Oral Answers to Questions

Alex Cunningham Excerpts

Monday 5th March 2012 Commons Chamber

[Steve Webb]

Rather than set an arbitrary deadline, we are keen to conclude as rapidly as possible. One important step forward has been the setting up of the employers’ liability tracing organisation. Often, people worked for firms many years ago, making employer liability insurance difficult to come by. This tracing service is helping people to get the insurance payouts to which they have every entitlement.

[Alex Cunningham (Stockton North) (Lab)]

11. What steps he is taking to tackle youth unemployment.

[Tony Lloyd (Manchester Central) (Lab)]

19. What steps he is taking to tackle youth unemployment.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

The youth contract, to which I referred earlier, is worth nearly £1 billion. It builds on the substantial support already available to help unemployed young people to enter work. It includes more intensive support for all 18 to 24-year-olds, additional funded work experience places and a new wage incentive scheme delivered through the Work programme.

[Alex Cunningham]

The number of young people in my constituency who are not in education, employment or training is double the national average, and it has been suggested that the area should be treated as a hot spot for action. Stockton borough council is doing its bit as a local employer, but its powers are limited in the wake of spending cuts. Will the Minister take specific action to help the hardest hit areas, such as mine, and will he make proper resources available so that real things can happen, rather than tinkering around the edges?

[Chris Grayling]

As the hon. Gentleman knows, I regard the labour market in the north-east as one of our big priorities. That is why we have targeted the area with support through the regional growth fund and established an enterprise zone in the Tees valley, and that is why we are doing all that we can—through the Work programme, the different aspects of the youth contract, and our work in the skills arena in providing more apprenticeships—to bring about both private sector growth and an increase in the skills of the hon. Gentleman’s constituents to help them get into work.

Oral Answers to Questions

Alex Cunningham Excerpts

Monday 23rd January 2012 Commons Chamber

[Steve Webb]

The hon. Gentleman raises an important issue. The Labour Government introduced the constraints on NEST—and for a good reason, as it ensured that NEST focused on its target market. The situation has moved on and competitive developments in the market have emerged that were not necessarily foreseen. We are reflecting on the role of those constraints and I look forward to discussing the issue further with the Select Committee on Wednesday.

[Alex Cunningham (Stockton North) (Lab)]

14. What assessment he has made of the likely effect of the closure of the social fund on (a) homelessness, (b) hardship and (c) use of payday loans.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The social fund is not closing as payments for maternity, heating and funeral expenses will continue. Some discretionary payments, particularly community care grants, will be replaced by targeted local provision at the same total level—so it is not a cut in the budget—and universal credit will provide a better service with payments on account supporting many people in need of short and longer-term credit.

[Alex Cunningham]

I am grateful for that update. For some people, the social fund is a crucial safety net, allowing them to avoid catastrophe. One of the major concerns about its abolition is that people will no longer be able to claim crisis loans to pay rent in advance when they move into private rented accommodation. What provision will there be to help formerly homeless people pay rent in advance when moving into independent accommodation?

[Steve Webb]

I know that the hon. Gentleman had written his question before he heard the answer, but the social fund is not being abolished. The new system under universal credit of payments on account will actually be more flexible, allowing people to draw down their universal credit ahead of time. That will be more efficient than the current rigid system of crisis loans.

Unemployment

Alex Cunningham Excerpts

Wednesday 14th December 2011 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

The dire news presented by the latest unemployment figures should cause members of the Government to hang their heads in shame, but there are not many present to do that today. The Government have promised much, but instead of delivering on their promises, they have proceeded to devastate the lives of ordinary hard-working people—people such as nurses, engineers, chemical process workers, local authority employees, shop assistants and even members of our armed forces, some of whom return from action on behalf of our country to learn that their jobs are either gone or under threat.

We were promised a private sector jobs revolution, but, as the Prime Minister had to admit today when challenged by my right hon. Friend the Leader of the Opposition, he has failed to deliver on that promise. His failure is proving expensive, not just for the millions who are unemployed, but for our country. Instead of investing billions in infrastructure, house building, new hospitals and other job creation schemes, the Tory Government are throwing that money away on escalating unemployment benefit bills which, sadly, are likely to increase even more in the future.

[Gordon Banks]

Is not one of the problems the fact that the Government seem to view the public and private sectors as two separate entities, although one cannot survive while the other is being cut to death?

[Alex Cunningham]

I agree. My hon. Friend provided an illustration of that earlier when he mentioned the job losses that have been announced in a company in his constituency. For some time the Tories said that we did not have a plan for jobs. They may have systematically dismantled our investment programmes for job creation, but it is not too late for them to adopt our five-point plan for jobs and growth.

Like others who have spoken, I shall concentrate on the subject of young people. The acceleration in the number of young unemployed people will help this Tory-led Government to go down in history as the Government who could not care less about our country’s most important asset.

[Jim Shannon]

It has been suggested that businesses should be given an incentive to employ people aged between 16 and 24, in the form of a £1,500 tax relief which would cover national insurance contributions for a year. Does the hon. Gentleman believe that such initiatives are capable of providing employment for unemployed people?

--- Later in debate ---

[Alex Cunningham]

I welcome all schemes that will encourage employers to take on workers and, in particular, increase the number of young people in employment.

In 1997, my Stockton borough inherited from the Tories an unemployment rate of 14.9% among young people, while the national rate was 8.1%. Hard work by the Labour Government more than halved the Stockton rate to 6.7%, but since then the Tories and their Liberal Democrat allies have allowed it to soar almost to its previous level. It is now 12.9%, which, although it may not seem a huge number, represents 2,300 young lives.

In my constituency, I see countless young people wandering the streets of Billingham, Norton and Stockton, and I worry about their future. I see them peering into shop windows, knowing that all they can do is look. They certainly cannot buy, as they see no positive prospects. They know that there is no longer any support that would enable them to go to college, and that even if they had qualifications, possibly even degrees, their prospects would be extremely low in an economy that is stagnant at home and across the country.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Will my hon. Friend endorse the work done by Glasgow city council? It has launched a scheme aimed specifically at young graduates, and is using some of its pension fund to give them an opportunity to gain employment.

[Alex Cunningham]

I have always been a great admirer of Glasgow City council and I am certainly not going to disagree with my hon. Friend there, but it saddens me that for so many young people, the first taste of adult life will not be starting their first job and getting on the career ladder, but waiting in the dole queue and competing for the tiny number of vacancies available, while being lectured by the Tory-led Government that there are jobs out there for them if only they look hard enough. However, in my constituency there are 10 people fighting for every job vacancy. There are 2,335 jobseeker’s allowance claimants aged between 18 and 24—an increase of 18% on the previous year.

Earlier this year, the employment Minister singled out the north-east as his “top priority” in safeguarding and protecting jobs. However, the money received from the regional growth fund—believed to be the cure for all our economic woes—is but a fraction of what has been invested in recent years through the regional development agency. I am grateful for the money we did get in my constituency from the regional growth fund, and I was pleased to visit one of its recipients, Darchem Engineering, last week. It is a fine example of the great British manufacturer we need to encourage, and the Government cash will help to attract new investment to the north-east. However, while that one example is a positive one, the amount of cash available through the fund is extremely limited in my area, and many other companies with strong plans for growing their businesses and increasing the number of jobs found that the Government cash chest was slammed shut in their faces.

In my constituency alone, 166 young people aged between 18 and 24 took up employment and after 26 weeks, 162 of them—98%—were sustained in employment as a result of using part of Stockton’s allocation of the working neighbourhoods fund, thanks to our future jobs fund. Add to that the fact that those successful young people undertook 628 pieces of individual training and achieved 80 NVQs at levels 2 and 3, and we can celebrate an excellent achievement.

Labour also introduced the education maintenance allowance, which subsidised poorer students through the sixth form, helping 650,000 16 to 19-year-olds from low-income families and tackling the long-standing problem of a high teenage drop-out rate from education, particularly among poorer students. However, both these effective programmes were recklessly cut by the Tory-led Government, who dismissed them as bureaucratic and wasteful despite their strong success in helping young people to reach their potential.

The £180 million bursary scheme the Tories replaced the EMA with has instead succeeded in giving 70p extra a week to 12,000 of the poorest students—while at the same time taking away £30 from many of their classmates whose finances are only marginally better. It is simply insulting that the Secretary of State for Education believes that this is concentrating resources

“on removing the barriers to learning faced by the poorest”.—[Official Report, 28 March 2011; Vol. 526, c. 52.]

I strongly urge the Government to reassess their priorities, given that they are currently bent on making access to education far more difficult and are cutting everything in sight—the very things that were helping young people. Such a blatant disregard for the future of young people really is shameful. We should be under no illusions about the damaging effect that unemployment among young people can have. Failing to harness the energy of the younger generations is eating away at the foundations of all our futures.

Work largely defines us and as a society, and we cannot afford to ignore the talent and potential of so many young people. Those one in five young people who cannot find work therefore often cannot leave home. They remain financially dependent on their parents and are trapped in a confidence-sapping cycle of application after application, rejection after rejection.

The current jobless figures are a wake-up call for the future for young people. Youth unemployment scars people for life, particularly if it is prolonged, and at today’s levels it will be costing the country millions of pounds a week. We must not let the scourge of unemployment leave a permanent mark on the hundreds of thousands of young people living through it today. We need to give those young people, and everyone else window-gazing in towns and cities across the country this Christmas, real hope for the future. They see very little of it now.

Youth Unemployment

Alex Cunningham Excerpts

Wednesday 9th November 2011 Commons Chamber

[Mr Iain Wright (Hartlepool) (Lab)]

Youth unemployment is the single biggest social and economic problem facing my constituency, and its effects will leave a scar on Hartlepool’s prospects for decades to come. My town has the dubious and unwanted distinction of having the worst youth unemployment in the country: 1,450 young people in Hartlepool—17.4%, or nearly one in five— do not have a job. We have not seen such levels of youth unemployment in my town since 1995. What is particularly worrying is that in my constituency unemployment is rising fastest among young people, and rising much faster than the regional or national average. Since this Government came to office 18 months ago, youth unemployment in Hartlepool has increased by some 60%, and it has been increasing fastest in the past six months.

[Alex Cunningham (Stockton North) (Lab)]

I am grateful to my fellow Teesside MP for giving way. Does he remember when Middlesbrough football fans used to chant, “There’s only one job on Teesside”, in celebration of Joseph-Désiré Job, who played for the club? That is no longer very funny, because young people might be under the impression that it is actually true as hundreds of them chase every single job opportunity on Teesside.

Pensions Bill [Lords]

Alex Cunningham Excerpts

Monday 20th June 2011 Commons Chamber

[Nick Boles]

I thank the hon. Lady—and remind her that her Government had been in power for 10 and a half years by the time they introduced those Acts, even though it was clear long before they took office that such problems existed. However, I do not want to be too ungracious and I do accept that some things were done—but not enough and too late.

So why are the Opposition taking this approach of opposing everything under the general charge that it just is not fair? Is it really fair to tell people that a budget deficit on the scale that we face can be dealt with without pain; without some people being asked to sacrifice things that are important to them; and without everyone in the country experiencing a real material loss? Is it fair to tell young people that, actually, there is no reason to pull back on EMA; that there is no reason to restrict their income when they stay on in education; that there is no reason to change the basis of funding for universities?

[Alex Cunningham (Stockton North) (Lab)]

You have gone on a lot about ideological things, but is it ideologically bonkers to fight for a fair deal for women who have made the sacrifices that you are talking about? They have sacrificed for their country, for their families—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Unfortunately, I am not responsible, so it is not “you”. I am sure the hon. Gentleman did not mean that.

[Alex Cunningham]

I beg your pardon, Mr Deputy Speaker. Is it “ideological” for us to stick up for women who have had a raw deal through life looking after their families and doing a low-paid job, but who now find out they have to work even longer for a pittance of a pension?

[Nick Boles]

I thank the hon. Gentleman, but I fear he misunderstands me: I am not accusing him and his colleagues of being ideological, and that, in a sense, is my point. Actually, the Opposition are perpetrating a grand deceit on the British people, which is that there is anything fair about protecting all these things that we can no longer afford; that there is anything fair about arguing to the British people that we—

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

I am very keen to speak about this issue because it has resulted in my heaviest postbag for some time, with most of the correspondence coming from women. Some time ago, I was declared an honorary woman, which I took as a great compliment. I was in a discussion with half a dozen women who were talking about things of a feminine nature. One woman looked at another and said, “There’s a man here”, only to be told, “No, it’s okay—Alex is an honorary woman.”

I am very pleased that I am not a woman, because at my age I would be one of those losing out under the formula that the Government have put together. Only this afternoon, I received a phone call from one of my constituents, Fiona, who is a 56-year-old nurse. I wish that the Minister could have heard her voice and learned a little about the anguish and despair that was in it. She told me that she started work at the age of 17 and has worked in the health service for several decades, and that she now feels that the Government are slapping her in the face. She said that she had been aware for some time that her pension age would be going up from 60 to 65, and that she understood that and did not mind—she even thought it was fair—but that raising the age even further to 66 was going too far, too fast, and with very limited warning. In her own words—we have heard this cliché all day—“They keep moving the goalposts.”

Fiona pointed out that older nurses and other health professionals, particularly those in their sixties, would struggle to lift and assist the most frail and elderly patients. Similar issues exist for manual workers, many of them women, who simply cannot do the job that they were originally employed to do. Surely we should value people such as Fiona, not force them to replan their future with such limited notice. It was on behalf of Fiona and many other women in my constituency that I wanted to speak.

It is great that most people are living longer—of course, many others are not—but it brings challenges. It is important that as politicians we confront the difficult issues raised by the ageing population, not just for pensions, but in health care, the quality of life we provide for older people and how society treats the retired population. Those are all important issues.

My hon. Friend the Member for Sunderland Central (Julie Elliott) and my right hon. Friend the Member for Croydon North (Malcolm Wicks) outlined inequality in a different way today, with regard to manual workers who will be lucky to reach retirement age and even luckier if they get to 70, let alone the grand old age of 100 that some Government Members think they and their relatives will reach. Those manual workers are the people who have created wealth in our country, and yet they have never had the advantages of that wealth and they get very limited benefit from their pensions.

[Mr Watts]

Does my hon. Friend agree that it is also unfair that many of the women we are talking about started work at the age of 15 and so will have worked for 10 years longer than many other people by the time they retire?

[Alex Cunningham]

Indeed, that is the case. Some of the women in these difficult jobs may not have their health in later years, so they will lose in all ways.

All too often, the elderly are ignored and not treated with the respect that they deserve. The Government should play a big role in ensuring that society takes care of people when they have retired and are not as independent as they once were. Family, friends and community all play a big role, but the Government can and should lead by example. Pensions, among other things, are a big part of that.

I am proud of Labour’s record in this field. We lifted a million pensioners out of poverty, and free bus passes, free TV licences and the winter fuel allowance all play their part in helping pensioners. In common with other hon. Members, I want to home in on two things.

[Stephen Pound (Ealing North) (Lab)]

I apologise for interrupting my hon. Friend’s fluent and fluid flow. Does he agree that it is insane, barking and bonkers to the ultimate degree to expect someone who has worked in a hard, physical job for most of their life to have the same longevity as someone who has luxuriated in the soporific circumstances of a stockbrokers’ office? What will happen is that people will be signed off sick. It will cost the Government more money and treat women appallingly in the process. Does he agree?

[Alex Cunningham]

Could I disagree? I most certainly could not. People in my constituency used to build ships and it has one of the biggest chemical industries in the country. It has people who have worked in difficult circumstances in hard jobs. My hon. Friend is correct that such people cannot expect a longer life, so I think we should make it a little easier for them.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

My hon. Friend is making a fantastic speech and it is great to listen to him. Does he agree that the issue is not just health and longevity, but that even people who are in very good health and will live longer simply cannot rearrange their economic affairs in the time that they have—six years’ notice of two additional years in the case of some of our constituents—to cover the loss of pensionable income that they will sustain when this Bill goes through?

[Alex Cunningham]

That is very much the case. I suppose that there will be an additional few years of misery for some people because they will not have the income to enjoy the things that they see other people enjoying. It is therefore even more important that we raise these issues today.

It is the significant effect on women that worries me. The Bill makes it more likely that those on low incomes will not pay into a pension. Many women have contacted me, incensed that they are losing out thanks to the Government’s changes. It is completely unfair. The Government Members who have talked about fairness need to think about women a little more. A total of 177 MPs signed early-day motion 1402 on the state pension age for women. It is time that the Government backed down on this issue. All afternoon and evening, Government Members have teased us by saying that the Government will change their mind. When the Secretary of State was here, he was shaking his head, but I have seen no such indication from the Minister as the teasing has continued.

Age UK’s report “Not Enough Time” makes it clear that women are unhappy with the plans, and it is worth repeating some of the statistics that it gives. The 330,000 women born in Britain between December 1953 and October 1954 will have to wait 18 months or two years for their state pension, and 33,000 will see their state pension age increase by two years at a loss of £10,000.

I suppose I should declare an interest, because just as I would be caught out if I were a woman, my wife Evaline is one of the women affected. Like others, she has fewer than seven years to plan for the changes. People need sufficient time to plan for the increase in the state pension age, and the changes are happening too fast and causing a lot of worry and anger. It will be the poorest women who suffer the most as a result, those who do not have savings to fall back on and are in low-paid jobs.

Raising the state pension age is necessary, however, to reflect the fact that some people are living longer. We all recognise that, and we need cross-party consensus on it, but we simply cannot afford this unfair treatment of women. It is always worth repeating that the coalition agreement promised that the women’s state pension age would not be raised to 66 before 2020. I do not care about the legal arguments and so on—if the Government are going to do that, they need to explain why. The Bill proposes equalisation of the age by 2018, and then increases to 66 for both men and women by 2020. Moving the goalposts—that cliché again—so late in the day has implications for public trust in the pensions system at a time when it is vital that we encourage more people to save for their retirement.

It is estimated that 7 million people are not saving enough for their retirement, but the Bill would raise the salary level at which someone is automatically enrolled in a pension scheme from about £5,000 to £7,500. That means that 600,000 fewer people will be automatically enrolled in a pension scheme, and again, women will be disproportionately affected. What long-term provision is there in the Bill for that group?

As I said at the start of my speech, I am glad that we are debating these issues today, but I believe that the Government have got the key elements of the Bill wrong. I cannot endorse the way in which a small but significant group of women, including my wife, are being hit by the accelerated pension age rise, nor can I support the changes to auto-enrolment given the problems that I have described. That is why I, too, will vote against the Bill today.

Post Office Card Account

Alex Cunningham Excerpts

Tuesday 24th May 2011 Westminster Hall

[Nia Griffith]

The hon. Gentleman conveniently forgets that although about 8,000 post offices probably met the previous Labour Government’s access criteria we kept 11,500 open, and put in a £150 million subsidy each year to do so. He was very lucky that a new sub-postmaster was found for Quedgeley, but in my constituency, and those of many Members, post offices have remained closed for much longer, and the real difficulty will be in enticing people to take on the businesses if they cannot see a viable future in them. I am so grateful to the hon. Member for Truro and Falmouth for securing the debate today, because the Post Office card account will be a key part of that viability.

[Alex Cunningham (Stockton North) (Lab)]

I was absolutely delighted this week to receive a letter from the Post Office saying that it is reopening a post office in Port Clarence, a community in my constituency. That has been made possible by the local authority, voluntary organisations and the local community working together. Is there not that wider responsibility on a whole community, even though the Government also need to be in there to ensure that things happen?

[Nia Griffith]

Indeed. It is very much a partnership, and where that can happen, all to the better, but a key part of that partnership is the Government business, which is what we are talking about today.

I hope that the Minister is able to shed some light on what the Government mean by Government front office. What is the additional business that they hope to give to the post offices? What is the enhancement of the Post Office card account that they can offer at this stage, and what is the future for the account after 2015? Without that security and that business coming into the post offices, it is very difficult to see how we will encourage new entrants to take on post offices, particularly in areas where there is little opportunity to do much else in the post office, because they are very small, for example. Sometimes there is little else in the village that would offer people the opportunity to get enough money just to pay the milkman or the fish van that comes round. I have constituents who cannot get the cash they need for very small, simple, everyday transactions without a local post office. It is absolutely vital, therefore, for the future of the Post Office that we get that Government business, and I hope that we will hear how the DWP will contribute to that and, in particular, what its views are and its plans for the future of the Post Office card account.

State Pension Age (Women)

Alex Cunningham Excerpts

Wednesday 11th May 2011 Westminster Hall

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I congratulate the hon. Member for Erith and Thamesmead (Teresa Pearce) on securing this debate. It is not only important, but potentially timely given that we all need to come together to address what I think is an injustice, and one that perpetuates injustice over time.

I feel empowered to speak on this issue because, although I am well out of the age bracket affected by this latest injustice, I automatically signed up for married women’s contributions. All Members here will have had women come to their surgeries absolutely distressed because there is nothing that they can do about their pension. It has been said that it was all explained properly and it was a choice—people are told that it was an “informed choice”—but of course it was not, and once someone is in that position, there is nothing that can be done about it. That is how we treated women in the 1960s. Are we doing any better today?

I am sure that other Members have met women who worked part-time in the public sector who had to have their rights recognised through the courts; even then, the publicity, the information and the time scale were not published in a way that was effective for everyone concerned. I agree with the hon. Member for Erith and Thamesmead; as part of the reserve army of the work force, women working part-time have been used, and it has affected their pension rights very badly.

[Alex Cunningham (Stockton North) (Lab)]

I was interested in the reference to public sector workers. Does the hon. Lady agree that there is no such thing as a gold-plated pension for public sector workers, and that the issues that women face are all the greater because they do not really have a pension to look forward to, even if they served 40 years in public service?

[Annette Brooke]

I made that particular point because those women could get justice and redress only through the courts, which is important.

A more recent instance of an injustice to women occurred during the time of the previous Government. The reduction in the number of contributory years for a full pension, to 30 years, was very welcome—it clearly helped women and so has to be welcomed. When it happened, only three in 10 women who reached state pension age drew a full pension in their own right, so that change alone should have raised the proportion to more than seven in 10—it was a good move. However, again, there was an injustice to a group of women whose birthday happened to be at the wrong time.

Amendment of the Law

Alex Cunningham Excerpts

Tuesday 29th March 2011 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

Like others, my speech will focus on people. The number of unemployed claimants in my constituency is now 3,812, which is 9.2%. In the north-east of England, despite the progress made over the past 12 years in diversifying our industrial and business base, we still have the highest rate of unemployment in the whole country, at 10.2%. Even more worrying is the fact that 23% of our 16 to 24-year-olds are out of work. It is against that backdrop that I want to speak today.

The worst of the cuts are yet to come. Thousands of public and private sector workers are set to lose their jobs, and the cuts are being front-loaded, leaving local authorities with no choice but to make quick savings by making staff redundant. My own very efficient local authority, Stockton borough council, is faced with having to make savings of £29 million over the next four years. The Chancellor is effectively throwing hundreds of thousands of people out of work, but he is passing the axe to the local authorities and leaving them to do the chopping.

Let us not forget that recent analysis published by the TUC found that there were almost 10 applicants for every vacancy in Labour-held constituencies. The figure in Tory constituencies was 4.5, and in Liberal Democrat areas, it was 6.1. That is because the cuts are hitting the poorest communities the hardest. Recent research into the impact of the cuts reveals that all but two of the 20 worst-hit councils are in the bottom 20% most deprived council areas in England. It cannot be fair that low and middle-income neighbourhoods should carry the heaviest burden because of the Government’s choices.

We are told that there is no alternative, but there is a choice being made by the Government to cut far too fast. Under Labour, the economy was heading in the right direction. It was growing at 1.2% when Labour left office. In the last quarter of 2010, however, it had shrunk by 0.6%. So, under this Tory-led Government, growth has gone down last year and this year, and it will go down next year. The Chancellor blames the poor economic performance on the wrong type of snow, yet Germany and the US suffered from similar Arctic conditions last winter and their growth figures are not so grim.

Inflation is up, and unemployment is up. It is becoming increasingly clear that the Tory-led Government’s plan for the economy is, yes, hurting but not working. Yet we are repeatedly told that there is no plan B. What we have instead is a real-life economic experiment, and the disgraceful thing is that it is completely politically motivated. The coalition hopes to get the worst of the pain out of the way before the next general election. What an irresponsible way to deal with our economy, and with people’s jobs and lives.

What is the Government’s response to this bleak outlook? We have had the announcement of the local enterprise partnerships, but with no money. The Budget announced 21 enterprise zones, including one in the Tees valley. I hope that both those projects flourish and create much-needed new jobs, but the reality is that their funding is a fraction of the funding that was available for regional growth through the now abolished regional development agencies.

What are the Government doing to address the fact that almost 1 million 16 to 24-year-olds are out of work today, the vast majority of whom are desperate for a job to kick-start their adult lives? The budget announced just 40,000 two-month work experience placements a year, and an extra 12,500 apprenticeships a year. That will not deal with the tip of the iceberg. I fear that there will be a lost generation, which will cost this country a great deal, economically and socially, in the years to come if we do not tackle the problem head on. The Government’s Work programme also gives me cause for concern. Every person who receives incapacity benefits is to get a medical reassessment, and huge numbers face being moved on to the jobseeker’s allowance, losing a third of their payments, if they are found to be fit enough to work. Many of them might not be.

As a member of the Work and Pensions Select Committee, I recently visited Burnley, where we spoke to people who had been part of a pilot for these assessments, and some of the stories we heard were very worrying. The test has been severely criticised by groups such as Citizens Advice and some argue that it is not fit for purpose. I look forward to the Committee’s further inquiry into that matter.

Clearly, the proof will be in the pudding, but even if these people are moved on to jobseeker’s allowance and are able to get the comprehensive support they will need to make them job-ready, they then face finding work in a tough environment, competing against people who might recently have been made redundant and against all those young people for fewer and fewer jobs. This will be tough enough in Tory constituencies, never mind those like my own in Stockton North and throughout the north-east. The Government need to think again about providing realistic incentives to create jobs and help people back to work, while still protecting the most vulnerable.

The real spending cuts are only just starting to hit people. My real fear is that we are facing a jobless recovery. This would be a disaster for Teesside and the north-east, which, as I have already said, suffers from the highest unemployment rate in the whole country. The Government must do much better.

Housing Benefit

Alex Cunningham Excerpts

Thursday 10th March 2011 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

I am pleased to have an opportunity to contribute to the debate. I congratulate my hon. Friend the Member for Aberdeen South (Dame Anne Begg) who chairs the Committee. This is the Committee’s first report and she has led us well to some excellent conclusions. I will concentrate my comments on evictions and homelessness, which I believe will affect many people in my Stockton North constituency, as well as across the north-east of England and beyond. The Government’s proposed cuts will, of course, have that result.

It is worth remembering some of the things that we heard while taking evidence. The Committee took extensive evidence from many organisations and interested parties on the subject. We took much evidence from Shelter, which—among other things—told us that 147,000 families with 250,000 children and 20,000 households with people over 60 would be put in serious difficulty by the proposals, and that is not just financially. The Mayor of London estimated that there would be a 50% increase in homelessness in London, costing £78 million for the 5,000 households in the city that could be placed in temporary accommodation.

There is more—much more. Nearly 3,000 people in the small borough of Stockton-on-Tees will lose out by at least £7 a week thanks to the changes. Most of those people are in my Stockton North constituency rather than in Stockton South, which is represented by a Conservative Member. To some people, £7 is not a lot of money. However, that can represent food on the table for a family for two or three days. Large families are particularly vulnerable to the changes proposed by the Government and could face temporary homelessness, especially in central London. There will also potentially be an increase in poverty, including child poverty.

I make no apology for referring time and again to Shelter, which is one of the most credible organisations that I know. It, along with other organisations, has expressed concern that the number of households living in overcrowded properties will increase as a consequence of the reforms. According to Shelter’s written evidence, 1 million children are living in overcrowded conditions across the country, which is not only a problem for large families. Shelter also estimates that 72,000 families with 129,000 children may be forced to move out of their existing homes and that children will be uprooted from schools, which impacts on their education and social development.

It is likely that the reforms will lead to a significant movement of local housing allowance claimants from higher to lower rent areas. Those areas are likely to be relatively deprived and lacking in job or training opportunities, transport links, good schools and so on. The reforms have other wide-reaching effects, which can only add to the considerable burden on already stretched local authorities and on resources such as schools and doctors at a time when local authority spending is being decimated by the Tory-led Government. In the Stockton borough, there is a 28% cut in grant over the next two or three years, most of which is front-loaded.

My hon. Friend the Member for Brighton, Pavilion (Caroline Lucas) mentioned that it is important we do not detach housing benefit from the broader issue of affordable housing provision and the difficulties for first-time buyers, especially in London and the south-east—although it is a problem across the country. The Government say that they will build 150,000 new affordable homes over the next five years, but that is less than a third of what the country actually needs. I recognise that Labour could have done much more in government to secure more adequate provision of social housing, but it is important to recall that, when we came to power in 1997, we were left with a £19 billion maintenance backlog by the previous Tory Government. I often wonder what the picture would be today if we had been able to spend that £19 billion on building new homes.

The Tory failure to fund the upkeep of social housing meant that hundreds of thousands of families were living in substandard and even dangerous conditions. Through our decent homes programme, council-owned homes have been fitted with more than 700,000 new kitchens, more than 500,000 new bathrooms and more than 1 million new central heating systems. More than £33 billion—£21 billion of it from central Government—has been invested in social housing, and we have reduced the number of non-decent social homes by 1.5 million. Yes, that created tens of thousands of jobs, but those jobs have now gone, forcing more people out of work and making them dependent on the kind of allowances we are debating today.

The Committee made a series of recommendations around the issues aimed at getting a balanced approach to change, and the Government responded just over 24 hours ago. Apart from the stark statement that the Government consider the estimates made by witnesses to have been exaggerated and that, in any event, the extra £190 million of funding will meet the challenges, however great, the response offers limited consolation to the people who will be most affected by the changes. Like others, I am not sure that the £190 million will go anywhere near to meeting the transition costs and other challenges. Paragraph 30 of the response states:

“If landlords reduced rents by £10 a week there would be a significant reduction in the number of customers in receipt of Housing Benefit under the Local Housing Allowance Scheme that would face a shortfall.”

There are two problems with that. First, I remain to be convinced that the claimed downward pressure on rents will happen, regardless of the number of people in receipt of that benefit. Secondly, why should families and individuals who have so little to start with have to face cuts in their weekly income for some politically motivated reason that I fail to understand?

Yes, I have heard the arguments, such as those made by the hon. Member for Woking (Jonathan Lord), who has left the Chamber, about it being unfair for people on benefits to live in the same or even better homes as people in employment. However, we surely do not accept the Daily Mail-type rhetoric that suggests the bulk of families on benefits are wasters and scroungers. They are not, and it is time we saw evidence of the care that the Government claim to have for our most needy. The Daily Mail line is disproved best by Shelter’s evidence that 0.01% of the entire local housing allowance caseload is represented by households claiming the maximum rent available.

Apart from the welcome decision to see sense and abandon the punishment of people on jobseeker’s allowance by fining them 10% of their housing benefit for being unable to find a job within 12 months, I am disappointed by the Government’s response to the report, which contains a set of recommendations put forward with the full agreement of the Select Committee. We have had a very thin response, indeed. As the Government’s programme is rolled out and the experts who gave us evidence are proven to have had well founded fears, I hope that the Government will take corrective action quickly and not allow a new underclass to be left deeper in poverty and struggling to find a home.

[Dame Anne Begg]

I wonder whether, with my hon. Friend’s experience as a local councillor, he has been able to quantify how much extra it may cost local councils to deal with the homelessness that will arise as a result of the Government’s proposals, and, indeed, the increase—perhaps return—of the bed and breakfast, which will be the only alternative that many people will have, as a result of being forced out of their homes?

[Alex Cunningham]

I do not currently have the specific details relating to Stockton-on-Tees, but I know that there are anxieties about everything, from how the council will deal with housing benefit in the future, to how it will deal with the people who are going to lose their jobs, as its responsibility is removed. It expects a considerable influx of people into the housing department seeking accommodation and further help. Whether that will be available, I do not know, and that is all the more reason why, as the Government have been proved to have been wrong on this issue, they will need to take quick action and correct it.

--- Later in debate ---

[Steve Webb]

The hon. Lady has said that proxies can be used, which means that we can identify categories of people to whom additional concessions should be made. That is what we did with the extra bedroom for the carer. The report specifically mentions people who need an extra room for a wheelchair. People on certain rates of disability benefit will almost certainly have a wheelchair but live in a house that can accommodate it; others will live in houses that need another room for the wheelchair. Rather than trying to categorise everyone in the same way, the flexibility of the discretionary system allows us to cater for those differences.

I was pleased to hear the hon. Member for Westminster North say that we have to work within our resources. That was a heartening comment, because every pound spent on another recipient or on further delays and concessions—on everything that has been asked for today—comes either from someone else covered by the housing benefit system or from our contribution to tackling the deficit, which is one reason for the reforms.

The hon. Member for Stockton North (Alex Cunningham) said that it is a difficult time for local government, implying that the Government just fancied cutting council budgets by 25% because of what he called an evil Tory-led, or Liberal Democrat-Conservative coalition plot. We all knew that this would happen, because substantial cuts in local government were coming down the track anyway. It is important to acknowledge that that is the backdrop against which we are operating. This is not an environment in which there is money kicking around. It is not as if we can resolve all these problems and delay tackling the remorseless rise in the housing benefit budget. Every £1 billion that goes on housing benefit every year is £1 billion that the low-paid, hard-working taxpayers, who are our constituents, will have to find.

[Alex Cunningham]

There would have been cuts under a Labour Government as well, but they would have been spread over a longer period of time. Does the Minister not accept that the pressure on local authorities today in dealing with all the inquiries from people who are worried about the Government proposals is just adding to the strain that they are under at a time when they are losing staff and more people are coming through their doors?

[Steve Webb]

As the hon. Gentleman has said, local authorities are making plans to reduce staff over the coming years. Some local authorities have chosen to frontload more than is necessary—more than is proportionate to the cuts that they have had—for their own political reasons. Nobody disputes that this is a difficult financial environment for local government; it is. Part of the problem is that spending has been allowed to get so out of control that we have had to rein it in rather rapidly.

--- Later in debate ---

[Steve Webb]

I have a feeling that it might have been the previous Government, in whom the hon. Lady was a Minister, who introduced the rent-a-room rate. The point about the rent-a-room scheme is to try to make better use of the housing stock. I will not dwell on the social housing overcrowding measures—they are in the Welfare Reform Bill and are not the subject of this report—but I will say that much of what the Government are trying to do is about recognising the limitations of the existing social housing, private rented and owner-occupied stock, and making better use of it.

We have here a classic example. Rather than pay a 29-year-old single person the full housing benefit for a flat of their own, we could pay them housing benefit that enables them to live in a spare room in someone’s house, which would be good news for the person who owned that house, would free up the one-bedroom flat and would save the taxpayer money. I have no idea why the hon. Lady opposes that idea, unless it is on the grounds that it is better value for money. [Interruption.] I am sorry, but I have not given way. I am trying to manage my time, because we have covered a very wide range of topics.

I have covered the fact that accommodation does not need to involve HMOs, and I have raised the rent-a-room scheme. As soon as I talk about, “living with family”, everyone will throw their hands up in horror and say, “You can’t possibly expect people to do that,” but there are diverse circumstances. For example, there is a set of people in their late twenties who live at home with their parents—I think they are called the boomerang generation. For them, it is a rational thing to do, and it enables them perhaps to save up for a deposit on a house. There is also a set of people who live close to family and have a good relationship with them—there are lots of caveats to that—to whom we pay housing benefit for the full rent on a one-bedroom flat just for themselves, when they have family down the road who could accommodate them at no cost to the taxpayer. At a time when money is tight, asking them to consider that option seems entirely rational and a sensible way to use the existing housing stock.

The hon. Member for Aberdeen South spoke about the housing market in her own constituency. I do not think that anyone is saying that all housing rent inflation is about the LHA. I do not think that I have ever said that, and I am not aware that any of my ministerial colleagues have either. I do not dispute for a second that in Aberdeen and other places local market factors drive up rents. However, it is clear that rising real rents are part of the story. In response to Professor Steve Wilcox, whom I know well because I have written papers with him, our breakdown of the growth in housing benefit between different factors suggests a significant role for rent growth. Let me just take Members through how we get to that.

In the past decade, between 2000-01 and 2010-11, the cash increase in spending on housing benefit was £10.5 billion. It is worth reflecting on that £10.5 billion increase over 10 years, and there is no sign of that increase easing off. With another billion, another billion and another billion, doing something does not seem particularly deplorable. Out of that amount, £5 billion is straight inflation—what we would have expected on the strength of inflation—£2 billion is real terms social rent growth, £2 billion is real terms private rent growth, £2 billion, right at the end of the period, as the hon. Member for Westminster North said, is case load growth, and about £500 million is the child benefit disregard. Real rent growth, therefore, is not only about the LHA, but it is a significant contributor to the growth in spending.

The challenge for us, as a Government, is whether to just sit back and take it, letting private landlords go on increasing rents above inflation year after year, and saying, “Yep, that’s fine, we’ll pay that,” without trying to put a brake on it. That is where CPI comes in. I have seen the projections. If CPI is done for decades, it of course has the sorts of effects that were described in the Shelter research mentioned by the hon. Member for Stockton North and, I think, the hon. Member for Brighton, Pavilion, who has now left us. CPI is not for ever. We have said that CPI on the LHA rates will be introduced in 2013, and will be reviewed at the end of the comprehensive spending review period in 2014-15. At that point, we will look at the impact, but what CPI will do is put a brake on the expenditure. Housing benefit expenditure is like a runaway train—nothing seems able to stop it—and we have to try to get the housing market to structure itself differently, rather than keep feeding the runaway train.

[Alex Cunningham]

If, as the Government say, CPI is the only fair way to determine increases in the future, is the Minister suggesting that they will go back to an unfair system at some point?

[Steve Webb]

No. The hon. Gentleman, possibly with my help, might be confused. We have already had lengthy debates on CPI as a measure of inflation for uprating benefits, and our judgment is that it is the most appropriate measure of inflation. What I am talking about here is what we do to the LHA rates in 2013. We will put a brake on them rising faster than inflation for two years, and at that point we will look at the impact. That is all I am saying. We are putting in place a mechanism that will cause a pause in that remorseless rise, and I have heard almost nothing in this debate about how we will tackle the growth, apart from building more houses, which is vital—in the past year, we have had the lowest rate of private house building on record, or certainly for a very long time. The argument appears to be, “Lie back and take it,” but that is not the action of a responsible Government.

My hon. Friend the Member for Cardiff Central raised the issue of broad rental market areas, which is relevant in the CPI context. If LHA rates are to be subject to CPI, ideally the broad rental market areas should not move around because the base figure subject to CPI would not be clear. The broad rental market areas must be frozen at the point at which one goes to CPI, and the question is what they would be at that point. My hon. Friends the Members for Cardiff Central and for Cambridge (Dr Huppert) have properly highlighted the problems with the city of Cambridge and the wider area of Cambridgeshire, and although there have been changes to the BRMAs around that area, the idea is that they will be fixed in 2013. My hon. Friend the Member for Cardiff Central mentioned coterminosity with local authorities, in relation to Wales, and that is one of the options being considered. It is an option that has a number of attractions. In London, it would mean that the BRMAs were smaller, and the affordability figures would therefore be within a tighter geographic area. We would be unlikely to make significant changes this side of 2013, partly because every time the rules are redrawn, another set of gainers and another set of losers are created. So, we would rather do that at the point of moving to CPI in 2013.

Local authority boundaries are not without their own problems. Many of my Liberal Democrat colleagues represent seats in Cornwall. Cornwall is now a unitary authority and the whole of Cornwall would be one BRMA—I think that BRMAs can be smaller than that. My colleague who represents Land’s End, my hon. Friend the Member for St Ives (Andrew George), and my hon. Friend the Member for North Cornwall (Dan Rogerson) might have views about the interchangability of their two areas. There is no simple solution, but we are certainly looking at local authority boundaries in response to the points that my hon. Friend the Member for Cardiff Central has raised.

Universal credit has been mentioned, and it was asked whether housing benefit would go in at a flat rate. The details of that will be discussed more in the Welfare Reform Bill Committee, but my certain understanding is that the intention is not simply to have a “so much for housing” number in the universal credit. I think that the approach will be much more tailored, but I am sure it will be discussed much more fully in the Committee.

On the under-occupation rules, it was asked whether people would be moving from three-bedroom houses to one-bedroom flats. The data show that about three quarters of the under-occupation in the social rented sector is by only one bedroom, so the move from three bedrooms to one bedroom would represent perhaps a quarter of the change. The impact might not be quite as great as I think the hon. Member for Westminster North suggested, but we have just published some more data on that.

Oral Answers to Questions

Alex Cunningham Excerpts

Monday 10th January 2011 Commons Chamber

[Mr Duncan Smith]

I congratulate my neighbour on his role in that idea, which reflects the fact that as the Minister of State, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), has made clear, Jobcentre Plus has worked really well in various constituencies to try to get work clubs going. In fact, the level of work club start-ups so far has been beyond what we expected at this point. Jobcentre Plus and my hon. Friend need to be congratulated, and I look forward to coming to see him in his constituency this Friday.

[Alex Cunningham (Stockton North) (Lab)]

The Demos report “Counting the Cost”, funded by Scope, shows that the number of disabled people who currently live in poverty is far higher than official estimates show, as their lower incomes and higher living costs are not taken into consideration. What action will the Secretary of State take to rectify that anomaly?

[Maria Miller]

I thank the hon. Gentleman for his question. The Government are doing two things. First, they are ensuring that more disabled people can get into employment. As I said earlier, around half of disabled people are in employment; many more want to work and cannot. The coalition Government have made clear their commitment to access to work as a way of helping disabled people into work, as well as to the work of the Minister of State, my hon. Friend the Member for Thornbury and Yate (Steve Webb), through the Work programme and Work Choice. However, we also recognise the extra costs that disabled people face, and our reform of disability living allowance and the introduction of personal independence payments will help to ensure that we have a robust mechanism in place, which is not means-tested but can support disabled people. I am glad to hear that the Opposition will perhaps support some of our reforms of disability living allowance.