draft of the order has been laid before and approved by a resolution of both Houses of Parliament”.

Amendment 31, page 14, line 29, at end insert—

‘(5A) The Secretary of State must make provision for additional personalised and specialist employment support in connection with the changes made by subsections (1) to (3).

(5B) The Secretary of State must issue guidance on the following—

(a) the forms of personalised and specialist employment support;

(b) the means by which a diverse market of suppliers for personalised and specialist employment support can be developed in local areas; and

(c) information for local authorities seeking to improve local disability employment rates.”

Amendment 20, page 14, line 39, leave out Clause 14

Amendment 57, page 14, line 39, leave out Clause 14

Amendment 58, page 15, line 1, leave out Clause 15

Amendment 59, in clause 15, page 15, line 4, leave out paragraph (a)

Amendment 60, page 15, line 4, leave out paragraphs (a) to (c) and insert—

“(a) in section 19(2)(c) for the words “under the age of 1” substitute “who has not yet started primary school””

Amendment 61, page 15, line 9, after “2,”, insert “3 or 4”

Amendment 62, page 15, line 10, leave out paragraph (c)

Amendment 63, page 15, line 13, leave out paragraph (a)

Amendment 64, page 15, line 13, leave out paragraphs (a) and (b) and insert—

“(a) in regulation 91 (claimants subject to work-focused interview requirement only), for the word “3” substitute “5 or when the child starts primary school”;

(b) in regulation 91A (claimants subject to work preparation requirement) for the words “3 or 4” substitute “who has not yet started primary school”;”

Amendment 65, page 15, line 15, leave out paragraph (b)

27 Oct 2015 : Column 252

Debbie Abrahams: It is a pleasure to be here on my first occasion at the Dispatch Box. On Second Reading I conveyed my concerns about the Bill, and after a few weeks in Committee I have not changed my opinion. I said then that I thought this is a wicked Bill, and I still feel that.

Amendments 56 and 20 seek to leave out clauses 13 and 14 so as to prevent cuts to the work-related activity component of employment and support allowance, and to the limited capability for work element of universal credit. We believe it is unjust and unfair that disabled people and those with serious health conditions who have been assessed during the work capability assessment as not fit for work and placed in the work-related activity group should have their social security support cut by nearly £30, from £102.15 to £73.10.

Compelling evidence from the independent Extra Costs Commission, which analysed the additional costs facing disabled people, shows that on average they spend an extra £550 per month on things associated with their disability. The Government’s proposed cuts to people in the ESA WRAG come on top of a host of other cuts to social security and support for disabled people since 2010. Demos has estimated that by 2018, £23.8 billion will have been taken from 3.7 million disabled people, with 13 policy changes in the Welfare Reform Act 2012.

The cut in the ESA WRAG comes on top of the freeze in other social security support and the £3.6 billion of cuts to social care. My hon. Friend the Member for Pontypridd (Owen Smith) has argued for a cumulative impact assessment of cuts to tax credits and other benefit reforms for working families on low incomes, as defined in new clause 2, but why has that not happened already? Why have the Government not undertaken a cumulative impact assessment of the latest proposed cuts for disabled people, given that it is a requirement under the Equality Act 2010? I raised that point in Committee, and although I am grateful to the Minister for her response, she implied that only one model can be used to analyse the distributional effects of a policy. That is a flawed judgment. The Equality and Human Rights Commission is somewhat surprised by the suggestion that such cumulative modelling is not possible, given that it is undertaking its own cumulative impact assessment. I understand that the commission has written to the Government and highlighted the resources that are available to help them do that work, and perhaps when she responds the Minister will enlighten the House as to whether the Government have changed their mind.

The Government have also failed to provide evidence to substantiate their claim that working families on low incomes will be better off in spite of having tax credits taken from them—for example, through the introduction of the new national minimum wage, changes to personal allowances, and extended childcare provision. The Government’s meagre offering of an impact assessment for clauses 13 and 14 has failed to provide reassurance that disabled people will not be subjected to serious financial hardship. Although the assessment estimates that approximately 500,000 disabled people and their families will be affected by the cut to the ESA WRAG, there is no analysis of the impact this will have on the disabled people who will be pushed into poverty.

27 Oct 2015 : Column 253

Ian Lavery: I am not sure whether my hon. Friend was present about an hour ago, when the Minister suggested that it was a good idea for people in the work-related activity group to lose 30% of their benefits so as to move them nearer to employment. How ridiculous is that?

Debbie Abrahams: I entirely agree with my hon. Friend. In fact, I am going to move on to a section specifically concerned with incentivising work and how on earth people with, for example, progressive conditions can be incentivised.

Richard Graham (Gloucester) (Con): I welcome the hon. Lady to her place. On the specific issue of trying to help people in the work-related activity group to get into work, does she agree that the current system is not working as well as it should and that we need to spend more money on helping them find jobs? It is harder for them to find jobs than it is for other people on jobseeker’s allowance. In answer to the point made by the hon. Member for Wansbeck (Ian Lavery), that is precisely why we should be transferring money into helping them to get jobs.

Debbie Abrahams: I thank the hon. Gentleman for his intervention, but his question belies the facts. Some £640 million is being withdrawn from people in the ESA WRAG, while £100 million is meant, in some undisclosed manner, to provide support. There is no information from the Government on how that will support disabled people back into work.

As I was saying, there is no analysis of the impact that this will have on the disabled people who will be pushed into poverty. Disabled people are twice as likely as non-disabled people to live in persistent poverty, and 80% of disability-related poverty is caused by their extra costs. Last year, there was a 2% increase in the number of disabled people who were pushed into poverty. That is equivalent to 300,000 people. The Minister’s recent reply to me did not address this particular point, so I would be very grateful if that could be explained. Half a million disabled people will be affected and lose £30 a week—nearly a third of their weekly income. What is the Government’s estimate of the increase in the number of disabled people who will be living in poverty?

Neil Coyle: I welcome my hon. Friend to her rightful place on the Labour Front Bench. Is she aware that in the other place Lord Low is going to carry out an independent review of poverty, in the absence of a Government study? Will she encourage the Government to interact with that independent review, in particular on poverty and the impact on higher health and local authority costs as a result of the reduction in ESA?

Debbie Abrahams: My hon. Friend makes some excellent points. The Equality and Human Rights Commission is able to undertake that analysis. Other bodies and organisations are doing it, so why are the Government not able to do it? Surely this is what we should expect from the Government in their implementation of policy. There are real concerns from disabled charities, disabled groups and Lord Holmes, the chair of the EHRC’s disability committee, about the extent to which the assessment of the impact on disabled people is understood.

27 Oct 2015 : Column 254

On incentivising work, on Second Reading the Secretary of State for Work and Pensions stated:

“the current system discourages claimants from making the transition into work.”—[Official Report, 20 July 2015; Vol. 598, c. 1259.]

What about people with progressive conditions, such as Parkinson’s, multiple sclerosis and motor neurone disease, who have no prospect of recovery but have undergone a work capability assessment? They have been found not fit for work and placed in the WRAG group. Are the Government seriously saying that the measure will incentivise this group of disabled people into work? They have already been found not able to work through the Government’s own assessment process. Their progressive conditions are not going to change. This is a real concern.

Mr Anderson: I welcome my hon. Friend to her position on the Front Bench. As chairman of the all-party group on muscular dystrophy, I would like to tell her that information shared with me suggests that people across the whole field of disability believe that this measure will actually have the opposite effect from the one intended. Rather than providing an incentive for people to go to work, it will mean that they will struggle to continue to have the independence they need. This £30 deduction will make a big difference: people will wonder whether they can afford to maintain their mobility, which will have a detrimental effect, making it less likely that they will find work than if they are left where they are now.

Debbie Abrahams: My hon. Friend makes an entirely valid point. Disabled people will find it more and more difficult to live fulfilling lives that enable them to make contact and fulfil their potential, which everyone should have the right to do, so it will be a disincentive.

Simon Hoare: I am chairman of the all-party group on multiple sclerosis. I entirely understand the hon. Lady’s concern and, indeed, the sort of representations made by the hon. Member for Blaydon (Mr Anderson). However, does she take heart, as I do, from the fact that Ministers are part of a party that brought forward pioneering legislation on disability rights, which should provide comfort that Ministers on the Treasury Bench will make sure that no policy will leave people behind?

Debbie Abrahams: Yes, it is right to acknowledge the Government’s role in bringing in the Disability Discrimination Act 1995, but this Bill flies in the face of that legacy. I really hope that by the end of today, the Government will be able to provide some reassurance, because to date there has simply been none for disabled people.

In Committee, the Minister said that these cuts would not affect people currently on the ESA WRAG, but does that mean that people diagnosed with progressive conditions, but assessed after the Bill is enacted, will be deemed to have a different form of the progressive condition? Will they require less support, or do the Government finally accept that, apart from being dehumanising and exacerbating people’s health conditions, the work capability assessment is not fit for purpose and needs a complete overhaul so that people with progressive conditions are not placed in the ESA WRAG? I would really appreciate some clarity on that point.

27 Oct 2015 : Column 255

Surely if the Government were serious about supporting disabled people into work, there would be measures in place to support into work those disabled people who are able to work. How many employers will be engaged? Although the Disability Confident scheme is a good first step, only 68 employers are currently active in it, and they will certainly not be able to support the 1.3 million disabled people who are able to and want to work. Do the Government intend to extend Access to Work beyond the 35,000 disabled people it helped stay in work or into a new job last year? What is going to happen about the appalling ratio of one disability employment adviser for 600 disabled people? [Interruption.] What estimates are there of the impact on the employment of disabled people of this measure and the reduction of the 30% disability employment gap?

Helen Goodman (Bishop Auckland) (Lab): My hon. Friend has just said the most astounding thing I have heard in this Chamber for a very long time. There is one work adviser for 600 people. In the course of a year, I wonder whether each person would get some attention just once. Has there been any assessment of the absurdity and ineffectiveness of this situation, as contrasted, of course, with the marvellous suggestions we heard a short while ago from the hon. Member for Gloucester (Richard Graham)?

Debbie Abrahams: That figure was revealed through the work done when I sat on the Select Committee. Yes, it is shocking. Some are trying to say that this Bill is about encouraging people into work, but there are no measures in place to support it. Indeed, my next point is—where exactly is the “work” bit in this Welfare Reform and Work Bill? Here we are on Report, and these basic questions have still not been answered. All we know from the Government’s impact assessment is that by 2020-21, approximately £640 a year will have been cut from social security support for disabled people—on top of the £23.8 billion of support that has already been taken from them—and that £100 million a year will be provided in unspecified support to help them into work. That is a disgrace; disabled people deserve much better.

3.45 pm

I am sure the House will recall the Government’s reluctance to publish data on the number of people receiving incapacity benefit and employment support allowance who had died. On the Thursday before the last August bank holiday, five months after the Information Commissioner had ruled that the Government must publish those data, they were finally published. They revealed that the death rates among people on incapacity benefit and ESA in 2013 had been 4.3 times those among the general population, having increased from 3.6 times in 2003. People in the ESA support group are 6.3 times as likely to die as members of the general population, and people in the ESA WRAG, a third of whose weekly income would be deducted as a result of the Bill, are more than twice as likely—2.2 times as likely— to die as members of the general population.

The Government have continually tried to malign, vilify and demonise people on disability and other social security benefits, calling them shirkers and scroungers, and that has been picked up by the media.

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Simon Hoare: Hitherto, the hon. Lady has been making a very thoughtful and considered speech. It may not be up to me, as a new Member, to say this, but the sentence that she has just uttered has fundamentally undermined the cause of her argument, and I invite her to reconsider it.

Debbie Abrahams: I appreciate that it is strong language, but I can only provide the hon. Gentleman with the evidence. In 2010, the use of the term “scrounger” by the mainstream press had increased by more than 330%, and it has remained at that level. We should always be mindful of the language that we use as leaders, and of how it is perpetuated.

Ian Lavery: May I advise my hon. Friend not to take any lectures from the team opposite when they are asking her to calm down in respect of her language against the disabled? Constantly, for the last five years, they have attacked disabled people, poor people and lower-paid people. No apologies are required.

Debbie Abrahams: I used that language to draw attention to the issue in the House, and more widely. I did so partly because I am sure I am not the only one to remember the autumn statement two or three years ago in which the Chancellor, at the Dispatch Box, referred to “closed curtains” when people were going out to work. It was quite clear what that implied. I use such language very carefully, and I repeat that its use in the media has increased by 330%. We all have a responsibility in this regard, including the country’s leaders.

The innuendo is that people with a disability or illness might be faking it or feckless. That is grotesque. As a former public health consultant, I speak with some knowledge. It is recognised that incapacity benefit and ESA are good population health indicators, and the release of the Government’s own data has proved the point. Disabled people in the ESA WRAG are a vulnerable group who need our care and support, and not our humiliation.

Simon Hoare rose—

Debbie Abrahams: I will give way to the hon. Gentleman one more time.

Richard Graham: I invite the hon. Lady to come to the opportunities fair in my constituency on 6 November, which is specifically focused on helping people in the ESA WRAG category to find opportunities for getting back into work. It will be very similar in tone to the first Disability Confident fair we held a year ago, and I am sure she would want to encourage Members from all parts of this House to hold these events and champion people like that who are trying to find jobs.

Debbie Abrahams: In return, I ask the hon. Gentleman to ask his constituents who are on ESA WRAG how they will be affected by these proposals and whether they will have to cut back on such journeys and work fairs because of the cuts the Government are likely to impose. Up and down the country good work is being done to support people back into work, but this measure is not part of that.

Several hon. Members rose—

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Debbie Abrahams: I am not going to give way anymore, as I am conscious of the time.

These cuts are punitive and wrong. They fly in the face of the Conservative party’s pledge to protect disabled people’s benefits. With this cut to ESA WRAG support, without putting in place anything to replace it, the Government are condemning more disabled people and their families to live in poverty. I predict that more tragedies will happen. I will be pushing our proposals to a vote and urge all Members to do the right thing by supporting the removal of clauses 13 and 14 from the Bill.

New clause 4 requires that the Government undertake a full independent review of their sanctions regime by 31 March 2016. It is with considerable regret that, after the Work and Pensions Committee’s report earlier this year, which also recommended an independent review of benefit conditionality and sanctions, the Government have failed to recognise the real concerns about their new sanctions regime, either in response to what was said in the Bill Committee or to that report.

I have been campaigning for an independent review of sanctions for nearly two years, and in that time constituents have come to me with their stories about how they have been sanctioned. One constituent was told while he was undergoing the work capability assessment that he was having a heart attack and should go to hospital, yet two weeks later he received a letter to say that he had been sanctioned. People up and down the country have also got in touch with their stories of how they have been sanctioned, for example, for being a few minutes late for an appointment with an adviser or work coach. Increasingly, people are being sanctioned unreasonably, for example, because they had attended their mother’s funeral, been hospitalised or gone to a job interview—this is absurd.

There was another category of reasons for being sanctioned. I still have the email from a constituent who had received a letter saying he had been sanctioned for non-attendance at a meeting with his adviser at the jobcentre, even though he had evidence that he had been there. The penny dropped when another constituent, who had worked in jobcentres across Greater Manchester for 20 years, came to me to tell me that as part of the new sanctions regime introduced at the end of 2012, the DWP had targets for sanctions. As he described it, claimants were being deliberately set up to fail, whether they had done anything wrong or not.

The Work and Pensions Committee also became concerned while conducting an inquiry in 2013 on “The role of Jobcentre Plus in the reformed welfare system”. At that stage, it recommended the following: