Welfare Benefits Up-rating Bill
Lord Jackson of Peterborough Excerpts(13 years, 1 month ago)
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Debbie Abrahams
I cannot because I do not have the figures to hand, but I am happy to provide them later. The evidence is there. Scenario modelling has been done—[Interruption.] If I could finish the point. Scenario modelling is available showing exactly how many have been assessed.
Debbie Abrahams
I will not give way at the moment. I will finish my point and then make some progress.
The Children’s Society’s analysis shows that between £500 and £400 will be lost per annum by key workers such as a second lieutenant in the armed forces or a primary school teacher.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I apologise for being absent for part of the debate while attending duties at the Home Affairs Committee.
The one inescapable fact is that however much the Chancellor talks about shared pain, we are discussing real cuts to benefits at a time when he thinks it is okay to prioritise tax cuts for millionaires. We should no doubt be grateful that pensioners have been spared this cut in their benefits, but that is probably down to Lord Ashcroft having identified what a key group they are and putting their benefits off limits.
I am afraid that these proposals look like an ambition to create division between those who have little and those who have less. That sits comfortably with the values and politics of a particular kind of Conservatism. This is called an uprating, but 1% rises over three years really represent a cut of 4% in the spending power of those already struggling. Citizens Advice estimates that when we take tax changes into account, a family with two children paying £130 per week in rent and earning just above the minimum wage will be almost £13 per week worse off. That is before we take food and energy inflation into account. No wonder people are being driven into the arms of payday loan sharks.
Income transfers for those on modest incomes, for example, are recognised throughout developed economies as exactly the kind of fiscal stimulus needed when recessionary pressures are highest, but the Chancellor is doing the exact opposite. A total of 4.6 million women will lose their tax credits, including 2.5 million working women and more than 1 million who care for their children while their partner works—the same people who are also having their maternity benefits cut. Lord Ashcroft calls them “suspicious strivers”. In his words, they fear they are one more redundancy, one interest rate rise or one tax credit change away from real difficulty, and they would not want to rely on a Conservative Government if they found themselves in trouble.
Mr Stewart Jackson
For the record, 42,654 people in the Peterborough constituency will be better off under the tax changes in April. Is the hon. Gentleman not ashamed that under his Government, who presided over 16 years of economic growth, more than 1,000 people in my constituency were parked on invalidity and incapacity benefit for more than 10 years. That is shameful and it is his Government’s record.
Steve McCabe
I cannot wait for the hon. Gentleman to have to meet all those people who are better off at his advice centre.
The International Monetary Fund regularly warns about the dangers of cutting the automatic stabilisers in these economically fraught times, yet that is exactly what is happening. It is estimated—the IMF is the source —that these benefit cuts will contribute to a £40 billion reduction in the country’s output when we desperately need the opposite to happen.
As well as implementing benefit cuts that defy economic logic, the Chancellor has set up a special hotline for Tory MPs who are confused about his benefit changes. Special hotlines for Tory MPs, Government cars to cushion Ministers from rail-fare rises, and specially arranged meetings to cover the transport costs if they want to watch the European cup final—yes, they are definitely all in it together.
My contention is that these decisions do not make economic sense, are not fair and will punish the very people who are striving and struggling to make ends meet while the Chancellor’s millionaire friends are prioritised for tax cuts. That tells us all we need to know about this Government’s values.
Mr Stewart Jackson (Peterborough) (Con)
I do not criticise Labour Members for their aspirations. There is nothing ignoble in the positions that they are taking; I just happen to believe that they are wrong. They know that the picture of despair and hopelessness that my right hon. Friend the Secretary of State saw in Easterhouse in 2002 was the same picture that the right hon. Member for Birkenhead (Mr Field) saw in 1997, when there was an historic opportunity for the then Labour Government to tackle welfare dependency and rebalance work and welfare. Unfortunately, they did not take that action.
People out there are decent; they care and their attitude is, “There but for the grace of God go I.” They do not want to stigmatise people, and nor do Government Members. I accept that there has been some rhetoric on both sides of the House, but people do care. They also care about the dependency culture, and about fairness. In all honesty, they feel that the previous Labour Government tested their patience on this issue.
It is disingenuous to talk about cruelty. I think that it was cruel to park 1,000 of my constituents on invalidity or incapacity benefit for more than 10 years without the opportunity—[Interruption.] I should remind Labour Members that this was in 2010. Those people were given no opportunity to inform anyone of their needs. People suffering from depression or other mental health problems, and people with physical afflictions, were simply parked and forgotten. I am not saying that the Labour Government did that because they were cruel or heartless; they did it because they were incompetent. We are taking the tough decisions that will make work pay, through the Work programme and through apprenticeships that will tackle youth unemployment, which the previous Government doubled. Work is the No. 1 determinant in taking people out of poverty and breaking the cycle of children seeing their parents unemployed, living in a half-life of hopelessness and poverty and lacking ambition. That has been demonstrated across the world.
Christopher Pincher
My hon. Friend is quite right to say that work provides the best way out of poverty. Does he agree that the 5.2 million people who were trapped in dependency when the economy was growing in the boom years under Labour are evidence of the previous Government’s structural failure to deal with poverty?
Mr Jackson
My hon. Friend is absolutely right. In retrospect, I think that it was a tragedy to import thousands of low-wage, low-skilled people from eastern Europe while we parked our own indigenous young people who needed skills and training and who needed educators and businesses to put their the faith and trust in them. I have nothing against the people who wanted to come to this country to make a better life for themselves and their families, but at what cost did they do so? Even the Scottish Trades Union Congress says the same thing.
Some of the arguments being used are disingenuous because they do not fully understand the context. We have uprated benefits by 5.2%, we have brought in apprenticeships, and we are trying to deal with these issues through the Work programme. I am on the Public Accounts Committee and I know that the programme is not perfect. We are at the beginning of a process and there are some difficulties with appeals, with people’s understanding of the system, and with advocacy. I understand that. However, my blue-collar constituents do not understand how it can be right, when their average salary is about £24,000, for a party that aspires to government to say that it will not countenance a benefit cap of £26,000. My constituency has some of the poorest super-output areas and wards in the eastern region, and my constituents are decent, salt-of-the-earth people who want to work. They are not shirkers.
Mr Jackson
I will not give way to the hon. Gentleman, even though he is a terribly charming fellow.
Those people in my constituency want to work, but they want the Government to give them a positive message about the future. It is cruel to park people and to forget them.
James Wharton (Stockton South) (Con)
I want to back up what my hon. Friend is saying. When I went around my constituency at the last election, the issue of making work pay came up time and again, and the communities in which it came up were the poorest ones. They had seen the damage that long-term welfare dependency could do to a community. The reason that my hon. Friend and I welcome the reforms is that the Government are finally tackling this long-term problem, which hits the poorest in our country the hardest.
Mr Jackson
That was eloquently put by my hon. Friend, who is even younger and better looking than the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). We take a pinch of salt for a party that has no coherent fiscal alternative. Frankly, “Tough on Coco Pops and tough on the causes of Coco Pops” does not make a fiscal policy. The 10p tax rate was a debacle, while re-spending over and over again bankers’ bonuses and pensions credit does not cut the mustard.
Let me give some free advice to Labour Members. We did the same as them in 1998 and 1999 when we said that the downturn was made in Downing street, but it did not help us because we were not seen as credible. I respectfully invite Labour Members, if they are going to vote against Second Reading, to say what they would cut and what they would spend as an alternative. The Bill will save the best part of £2 billion. Politics is about choices, as Aneurin Bevan said 50-odd years ago, and he was right. It is disingenuous to keep repeating the issue of tax cuts to millionaires, when we have taken millions of people out of tax and cut the taxes of many low-paid working people. This Bill is about giving a message—that work pays and that it is better than welfare. We should give people the life they need and deserve—a life of work and a better future.
Living Standards
Lord Jackson of Peterborough Excerpts(14 years, 2 months ago)
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Nick de Bois (Enfield North) (Con)
Given the constraints on time and the number of people who wish to speak, which shows how seriously Members on both sides of the House take this issue, I will try to limit my remarks.
The obvious route to improving living standards is to help as many people back into work as possible. Instead of focusing on the points that have been made about some of the very good schemes that have been introduced, I should like to start with structural issues to do with employment. There is no question but that the Government are introducing measures that will help to increase employment. For example, they are looking at rebalancing out-of-work incentives. We are trying to make work pay through the very welcome introduction of higher personal allowances, which will help people at the lower end of the scale. We are also, as the Secretary of State outlined, looking at the bigger picture of welfare reform.
However, we have to consider matters beyond that. As a former employer who started a business with one or two people and ended up with 100 people, I saw, and shared, the intense pleasure of recruiting someone into a new job or their first job. I also understood, and felt, the enormous pain, and sometimes shame, of people who underwent redundancy through no fault of their own. In the last two years of my working time before I came into Parliament, I was very worried by the level of the CVs that were being produced and the failure of candidates to articulate themselves with even basic English or a basic education. That was a clear sign that some people were being failed by their education. I am sure we all agree on the common goal to improve education and raise standards, but there is no question but that the structural changes that we are introducing will improve people’s chances and lead to a fundamental generational change for the future. If those changes fail, we may be back here in 10 years, still talking about the problem.
Mr Stewart Jackson (Peterborough) (Con)
Has my hon. Friend, like me, noted the lack of contrition from the Labour party in its failure to apologise for driving many people into welfare dependency through its policy of unrestricted immigration over the last 13 years?
Nick de Bois
I welcome my hon. Friend’s comments on the complex issues that he raised. We have to consider the consequences of both those issues, but I shall continue to examine the structural changes I was discussing.
The welcome sign for the future is that we have rightly shifted the emphasis from a purely academic route and are now pushing vocational routes, whether through apprenticeships or through further skills and training, giving people a choice from the age of 14 or 16 that will meet the skill needs of employers. Otherwise, we could be back here in 10 years discussing many of the same issues.
With the changes that are being introduced, we need to look at the tactical areas where we can help people get into Work that will meet the immediate challenges of improving both their life chances and their living standards. I have met Work programme providers and witnessed how they are determined to provide long-term jobs for those who are unemployed and going through the new system. These programmes are to be welcomed because they seek to provide a long-term, rather than a short-term, solution.
I am particularly impressed by the early results of the work experience programmes, working with the jobcentres, where people who had little chance of breaking the dependency culture and moving to independence are put into a work environment and employers are encouraged to take them on. As a result, over half of those who have been in such employment for three months are getting full-time work. I do not subscribe to the theory that so many people just wish to sit on benefits. The road to work is through breaking the cycle of dependency and putting people into an environment where they relish the challenge and want to work. That is the very life chance that they will be able to see, given the chance to improve their opportunities, shaped around the proposals of my right hon. Friend the Secretary of State.
Much has been said about the debt interest. It is shocking that this country pays about £46 billion a year to service debt in return for nothing. The worst thing is that that money is going to our competitors. The people who are lending us money are the people who will make it harder to help people in this country improve their life chances.
Welfare Reform Bill
Lord Jackson of Peterborough Excerpts(14 years, 11 months ago)
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Mr Duncan Smith
We have had, and continue to have, those discussions, and I understand the concern. There is a debate, on both sides of the argument, about whether we basically continue with the principle that we should pay people and deal with certain elements of what they receive because they are not capable of doing so themselves, or whether we try to get people to the point where they are capable of managing their own money more and more. I recognise from the hon. Lady’s intervention that, on this matter, there is no absolute, but there is at least a debate on both sides, and that is simply where we are at the moment—trying to discuss the issue with those who feel that they would be most affected.
Mr Stewart Jackson (Peterborough) (Con)
Was it not a moral catastrophe and economic madness when, under the previous Labour Government, registered social landlords had no incentive to tackle welfare dependency, because their main funding stream was housing benefit? Under this Bill, registered providers will have an opportunity to tackle welfare dependency among their tenants.
Mr Duncan Smith
What we want from the Bill is to encourage people to get involved in the process—to help people to use it as part of the incentive of trying to make the right decisions about taking work and providing for their families.
Mr Byrne
I would do no more than encourage the hon. Gentleman to look at the analysis of his noble Friend Lord Freud, who examined our work to get people back to work and remarked on how fast the number of people on out-of-work benefits had fallen. He examined the number of children lifted out of poverty and said that our record was truly remarkable.
Mr Stewart Jackson
I fear that the right hon. Gentleman is going through the motions. He was a gifted and talented Chief Secretary to the Treasury, and I do not think he truly believes what he is saying. Will he at least concede that people who are no friends of the Conservative party, such as the Scottish TUC, have said that worklessness was exacerbated by the decision to import millions of low-skilled, low-wage workers from eastern Europe, which drove down wages and conditions and made it much more difficult for indigenous British workers to secure jobs and get off welfare dependency?
Mr Byrne
I do not think I should veer into a debate about immigration this afternoon, because you, Mr Deputy Speaker, would quickly call me to order. I would, however, make the point that, after consistent economic growth, employment went up, the number of people on out-of-work benefits came down and the number of people lifted out of poverty, including pensioners and children, was at a record high. The Government can learn something from that record.
Of course, that has to be put alongside the right legislation to encourage people back to work, which is where I fear the Bill will fall short, for a very simple reason. It fails the basic tests of whether it fosters ambition and whether it reinforces and consolidates our obligations to each other. Fostering ambition and nurturing compassion are the basic tests of welfare reform, and I am afraid the Bill fails both.
Youth Unemployment
Lord Jackson of Peterborough Excerpts(14 years, 11 months ago)
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Chris Grayling
Let me tell the right hon. Gentleman what we are doing to get young people into the workplace for the first time.
One of the first things I received on entering government was an e-mail from the mother of a young woman who had arranged a month’s work experience for herself but been told by Jobcentre Plus that she could not do it, because the rules, which the previous Administration put in place, prevented her from doing so. We have therefore changed things.
We now encourage work experience. Through Jobcentre Plus, we will actively find work experience for young people, without their losing their benefits, and give them the opportunity to solve the age-old problem whereby, if someone cannot get the experience, they do not get the job, but, if they do not get the job, they cannot get the experience.
We have also strengthened volunteering opportunities for young people, and we will have Prince’s Trust representation in every job centre, so that we can steer young people towards voluntary work and take advantages of the trust’s skills to help unemployed young people.
Mr Stewart Jackson (Peterborough) (Con)
Is my right hon. Friend as incredulous as I am at the Opposition’s faux outrage? They are members of the party that, during 13 years of government, imported low-wage, low-skilled people from eastern Europe—more than 1 million of them—and pushed thousands of young people into welfare dependency and on to the dole. They should be ashamed of themselves.
Chris Grayling
My hon. Friend is absolutely right. There is collective amnesia among those on the Labour Benches. One of the things they have also conveniently forgotten, which was revealed by one of their number, the right hon. Member for Birkenhead, is that over the course of those years nearly 4 million new jobs were created in this country, the vast majority of which went to people coming to the UK from overseas. The Labour Government completely failed to make a serious inroad into the nearly 5 million people on benefits, or to get British people into what was once described as the goal of the previous Prime Minister—British jobs for British workers.
Oral Answers to Questions
Lord Jackson of Peterborough Excerpts(15 years ago)
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Mr Stewart Jackson (Peterborough) (Con)
6. What assessment he has made of the likely effect of the introduction of universal credit on the level of the couple penalty.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The couple penalty is often slightly misunderstood. It is normally created when a higher benefit rate for single people means that couples are materially disadvantaged by living together. It is generally recognised internationally that a saving is made when two people live together, and the figure given by the OECD and others is about 75% at most. In the UK, under the benefit system left by the last Government, workless couples received only 60% of the benefits received by two single workless people, which I believe put us in the bottom four OECD countries. Simultaneously, the proportion of people forming couples is at its lowest at all income levels, about 15% down against other countries. The Institute for Fiscal Studies recognises that the universal credit will start to make inroads into that problem.
Mr Duncan Smith
From the figures that I have just given and those that we have looked at, there is no question but that the disparity between where the last Government left us and where it is generally accepted that couples should be is the real cause of the problem that is making people live apart, particularly those on lower incomes. I draw attention to the right hon. Member for Birkenhead (Mr Field) and his interesting “Panorama” programme. He is to be congratulated on his work in this area, and he has made the very good point that it is madness that the system drives people apart rather than keeping them together.
Mr Stewart Jackson
There is a welcome across the House for the universal credit, not least because of the impact it will have on low-paid couples in my constituency and across the country. Will my right hon. Friend, on this particular day, reaffirm his commitment to supporting and advocating fiscal incentives for the institution of marriage?
Mr Duncan Smith
My hon. Friend knows very well that the issue of fiscal incentives is one for the Chancellor, and I will certainly pass his comments on to the Chancellor and the Prime Minister. When it comes to the benefits system, Members of all parties should recognise the invidious position that even though we know children and elderly people do better where families with two parents work together for them, the system is driving couples apart. That surely cannot be right, and I hope that the matter will unite Members on both sides of the House, as I am sure the right hon. Member for Birkenhead does.
Jobs and the Unemployed
Lord Jackson of Peterborough Excerpts(15 years, 7 months ago)
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Margot James
The previous Government inherited falling unemployment in 1997, and it steadily increased during the first decade of this century. We have been through a couple of economic cycles during that time, but historically unemployment is always greater when a Labour Government leave office than when they arrive.
Rising unemployment under Labour Governments is always followed by a lot of well-meaning interventions to try to support people back into work. That is a laudable aim, with which we all agree, but it leads, as it has during the past five or six years, to a confusing array of individual benefit programmes that create a flourishing array of different funding streams and agencies, and they grow like Topsy. They beget a flourishing cottage industry of providers, all of which make money out of the taxpayer in trying to deliver the same services. It is imperative that the Government simplify, as they are doing, the 12 support-for-work programmes. I congratulate the new team on the steps that they have taken to integrate everything into a single get-back-to-work programme.
I do not want to be wholly negative about the interventions under the previous Government. I was a governor of Stourbridge further education college in my constituency, and a good programme was developed with Westfield, the company that manages the retail centre, and it was known as the retail academy. It took long-term unemployed people, such as women who had left the workplace to have a family, who had not been able to get back into work and who had lost their confidence. They did not have to lose their benefits. The programme was a 9-to-5 commitment, and more than half of them managed to get proper long-term jobs in the retail sector. I would not want to imply that all the individual programmes were a waste of money—of course some of them helped, and I am sure that we will learn from them—but simplification and better co-ordination is key, as another example that I want to share with the House demonstrates.
A few weeks ago, like me, some Members will have visited the manufacturing insight conference that took place just off Westminster Hall. I was struck by the story of a managing director of a small business in Lincolnshire employing about 30 people who wanted to access training for her finance staff. They wanted NVQ level 2 finance training, but in order to qualify she had to guarantee that eight people from her workplace would attend the course. She did not have eight people who needed the course, but there was only one provider that she could approach, and it was subcontracted by another provider that had the contract with the college.
All these providers and subcontracted providers take a slice of taxpayers’ money, which is another reason why we must simplify and codify the work, so that just one company or social enterprise is charging the taxpayer a fee for delivering a much-needed service. Business needs support, but it knows, for the most part, what it needs to employ people, and we must give companies much more direct access to the funding. They should not have to go through all these multiple layers of provision, and they should not have to go through regional development agencies, Business Link and so on—they should be able to access the vital help much more easily.
Mr Stewart Jackson (Peterborough) (Con)
Does my hon. Friend agree that laudable aims sometimes have perverse consequences? She will no doubt have come across people on the doorstep—usually women—who want to work more, but because of the extremely complex tax credit system built up by the former Government, it is simply not worth their while working. They therefore have an incentive to stay at home and remain on benefits, which cannot be right for them, their families or the wider community.
Margot James
I thank my hon. Friend for that excellent intervention. It is absolutely true. We have to create a situation in which people do not fall off the face of a cliff when they lose their benefits overnight, as soon as they take on a job for not that many hours a week. It is a poverty trap—it traps the children as well as the parents—so we have to address that. He raises an important matter.
We have talked a lot in this debate about various Government support initiatives with which we will continue under the new simplified Work programme. However, let us not forget that what the private sector really needs is a vibrant economy. First and foremost, that is what drives jobs. It is not rocket science: we need an educated and skilled work force; controlled immigration, so that businesses are not tempted simply to seize on quickly available, easy and cheap labour—we really must stop that—a benefits system that does not discourage people from going into work, as my hon. Friend the Member for Peterborough (Mr Jackson) said; and, above all, a low tax and a light regulatory regime that encourages investment, rewards risk and stimulates growth. That is our golden vision on the Conservative Benches, that is what we will deliver over five years, and that is what the Budget was all about.
I am pleased to say that, despite the dire economic circumstances we are having to deal with, and the deficit reduction plan that has been forced upon us, we are making great headway in creating the conditions for business that I just described. I will conclude by running through some of the excellent programmes that will drive the recovery. For a start, the employers’ national insurance increase will be tempered and the planned increase on the employers’ side will not go ahead. Although the employees’ side will go ahead, it will be compensated for by the raising of the nil rate on personal tax allowances. We are also looking at tax relief for small businesses, and the first 10 members of staff in any business will be exempt from national insurance contributions.
Whenever I do a survey of businesses in Stourbridge, I find that one of the biggest complaints is the cost of business rates, and by increasing the small business rate relief for one year from October, we will help an estimated 500,000 small businesses. Furthermore, as a west midlands Member, I can say with great passion that the regional growth fund and the commitment of £1 billion will help areas and communities particularly affected by the spending reductions forced upon us. There are other regional policies designed to correct the balance as far as we can. The number of jobs in the boom years created in London, the south-east and the east rose at 10 times the rate of new jobs everywhere else in the economy. Having come from the west midlands, worked for many years in London and gone back to the west midlands, it is deeply striking to me how we have almost become two nations. I am therefore delighted that my right hon. Friend the Chancellor of the Exchequer is so committed to helping regions outside London, the south-east and the east.
Finally, I wish to acknowledge the words of the Secretary of State for Business, Innovation and Skills, who has said that
“the Government’s role is to create the right business environment and the right skills base. The Government cannot simply keep writing out cheques.”
That is the nub of how we propose to stimulate the recovery that this country so urgently needs.
Alison McGovern (Wirral South) (Lab)
I wish to focus my remarks specifically on young people, and with that in mind I should like to comment on what my hon. Friend the Member for Islwyn (Chris Evans) said. Like him, I grew up in the 1980s in a part of the world where it sometimes felt as though very few people had any faith in us. That motivated many of us in the House who come from such parts of our country to stand for election and stand up for investment in young people today.
With that in mind, I wish to say a few words on business confidence and its importance for young people’s employment prospects. I was concerned to read about the Deloitte survey of FTSE 100 directors of finance that was reported this week. The report explained that those finance directors saw an increased probability of a double-dip recession, up five percentage points from a 33% to a 38% likelihood in the past three months. That was attributed to the Government’s policies. That concerns me, because the last thing that I want is falling business confidence that will cause this country similar problems to those that we saw in France and other European countries years ago. At times when business did not want to invest, people at the start of their careers were disproportionately affected, and young people suffered much more than others in their career progression in times of downturn. I call on the Government to guard against that.
In addition to the importance of business confidence and the Government demonstrating counter-cyclical measures, I have a few comments to make at a practical level. Throughout the election and since being elected to the House, I have been concerned about what is happening in my local Jobcentre Plus. The people who work at that centre in Bromborough, about a mile away from where I was born and grew up, work incredibly hard and responded very well throughout the recession to help people who had been made redundant and suffered unemployment.
Over recent months, there has been a real threat of that jobcentre losing some of its work force. They have built up their capacity and skills to try to encourage people back to work and to find the best avenues for them, but now the centre is working under the shadow of the threat of losing its work force and their skills when they are most needed. I call on the Government to consider the matter carefully and not cut away front-line Jobcentre Plus staff at the very time when we need them most.
Members have mentioned the future jobs fund. Although my right hon. Friend the shadow Secretary of State has already referred to the Prime Minister’s comments, it is appropriate for me to say again that when he visited Liverpool, he said that the future jobs fund was “a good scheme” and that
“we’ve got to help people who are unemployed for a long time and social enterprises like this help. It demonstrates where giving more power and control to projects like these works.”
I was struck by the comments made to me by my friend John, who is a trustee of an older people’s charity in Wirral. He told me about the two young men who came to work for the organisation, doing practical tasks in the building where the charity is housed, and described the confidence boost that this had given them and the important skills that they were learning. Those jobs would not necessarily be jobs for life, but they were going to keep the CVs of those young men consistent. That example, along with the evidence from the Prime Minister, shows that perhaps the Government could have thought more carefully about the future jobs fund. The Government’s decision, added to the loss of the young person’s guarantee, has caused me real concern about the prospects for young people in my constituency and the part of the world where I grew up.
I hope that the House will permit me a small amount of partisanship.
Mr Stewart Jackson
Before the hon. Lady continues, let me say that the House would be slightly more accommodating of her partisanship—which is no doubt coming—if she were willing to admit that the number of NEETs under her Government was the highest ever and that the further education capital programme was a calamitous disaster. The corollary of that negative news is that this Government are setting up 50,000 more apprenticeship places and expanding higher education. In the spirit of fairness, surely she can concede that her Government made mistakes and that this Government have new and fresh ideas.
Alison McGovern
I will certainly concede that any plans to increase the number of apprenticeships are welcome. Such plans are vital for my constituency and, I am sure, the hon. Gentleman’s constituency too. When I meet the people from Wirral borough council who work on the Wirral apprenticeship scheme and they tell me about the proactive way in which they have helped young people not in employment, education or training in my area, I can only applaud their work and hope that we will support them on a cross-party basis to continue that work. In that regard, where there are increases in the number of young people who face the threat of unemployment or who are not in employment, education or training, we all need to redouble our efforts and find what can be done. We are all aware of the potentially scarring impact of that not just on those young people, but on their families and communities.
The tenfold increase that we have seen in apprenticeships in Wirral since 1997, which I mentioned in an intervention, has been so welcome partly because of its intergenerational aspect and how it has built up our community. Parents no longer feel that the options for their young people are university or nothing very much. They are now starting to feel that there might be some options; so, to respond to the hon. Gentleman, as Members of this House we must redouble our efforts to focus on apprenticeships and encourage business to invest. However, that needs to involve the public and private sectors working hand in hand. It is important to recognise that we cannot expect those in the private sector to take a chance on young people where the public sector locally is not working alongside them.
As well as talking about those who go into apprenticeships, I want to say a few words about graduates. In this discussion about unemployment, we need to recognise that getting a degree these days is no magic bullet for securing a future career, and we must not pretend that it is. In fact, we need to encourage young people, both pre-university and while they are there, to gain the work-relevant skills that will assist them with their careers.
Nadhim Zahawi
I will not, as I would like to make some headway in my speech.
Following the election of the new Government, it immediately became clear to us that we faced a series of immense challenges in tackling unemployment and worklessness. Let us be honest—those problems have not come about purely because of the recession. Over the past decade, the very fabric of this nation has been altered. This is now a nation of huge government and huge inefficiency, and one that does not do much for those looking for work. Instead, it seems to encourage those who do not want to work. Those factors have undermined this country’s competitiveness, its efficiency and—perhaps most importantly—its social fabric.
This is a self-aggravating situation. Those who are brought up in workless households are themselves more likely to experience worklessness, welfare dependency and poverty in later life. This is not an issue we can ignore. It is vital that we address the causes and begin to secure solutions to these enormous problems. That can be done by making changes to the way in which the welfare state is operated. My right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), the Secretary of State for Work and Pensions, alongside the right hon. Member for Birkenhead (Mr Field) and John Hutton, the former Member for Barrow and Furness, have the historical credibility and experience to make a real difference. Focusing on key issues such as the long-term unemployed and the high level of youth unemployment is critical.
Business is another key area in which a real impact can be made. Supporting our businesses and reducing the regulation that strangles them will lead to more opportunity and more jobs. That is a tried and tested solution and one that I, as a business man, will address shortly, but for now I feel that I cannot ignore the record of those sitting opposite me. After 13 years of a Labour Government, huge numbers of people are living off the welfare state. A whole swathe of society has been led to believe that the culture of aspiration and hard work on which Britain has long prided itself can be ignored in favour of welfare and idleness. Yet I do not blame those people, because it is the last Government who allowed that culture to become ingrained in the British psyche. It is the last Government who bloated not only the welfare state but the public sector. I would never accuse them of doing that for reasons of self-interest, but the questions have to be asked: why was it allowed to happen, and what can we do to rectify it?
Let me turn briefly to the figures, for they do not lie. As I mentioned earlier, unemployment is now just shy of 2.5 million, with nearly 1.5 million people claiming jobseeker’s allowance. We also have 1.7 million people who are long-term unemployed, having been without a job for at least 12 months. Of those, 1.4 million have been on out-of-work benefit for nine or more years; that is a deep rut that is hard to climb out of. I should also make it clear that that does not take account of the 2.6 million people in receipt of incapacity benefit and employment and support allowance. Ours is the nation with the highest number of workless households in Europe. There were 5.9 million working-age benefit claimants in November 2009, and we have an incapacity benefit system that makes it more likely that those on it will die or reach pension age, rather than getting another job after two years of claiming. That is the legacy we have been left.
The last Government have clearly failed. They led this great nation for 13 years, and that is the record that has been left. They may point to and blame the recession; they may claim that factors out of their control led to this situation; but I say no, they cannot so easily shirk the responsibility that the people of Britain placed on them in 1997. They claimed that they would take “Britain forward not back”, yet it is backwards that we have gone: back to the dole queue, back to unemployment, and back to poverty. It is now up to us, the coalition Government, to rectify the mistakes of the past and ensure that once again we “Get Britain working”.
Of course, an enormous number of areas must be discussed if we are both to understand and to begin to deal with this problem: the welfare system and what we can do to change and streamline it, the huge problem of youth unemployment, and what we can do to help lone parents back into work. But as a business man myself and a keen believer in the power that enterprise in the UK has in job creation, I intend to focus on that area. I am a firm believer in creating real jobs in the real economy. We have made it clear that a key element of our programme is boosting economic growth and, as a direct result, creating jobs to ensure that Britain has an economic climate in which private enterprise can compete and invest with confidence. It is vital that we ensure that jobs are available both for those looking for work, and for those whom we will try to get into work.
Mr Stewart Jackson
Does my hon. Friend agree with my comparison between what the Conservative party did in government in the 1980s, when they brought about a real transfer of wealth and capital to working people through shared ownership and the right to buy, and what the Labour Government did, which was to ossify social mobility and widen the gap between the richest and the poorest 10% in our country?
Nadhim Zahawi
My hon. Friend is right. One example is the way in which the gap between the south-east and the rest of the country has grown. Labour Members just do not seem to understand what it takes to create an enterprise economy.
Capital Gains Tax (Rates)
Lord Jackson of Peterborough Excerpts(15 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Duncan Smith
The reality is that the grant came far too late and had no effect on improving women’s health, which was its original target. It was actually paid after the child was born, so the whole grant was a nonsense from start to finish. Getting rid of it has affected nothing out there and there are far better uses for the money.
Mr Stewart Jackson (Peterborough) (Con)
Did my right hon. Friend read last week that the media commentator Stephen Pollard had spent his family’s health in pregnancy grant on a trip to the Fat Duck restaurant in Bray? That is an example of a lack of proper targeting of those who are most in need of such funding, and it shows why we were right to get rid of the grant.
Mr Duncan Smith
I thank my hon. Friend for that example. We have put £2 billion into the child tax credit because we believe that that is a far better way of helping poorer parents. The grant is rather indicative of the way in which the previous Government scattered money around in the hope that they could buy some votes in the run-up to the election although, as was demonstrated, that failed.
Mr Stewart Jackson (Peterborough) (Con)
It is a pleasure, as always, to follow the hon. Member for Foyle (Mark Durkan). I pay tribute to my hon. Friend the Member for East Surrey (Mr Gyimah) for his fluent and assured maiden speech. There is a great future for him in this House.
The Budget that was presented to the House by the Chancellor of the Exchequer last week was brave and bold, and it was the right thing to do. History will record that it will set our country back on the road to economic recovery and prosperity. Just as it fell to Margaret Thatcher 30 years ago to deal with the poisonous legacy of Labour profligacy and financial ruin, the Prime Minister faces a similar challenge today. Labour Members, in their faux outrage at the Budget, barely comprehend the fiscal catastrophe that they inflicted on our country, displaying a mixture of cocky bravado and denial.
Mr Jackson
I will not at the moment.
A modicum of humility or contrition from Labour would surely be appropriate and in order. Given Labour’s utterly negative message at the general election, with no vision of what a fourth Labour Government would mean, it is no wonder that few commentators and fewer voters take its protestations seriously. It simply has no coherent alternative, other than to tax and spend, and to bribe the core vote with other people’s money. Labour’s plan to cut the deficit was completely empty of detail and its deficit reduction bill merely partisan window-dressing.
The Labour party would have had more credibility at the general election and in this debate if it had been honest with the voters about the 20% cuts in non-ring-fenced departmental budgets that the previous Chancellor had already planned. We know that Labour prepared position papers in the Treasury for a 20% VAT rise, which, most importantly, the party failed to rule out in its election manifesto. Labour bet the ranch over the past 13 years on financial services that were not properly regulated, on unsustainable increases in public spending and on a housing market built on a South Sea-style bubble. Labour lost, and we all lost: a £155 billion deficit—bigger in percentage terms than in Italy, Greece or Portugal—a structural deficit that is £12 billion more than we were led to believe, and a debt mountain of £1.4 trillion from the Government who gave us £3 billion overspends on welfare payments and wasted £780 million on the reorganisation of Departments and agencies.
It is scarcely possible to believe that during a dozen years of plenty so many of our fellow citizens were failed, and none more so than the so-called working poor—those who get up in the morning and go to work, pay their taxes, teach their children right from wrong, and have a sense of pride and self-respect. People are rational, and they will do rational things. If we pay for people not to go to work, they will take the path of least resistance and not work. That is Labour’s legacy: the people who need our help, trapped in a half-life of bureaucratic form-filling, and a hopeless and aimless existence on benefits. I believe that the Labour Government were not malevolent, but merely incompetent to an Olympian degree. After 13 years, the number of children in severe poverty is rising. We also have a higher number of children living in workless households than practically any other country in the European Union, 4.8 million people of working age in workless households, and one in five 18-year-old boys who are NEET—not in education, employment or training.
Mr Leigh
The worst statistic of all is that last year, of the 85,000 children in receipt of free school meals, whom we should be helping more, only 45 got into Oxbridge, which is fewer than those who came from just one school—that attended by the Leader of the Opposition. That is the true demerit of what we have been creating in the past 13 years.
Mr Jackson
My hon. Friend is absolutely right to draw the House’s attention to that statistic. Likewise, the number of children who go from care into higher education is also a shameful figure. I therefore strongly endorse the ambition of my right hon. Friend the Secretary of State for Work and Pensions to tackle the deep-rooted causes of poverty in this country, and to tackle the twin aims of lessening the scale of social breakdown and improving the quality of life of the poorest in our society. If our Government achieve nothing less, they will have served our country in achieving that.
In my constituency, where we have recently suffered job losses, and where we also have low skill levels, lower-than-average pay and high welfare dependency, the problems are real and they are about people, not statistics. Hundreds of children in Peterborough live in dysfunctional families, their parents on welfare benefits. Those children lack ambition, a focus and, often, a moral framework, going without anything other than peremptory familial love and experiencing, through no fault of their own, an inevitable poverty of imagination, as well as, too often, material poverty. Dedicated teachers, nursery staff, health professionals and members of the extended family, such as grandparents, are often forced to assume a role in loco parentis. I believe that we have a moral duty to those children to do something about the situation, even if not to their often indolent and feckless parents.
Mr Jackson
No, I will not give way; I do not have time.
More than 6,000 of my constituents languish on disability living allowance and, most shockingly, more than 1,000 of them languished on that particular benefit for more than 12 years under the previous Labour Government.
We simply cannot go on as we are. I welcome the measures in the Budget. I believe that they seek to protect the vulnerable while rebalancing our efforts to generate a private sector-led recovery that will benefit everyone in the medium term. In that spirit, I particularly welcome the 50,000 extra apprenticeships, an increase in the child element of the child tax credit, the re-linking of pensions and the allowance increase of £1,000 for low and middle-income earners. I restate our commitment to Sure Start, to refocusing on the neediest families and to helping ensure that the 6 million carers in our country receive appropriate respite care. I welcome too the cuts in corporation tax, the £200 million increase in the enterprise finance guarantee scheme, the green investment bank and the green new deal.
I hope that the new fiscal rules that the Chancellor has outlined will mean that by 2016, if we have extra money as a result of the cyclically adjusted current balance being in surplus, we will be able to cut tax again for the lowest-paid working people in this country. It took courage in this Budget to tackle the entitlement culture and some of the shibboleths and sacred cows, but putting this country back on track will require further tough decisions, which are the right thing to do. We should also disregard the opportunism of Her Majesty’s Opposition. There is nothing inevitable about a double-dip recession, and I believe that it will not happen. The Budget is borne of desperate necessity, but is there any evidence that seeking to encourage private sector growth and reducing the size of the state to 39% of GDP in four years is a bad thing and will not create jobs, wealth and new markets for our goods and services?
The Chancellor was candid and straightforward last week, in contrast to the Labour years of subterfuge, stealth taxes and fictitious growth projections. Tough but fair, a progressive and forward-looking Budget; a Conservative Budget for the nation and not for narrow, sectional, vested interests and the core vote—it is for this reason that I commend the Budget to the House and my constituents. I will be voting for it tonight.
Glenda Jackson
This is a kind of psychobabble. When we get to the age of 18 and become adults, we really cannot blame everything on our parents, and, at his age, the hon. Gentleman really should not be blaming all those grandparents and great-grandparents for anything. The Liberal Democrats made their choices: they campaigned and they spent money on posters that warned of the VAT bombshell, but they have now signed up for it.
I want to go back to my point that it is always the poorest who pay the most. It will not be the richest who will feel the pain of the VAT increase; it will be the poorest. We have only to go round the supermarkets to see the kind of changes that are being brought into play. The special purchases of particular products that are cheaper than the branded product—or even, in some instances, than the supermarket’s own product—will be the products that the poorest people will have to buy.
Glenda Jackson
No. The idea that you have allowed children to languish in that state in Peterborough for all these years and done nothing about it—no, I am sorry, I cannot give you time. You voted against Sure Start. You voted against the new deal. You voted against every single policy that the Labour Government brought in over our 13 years to give every child a chance and to ensure that we as a nation invested in our greatest national treasure: our people.
Glenda Jackson
You did not have to go through a rubbish dump to find things to sell. And I am a working-class girl.
There is a fantasy about a big black hole of debt that is resting on the shoulders of every man, woman and child in this country. I have lived all my life under the debt incurred by this country fighting and winning the second world war. We paid that debt off about five years ago, but I had not even been aware of its existence. During those decades, I and millions like me were given opportunities to move forward, to develop our talents and to create work that had not been dreamt of by the preceding generations. That could have happened again, but it will not happen under this Budget. This Budget is quite deliberately following the good old Conservative rule of divide and rule, and blame the poor—
Glenda Jackson
Don’t shake your head. In every soundbite you give, you are running with the idea that the people who are claiming benefit are scroungers, and that they have no job because they do not want to work. That is classic Conservative party doctrine. This Budget is a disgrace, because it attacks the most vulnerable in our society, and they are the people, regardless of their party political colour, whom everyone in the House should be committed to defending and protecting. You are simply destroying their opportunities.