Oral Answers to Questions
Chris Williamson Excerpts(6 years, 1 month ago)
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Alok Sharma
Through Citizens Advice, which we are rolling out across the country, it will be possible particularly for the most vulnerable to get support in terms of budgeting help and also digital support.
Chris Williamson (Derby North) (Lab)
Alok Sharma
We have been absolutely clear that there are going to be protections in place for those currently on legacy benefits as we move across to universal credit. I do wish the Opposition would stop scaring people from moving on to universal credit.
Welfare Reform (Sick and Disabled People)
Chris Williamson Excerpts(10 years, 8 months ago)
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John McDonnell
That is exactly why people feel that the impact is so harsh. Many local authorities have changed the eligibility criteria—that is the problem—to cover only those with substantial needs, which automatically cuts out about 100,000 people from receiving any form of social care whatever.
Chris Williamson (Derby North) (Lab)
Does my hon. Friend agree that this is very much a false economy, because cutting back on social care will inevitably lead to people’s conditions tending to deteriorate, meaning that they will need more urgent care and that many of them will find themselves in hospital? Consequently, the cost to the public purse is substantially greater as a result of this false economy and these cuts, which are so devastating to disabled people.
John McDonnell
That is exactly right. There are three consequences from what is happening. First, disabled people are being forced more and more to rely and depend on care from their own family members, who are themselves, to be frank, overstretched in providing that care, especially as local authority respite care is now being cut back so dramatically. Startlingly, as we found in a previous debate, a large number of these carers are children caring for their parents. A year-long investigation by Carers UK confirmed that carers, who save this country an estimated £119 billion a year in care costs, are about to lose £1 billion in benefit cuts.
Secondly, the care needs of many disabled people are simply not being met. A recent inquiry by the all-party groups on local government and on disability found from the evidence they took that four in 10 disabled people are failing to have their basic social care needs—which my hon. Friend the Member for Leicester West (Liz Kendall) has mentioned—met.
Thirdly, as my hon. Friend has said, the withdrawal of social care and support services is cutting many people off from any form of social contact with the outside world. Many are driven back into their homes, while others are forced out of them, losing all their independence, and into residential care or even hospital care as a result.
Alongside cuts to social care, there are the mounting cuts in welfare benefits. Like most hon. Members, the vast majority of disabled people whom I have met are, like any other employed person, desperate to work and support their family with a regular wage. For some, the tragedy is that their disability is so severe that they will never be able to work and will have to rely on welfare benefits to ensure that they do not live in poverty, while others need positive and sensitive practical support to help them to get back into work or to work in the first place.
The system introduced during the past six years to support people in securing work or the appropriate benefits could not have been better designed to undermine disabled people’s ability to get into work or receive the appropriate benefits to assist them. The previous Government started the process of reassessing all those on incapacity benefit to see whether they could be assisted back into work, and if not, to ensure that they had the right level of financial support. They introduced the work capability assessment, and brought in Atos to implement it. That might have been well intentioned in theory, but in practice, thousands of disabled people have been caused untold suffering, humiliation, stress and, at times, absolute despair.
Job Insecurity
Chris Williamson Excerpts(10 years, 9 months ago)
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The Secretary of State for Business, Innovation and Skills (Vince Cable)
I am delighted to respond to the hon. Member for Streatham (Mr Umunna) and I appreciate that, as he acknowledged at the beginning of his remarks, he has a problem because trying to manufacture an Opposition day debate on the economy is difficult when it is now growing rapidly.
Vince Cable
Give me some time and I will happily take interventions. I am always generous with interventions and I will wait until a suitable point and give way to the hon. Gentleman.
The danger the hon. Member for Streatham faces is that of creating a cliché such as “triple-dip recession” or “no more boom and bust” that then proves to be positively cringeworthy when the situation changes. Labour’s slogan is now the “cost of living crisis”, and at first sight that is a plausible line of attack because, as I have always acknowledged, real wages fell in the wake of the financial crisis, the country is poorer and the consequences have been painful. The hon. Gentleman buttressed his argument by quoting from the Institute for Fiscal Studies that this painful process is likely to go on until the end of next year. That was what it said until quite recently, but I do not know whether he has seen its report today, which states that the cost of living crisis is to turn around this year. Inflation is now falling so rapidly and the economy recovering so quickly that it expects that turnaround to happen by the middle of the year. I fear that the “cost of living crisis” may be another to go in to the museum of clichés.
Vince Cable
That is correct. I was merely referring to the point at which things start to turn around and improve. The IFS, like everyone else, underestimated the strength and speed of the recovery. Of course, its forecasts, like everyone else’s, may have to be revised upwards.
I have been responding to debates from my current position for the best part of four years, and I have seen the Opposition’s jobs argument go through four or five iterations. When we first started, the argument from the Opposition was that the attempt to deal with the fiscal crisis would result in mass unemployment. That now looks positively silly today, but if they go back to their speeches in 2010, that was their prediction. We now have the highest level of employment ever—30 million. We have 1.3 million more people in employment than in 2010. The jobless—unemployed—total has fallen not just in relative terms, but in absolute terms by 650,000 to 7.1 %. Of course, there are regional variations. I accept that there are particularly serious problems in the north-east, which is the only part of the UK that has double-digit unemployment.
It is worth contrasting the overall picture with some other countries that had a far less serious experience of the financial crisis than we did. Sweden has 8% unemployment. The unemployment rate in Canada, which everybody thinks is a wonderful economy—we recruited our central banker from there—is higher than in the UK. In the eurozone, even including Germany and Austria, it is 12%. Our unemployment position is significantly better than that of most other western countries.
Chris Williamson
Will the Secretary of State at least acknowledge that the degree of underemployment is masking the real problem in the economy? If those people were put in full-time equivalent posts, the number of unemployed people would be a much bigger picture, would it not?
Vince Cable
I am going to come on to underemployment and part-time employment shortly, because it is a legitimate concern. Obviously, there are people who took part-time jobs in the depth of the recession who now want full-time work—of course that is true. What the hon. Gentleman might not be aware of is that in the past year the number of people in part-time employment has actually fallen in absolute terms by 7,000, and that the number of people in full-time employment has risen by 475,000. There was an issue relating to part-time jobs in the depth of the recession. It was understandable that people took part-time jobs in a very difficult situation, but over the last year the position has changed dramatically. Building an argument around part-time employment is now of historic interest, not contemporary interest.
Welfare Reforms and Poverty
Chris Williamson Excerpts(10 years, 10 months ago)
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Chris Williamson (Derby North) (Lab)
I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing this incredibly important debate on the need for a commission of inquiry into the impact of this cruel, callous coalition’s policies on poverty in the United Kingdom. I wish to focus in large measure on the impact of housing and the welfare reforms that have been put in place, but I wish to start by addressing the intervention made by my hon. Friend the Member for Corby (Andy Sawford), who referred to the pernicious reforms that have been made to the council tax benefit system. We hear a lot from the Government about freezing council tax. That is fine and dandy for the people who have the resources not to need council tax benefit, but the very poorest people, even in those local authority areas that had a freeze on their council tax, are seeing an increase in the amount of council tax they are expected to pay. That is absolutely disgraceful, and I do not know how Ministers can sleep in their beds at night when they are inflicting such penalties on the poorest people in our country.
As I have said, housing is a key area in addressing poverty in our country. The hon. Member for Stafford (Jeremy Lefroy) said that the commission we are talking about should have a slightly wider remit, and that is important, as it should incorporate housing, too. What we saw when this Government came to power was a massive reduction in investment in affordable housing in our country. One of the first things they did was to cut it by 60%—that is what they did when they first came to power. Their housing policy is shambolic. They are not building anywhere near enough houses for the people in our country, and the houses they are building are too expensive—to buy or to rent. People are caught in a Catch-22 situation. Youth unemployment is growing, with about 1 million young people on the dole, and low pay is endemic. As my right hon. Friend the Member for Oldham West and Royton pointed out, some 6.7 million people living in poverty in our country are in employment —that is disgraceful.
Let me briefly touch on my personal story, and how things have changed from the 1970s in terms of what ordinary working-class people were able to do and the sorts of lifestyles they were able to afford, particularly the housing. I was a 19-year-old apprentice bricklayer when I was able to buy my first house, with the benefit of the option mortgage scheme brought in by the 1974 to 1979 Labour Government. I was earning £60 a week and I was able to buy a brand new three-bedroom house that backed on to a canal for £10,000. That was three times my salary then, but it would be impossible to do the same today because the average price paid by a first-time buyer is £185,000. I have checked on the internet what a bricklayer can earn these days. On average, they earn £10.28 an hour, or £21,382 a year, so the average price for a first-time buyer would be a multiple of 8.6 times their salary. In this day and age, an apprentice bricklayer earns around £170 a week, or £8,840 a year, so a multiple of 21 times their salary would be required. People can no longer put down roots in the way that they did, because they have been priced out of the market. I am talking not just about buying but renting as well.
It is vital that we build the houses that people need. Labour is committed to building 200,000 homes per annum, which is vital in not just delivering a social need but putting thousands and thousands of people back into work. We need a renaissance in council housing, because the private rented sector is ill-suited to social housing, which has led to the obscene housing benefit subsidy system that was set up by the right hon. Member for North West Hampshire (Sir George Young) when he was the Housing Minister. On 30 January 1991 he said:
“If people cannot afford to pay that market rent, housing benefit will take the strain.”—[Official Report, 30 January 1991; Vol.184, c. 940.]
Well, take the strain it most certainly has. Some £24 billion a year is being paid out in housing benefit. According to the House of Commons Library, £9.3 billion is going into the back pockets of private landlords. Compare that with the £1.1 billion this Government are putting into building affordable homes for people. The affordable homes programme summary said that will result in just over 67,000 homes per annum. Imagine if we put all that money into building homes for people. Think of all the jobs that could be created. If we just used the amount that is going to private landlords, we would be able to build 600,000 homes a year. We are building nowhere near that. We have a massive housing crisis in our country. There is a crazy housing subsidy system, which needs to be reformed. There are 1.7 million households on the housing waiting list across our country, 4,000 of which are in Derby. More and more people are reliant on the vagaries of the private rented sector. That cannot go on. What we need is a change in emphasis. We need a bricks and mortar subsidy to build the homes that people need. We need a council house, renaissance, to regulate the private rented sector and to ensure that land is released to build homes that people can afford.
Steve Rotheram
Does my hon. Friend also agree that Labour’s pledge, if we were to be the next Government, would mean an additional apprentice for every £1 million of public sector contracts?
Chris Williamson
That is a really important commitment. Let me refer if I may to some other statistics. I have talked about a massive investment in council housing. It is important to recognise that for every £1 of public sector investment in infrastructure, the Exchequer gets back 56p. As the net expenditure is somewhat less, it is well worth making that investment to generate the apprenticeships to which my hon. Friend referred and the jobs across the piece that are required, and to build the homes that people need. We need this commission. Its terms of reference should be somewhat wider than has been set out in the motion. If we can invest in the housing that we need, it will help to create stable communities, generate jobs and promote economic growth. Yes, we need a commission, but we also need a Labour Government in 2015 with the radical commitment that we saw in 1945 to deliver what Beveridge achieved. We need to deliver on the recommendations of the commission, which has been called for by my right hon. Friend the Member for Oldham West and Royton.
Katy Clark (North Ayrshire and Arran) (Lab)
It is a pleasure to follow the hon. Member for Worthing West (Sir Peter Bottomley). I congratulate all those who signed the motion and did the work to secure this debate, because I think that a commission of inquiry should be established to investigate the impact of the Government’s welfare reforms on the incidence of poverty. I say that because of my experience as a constituency MP, and my knowledge, from this place and other places, of what is happening nationally.
The reality is that all of us are inundated in our constituency surgery by constituents who are experiencing the impact of the Government’s welfare reforms. Mr Scott, a constituent, came to see me last week; he was diagnosed with bowel cancer last summer, and had applied for the personal independence payment. He has worked all his life; it was the first time that he had had contact with the welfare benefit system. He is still awaiting receipt of any money. Many other constituents who come to see me, including carers and those who are disabled, are suffering as a result of the bedroom tax.
There has been a massive increase in poverty in this country since 2010. Some of that is associated with welfare reforms; some is related to other aspects of Government policy, and what is going on in the country with low pay, wage freezes, wage cuts, and less secure forms of employment, and all the other issues that we spend time talking about in this place.
We particularly need to focus clearly on welfare reforms, both for those in work and those who are not working. Since 1997-98, there has been a decrease in poverty for most of the time. Some 28% of the population lived in absolute poverty in 1997, but by 2010, that had dropped to 15%—still a scandalously high figure that is unacceptable in any civilised country, but the reality was that 2.3 million children and 2 million pensioners were lifted out of poverty in that time. The country can be proud of that, even though, as I say, a huge amount more needed to be done. Since 2010, absolute poverty has increased by 1.4 million people, including 300,000 children and 200,000 pensioners. There can be absolutely no doubt that much of that increase in poverty has been a direct result of the coalition Government’s policies.
I will talk about some of those policies. We have had these debates already in this place, and we have divided on many of these issues. One of the impacts that will have the biggest cumulative effect over time is the uprating of benefits in line with the consumer prices index instead of the retail prices index. Of course, we already see the impact of that change. In 2010, when the Government changed the indexation, the difference between RPI and CPI was the difference between 4.6% and 3.1%. In every year since, RPI has been higher than CPI. Of course, the impact on our pensions and benefits affects disproportionately those on the lowest incomes.
Let us look at those in receipt of carer’s allowance. In April 2010 they received £53.90 a week. If that had increased under the old system, using RPI, they would now be receiving £61.08 a week, rather than £59.75. They are therefore £167.96 worse off each year as a result of the switch from RPI to CPI.
We see a similar situation with disability living allowance. Someone in receipt of the higher care component is now £221 worse off as a result of the switch. People with more serious disabilities who are on the higher rate mobility component are now £155.48 worse off a year. Those who receive both the higher rate mobility component and the higher care component are now £376.48 worse off a year. Those might sound like relatively small amounts to some people, but the reality is that those benefits are received by some of the poorest and most vulnerable people in the country, who were already struggling and finding it difficult to cope.
People in receipt of employment and support allowance—another form of benefit that many constituents come to see us about—are now £342.68 worse off a year as a result of the shift from RPI to CPI. It is not just that shift, but the impact of other policies, such as the 1% cap on benefits, that is having an effect. Ministers have claimed that those in the ESA support groups are exempt from that, but of course that benefit is both a basic payment and an additional payment. Although one is exempt from the 1% cap, the other is not. The reality is that for almost every benefit we look at, we are seeing our constituents receive less money every week, every month and every year.
Chris Williamson
Does my hon. Friend agree that cutting benefits for the poorest people in our communities has a knock-on impact on economic growth, because they inevitably spend the money in their pockets in the communities in which they live?
Katy Clark
I agree with my hon. Friend. I am sure that that is the case in his constituency, as it is in mine. In areas that are disproportionately reliant on the public sector and the welfare state, cutting benefits is taking millions of pounds out of the economy every year, which is simply putting us in a worse situation.
We have also seen a massive increase in the impact of benefit sanctions, as I am sure many Members are only too aware from their constituencies. It is often the same people receiving those benefit sanctions again and again, and each time it is for a longer period. Many of those people have nowhere to go, because they can go to a food bank only three times.
The other major concern is the bedroom tax, which constituents come to see me about all the time. In North Ayrshire we have seen a 756% increase in discretionary housing payment applications. Only 66% are accepted, which means that a third of those people do not get the payment. Indeed, when people go back to apply the next time, because it is a time-limited payment, they are often refused. That is having an impact on council rent arrears. Rent arrears in North Ayrshire, for example, have increased from 3.6% of annual rent to 5.5%.
Those are just a few examples from my constituency, but we all have many others. This is having a massive impact on our country. We are seeing a massive shift in wealth. We need someone to look at that seriously, which is why I think that the motion before us—
Simon Danczuk (Rochdale) (Lab)
Let me start by thanking those Members who pressed for this important debate, particularly my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and the hon. Member for Worthing West (Sir Peter Bottomley). I believe that we should be proud of our welfare system in this country. It provides a vital safety net, and not just for people who have fallen into poverty, but for the disabled, older people and those who need to get back into employment.
However, we should not fall into supporting an argument that suggests that the system is perfect. Too many people take the view that the welfare system is a sacred cow that should be left alone. I do not share that view; on the contrary, I believe that self-reliance and making the welfare state much more accountable and appropriate to people are extremely important. I certainly believe that reforms can be made, especially to the way in which the system supports and challenges people—and, yes, pushes them back into employment. However, when reform of the welfare system is undertaken we must be certain that we do not abandon the most vulnerable people and push them into poverty.
I will give two examples of the Government’s welfare reforms having left vulnerable people without the safety net they need. First, I want to talk about one of my constituents, Sheila Holt. On Friday I met her father, Mr Kenneth Holt, and other members of her family. Sheila is 47 years old. She had an exceptionally traumatic childhood that I will not detail here, but needless to say it was a period of her life that scarred her mentally. She has not worked for 27 years because she has a severe psychiatric condition; she is unable to work. Because of cuts, I suspect, Sheila was relatively recently persuaded to sign off her psychiatric treatment. Soon after that, she was being pushed by the DWP towards the back-to-work scheme. Her family advocated for her, explaining that she had had trauma in early life and had a psychiatric condition. They made those points strongly, but to no avail. Sheila had to start attending back-to-work classes in another town. She struggled with meeting other people. Most importantly, no mental health support or service was offered to her. The safety net was not there for her. She also had to start paying the bedroom tax. Needless to say, she was falling into poverty and beginning to worry about becoming increasingly poor. She started to become agitated and her medication could not keep up with her condition. On 6 December she was admitted to Birch Hill hospital under section 3 of the Mental Health Act 1983. A few days later, she suffered a heart attack—at the age of 47, which is my age—and she is now in a coma.
The reason I tell this story is that Sheila’s family want people to be aware that she was pushed into this situation. Soon after Sheila started her life, she experienced terrible trauma that mentally crippled her. The truth is that she is trying to live through the welfare system as best she can, but the unsophisticated and haphazard way in which it has been changed has forced a very vulnerable woman into a terrible predicament. She had a very difficult early upbringing and now finds herself in the situation she is in today.
My second point is about the discretionary social fund, which has provided crisis loans to people in need. Hon. Members will be aware that in April this year the DWP passed that responsibility on to local authorities. They will also be aware that the fund is not ring-fenced, and it has been open to local authorities to spend it however they wish. For me, this came to light because a number of constituents were presenting to me with difficulty in being able to claim any sort of crisis loan from any sort of crisis fund. One woman who came to see me was heavily pregnant and was being told by Rochdale council’s social services that unless she provided a carpet in her property she would lose the child, who would be taken into care. Ironically, the local authority was not administering the local discretionary social fund in a way that would enable her to claim money to be able to get the carpet.
Rochdale is not an exception to the rule. I carried out some research looking at local authorities right across the country, and it shows that the passing down to them of this responsibility has meant that they have set criteria far too strongly, to the point where one local authority has spent only 1% of its budget for helping people through crisis loans or grants. The irony is that, when the fund was administered nationally, it encouraged self-reliance because it was a loan that the recipient could pass back, but since responsibility was given to local authorities it has not done so because it is now a grant that cannot be passed back.
The best bit came just before last Christmas, when the Government announced that the fund will be scrapped completely from 2015. It will not exist at all and there will be no safety net for those people who really need it. They will be pushed towards loan sharks and money lenders. That will certainly happen in Rochdale and, I have no doubt, in other places as well.
Chris Williamson
Does my hon. Friend agree that this is tantamount to the reintroduction of the Poor Law, which was abolished by the 1945 Labour Government?
Simon Danczuk
I certainly take on board the point that we are moving that way in some respects. I am wholly in favour of reform of the welfare state, as I pointed out at the beginning of my speech, but it has to be done compassionately and it has to retain the safety net. If we do not do that, we will see, as my hon. Friend suggests, a return to Victorian values in the way that we administer our welfare state.
I call on the Government to reverse their decision on the discretionary crisis fund. I believe that the purpose of the welfare system is to provide a safety net for the vulnerable, but it is clear that some of the Government’s reforms are destroying parts of that safety net and leaving people much more vulnerable to poverty. As my hon. Friends have said, we need an inquiry into how the reforms are impacting on people so that they are not abandoned and left to poverty.
Mike Penning
I thank the hon. Lady for her intervention and for her comments about my time as a Minister in Northern Ireland. That means an awful lot to me. Most of the welfare reforms have not been implemented in Northern Ireland yet because they are being blocked by one particular party, so it is difficult to see how we could appraise what was going to happen in Northern Ireland compared with the rest of the United Kingdom because the welfare reforms have not been introduced there in the way that they have in the rest of the country. I do not think that the answer at this stage is to have an independent review. The Government issue huge amounts of research—very expensive research—and we need to look carefully at what is going on.
We have of course brought in the benefit cap and reformed housing benefit. My constituency has one of the largest council-run social housing stocks in the country—nearly 16,000 council properties—as well as quite a large housing association stock. I get family after family saying to me, “Why do my children have to do their homework in the corridor? Why can’t we move into a larger property.”
Mike Penning
Absolutely. The hon. Gentleman’s party had 13 years to do so. The housing situation has not suddenly occurred in the last five minutes. Labour did not do it when it was in government, and yet it wants to rewrite history this evening. That is not possible and it will not happen. We need to ensure that we have fairness in the system. I have listened carefully to Members throughout the debate. The system has to be fair for both sides. It has to be fair to the people who are working and to those who are on benefit.
Earlier in the debate someone mentioned the Channel 4 programme. The idea of Channel 4 being supportive of this Government would be a shock to the system and to Channel 4. I was brought up in a working class area in north London, and, as I have said, I have two estates in the top 10% of the most socially deprived areas, but I was shocked by what I saw.
Mike Penning
Whether or not it is a fair representation is a matter for Channel 4. Like the rest of the country, I sat and watched the programme. I have not said anything about it, because I do not know the facts. I will go and see what is happening on the ground rather than speaking in generalisations. Channel 4 is not in any way a mouthpiece for this Government. It has been hugely critical of what we have been doing.
Welfare Benefits Up-rating Bill
Chris Williamson Excerpts(11 years, 10 months ago)
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Gavin Williamson
Where we have a culture in which it sometimes does not pay to take a job or to work more hours, we capture people in a culture of dependency.
How do we measure success? Is it about spending more and more money? Is it about spending money on welfare, constantly and consistently, or is it about results? I think that we on this side of the House believe that it is about results. In 1997, the number of households in which no one had ever worked was 184,000. That number was far too high. Given all the billions of pounds that were spent, we would expect it to have fallen considerably: perhaps by 10,000, perhaps by 50,000, perhaps by 100,000. So what happened? Did it increase or did it fall? It increased, and not by 10,000—
Gavin Williamson
Does the hon. Gentleman think that the number increased, or does he think that it fell? Perhaps he will tell the House.
Chris Williamson
If the hon. Gentleman is concerned about an increase in long-term unemployment, why will he not go through the Lobby with the Opposition in support of our amendment, which will guarantee jobs to people who are out of work for more than 24 months?
Gavin Williamson
The hon. Gentleman is living in cloud cuckoo land. He will not answer the question that I asked. How many more families are there in which no one has ever worked? In fact, the number increased from 184,000 to 352,000 under the last Labour Government. Is that a legacy to be proud of? I think that Members on this side of the House would say that it is not.
Benefits Uprating (2013-14)
Chris Williamson Excerpts(11 years, 11 months ago)
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Steve Webb
I do not recognise the hon. Lady’s description. A wide range of the policies we have introduced—for example, in my area on state pension reform—are focused particularly on assisting women. Many beneficiaries of universal credit will be in lower-paid work, which includes many women. She referred to very low-paid women, who, for example, receive statutory maternity pay. They will almost all benefit from the personal tax allowance increase.
Chris Williamson (Derby North) (Lab)
The Prime Minister used to talk about broken Britain, but is not the truth that this Government are breaking and dividing our country? How can the Minister justify the £3 billion tax give-away to millionaires while thousands of people in his constituency will lose out as a result of these announcements?
Steve Webb
We inherited a situation in which approximately £80 billion a year of spending reductions and tax increases were needed simply to balance the books. I have not heard anything this morning from the Opposition—not a single word—on where, now there is no money left, that should come from. If the hon. Gentleman voted against our proposals he would have some credibility, but of course when the crunch comes he will not—he will sit on the fence. He wants his constituents to think he cares, but when it comes to casting his vote in this place he will be somewhere else.
Welfare Reform Bill
Chris Williamson Excerpts(13 years, 8 months ago)
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Julian Sturdy (York Outer) (Con)
It is a privilege to speak in this debate, and I strongly suspect that our exchanges in the House are being replicated across our country, such is the importance of this matter. People rightly care passionately about Britain’s welfare system, as has been evident from hon. Members’ contributions, but I cannot quite agree with the most recent comments made by the hon. Member for Swansea West (Geraint Davies).
A society’s willingness and ability to help its most vulnerable individuals is a measure of its compassion and its economic and social well-being. Ensuring that Britain has an efficient, fair and caring welfare system is key. We do not necessarily have that at the moment, which is why radical and bold change is badly required. I am delighted to support the Bill, as it is radical and bold.
To accept the need for such reform, we must wake up to the facts. Over the past 10 years the welfare budget has grown disproportionately, by more than £56 billion. Despite that huge increase, almost 1.5 million people have been on out-of-work benefits for nine of those 10 years. Despite years of economic growth, job creation and increases in the welfare budget, a whole group of people have never worked at all. It is therefore time to review this broken system. After all, the simple truth is that Britain’s welfare arteries are clogged up. Too little support is reaching those truly in need and too much is being lost in bureaucratic incompetence—even more worryingly, it is being lost on people who should not be in receipt of such support at all.
In essence, the whole culture of our welfare system is wrong; the cost of maintaining it is out of control and the decision-making processes within it are woefully inefficient. The Bill is therefore right to focus on incentivising pathways back to work by ensuring that employment always pays more than benefits. That is fundamental to the Bill and, as a simple Yorkshire man, I feel that it is basic common sense.
Chris Williamson (Derby North) (Lab)
Would the hon. Gentleman care to comment on the fact that his Government are cutting 1 million jobs in our economy—500,000 in the public sector, with a further 500,000 to go in the private sector as a consequence? If he genuinely believes that work is a pathway out of poverty, why does he support measures that will cause greater unemployment rather than enable people to get back into work? He has expressed concern about people who have been out of work for a long time, but they would be more likely to get an opportunity of employment in the public sector if his Government were not forcing through so many cuts.
Julian Sturdy
I agree that this Bill offers an important pathway back to work. We have to get more jobs in the private sector and restore the balance between public and private sector jobs, which was skewed by the previous Government—certainly in my region and in the north especially. The measures that this Government are introducing—I hope we will see more of them in the Budget—will incentivise private sector growth and job creation which, alongside the Bill, will get more people back into work.
It is a sad but well-known fact that the current system discourages those in low-paid jobs from increasing their hours, as rates of tax and benefit reductions often leave them worse off. This ridiculous situation helps only to dampen aspiration while increasing dependency in the benefits system as a whole. In addition, hard-working, taxpaying families, who are feeling the squeeze in these difficult economic times, should not subsidise the small but still significant number of people in our society who see the welfare system as a career choice. That must stop. By annually capping benefits, withdrawing support from those who refuse to work and increasing the financial incentives for those who do work, the Bill includes specific measures that will make work pay.
Oral Answers to Questions
Chris Williamson Excerpts(14 years ago)
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Maria Miller
As my hon. Friend knows, we are undertaking a thorough review of the assessment process concerning DLA. Those are just the sort of issues that we will be looking at in detail.
Chris Williamson (Derby North) (Lab)
Does the Secretary of State accept that the Government’s plans to accelerate the increase in pension age will come as a cruel blow to a whole generation of women in this country, because the financial reality of motherhood and family life makes it much harder for many women to build up a pension comparable to those of men? What provision is being made for women aged 54 to 59?
Steve Webb
I can assure the hon. Gentleman that no woman aged 59 or 58 is affected at all by the changes. However, we are equalising men’s and women’s state pension ages somewhat more rapidly. No one will be affected until 2016, and those who are most affected and who have the longest increase in working life will have a period beyond 2016, so they will have at least seven years’ notice of the change.
Tackling Poverty in the UK
Chris Williamson Excerpts(14 years, 5 months ago)
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Mr Field
I am happy to give assurances to my hon. Friend. The law is quite clear about the objectives. I have no idea what the report will contain, but those objectives that we have are ones that we should achieve. The primary definition that we used before the 2010 Act was not only difficult to achieve mathematically, but has not been achieved in any country in the free world—hence we asked in the document that we published whether we should use an average of those countries that do best in achieving that definition in setting our target.
Time is scarce, and I obviously do not want to be delayed by a narrowly focused, technical debate on definitions—I hope there will be plenty of time for that—but my hon. Friend says that other aspects of the 2010 Act that are used to define poverty are important. Of course they are important, but I want to focus much more clearly on pathways out of poverty and on increasing life chances. I hope that those Members of Parliament who have views—they clearly have, given today’s maiden speeches—that will add to that side of the review, as well as to the debate on the technical definition of poverty, will contribute to the review.
Chris Williamson (Derby North) (Lab)
Does my right hon. Friend agree that measures such as the future jobs fund, tax credits and the increase in child benefit provide an important pathway out of poverty? I hope that he will touch on that—I see from his notes that he might—because I am very concerned about the coalition Government’s proposals to undermine those schemes.
Mr Field
If my hon. Friend had really good sight, he would be able to see that No. 3 on my extensive notes is the jobs fund.
There will be two tasks for Opposition Members as the Government begin the necessary task of reducing public spending towards the level of what people in this country are prepared to pay in taxes. We will no doubt have a rigorous debate, but even when the details are decided, I hope that stage 2 will be to argue whether any cuts are being made in the right areas. My plea to Ministers is that they look most carefully at their choice of making initial cuts to the new deal jobs fund programme. When I sat on the other side of the House, I was clear in my criticisms of the new deal. One has only to look at the outcomes regarding levels of unemployment, levels of NEETs—those not in education, employment or training—and levels of retreads to conclude that that huge area of expenditure clearly needs to be examined.
The one thing that I hoped we would do in our first year in office—we got round to it only towards the end of our time—was to ensure that we could give some job guarantees to our constituents, including our younger constituents. That is important for two main reasons, the first of which is that, as we all know from our constituencies, many people try desperately hard to get jobs yet fail to do so, and the cumulative effect of that failure has an enormously crushing effect on them. The jobs fund was beginning to offer concrete jobs for people to go to, and that was a lifeline that had never been offered by any amount of new deal, any amount of retreading the new deal, or any amount of rhetoric from our side. The fund was one of the most precious things with which the previous Government were involved.
The second reason why the scheme was valuable was because we all have individuals in our constituencies, especially young lads, with no intention of working, although this is not the time for us to delve deeper into why that is so. If we are telling people that their benefits will be time-limited, cut or ended, we will carry the electorate with us only if we can definitely offer someone a job. Those young lads who have worked out how to fiddle the new deal and know that, if they turn up in a certain state, no employer in their right mind would ever give them the job on offer will know that it is decision time for them if, through the jobs fund, we can guarantee to offer them jobs irrespective of how they turn up. As I said, the fund was one of the most precious initiatives that the Labour Government introduced, so although I am not arguing with Ministers against their cuts, I ask them to think differently about how the cuts are distributed among people on benefits whom we would hope would be seeking work.
I am grateful for being called to speak, and I am even more grateful for the interventions because they have given me a bit of extra time. I look forward to hon. Members’ contributions to both this debate and the review.
Chris Williamson (Derby North) (Lab)
I, too, congratulate you, Madam Deputy Speaker, on your elevation to your new role. I am sure that you are probably getting tired of hearing such congratulations, but I wanted to add mine.
I also congratulate hon. Members on their maiden speeches. Having made mine a couple of weeks ago, I know what a daunting prospect it is. I particularly welcome the contribution by the hon. Member for Mid Derbyshire (Pauline Latham). We were colleagues on Derby city council before we were elected to the House at the general election, so it is especially fitting to address the House directly after her.
Poverty is an incredibly important issue, and a recognition of its importance is shared by hon. Members on both sides of the House. In many ways it defines the sort of society in which we live. I welcome the coalition Government’s commitment to the previous Labour Government’s commitment to eradicate child poverty by 2020. The big question is, of course, how we will get there under the new regime.
I and other Labour Members strongly believe that work is indeed one of the best pathways out of poverty, but to ensure that it is a genuine pathway out of poverty, it is vital not only that we continue to support measures such as the national minimum wage and move towards a living wage, but that we recognise that we must also support initiatives such as child tax credits. Child trust funds have also made a big contribution by encouraging people to save. I very much regret that the Government have decided to do away with those funds. Particularly for families from low-income backgrounds, not to have that start in life or that incentive to continue to save and to build up a nest egg for when they reach the age of 18 is a very big mistake.
On work as a pathway out of poverty and the importance of the measures that I have identified, we must acknowledge—I used to work in welfare rights, so I have some knowledge of this—that the work disincentives that used to exist have now been addressed in large measure. Although I accept that more probably needs to be done, work has become a genuine pathway out of poverty. I stress that I am very concerned about the Conservative party’s proposals. The precise detail of some of them remains to be seen, but I would be concerned about any attempt to reduce support for things such as tax credits, which are so vital to the process of helping people into the labour market.
Of course, ensuring that employment pays is one of the most important methods of addressing poverty, but we should also acknowledge the measures that are vital in relation to tackling pensioner poverty and the fact that many disabled people also experience poverty. Again, that is why I would be concerned if measures were proposed to undermine some of the support mechanisms that we put in place. For example, concessionary travel has liberated whole swathes of older people in our country who were previously imprisoned essentially in their own homes, unable to travel beyond their immediate neighbourhoods. The pension credit system has also made a big contribution to tackling poverty, as have the cold weather payments. I remember that many elderly people simply could not afford to heat their homes in the 1980s, but those sorts of things are no longer among the concerns of many elderly people in our country because of the measures put in place by the previous Labour Government.
In the end, growth is the key to tackling poverty, so the big question is how we deliver growth in our economy so that we make the welfare payments that are so important to addressing poverty a reality. Labour Members believe that it is vital that the state and public spending play a role in ensuring that the economy continues to grow. Conservative Members say that they are sick of hearing history lessons from us, but if we do not learn the lessons from history, we will make the same mistakes. It is therefore essential that we acknowledge the role of the state in ensuring that the economy continues to grow.
For example, Bombardier, a company in my constituency, is bidding for the Thameslink contract. We hope that the announcement will come shortly and that it is in favour of Bombardier, because that will secure 2,600 jobs directly in the company, as well as a further 5,000, 6,000 or even 7,000 jobs in the supply chain. If we cut public spending and such programmes, however, that would throw 7,000, 8,000 or perhaps 9,000 people out of work, which would put more pressure on the state, because of increased unemployment benefit, and lead to the downward spiral of having to make cuts to people’s welfare provision to accommodate the diminishing tax revenue resulting from a declining economy. I therefore urge Conservative Members to learn the lessons of history because they are otherwise destined to repeat the same mistakes, and it will not be they or many Labour Members who will pay the price of those mistakes, but ordinary working-class people in my constituency and throughout the country. They will pay the price for a failed economic prospectus that was tried in the 1980s and the 1930s but proven not to work. For goodness’ sake, people need to look at their history books and learn these vital lessons.
Andrew Percy
We are hearing a lot about history from the hon. Gentleman, but the Labour party does not seem to have learned one lesson from history: whenever it has left government, the country has been more bankrupt, more in debt and with unemployment higher than when it came in. Interesting as it is to hear history lessons from the hon. Gentleman, he should perhaps look to his colleagues before he starts lecturing Conservative Members.
Chris Williamson
The hon. Gentleman ignores the fact that we have just experienced the most significant worldwide recession for 80 years. Worldwide opinion acknowledges that the previous Government’s leadership, particularly under the auspices of the former Prime Minister, is getting the world’s economy back on its feet. It is somewhat unfair for the hon. Gentleman to talk in such terms about the economic situation that the coalition Government have inherited.
As independent commentators have said on a number of occasions, without the measures put in place by the previous Government, at least 500,000 more people in this country would be out of work. The largest proportion of this country’s deficit is a direct consequence of unemployment. If the Government parties’ policies are put in place, however, I fear that unemployment will continue to grow, which will put further pressure on the public finances and mean that we will not get the growth that we desperately require.
I know that the Government parties are set on a course, but we will scrutinise very closely and expose all their shortcomings to ensure that, at the next general election, they are held to account for the actions they take.