Amendment of the Law

Alec Shelbrooke Excerpts

Tuesday 29th March 2011 Commons Chamber

[Mr Duncan Smith]

What we are dealing with here—[Hon. Members: “Ah!”] I will tell Labour Members what the big “Ah!” is. It is “Ah, who were in government for the past 12 years?”, it is “Ah, who left us with the worst structural deficit?”, and it is “Ah, who left us with massive debts, rising youth unemployment and a total shambles from which we are going to have to pick up the pieces?”

One of our biggest challenges was getting to grips with the welfare system, which many Members on both sides of the House will recall. Spending on working-age welfare increased by some 50% under Labour, from £48 billion to £73 billion in real terms. People talk about the problems of increasing welfare spending in difficult times, but let me remind the House that that increase took place during a period of growth. Notwithstanding that extra spending, improvements were quite poor. The universal credit is about getting the incentives right. That is the sort of reform that we have to bring through, recognising that people have to see the financial benefits from taking up employment, and simplifying the byzantine benefits system that we inherited. Alongside it, the Work programme is about supporting people to be work-ready so that British business no longer has to look abroad when it wants to commit to bringing in employees.

We are finally getting to grips with a housing benefit system that has been allowed to run out of control. The failure to reform housing benefit has left us in the absurd situation whereby some benefit claimants can claim up to £100,000 a year to live in large houses in expensive areas. The local housing allowance formula was behind all this madness. I remind Labour Members that it was their Government who introduced the local housing allowance, which pumped fuel into that growth. The difference between the average award under the LHA and under the older schemes for private deregulated tenants that it replaced was an additional £10 per week, or about 10%. As a result, the costs of housing benefit rocketed from £14 billion in 2005-06 to £21 billion in 2010-11. Left unreformed, the housing benefit budget was projected to reach £24 billion in 2014-15. That is, frankly, unsustainable and unacceptable to hard-working British taxpayers.

Housing benefit is an issue on which Labour Members have shown themselves at their very worst. First, we got ludicrous claims about social cleansing from central London, whipping up fury and fear. [Hon. Members: “That started with you.”] No, it started with them, and I know exactly who it was. Then, on top of that, we were told that the real reason was that we are a Government bent on some kind of plan for ethnic cleansing. Labour Members are not averse to a bit of dog-whistle politics when it suits them, scaring some of the most vulnerable people in society and leading them to fear what is coming next.

The problem is that the Labour Government had over 10 years to get to grips with the welfare system, and literally nothing was done about it—it was fiddle, more fiddle, and more expense. The Office for Budget Responsibility has confirmed that as a result of the changes to expenditure that we brought through, we remain on track to eradicate our structural deficit over the course of this Parliament.

It is important, too, to reflect on how the Budget for growth has gone down with people. Sir Martin Sorrell says:

“The coalition from the very beginning had said it was crucially important that Britain had a competitive tax landscape. They've gone further than I expected on corporate”

tax

“and also on personal taxation.”

He went on to say that

“it looks as though we will make that recommendation”

to return his company’s headquarters to the United Kingdom. That is a real endorsement.

A letter in The Daily Telegraph yesterday from 39 leading venture capitalists stated:

“These changes are a shot in the arm for enterprise. Thanks to them Britain is being positioned as a world-class place to launch new businesses. Now British entrepreneurs and those relocating to Britain will find it easier to raise the funds they need to do what they do best: create and expand world-beating businesses.”

John Cridland, the CBI director general, said:

“This Budget will help businesses grow and create jobs. The chancellor has made clear the UK is open for business.”

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Hear! Hear!

--- Later in debate ---

[Mr Duncan Smith]

First, we will publish the Green Paper very shortly. We are finalising it, so I do not want to get into the full detail now, but I promise the right hon. Gentleman that we will answer all such questions. Less means-testing is the key. I leave him with that thought, but I will tantalise him not much longer: there is some really good stuff coming in the Green Paper, and I am sure he will find every reason to support it, given that he has been so positive about pensions for many years.

[Alec Shelbrooke]

Like many hon. Members, I have received representation from constituents who wonder why there is a two-year jump in the pensionable age. Will the Secretary of State outline why that must be done?

[Mr Duncan Smith]

That is to do with the process of equalising, which we are doing slightly faster. It is in the interest of the nation and individuals for us to do that. If we do not do it, there is a cost implication, which could be as high as £10 billion. I say simply to my hon. Friend that if the Opposition and others do not want to do that, they should please let us know where they think the money will come from.

We are making responsible choices for the British economy. I am particularly proud of the decision we took with my right hon. Friend the Chief Secretary to the Treasury on the potential for a single-tier pension. That is in stark contrast, I think, to the mess we saw from the previous Government. What is interesting is that the Labour party has been out of power for 10 months, but listening to what Labour Members say about the current situation, one would think that it has been more like 10 years and that they had nothing to do with it. They do not know whether they are coming or going. Interestingly, half of them seem to support the Darling plan, and the other half do not. For the shadow Chancellor, it rather depends on who asks him, when they ask him, and what time of day it is.

It seemed that the Labour party would not cut, but then we heard that theoretically it would. More frightening still, it has made it clear how it would spend more of our money. Notwithstanding the plan set to start on 1 April, in the past month or so, the Opposition have made some £12 billion of unfunded spending commitments, which actually makes their spending profile even worse. They will tell us that it would all be funded by an extra tax on the banks. Oh dear! I remember that they used to attack the Liberal Democrats for making a similar claim over the extra 1p on income tax. They said, “This is the longest p in history.” Well, this is now the biggest, longest tax in history. It would have to be raised at least six times to pay for the sort of commitments they have engaged in. However, we should not be surprised to discover that fiscal mathematics is not Labour Members’ strong point.

Now we see the Leader of the Opposition joining a march for an alternative solution. I personally hope he has found it, but I do not think he did on the podium the other day. Instead, we see that he is now linked with some of the great names of history: the suffragettes, the anti-apartheid movement and Dr King in America. I am pleased that the Leader of the Opposition also has a dream, but for us it is not having a dream that matters, but that soon enough he should wake up and smell the coffee. The reality is that this Government are sorting out the deficit; this Government are getting Britain back to work; this Government are dealing with the mess that Labour left; and meanwhile they are in denial.

--- Later in debate ---

[Mr Byrne]

I would rather have written a bad joke in public than a bad Budget in public.

Now we know—and now the Secretary of State has been forced to admit—that unemployment is not going to fall below 2 million. He will remember, just as we remember, the last time that happened. For those with long memories, what has happened is all too familiar. The last time the Tory party was in office, it took a couple of years to get unemployment above 2 million, but after that it did not fall below 2 million for 18 years, until the Labour party was elected in 1997. Now the Government have decided that that record of the 1980s is worth a rerun, or something of a repeat, because there is one thing that has not changed: the Conservative party still believes that unemployment is a price worth paying.

[Alec Shelbrooke]

I am grateful to the right hon. Gentleman for giving way, and I am listening carefully to him. While we are discussing the figures, does he welcome today’s news that construction grew by 2.3% in quarter four, and that productivity was also up?

[Mr Byrne]

Of course, and the hon. Gentleman will also recognise that, despite the fact that we are some way out of the recession, today’s figures also confirmed that in the last quarter for which records are available, the economy shrank. I am not sure that that is a record of which he can be proud.

In the circumstances, I would have thought that the House could expect to hear rather more from the Secretary of State about what the Budget would do to get people back into work. The Office for Budget Responsibility is well aware of the Secretary of State’s Work programme and the Chancellor’s tax breaks on offer for business, yet its conclusion was the cold fact that unemployment will continue to rise. Every time the Chancellor stands up at the Despatch Box to deliver a Budget, he revises down his forecast for growth and revises up his estimate for the number of unemployed people in our country. He is costing this country a fortune.

What, then, did this Budget offer for jobs? Incredibly, it said that by the first quarter of 2013, unemployment would be 200,000 higher than was forecast just last October. What a triumph! Under the circumstances, we could have expected a rather bigger push from the Secretary of State and his right hon. Friend the Chancellor to get people back to work. After all, his Minister for the unemployed, the right hon. Member for Epsom and Ewell, told the Select Committee on Work and Pensions on 14 March:

“If there was a very substantial change in the labour market, one way or the other, frankly, that is the kind of circumstance in which we might need to revisit some of the assumptions.”

Well, 200,000 more people on the dole sounds like rather a substantial change to me.

What is the Government’s response? Some £20 million for work experience. This morning I had a look at the Secretary of State’s accounts for January. It would appear that his new work placement scheme, which was so proudly trumpeted this morning, will cost less than his Department spends on stationery every year. At the very least, we would have expected more resources for the Work programme. The Prime Minister is fond of telling us that the Work programme is

“the biggest back-to-work scheme this country has seen since the 1930s.”—[Official Report, 16 February 2011; Vol. 523, c. 951.]

In fact, as the BBC has shown, there are 250,000 fewer places on it than Labour had last year, when unemployment was lower. The association of bidders for the Work programme now has so much confidence in the Secretary of State’s plans that it says:

“the design of the Work Programme is fraught with risks which may impact significantly on the number of unemployed people who can benefit from it”!

That is hardly a vote of confidence. When my hon. Friend the Member for Westminster North (Ms Buck) asked the Secretary of State how much extra he had received from the Treasury to get people back to work, he refused to give her a straight answer, and we all know what that means: that he asked for nothing and he got nothing. With unemployment now forecast to rise, the very least that we could expect from this Secretary of State is to stand up for his Department, fight his corner and get some extra help to get this country back to work.

--- Later in debate ---

[Mr Byrne]

We have made it quite clear that we support reform of DLA, but what we do not support is a top-down, cuts-driven agenda that will deny support to 170,000 disabled people in this country. That is the wrong approach; the Secretary of State needs to think again.

[Alec Shelbrooke]

The right hon. Gentleman is most generous in giving way. I have just listened, as has the rest of the House, to a whole host of numbers that he reeled off relating to where cuts would be made, but he has not said where those cuts would be made, or what exactly would be cut. Will he enlighten the House?

[Mr Byrne]

The deficit reduction plan that we put in place is spelt out in 38 pages of the March 2010 Budget. Will the hon. Gentleman tell me whether he has read it? [Interruption.] No, obviously not.