S E L E C T C O M M I T T E E O F T Y N W A L D C O U R T O F F I C I A L R E P O R T R E C O R T Y S O I K O I L B I N G E R – L H E H T I N V A A L P R O C E E D I N G S D A A L T Y N Poverty HANSARD Douglas, Monday, 23rd November 2020 PP2020/0229 POV, No. 5 All published Official Reports can be found on the Tynwald website: www.tynwald.org.im/business/hansard Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, Isle of Man, IM1 3PW. © High Court of Tynwald, 2020 SELECT COMMITTEE, MONDAY, 23rd NOVEMBER 2020 Members Present: Chairman: Hon. J P Watterson SHK Miss T M August-Hanson MLC Mr J R Moorhouse MHK Clerk: Mrs J Corkish Assistant Clerk: Ms G Phillips Contents Procedural ............................................................................................................................... 139 EVIDENCE OF Hon. Alfred Cannan MHK, Minister; and Mr Ralph Peake MHK, Member, Treasury .................................................................................................................................. 139 The Committee sat in private at 3.49 p.m. and resumed its hearing in public at 3.57 p.m. ........ 160 Procedural ............................................................................................................................... 160 EVIDENCE OF Ms Victoria McLauchlan, Director; and Mr Darrin Oldam, Deputy Director, Social Security ......................................................................................................................... 160 The Committee sat in private at 4.59 p.m. ............................................................................... 179 __________________________________________________________________ 138 POV SELECT COMMITTEE, MONDAY, 23rd NOVEMBER 2020 Select Committee of Tynwald on Poverty The Committee sat in public at 2.30 p.m. in the Legislative Council Chamber, Legislative Buildings, Douglas [MR SPEAKER in the Chair] Procedural The Chairman (Mr Speaker): Well, good afternoon everyone, and welcome to this public meeting of the Select Committee of Tynwald on Poverty. I am Juan Watterson, Speaker of the House of Keys, and I chair the Committee. With me are Miss Tanya August-Hanson MLC and Mr Jason Moorhouse MHK. 5 Could we please ensure that all mobile phones are turned on silent or off, so we do not have any interruptions; and for the purposes of Hansard, I will be ensuring that we do not have two people speaking at once. Minister Cannan, Mr Peake, welcome and thank you for coming to talk to the Committee today. We have invited you here because we want to talk about poverty on the Isle of Man, 10 including policy decisions from the Treasury and the impact policy decisions have on vulnerable people. We are also interested in finding out about progress made following the Ci65 report. EVIDENCE OF Hon. Alfred Cannan MHK, Minister; and Mr Ralph Peake MHK, Member, Treasury Q364. The Chairman: For the purposes of Hansard, could you both please introduce yourselves, including your title and how long you have been in post? Thank you. 15 The Minister for the Treasury (Mr Cannan): Alfred Cannan; Treasury Minister; four and a half years, just. Mr Peake: Good afternoon. Ralph Peake, Member of the Treasury and political responsibility 20 for Social Security. Q365. The Chairman: Thank you. The first question then is what are the overarching policy aims of Treasury in terms of social security? 25 The Minister: Well, I think if you are specifically looking at what we are doing regarding Social Security and poverty, what we have is a number of anti-poverty policies: growing the working population, supporting working families, creating jobs, job opportunities, investing in education, supporting low incomes, supporting minimum or living wages. We are measuring all that through __________________________________________________________________ 139 POV SELECT COMMITTEE, MONDAY, 23rd NOVEMBER 2020 30 unemployment figures, jobs figures, the numbers of educational opportunities, benefits rates and the numbers accordingly. So just to build that out a bit, actually, funnily enough, just before I came, I was looking at what we had done over the last four years around supporting those policies, which are fairly well expressed I think, both in the statements that we have made in the budgets, but also within the 35 Programme for Government. You will see noted, and well noted, we have done a lot I think to try and support working families, particularly those on low to middle incomes, through raising personal tax allowances, Child Benefit in particular. We have given significant uplifts to Child Benefit – I think with a 13% increase at the last Budget – across the last four years, and we have really tried to target, Mr Chairman, some of the areas where we felt that the income support was 40 not delivering, perhaps in the interests of the main themes that I set out then in the five or six key anti-poverty policies. We have also done things like increasing Employed Person’s Allowance quite significantly, looked at working disabled individuals – for example, EPA was increased significantly for them in 2019 – and taken other policies as well to try and help those particularly on low incomes. So for 45 example, with pre-school credits, where we have significantly increased that from £1,700 per child to £3,420 per child. So there are other examples as well, but broadly throughout the last four years/budgets we have sought to support society through targeted increases, but on the back of the key themes that I set out at the beginning, and various others I can probably mention as well. 50 Q366. The Chairman: I think in terms of the two you mentioned that seemed to be relating specifically to Social Security, because you mentioned working families, population, but it seemed to be about supporting low-income families and minimum or living wage. How would you, I suppose, define the vision for Social Security in the Manx context? 55 Mr Peake: I think what we have tried to do over the last few years is really to put the person first. So in the Isle of Man, okay, the Isle of Man is slightly different to the UK with a number of aspects – I think we all acknowledge that it is slightly more expensive to live here. But what we have tried to do is put the person first. So we have really tried to encourage respect, with people 60 as well as our staff, but we have also tried to then give people hope. So it has really been about helping people help themselves. So that is where, really, these job-focused conversations have come from. That is a want to actually help people help themselves, so we can really identify the position they are in, to help the individual acknowledge the position they are in and then build on that. Then hopefully they can 65 then build themselves into a better position. Q367. The Chairman: Obviously this Committee’s focus is on poverty and we produced our first report about definitions, but how does Treasury define poverty within the current benefits policy? 70 The Minister: Well, there is no specific definition at all of poverty. We benchmark pretty much our income support levels from those that are applied in the United Kingdom, to a large degree. Obviously we have had a lot of reciprocal agreements in the past and still do today. But we very much benchmark that against what at the time have been the appropriate figures. We also try to 75 get an understanding in some of the specialist benefits, or the defined benefits – say, for example, around nursing care fees and contributions – what is being paid, what the sort of rates are that are being paid. But there is no set definition of poverty and, as you know from your previous report and from the work that has already been done, it is often a complex and complicated area to look at and understand. 80 __________________________________________________________________ 140 POV SELECT COMMITTEE, MONDAY, 23rd NOVEMBER 2020 Q368. The Chairman: So how do you know whether the benefits system is achieving or not? How do you know whether it works or not? The Minister: Well, I think we look at a series of the statistics coming through, for example. We 85 can see the numbers on Income Support, we can see the numbers on EPA, we can see, for example, the unemployment figures. Our job is to try and create as many opportunities for people as possible. The difficulties come when people, and if you are going to talk about poverty, find themselves in difficulty. So I think primarily our vision is to try and give everybody as much opportunity as possible not to fall into 90 poverty, and we can see those measurements coming through from Income Support, for example, from EPA figures in terms of levels of earning. But I think when they get into these more difficult situations, as Mr Peake has just been saying now, we have changed the emphasis in terms of trying to provide new ways of helping the individual, giving the individual that support. Do you just want to build that out, Ralph? 95 Mr Peake: Yes, you are absolutely right. So Chair, you will recognise the personal capability assessments that were carried out, and they were stopped a few years ago. So what Treasury and Social Security have really focused on now is how we can measure people’s well-being. So we really want to try and understand how better people feel, so one of the elements that we actually 100 brought in is a local charity to actually start working with people from, if you like, a therapeutic point of view. Now, there are other elements that have yet to come in.