Welfare Cap

Chloe Smith Excerpts

Wednesday 16th December 2015 Commons Chamber

[Owen Smith]

I was here in the Chamber, and I saw the Secretary of State arrive just before the Minister rose to speak. While we are on the subject, perhaps the Minister can clear up this matter. He said to us on Monday at Department for Work and Pensions questions that the Secretary of State had visited a food bank. We submitted a parliamentary question to the Minister asking when that had taken place. The interesting answer—in truth it was a slightly slippery answer—was that Ministers, not the Secretary of State, have attended lots of things, including food banks. I gather there is another question. Perhaps he could tell us when the Secretary of State went to a food bank. [Interruption.] Clearly, he does not want to say.

As I was saying before the Minister intervened on me, it was a year ago when, to a packed House, the Chancellor unveiled his latest wheeze, the welfare cap. He had a mile-wide smirk on his face like one of the famous cats from his Cheshire constituency. He was positively purring as he laid down what he thought would be a trap for a future Labour Chancellor. He said:

“The welfare cap marks an important moment in the development of the British welfare state…and ensures that never again can the costs spiral out of control”.—[Official Report, 26 March 2014; Vol. 578, c. 374 and 381.]

He wanted Labour Members to stand up

“and say exactly what they think of the welfare cap, and tell us that they support it, and that they should have introduced it when they were in office. They look such a cheery bunch.”—[Official Report, 26 March 2014; Vol. 578, c. 380.]

Well, we are cheery this afternoon, as we look for the soles of the feet of the Cheshire cat Chancellor who has carelessly and ignominiously fallen into his own welfare cat trap. It is less a case of being hoist by his own petard, as slipping on his own smirk. Where is he today to answer these questions? A year ago, he was insistent that it would be he who would be called to account in this House for the breach in the welfare cap. He said in the same debate:

“The charter makes clear what will happen if the welfare cap is breached. The Chancellor—

not the Secretary of State for Work and Pensions or one of his Ministers, but the Chancellor—

“must come to Parliament, account for the failure of public expenditure control, and set out the action that will be taken to address the breach.” —[Official Report, 26 March 2014; Vol. 578, c. 380.]

But cometh the hour, there is no sign of the cat. He has disappeared. Even the smirk has disappeared.

[Chloe Smith (Norwich North) (Con)]

Will the hon. Gentleman enlighten us about where the shadow Chancellor is—or does he disagree with him?

[Owen Smith]

I am sure that the shadow Chancellor is up to some extremely important business. Ostensibly, the Secretary of State for Work and Pensions is meant to account for this on behalf of the Chancellor—talk about adding insult to injury or rubbing salt in the wounds, not only has his budget been raided to pay for the embarrassing reversal on tax credits and the breach of the welfare cap, but he was asked to come here to explain it to the House. I do not blame him for one minute for deciding to attend a really important Cabinet Committee instead of coming to the House to explain about the welfare cap.

--- Later in debate ---

[Marie Rimmer]

Sit down! I am sorry, Madam Deputy Speaker.

We always know when the Government are at their weakest, because they go on and on about the financial crisis. But let us get to the welfare cap. Of the two major cuts to in-work support in the summer Budget—to tax credits and its replacement, universal credit—only the tax credits element has been reversed. The reason we are in this state is that the Chancellor originally set the cap at a level that, in the first instance, simply tracked the Office for Budget Responsibility’s projections for spending on those benefits and tax credits that were in scope—as one of my colleagues mentioned, tax credits are in scope, which is unacceptable. The cap started in 2015-16 and extends for the next five years, meaning that, for now, the cap has no policy effect whatsoever. The Government are simply committed to operating future policy on the basis of not overshooting the current estimate of financial spending over the coming years. We could be in this position next year and the year after, because there are no real policy decisions. It is short term. It is nothing else.

As predicted, that led to the announcement of emergency cuts, including those to tax credits, but they were resoundingly kicked out by the Lords—the Conservatives at prayer, as someone described them. Although I am not in favour of an unelected second Chamber, I applaud them for taking that action. Only the tax credits element was reversed, however, and working families remain on the front line of further assaults, such as the cap and the universal credit cuts. The latter will affect many people—more than 200,000, I think—from April 2016, and the majority of those on universal credit are in the north-west. They are the ones who suffer the most from unemployment and financial deprivation—much of which is caused by zero-hours contracts, insecure employment, low pay and part-time work—which is why they are on benefits.

[Chloe Smith]

Will the hon. Lady give way?

[Marie Rimmer]

No, I want to carry on.