Amendment of the Law

Baroness Primarolo Excerpts

Tuesday 29th March 2011 Commons Chamber

[Mr John Leech (Manchester, Withington) (LD)]

It is a pleasure to follow the right hon. Member for Birkenhead (Mr Field), who made some very measured comments.

I am delighted to be able to contribute to the debate, and to welcome a number of measures that will be good for Manchester and good for the people of Manchester. I must confess that I approached the Budget with a certain amount of trepidation because of the difficult decisions that the coalition Government had already made in order to deal with the mess with which the previous Government left us. However, I was also well aware of all the work done in the Treasury and between Departments to produce a Budget that would stimulate growth and help to kick-start the economy.

The question is whether the Budget has delivered for Manchester. Before it had even been announced, Manchester Labour councillors tabled a motion which is to be dealt with in the council tomorrow, stating that the council

“notes the damaging impact of George Osborne’s budget on the people of Manchester.”

It was pretty clear that, regardless of what the Chancellor announced, Labour would try to spin it as terrible for Manchester, just as it has tried to absolve itself of any blame for the financial mess in which the country finds itself and the unnecessary and vindictive political cuts that it has proposed in Manchester.

Of course, we would expect the Liberal Democrat opposition in Manchester to take a more positive view of the measures in the Budget. We would, perhaps, expect Simon Ashley, the leader of the Liberal Democrat opposition on the council, to say something like

“This is good news for… Manchester.

It’s a double win because not only does it give incentives for new businesses to develop at Airport City, it also generates income we can use to encourage development across the whole of Greater Manchester.”

However, he did not say that, although he has warmly welcomed the good news of the enterprise zone for Manchester. That comment was, in fact, made by Richard Leese, the Labour leader of Manchester city council, who, interestingly, is one of the signatories to the Labour motion that condemned the Budget even before the Chancellor had come to the Dispatch Box to deliver his speech. Yes, even the Labour leader of the council has been forced to admit that the Budget has delivered good news for Manchester.

Under the last Labour Government, private sector job growth in Manchester lagged massively behind that in the rest of England between 2003 and 2008, at less than half the average percentage. That is set to change under the coalition Government. Manchester airport was a beneficiary as one of the first enterprise zones, and up to 13,000 new jobs will be created in the city—more than five times as many as there are unemployed people in my constituency. At the same time, the Chancellor has given the go-ahead for the Ordsall Curve rail project, which will increase rail capacity and improve journey times and encourage investment, growth and job creation in Manchester. During 13 years in government Labour failed to deliver that vital infrastructure project, but it has been delivered in fewer than 11 months by the coalition Government, which is proof of the Government's commitment to investing in our rail infrastructure. Moreover, an extra £873,000 will come to Manchester to help to repair our damaged roads. That will go a long way towards dealing with the thousands of potholes in our streets.

All those measures will help to get people in Manchester into work and protect existing jobs, and the additional 40,000 apprenticeships that have been announced will help more Manchester residents to gain the skills and experience that are needed to grow the economy further.

What about those surviving on pensions? One of the lasting memories of the previous Labour Government was the derisory 75p rise in the state pension. For all their talk, the last Labour Government failed to deliver for pensioners. When the coalition Government were formed, there was a real commitment to give a better deal to pensioners. Pensions have been re-linked to earnings—which was unaffordable, according to Labour—and the triple-lock guarantee will ensure that there is never a repeat of the disgraceful 75p rise. Instead, as a result of this Budget, pensioners will receive an extra £4.50 a week, taking the pension above £100. That is in addition to the decision to make permanent the increase in the excess cold weather payment to £25 for every week of excess cold in the winter. My only objection is that the Chancellor has decided to follow Labour’s plans and not to make permanent the temporary increase in the winter fuel allowance. In my view, that is a mistake and should be looked at again.

Finally, the Budget has also delivered on the coalition promise to take some of the lowest-paid out of paying tax altogether. The increase in the personal allowance by £1,000, and the announcement of a further increase next year, will scrap income tax for more than 1 million of the lowest-paid people. That puts the coalition on track to deliver a key Liberal Democrat manifesto commitment: to increase the personal allowance to £10,000. That has been welcomed by the Institute for Fiscal Studies as “progressive” and by The Times leader column for increasing “the incentives to work.” These changes mark a stark contrast to the Labour Budget that abolished the 10p tax rate, increasing the tax burden for some of the lowest paid.

Overall, the Budget is good news for Manchester—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Time is up.

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[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

I call Cathy Jamieson.

--- Later in debate ---

[Graeme Morrice]

And 50% of those people continued in full-time employment.

The Centre for Cities report also said that most jobs had simply been displaced from elsewhere and so they may bring short-lived prosperity to one area at the expense of another. That point was ably made earlier by my hon. Friends the Members for Wolverhampton North East (Emma Reynolds), for Kilmarnock and Loudoun (Cathy Jamieson) and for Newcastle upon Tyne North (Catherine McKinnell). Given the Government’s professed enthusiasm for efficiency it seems bizarre that they should pursue such an inefficient means of creating new jobs, but when it comes to unemployment the Tories continue to be stuck in a time warp. They believe that the Thatcherite policies of the 1980s are the solution to today’s job crisis, but we know they are no more the solution now than they were then, when millions were left on the unemployment scrap heap.

The most alarming aspect of unemployment today is the UK’s high level of youth unemployment. As Members will know, the number of unemployed 16 to 24-year-olds increased by 30,000 in the last quarter to reach nearly a million—some 20% of all young people—which is the highest figure since comparable records began in 1992. The Government have been pretending that this is somehow not their problem and that they are not responsible for that record high, but let us look at what they have done since taking office last year. They have axed Labour’s future jobs fund—a criminally short-sighted decision—they have axed the education maintenance allowance, thereby disincentivising young people to stay in further education and improve their skills, and they have axed other employment schemes that were aimed at supporting into the workplace young people who have been out of work for more than six months. Let there be no doubt that this Tory Government and their Lib-Dem pals are the ones who are responsible for the record levels of our young people out of work.

Youth unemployment in my constituency stands at nearly 1,000, which is certainly not the worst figure in the country by any means, but every unemployed young person is one too many. I know from speaking to young people in my area that many feel a sense of hopelessness about their situation. They feel that little is being done to support them, that no one in Government cares about their plight and that their future is bleak. Once again, a whole generation of young people is being cut adrift by the dogmatic policies of the Members on the Government Benches.

The Government’s work experience placements will not improve young people’s employment prospects in the same way that six months of real work would. The Department for Work and Pensions has already said that

“the target group for work experience will be a very small proportion of young claimants aged 18-21”

and that it is not about guaranteeing young people a permanent job. The extra 12,500 apprenticeships a year announced in the Budget are woefully inadequate given that nearly a million young people are out of work and need help.

The Federation of Small Businesses has said that the Chancellor’s Budget did not go far enough to incentivise job creation, so action on job creation is another clear dividing line between the Government and the Opposition. The Government stick with their reckless cuts and do nothing to address the record level of unemployment, particularly youth unemployment, that they are presiding over.

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

Welfare Reform Bill

Baroness Primarolo Excerpts

Wednesday 9th March 2011 Commons Chamber

[Teresa Pearce (Erith and Thamesmead) (Lab)]

All Members agree that the welfare system needs reform, and I welcome attempts to simplify the benefits system and make work pay. We need a welfare system that helps those who can work to do so, by supporting people into good, well-paid, meaningful work, and properly supports those who cannot work. However, I have serious doubts about the Bill’s effectiveness, and I am worried about the impact that some of its provisions will have on vulnerable people in my constituency.

I shall first raise some concerns that I have about how the Bill has been drafted and presented. Almost all the charities and organisations that I have been in touch with have raised legitimate concerns about the speed of the legislation and particularly the lack of detail. There is a heavy reliance on regulations and secondary legislation that makes it difficult for Members and others to scrutinise how the welfare reform agenda will work in practice. Clause 11 on housing costs, for example, is only 30 lines long. There is little detail or analysis of how child care costs, free school meals and council tax benefit will be covered under universal credit.

One of the most concerning aspects of the Bill is that some of its provisions are still under consultation. For example, clauses 69 to 72 propose the abolition of the social fund, yet the Department for Work and Pensions consultation on its proposed replacement is still open and does not close until 15 April. Abolishing the central fund and handing the emergency money to local authorities without ring-fencing is likely to create a postcode lottery. It is not right that this provision is included when we do not know its full impact and people have not had a chance to submit their views. I strongly urge the Secretary of State to withdraw any clauses on which consultation is still open.

One of the reforms in the Bill that will affect my constituency most is the changes to housing benefit. Capping local housing allowance rates and setting them at the 30th percentile of local rents rather than the median from April will create affordability problems. Many people will see a shortfall between their benefit and their rent. Plans to introduce regulations to uprate LHA rates based on the consumer prices index will make the problem worse. The DWP’s own impact assessment states that CPI is expected to rise by 2% each year, but rental costs will rise by 4%. This will break the link between housing benefits and actual rent costs, and means that many families will struggle.

The change will push many LHA claimants in London further out to areas like my constituency, Erith and Thamesmead, which has some of the cheapest housing in Greater London. This will place a great strain on our already overstretched housing and local services. The other possibility is that people will simply be unable to find any affordable accommodation, and will be at risk of debt and homelessness. Everyone should be entitled to a secure home. I urge the Secretary of State to think again.

Another of my concerns about is the proposal in clause 111 to apply a £50 civil penalty for claimant error. The proposal will affect the most vulnerable claimants—those who have difficulty filling out forms, those whose first language is not English and whose literacy skills are poor—and people who inadvertently miss out information. More importantly, it appears to link error with fraud, something that Ministers have done far too often recently and this afternoon, the most obvious case being the Chancellor’s announcement in the comprehensive spending review statement that over £5 billion was lost to benefit fraud. As we heard today from the hon. Member for Kingswood (Chris Skidmore), the figure is £1.5 billion. The DWP’s latest central estimates of total fraud and error across the Department shows that roughly the same amount of money was lost in claimant error as through official error by the Department, but we do not talk about departmental fraud. I urge the Secretary of State to reconsider the proposal to introduce a £50 civil penalty for claimant error, as well as the heavy sanctions in other clauses.

I was pleased that the Secretary of State decided not to proceed with plans to impose a 10% housing benefit cut on anyone who had been out of work for a year. That sanction did not make sense, and similar provisions in the Bill need to be reconsidered. A sanction-led approach does not make sense when we are facing huge public sector redundancies, a knock-on effect in the private sector and a weak growth rate which means that jobs simply are not available. There are 2.5 million people unemployed and fewer than 500,000 vacancies in the economy. I am already receiving a significant number of letters from constituents, many of whom were recently made redundant late in their careers, who are desperate to work but cannot find employment.

I have visited local colleges, where highly motivated young people are gaining qualifications in the hope of getting an apprenticeship or a job, but they are fearful because they know that the ratio of claimants to Jobcentre Plus vacancies is 12 claimants to every three vacancies. People need help overcoming barriers to work. They need personalised support, and a Government with a growth strategy to create jobs. A sanction-based approach will only cause severe hardship for the people who need the most support and further stigmatise people on benefits, setting neighbour against neighbour. I also fear that it will mean a significant increase in child poverty rates in this country.

Finally, I dispute the assertion by the Secretary of State that the welfare state is only for the most vulnerable. It is not: it is for each and every one of us. It is in effect a national insurance system into which people pay when they do not need it so that it is there when they do. It is a system in which contributions have just gone up by 1% for everyone in employment, but all they can expect is a cut in pensions and benefits. Overall, I support the principle of universal credit, and I am in favour of simplifying the benefits system and creating work incentives, but in the context of £18 billion of welfare cuts—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

Social Security

Baroness Primarolo Excerpts

Thursday 17th February 2011 Commons Chamber

[Madam Deputy Speaker (Dawn Primarolo)]

I understand that it will be for the convenience of the House if we take motions 2 and 3 together.

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

I beg to move,

That the draft Social Security Benefits Up-rating Order 2011, which was laid before this House on 3 February, be approved.

[Madam Deputy Speaker]

With this we shall discuss the following motion on pensions:

That the draft Guaranteed Minimum Pensions Increase Order 2011, which was laid before this House on 3 February, be approved.

[Steve Webb]

I shall deal briefly with the Guaranteed Minimum Pensions Increase Order 2011. The order provides for contracted-out defined benefits schemes to increase by 3% their members’ guaranteed minimum pensions that accrued between 1988 and 1997. Increases are capped at this level when price inflation exceeds 3%. This is a technical matter that is attended to on an annual basis, and I suspect that it will not be the focus of our discussions.

The broader uprating of social security benefits this year is a landmark event for two reasons. First, it enshrines the restoration of the earnings link for the basic state pension. Secondly, it introduces a clear and consistent approach to price measurement through the move from the retail prices index to the consumer prices index. I suspect that a lot of our debate will focus on that issue, but I want to turn first to pensions and pensioners. It is more than 30 years since the link between the basic state pension and earnings was broken. Although Labour Members talked a good game towards the end of their time in office, they had 13 years in which to restore that link, and they failed every year to do so.

The coalition Government said that they would restore the earnings link for the basic pension, and that is precisely what we have done. Indeed, we have gone one better with the introduction of our triple guarantee, which means that the basic pension will be increased by whichever is highest of earnings, prices or 2.5%. We estimate that the average person retiring on a full basic pension this year will receive more than £15,000 extra in basic state pension income over their retirement than they would have done under the old prices link. This important change will be a benefit to existing and future pensioners. It will provide a more generous basic state pension, giving a solid financial foundation from the state. So from this April, the standard rate for the basic state pension will rise by £4.50 a week, taking it from £97.65 to £102.15 a week. The introduction of this triple guarantee will finally halt the decline in the value of the basic state pension for current and future pensions. It will also mean that even in times of slow earnings growth, we will never again see a repeat of derisory increases such as the 75p rise presided over by the previous Government in 2000.

In addition to restoring the earnings link, we have taken action to ensure that the poorest pensioners do not see the increase to their basic state pension clawed back in the pension credit. This has been done by linking the minimum increase for the pension credit to the cash increase for the basic state pension this year. Therefore, from April 2011, single people on pension credit will receive an above-earnings increase to their standard minimum guarantee of £4.75, which will take their weekly income to £137.35. Of course, as you will be well aware, Madam Deputy Speaker, this is in addition to the key support for pensioners that the coalition protected in the spending review: free NHS eye tests; free NHS prescription charges; free bus passes; free TV licences for over-75s; and winter fuel payments exactly as budgeted for by the previous Government. In addition, we have reversed a planned cut—one of Labour’s many ticking time bombs that I discovered in my in-box. The previous Administration had planned to reduce the cold weather payment from the pre-election—I use that phrase deliberately—rate of £25 a week to just £8.50 a week. We took the view that despite money being tight, helping elderly people on a low income to heat their homes in winter was vital and a priority for the coalition. I can update the House by saying that we have paid slightly more than we thought—an estimated 17.2 million payments worth an estimated £430 million, which we believe is money well spent.

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[Guy Opperman (Hexham) (Con)]

When answering the question asked by my hon. Friend the Member for Poole (Mr Syms), you said you would—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. All hon. Members are doing this, not just the hon. Gentleman. When addressing the shadow Minister, if they refer to him as “the right hon. Gentleman”, we will not have the problem of whether the Chair is planning the election manifestos of all the political parties for the next election.

[Guy Opperman]

The right hon. Gentleman mentioned “a period of time”. How long would that be?

Housing Benefit

Baroness Primarolo Excerpts

Tuesday 9th November 2010 Commons Chamber

[Mr Douglas Alexander]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Members should not be constantly standing on their feet. The Secretary of State is indicating to whom he intends to give way. I would be grateful if Members resumed their seats.

[Mr Alexander]

I would not wish the Secretary of State, however inadvertently, to leave the House with a misapprehension in relation to the impact of the 10% cut in housing benefit on those receiving jobseeker’s allowance who find themselves unemployed after a year. If I heard him correctly, he came close to saying that people would not lose out because of other changes to the benefits system, such as the introduction of the Work programme. Will he therefore explain why, in the Red Book, it is scored as a saving of £110 million? Either people will lose money and be punished because they find themselves unemployed after 12 months, or they will be better off, in which case there should not be that saving score in the Red Book.

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[Andrew Griffiths]

I thank the Secretary of State for giving way. He will know that one of the myths put about by the Opposition was that councils in London were already booking bed and breakfasts across the city to cope with the consequences of this policy. I draw the Secretary of State’s attention to a website called FullFact.org, which has made some freedom of information requests to local authorities in London. I shall pick just a few. In Kensington and Chelsea, no such bookings have been made; in Wandsworth, no bookings have been made in bed and breakfasts; Lewisham council confirms that it has not made any bookings—

[Madam Deputy Speaker]

Order. That was supposed to be an intervention, not an opportunity to read statistics on to the record. I am sure the Secretary of State is perfectly capable of doing that himself.

[Mr Duncan Smith]

My hon. Friend the Member for Burton (Andrew Griffiths) is right. That was based on one comment by one person, who backed it up with no evidence. The point here is that, as we are discussing with councils, there is no need for them to worry about having to put people into homeless accommodation because once we get these numbers right, which we believe we are doing, the money we will be allowing will be sufficient to cover the costs, such as for rents and school year changes, of those who may have to move, of whom there will be far fewer than the Opposition claim. That is the real point, so my hon. Friend is right. What did Labour do with the figure in question? They just used it by ramping it up and saying, “This is terrible, all these people are going to be shipped out to Reading or somewhere on the south coast”—another scare story put about by Labour. It is absurd.

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[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. I remind hon. Members that Mr Speaker has imposed an eight-minute time limit on all speeches. There are 36 or 37 Members who wish to participate this afternoon and the time limit starts now.