Comprehensive Spending Review

Baroness Gould of Potternewton Excerpts

Monday 1st November 2010 Lords Chamber

[Baroness Gould of Potternewton]

My Lords, it gives me enormous pleasure to congratulate the noble Baroness, Lady Healy of Primrose Hill, on her very thoughtful and excellent maiden speech. I should also like to add my congratulations to the noble Baroness, Lady Nye, for it must be a unique occasion to be able to welcome two such good friends—both of whom I have known for more than 30 years.

I first met the noble Baroness, Lady Healy, when she joined the staff of the Labour Party in the press department in 1978. I think her boss at that time must have been the noble Lord, Lord Mandelson. I worked with her as a colleague for the following 10 years, until she moved over to work here in Westminster—first for the Parliamentary Labour Party, and then as a special adviser to shadow Ministers and Ministers. The noble Baroness has many friends on these Benches because of the long service she has given to the Labour movement, service that we have all appreciated over the years. Very often, though, she has been behind the scenes, but we have known that Anna has always been there giving good advice and support and we all appreciate that enormously. Your Lordships will, without doubt, benefit from the knowledge that she has gained over those years. Although she has a calm and dignified demeanour, do not be fooled. She is very determined and positive of views, which I know will come across in the significant contribution that she will make to your Lordships' House. I congratulate her again and welcome her enormously to our Benches.

Fairness, we were told earlier today, runs through the heart of the Government’s decision-making. I make no apology for repeating that there is certainly no fairness to poor families, pensioners, women or the disabled in either the emergency Budget in June or in the comprehensive spending review. It is difficult to comprehend how, using the Treasury’s own figures, it can admit that the poorest 10 per cent of the population will bear the brunt of the cuts, and then have the audacity to say that that is fair.

There is another element to the package—the increase in VAT. I need to refer to the Prime Minister. He said—I paraphrase—that an increase in VAT is very regressive; it hits the poorest the hardest. It is a great pity that he has forgotten those words. Nor is it fair that direct support for children is being cut by £66 billion—three times more than the banks. Is it fair that almost half a million low-income families are to be affected by cuts in childcare support and lose up to £30 a week? That may seem to be a small amount to some, but, as my noble friend Lady Sherlock said, for families on low incomes it is an enormous amount of money, which they certainly cannot afford to lose. It is the difference perhaps between being able or not to put something decent on the table to eat. The loss will also make it harder for parents to be better off in work. We have been told about the ladder of opportunity, but where is the ladder of opportunity for those parents? Perhaps the Minister can tell us.

We have been told that the spending review provides compensating measures and that child poverty will not increase for the next two years. That was an extraordinary statement; we do not want child poverty to increase at all. I do not understand what will happen when the two years is up. Many of the cuts in welfare spending will come into effect after 2012 and reduce the income of families in poverty unless compensatory measures are announced in the interim. Will they be announced?

The analysis by the End Child Poverty campaign makes it clear that,

“these compensating measures don’t go nearly far enough to stop this being a dark day for any family struggling to stay out of poverty”.

A consequence of the lowering of standards of living will be that such families will need greater support from health and social services. We also find that for the health service, which we are told is to be protected, the baseline has been changed, and money switched from health into social care, and the personal social services budget moved from the Department of Health to councils, which are to be strapped for cash. What guarantees will there be that the social services budget will survive?

We are told that work pays—and that is right—but it pays only if you have a job to go to. Not only will there be job losses in the private sector, as we have heard, but the Government forecast half a million job losses in the public sector. We have heard that the job losses, on any analysis, will impact more heavily on women, who make up 65 per cent of public sector workers, 77 per cent of the NHS workforce—many thousands of whom will be affected by the cuts in public health front-line services and the abolition of primary care trusts and SHAs—and 75 per cent of local government employees. The Local Government Association predicts that the cuts will mean the loss of many dedicated women workers in local government. These measures are already taking effect. In September, 79 per cent of those newly signed on for unemployment benefit were women. We need to ask why. However, it does not stop there. That loss of income will go on to affect future pensions. Will these women be joining the older women who are currently facing cuts in pension credit, public sector pensions, attendance allowances and carers’ allowances?

Many other noble Lords have referred to the effect of cuts in public services. But it is the poorer households and women who need public services the most—because of pregnancy, longer life-expectancy, lower earnings and assets, and assistance in managing caring responsibilities. There are already signs of crucial services under threat, including children’s services, support for teenage parents and midwifery support. Similarly, because of women’s relative inequality and poverty, women are the main recipients of benefits and tax credits—they receive 70 per cent of tax credits, 60 per cent of housing benefit, and 94 per cent of child benefit. In spite of the importance to women of receiving those benefits, it is proposed that there be a universal benefit to be paid to the main earner in the family, which is almost certainly, in the vast majority of cases, going to be a man. This move will put women’s access to an independent income under threat and reverses at a stroke all the redistribution from wallet to purse—mostly in recent years, but it was a redistribution that was started with the introduction of child benefit in 1977. That date is fixed in my mind, because myself and other colleagues on these Benches fought very hard with the then Labour Government to ensure that child benefit—which had previously been the family allowance—went from the father to the mother. How important that has been over the years. That independent income has been crucial to so many women and has on many occasions enabled a mother and her children to escape an abusive relationship. That is going to be impossible for her in the future—a very backward step.

The Government insist that it is impossible to say that women will be disproportionately affected by the cuts, because they have conducted an equality assessment of the measures in the comprehensive spending review. The impact assessment on gender that was carried out covered only two of the nine departments. The Government have avoided looking at the gender impact on tax and benefits because they said they could not determine how income is shared within a household. It sounds more like an excuse than an actual fact. Clearly there has been no in-depth analysis, in spite of the law requiring that all public authorities, including the Government, have to assess the impact of their current and proposed policies and practices on gender equality to ensure that neither sex is disadvantaged. The proposals fail to take into account the different barriers to employment faced by women, their particular reliance on benefits and tax credits as social protection, and the value to society of women’s employment. If they had done a proper analysis, perhaps they might have been convinced to distribute the burden a little more fairly, to focus a little more on tax cuts as opposed to spending cuts, but somehow I doubt it because, as my noble friend Lady Turner said, it is all about ideology—it is certainly not about fairness.