Department for Work and Pensions

That, for the year ending with 31 March 2020, for expenditure by the Department for Work and Pensions:

(1) further resources, not exceeding £48,180,879,000 be authorised for use for current purposes as set out in HC 2154 of Session 2017-19,

(2) further resources, not exceeding £362,104,000 be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £49,265,200,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Jeremy Quin.)

I inform the House that Mr Speaker has not selected either of the amendments listed on the Order Paper.

I thank the Backbench Business Committee for allowing me to lead this debate on the Department for Work and Pensions public spending estimates. In so doing, I shall explain what I think are the purpose and principles of the Department; where I feel that, unfortunately, it is currently failing; and what needs to happen to change that.

Today is about public spending. Most people in the House will know that the Department for Work and Pensions is the largest spending Department of all; it spends around a quarter of the Government’s money. However, although this is an estimates day debate, we should not focus on the money. The money is interesting really only in so far as it is for something—in so far as we spend it for a purpose and we carry out that purpose in accordance with our principles.

My hon. Friend has probably noticed that there is nothing in the estimates to help the women born in the early 1950s who lost out on their pensions. Does she agree that there will be a round of estimates coming up shortly, and we would like to know from the Minister what the Government are going to do about that, and whether the Department will include it in its estimates to the Chancellor for a future Budget?

My hon. Friend makes an effective point—which I will come to—about the position of the WASPI women, born in the 1950s. They dealt with challenges in the labour market that I have never faced. They fought for the changes that my generation benefited from, and at their point of retirement the Government undermined them. I will say why I think that is contrary to the principles on which we operate the welfare state in this country and I thank him for that appropriate intervention.

Before I come to the principles, I shall address the purpose. What is the purpose of all the money spent by the UK’s biggest spending Department? What is it for? The spending has a simple principle—and Beveridge articulated it in his report, which really commenced the modern welfare state in the UK—and that is to smooth incomes. The idea is that we spend to allow people to take money from the system when their income is low and to pay in when their income is high. It is very simple. If we allow people to smooth their potential for getting wages and income over their lifetimes, on average people will be richer than if they have to cope alone in the hard times. If we allow people to use social insurance to smooth their income, we are all better off. We pay in when we can, we take out when we need; that is how it works. It has a simple purpose. How does the system do that? It operates by some simple principles. It is a huge amount of money, but our welfare state adheres to a straightforward and simple principle—the contributory principle, one that any student of Beveridge will know all about. The idea is that we all pay in when we can and we are all entitled to take out when we need.

Why have I made those points about the simple purpose and principles of the welfare state? I do not think that very much has changed since Beveridge’s time when it comes to the fundamental way that the labour market operates and the risks that people face in their lives that will make them poorer if we do not have an effective welfare state. We are still fighting the same evils that Beveridge identified, and the reasons people might not have enough to get by are fundamentally the same as they were when he wrote his report. The one that we all know about is old age, as my hon. Friend the Member for Coventry South (Mr Cunningham) has already mentioned. That is why it is right that, in the 10 years since the crash, the incomes of pensioners in our welfare state have—by and large, with one notable, shameful exception—been protected. We have seen pensions keep pace with earnings and with the general movement of our economy. When the economy is growing, pensioners’ incomes have kept pace. We know that the uprating, the increase in spend on pensioners, has protected them from the possibility of poverty. No one wants to see people who have worked hard all their lives go without and struggle with poverty in their old age.

I thank my hon. Friend for giving way and for the way she is introducing the debate. Does she agree that at a time when the Conservative leadership contenders are splurging billions of pounds in spending commitments, not a single penny is available for the WASPI women and that really shows where their priorities lie?

I thank my hon. Friend for his intervention. The Conservative leadership election feels like the reversal of politics as I had come to know it. I had always expected that Labour would be on the defensive when it came to public spending. I thought that my party would always have to prove that we were the ones who would deal responsibly with the economy, that we would always be on the defensive and the Tories would always be on the attack. But those competing in the Conservative leadership election seem to want to reverse that principle. They seem to want to be accused of splashing the cash. Given that one of the candidates found nearly £10 billion to be spent on tax cuts, I suggest that the debate should never again be about whether austerity was necessary, but should instead be a simple question of political priorities.

The hon. Lady is making some powerful points, many of which I agree with, and I am also concerned by some of the pledges in the leadership contest about the spending of taxpayers’ money. What does she think about Labour’s election manifesto pledges of £1 trillion of spending?

The hon. Gentleman asks about the 2017 manifesto. I simply remind him that before the publication of the manifestos in that election most people expected the Conservative party to get a stonking great majority so that it could push through its version of Brexit based on the quality of their manifesto as opposed to ours. I point the hon. Gentleman to the historical facts, as it did not turn out at all like that.

To return to the point about the WASPI women, I completely accept that we all want to make sure that people have dignity in retirement, but does the hon. Lady acknowledge that the Government’s figures show that reversing the impact of the decision to raise the state pension age in line with rising life expectancy would cost £181 billion? Where on earth would we find such a sum of money?

The hon. Gentleman is a fellow member of the Treasury Committee and I thank him for his intervention. That is an interesting forecast. I do not think that dealing with the injustices would cost anything like as much, but if he wishes to have the discussion, we have many hours on the Committee together and I will happily discuss his spreadsheet any time he wishes.

Before my hon. Friend gets to that spreadsheet, she is making an important point. The budget has been brought more into balance by the cuts in welfare benefits, which have been concentrated on families with children. In our constituencies, many people have been pushed into hunger and destitution for the first time in their experience, not because they have lost talent or the ability to manage, but because for the first time in a century we are cutting benefits to the very poorest.

I thank my right hon. Friend and constituency neighbour for that intervention. He brings me to the point that I was just about to make, which was what Beveridge might have thought of what we have done to family benefits. When we have children, life costs more. Beveridge knew that in the 1930s and 1940s, and family benefits were always designed to be a solid part of the modern welfare state that would help our country rebuild after the second world war. That is also because those benefits rely on the contributory principle. How on earth do we expect to get responsible adults who are able to use their talents for the benefit of our country and get to the point in their lives when they can adequately pay back to the welfare state if children’s ability to grow and learn has been undermined at the very point when they needed the welfare state to pay out for them? We take out when we need, and we pay in when we can. That goes for family benefits along with everything else.

The hon. Lady is making a powerful speech, as I would expect of her. Last week the Scottish Government introduced a new Scottish child payment which, when delivered in full, will mean an extra £10 a week for more than 400,000 children. The Child Poverty Action Group has described it as a “game changer” for tackling child poverty. Does the hon. Lady agree that that is the sort of proposal that this Government should be implementing for the whole of the United Kingdom, and to which the Labour party should commit itself?

The hon. and learned Lady will know that I believe in the pooling and sharing of resources across the United Kingdom. If the Scottish Government have found evidence that there is a way of aiding children that can work, I will be learning the lessons, but I firmly believe that the way the United Kingdom’s welfare state pools and shares resources is the most powerful tool that we have with which to tackle the child poverty that worries me today.

We know that the projections for child poverty over the next few years are a disgrace. We will see it rise to record highs, and if we do not make a decision and do something about it, it could affect more than 5 million children by 2024. I do not know about you, Madam Deputy Speaker, but I am not prepared to stand by and see the welfare state that this country has built over many years fail at that level. I am not prepared to see the contributory principle that says that we pay out to people in need so that they can pay in when they can, become fatally undermined by the growing wound in our country that is child poverty.

I should like all Members who are present today to ask themselves a simple question. On the basis of the purpose of the welfare state and the principles by which it operates, is the DWP’s current spending a success? We all know the answer to that question. It stares us in the face when we think about what is going on in our own constituencies, and the people whom we see in our surgeries. It stares us in the face when we walk through the doors of the House of Commons and see the destitution, and when we know that a person died on our own doorstep. It stares us in the face when we hear from the Trussell Trust that last year it handed out 1.6 million food bank parcels.

My right hon. Friend the Member for Birkenhead (Frank Field) made exactly the right point. Do we think that there were 1.6 million incidences of fecklessness? Do we think that there were 1.6 million incidences of people being so unable to deal well enough with their lives that they had to turn to food banks and beg for help? Do we think that there were 1.6 million incidences of error, or mistake, or confusion? Quite clearly not. What we have seen are 1.6 million incidences of injustice and unfairness.