Welfare Benefits Up-rating Bill

Angus Brendan MacNeil Excerpts

Tuesday 8th January 2013 Commons Chamber

[Mr Iain McKenzie (Inverclyde) (Lab)]

The Chancellor intends to take a further £6.7 billion from benefits and tax credits over the next four years by capping the increase in them at 1%. That is a real-terms cut and an additional squeeze on families, because of the Chancellor’s failure to create growth in our economy, and the delivery instead of a double-dip recession. The Government told us that they would bring down borrowing, but they are now borrowing an £212 billion more than planned. The Chancellor claims that he is cracking down on a benefits culture, but hard-working lower and middle-income working families are those hit hardest by the Bill. Many working families need tax credits and benefits to top up their incomes, as without them work really would not pay. Just 23% of the savings come from jobseeker’s allowance, employment and support allowance, and income support—the principal out-of-work benefits. The rest comes from tax credits such as maternity pay, sick pay and housing benefit, all of which are claimed by working people.

Some 60% of people affected by the changes to tax credits and benefits are in work, and one-earner working families could lose as much as £534 per year at a time when more than 6 million people in working households are already in poverty. Levels of long-term unemployment are worryingly high, because the Government have failed to kick-start the economy and their Work programme has failed. Even excluding the 60% of working people affected by the changes, this is hardly the time to start picking on the unemployed. The Government are always prepared to talk about skivers when unemployment is high and they are worried about costs, but never want to do so when job vacancies are relatively numerous and unemployment is low. Surely, if the Government wanted to inconvenience so-called skivers, this is not the time to target them, when large numbers of people are without work and reliant on benefits.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Does the hon. Gentleman agree that the reform will make it more difficult to kick-start the economy? It will remove millions if not billions of pounds from communities up and down the UK, making it harder for people to spend and therefore kick-start the economy.

[Mr McKenzie]

I could not agree more with the hon. Gentleman. The Bill will take many millions out of local economies and have a double kick on the downturn.

Incredibly, the Government take from struggling households and give to millionaires. As I have said, at the same time as the Government are giving tax cuts to millionaires—as we have heard, some cuts are in the region of more than £2,000 per week—the Bill effectively means a permanent reduction in benefits, which could have a devastating effect when a proper safety net is desperately needed by millions of the most vulnerable people in Britain.

It is highly likely that this regressive change will lead to an increase in poverty, especially for those who are already facing a perfect storm of cuts to public services and rising prices. Clearly, the Bill is an attack on hard-working families, who are paying the price for the Government’s economic failure. It is without doubt an attack on striving families. In my Inverclyde constituency, 6,300 families receive working tax credit. They are being asked to pay the price for the Government’s failure, while millionaires—believe it or not—get a tax cut.

In Inverclyde, the number of unemployment claimants means that 15 people chase every vacancy. The Government would suggest they use the Work programme. Where can I start with that? My constituents never hear from the Government where they can start work. The Work programme has delivered less than 1% in my area, which is a disgraceful and pitiful success rate.

The best way to reduce the cost of welfare is to get people back into work. The truth is that the Government’s failure on the economy is pushing the dole bill through the roof. That is why Labour propose real jobs for those who have been out of work for two years or more. Scotland stands to gain most from the introduction of the compulsory jobs guarantee. Long-term unemployment has been rising faster in Scotland than in any other part of the UK.

I shall conclude, because other hon. Members wish to speak in the debate. The welfare bill is going up under this Government—it is a staggering £13.6 billion higher than forecast—because they are failing to get Britain back to work. The Government need to practise fairness, but the Bill fails on fairness and on the economic tests, which is why I will support the amendment.

--- Later in debate ---

[Mr Jackson]

My hon. Friend is absolutely right. In retrospect, I think that it was a tragedy to import thousands of low-wage, low-skilled people from eastern Europe while we parked our own indigenous young people who needed skills and training and who needed educators and businesses to put their the faith and trust in them. I have nothing against the people who wanted to come to this country to make a better life for themselves and their families, but at what cost did they do so? Even the Scottish Trades Union Congress says the same thing.

Some of the arguments being used are disingenuous because they do not fully understand the context. We have uprated benefits by 5.2%, we have brought in apprenticeships, and we are trying to deal with these issues through the Work programme. I am on the Public Accounts Committee and I know that the programme is not perfect. We are at the beginning of a process and there are some difficulties with appeals, with people’s understanding of the system, and with advocacy. I understand that. However, my blue-collar constituents do not understand how it can be right, when their average salary is about £24,000, for a party that aspires to government to say that it will not countenance a benefit cap of £26,000. My constituency has some of the poorest super-output areas and wards in the eastern region, and my constituents are decent, salt-of-the-earth people who want to work. They are not shirkers.

[Mr MacNeil]

rose—

[Mr Jackson]

I will not give way to the hon. Gentleman, even though he is a terribly charming fellow.

Those people in my constituency want to work, but they want the Government to give them a positive message about the future. It is cruel to park people and to forget them.

--- Later in debate ---

[Mr Kevin Barron (Rother Valley) (Lab)]

First, I am sorry to see that the hon. Member for Brent Central (Sarah Teather) is no longer in her place, as she made a very good speech. She mentioned one word that applies to much of the debate when she spoke about the use of “language”, while another important word, spoken about by the hon. Member for Nuneaton (Mr Jones), who is now leaving, is “ideology”. Language and ideology have surrounded this debate for many years.

In the last 12 months, we have noticed the language used by the coalition to get us to where we are today. Twelve months ago last January, the Deputy Prime Minister was talking about “alarm clock Britain”, and then we had talk about people “behind the curtains”. On 8 October last year on the “Today” programme, the Chancellor of the Exchequer said it was

“unfair that people listening to this programme going out to work see the neighbour next door with the blinds down because they are on benefits”.

My blinds used to be down because I was on night shift, and for many people the blinds and curtains are closed in the morning because they are working hard throughout the night, seven of 24 hours every day to keep industry running. Many people will resent what has been said.

This is not the first time that such language has been used. Andrew Rawnsley, a political columnist for whom I have a lot of time, got it right in an article in The Observer this Sunday, when he said that in view of the true intent of the author of the Bill—I assume he meant the Chancellor of the Exchequer—it should be called

“the Welfare (Make Labour Look Like the Party for Skiving Fat Slobs) bill”.

It is a pity that the hon. Member for Cannock Chase (Mr Burley) is not in his place as that description fits well with his anonymous quotes about people being at home because that is what they want to do and because they do not want to go out to work. That is not my experience in life, and I have been a Member of this House a long time. I started work as one of six children in a coalmining community. I lived in that community for most of my life, and I can say that the people I know and have represented for years are not like the caricatures that have been portrayed in this debate for far too long.

Andrew Rawnsley went on in his article to say the real truth:

“The majority of those who are going to lose—about 60%—are people in work, among them 3.7 million people on child tax credit and 2.5 million on working tax credit…those hit will include primary school teachers, nurses and army officers”.

As he went on to say, they are

“not exactly the ‘shirkers’ and ‘scroungers’ of some Tory rhetoric about benefits.”

The Government are trying to play politics with the welfare state, but their claims are clearly unravelling. It is no wonder that the Government have run out of speakers—and come the next general election, some Government Members will deeply regret the speeches that they have made today.

The Citizens Advice Bureau works with these people week in, week out, giving them advice, and it works with us as well, certainly in my part of the world. According to the brief that it sent to us:

“A couple with two children earning £26,000 a year and paying a fairly modest rent of £130 a week… will experience a net loss of £1.85 a week from next April, £6.52 the following April and £11.20 in April 2015. A possible rise in the personal tax allowance to £10,000 in perhaps April 2014 would only give them £0.75 a week to offset the loss of £6.52.”

[Mr MacNeil]

Will the right hon. Gentleman give way?

[Mr Barron]

No, I will not. Other Members wish to speak.

As was pointed out by my hon. Friend the Member for Aberdeen South (Dame Anne Begg), this is the first time that we have sat here and not had one debate about one annual uprating of benefits. That is because this uprating is so unpopular. It has been driven by a nasty party, and by a nasty piece of legislation which I will oppose.