Welfare Reform and Work Bill

Debate between Iain Duncan Smith and Jeremy Corbyn

Monday 20th July 2015 Commons Chamber

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I beg to move, That the Bill be now read a Second time.

I am conscious of the fact that many Members wish to speak today and that we have compressed time as a result of the statements. I will take interventions, but I recognise that we need to make some progress so that everybody has a chance to speak. In moving the motion, I wish to make it very clear that Conservative Members are united in support of the Government’s aim to move from a high tax, high welfare and low wage society to a low tax, lower welfare and higher wage society. This Bill lays the ground for that commitment and helps us to continue the job of reversing the Labour’s Government’s failure that led us into the difficulties we inherited.

Let me remind the House quickly, before we get into the details, of what we inherited when we came into office in 2010: nearly one in five households had no one working—this is what Labour left us; the number of households where no one had ever worked had nearly doubled; 1.4 million people had been on benefits for most of the previous decade; and close to half of all households in the social rented sector had no one at all in work. Since then, even through the coalition, we have proceeded to get to 2 million more jobs being created; there are now 2 million more apprenticeships; the number of workless households has reached a record low—it is down more than 670,000 since 2010; and the workless household rate in the social rented sector is now the lowest on record. The recent Budget debate, in which we had a pretty full discussion of many of the characteristics of this Bill, made it clear that we want to go further, delivering 3 million more apprenticeships and moving towards full employment. These are measures that this Government will drive forward and that this Bill requires us to report on each year.

We will also continue to bear down on the deficit and debt, achieving a surplus by the end of the Parliament. We are spending £3 billion on debt interest payments alone every month—the figure is £33 billion a year, which is £1,236 per household. Every pound we spend on paying off the debt is a pound we are paying to others such as overseas investment funds, rather than on the necessary public services such as schools and hospitals or on being able to reduce taxation further. Eliminating the deficit and paying off our debts is the moral and most effective things for a responsible Government to do for people on low incomes, who rely more than anybody on those services.

It is worth pointing out that we also need to drive productivity improvements. The Budget contains some important measures to make that a reality, and our long-term productivity plan sets out how it will boost productivity over the next 10 years. As my right hon. Friend the Business Secretary made vividly clear in launching that plan, if we could, for example, match US levels of productivity, we would increase GDP by 31%—that is £23,000 a year for every household. A key driver to getting us there is the national living wage. That historic reform will give more than 2.7 million people currently on the minimum wage a pay rise of more than £5,000 a year. With the increase in the personal allowance to £12,500 by the end of the Parliament, the national living wage will make work pay and improve people’s living standards. It will also help productivity. The Governor of the Bank of England confirmed last week that the living wage will help increase the productivity of workers and of the country—

[Jeremy Corbyn (Islington North) (Lab)]

rose—

[Mr Duncan Smith]

I want to quote what the Governor has said and then I will give way to the hon. Gentleman. The Governor said:

“There should be some improvement in productivity as a consequence of adjustment in the national living wage”.

[Jeremy Corbyn]

I thank the Secretary of State for giving way so early on in his speech. Obviously, all of us are supportive of a productive, growing economy—that benefits everybody. But when he drew up proposals for this Bill, did he look at the levels of child poverty in Britain? Did he look at the levels of homelessness, destitution and rough sleeping in Britain? How does he think this Bill is going to improve that situation? Alternatively, will it make the holes in the welfare state safety net rather bigger, with more people falling through it as a result?

[Mr Duncan Smith]

I am grateful to the hon. Gentleman for his intervention. I wish him well in his campaign. [Laughter.] I was being genuine and not politically expedient. I must say that being Leader of the Opposition is not all that it is cracked up to be. I have some personal experience of that. He should be careful what he wishes for. None of us wishes him ill.

On the hon. Gentleman’s legitimate question, I say yes to the first part. The measures in the Bill relating to life chances will do more to help us target the kind of work that we should be doing to turn lives around in families and households to ensure that people are able to get into work and to sustain themselves in work. As for the third part of his question, it is also correct that this Bill, with all the other welfare reforms and the things that we are bringing in, will ultimately improve the life chances of people and the numbers in work. We know that the best way out of poverty is through full-time work.

Child Poverty

Debate between Iain Duncan Smith and Jeremy Corbyn

Wednesday 1st July 2015 Commons Chamber

[Mr Duncan Smith]

I agree with my hon. Friend. The Opposition are concerned and angry that the measure is being changed, but it is worth relating the interesting fact that, even with all the money under the measure, the number of working-age people in in-work poverty rose by 20% between 1998-99 and 2010. It beggars belief that some want a policy that is clearly not working to continue simply because it has become totemic to them. They are not looking at its actual effect.

[Jeremy Corbyn (Islington North) (Lab)]

If I heard the Secretary of State correctly, he said that a quarter of those who move from unemployment into work remain in poverty. Is not there a problem, therefore, of short-term working, zero-hours contracts and low wages? Is not there also a problem, particularly in London and the south-east, of excessively high rents, which are driving so many people into poverty? Any interested observer of the Secretary of State’s statement would say that it was a study in obfuscation to avoid examination of what he is really doing, which is damaging the life chances of millions of young people in this country. Child poverty is a terrible thing and he should address it rather than run away from the facts.

[Mr Duncan Smith]

The hon. Gentleman and I should be at one, because we are addressing the facts. That is what today’s announcement was about. The hon. Gentleman mentions the number of those who are in work but who have not risen out of poverty. The figures I read out earlier show that, of those who fail to get proper maths or English qualifications at school and make it into work—they are in the minority—some 75% of the women will never progress because of their failure to get qualifications. Does not the hon. Gentleman think that I am answering his charge through educational attainment—driving change for those children and getting them into work so that they can progress?