Universal Credit and Welfare Reform

Debate between Lord Field of Birkenhead and Graham Stuart

Tuesday 11th September 2012 Commons Chamber

[Mr Frank Field (Birkenhead) (Lab)]

I want to touch on three themes. First, the importance of this debate goes beyond universal credit, because it is the big test of whether an approach to welfare reform that has been increasingly based on means-testing is the correct strategy for us to follow. Secondly, I want to explain why I fear that this will be a disaster despite all the comforting words that we have heard. Thirdly, I want to suggest to my right hon. and hon. Friends that if that is the view that emerges in the country, we will need an alternative to strategies of the kind that we have been deploying for the past 50 or more years.

First, I have nothing but praise for the Secretary of State for how he has engaged with the debate. He has accomplished an extraordinary feat by getting into a new area, mastering it and introducing his own proposals; but the fact that he is so exceptional in that sense does not necessarily mean that his proposals will work or are desirable. Means tests rot the souls of individuals. We have heard lots of talk about how important this is and how people will be better off in work than out of work, but even if someone is a saint, means tests will corrupt them.

Let us assume that someone who wants to work is in the very small group of people whom we are paying more than 90%, which will be reduced to 65%. Under this reform, the number of people who will pay higher marginal tax rates will be higher than that under the previous proposal. What is being clawed back makes people question whether it would be worth taking on overtime, an extra job or getting qualifications. If those on the Treasury Bench think that the rich in this country will not get off their backsides and work harder if we tax them at 50% and that we therefore need to reduce the rate to 45%, why do they think that that stick of making people marginally better off will work for the poor?

There are two groups of people: those who are in work wondering whether they would be better off, and the 1.45 million people—which is the figure that the hon. Member for Dover (Charlie Elphicke) kept coming up with—who have never worked. If those on the Treasury Bench think that tweaking the marginal rates of tax will get a large number of those who have turned down jobs actually to work, they have another think coming. That is not to say that there are not huge armies of people who wish to work and who would jump at any job, but we delude ourselves and misrepresent our constituents if we believe that the whole body of people who are registered as having never worked since they left school are eager to get a job. They are not and they will certainly not be affected by universal credit.

My second point is on how the atmosphere has changed. For Third Reading of the Welfare Reform Bill, the Government Benches were full and Government Members were baying at us. Their tails were up and they were confident about the reform, but look at them now—they are going to run out of speakers unless the Whips get more into the Chamber. By contrast, a galaxy of Opposition Members want to contribute. [Interruption.] The seven-minute rule has been applied purely and simply because we will not otherwise fit in all the Opposition Members who wish to speak. The atmosphere is changing. The Secretary of State will not have seen how glum his supporters looked when he was making his contribution. It is a totally different situation from that during Second and Third Readings of the Bill. What some of us forecast is coming home to Government Members.

Let us put to one side all the IT schemes that we failed with and look at when we tinkered with tax credits back in 2005. That scheme was much narrower in scope than this one. The then Prime Minister had to come to the House to apologise for the chaos that we managed to create. Nearly 2 million people were being overpaid and there was little chance of getting the money back from them, and 750,000 people were being underpaid. The lessons for making the proposed changes, even if they are made in stages, are difficult. Although I wish the Government well, I doubt whether they will be that much better than we were when we implemented a reform that was far less ambitious than their scheme.

The disaster will not only come from the IT. Why the secrecy? Why has not the pilot on the operation of the scheme been released to the Department for Work and Pensions? The Secretary of State says that a member of the team is now in the Department, but I can tell him that, even if someone is a Minister in a Department, it is possible for people to make sure that departmental information cannot be accessed, never mind information that is shared by Departments. Why the secrecy over that? Why have the senior civil servants on this project been lost? Why cannot Opposition Members get more information about the real-time working? The crucial point is not whether Sainsbury’s or Marks and Spencer can fit into that—of course they will be able to. The problem is with the vast majority of employers from whom the Revenue already has difficulties getting an annual return, let alone a monthly return or an even more frequent one.

Perhaps understandably, the Government are secretive over their risk register. I hope that the National Audit Office will be more effective than Parliament has been in looking at that, so that we can be more aware of what the risks are and of how the Government have tried, or not tried, to counter them.

I do not have time to get on to my third theme. I will seek another occasion to discuss it. It is all very well for us to criticise what we fear is going to happen. Come the election, I hope that there will be an alternative proposal, based on real wage rates.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

Will the right hon. Gentleman give way?

[Mr Field]

I will give way, because then I can have an extra minute.

[Mr Stuart]

I was intervening to be helpful, because the right hon. Gentleman is making such interesting points, on which I hope he will expand.

National Referendum on the European Union

Debate between Lord Field of Birkenhead and Graham Stuart

Monday 24th October 2011 Commons Chamber

[Mr Frank Field (Birkenhead) (Lab)]

I want to address the politics of this question, and in doing so pose the question why this issue, above all issues, has a sulphurous effect on our politics. I also wish to thank Ministers for getting us off the hook tonight by imposing a three-line Whip, which disguises the changing politics in the House since I have been a Member and signals that we need to rethink our position.

Why does Europe have such an evil, sulphurous influence on our politics? I am not nearly as hopeful as the hon. Member for Cheltenham (Martin Horwood), who thinks that we are all sailing into the sunshine. Given the stresses caused by the stupidity of a single currency, I worry about what will happen to democracies in mainland Europe as countries’ living standards are forced down in an attempt to make their budgets balance.

The real reason why Europe has such a sulphurous impact on our politics is that, as we now know from the records, there has been an exercise in deceit from the word go. We know that Ted Heath, in presenting it to the British people as merely a common market, was signing up to the political project that we see now. We need not just dwell on the origins of the problem, because in the previous Parliament my party’s Government said that they would offer a referendum on the constitution. Of course, what we did not notice was that they were going to decide whether it was a constitution, and they decided that it was not. They said that they would have a referendum on it, but then said, “Oh, it’s rather too late now for the people to have such a vote.” Over the years, there has been a growth in cynicism among the electorate about whether we as parliamentarians are ever going to deal seriously with the issue, and that is what we ought to address tonight.

[Mr Graham Stuart]

I know that the right hon. Gentleman is very fair-minded, so I put it to him that there is a massive difference between the Labour Government’s promise on the constitution/Lisbon treaty and the Conservative party’s leadership saying, once the cheque had been cashed and the treaty ratified, that holding a referendum on it was pointless. It was not a betrayal, it was recognition of the betrayal carried out by the Labour party.

[Mr Field]

I disagree with that. Part of the reason for rearranging our procedures in the House and giving the Backbench Business Committee more power was to try to strike a new relationship with the electorate. What has happened? We are now having a debate that the Government presumably did not want us to have, and they are railroading their Members into supporting them with a three-line Whip. The same is happening on our side of the House.

The truth is that the Government have scored an own goal. The second big change in the House in the years I have been here, along with the cancerous effect of Europe on our democracy in this country, is that the Conservative party has changed radically. People watching the debate tonight need only look at the number of Conservative Members who wish to participate and the number of Labour Members who wish to participate. When I first came here, if someone raised the issue of Europe regularly they were cast as being slightly bonkers or very bonkers. Now we see that the Conservative party has genuinely changed on the issue. Thanks to the Government’s ham-fisted approach in imposing a three-line Whip, the country will not see how significant that change has been and how in tune the Conservative party now is with both Conservative and Labour voters in the country.

I make a plea to Members on my own side of the House. We are getting it wrong on the issue of the representation of England and appear to be a party controlled by our Scottish colleagues. Increasingly, the question will be how England is represented in this Parliament, and so far we are on the wrong side of that debate. Again tonight, by trying to force Members into the Lobby in support of the Government stance, we are in danger of alienating many Labour voters.

When I first stood for election, the turnout was 85%. Last time, it was 60%. How have we managed to turn off 25% of the electorate? It comes down to our conduct as politicians. We were going to make a small move by having debates that we, Back Benchers, could control, but the Government decided it would be better to clobber us with—