amendment of the law

Baroness Burt of Solihull Excerpts

Tuesday 25th March 2014 Commons Chamber

[Andrew Griffiths]

I thank my hon. Friend for that intervention, and I will not let petty rivalries interfere in this important debate. He is right, however, because this is cumulative: it is not just about the historic cut in duty by a penny this year, but last year’s 1p cut in duty and the scrapping of Labour’s hated beer duty escalator. Added together, they have taken more than 7p off the price of a pint in our local community pubs. Beer drinkers, publicans and the industry will welcome and raise a glass to that, and it is part of the measures that have shown this Government to be the most pro-pub and pro-beer Government in generations. It is historic: this is the first ever Chancellor to cut beer duty two years running, and it comes after the previous Government, when beer duty rose by an eye-watering 42% between 2008 and 2012. Is it any wonder that the industry has been in such dire straits?

This industry is important for our community pubs. We talk about supporting community pubs, but seven out of 10 drinks purchased in a pub are a beer. This is a great British product that is brewed and consumed in this country and employs people in this country. Those 1 million jobs are important—46% of those workers are under 25, and more than 50% are women. If we want to help young people into the jobs market and get more women into the workplace, supporting the hospitality industry, pubs and breweries is exactly the way to do it. CAMRA, the Society of Independent Brewers, and the British Beer and Pub Association have welcomed the support that this Government have shown for beer and pubs.

Last year the Chancellor had a beer brewed in his name. Pennies from 11 was brewed by a Tatton brewery, and Sajid’s Choice was brewed in recognition of the support that the Financial Secretary gave the brewing industry during his time in the Treasury. I have no doubt that in weeks to come, Morgan’s Magnificent Mild will be brewed in gratitude.

[Lorely Burt (Solihull) (LD)]

I totally agree with my hon. Friend, but no list of beers named after hon. Members would be complete without Ginger Rodent, which was brewed in honour of the Chief Secretary to the Treasury.

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[Neil Parish (Tiverton and Honiton) (Con)]

It is a great pleasure to follow the hon. Member for Livingston (Graeme Morrice) although I disagreed with many aspects of what he said, in particular his comments about bankers’ bonuses. Under the previous Labour Government, £12 billion was spent on bonuses but that has dropped to £1.6 billion. That is still too much, but it is less than what Labour intends to spend on its various projects, which it spent many times over.

I welcome this Budget, and I congratulate the Chancellor and the Conservative-led Government on getting to a situation where, by the end of the year, we will have virtually halved the deficit that we inherited from the Labour Government. Let us not beat about the bush: we as a country were borrowing £120 billion, not to build infrastructure projects such as HS2 or anything like that, but just to cover the running costs of day-to-day government in this country such as local government spending and housing benefit. Those things have to be paid for, and we were borrowing the money for it.

Who will pay that money back? Not necessarily my generation, but that of my children and grandchildren, will be the ones who pay back the money borrowed by the last Labour Government. There is no great morality in borrowing more and more money, yet that is all we saw from the last Labour Government, and that is all we will see if—God help us!—there is a future Labour Government. I applaud the Government for taking the right decisions. We have control over spending and that needed to be done.

I want to comment on the help for savers in the Budget. For five years we have had a 0.5% base rate of interest. When I was in business, I lived through interest rates of 7%, 8%, 10%, 12% and even 15%. They were crippling for those who were borrowing money, but for those who were saving and had money in the bank the high interest rates gave them a very good income. In this five-year period with a 0.5% base rate, our retired people and other people with savings have had a very low income from their savings. People will now be able to put up to £15,000 a year per person into an ISA, and that is to be welcomed.

I also welcome abolishing the 10p rate on savings income. If hard-working people on the base rate of tax have paid tax on their savings, why should they then have to pay tax on the income from those savings? This is, therefore, a very helpful measure. From 2015, pensioners will have access to a bond with a 2.8% return for a year’s savings and 4% on a three-year bond. In these very difficult times with very low interest rates for savers, that is very much to be welcomed.

It is a good idea that people will not automatically have to buy an annuity. For too long, pensioners have been held to ransom by those who sell annuities. There will now be competition. I have been on the Lamborghini website, but I have not seen a huge increase in the price of Lamborghinis as a result of what the Chancellor put in his Budget. I trust people to spend their money, which they have worked hard to earn and put into their savings all their life, in a way that they want. If they want to buy property and use it to provide somebody with a rented home, that is also good news for the economy.

Personal allowances are going up to £10,500 in 2015-16. They are always good for my constituents and good for the people of this country. The Government cannot create jobs or increase the buying power in people’s incomes by waving a magic wand, but they can reduce the amount of money they take away from people. That is what the Government are doing. Let us not forget that this is a Conservative-led Government. We are prepared to give hard-working people on low wages as much money as they can in their pockets, so that they are able to buy as much as they can.

[Lorely Burt]

I am very interested in the hon. Gentleman’s comments on the Conservative-led Government, but this is a coalition Government. The policy on hard-working people keeping more of their money actually comes from the front page of the Liberal Democrat manifesto. He is most welcome to praise it and it is an excellent policy.

[Neil Parish]

I thank the hon. Lady for her intervention. It is indeed a Liberal Democrat policy, but it is also a Conservative policy. If we look at the make-up of the Government Benches, there are some 307 Conservative MPs compared with 50-whatever it is of Liberal Democrats, so I think the Conservatives can take a fair share of the credit for bringing the policy forward. As I said, the rise in personal allowances to £10,500 in 2015-16 is very good news, because it will take more and more people out of tax.

Taking a penny off the price of a pint of beer is great. The Otter brewery and the Branscombe Vale brewery are in my constituency. Of course, we also have Aston Manor brewery, which creates wonderful cider. While I am very happy that the Chancellor has taken a penny off beer and has frozen cider duty, I hope—being a good west country man—that cider will get its fair share in the form of a duty reduction at some point in the future.

There is no doubt that the council tax freeze that the Government have delivered, through both Conservative-led Devon county council and Mid Devon district council, has helped people greatly with their living costs, and I think that we, as a Government, should be commended for it. We in Devon welcome the help for social enterprise, because Devon has one of the highest densities of social enterprise in the country, and we welcome the help with fuel duty for the air ambulance service, because Devon has a very successful air ambulance.

The doubling of the business investment allowance to £500,000 is great news for the economy, because businesses do not get any relief unless they invest the money. If we want to see investment in the private sector, it is absolutely right for the allowance to be raised. The help for energy-intensive companies is also absolutely right, because of the rise in energy prices.

For all those reasons, I very much welcome the Budget.

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[Richard Fuller (Bedford) (Con)]

Budgets aren’t what they used to be. It used to be that there were no surprises in Budgets because the measures were trailed in the media; that is what we got used to under the last Government. Yet one of the most far-reaching and long-term changes came as a surprise in the Budget statement, and I commend the Chancellor for that.

Budgets aren’t what they used to be because they used to be met by a vociferous and articulate Opposition pulling the Budget to pieces and expressing their hostility to measure after measure after measure. That has been replaced by a deathly silence on the Opposition Benches, and here we are with two hours to go still wondering whether the Opposition will decide to oppose anything in the Budget whatsoever. I do not know whether the shadow Chief Secretary to the Treasury has yet worked out with his colleagues whether they are going to be more ambitious and more left wing in their response, or whether they are going to go along with what the Government have provided.

[Lorely Burt]

rose—

[Richard Fuller]

Perhaps my colleague in the coalition will enlighten us on what she understands the Labour party may do.

[Lorely Burt]

As my hon. Friend was speaking, I wondered whether the Opposition have nothing to say because the Budget is so excellent.

[Richard Fuller]

That is a fair comment, but we would hope for critical thought—a thoughtful Opposition going through the Budget and finding good reasons to oppose what is in it. Again, however, we heard nothing from the Opposition. It is all very well trotting the shadow Chief Secretary into the media studios to claim—despite the fact that growth is up, unemployment is down and inflation is down—that everything is going badly, like a latter-day Chemical Ali, but the truth is the Opposition have no coherent response to what will prove to be one of the strongest foundations for long-term stability in our economy.

That foundation is based on the sensible principle that people know best how to spend the money they have earned. This Government recognise that and, more importantly, in this Budget we recognise that people understand that when they have spent a lifetime saving money from their earnings, they are in the best position to decide how best to spend it. They do not want to be artificially constrained by someone else telling them how best way enjoy their retirement. This Budget delivers that freedom to them and should be applauded. It comes after years of socialist trickle-down, taking money from working people to put into Labour’s big bureaucratic plans—out of touch with the realities of people—to find out whether their Highgate polices are somehow going to deliver from the socialist graveyards in Highgate to the people of Bedford and Kempston. We have dismissed all that top-down, trickle-down, socialist rhetoric, in order to give people back the money they earned. This is a Budget for working people, and I am proud to support it.

The Budget also shows that the Government recognise that as we were so highly leveraged—with so much debt—in 2010, it will take a long time to recover. A few years ago, I would have urged the Chancellor to go further and cut expenditure more, but he chose a middle path on reducing public expenditure. We have made progress in bringing the deficit down, and sometimes we are now joined by people who said a few years ago that we were going too far, too fast. The Chancellor has found a middle way with that.

The Opposition’s level of coherence on this Budget is most starkly demonstrated by their position on the benefit cap. May I say to the shadow Chief Secretary—if he has the time—that I understand from the speech of the hon. Member for Leeds West (Rachel Reeves) that the Opposition are going to support the benefit cap? Page 88 of the Red Book contains a helpful listing of the benefits that will be included in the benefit cap, which include housing benefit, other than housing benefit passported from jobseeker’s allowance. I presume that that includes the spare room subsidy. So my question to the shadow Chief Secretary, who, let us face it, ought to have some economic competence, is: if the spare room subsidy is included as a benefit, how can he keep referring to it as a tax? Does he understand the difference between a tax and a benefit? If he does not, and if he is going to vote on this, will he stop—[Interruption.] He is saying from a sedentary position that it is not just him, but he is charged with coming up with economic policies. One core feature of economic policy is understanding the difference between a benefit and a tax.

Inherited Social Housing Tenancies

Baroness Burt of Solihull Excerpts

Monday 24th March 2014 Commons Chamber

[Esther McVey]

I have already said that—of course we will.

[Lorely Burt (Solihull) (LD)]

Is not the crux of the problem that far too many families are waiting for social homes, that there is too much overcrowding in our social housing and that more than 400,000 houses were lost under the previous Government? Is not the answer to build more social housing for everyone who needs it?

[Esther McVey]

My hon. Friend is correct; we have to look at those on housing waiting lists and those in overcrowded accommodation, not that the Opposition seem to care about those people. We have committed to £4.5 billion of spending to ensure that we have another 177,000 social homes by 2015.

Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Monday 24th February 2014 Commons Chamber

[Esther McVey]

That was certainly a rewrite of history, but Labour is used to doing that. The future jobs fund cost £6,500 per person and had only a 50% success rate, but not in the private sector, because most people did not end up there. The hon. Gentleman will be pleased to know that with the work experience programmes and sector-based work academies we are introducing, we are achieving better success rates at one twentieth of the cost—£325 per person.

[Lorely Burt (Solihull) (LD)]

6. What steps he has taken to help those reaching retirement age before the introduction of the single-tier pension.

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

For those who will reach pension age before the introduction of the new state pension, we have introduced a new class of national insurance contributions, which will allow those pensioners the opportunity to increase their state pension in retirement. More details of the scheme will be announced later this year.

[Lorely Burt]

I am grateful for that answer and it is extremely encouraging. Can my hon. Friend the Minister say what the Government have done to ensure that pensioners in my constituency are able to manage the cost of living rises in this Parliament?

[Steve Webb]

As my hon. Friend knows, the manifesto on which she and I stood proposed a triple lock, which was implemented by this coalition Government. It means that each year the pension will rise by the highest of the growth in average earnings or prices or by 2.5%, so the state pension is now a higher share of national average earnings than at any time in more than 20 years.

Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Thursday 30th January 2014 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

4. What steps her Department is taking to ensure that internet service providers and social media companies tackle and confront the online abuse of women.

[Lorely Burt (Solihull) (LD)]

6. What steps her Department is taking to ensure that internet service providers and social media companies tackle and confront the online abuse of women.

[Stuart Andrew (Pudsey) (Con)]

7. What steps her Department is taking to ensure that internet service providers and social media companies tackle and confront the online abuse of women.

--- Later in debate ---

[Lorely Burt]

Oh behalf of my own party, may I echo the comments of my hon. Friend the Minister? Liberal Democrats do not, and will never, tolerate the abuse of women in the workplace. Does my hon. Friend agree that the abuse of women and others online should be treated in the same way as offline abuse, and will he tell us what he can do about it?

[Mr Vaizey]

Yes, I do agree with the hon. Lady, which is why I welcome the recent convictions of John Nimmo and Isabella Sorley, which clearly demonstrate that threatening or harassing behaviour is illegal, whether online or offline. Last year, the Crown Prosecution Service made 2,000 prosecutions under section 127 of the Communications Act 2003.

Mesothelioma Bill [Lords]

Baroness Burt of Solihull Excerpts

Monday 2nd December 2013 Commons Chamber

[Kate Green]

It is right to say that progress could have been faster and that more could have been done, but we should not overlook the fact that, over four decades, it is Labour Governments who have, until now, made the progress that has been made. As I have said, it was my noble Friend Lord McKenzie who began the process of consultation that has brought us to where we are today.

[Lorely Burt (Solihull) (LD)]

I am very supportive of the Bill, as I was of previous ones—my grandfather died of pneumoconiosis—but do the Opposition welcome the Bill and will they support it in the House tonight?

[Kate Green]

I am happy to answer that question, as I would have done during my speech. The Opposition welcome the progress that has been made, and we will not oppose the Bill this evening, because we share with the Minister and Members from both sides of the House a wish to process payments and get them to victims as quickly as we can. That is not, however, the same as saying that the Bill cannot be improved further. We believe that it can be improved, and I will outline some of our suggestions for how that might be achieved.

As I have said, the Bill has already passed through the House of Lords, and the work done in that place has undoubtedly improved it already. We will support the Bill on Second Reading, but it does not go quite as far as necessary in bringing justice for victims. We will therefore seek further improvements as the Bill continues its parliamentary passage. I want to make it very clear that we are not doing so to score political points or to delay the Bill unnecessarily. Everyone understands the importance of establishing a scheme and getting payments flowing as quickly as possible. However, this House will fail the victims of this terrible disease if we do not do the best we can to recognise their appalling suffering through a fair system of payments.

Victims have been left for years without any compensation, while the insurance industry has continued to benefit from billions of pounds in premiums. It certainly seems to the Opposition that the Government have not yet done everything that could be done and all that needs to be achieved, despite the progress that has been made and the undoubted good intentions of the Minister and his colleague in the House of Lords.

Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Monday 5th November 2012 Commons Chamber

[Mr Hoban]

The hon. Lady should examine some of the schemes that the previous Government introduced, under which people were paid regardless of the outcome—regardless of whether they helped people get back into work. Our Work programme pays people by results; it ensures that contractors are paid only where people get jobs, and sustainable jobs at that.

[Lorely Burt (Solihull) (LD)]

8. What steps he is taking to protect members of pension schemes from being incentivised to transfer their pensions.

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

The Government have worked closely with the pensions industry to address concerns regarding incentive exercises. As a result, an industry code of practice was published in June, which we fully support. A monitoring board has been established to evaluate the effectiveness of the code.

[Lorely Burt]

I am grateful for that answer. Can my hon. Friend provide evidence on the number of companies that have signed up to the code of practice? Is it achieving its objectives?

[Steve Webb]

I am grateful to my hon. Friend for that. The industry’s response to the code has been very encouraging. Some 49 individual firms and, perhaps more importantly, 14 representative organisations have publicly signed up to support the code, and the figures are growing. The supporters include the major employee benefit consultancies engaged in these exercises and their representative organisations.

Living Standards

Baroness Burt of Solihull Excerpts

Wednesday 30th November 2011 Commons Chamber

[Charlie Elphicke (Dover) (Con)]

I want to talk particularly about the importance of getting the country going in order to raise living standards. I pressed the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) on what Labour’s growth plan was and how much it would cost. I will happily accept any intervention from Opposition Members on this, but it seems to me that it would cost billions. How would it be funded? It is clear that it would be funded by debt––more borrowing.

We have narrowly avoided suffering from the debt storm throughout Europe, but were we to give way on the fiscal rectitude that we have shown and to go to the markets and borrow to fund Labour’s extravagant growth plan, we would be at risk of higher interest rates. Let us bear in mind that every one percentage point increase in interest rates means another £1,000 on the average mortgage.

Painful though the programme to cut overspending has been for so many people throughout the country, the most important achievement—the most important tax cut, if we like—has been the reduction in the cost of borrowing. It has helped so many hard-pressed families, including those in my constituency, to muddle through the recession as best they can, in a situation in which global inflation from imported goods, such as petrol and so on, has been higher and has put pressure on living standards, as every constituency MP understands all too well.

These are very difficult times not just for my constituents in Dover and Deal, but for everyone in the country who finds themselves without a large pay rise at work and facing rising global food prices. It has been a very difficult year, as the OBR makes clear. This year, average inflation has been 4.5%, yet average earnings have not kept pace. It has been difficult, and it has been a squeeze, but world prices, including in commodities and food, are something over which no Government have any great control. I, like my hon. Friend the Member for Poole (Mr Syms), have not heard from the Opposition any clear plan for what they would do differently to deal with the situation, but it does get better next year as those things work their way through the system.

[Lorely Burt (Solihull) (LD)]

My hon. Friend paints a picture of the difficulties that families throughout the country face, and I fully understand the points that he makes. Will he speculate on how much worse the situation would be if, having entered government with a warning on our triple A credit rating, we had not taken those necessary steps? We would be in the same situation as Italy or even Greece. How many more families would be out of work, and how much smaller would be the amount of money to go round?

[Charlie Elphicke]

I thank my hon. Friend for that powerful intervention, and she is absolutely right. The point has been made that, when we entered office, we had similar interest rates to Italy, but its rate is now up at about 8% and we are basically parallel with German borrowing. If we were turned by the Opposition into—dare I say it?—an Italian job, we would find that interest rates shot up for the average home owner and small business borrower, and that we faced serious difficulties and serious economic decline. In fact, we are not in recession and we are still growing.

Youth Unemployment

Baroness Burt of Solihull Excerpts

Wednesday 9th November 2011 Commons Chamber

[Mr Byrne]

This is the Minister whom the chairman of the UK Statistics Authority once wrote to about his casual use of statistics, so I shall take no lessons from him about statistics traded across the Dispatch Box.

[Lorely Burt (Solihull) (LD)]

Will the right hon. Gentleman advise me on the future jobs fund, which he heralds as a great creator of opportunities? Owing to EU rules on wage subsidy claims, posts offered had to be newly created; they could not be normal vacancies. How many young people got real, permanent jobs out of the future jobs fund?

[Mr Byrne]

The hon. Lady need only look at the statistics, including those for her area. This year, long-term youth unemployment has risen by one third in Solihull. The future jobs fund was helping to bring youth unemployment down. To return to the point made by the hon. Member for Beverley and Holderness (Mr Stuart), we have to help young people stay close to the labour market because if we let them drift into long-term unemployment, they have a bigger chance of being unemployed in the future, of being low paid and of drifting into ill health. That is why the right decision for her constituents, as well as mine, is not to do nothing, but to act.

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[Lorely Burt (Solihull) (LD)]

I shall be very brief. There is not enough time to cover everything mentioned in the motion, so I will avoid the usual political knockabout in the first part of the motion, which is the Labour narrative about how we got into this economic situation. Those arguments are well rehearsed. What matters is not how we got here, but how we get out. I agree with some of the suggestions the Opposition have made. I have long campaigned for a 5% VAT rate on home renovation materials and have asked the industry to analyse the cost-effectiveness of that proposal.

[Mark Lazarowicz]

Will the hon. Lady give way?

[Lorely Burt]

I will not, if the hon. Gentleman will forgive me.

I agree that we could work up a programme to give national insurance relief to small companies taking on new workers, maybe even in the form of a rebate after the first complete year of employment. I have got lots of other ideas, which I hope colleagues in the Treasury will consider. Again, I agree with the Opposition: we need more incentives to stimulate private business to rev up the engine of growth.

It all boils down to growth, but it must be growth in the private sector, not growth led by creating jobs that do not exist, which is what one could argue the future jobs fund did. The Minister has outlined all the steps we are taking to create jobs and prosperity. The motion says only two things about youth unemployment: that long-term youth unemployment is up, and that we should not have scrapped the future jobs fund. Well, youth unemployment is up, but it grew under Labour by 40%—going from 664,000 unemployed 16 to 24-year-olds in May 1997 to 924,000 in May 2010. According to the latest statistics, that figure is 991,000. I hope that a Labour Member will intervene to explain to me how that equates to a 68% increase because, according to my mathematics, that seems more like 7%.

[Meg Hillier]

I thank the hon. Lady for giving way, especially given that time is short. Does she not agree that, out in the real world, people do not want the bickering. What they are concerned about, as we should be, is that an entire cohort—for example, graduates—is experiencing a higher rate of unemployment. We should be addressing the whole cohort issue, because we are condemning an entire group of young people to lower incomes and worse life chances as a result of Government policies.

[Lorely Burt]

I am sure we agree on the seriousness of the situation and all the different groups of young people who are affected. Unfortunately, the hon. Lady did not answer my question, but never mind.

[Rachel Reeves (Leeds West) (Lab)]

Will the hon. Lady give way?

--- Later in debate ---

[Lorely Burt]

I am sorry, but I will not give way.

Dealing with youth unemployment is incredibly hard, but the Opposition should not make political capital out of a relatively small increase in existing figures that are a legacy of their own figures.

[Rachel Reeves]

Will the hon. Lady give way?

[Lorely Burt]

I have only two minutes. I am very sorry.

The future jobs fund was well intentioned, but ineffective and expensive. It created new positions that were not, by definition, real jobs. It was so ineffective, in fact, that young people who were not on the programme fared better in getting real employment than those who were. It cost more than it saved, and failed to accomplish its targets. Now the Opposition are also calling for a bank levy to raise funds for a youth jobs fund. However, we have already introduced a bank levy, and it raises more each year than they managed to raise with their bankers’ bonus tax.

So what have we done for young unemployed people? We have concentrated on apprenticeships and getting people into real jobs. We have exceeded the targets in our apprenticeship scheme, with the provisional figures showing that the number of apprenticeships has grown by 58% across the UK and some areas showing growth of 198%. Perhaps the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) would like to welcome the 82% rise in apprenticeships in his constituency. The Work programme is designed to ensure that people can get out of a cycle of benefits and get back into work that pays. The jury is still out on the Work programme, but I am really hopeful that the work of specialist agencies, using their skills to find jobs for long-term unemployed individuals, will bear fruit.

I welcome the fact that Labour Members are bringing ideas to the table. As I said, I agree with some of them, but not all. We will listen and we will work with all colleagues in this House for a more prosperous future for all our constituents.

Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Monday 13th June 2011 Commons Chamber

[Maria Miller]

The only reason I read the list out quickly was not to incur the wrath of Mr Speaker.

I would like to reassure the hon. Lady that I absolutely understand her point. Indeed, I am meeting organisations representing many people with fluctuating conditions. Importantly, we are also considering the findings of the work capability assessment to see how we can build into the new personal independence payment a way of ensuring that people with fluctuating conditions are well served.

[Lorely Burt (Solihull) (LD)]

13. What assessment he has made of the effects on women born between 6 March and 5 April 1954 of his proposals to increase the state pension age.

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

Our proposed changes will equalise women’s pension age with men’s more rapidly than previously planned. Under the Government’s proposals, women born on 6 March 1954 will have a pension age of 66 and those born between 7 March and 5 April 1954 will have a pension age of up to a month less.

[Lorely Burt]

I highlight the plight of 33,000 women born in one month in 1954 who will be the worst affected under the pension retirement rules. In total, 500,000 women will be affected by one year or more than expected. When they get their pensions, they will be a lot better off than they would have ever been under the Labour party, but what can we do for women in this particular group, who will have to wait an additional two years for their pension?

[Steve Webb]

My hon. Friend raised this important issue, I think, in last Wednesday’s debate when we were startled when she declared an interest in the question. Were we to address the concerns of that group of 33,000 women, we would find that women born one month before or after—who might be affected by a few months less, but still significantly—would ask for a change as well. The short answer is that to delay the whole thing till 2020, as some have suggested, would require an additional £10 billion to be found. She will understand why that is not possible.

Low-income Households

Baroness Burt of Solihull Excerpts

Tuesday 14th September 2010 Westminster Hall

[Lorely Burt (Solihull) (LD)]

Welcome to the Chair, Ms Clark, for your first chairmanship of a Westminster Hall debate. I am sure that you will always guide us wisely and fairly.

I congratulate the hon. Member for Westminster North (Ms Buck), who spoke with great passion. Her presentation was extremely well researched, but the facts that she presented support her case, which is exactly what one would expect. Liberal Democrats certainly do not take these issues lightly, and we heard in the passionate words of my hon. Friend the Member for Colchester (Bob Russell) that no ideological pleasure is taken from any cut made by the Government.

Liberal Democrats are in coalition because the country is in a financial pickle. We are borrowing £1 of every £4 that we spend, and if we do not do something about it, two main things would happen. First, we would lose our AAA borrowing status, which would mean that we would have to pay more to borrow, which would mean that our economic standing in the world would go down and we would go into economic meltdown, similar to Greece.

[Ms Buck]

I am listening carefully to the hon. Lady, who is making important points. However, the purpose of my debate was to query the Government’s claims, and their practice of requiring a deficit reduction programme to fall disproportionately on the poorest people. I am not sure that what she is saying, important and valid though it is, actually addresses that point.

[Lorely Burt]

I am not sure that what I am saying is not relevant. I shall discuss the effects of the reductions that we will make, but I contest the hon. Lady’s claim that many of them are not fair. Well researched though her presentation was, there are things that she cannot know—a great deal is still to come from the Government.

Much of what has been presented has been based on speculation, and there is a great deal of scaremongering at present. Clearly, as the hon. Member for Cities of London and Westminster (Mr Field) said, people are afraid. The time to become afraid is when we see what the Government are proposing. They are trying hard to make their proposals as fair as possible.

I want to make a second point about why we are doing this—it is the legacy. The hon. Member for Cities of London and Westminster said that we must take a grip of the existing situation. That would apply whatever party were in government. I am declining the invitation of the hon. Member for Westminster North because I want to talk about the issues that she wants to me to raise. She mentioned the report of the Institute for Fiscal Studies. I do not claim to be an expert, but it was selective in what it chose to raise, and it ignores some of the major parts of the Budget, including changes to tax credits, the increase in income tax personal allowance and freezes on council tax. It does not take account of the choices on which measures in previous Labour Budgets to continue and which to reverse, or the effect of future Budgets.

The debate on the effect of Government policy is legitimate, and all parties must be prepared to discuss that, but with respect, the debate is happening too soon. The way in which the vast majority of changes to Department for Work and Pensions policy and savings in the welfare budget will be implemented will not become clear until after the departmental spending review in October. Any debate before then is bound to be based on media speculation, of which we have had sufficient.

One reason for the consultation on departmental spending is to ensure that the difficult decisions are not made lightly, and that any cuts are made in a way that protects those on the lowest incomes. Alongside the cuts is a radical programme of core Liberal Democrat policies specifically targeted at people on low incomes—the income tax pledge, the pupil premium and the re-linking of the basic state pension to earnings. However, in the coming weeks and months, the Government must ensure that they focus on ensuring that those groups most likely to be on low incomes are protected, specifically disabled people, older people, young people and people who are long-term unemployed.

[Kate Green]

It is absolutely right to want to protect the most vulnerable, and I am grateful to the hon. Lady for mentioning the disabled, but are we not already seeing increasing numbers of disabled people going through the new work capability test for employment and support allowance and being found to be ineligible for that benefit, and being pushed on to the lower level of jobseeker’s allowance? Can we expect that position to become even more of a problem as existing incapacity benefit claimants are put through the test and perhaps experience the same outcome? Is that not a cause for concern, particularly when there is an exceptionally high number of appeals against work capability tests, many of which are proving successful?

[Lorely Burt]

The hon. Lady makes an important point, but the issues to which she refers began under a Labour Government, which she supported. We must be sure that the tests that are imposed on people are absolutely fair.

Several hon. Members mentioned housing benefit. The proposals have not yet been fully created, and it is not yet possible to say what impact they will have on low-income households. However, any cap on maximum local housing allowance payments must ensure that those with large families are not unfairly discriminated against, and I hope the Minister will speak about that.

I shall conclude on a slightly more positive note, by mentioning some of the positive changes for low-income households. On the income tax threshold, we have increased the personal allowance by £1,000, so 880,000 people will come out of tax altogether and 23 million other taxpayers will benefit by £170 million a year.

We have discussed the child element of tax credits, and some hard decisions have been made so that the poorest families will benefit much more than those who can afford to bear the burden. In addition, the coalition Government will increase the personal allowance to £10,000 per annum, which the Liberal Democrats pledged in their manifesto, and will lift the poorest 3 million people out of income tax altogether.

The Government are consulting on the pupil premium to determine the exact figure for it. It will attach additional funding to children from low-income households and will dramatically improve the life chances of children from families that fell into a poverty cycle under the last Government.

With the re-linking of pensions to earnings, pensioners will finally receive a fair deal with no more 2p—or whatever it was—increases in their pension. Under the triple lock proposed by the Liberal Democrats, the basic state pension will rise in line with prices or inflation, or by 2.5% a year, whichever is highest.

The consultation is taking place. The theory and principle to which we adhere is that savings may be made on benefits through large-scale simplification. The consultation paper proposes a universal credit to replace the main three forms of benefit support—jobseeker’s allowance, employment support and income support—as well as other sorts of benefit. We will allow a uniform taper rate so that when people find work, benefits will be withdrawn in line with earnings. I agree that the previous Labour Government tried hard to resolve the poverty trap, and the taper may be a solution to ensure that it will always be profitable to go to work.

The division between rich and poor increased under the previous Labour Government. Throwing money at the problem has not provided the solutions that they and everyone wanted. I hope that in the dire financial straits facing the country, the present Government will be imaginative in creating a fairer way of ensuring that people achieve prosperity and work in the best possible way.