Housing Benefit (Abolition of Social Sector Size Criteria)
Andrew George Excerpts(10 years ago)
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Rachel Reeves
Yes, and it tells us all we need to know about the priorities of this Government when people earning more than £150,000 got a tax cut while another group of people, two thirds of whom are disabled, got a £14 increase in their rent that they simply cannot afford. What we will note is that there would be no bedroom tax without the Liberal Democrats. They joined the Tories in the Lobby time and again to vote it through, and they combined with the Tories again and again to block Labour’s attempts to repeal it.
In conclusion, the bedroom tax is a cruel and unfair tax that is hitting around half a million low-income households. It has left vulnerable people feeling insecure in their own homes through no fault of their own.
Andrew George (St Ives) (LD)
The hon. Lady says that ours are mere proposals, but in fact they are encapsulated pretty much word for word in my Affordable Homes Bill, which of course has the support of the House. Surely that is the route to take. What we need to do is find a consensus. If she is really as concerned about this issue as she claims to be, she should apply today’s motion to the private rented sector in the same way as it would apply to the social rented sector.
Rachel Reeves
If the hon. Gentleman is so serious about doing the right thing, I hope that he will join us in the Lobby this evening, because “noting proposals” will not pay the rent or keep people in their homes. Only by voting with Labour this afternoon can Members do the right thing and repeal this unfair and cruel tax.
The bedroom tax has pushed many into debt and to resort to food banks, and it has brought others to the point of eviction and homelessness. It is wreaking havoc with local housing policies and with the finances of social housing providers, creating extra costs and perverse consequences on all sides. It is yet another example of Tory welfare waste—wasting time and energy even as it fails to deliver the savings that were promised.
The bedroom tax will be remembered for years to come as a signature policy of this unfair, out-of-touch Government. Today we have given Members on both sides of the House an opportunity to come together and consign this cruel policy to the history books. However, if Government Members do not do the right thing and join us to abolish it this afternoon, I pledge that the first thing I will do if I am Secretary of State next May is cancel the bedroom tax, removing that symbol of the injustice we have seen under this Government. That is a fully funded commitment that we will pay for without extra borrowing by closing tax loopholes and reversing the tax breaks with which this Government have favoured the wealthy.
That will be a signal of how different things will be under a Labour Government: dealing with the deficit in a fairer way and treating those who work hard to care for the most disadvantaged and vulnerable members of our society with the decency and dignity they deserve—so different from what Government Members have done. For hundreds of thousands of families across the country, that change cannot come soon enough.
Andrew George (St Ives) (LD)
It is a pleasure to follow the hon. Member for Makerfield (Yvonne Fovargue). She is well respected as a knowledgeable expert on these issues. She said that the under-occupancy penalty is cruel and described the mindset of those who would introduce such a policy. Presumably, that is the same mindset that introduced this policy into the private rented sector and reinforced it. My record on this issue can be seen on a number of occasions, including on the Affordable Homes Bill, which received a 75-vote majority in this House on 5 September. My opposition to the under-occupancy penalty has been consistent throughout, including during the previous Labour Government.
It is not the fault of those who are in housing need that successive Governments have failed to build enough homes of the right size, and they should not be made to pay the penalty for that. It would be nonsense to move disabled people from homes that have been converted, often expensively at taxpayers’ expense, only to have to do it all over again in another property. It is rare in my constituency, and I know in many others, to find a suitable alternative home within 20 or 30 miles. It is wrong that people who have a settled life in a local community should have to uproot themselves from their social and family, and other supportive, connections to meet the requirement of this unacceptable policy.
The fundamental moral point is that the poor are just as entitled to a stable family home as the better off. There are many circumstances where apparent under- occupancy is for a good reason: the visiting carer; the young nest returner coming back to a family home—something that middle-class people expect to offer to their younger people—after perhaps not getting on in life as they anticipated; and those who provide shared care. We should be encouraging housing associations and other social housing providers to build larger homes. When I worked in this sector, I always sought to ensure that social housing providers had some flexibility. Having larger homes provided flexibility in the management of their estate. This policy drives them in the opposite direction. I fear there is also a sinister agenda to create an environment in which poor families will ultimately turn on their poor neighbours and blame them if they are living in overcrowded accommodation, rather than looking further afield to find the real culprit.
Mr Jim Cunningham (Coventry South) (Lab)
What happened to the hon. Gentleman’s private Member’s Bill? How was it stopped? He mentioned poorer families. What is the actual cost? Is it costing £15 or £25 a week for those families who have to move?
Andrew George
It is already on record as 14% and 25%, depending on the number of rooms. I am concerned about the trading of statistics in the debate so far. I have to say that they are far away, and wildly so, from many of the statistics I have scrutinised when looking at the impact of the policy. They need to be traded in a calmer environment.
Andrew George
There is a division between Liberal Democrats and Conservatives on this issue, and I think it will be amplified now.
David Rutley
I want to make a separate and important point. We have a very creative local housing association in our area, Peaks & Plains, which has established pop-up business schools to enable more people to set up their own businesses and become established on their own two feet. Does the hon. Gentleman believe that that, and other policies from the Government Benches such as the new enterprise allowance, is helping more people to get established and be better able to take care of their housing costs?
Andrew George
I think that is slightly outwith the focus of the debate. Nevertheless, I of course acknowledge the merit of what the hon. Gentleman suggests.
The Conservatives have form when it comes to spending public money on the under-occupancy of residential property. After all, the last time they were in government on their own they introduced a council tax discount for second homes. Hundreds of millions of pounds of taxpayers’ money was spent every year subsidising the wealthy to have their second homes, when there were thousands of local families who could not afford their first home. That defines the Conservatives’ approach: they reward the wealthy when they under-occupy their second home and they penalise the poor when they under-occupy their council home.
The Conservatives claim that the purpose of the under- occupancy penalty is to save money by cutting benefit where the recipient occupies a property that is larger than they need, and to ensure the efficient use of a scarce public resource—social housing. Those two objectives, however, contradict each other. If the second objective—the effective use of public resource—were achieved and every last cubic centimetre of every council house was fully occupied, it would fail to meet their first objective of saving money.
I have a problem with the Labour party’s motion, partly because it deals only with the social sector, which is odd. If Labour had applied it to the private rented sector, I might have considered voting for it. Above all, I am concerned to deal with this issue seriously. We can either play party politics and come up with the kind of motion the Labour party has come up with today, or we can use the vehicle that is available, the Affordable Homes Bill. Although my amendment has not been accepted for debate, we should still be working together to seek political consensus to help the victims of this policy, instead of using them to score party political points, and that could be done with the money resolution necessary to advance my Bill. The Minister asked how we would pay for it. We could pay for it by driving down rents, rather than driving people out on to the streets. On the money resolution, I am afraid—
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. Will the hon. Gentleman stop talking about the money resolution and get on with it?
Andrew George
The money resolution concerns my Affordable Homes Bill, which would address this issue, were we to solve the problem with the money resolution.
In conclusion, we should be seeking consensus, rather than scoring party political points.
Affordable Homes Bill
Andrew George Excerpts(10 years, 3 months ago)
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Andrew George (St Ives) (LD)
I beg to move, That the Bill be now read a Second time.
I have not been present on Fridays recently and I had forgotten how popular they can be. Perhaps we should move a motion to do this more often.
It was my good fortune to come top of the MPs’ national lottery for private Members’ Bills, and a great opportunity it was. Just as we have held the Commons prayer that we should be working
“to improve the condition of all mankind”,
I felt that an area of greatest concern in my constituency, and the area of policy that I would like to advance the case for, is that of addressing the desperate need for affordable accommodation of very large numbers of the population throughout the country.
I have been engaged in discussions with many interest groups and many colleagues around the House to seek to advance that cause. Indeed, when my name came out of the hat first, I consulted my constituents and proposed a range of ideas. I listened and was bombarded by a large number of proposals for a private Member’s Bill, and I narrowed them down to three: one on health, one on devolution and the other on housing. Having consulted my constituents, it was clear to me that housing was the most pressing issue they face, especially the lack of affordable housing and the poverty caused as the result of policies that perhaps need to be adjusted to take account of the conditions in which people live.
Having had a range of discussions on different aspects of the Bill—it started quite wide and we have narrowed it down—we have come to a proposal that has three elements. Existing tenants will not be subject to any housing benefit deduction until they have received a reasonable offer of alternative social rented accommodation with the correct number of bedrooms. Tenants who need an extra bedroom for genuine medical reasons or whose homes are substantially adapted will not have their housing benefit reduced. Clause 3, as people will have noticed, will encourage a systematic review of the Government’s efforts to provide affordable housing and, in particular, intermediate market housing.
I consulted the Public Bill Office, and the Clerks were enormously helpful to me in drafting the Bill. They assure me that it meets all the requirements of a private Member’s Bill, including that its primary purpose clearly is not to spend money. Indeed, in relation to its housing benefit implications, there is a lot of speculation about the likely impact of the Government’s current policy and their policy as amended by the Bill. I am very much reassured that the Clerks have given me that support.
I mentioned that a number of other measures were originally in the first draft of the Bill, including placing a cap on the number of second homes by introducing a new planning use class. In discussions with a wide range of people, I could not get sufficient support for that measure, but I am keen to advance that policy in other ways. Another measure was a “use it or lose it” approach to deal with the problem of large numbers of developers who land-bank, or hold back development land, which has the effect of driving up development land prices and therefore the ability to build affordable homes.
I have promoted intermediate market housing for many years. Indeed, in a professional capacity before I was first elected, I was engaged in that activity and work. I am keen to ensure that we have an opportunity to develop a new lower rung of the housing ladder to advance that case. Clause 3, largely through tentative steps, encourages the Government to look more urgently at the opportunities that people need to address that issue.
This is the first coalition Government for many years, and I have personally taken the strong view that coalition should be relatively easy to do. We should simply get on and deliver the things on which we agree and seek compromise in those areas where we disagree; but I am personally a strong parliamentarian and I believe that, where coalition parties fail to achieve compromise, it is better to resolve the matter here on the merits of the debate, rather than through backroom deals and matters that are not open to debate in the House.
Sheryll Murray (South East Cornwall) (Con)
Will the hon. Gentleman give way?
Andrew George
Will the hon. Lady allow me to make this point, if she does not mind?
In advancing the Bill in the form in which it now appears on Second Reading, I know that there have been a number of discussions between all parties. I ask the Minister whether he will confirm in responding to the debate that collective responsibility will be suspended on this private Member’s Bill.
The Minister of State, Department for Work and Pensions (Mr Mark Harper)
indicated assent.
Andrew George
I notice that the Minister nods his assent to that question, so I am given to understand that collective responsibility will be suspended on the Bill. That is important, and I am very encouraged that we have an opportunity for a more open debate.
Andrew George
The hon. Lady will have an opportunity to intervene on me in a moment. If collective responsibility has been suspended, I hope that she and her colleagues and, indeed, all hon. Members will have the opportunity to reach a judgment on the merits of the Bill.
Sheryll Murray
The hon. Gentleman has said that with coalition comes partnership. Has he consulted the Minister on the Bill’s cost implications?
Andrew George
I have had a wide range of discussions, and when the Bill is considered in Committee, we will doubtless have an opportunity to do that. I was disappointed that, having sought Ministers’ co-operation to advance the Bill, I was told that I would not have that co-operation. [Hon. Members: “Ah!”] Clearly, in terms of being able to advance a discussion on matters relating to how the Government perceive the effect that the measures in the Bill would have on public expenditure, I would be very keen to have that discussion with the Minister. I certainly hope that when the Bill is supported—as, indeed, I believe it will be because hon. Members will be persuaded by the strength of the arguments today—we may have the opportunity to have those discussions before the debates in Committee.
Andrew George
No, I will not give way. I am well aware—it is quite evident from the large number of Members who are here—that many Members wish to speak in the debate, and I therefore do not intend to speak for long, to enable as many Members as possible to take part.
I can understand the rationale that the Government have advanced for implementing the regulations.
Andrew George
I am certainly not going to give way to the hon. Lady again.
I can entirely understand the rationale for advancing the regulations: to apply the regulations to the social rented sector that previously applied only to the private rented sector. As a rationale, that is entirely understandable. The Government certainly had an opportunity to see how those regulations would bed in. The purpose of the Bill is to reflect on the results of interim assessments of how the new regulations have fared since their implementation on 1 April last year.
We have now had long enough to be clear about how the regulations have an impact. Therefore, it is clear that if we are to ensure that private and social tenants are treated equally, yet the vulnerable are properly protected, we have as a result of the interim evaluation commissioned by the Government evidence of how the policy has fared. I propose, therefore, that the rules be changed so that existing tenants are not penalised when they cannot move into smaller accommodation because it is not available in their locality, or if they have a serious medical reason for requiring an additional room.
The findings, which have been widely reported, studied and understood, show that, certainly in the first six months of the implementation of the regulations, only 4.5% of affected claimants were reported to have downsized to a smaller social sector property. The researchers found little evidence of claimants finding work, increasing their pay or taking in a lodger, as the Government anticipated when they introduced the regulations. That needs to be taken into account as well. Tenants affected were making cuts and incurring debts, with 57% of them reporting cutting back on what they deemed to be household essentials.
Mr David Anderson (Blaydon) (Lab)
Does the hon. Gentleman accept that the interim evaluation proved everybody right in what they said about how exactly the regulations would work out? The only people who were wrong were the Government and the Liberal Democrats who supported them.
Andrew George
I urge the hon. Gentleman to study the voting record. The Bill proposes moderate and reasonable measures that should receive the support of all Members from all parties because they are based on the evidence. Perhaps some people had remarkable foresight about how the regulations would fare, as the hon. Gentleman suggests he had, and we can look at Members’ voting record. Labour introduced similar regulations concerning a bedroom tax in the private rented sector. We have to reflect on the evidence and consider the consequences, and the Bill is simply a moderate and reasonable measure introducing new regulations based on that evidence.
Mr Nuttall
The hon. Gentleman said that this is a reasonable and moderate measure, but on his website he says:
“Naturally, if I succeed at Second Reading on Friday, I hope I can beef up the Bill with amendments at Committee Stage”.
So, in fact, this is not the whole story. Will the hon. Gentleman tell us what he would really like to do with this Bill?
Andrew George
There is nothing on this issue that I have withheld from the public domain. Indeed, I have already said to the House that in its original form the Bill contained a wider range of measures, particularly in the clauses that I have mentioned, and I had a number of other proposals that I wanted to discuss with Members. The whole purpose of the Committee stage of a Bill is to consider whether there is further evidence that might advance the case. This is, in any case, a developing area of policy, and it develops on the basis of the evidence. I have long had a deep concern about it, and all I seek to do is ensure that the Government get it right.
Andrew George
I shall give way first to the hon. Member for Coventry South (Mr Cunningham) and then to the hon. Member for Dumfries and Galloway (Mr Brown).
Mr Cunningham
The hon. Gentleman has been consistent on the subject of this Bill—let us be quite clear about that. Does he agree that the Government’s measures placed a burden on the needy and disabled in this country, and the chickens are now coming home to roost for the Government?
Andrew George
I assume that that remark is directed at those who sit on the Front Bench today.
I want to make a further point about the evidence from the interim evaluation. It is clear that total rent arrears held by landlords increased by 14% in the first six months, and the National Housing Federation says that two thirds—67%—of affected tenants are finding it difficult to afford to pay the rent, compared with less than a third of non-affected tenants. Affected tenants are four times more likely to say that they need to borrow money and therefore go into further debt than they were before 1 April 2013, when the measures were introduced. The evidence that is now available helps us, and I certainly hope that it helps the Government, to consider how best to respond to the issue. That is why I strongly urge all Members of the House to support the Second Reading of the Bill.
Mr Harper
The hon. Gentleman said that he wanted the House to make an informed decision, so I thought it would be helpful if I shared with hon. Members in all parts of the House the Government’s estimate of the costings of the Bill, whose drafting goes rather wider than the spare room subsidy. The Government estimate that the Bill would cost about £1 billion of public expenditure, so I would be grateful if he let the House know what spending cuts or tax increases he intends to put before it when it makes its decision.
Andrew George
That is most interesting because the Minister was not prepared to share that estimate—that speculative figure—with me before today’s debate. Looking at the consequences of the regulations, we see that if people had no other purpose in their life than simply to be the stimulus for the workings of the housing benefit system, and no say in how or where they lived, there would be no savings for the Government in any case. If the purpose of Government policy is to ensure the proper, efficient and effective use of the social housing resource with no under-occupation, so that every cubic centimetre of every social property is fully occupied, there will be no saving in housing benefit.
My point is that the policy is putting pressure on vulnerable people and they are expected to go into debt, and indeed the evidence shows that they are doing so as a consequence of the policy. That is the reasoning behind these modest and reasonable measures, which are based on the evidence. We can certainly debate the Minister’s speculative estimate of the cost. In any case, when the Government first proposed the measures, they said that they would make savings of £500 million, and they have had to revise that down again and again. We must take into account the number of tenants who have had to move into the private rented sector, where rents are higher, and the number of disabled people who have had to move, requiring adaptations to be made at taxpayers’ expense.
There are elements of the Government’s estimates that we have not seen properly, and I would like to scrutinise the evidence that the Minister believes he has for them. He simply stood up and spouted one figure without any evidence. Perhaps when he winds up the debate, we will hear more about that figure, and I hope that he will come and talk to me before the Bill goes into Committee.
Mr Russell Brown
I congratulate the hon. Gentleman on his Bill. He has much support from Labour Members. May I take him back to his remarks about the legislation introduced by the Labour Government on private sector housing and the subject of those who had desperately to look to the private sector for rented accommodation? Will he please correct the record, because that legislation was not retrospective? Moreover, everyone was included in it. There were no exceptions, so pensioner households were included as well. That legislation, which the previous Labour Government put through, made no exceptions for anyone, so it is fundamentally different.
Andrew George
I acknowledge that it is different. I do not wish to be taken down a cul-de-sac of an argument, but regulations that were not retrospective in a sector that is characterised by six-month shorthold tenancies were not going to be non-retrospective for very long.
Sarah Newton (Truro and Falmouth) (Con)
There is not a person on the Government Benches who does not care as much as the hon. Gentleman for vulnerable people. There is no doubt that there are huge pressures on housing in Cornwall, but the evidence shows that Cornwall council is using its discretionary housing allowance to help the most vulnerable people in our society. In fact, it has not even spent all the money that is available to help the very same people whom he and I care about, so I really cannot accept that people with disabilities and people who absolutely need help are not able to get it.
Andrew George
I am grateful to my hon. Friend for that intervention, because it gives me the opportunity to say that the discretionary housing payment allowance to local authorities is helpful, and it is clearly important given the way in which the Government introduced these regulations. However, the rules attached to it make it extremely difficult to apply it willy-nilly for anyone who says, “I don’t like this tax—could you please just cover it for me?” It does not apply in that way, and it is wrong to imply that it does.
Some Conservative Members are saying that they really care about this sector, so let us look back at the DNA of the Conservative party and the last time we had the opportunity to look at the state’s relationship to under-occupation of property. My hon. Friend will understand this from a Cornish perspective. She will remember that the last time the Conservatives held power on their own, they introduced a 50% council tax rate for second homes. That represented the state spending hundreds of millions of pounds of taxpayers’ money every year to enable the wealthy to own second homes, when thousands of families in constituencies such as mine could not afford their first. There was not just under-occupation but un-occupation of properties that were essential to local communities. I hope that the Conservatives have moved on from that policy and, as a result of their association with the Liberal Democrats, have been prepared to moderate their line in relation to the application of public money and under-occupation.
Joan Walley (Stoke-on-Trent North) (Lab)
I congratulate the hon. Gentleman on introducing a Bill that I hope will be the first step in getting rid of this pernicious tax. May I take him back to the Minister’s intervention on sharing the information about the so-called £1 billion cost of these proposals? If the hon. Gentleman is able to have discussions with his colleagues in the Government on the costs, will he make sure that he brings the National Audit Office and the Office for National Statistics into that debate, because we have to talk about the unintended costs in social, health and economic terms of what this tax has created? Those are the issues that we should be costing—not just the straightforward black-and-white costs, which I think the Minister is completely wrong about.
Andrew George
I thank the hon. Lady. I am sure that the Minister will have heard those remarks.
John Pugh (Southport) (LD)
Is not the huge amount of discretionary money that the Government have had to throw at this scheme an indication that things are not working and that we need to move towards a more evidence-led policy?
Andrew George
I am grateful to my hon. Friend for making that point for me very articulately.
Andrew George
I am aware of the time. The hon. Lady has already had an intervention, and rather a long one.
Andrew George
I believe that the hon. Gentleman has put his name down to speak, so I am sure we will be ready for that when it comes.
With regard to the changes in relation to disability, the clause is self-evident and I do not need to explain the reasoning for those measures. The provision about a reasonable offer of alternative accommodation is entirely reasonable. In a constituency such as mine, anyone engaging in the desperate weekend effort to try to find alternative accommodation through the Homechoice register would be very lucky, if they are seeking to downsize, to be able to move within a radius of 40 miles. If they live on the Isles of Scilly, there is no chance that they will be able to stay there. People who are seeking to downsize clearly cannot do so within their own local community, as would be reasonable. Therefore, as a result of moving, they will lose their ties with their school, their job, their social network, and their family. It is important and reasonable that we address these issues, and that is what the Bill does.
Andrew George
I am conscious of the time. I have taken a large number of interventions, so I will not take any more in order that I can bring my remarks to a conclusion as quickly as possible.
In the light of the evidence, we should try to steer away from implying that it is somehow the fault of the vulnerable that they are living in under-occupied accommodation. In fact, we need to look carefully at the approach of successive Governments in the past who have failed to build the right proportion and number of the right size of accommodation to ensure that we make sufficient decent properties available. We need to recognise the unintended consequences of this regulation, particularly for those living in expensively adapted disabled accommodation. Those costs will have to be paid all over again if we force them to move to alternative accommodation when there is a lack of reasonable alternatives. The mere fact that someone is poor does not mean they are any less entitled to a stable family home than if they were better-off.
When I was engaged in the sector before I came to this place, I used to make recommendations as a result of needs assessments. I tried to make sure that we developed in social housing ranges of property that met the future needs of the local community, not necessarily just immediate need, so I would always err on the side of three and four-bedroom properties. The marginal cost at the time of development is only 3% or 4%, and that provides flexibility in future, particularly in small communities. It is essential that we have that. The problem with the regulation as it stands is that it sends the wrong signals to social housing providers so they will build too many small properties, creating a legacy for future generations that continues to put pressure on families in social housing. Personally, I find that unacceptable.
Andrew George
I have said that I will not take any further interventions because of the time I have taken—I apologise.
Clause 3 relates to intermediate market housing. I am keen to make sure that we advance the case for intermediate market housing, which I think is self-evident. I hope that I can have discussions with Government about this measure. It is reasonable to undertake an evaluation of what is going on in that sector and to try to create tools to enable housing associations and community land trusts to construct a new lower rung on the housing ladder.
Having taken a large number of interventions to accommodate those who wished to make them, it only remains for me to say that I believe the measure is reasonable and based on the evidence—I took account of the evidence of the interim evaluation—and I urge all hon. Members from across all parties to support the Bill on Second Reading.
Chris Bryant
No, I will not give way. The hon. Gentleman gets to make a speech later.
In an e-mail to me, and I suspect to many others as well, the hon. Member for St Ives said:
“This is a compromise on what I had hoped to bring forward at this stage, which would have been to abolish the Bedroom Tax altogether.”
I am not sure with whom he is compromising. Obviously, it is not with the Conservatives: they are on a three-line Whip to vote him down. I suppose it must be with those on the Liberal Democrat Front Bench. Perhaps it is with the Deputy Prime Minister, the Chief Secretary to the Treasury or the Pensions Minister, who was one of the stoutest defenders of the bedroom tax and saw off all amendments in Committee, including the amendments that will now be brought forward today.
Andrew George
I am grateful to the shadow Minister for giving way. The compromise was in relation to the Bill that I had previously proposed, which included measures to put caps on second homes, but that was opposed by Labour. What I seek to do is to help people who are unfairly affected by this legislation. This is a reasonable measure on which the House can unite. Yes, it is a compromise, but that is because I want to get something through that helps people.
Chris Bryant
And so do I, but I think the hon. Gentleman also wants to scrap the tax as well. Or has he reneged on the position in his e-mail? He sent me an e-mail, and I thought that it was a personal one, so I am taking him at his word.
Mr Nuttall
I have not inquired of the Clerks whether that would be correct parliamentary procedure. It is certainly unusual for a Bill’s promoter to admit at the outset that the measure being proposed is not the measure they want agreed on Third Reading and that they intend to table amendments in Committee. It is usual for the rest of the House, not the promoter, to want to amend a Bill.
Andrew George
I am particularly grateful to the hon. Gentleman for following this process very closely. I am sure that my constituents will be interested in his remarks. As well as those who responded, many other people certainly commented to me, but the hon. Gentleman needs to understand that arriving at the published Bill is, of course, a process of considering what is likely to succeed and that I or, indeed, anyone else who tables amendments, would take into account what is and is not orderly to propose in Committee. That is self-evident.
Mr Nuttall
I am grateful to the hon. Gentleman for trying to clarify matters. I am not sure whether I am any clearer about why, if he thinks it is a good idea to include other matters, they are not in the Bill this morning. It is not clear to me that there is any reason other than that he thinks that a slimmed-down Bill stands a better chance of getting a Second Reading. On that basis, it is fair for hon. Members, in reaching a decision this morning, to have in the back of our minds the fact that the Bill is a Trojan horse.
Mr Nuttall
I am grateful to the hon. Gentleman for giving me a chance to expand and clarify that point, because there is a fundamental difference: when the Government or anyone else table amendments, they do so in response to comments made as the Bill goes through the legislative procedure. In my experience, it is very unusual for the Member introducing a Bill to openly admit and declare at the outset, on Second Reading, that the Bill is not actually what they want.
Andrew George
To be clear, and to help the hon. Gentleman, I point out that in its early stages the Bill proposed a range of measures. He has read my words and, yes, of course I would like to beef up the Bill, in particular the purpose of certain clauses and the subject matter that they cover, on the basis of evidence. There is a clear need in constituencies such as mine to place a cap on the number of second homes, which is clearly opposed by the Conservatives, and although there is no chance of achieving that in this Bill, we are able to advance the proposal through the Sustainable Communities Act 2007. South Lakeland council proposes a new measure that the Government will have to consider. That measure is supported by my constituents, and the 2007 Act is the legislative route for it.
Mr Nuttall
I am glad that the hon. Gentleman has had an opportunity to put that point on the record.
Housing Benefit
Andrew George Excerpts(11 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Andrew George (St Ives) (LD)
The hon. Lady says that the bedroom tax should be abolished. Does she agree that it should be abolished for private sector tenants, too?
Dame Anne Begg
There is a fundamental misunderstanding about the nature of social housing. When my parents got their first council house, they thought that that was their home for life. That is not the same for people who rent in the private sector as a stepping stone to buying a house. My parents never had that expectation, and anyone who has lived in a council house would understand that.
The bedroom tax hits the most vulnerable, many of whom do not qualify, despite everything that has been said, for discretionary housing payments. In Aberdeen, I have been hearing the stories of people who have fallen on hard times and become victims of drug or alcohol abuse. They are now trying to get their lives back together but cannot, because they are being hit by the bedroom tax. For example, a 37-year-old merchant seaman sustained injuries in a car accident, and he therefore needed a ground-floor flat. He was allocated a two-bedroom flat because that was all there was, and he has now been hit by the bedroom tax. A 47-year-old disabled man, who, after his parents died, continued to live in the two-bedroom flat that he had been born in, has been hit by the bedroom tax.
Andrew George (St Ives) (LD)
I voted against this policy before and I will again be voting against the Government today, but I have to say that the Labour motion is tortuous and convoluted and not very well argued. My hon. Friend the Minister who opened the debate for the Government is right that the Labour party is incoherent in that it brought forward policies introducing a bedroom tax in the private sector yet opposes it, on the basis of a principle it claims to abide by, in relation to this measure.
Andrew George
The point still applies because ultimately the previous Government were seeking to achieve exactly what the current Government want to achieve in respect of the social rented sector.
Andrew George
I will not give way again on that point.
The debate has thus far largely focused on talking about a ghetto—or, rather, reservation—of people who live in social rented accommodation. It is, however, important to place this debate in the context of the way in which the whole housing market works and the important role social housing plays in relation to that.
In my constituency, many properties are sold as recreational investments to wealthy investors to be used as a second home or holiday home. Meanwhile, some hard-working, low-paid families will be evicted from their council houses because the Government believe they have one more bedroom than they deserve. I voted against this policy previously and my opposition to it is, if anything, even stronger now that I have met many of my constituents who are affected by it.
This policy will not increase the stock of desperately needed affordable homes for local people. The spare room penalty or bedroom tax victimises the most marginalised in our communities, undermines family life, penalises the hard-working low-paid for being prepared to stomach low-paid work, and masks the excessive cost and disruption to the disabled who have to move from expensively adapted homes. It is, in my view, Dickensian in its social divisiveness. It is an immoral policy.
Barbara Keeley
The hon. Gentleman is making a good speech and I am glad he will vote with us tonight. Does he agree that one of the most vindictive aspects of this policy is the way it penalises carers? I have mentioned the Carers UK research on how carers are being affected. It found that among the households affected, one in six carers—people who cannot get more hours of work because they have given up their jobs to care—had rent arrears and faced possible evictions.
Andrew George
The hon. Lady makes a very good point. I think this policy has been introduced in such a headlong rush that some of the inconsistencies and consequences have not been thought through carefully enough. The issue has been approached from entirely the wrong angle. If there is a problem with the housing stock, it is wrong that people in the social housing sector who are apparently over-housed should, in effect, be blamed by people elsewhere in the local community who are rather under-housed. They are being blamed for the effects of the failure of successive Governments to build enough affordable homes of sufficient size to give communities the flexibility to be able to ensure that local families have accommodation of adequate size and to meet the range of needs that exist.
The Liberal Democrats have proposed a mansion tax. That has been opposed by some people with large mansions who are quite happy to impose a bedroom tax on people who are clearly going to be severely affected by that. Furthermore, in rural areas like mine, many of the people who are affected and who are prepared to uproot themselves and move—in many cases from long-standing family homes to a smaller property—cannot find a property within 20, 30, 40 and sometimes 50 miles. In order for many rural areas to be able to comply with this policy, people have to uproot themselves from their community and place of work, their children’s schooling, their church, and their social and family networks—from everything—and go to alien places. Even in Cornwall there are places which many Cornish folk would find alien to them. That is the only option for them, however, other than having to face extremely penal charges in order to carry on living in their current home.
I was involved in building affordable homes for local people before I was elected to this place. We tried to introduce new schemes with sufficient three and four-bedroom accommodation to ensure that the community would in future have the flexibility to meet the range of needs that might arise. That was important because these properties would be available for decades. This tax will discourage housing associations and others who want to build housing in years to come from making sure they build a broad range of properties and thereby provide the flexibility to meet future needs. They will instead build smaller properties, which will result in increased overcrowding in future. If we go in that direction, we will end up with further ghettos. The ghettos of the future will be built as a result of this policy. That will be the consequence of going forward on this basis. If this policy is not based on a prejudice in respect of some of those who are marginalised, many of whom do not vote, I am sorry to say that it is based on an indifference to the most vulnerable families in our communities.
Welfare Benefits Up-rating Bill
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Mr Redwood
If somebody wanted a part-time job, I am delighted that they have now got a part-time job. Quite a lot of people choose to have a part-time job. Their family commitments mean that that is what they can manage and it is a very good thing that we have generated more part-time jobs so that they can have them. To those who seriously want a full-time job—I am sure the hon. Gentleman can find people who would prefer a full-time job and are still in part-time work—I would say it is easier to get that full-time job from their part-time job than from unemployment. It is easier to get work from work. It is easier to get promoted when they are in the company and very difficult to get promoted if they have not joined the company.
It is very encouraging that people in some of our best large enterprises start off in part-time, low-paid, not very glamorous work, and when they show application and interest, they get trained and are then given greater responsibilities, and they can go on to do great things. When I last visited one of my local supermarkets, I met the manager and the deputy manager who had worked their way up from shelf-stacking some years before. That is great and shows that that path can work for people.
Andrew George (St Ives) (LD)
The broad-brush principles that my right hon. Friend describes are pretty much unarguable, but the Bill is very specific. It specifies a 1% uprating for two years beyond the coming year. Does he sign up to that inflexible approach? He is talking about keeping inflation down. Does he think that being able to predetermine and know the rate of increase is a wise approach to deal with the problem?
Mr Redwood
I have already expressed the view that I did not come to Parliament to impose such restrictions on people with very little income, that that is a difficult thing to have to do but that I quite understand why Front Benchers are in that position.
Yes, I will trust Ministers’ judgment today but I am also saying to them that there are those two important conditions. They have to watch the situation because if inflation starts to rise too far, things will be too tough, and it would be wrong not to recognise that. If there is not a sustained increase in the number of jobs, that, too, will make the policy difficult to sustain. I am hoping that the economic policy can kick in with lower price rises and more jobs, which would make the measure a little less unpalatable. However, surely nobody can say that they want to do this—it is not very pleasant—but what else can we do?
Caroline Lucas
I congratulate the right hon. Gentleman on his attempt, but it was a bit feeble. All the evidence from Deutsche bank, the International Energy Agency and many other places tells us that rising fuel bills are a result of rising gas prices, and the percentage extra on people’s fuel bills that is coming from renewable energy, which, sadly, he is not a fan of, is very much smaller. I do not agree with his premise.
If our priority is fairness, we should be seeking savings from those who can afford it, not penalising the poorest and pushing them into ever more precarious misery. Without this very basic link to RPI, what exactly are we saying to people on benefits? We are giving them a message of punishment that says, “You’ve done something wrong. It’s your fault that you don’t have a job and the state is going to make life hard for you.” Frankly, that is despicable. Oxfam says that it is Dickensian and rightly points out that slashing the incomes of those at the bottom is not just cold-hearted but wrong-headed, because it will depress the economy further.
I said earlier that most people want to work, and I could cite very many examples from my own constituency of people who have come to my surgeries who are desperate for work but have been unable to find it. The link to RPI, as I have said, is essential. It is the absolute minimum acceptable. The Government have already taken from the poorest by switching to CPI and now they want to heap even more misery on people who simply cannot absorb it. Amendment 7 seeks to provide the most basic protection for benefits from the accumulative erosion of value that severing the historic link to prices will create. I commend the amendment, and hope to press it to a vote.
Andrew George
Amendment 10 stands in my name and in those of my right hon. Friend the Member for Ross, Skye and Lochaber (Mr Kennedy) and my hon. Friends the Members for Argyll and Bute (Mr Reid), for Manchester, Withington (Mr Leech), for North Cornwall (Dan Rogerson) and for Ceredigion (Mr Williams). Its purpose is to address the oft-repeated key concern of the Secretary of State and the Government—it has been repeated today by the hon. Member for Gloucester (Richard Graham) and others—that in certain circumstances and, admittedly, over selected periods, benefits have risen at a rate higher than wages, and that in straitened times such as these, a principle should be established whereby that should not happen and that average wages should be the marker against which future benefit rises are set.
A further weakness in the Government’s proposals, to repeat an earlier intervention of mine on the right hon. Member for Wokingham (Mr Redwood), relates to their intention to enshrine in future policy the blunt and inflexible instrument of a 1% rise beyond the next general election—up until 2016—and whether we can foretell with confidence what is likely to happen during that time.
Kwasi Kwarteng (Spelthorne) (Con)
Is it not the case that the 1% uprating is for two years? It is not designed to be extended after the next election.
Andrew George
The hon. Gentleman is right that it is for two years—it is from 2014 to 2016, which is beyond the next general election.
Mr Alan Reid (Argyll and Bute) (LD)
The Bill covers only two years, but the Government have already announced in the autumn statement their intention to introduce a statutory instrument so that the 1% also applies next year, so it will cover three years in total.
Andrew George
The combined effect of both the statutory instrument and the Bill will, indeed, be for three years. I have no clairvoyant skills whatsoever and would never follow my forecasts on the future of the economy or prices, but the Bill is asking us to forecast what is likely to happen, particularly in relation to prices. In the context of food price volatility, which we know takes place, and of tremendous uncertainty in the energy market and, indeed, other markets, we are being asked to predict what the circumstances are likely to be in 2016, beyond the next general election.
In his opening remarks, the hon. Member for Gateshead (Ian Mearns) said that large swathes of people are out of work in some parts of the country and in work in other parts. There are also many places, including my own in west Cornwall and the Isles of Scilly, where a lot of people spend their lives going in and out of work because of the seasonality of the area’s economy. Not only are such people moving in and out of work—not of their own choice, but because of their circumstances—but there is also a plethora of zero-hours contracts and of people who exist on the basis of putting together part-time work.
I congratulate the Government on their achievement in rolling out apprenticeships, but the fact is that those apprentices are being paid £2.65 an hour for their apprenticeship and have to do bar work, waitressing and other work at the weekend in order to get themselves up to a living wage. An apprenticeship offers a good opportunity, but we have to acknowledge that, among working people and those who are moving in and out of wages, there is a class or group who are, in effect, on the very margins of survival. They will be significantly affected by the proposal to peg benefits at 1%. Some argue that the Bill is about ensuring that we make work pay and that clause 1 is entirely about out-of-work benefits, but the fact is that a significant number of people—many thousands—who are in work or, indeed, in and out of work will be affected by it. That is the most difficult position.
Andrew Bridgen
My hon. Friend makes a valid point about those who move from unemployment into temporary work and the complexities involved in re-applying for benefits under the current system. Does he agree that the introduction of universal credit will improve the situation, remove that uncertainty and make it a much bigger incentive for those who are out of work to take temporary work?
Andrew George
I agree with that point and congratulate in particular the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) on advocating that for many years. He must be pleased. Indeed, I am pleased for him and it is appropriate that that policy is being rolled out. I hope that it will help to iron out the difficulties faced by a lot of people. Having said that, let us see whether it addresses those issues, as I hope it will, when it is rolled out.
If we look back at the principles set out by the Chancellor in the first emergency Budget, we will see that we were clearly told that we were all in it together, that those with the broadest shoulders would bear the greatest burden and that the vulnerable would be protected. Those are the principles against which we must measure the Government. We all have different views on where the lines should be drawn with regard to achieving those objectives, and that is where we get into specifics such as those in the Bill.
It would be a kamikaze mission for me to begin a debate—I am only seven minutes into my speech—by asking my hon. Friend the Minister, for whom I have the highest respect this: what on earth does he know about benefits? He is highly regarded in that sphere. He is respected considerably by people and, indeed, by his political opponents—and rightly so—for what he has achieved. I think we would have ended up with something a great deal worse had he not been in his position.
Helen Goodman
Before the hon. Gentleman began on his paean of praise for the Minister, I thought he was making a very good case about the situation in west Cornwall and the difficulties faced by people on the margins of the labour market. That being so, when it comes to the vote will he and his colleagues who tabled amendment 10 vote against clause stand part?
Andrew George
I am sure that my right hon. and hon. Friends will make up their own minds on that issue. I do not speak for them, but I have made it clear that I will vote against the Bill as it stands, because I do not think it addresses the fundamental concerns that I have enunciated elsewhere.
To return to congratulating my hon. Friend the Minister on his achievements, my beloved coalition colleagues may not like what I am about to say—[Hon. Members: “Don’t say it!”] Having listened to what has been articulated by those in the Conservative party in recent months, we have to acknowledge what would have happened had my hon. Friend and, indeed, the Liberal Democrats not been in the coalition Government. First, we have to question whether we would have had the increase in the personal tax allowance, on which I congratulate the coalition Government. The Conservatives made it quite clear that they wished not only to freeze benefits altogether but to do so for six years, so we would not even be getting a 1% rise. There would have been a wider impact on pensioners and the disabled, which would have been significant. Child benefit would have been constrained, as well as being cut from families with more than two children.
Ian Mearns
The hon. Gentleman is making a powerful contribution. Given what he has said, does he reject the spin of some Government Members who have said that people on benefits have had their income uprated by 20% over a five-year period as opposed to 12.5% for those who work? When we examine the figures in cash terms—the impact on people’s pockets—we see that the uprating has been worth an average of £49 for people in work and only £12 or so for those who rely on benefits.
Andrew George
There has been a lot of selective quotation of statistics, with selective beginnings and ends of the time period within which those comparators are applied. I understood that the purpose of the Bill was as the Secretary of State articulated it when he introduced it—to ensure that benefits would never rise faster than average wages. Our amendment would deal with that.
Kwasi Kwarteng
My hon. Friend has suggested that people are referring to arbitrary time frames, but they are not. By looking at the past five years we can determine when the financial crisis began, so that is an entirely natural time frame to examine.
Andrew George
One can look at it in a variety of ways. If we examined a much wider time period, say the past 20 or 30 years, we would certainly not come to the conclusion that benefits have risen significantly faster than wages, because that is clearly not the case.
Kwasi Kwarteng
Will my hon. Friend acknowledge that the fiscal problem that the Government face began as a result of the financial crisis? It is therefore entirely logical to consider the matter over the period between the financial crisis beginning in 2008 and the present day.
Andrew George
But when does the crisis end? The figures produced by the Office for Budget Responsibility estimate that in three years’ time, wages will exceed CPI. One has to examine the matter over a much longer period. The Conservatives paid for some posters a couple of weeks ago to make the point that it was unacceptable for benefits to rise faster than wages, and the amendment would deal with that issue.
I said earlier that one big weakness of the Government’s proposal, and the reason why I opposed it, was the inflexibility of the 1% uprating. It takes no account of what may happen to food prices, for example, by 2015-16. It is all very well having a Bill that takes a clairvoyant view that a 1% increase will not press large numbers of working families, as well as out-of-work families, into severe and extreme hardship. However, we have experienced this year in the UK the impact of significant volatility in our climate. There has been significant climate change, which is having an impact on the food baskets of the world, including those in many developing countries and here. We therefore need to ask ourselves whether we can confidently say that there will not be food price spikes such as we saw only a few years ago. I suggest that we may see such spikes again. There is also tremendous concern about the potential volatility of energy prices. The 1% uprating figure is inflexible and somewhat arbitrary, and we cannot say with confidence that we will not need to introduce further primary legislation to revise that figure in 2016.
We must also consider the impact of the 1% uprating on housing. In their emergency Budget, the Government proposed to cut housing benefit from the 50th percentile of rents to the 30th percentile. Whether or not we like the fact that only 30% of the private rental market might be available to people in receipt of housing benefit, rather than half of it, it is essential that the rate is linked to the variation in private sector rents. The 1% uprating will break the link with what is available in the market and instead peg housing benefit back. In my area, and I know in many others, the Government’s attempt to peg it back by cutting the rate to the 30th per- centile of rents has failed to constrain private sector rents, so it has not had the desired impact. Maybe it has in some areas, but certainly not in mine or many others.
The measures that the Government have brought forward in the Bill have been ill thought through, and I fear that we will have to reconsider the figure set out in it next year or the year after. On that basis, we will listen to what the Minister says in response to the debate before we have the opportunity to divide the Committee on the amendment.
Toby Perkins
It is a great pleasure to follow the thoughtful and useful contribution of the hon. Member for St Ives (Andrew George) and the contributions of other hon. Members.
One thing that has come across in the speeches of Members on both sides of the Chamber is the economic illiteracy of the Government’s policy as part of a strategy for reducing the deficit. As other Members have said, one of the great things about welfare payments is that when people are living on the bread line, the money that they receive is spent in the local economy, often within their own community or on their own estate. They spend it at their local convenience store. They tend to spend it the minute they get it, rather than put it in trust funds, because they are attempting to sustain their life on the bread line.
When money is taken from the poorest in our society and at the same time given to the very wealthiest in our society, as was mentioned earlier, we are taking money away from people who will spend it in the real economy and giving it to people who are much more likely to take it out of the real economy and not spend it. It makes no economic sense, even on the basis that the Government are introducing this measure to reduce the deficit.
Steve Webb
If it were trivial to raise £100 billion from the filthy rich, I suspect that most Governments would have been there by now.
The most credible, coherent amendment in this group is amendment 10, which was moved by my hon. Friend the Member for St Ives (Andrew George). He was so nice about me that I was almost tempted to accept the amendment, but not quite. Let me explain the reasons why not.
The first relates to the specifics of the amendment, which links benefit increases in 2014-15 and 2015-16 to whatever amount average earnings grow by. Based on the forecasts—I accept that that is what they are—that would mean an above inflation increase in the second of those two years, because we think that average earnings in a couple of years’ time will be more than CPI, as is the case in many normal years. At a time when we all agree that money will be tight, my hon. Friend is suggesting that an above inflation benefit increase in the second of those two years should be a priority. I do not think that it should be. At a time when we will have to make other difficult decisions about saving, the first consequence of his amendment—I do not imagine that he meant this—would be to lock in what we expect to be an above inflation increase in benefits in 2015-16. I do not believe that that will be our priority at that point.
Had we been in Committee upstairs and the Bill had further stages to go through, my hon. Friend may well have said that this was a probing amendment and we could have had a chat about it, but if we were to agree to the amendment tonight it would become part of the Bill that will go to the other place. It is a serious amendment that would have an unintended consequence.
Secondly, this is not intended as a wrecking amendment, but it would have that effect. We estimate that it would wipe out virtually all the Bill’s savings. Although I understand that my hon. Friend shares my concern about the impact on people on low incomes, that money would have to be found somewhere else. I do not believe that there is a painless way of finding that money or that the social security budget would be exempted from finding it.
We have already had to do some very difficult things on welfare spending in the Parliament whereby we have targeted particular benefits and identified particular issues, and a relatively small number of people have faced large cash losses. This is a different approach. It is a gradual approach that will create much smaller losses, but for much larger numbers of people. At a time when we are trying to find savings from this budget, I believe that spreading the pain relatively thinly across a larger group, rather than focusing on a smaller one, is the way to go.
Andrew George
Leaving aside the wisdom or otherwise of committing ourselves to the Government’s proposed uprating level of 1% for 2015-16, my hon. Friend is right, according to the Government’s figures, that there is a funding gap of about £2.5 billion for 2015-16. He has to accept, however, that two fifths of cash benefits go to those with above average incomes. Indeed, a former constituent of mine has said how laughable it is that he now lives in Greece yet still receives a winter fuel allowance. Surely we can find savings that are less painful than those proposed.
Steve Webb
I can tell my hon. Friend that we have his ex-constituent in Greece in our sights. All I can say is that I hope he enjoyed his last payment. Joking aside, even if we took away all winter fuel payments to overseas pensioners, we would be talking about tens of millions of pounds, not savings on the scale that we need.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I understand the hon. Lady’s frustration, but the amount of time given was agreed by the House on 8 January, and unfortunately the time allowed today has been squeezed on that basis. We are now eating into Third Reading time, which we would have lost completely had more Divisions been allowed.
Andrew George
Further to the point of order, Mr Deputy Speaker. As the hon. Member for Brighton, Pavilion (Caroline Lucas) has pointed out, there is some disappointment among those who wished to test the temperature of the Committee. We were readily allowed to engage in the two-dimensional tribalism represented by previous Divisions, but we had no opportunity to ensure that the more nuanced and considered debate on other issues was brought to a proper conclusion, because those who wished to express a view had no opportunity to do so in the Lobbies.
Mr Deputy Speaker
That was, in fact, the same point of order. Again, I understand the frustration that is felt, but—quite rightly—it is not for the Chair to decide the amount of time that is allocated for a debate. It is for the House to make that decision, and it did so on 8 January. No doubt the hon. Gentleman will wish to take the matter up with the Whips in future.
Bill reported.
Third Reading
Welfare Benefits Up-rating Bill
Andrew George Excerpts(11 years, 11 months ago)
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Mr Duncan Smith
It is worth pointing out to my hon. Friend that, when the Opposition originally heard about the Bill, the shadow Chancellor and my opposite number—the shadow Secretary of State—entertained the idea that what was wrong with the Bill was that it affected too many people who were in some kind of work through working tax credit. The speculation was that, somehow, they would be prepared to support, or not oppose, measures on those not receiving working tax credit. I notice that there is no mention of that position in the amendment, because they have been clobbered by their left and by the trade unions, their paymasters. Instead, there is a rag-bag amendment expressing opposition to a variety of things, which bears no relation to their previous position. There they go again, denying where they are.
The real question for the shadow Secretary of State and the shadow Chancellor, before they intervene again, is this: having opposed every single reduction to the deficit, what exactly would they do to cut it? They have not a single answer.
Andrew George (St Ives) (LD)
We have just heard that one justification for capping benefits at 1% is that, allegedly, benefits have risen significantly more than wages. In that case, would it not be wise for the Government to introduce a measure so that benefits do not increase by more than average wage inflation?
Mr Duncan Smith
As I have said, the Bill is about trying to bring that fairness back into the welfare payments process. As my hon. Friend the Member for Dover (Charlie Elphicke) has said, the reality is that in the period since the recession, payments for those in work have risen by about 10% and payments for those on benefits have risen by about 20%. We are trying to get a fair settlement back over the next few years. Eventually, benefits will go back on to inflation.
Andrew George
We do not know—the Secretary of State is probably more clairvoyant than I am—what food price inflation will be in, for example, 2016. We are being asked to predict what the circumstances will be in the context of the rather arbitrary figure of 1%. I simply urge my right hon. Friend to keep an open mind, and to have a means by which we will uprate that is fair to both benefit recipients and those in work.
Mr Duncan Smith
I accept the point about fairness—that was my point—but the reality is that the Bill is also about getting the overall welfare bill down and in kilter. As I have said on the radio and again today, the key is that we must reduce the deficit—that is at the heart of the measure. The Liberal Democrats joined us in the coalition. I should remind the hon. Gentleman that the No. 1 priority we face is reducing the deficit that Labour left us—the biggest deficit on record of any Government since the second world war. That is the reality, but Labour Members are in denial, so I will move on.
The reality is that affordability—
Andrew George
Of course we welcome the Labour party’s last-minute pre-election conversion to increasing tax for wealthy people. The right hon. Gentleman will have heard in my intervention on my right hon. Friend the Secretary of State my sincere misgivings and my wish to encourage him to review this rather arbitrary 1% cap and perhaps to find ways of relating it to average wages. Bearing in mind that the welfare budget is—
Madam Deputy Speaker (Dawn Primarolo)
Order. It was only a few moments ago, I remind the hon. Gentleman, when I said interventions on a speech needed to be brief and should not become a speech in their own right.
Mr Byrne
I am grateful for the intervention because I think the hon. Gentleman, like us, is concerned that in our country today a food bank is opening every three days, and that 5 million people may resort to payday loans this year in order to balance the books for the end of the month. The Sun on Sunday this weekend, in an article carried next to the one by the Secretary of State, said that a quarter of mums are now turning off heating so that they have enough money to feed the kids. Is that the kind of country that we are becoming, because the Saint of Easterhouse has now become the punch bag of the Treasury? Once he talked about broken Britain; now he is presiding over breadline Britain because he keeps losing his battles with the Treasury.
Andrew George
In view of that and given that the welfare budget is £220 billion, does the right hon. Gentleman believe that it is something that needs a long hard look at? Particularly in a time of austerity, where does he believe the savings can be made within that budget?
Oral Answers to Questions
Andrew George Excerpts(12 years, 1 month ago)
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Mr Duncan Smith
There is an awful lot of lost memory among Opposition Members. It was they, when they were in government, who set the process up. It is this Government who have made all the alterations, thanks to Professor Harrington, that have improved the situation. We are doing exactly what the hon. Lady requests. I wish she would speak to members of her Front-Bench team and avail them of that information.
Andrew George (St Ives) (LD)
T2. Disability Cornwall has expressed concern to me that its good name has been used by the company Atos when bidding to undertake the personal independence payment assessments, when in fact no such discussion regarding a potential local partnership has ever taken place between Atos and Disability Cornwall. Does the Minister agree that this may have resulted in Ministers being misled? Will the matter, therefore, please be investigated?
The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
To correct my hon. Friend, what the contract said was, “Should we win the contract, the sort of people we would look to negotiate with would be Disability Cornwall”—[Interruption.] The right hon. Member for Stirling (Mrs McGuire) is passing comments from a sedentary position; she may be thinking of a different matter altogether. In regard to Disability Cornwall, Atos’s position was that should it win the contract, it would look to negotiate with Disability Cornwall.
Specialist Disability Employment
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Maria Miller
I can guarantee that by using the money differently we can help more disabled people into work. As a result of today’s measure, some 8,000 disabled people can get into work who would not have had that support otherwise.
Andrew George (St Ives) (LD)
The Penzance Remploy factory in my constituency has contributed not to segregation but to an integrated spectrum of employment opportunities for disabled people, and today’s news will come as a bitter disappointment, especially in view of the fact that it has worked tirelessly with the local college and the Brandon Trust to find an alternative model. I do not know whether the Minister indicated that the door was still open on some of those listed among the 27 today, but would she be prepared to meet me and representatives from my constituency to explore alternatives to today’s announcement?
Maria Miller
My hon. Friend obviously speaks up strongly for the Penzance factory, which employs 32 disabled people, but the problem is that in employing them the factory runs an operating loss of more than £700,000 a year. It is unfortunately difficult to resolve that situation and achieve financial stability, however, and, although I am always available to meet him, I am not sure how satisfactory the outcome of such a meeting would be for him.
Remploy
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Ann Clwyd
Again, many years ago when I was a Member of the European Parliament, I wrote a report for that Parliament on the social consequences of unemployment. I have been trying to dig out that particular report from the terrible filing system of my office, because, as I remember, the conclusions are absolutely as apt today as they were then. Nothing has changed in about 25 years. The conclusions will be exactly the same.
Andrew George (St Ives) (LD)
The Penzance Remploy factory in my constituency was one of those that managed to survive the closure programme under the previous Government. It has, indeed, been very offended by some of the remarks in the Sayce report about what goes on in the factory. On Remploy potentially having top-heavy management, it is very telling that many of the successful contracts that have been carried out by the textile factory at Penzance have, in fact, been won by the disabled people themselves. That is very telling and shows that those disabled people have demonstrated a great deal of dynamism and ability at the factory level.
Ann Clwyd
That is a very important point, because the quality of the work produced is also excellent. A focus on procurement is therefore key to the future development of the Remploy factories.
The unions argue that Remploy’s capacity has been driven down through bad management, making it possible for the Government to claim that Remploy is not working. If orders are gained through effective procurement policies, which they are in some areas, the unions argue that factories can work at full capacity and that they can be viable. Surely, the future of Remploy can be secured by enabling each individual factory to procure work and to work with other Remploy factories, if needs be.
Stephen Lloyd
I thank the hon. Gentleman for that intervention. George Tomlinson’s goal was to help disabled people to secure open employment and to lead full lives, and the Remploy factories existed as a short-term solution for rehabilitation and learning new skills. Tomlinson never intended them to be places where disabled people stayed for long. As Andrew Lee, chief executive of People First, who happens to have a learning disability, has said:
“People with learning difficulties want the chance to have the same job opportunities as everyone else. Organisations such as Remploy that segregate disabled people will not provide the opportunities to work that disabled people want for the 21st Century.”
Surely, therefore, in this modern world, there is something wrong—we are back to Remploy—when workers are mostly disabled, but managers are mostly non-disabled. Many disabled people successfully run their own businesses, employing disabled and non-disabled people, so can it be right that we support in 2011—solidify, even—such an old-fashioned, paternalist attitude towards people with disabilities?
Andrew George
I respect the bravery of the case that my hon. Friend is making, although I have not necessarily come to the same conclusions. Recommendation 5 of the Sayce report emphasises choice for disabled people. One choice should surely be the stepping-stone of sheltered workshops. The problem with the recommendation is that, if the funding follows the disabled person, the money will not be in place to provide either the certainty or the capital investment to ensure that sheltered workshops will continue to exist, to provide that choice.
Welfare Reform
Andrew George Excerpts(14 years, 1 month ago)
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Mr Duncan Smith
There are several ways to make work pay beyond what I am doing. Making work pay by leaving people with more of their own money in the first instance will be a major step forward. The minimum wage is a good indication of how to set the base below which people should not fall. Another area in which the Government have also made a start is lifting the tax threshold for the poorest people. As we have said, we intend to move that all the way up to £10,000, and I hope that the hon. Gentleman will welcome that.
Andrew George (St Ives) (LD)
Will this targeted work activity effectively be a stick—a humiliating sanction—which will not work, or will it be a carrot and a golden opportunity that will build a bridge between joblessness and the workplace, which would be welcomed by unemployed people and the voluntary sector?
Mr Duncan Smith
I think that the hon. Gentleman is referring to the mandatory work placement. May I explain to him that there has been some over-excited commentary on this proposal? It will be available to jobcentre staff who will be able to use it for two categories of people. First, if someone has been out of work for a long time and comes in, clearly demoralised and with very little self worth, and does not feel that they can get up in the morning—as normal people do when they go to work—they can be put on one of these placements, which will give them a start time and a place of work to go to. All the interviews we have done with people on this scheme have said that they benefited hugely from it because it got them up and out. They will still be brought back in to the jobcentre to look for jobs.
The second group is those people who, we suspect, may actually be already working. Placing them on such a programme does something quite neat: it means that they cannot go off and do the work that they are doing and claim benefit. Instead, they have to make a choice.
Capital Gains Tax (Rates)
Andrew George Excerpts(14 years, 5 months ago)
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Andrew George (St Ives) (LD)
I wish to approve the headline description of the emergency Budget and what it is intended to achieve, which, as my hon. Friend the Member for Bradford East (Mr Ward) has said during the Budget debate, is that the richest pay the most and the vulnerable are protected. We must test that claim as we proceed. The coalition Government face many challenges in achieving that, in circumstances in which the public finances are in a very serious state, which I do not need to describe again this evening.
I wish to give the Budget a fair wind at this stage, and of course as a Liberal Democrat I gather a degree of satisfaction from a number of measures that I and my colleagues have campaigned for, namely the increase in the tax allowance with a target of an allowance of up to £10,000, taking many thousands of people on low income out of tax altogether; the restoration of a meaningful annual increase in the basic state pension, for which pensioners have been crying out for decades; increases in the child care element of the child tax credit for the poorest; the closing of the gaping tax avoidance loophole created by the previous Government through changes to capital gains tax; the introduction of a banking levy; and the protection of lower-paid public servants. There are a number of measures that I applaud and welcome very much.
This is a coalition Government and a new arrangement altogether, with two distinct parties. Seeking consensus between those parties inevitably creates significant debate.
Mr Kevan Jones (North Durham) (Lab)
The hon. Gentleman is showing by his demeanour that he is not very enthusiastic for his coalition. He says that he has campaigned for many things in the Budget. Can he tell the House when he and the Liberal Democrats campaigned for an increase in VAT?
Andrew George
As far as I recall, none of the three main parties ruled out the prospect of VAT increasing. It is only when one is in government that one can see the nature and state of the finances, and therefore fully understand the impact that it is likely to have.
Having said that, as all Members will know, there is an amendment about VAT on the Order Paper in my name and those of some of my hon. Friends. It asks, I think reasonably, that an impact assessment be undertaken, taking into account a number of factors including the impact that the VAT increase would have on businesses, charities and families and households across the income range and age groups. It is vital that, in order to advance a number of the challenging measures in the Budget, the Government should reasonably be expected to bring forward more information than they are able to at this emergency stage of the Budget, so that we can debate the impact of those changes.
Roger Williams (Brecon and Radnorshire) (LD)
I thank my hon. Friend for giving way and I agree with the sentiments he is expressing. Does he agree that charities that are unable to reclaim VAT could be about £250 million worse off as an unintended consequence of the VAT measure?
Andrew George
I am very grateful to my hon. Friend for that comment. There is not just a new coalition Government, but a new Parliament, and in it we should be able to debate issues both across the Chamber and within the parties of the coalition Government. That is not unreasonable. The Chamber should enable greater transparency and discourse across and between parties. The purpose of our amendment is to probe issues that need and deserve to be probed.
Andrew George
I shall not give way any more, I am afraid, because of the limit on time.
The motion refers to the Red Book, which, at page 67, in relation to chart A3, describes the VAT change as potentially “progressive”. I think that the notion is based on the expectation that those who spend the least will be less affected. Of course, those who spend the least are inevitably those on lower incomes, who will, as the Red Book explains, pay less VAT in absolute terms. But not everyone agrees with that: the hon. Member for Gainsborough (Mr Leigh) has described VAT as regressive, as have Labour Front Benchers.
The Institute for Fiscal Studies is rather equivocal on this issue. It says that when contrasted with income, VAT does look more regressive as it hits those with high expenditures the hardest. It also says that those with the lowest incomes tend to have the highest expenditures relative to their incomes, so there is an issue that needs to be investigated a great deal more. I believe that the Government should reasonably bring forward an impact assessment of the type that I have described and that we should have an opportunity to debate it not just in the Finance Bill Committee but in the Chamber.
I represent the poorest region in the country, so I am bound to be particularly sensitive to the impact of the Budget on the poor. However, I am not just concerned about low-income families; I am concerned about the impact of the VAT increase on rural travellers, who have a car out of necessity, not luxury, and on charities, as my hon. Friend described a moment ago. I am also concerned about the contrast between the effect on businesses that are engaged in the renovation of older buildings, for which VAT is applicable, and on those that build new buildings, for which VAT is not applicable.
The key themes underlying the emergency Budget turn on the challenges that any Government would have, such as ensuring that those who dropped us into the mess that we are in—due partly to the management of public finances by the Labour party and partly to those in the City who contributed a great deal—should be doing the most to help us out of it. As is made clear in the Budget, there is also an issue regarding wealthy people who have managed to pay less marginal tax than their cleaners. Those people should start paying their way. I hope that the Chief Secretary will consider very carefully our amendment and the reason behind it when he winds up. In this area of policy and policy making, we should have an impact assessment and an opportunity to debate this issue.