State Pension Age: Women
Lord Evans of Rainow Excerpts(9 years, 2 months ago)
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Ian Blackford
I hope that the Government are beginning to get the picture. For each month that passes, women’s pensionable age is increasing by as much as three months. We should just dwell on that—a three-month addition to pensionable age for each month that someone was born later than their neighbour, friend or colleague.
I spoke about a woman born in March 1953 who retired this year at age 63, but a woman born a year later, in March 1954, will not retire until September 2019, when she will be aged 65 and a half. [Interruption.] Conservative Members seem to think that this is funny, but we are talking about women who are being significantly disadvantaged over too sharp an increase in women’s pensionable age. Those Members might find that acceptable, but I am afraid that I, my colleagues and many millions of other people in the country certainly do not. A woman born six months later, in September 1954, will have to wait until she is 66 in September 2020. Over an 18-month period, a woman’s pensionable age will have increased by three years.
As we keep saying, we are not against equalisation of the state pension age—[Interruption.] My colleagues and I have said that in every speech we have given in this House. We have made it crystal clear, as have the WASPI women, that we agree with equalisation. It is the pace of change that is the problem, and Conservative Members are burying their heads in the sand over it and are refusing to face the reality.
Ian Blackford
Absolutely. Of course we have to face the gender inequality that has been with us, with women paid less for such a long time and women gaining less access to occupational pension schemes, but Government Members just seem to want to make things worse. As we keep saying, we are not against equalisation of the state pension age; it is the pace of change and the lack of appropriate notice that are the real issues.
Graham Evans
I am most grateful. If Germany can introduce equalisation of the pension age in 2009, why cannot the United Kingdom do the same? We are behind the game.
Ian Blackford
I am absolutely dumbstruck! I do not know how many times we have to say it, but we are not against equalisation. We support it. It is the pace of change imposed by the Government that is the problem.
While we are on the subject, the Government might wish to consider the fact that the Polish Parliament met on the 16th of this month and agreed to reverse the increases in pensionable age because they recognised the unfairness. Perhaps we should take a leaf out of the Poles’ book, rather than this one.
Graham Evans (Weaver Vale) (Con)
I am grateful to you, Mr Deputy Speaker, for giving me the opportunity to speak in this important debate. I am a little surprised that there are so few Members on the SNP Benches.
There is a clear need for equalisation of the state pension age. We are all agreed on that. We have an ageing population. People are leading healthier, longer lives. Given that an ever greater proportion of the population are drawing pensions, while an ever smaller proportion are contributing through national insurance, the pension system risks becoming unsustainable without the important measure that we debated and voted on in 2011.
On the most fundamental level, however, we as a House should champion equality. The new single-tier pension is much fairer and simpler. People who have worked for 35 years will receive £8,000 a year. It is a very simple process: 35 years of work will give us £8,000. I have already worked for 35 years, but I will not qualify for my pension until I am 67; the same applies to Mrs Evans. As we all live longer and healthier lives, that will increase, I am sure. Let us make that clear, here and now. The single-tier pension also takes into consideration for the first time the time off that people take to have children—maternity and paternity leave.
I supported the measure. When I was a member of the Work and Pensions Committee we investigated the matter. I contacted the DWP to find out my retirement date, and I have to say to the Minister that the document I received was rather drab—not the most exciting document to read. The first time I went through that process, in 2013, I was told I was going to retire at 65; when I did it in 2014, the answer was 66; and the following year it went up to 67. I had to read the documents very carefully indeed, so I think people can be forgiven for not realising that their retirement date had changed. I encourage the Government to take a look at the personalised documents that are regularly produced, with a view to perhaps introducing a little colour—for example, making the retirement date red and easier to see.
Mr Pat McFadden (Wolverhampton South East) (Lab)
I am grateful to the hon. Gentleman for his comments about information, but this is not a small mistake. I have constituents who will lose £30,000 or more by the shifting of the goalposts. Does he not think that because of the failure to communicate the changes, the Government have a duty to look again at transitional arrangements for the women affected?
Graham Evans
I do not agree, because, to be fair to the DWP, it has communicated with people. I think it could communicate better, as I have just described, but following the 1995 Act the Department issued a leaflet, among other press and publicity measures including direct mailings, to advise the public of the changes. In 2004, during the 13 years of Labour Governments, the DWP ran an information campaign distributing more than 2 million pension guides alongside adverts in the press and women’s magazines to complement an interactive online state pension calculator. In addition, all state pension statements issued from 2001 would have included as standard the new state pension age as determined by the 1995 changes. Since then, more than 11 million statements have been issued.
The Government have been notifying women of the changes. Those most affected by the 2011 changes were written to directly. That involved sending out more than 5 million letters between January 2012 and November 2013. Research carried out by the DWP found that 6% of women who were within 10 years of pension age thought that their state pension age was still 60. However, those efforts were not wholly successful. Had they been, we would not be here now debating this subject. There are lessons to be learned by Governments of all colours, present and future, on effective communication of such important matters. Those who planned for their retirement want to live the retirement they planned for.
After the 2011 changes, the Government passed an amendment to the Bill that provided £1.1 billion-worth of transitional funding, delaying the equalisation of the state pension age. We have already considered this matter and taken mitigating action. The new state pension has been brought forward a year and many women will be significantly better off than they would have been. By 2030, more than 3 million stand to get an extra £550 a year. Likewise, the introduction of the triple lock, which ensures that the state pension rises by inflation, wages or 2.5%, whichever is greater, ensures that the basic state pension will be over £1,100 a year higher than it was at the start of the last Parliament.
To undo the 2011 changes would cost £30 billion in addition to the loss of £8 billion in tax revenue. To undo the 1995 changes—
Oral Answers to Questions
Lord Evans of Rainow Excerpts(9 years, 3 months ago)
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Penny Mordaunt
I thank my hon. Friend for that question. Historically, we have not paid benefit during an appeal. The key to cracking this is to ensure that the assessment is done correctly. I would point out to him that the mandatory reconsideration process would be over before the person had to return the vehicle.
Graham Evans (Weaver Vale) (Con)
The Minister for Disabled People, Health and Work (Penny Mordaunt)
Building on the work of my predecessor, we have introduced a new Disability Confident scheme to identify the value that disabled people bring to businesses and to give employers the tools and techniques they need to recruit, retain and develop them. The new scheme went live in July, and it will be formally launched soon. I must thank my hon. Friend for being an early adopter.
Graham Evans
I thank my hon. Friend for that answer, and I pay tribute to her predecessor. Earlier this year, I held my fifth annual jobs and apprenticeship fair at Mid Cheshire College in Weaver Vale. In July, I undertook my first Disability Confident fair, where I signed up 19 Cheshire businesses to become Disability Confident employers. Will my hon. Friend tell the House what steps the Government are taking to encourage more small and medium-sized enterprises to take up this very important role?
Penny Mordaunt
In addition to the Disability Confident scheme, we are trialling the small employer offer, which will provide some additional support to those who may have less capacity within their own organisation. We are also working closely with the Health and Safety Executive, with its reach to SMEs, to target our services better.
Welfare Reform and Work Bill
Lord Evans of Rainow Excerpts(9 years, 11 months ago)
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Stephen Timms
I think that the hon. Member for North Dorset (Simon Hoare) must be rather inexperienced in the procedures of Parliament, because ping-pong is a well-established feature of our proceedings.
I welcome the change of heart on the publication of child poverty indicators, but I am very disappointed by the position that the Minister has taken on the Lords amendments on the employment and support allowance. It is a shame that the Secretary of State is not here tonight. As we have heard, he has written to Back-Bench Conservative Members to tell them that it is “impossible to provide” the information that is required. However, that is not what the Equality and Human Rights Commission says, as my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) pointed out in her excellent speech. A letter from the commission’s chief executive dated 16 September last year made this point:
“Assessments need to include sufficient detail and analysis to demonstrate that the draft proposals have been adequately considered for their potential impact on equality. We have considerable expertise in this area”.
However, the Secretary of State rejected its offer of help and now says that it is impossible to provide the information. It is perfectly possible to provide that information, but Ministers do not wish to provide it because the House would then be able to see what the effects would be.
An attempt has been made to present these changes as in the interests of disabled people, but they are not supported by a single one of the organisations representing disabled people. Parkinson’s UK has made its position very clear:
“The policy is likely to have a significant, harmful impact on the health and wellbeing of people with Parkinson’s.”
Macmillan Cancer Support states:
“Macmillan strongly opposes the proposed reductions because of the negative impact they will have on people affected by cancer and other long-term conditions.”
The judgment that the House has to make tonight is whether Ministers are speaking for disabled people or whether the organisations representing disabled people are speaking for them. I hope that the House will choose in favour of the latter.
Graham Evans (Weaver Vale) (Con)
This is a very important debate. It is important to note that these changes relating to the provision of the employment and support allowance work-related activity component will have no impact on existing claimants. They will apply only to new claimants and to claims made after April next year.
Additionally, the Government have said that they will publish a White Paper this spring detailing how they plan to improve support for people with health conditions and disabilities. I look forward to seeing what is in that White Paper, particularly on the role of employers in reducing the disability employment gap. I carried out my fifth jobs and apprenticeships fair in my constituency recently, and the 40 employers I spoke to all agreed that they would commit to a Disability Confident-aware fair, which is what I will hold this year. I am going to play my part, and everybody in this House has a role to play in helping people who wish to get into work.
There is an overwhelming body of evidence that work is generally good for physical and mental wellbeing, and 61% of those in work-related activity groups say that they want to work. The existing policy set up by Labour in 2008 is failing those claimants. Despite £2.7 billion being spent this year supporting those in the ESA work-related activity group, just 1% of the WRAG claimants moved off ESA each month. The policy is clearly not working, and we need a better system than this.
Jo Cox (Batley and Spen) (Lab)
I urge the Government to remember that, by their own definition, claimants receiving work-related ESA are not capable of work at that time. They are people the Government’s own work capability assessment has deemed not to be fit for work. Surely it is therefore preposterous that the Government think they can cure those people’s complex and long-term ailments and miraculously incentivise them to return to work by reducing their financial support.
If implemented, these cuts will surely also hinder the Government’s ambition to halve the disability employment gap. Instead, they will push many disabled people further into poverty and have a significant and harmful impact on the health and wellbeing of many people, including many in my constituency. As has been mentioned, a Macmillan survey of nearly 1,000 people living with cancer recently found that one in 10 would be unable, or would struggle, to pay their rent or mortgage if they lost £30 a week. How can this Government think it is acceptable to risk cancer patients losing their homes as a result of these cuts? Surely, as has been said by many hon. Members, particularly the hon. Member for Stevenage (Stephen McPartland), who spoke articulately and with such passion and principle, it is time to listen to Macmillan, Scope, Sense and Parkinson’s UK, to the many experts who have lined up and to the recommendations of the parliamentary review of the proposed cuts and reverse the removal of the work-related ESA component—and the equivalent payment under universal credit—as proposed by these amendments. It is also surely time for a thorough impact assessment of the proposed changes before they come into effect.
Finally, instead of cutting these life-saving benefits, the Government should, as my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) has so clearly articulated, put in place much more effective back-to-work support and provide more disability employment advisers to help these people deal properly with the barriers they face. We should not be punishing some of the most vulnerable people in our country—we should be giving them a helping hand.
Welfare Reform and Work Bill
Lord Evans of Rainow Excerpts(9 years, 11 months ago)
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Debbie Abrahams
The hon. Gentleman makes a very valid point.
The suggestion that working four or five hours a week should recoup the loss of income with the introduction of the so-called living wage has been questioned by the Equality and Human Rights Commission. The Disability Benefits Consortium, a coalition of more than 60 disability charities, has said that the proposed cut will push sick and disabled people further away from work and into poverty. It will not help, as the Government have claimed. A recent survey shows the concerns not only of disabled people—seven out of 10 of them think that their condition will deteriorate with the introduction of the ESA WRAG cut—but of the public as well. A Populus poll of 2,000 adults in January revealed that 71% think that cuts to social security will make the UK a worse place for disabled people.
Graham Evans (Weaver Vale) (Con)
This Government spend £50 billion a year supporting people with disability and health conditions. That is more than France and Germany. If what the hon. Lady is saying is true, it is not just about money, is it?
Debbie Abrahams
Again, we need to look at our spend as a proportion of GDP. We are 19th out of 32—[Interruption.] No, France and Germany spend more. We spend 1.3% of GDP. We are 19th out of 32 EU countries. Contrary to what this Government perpetually claim about our generosity, we are not good at all in terms of the actual spend in relation to GDP. It was 1.6% of GDP in 1960. Now it is 1.3%. It is shameful. On those grounds, I ask all Members across the House to consult their consciences and support amendment 8.
Let me move now to clause 14. Again, the Government have been more than a little disingenuous when they suggest that the reduction in social security support applies only to new ESA WRAG claimants from 2017. From this April, 492,180 people currently on ESA WRAG will start to migrate across to universal credit, which, as many people know, combines a number of benefits, including ESA, into one amalgamated benefit.
Clause 14 removes the limited capability for work component for the work element of universal credit. That means that everyone currently on ESA WRAG will ultimately be transferred on to universal credit and will also have their support cut by £29.05 a week, or £1,500 a year.
Paul Maynard (Blackpool North and Cleveleys) (Con)
Everything comes to he who waits—and that was a long wait, everyone will agree. I will try to be brief, as I have seen how many Members want to speak.
I want to explain why, despite some misgivings about minor details, the Lords amendments are not just wrong but a retrograde step that would make matters worse. No one in the Chamber would disagree that it is a policy failure that only 1% of WRAG claimants exit the scheme to take up employment. We should not lock that into legislation, as that policy failure is unacceptable. I see constituents who have come to my surgery because they are marooned in a no man’s land. Some have been found to have limited capability for work in the work capability assessment, and some have exhausted all avenues of appeal, but for various reasons they do not feel comfortable with transitioning to jobseeker’s allowance, even though in theory they might receive greater support to re-enter employment if they did so. I endorse the disability charities saying that we need more disability advisers in Jobcentre Plus. That is one use to which we could put the extra £100 million that the Government talk about.
Housing Benefit and Supported Housing
Lord Evans of Rainow Excerpts(10 years ago)
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John Healey
My hon. Friend, who chairs the Select Committee on Communities and Local Government, understands this better perhaps than anyone in the House. There is no alternative to the supported housing needed by many of the most vulnerable people, and which they have at present. That is why Ministers must act immediately to exempt supported housing in full from the crude cuts and undertake a detailed consultation with providers about how such housing can be secured in future. Before Christmas, I revealed the scale of the problems facing people in specialist supported housing.
John Healey
No, I will carry on for the moment.
Since then, we have had a series of half-baked statements from the Government. The first was, “This is unnecessary scaremongering.” Not true—we are giving voice to the warnings and evidence from those who have the facts and will have to manage the consequences. Those are organisations the British public trust and respect, including Age UK, Mencap and Women’s Aid. Secondly,
“nothing will change until 2018.”
Not true—the cut and the cap apply to new tenancies from April this year, so the problem is immediate. My local housing association, South Yorkshire Housing Association, has told me that
“it takes time to rehouse anyone, let alone the most vulnerable people. Consultation on scheme closures will need to begin within a matter of weeks”.
No one will sign contracts for supported housing when they do not know whether the basic costs can be covered. New investment has already been stopped in its tracks: one in five providers have frozen investment and new schemes, according to the Inside Housing survey. Golden Lane Housing, Mencap’s housing arm, had plans for £100 million of investment over the next five years in supported housing across England, but they have been scrapped.
Thirdly,
“Additional discretionary housing payment funding will be made available to local authorities, to protect the most vulnerable, including those in supported housing”.
Not true—the fund is run by councils to deal with emergency applications from people already coping with the bedroom tax, the benefits cap, and the cuts in the last Parliament to the local housing allowance. Awards often run for only a few months. The fund is currently £120 million a year, and it is a short-term and overstretched measure.
Policy costing in the autumn statement scores the cost of the Chancellor’s housing benefit cut at £515 million. The Government proposed to top up the discretionary housing payments fund by not £515 million but £70 million. Housing organisations rightly dismiss the idea that the fund is the solution, saying that that is “nonsense and unworkable”.
Brandon Lewis
We have been clear about protecting the most vulnerable people in our society; I will come to that in a moment. The hon. Gentleman is right. We need to continue to make progress in cracking down on fraud and error, and in local government as well—something that the Labour Government did nothing about.
Graham Evans
My hon. Friend is making some powerful points. Will he remind the House that the Government are issuing £800 million to be allocated to local authorities for discretionary housing payments, and that a further £40 million was announced in the autumn statement for supporting the vulnerable, particularly for refuges for beaten women?
Brandon Lewis
My hon. Friend makes a strong point. It is rare that I disagree with him, but the figure is slightly better than he says. There is £870 million coming through. He highlights the Government’s clear focus on these issues.
Graham Evans (Weaver Vale) (Con)
I would like to put it on record that I, too, welcome the announcement on the 1%.
We spend more on family benefits in Britain than they do in Germany, France or Sweden. There is no doubt that social housing is invaluable for hundreds of thousands of people in this country who need help in getting accommodation, but it cannot be right to continue to subsidise people to live in houses that are bigger than they need while there are 375,000 families living in overcrowded conditions. Nor can it be right to subsidise people to live in houses that are out of reach or unaffordable for hard-working taxpayers.
Page 97 of Labour’s 2009 Budget summarised the problem:
“Indications…are that some claimants may be able to afford accommodation that is out of reach of working families on low incomes. Furthermore, costs of Housing Benefit have been rising above inflation despite static caseloads.”
In fact, between 1999 and 2010, the cost of housing benefit rose by 46% in real terms, reaching £21 billion. Housing benefit was truly out of control, with the maximum housing benefit award reaching over £100,000 a year. Even after the benefit cap, people can seek support for housing up to a rate of £20,000 a year. What would a working family paying tax have to be earning to afford rent of £20,000 a year? They would have to be earning £60,000, £70,000 or £80,000 a year.
Rents in the social sector increased by 20% over the three years from 2010-11 and were markedly higher on average than for like-for-like properties in the private sector. That is clearly unsustainable and helped to fuel the something-for-nothing culture that Labour presided over for 13 years. Some 1.4 million people spent most of the previous decade trapped on out-of-work benefits, while the number of households where no member had ever worked nearly doubled under Labour.
The announcements in the autumn statement followed on from reforms in the last Parliament to better align the rules between social and private landlords, ensuring fairness between those receiving housing benefit and the hard-working taxpayers who have to pay for it.
Graham Evans
No, I will not.
Those who oppose making difficult decisions on welfare must say what they would cut or what taxes they would put up to pay for it. However, it would seem from some contributions by Opposition Members that Labour and its leader have still not learned the lessons of the past. Their plans to spend more, borrow more and tax more are exactly what got us into the mess before; and, as Labour’s great recession showed, it is working people and their families who end up paying the price for it. When we came into government in 2010, the country was borrowing over £150 billion a year. One in every four pounds spent by the then Labour Government was borrowed. Unemployment had increased by nearly half a million. Britain had suffered the deepest recession since the war and had the second biggest structural deficit of any major economy.
We have halved the deficit and are working to eradicate it by 2020. It is a fundamental truth that without sound public finances there can be no economic security for working families and the country cannot pay for the hospitals, schools and housing that people rely on. It is this Government’s long-term economic plan that is turning this country into a high-wage, low-tax, low-welfare economy. The Labour party is out of touch with hard-working people. Labour is out of touch, out of ideas on welfare and out of office—and, based on this debate, will be for a very long time.
Universal Credit: North-West
Lord Evans of Rainow Excerpts(10 years, 1 month ago)
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Marie Rimmer
Yes, there will. How can it be right that anyone should be subject to a great injustice based on a postcode lottery determined by arbitrary decisions and the serial failings of the Department for Work and Pensions in delivering the programmes thus far? We have all heard the arguments on tax credits, and Members on both sides of the House were in agreement. Surely the change of terminology to universal credit from tax credit does not justify or warrant these cuts. It is simply indefensible that some people should be cast aside in this incompetent administrative experiment.
We have experienced other issues during the roll-out of universal credit. It would be unreasonable to assume that such a large scheme could be implemented without hiccups and a certain level of teething problems. The Government were forced to slow down the roll-out of the programme dramatically compared with their original aim. The OBR forecast in March 2013 that there would be 6.1 million claimants, but it is now expected that 330,000 people will receive universal credit during 2016-17. However, the problems that we have experienced in the north-west go well beyond what could be put down to normal problems that can be ironed out as the system beds in.
A range of administrative issues have had a terrible impact on people in receipt of universal credit. Many of the issues were highlighted in a report by Citizens Advice published in the summer of 2015. That report, “Waiting for Credit,” was drawn from 16 citizens advice bureaux, the majority of them in the north-west, including St Helens CAB. It detailed a range of issues faced by people claiming universal credit and by those trying to access it. For instance, universal credit is paid monthly in arrears. Following a new claim, the aim is for the claimant to be paid within five weeks—that is a total of nine weeks. The time lag causes claimants huge short-term financial difficulties, even when that aim is adhered to. However, the report found that 30% of claimants had to wait even longer.
Graham Evans (Weaver Vale) (Con)
I am grateful to the hon. Lady for securing this important debate. She mentioned that people are paid monthly in arrears. Does that not apply to everybody who works for a living and pays taxes, which is what ultimately pays for the welfare?
Graham Evans (Weaver Vale) (Con)
Thank you, Mr Nuttall, for calling me to speak in this important debate. It is a pleasure to serve under your chairmanship.
I pay tribute to the hon. Member for St Helens South and Whiston (Marie Rimmer) for bringing this important debate to this Chamber today. In the last Parliament, it was my privilege to work for three years on the Work and Pensions Committee. We conducted an investigation and produced a report on the introduction and roll-out of universal credit, and we visited jobcentres in the Greater Manchester area. Indeed, we also conducted an investigation at about the same time into jobcentres themselves, which was overwhelmingly welcomed by the people at the sharp end—the people who work in jobcentres.
A couple of weeks ago, I visited two local jobcentres—one in Runcorn and one in Northwich—and the staff told me that universal credit made it a lot easier to help people to get into work, particularly the long-term unemployed. Together with the changes that the Government have introduced to tax, which effectively take some of the lowest-paid people out of tax altogether, universal credit helps people who have been unemployed for a long time. There is a clear incentive to work, because people can keep more of their pay. The Government intend to introduce a system whereby people can earn £12,500—just over £1,000 a month—before they start to pay income tax.
Chris Green (Bolton West) (Con)
Does my hon. Friend agree that this change marks a profound shift in the welfare system? As many people would expect, the welfare system is now a mechanism to help people into work, as opposed to a catchment for people to remain unemployed.
Graham Evans
I absolutely agree with my hon. Friend; he hits the nail on the head. This change is about enabling people to stand on their own two feet and to get away from the welfare culture that grew under the 13 years of the previous Labour Administration. When Labour introduced tax credits, they were going to cost £4 billion; the figure is now £30 billion. That is simply unaffordable. As a nation, do we pay money to people for not working or do we encourage them to stand on their own two feet and get a job? And as I say, the tax incentive means that people can earn about £1,000 a month before paying tax, because Conservatives believe that people should keep more of their earnings.
Fiona Bruce
Perhaps it is also good to remember that this Government are going to double the amount of free childcare to 30 hours a week, which for working parents of three and four-year-olds is worth about £5,000 a year per child. More than that, even for those on universal credit there is help. Universal credit currently covers up to 70% of eligible childcare costs, but from April that will increase to 85%. That is a huge difference, worth £1,368 per year for every child.
Graham Evans
I am most grateful for that intervention; my hon. Friend makes a very powerful point. As I have said, jobcentre staff say that the changes that the Government have introduced to simplify welfare and benefits, and the incentive to work, enable those people who are unemployed to get into work quickly. And for long-term unemployed people who have been on benefits for many years, there are now clear incentives to get into work, because they will keep more of the money they earn; universal credit enables them to keep more of what they earn.
Nick Thomas-Symonds (Torfaen) (Lab)
It has emerged clearly from this discussion that there needs to be greater awareness of the cuts to the universal credit work allowance that are coming in this April. Let me just give the example of a single parent—say, a single mother—with one or more children. That allowance will be halved from April from £8,808 to £4,764, which is a reduction of £4,044. In cash terms, that working mother will lose £2,628 from this April. How on earth is that an incentive to work?
Graham Evans
We have to look at the whole scheme. We have to look at the fairness to those in receipt of welfare and benefits, but what we never hear about from Labour Members is that the scheme has to be fair to the people who pay for it, who are the hard-working taxpayers. If we look at people who are working—[Interruption.] I know it is controversial to talk about the people who actually contribute and pay for welfare, but we have to look at the people who make the decisions to work hard and work full-time. The examples that people always look at are of people who work part-time, and their income is topped up. Well, we have to look at the decisions of people who work hard every day. They have to work full-time—work, work—and make those decisions and pay taxes, which go into the welfare system.
Several hon. Members rose—
Graham Evans
I will give way to the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) and then I want to make some progress.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I intend to make a speech, and I appreciate the hon. Gentleman’s courtesy in giving way. I gently say to him—this is important in a debate on universal credit—that Britain is not divided into two groups of people: those who pay taxes and those who receive welfare benefits. It is a lot more complicated than that. The point of universal credit was actually to allow a seamless transition between the two to support people. The point of this debate should be to point out that that transition is not working so far in the initial roll-out of universal credit. That is where the attention needs to lie in a discussion such as this.
Graham Evans
As always, the hon. Gentleman makes a powerful point. I am not saying that the system is perfect. Under the Labour Government, the welfare system was very complicated. In the previous Parliament, the Government tried to make it simpler and fairer for people in receipt of welfare while also making it fairer for the people who pay for it—hard-working taxpayers. Not for one minute am I saying that the system is perfect, but the people who work in Jobcentre Plus tell me that universal credit makes it a lot easier and simpler for them to help people, particularly the long-term unemployed, to get into work. That is the evidence in my constituency.
Graham Evans
May I make a bit of progress first? I have actually got a speech here.
Everyone with the ability to work should be given the support and opportunity to do so. The previous system wrote too many people off for too long, and too many people were left in a cycle of welfare. The point behind the reforms is to break that cycle. The roll-out of universal credit will fundamentally transform the welfare benefits system in Britain and the north-west, making 3 million people better off and bringing £33 billion in economic benefits to society. Universal credit will simplify and streamline the welfare system, improve work incentives, tackle poverty among low-income families and reduce the scope for error and fraud.
The hon. Member for St Helens South and Whiston gave some powerful examples. I am not saying that errors do not happen; of course they do. Things are not perfect, but other nations around the world are looking at the welfare reforms that the previous Government introduced and are considering doing the same. Since the introduction of universal credit, unemployment in the north-west has fallen by 50,000—more than 30%. Unemployment in my constituency has more than halved in the same period. While that fall cannot be solely attributed to universal credit, its roll-out has had a part to play in that success, and it will continue to play a major part in entrenching that success as the roll-out continues.
Jim Shannon
The hon. Gentleman is making powerful points, but I am sure that he recognises the concerns of those of us on this side of the Chamber. Government Members may share those concerns, to be fair. Society is marked by its attitude to those on low incomes and the less well-off. In this House, we have a duty to them as well as to taxpayers, who provide income. Does he accept that universal credit is causing undue delays for many of my constituents and those of other Members in the Chamber? There is a knock-on effect on those receiving benefit with the changes to their income tax, tax credits and housing benefit. Some people are without money for periods of seven, eight, nine or even 10 weeks. There has to be something wrong with a system that cannot respond to the needs of those on low incomes when they need it most.
Graham Evans
I am most grateful to the hon. Gentleman. There is a lot of evidence that delays are there, and those delays are unacceptable for the individuals concerned. I will not attempt to defend that. The system is not perfect, but any individual cases should be brought perhaps to the attention of the Member of Parliament, but certainly to the attention of Jobcentre Plus and the benefits agency. Those cases should be looked into and investigated.
People claiming universal credit are 13% more likely to be in work than people claiming jobseeker’s allowance. They are earning more money and are more willing to take a job. One constituent of mine, a hairdresser, was complaining. She said, “At this time of year, I usually get a rebate on income tax, but because I now have a far better personal allowance, I do not have that problem.” She is keeping more of her hard-earned money. That is what the Government are helping the lowest-paid to do.
Employment has been the Government’s real success. A thousand jobs were created each and every day during the last Parliament. That represents 2 million jobs over that period. The Office for Budget Responsibility predicts that a further million jobs will be created over the next five years. This country is the economic powerhouse of Europe. Yorkshire is creating more jobs than France, and that is why so many people want to come here. We have good quality, well-paid jobs, and the living wage is being introduced. We have a far better working environment than many other countries in the European Union. That all indicates just how successful the Government have been at getting people off benefits and back into work. There are so many opportunities in all our communities, and it is important that we expose those opportunities to those looking for work.
Crucial to the Government’s success has been the support towards childcare costs for parents, as my hon. Friend the Member for Congleton (Fiona Bruce) pointed out. Under universal credit, there is additional cover for childcare costs for parents, with up to 70% of childcare costs covered regardless of hours worked. That will be increased to 85% this year, with a monthly limit of £646 for one child and more than £1,000 for two or more children, helping more parents into work. When my children were younger, I remember Mrs Evans saying, “It is pointless me going back to work because of the childcare costs.” I know that the cover for childcare costs is an important step forward in helping working mums to work longer and keep more of their money.
The ethos of “It pays to work” is built into the DNA of the Government’s reforms, particularly universal credit. I have no doubt that as universal credit is rolled out further, we will continue to see more and more people getting back into work. The hon. Member for St Helens South and Whiston referred to the region as a guinea pig, but I am comfortable and proud that the north-west has led the way. I was particularly pleased when universal credit started in my jobcentres in Weaver Vale, because it made a massive difference. I pay tribute to the hard-working staff at Runcorn and Northwich jobcentres for the fantastic work they do helping people back into employment. They are a great example of best practice, and their hard work was recognised by the Secretary of State for Work and Pensions when he visited the jobcentre in Northwich at the end of last year. He gave the staff an award for the number of people they had helped back into work. The staff at Northwich jobcentre have told me that the introduction of universal credit has made their job easier.
A lot of people come into Weaver Vale to work. As the MP, I am puzzled why people travel great distances to work in my constituency yet I still have unemployed people. One of my challenges is to get my constituents to take the jobs that are virtually on their doorstep. That is why, when I became the MP, I started my jobs and apprenticeship fairs. The fifth will take place next month. The first time I did it, there were a lot of unemployed people, but that number has halved over the past four or five years. It is the harder-to-reach people who are left. The companies that come to my jobs fairs are fine-tuning their job offers for people who perhaps have not been in work for a long, long time.
I was most privileged to have the John Lewis Partnership come into Northwich. I am sure Members will agree that Waitrose is a fantastic organisation. When it came, it said, “We will guarantee that 30% of interviews will be for local people.” That was only an interview, not a job, but it was so impressed with the calibre and the quality of the interviewees that it ended up with more than 50% of its employees being local people. Some of those people had been long-term employed, but Jobcentre Plus had worked with the local authority and Mid Cheshire College, training the people for job interviews, CV filling out and what retail employers are looking for. That was a great example of organisations working together to get the long-term unemployed working for the great company that is the John Lewis Partnership. That 50% figure is an achievement of which we can be proud. The reforms are transforming the lives of some of the poorest families in our communities and giving people the skills and the opportunity to get on in life and stand on their own two feet.
I am keen to move Weaver Vale—indeed, Great Britain —from a low-wage, high-tax, high-welfare economy to a higher-wage, lower-tax, lower-welfare country. I support the Government’s reforms in welfare and universal credit. The system is not perfect, but it is far better than that attempted by the previous Government. I believe it is working, as proved by the reduction in unemployment, the growth in wages and the quality of the jobs now available in this country.
Mr David Nuttall (in the Chair)
Will people who wish to catch my eye please stand?
Yvonne Fovargue
I agree, but, as for sending emails, the local authority did a survey to see how many people in Wigan use the internet regularly and found that 30% have never accessed or even looked at the internet. We need to think about those people. When we look at digital by default as a way of claiming, we need to provide more help for people to claim in other ways and not penalise them with a delay.
Graham Evans
The hon. Lady is making powerful points and I do not disagree with a lot of what she is saying. My hon. Friend the Member for Ribble Valley (Mr Evans) also just made a very good point. On digital by default, when I left school there were no computers. I have had to learn how to use computers throughout my life, so I know how difficult it is for people of a certain age to gain access to the internet. Even now, I am not perfect—my children are far better. Does the hon. Lady agree that, in the 21st century, if someone is unemployed and looking for a job but is not very good with the internet and computers, they will not find many jobs in which some form of computer use would not be required at a basic level? It may be that 30% of the hon. Lady’s constituents have never accessed the internet, but as much help as possible should be given to that 30% to enable them to apply for jobs, because I am pretty sure that computers will be involved.
Yvonne Fovargue
I do not disagree, but in the meantime people should not be penalised by having to seek help to claim the universal credit benefit because it is digital by default. If they want help to claim, there are agencies that can help, but there is often a delay in receiving an appointment for that. People should not be penalised because they have to wait to claim universal credit simply because they do not have access to a computer. That is another issue to look at.
When claims are refused, people are sometimes confused about why. Again, a helpline number—an 0800 number—would be extremely helpful for those people. When it gets complicated, there should be a named person to help them. I do not think anyone would disagree with the idea that we want to make the system as simple as possible. We know that people’s lives are complicated and that they move in and out of work, particularly those in low-paid work. Anything that makes the transition more simple should be looked at carefully.
Neil Gray (Airdrie and Shotts) (SNP)
It is a pleasure to contribute to this important debate under your chairmanship, Mr Nuttall. I pay tribute to the hon. Member for St Helens South and Whiston (Marie Rimmer) for securing this debate. It is primarily focused on the north-west of England, but as it concerns the roll-out of universal credit across the isles, the implications of what is said this morning stretch much further than the north-west. I congratulate her on her very good speech. She rightly did not shirk the opportunity to give the Government a kicking on their record on this matter. I pay tribute to other hon. Members who contributed. In particular, the hon. Member for Makerfield (Yvonne Fovargue) delivered a very powerful speech.
There are a great many issues at play around the changes to universal credit and the roll-out in the north-west and further afield. SNP Members are fundamentally concerned about the removal of the work allowance, which underpins the potential success of universal credit and the aim to support people into work and make work pay. We are also concerned about the monthly payment regime. Support for housing benefit recipients will not go directly to landlords, and payments will be made to households, rather than individuals.
Neil Gray
I will make some progress; I am just starting.
Pilot projects across the country have shown that those areas of concern are problematic. That has been highlighted by a raft of third-sector organisations in reports on this subject. In principle, universal credit sounds tempting. We are told that it is a smooth, streamlined system to assist low-income families. However, as has been emphasised today, in reality it is fraught with flaws, and low-income families are the casualties of the Tories’ poor economic choices and ideologically driven cuts. The ineffective and costly roll-out of the system to date highlights the need for an urgent rethink of these draconian policies.
Universal credit was first introduced as a pathfinder in Ashton-under-Lyne in April 2013. New claims were taken from single unemployed people who satisfied the gateway conditions. The pathfinder was then extended to three other areas in the north-west—Wigan, Warrington and Oldham—in July 2013, and in the summer of 2014 universal credit was expanded to a further 29 areas in the north-west for single people and couples who satisfied the gateway conditions. After a relaxation of the constraints on single people claiming between September and December 2014, universal credit was expanded to cover all parts of the north-west of England. New claims from families with children have been accepted in some areas, and since last January new claims from families with children have been accepted throughout the north-west.
The north-west was the first area in which universal credit was rolled out to all jobcentres. Of the 155,568 claimants at mid-November 2015, 77,378 were in the north-west, and of those, 26,521 were in employment and 50,855 were not in employment.
Graham Evans
May I go back to a point that the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) made about treating people like children? The hon. Member for Airdrie and Shotts (Neil Gray) mentioned paying housing benefit directly to the landlord. Are we not treating people like children if we do not think they are able to pay their housing benefit to their landlords? Surely people in receipt of benefits are perfectly capable of paying their landlords.
Neil Gray
It is not treating people like children. I totally disagree with that. People in such circumstances often live chaotic lives. Sometimes, although not always, they do not wish to have the responsibility for managing that extra level of financial responsibility. A great many people in my constituency have told me that they would far rather know that they have a roof over their head that is secure regardless of what happens elsewhere, and that they would rather see their benefit paid directly to their landlord. People should be given the choice over that matter, and at the moment they are not. It is being paid to them, and they are being given the responsibility, which is not always welcome.
Neil Gray
Where people are capable of working, it is right that we should encourage them to do so. However, the problem with the changes that the Government are implementing through universal credit is that they are removing the work allowance, which is the only incentive to work in universal credit. It underpins the incentive to get into work and to remain there. Taking that away removes the premise that work should pay, which is a sad situation.
The DWP has said that universal credit will be simpler for claimants and will be treated like a wage for individuals, readying them for work. In reality, there are complex problems that will ultimately see less money in people’s pockets and more difficulties accessing adequate financial support. Analysis of the autumn statement by the IFS found that the benefit system is still much less generous in the long run, pointing out that universal credit now represents an additional cut on top of other changes, including the cut to benefit entitlement, of £3.7 billion a year in the long run. Some 4.5 million working families will be affected by the introduction of universal credit, and 2.6 million will lose an average of £1,600 a year.
This is where I must disagree with the hon. Member for Weaver Vale (Graham Evans) and where he missed the point in his contribution. People are being encouraged into work, which is right for those who can work, but removing the work allowance aspect of universal credit takes away the only incentive to work. He also made the point that the social security system needs to be fair for those who pay for it, but he perhaps forgets that those in receipt of the universal credit work allowance are in work.
Neil Gray
Absolutely. They are taxpayers.
Some 1.8 million non-working families will be affected by the introduction of universal credit, and 1.2 million families will lose an average of £1,000 a year. Over recent months, the focus of much discussion has been on tax credits, but changes to universal credit will also have profound effects. The Government’s so-called U-turn on tax credits is nothing more than a delay tactic, with the pain to be felt in the next few years under universal credit. Support for working households on low incomes getting universal credit was also reduced in the summer Budget. Ian Mulheirn of Oxford Economics said that,
“this may be a U-turn in April 2016, but it doesn’t look like a U-turn by 2020.”
In conclusion, the Scottish people voted in May 2015 for an end to austerity when they voted for the SNP. They deserve the leadership they voted for and not to face the social security storm that the Tories are brewing. The failures of the UK Government to give us full power over universal credit have left our country picking up the tab for the Tories’ poor economic choices and shoddy governance once again.
Nick Thomas-Symonds
I will come to people earning more than ever before in a moment. I make no apology for a Government who introduced the national minimum wage or for wage growth in the Labour years. This decade risks becoming the lost Tory decade, with wage growth lower than at any point since the 1920s.
The hon. Gentleman wants to talk about money in people’s pockets. I have already spoken about the effects of the cuts to the universal credit work allowance on single parents from this April, so shall I use some other specific examples? Take a couple, living and working together, one or both of whom has limited capacity to work as they are disabled. For them, the work allowance will be cut from £7,700 to £4,700, a loss in income of £3,000. That is for people who are actually in work. To take another example, single individuals will essentially lose everything, with a reduction of £1,332, at a net loss to income of £865.
When universal credit is damaging and attacking people in work, it is in danger of undermining the aims that it was set up to achieve. If Government Members do not want to take my word for that, let us take the word of the Social Mobility and Child Poverty Commission’s “State of the nation 2015” policy paper, published on a big date for dumping things just before Christmas, 17 December 2015. The paper is available on the Government website if any Members want to see it. The commission stated:
“The immediate priority must be taking action to ensure that the introduction of Universal Credit does not make families with children who ‘do the right thing’ (in terms of working as much as society expects them to) worse off than they would be under the current system. That means reversing the cuts to Universal Credit work allowances enacted through the Universal Credit (Work Allowance) Amendment Regulations 2015 before they are implemented in April 2016.”
That is what the commission says should be the priority from this April.
Graham Evans
The hon. Gentleman is right to point out that the Labour Government introduced the national minimum wage. I supported that outside this place, as did many of my Conservative colleagues. This Government, however, are introducing a national living wage and—this is the key thing, which is lost on the Opposition—are keen for people to keep more of their own money. That is why the personal allowance has increased, taking the lowest-paid out of income tax altogether. He might remember Gordon Brown’s fiasco with the 10p tax rate, which penalised the lowest-paid workers in the country. The system is complicated, yes, but the underlying mantra is that it always pays to work. Getting low-paid people out of tax altogether is the best way of doing things, so that they keep more of their own money.
Nick Thomas-Symonds
I am interested in history, as the hon. Gentleman might know, but I do not recall the Conservative party in the 20th century supporting a national minimum wage. His personal view might well have been different, but I do not recall his party voting for a national minimum wage—rather, at the 1997 election I remember the Conservatives saying that it would cost jobs. They seem to have changed their position significantly since, which is to be welcomed.
Oral Answers to Questions
Lord Evans of Rainow Excerpts(10 years, 2 months ago)
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Priti Patel
I would be very happy to look at the constituency case that the hon. Lady has just raised. I also remind her and the House that we have already had five reviews of the WCA.
Graham Evans (Weaver Vale) (Con)
T7. Since 2010, unemployment in Weaver Vale has decreased by 54%. Will my right hon. Friend join me in paying tribute to the hard-working staff of Jobcentre Plus who have helped to make that happen? Is it not an example of this Government’s long-term economic plan delivering for hard-working taxpayers in Weaver Vale?
Mr Duncan Smith
As my hon. Friend knows, I visited him the other day in his constituency, where he is doing an exemplary job, as is the jobcentre. Employment is improving and unemployment is falling, and that is happening nationally as well as with him. I would be very happy to visit him again.
Oral Answers to Questions
Lord Evans of Rainow Excerpts(10 years, 5 months ago)
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Mr Duncan Smith
I believe that our reports will cover a much wider range of issues that affect child poverty. I have always felt that issues to do with family stability, drug and alcohol addiction and education are critical to a child achieving a decent outcome. If the right hon. Gentleman has anything further to add, I am always willing to take his submissions, and the Select Committee has also said that it will do the same. My point is that an arbitrary target simply for an income line, which is what his Government did, leads to a huge distortion in the benefits system, and the right hon. Member for Birkenhead (Frank Field) has said exactly the same.
Graham Evans (Weaver Vale) (Con)
7. What steps he is taking to increase public awareness and understanding of the new state pension.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
We have begun a new media campaign for the new state pension. It will use the full range of communication tools, including press, radio and digital means. Material has been updated to be clearer, to engage people and to help them better understand what the changes mean for them.
Graham Evans
The basic state pension would have been £560 a year higher by the end of the last Parliament if it had been uprated by earnings alone. Does my hon. Friend agree that maintaining the triple lock gives pensioners the greater certainty about their security that they definitely deserve?
Mr Vara
My hon. Friend is absolutely right, and I am grateful to him for making that point in this House. It is important to remember, notwithstanding the tough economic climate, that we on the Conservative Benches have looked after the pensioners. We have given them security and the protection that they need, and I can assure the House that they will continue to have that protection with the triple lock.
Welfare Reform and Work Bill
Lord Evans of Rainow Excerpts(10 years, 6 months ago)
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Graham Evans (Weaver Vale) (Con)
The United Kingdom represents 1% of the world’s population; it also has 4% of the world’s wealth and accounts for 7% of the world’s welfare. That is clearly not sustainable. During the last Parliament, I had the honour of sitting on the Work and Pensions Committee. We conducted several investigations and produced reports on Jobcentre Plus, the Work programme, universal credit, benefit sanctions and pensions reform. The Bill improves on the work done in the last Parliament.
Everyone with the ability to work should be given the support and opportunity to do so. The previous system wrote off too many people and left too many trapped in a cycle of welfare dependency. Over the past five years, the number of people in Weaver Vale claiming jobseeker’s allowance and universal credit while not in employment fell by more than 1,000—a 51% drop. This Government’s long-term economic plan is clearly working for Weaver Vale by getting people off a life on benefits and back into work.
Welfare reform is not just about saving money; it is about transforming lives. Employment has been this Government’s real success, with 2 million more jobs, and with 1,000 jobs created each and every day during the last Parliament. We understand that the route out of poverty is not through welfare; poverty can be left behind only through work. The Office for Budget Responsibility has predicted that a further 1 million jobs will be created over the next five years, but we are the party of ambition and we want to go further. The Bill is working to a target of full employment.
I have held four annual jobs and apprenticeship fairs in Weaver Vale, and I have plans for more. The fairs involve bringing together local and national employers to showcase the job and apprenticeship opportunities they have available. Hundreds of jobseekers attend the events and benefit from seeing what is on offer and hearing first-hand accounts of how others have managed to get off welfare and into work.
The Jobcentre Plus and employment support schemes that were introduced in the last Parliament, which are being expanded in the Bill, underpin our success in getting people off benefits. With the jobcentre’s help and guidance, most people move off jobseeker’s allowance quickly, with more than 75% of people ending their claim within six months. The minority of people who have been on jobseeker’s allowance for a longer time finish the Work programme and move on to the help to work scheme, in which they have to take up one of three different types of intensive support depending on what is preventing them from finding work. That could involve a daily meeting with their jobcentre adviser or taking up a new activity to improve their skills base. Previously, a claimant needed to attend only once or twice a week. Claimants whose lack of work experience is felt to be holding them back from finding a job might be asked to undertake a placement in their local community.
For jobseekers with multiple or complex barriers to work, the Jobcentre Plus advisers spend more time with the claimant looking at how to tailor back to work support. The help to work scheme is rightly mandatory, and those who fail to participate face financial sanctions. Conditionality remains a necessary part of the benefits system and is still one of the most effective tools for encouraging engagement with the employment support programmes at Jobcentre Plus.
The Bill continues the work of my right hon. Friend the Secretary of State in the last Parliament on restoring to the core of Britain’s welfare system the ethos that it always pays to work. The reforms are transforming the lives of some of the poorest families in our communities and giving people the skills and opportunities to get on in life and stand on their own two feet.
Budget Resolutions and Economic Situation
Lord Evans of Rainow Excerpts(10 years, 7 months ago)
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Mr Duncan Smith
If hon. Members want, we can go back over the figures one more time. I am enjoying myself, even if the shadow Chancellor is not.
Mr Duncan Smith
I will give way to my hon. Friend the Member for Weaver Vale (Graham Evans). I know he wants me to keep going.
Graham Evans
Opposition Members never miss an opportunity to miss an opportunity to apologise for wrecking the country’s economy. The shadow Chancellor criticised my right hon. Friend the Chancellor and said there was no mention of science and technology. My right hon. Friend has a very proud record of investment in the north of England, as part of the northern powerhouse—
Mr Deputy Speaker
Order. Mr Evans, you will be making your speech very shortly. The danger is you will have nothing to say because you will have already made it.
Dr Whiteford
I will not give way at the moment.
Amid all the rhetoric and the hyperbole of Budget day, it would have been very easy to form the impression from the media lines being trotted out yesterday that tax credits are predominantly a benefit paid to unemployed people, when in fact the opposite is the case. In Scotland, the overwhelming majority of tax credits are paid to working people. In fact, half of all families benefit from tax credits, and 95% of tax credits in Scotland are paid to families with children. We should make no mistake about where the cuts are being targeted.
It is inevitable that today we will consider the short-term consequences, because those cuts will put acute pressure on families, but we should be under no illusion: growing up in poverty has serious long-term consequences for children, too. It is associated with poorer educational attainment, poorer job prospects, poorer health throughout life and lower life expectancy. That is why asking families to bear the brunt of the cuts is so short-sighted. It has not only an enormous social cost, but an enormous economic cost: it holds back our economic progress and productivity, which are what we should really be focusing on and trying to improve.
The Government have tried to argue, today and yesterday, that the cuts will be offset by increases to the minimum wage and changes to the personal allowance, but that claim simply does not stand up to scrutiny. I think we all welcome the announcement of a long-overdue increase in the minimum wage to £7.20 an hour from next year and, indeed, the changes to national insurance, but let us not kid ourselves that rebranding the minimum wage as a living wage will actually make it a living wage.
There is already a living wage: it is calculated by the Living Wage Foundation and is already used by employers in the public, private and third sectors, including, I am very pleased to say, the Scottish Government. The living wage is based on the actual cost of living and it is already £7.85 an hour outside London and is due to go up again in November. We need to be absolutely clear that £7.20 is not a living wage and it will not offset the cuts in tax credits.
The critical point about the living wage is that it has been calculated on the basis of low-paid workers claiming their full entitlement to tax credits at the present rate, so any cut in tax credits means that the living wage will have to go up even further in order for it to provide enough for people to live on. If the Government take on board only one of the points I make today, I want it to be that one.
Graham Evans
Does the hon. Lady want Scotland to be a high wage, low benefits, low tax economy? Does she agree with what the Government are trying to do?
Dr Whiteford
Scotland has already shown the progress we are making towards a high-skill economy. I was interested to hear yesterday’s announcement on improving the apprenticeship scheme in England. I hope the Government will aspire to do what the Scottish Government have already done. The uptake has been phenomenal and we are well on course to reaching 30,000 apprenticeships a year, which is far more proportionately per head of population than the current number in England. The Opportunities for All scheme guarantees a place in education or training for every single young person. It has been a phenomenal success, with more than 90% of our young people going into sustained employment afterwards. Instead of waiting until people have been unemployed for a year before intervening, we are intervening early so that every school leaver gets those opportunities. The approach is much more carrot than stick. The scale of the uptake shows that in Scotland we are committed to having a more successful economy and to growing it to meet the needs of our population.
I want to return to tax credits and not be distracted from them. Today the Resolution Foundation, which has done so much to promote the living wage and highlight the issue of in-work poverty, has said that the living wage would need to be £10 an hour by 2020—not the £9 announced yesterday—to keep pace with the cost of living under the new tax and benefits regime. Let us be clear: we are not going to get out of the poverty trap with this rebranded minimum wage. We need to bring it up to the level of a living wage if we are going to take away the support currently provided through tax credits.
The huge cuts in tax credits will make the gap between the minimum wage and the living wage even greater and it will leave the earnings of low-paid workers even further below the actual cost of living. At present, a family with two children where both parents work and who live in a house with average rent will be below the breadline, and the changes announced yesterday will not change that. Such families will still struggle to keep their heads above water and their children will still grow up disadvantaged.
We need to recognise that bringing up children is expensive—for everyone, in all income groups—but children are not some sort of luxury lifestyle accessory. Having children and encouraging family life is an essential, necessary and natural part of the human life cycle. For some years, however, we have made it really difficult for younger adults to even contemplate starting a family, simply because of the pernicious combination of low pay, job insecurity and exorbitant housing costs.
That brings me to the differential impact of this Budget on women, because, in spite of the progress that has been made, women are still heavily concentrated in low-paid work. We are far more likely to be working part-time or in zero-hours jobs, and we are more likely to be the primary carer of children or, indeed, frail or disabled relatives. Too many women end up in low-paid, part-time work such as cashiering or cleaning simply because they can work their hours around their family responsibilities. While I welcome the increase in the personal allowance, we need to recognise that many of those women working part time in low-paid jobs will not see the full benefit of it. Indeed, the key beneficiaries are, of course, higher-rate tax payers like ourselves, and 80% of the benefit of the increase will fall in the upper half of the income spectrum.
I have a number of questions for the Government about limiting tax credits to two children. I am not sure why they would do this—certainly in Scotland, we have a worryingly low birth rate so we should not be trying to deter people from having more children. I ask Ministers for clarification about the basis on which the number of children eligible for support through tax credits will be determined. Will it be a couple’s first two children together, or will children from a previous relationship be counted in the total? What will happen, for example, if a woman has her first child with a partner who already has two children from previous relationship or if a mother’s third child is the father’s first? As anyone who ever runs a constituency surgery will know, these are not abstract questions, and I hope Ministers will address them this afternoon.
Graham Evans (Weaver Vale) (Con)
It is a great privilege to follow the hon. Member for Bradford South (Judith Cummins)—a fine constituency and a fine city. I am sure that she will do an excellent job as the constituency’s new MP. I also pay tribute to my hon. Friend the Member for North Warwickshire (Craig Tracey), an outstanding individual who will, I am sure, do a great job for his constituents. I also pay tribute to his good lady wife for her service to Queen and country.
At a time of uncertainty abroad—be it in Greece, Russia or the middle east—the Chancellor delivered a Budget that prized economic stability at home. It was a one nation Budget that will provide security for working people in Weaver Vale, greater Cheshire and the north-west as a whole. Despite the chaos in the eurozone, Britain is still growing faster than any other major advanced economy in the world—faster than America and Germany. Our economy grew by 3% last year, a figure revised upwards from the 2.6% we expected in March. Our long-term economic plan is working. Indeed, before the election, the US President commented that the UK must be doing something right on its economy.
British businesses, backed by the Government through tax cuts and the removal of red tape, have created 2 million new jobs since 2010. I know that businesses across Weaver Vale welcomed the announcements made by the Chancellor yesterday about the extension of the employment allowance to £3,000 and the news that corporation tax will fall to 18% in 2020—from the 28% we inherited five years ago.
Earlier, the shadow Chancellor said that science and technology were not mentioned in the Budget, but the Chancellor has a fine record on such investment, including in Sci-Tech at Daresbury. The previous Labour Government took investment away from Daresbury, and when I became MP for the area in 2010 I was advised by the then Chairman of the Science and Technology Committee—he is no longer a Member, but he was a fine Chairman and I pay tribute to him—to watch like a hawk to ensure that the new Government did not take away investment from Daresbury as the previous Government had done. Instead, the Chancellor invested £150 million recently in big data, and I was proud that, just before the election, IBM signed a £130 million partnership with the Science and Technology Facilities Council that will secure high growth and high-tech, well-paid jobs for my constituents in the long term. That is good for my constituency and for the country, as we become an international hub for science and technology and big data.
The OBR has predicted that a further 1 million jobs will be created over the next five years, but we are the party of ambition and we want to go further. We are working towards a target of full employment—a job for everyone who wants one and a country that is open for business. In the past five years, Government-backed schemes such as the right to buy have helped 200,000 people on to the property ladder. That is vital, because home ownership is central to the aspirational country that we are building. Owning their own home means so much more to families. I was born in a council house, the youngest of four children. My family lived there for 20 years and, in 1972, Ted Heath’s Conservative Government offered us the opportunity to purchase the property, so my parents did so. My father died when I was a teenager and my mother had security in old age and retirement because they had invested in that house. The right to buy is central to the Conservative party’s philosophy that everyone should have a home of their own.
Yesterday, my right hon. Friend the Chancellor gave Britain a pay rise. Over the course of the Parliament, the introduction of the national living wage could be worth more than £5,000 to someone working full time for the minimum wage. I need not tell the House how much that extra income will mean to hard-working families trying to get on. Not only will working people earn more, they will keep more of what they earn. Typical taxpayers will pay £905 less tax than in 2010, thanks to the increases in the personal allowance over the last five years.
Mr Betts
I do not know whether the hon. Gentleman has seen the analysis from the Institute for Fiscal Studies today, but it says that the minimum wage announcement will not go anywhere near compensating for welfare cuts in cash terms. People currently on tax credits will be significantly worse off and the reform could cost 3 million families an average of £5,000 a year. That is the IFS’s calculation.
Graham Evans
I have to confess that I have not seen those figures, but the Government’s overall mantra is “A higher wage, lower tax, lower welfare economy”, which will benefit all of our constituents. That is in contrast to the Labour party, which had a high-tax, low-wage, high-benefit culture. That is the debate we are having today: the Conservatives want high wages and low benefits and I believe that the Budget will move Britain in that direction. That will be good for the country, for my children and for our country’s future. We are a beacon in Europe, as its second biggest economy, and if we continue down the same road, in 10 to 15 years we will become the biggest economy in Europe. The whole world is watching this great country, and we are the beacon for how things can be done in difficult economic circumstances.
Barbara Keeley (Worsley and Eccles South) (Lab)
I want to add to what my hon. Friend the Member for Sheffield South East (Mr Betts) said. The IFS has said that it is “arithmetically impossible” for the Chancellor’s national living wage to offset the loss of income from tax credits. I recommend that the hon. Gentleman reads that. Will he and other Government Members who have said similar things to him today also advertise a surgery on tax credits and invite their constituents to see how they feel about it and whether they think this Budget makes things better?
Graham Evans
I am most grateful to the hon. Lady. I will indeed look into those figures. I hold surgeries every Friday, so I will see constituents about that. What I would say to her is that unemployment in Weaver Vale has dropped by 70% since 2010, and that is 80% full-time, good quality jobs.
I am not saying it is easy, but these difficult decisions have to be made. When Gordon Brown introduced working tax credits, he said the figure would be £2 billion. It is now £30 billion. The Labour party has to decide—I asked this question yesterday and did not get a reply—whether £30 billion is too much, too little or about right. We have to make these difficult decisions, but the hon. Lady makes an important point. I am not saying for a moment that it will be easy, but we are the party of aspiration. We are the party that always makes work pay, which is something that did not happen under 13 years of Labour.
Jeremy Quin
My hon. Friend will recognise, as those of us on the Government Benches do, that we will still be paying out tax credits in the same numbers that we were paying them out in 2007 and 2008, under the last Labour Government. What we are talking about is the sudden spike to which my right hon. Friend the Secretary of State for Work and Pensions referred in his speech.
Graham Evans
My hon. Friend makes a powerful point. Working-age benefits are something we have to tackle so that we can eradicate the deficit and start paying down the national debt. That is what I believe in. I believe that the Government are right: a higher-wage, lower-tax, lower-welfare economy. Britain is open for business. That is the future for our country.