Amendment of the Law

Christopher Pincher Excerpts

Monday 23rd March 2015 Commons Chamber

[Rachel Reeves]

My hon. Friend speaks powerfully about something she knows a lot about. The number of zero-hours contracts in the social care sector, and more widely across the economy, has grown. It is incredibly difficult to plan from week to week if someone does not know how much money they will take home or whether they can afford to pay the rent and bills and put food on the table. That is why more people in work are having to rely on food banks to make ends meet.

I move now to key reforms that have spun out of control under the Government. Universal credit was supposed to cut fraud and make work pay, but after five wasted years of this Government and more than half a billion pounds of taxpayers’ money spent, it is being paid to just 41,000 of the 1 million people who were supposed to be receiving it last April. The National Audit Office has identified a fortress mentality and a “good news” reporting culture in the Department as key factors behind this fiasco. Last summer, the Secretary of State promised an accelerated roll-out plan, but we have yet to see much evidence of it—things could not be going much slower.

The Work programme—another failed programme—was the Government’s belated and inadequate replacement for the future jobs fund they scrapped, but it has failed to tackle long-term unemployment. Indeed, the number of long-term unemployed people has risen by a staggering 49% since 2010. It still sends more people back to sign on at the jobcentre after two years than it places in a job and has made no impact on the disadvantaged and high-risk unemployment faced by over-50s and disabled people. The introduction of personal independence payments has also been a complete and utter shambles, leaving sick and disabled people waiting months on end for support, while total spending has gone over budget by more than £2 billion. The roll-out of employment and support allowance was supposed to deliver big savings by helping more disabled people into work, but just 8% of people on ESA have been helped into work by the Work programme. Furthermore, analysis by the House of Commons Library shows that the Secretary of State has spent £8.6 billion more than he said he would on ESA. What a mess and what a waste—five years of Tory welfare waste we needed this Budget to put an end to.



The Budget was a wasted opportunity. We needed a better plan to make work pay and get social security spending under control, but instead the report of the independent OBR confirmed that all we could expect from the Government in the future was more of the same: more unplanned spending on social security and more failure to deliver promised savings on disability and sickness benefits, with the OBR noting on page 143 that

“projected spending on incapacity benefits, DLA and PIP is up by £0.2 billion a year on average between 2014-15 and 2019-20”;

more failure to deliver promised savings on fraud, with the OBR reporting on page 191 that it had

“revised down the savings associated with tax credits operational measures. These increase spending by £0.2 billion a year between 2015-16 and 2019-20”;

and more of the “good news” culture on welfare reform, with the OBR noting on page 192 that

“we have noted a history of optimism bias relating to reforms to incapacity benefits, disability benefits and universal credit.”

“Optimism bias” is a polite way of saying that we cannot trust a word the Government say.

In a moment of optimism bias, the Secretary of State promised that 1 million people would be on universal credit by April 2014, but one year on, fewer than 41,000 people are claiming it. In another moment of optimism bias, he promised that universal credit would be on time and on budget, but with delay after delay and millions of pounds written off, everyone knows that it is neither on time nor on budget. In yet another case of the Government’s optimism bias, they promised to back carers but then forced 60,000 households with carers to pay the bedroom tax, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) mentioned. Was it not optimism bias that led the Chancellor to promise to reduce the benefit bill, only for the Government to spend £25 billion more on social security than they set out to spend? And perhaps optimism bias is why the Chancellor broke his promise to clear the deficit by the end of this Parliament.

[Christopher Pincher (Tamworth) (Con)]

Is the hon. Lady’s muddled jobs guarantee an example of optimism bias?

[Rachel Reeves]

Labour’s jobs guarantee would help 150,000 people get into work in the first year of a Labour Government. I am optimistic that we can transform the lives of young people and the long-term unemployed, unlike this Government, who have left them on benefits. Funded by a repeat of the bank bonus tax they abolished and by restricting pensions tax relief to 20% for people earning more than £150,000 a year, our compulsory jobs guarantee will help young people who have been unemployed for a year and older people out of work for two years. Should that not be our priority, rather than tax cuts for bankers?

The Budget also reforms the rules governing pensions and annuities. The Opposition have long called on the Government to sort out the failing pensions and annuities markets, which result in too many hard-working savers finding their retirement pots eroded by excessive fees and poor-value products. So we welcome more freedom for savers to choose how to access their money and plan their retirement. Just as with last year’s announcement, we find the same failure to ensure that savers and pensioners have the support and protection they need to secure a decent and reliable income and to avoid the rip-offs that are already threatening to create another mis-selling crisis.

Just this weekend, we learned that with fewer than two weeks before the reforms announced in last year’s Budget come into effect, there is still no telephone number for the promised advice service, Pension Wise, leaving hundreds of thousands of savers exposed to scams that could have a devastating effect on their retirement plans. Instead, we have the ridiculous spectacle of the Pensions Minister trying to wash his hands of the responsibility by warning of the rip-offs that will result—without doing a single thing properly to protect people from those risks.

--- Later in debate ---

[Christopher Pincher (Tamworth) (Con)]

During most of her speech, the right hon. Member for Salford and Eccles (Hazel Blears) spoke of optimism, a word that might have been coined for her. She is never knowingly under-optimistic, and we will certainly miss her sunny disposition.

Five years ago, like the right hon. Lady, I was canvassing for election. At that time, Tamworth was a town in trouble. Unemployment was climbing to 6%, businesses, including well-known names such as Woolworths, were going to the wall and people were losing hope. If you walked from the great city of Worcester to Tamworth, and then down Glascote road, you would see in window after window repossession notices as banks took possession of people’s homes. The grisly legacy of the previous Labour Government was that people were not just losing their jobs or their shops, but losing their homes as well. Walk around Tamworth today and you will see a town that is rebuilding. Just 427 people in the working-age population—fewer than 1%—are claiming jobseeker’s allowance. Unemployment is falling faster in Tamworth than anywhere else in the country: the BBC tells us so. It also tells us that wages are outstripping inflation. Since 2010, 105 new businesses have been created in the town. New jobs and new skills are being created, and with those new jobs and new skills comes new hope. Jobs are transforming people’s lives, and this Budget was a Budget for jobs.

I should like to speak about some of the more detailed elements of the Red Book that will help people and their jobs in Tamworth. Every year, I hold an export conference at Drayton Manor to help small and medium-sized enterprises in my constituency to build the knowledge and confidence to export their goods and services. I am especially pleased that the Chancellor announced £3.5 million of new funding to help our trade with that great, unfathomable market—China. I mention that particularly because Birmingham airport has just extended its runway and it is now possible to travel long-haul directly to China, sending business folk to that place to do better business with it.

I hope that when the Chancellor considers that investment, he also remembers the £7.5 million that he has given to the northern powerhouse to aid its overseas trade delegations. In his next Budget, I hope that he will consider matching that funding to create a midlands powerhouse. Although we have in this Budget the £60 million invested in the Energy Research Accelerator in the midlands, Birmingham and surrounding areas could benefit from a midlands powerhouse strategy to help our economy to grow and prosper. I trust that the Chancellor will take that on board.

Also buried deeply in the Red Book is the determination to build up a study of regeneration on our larger estates in the midlands. That is welcome, but I hope that the Government, in their determination to look at the challenges that we face on big estates in Birmingham and Coventry, will also recognise that smaller towns in Staffordshire, such as Tamworth, Burton and Cannock, have smaller estates that face challenges and also require study and investment. I hope that the study that the Chancellor is considering will look at those smaller estates as well.

I end with a plea for a business in my constituency that benefits from the Budget. It is called Invotec, and it exports electronic circuit boards around the world—very successfully so. It employs 250 people in Tamworth and in Telford in Shropshire. However, while this Government and this Budget tear up more and more red tape, there is still a problem with exporting those circuit boards because they are used for defence purposes. No other country in the EU applies a licence regime for every circuit board that is exported. As a result, Invotec faces difficulty in selling to its clients. BIS undertook to review the situation, but the report that was due to resolve it has not been published. I encourage those on the Treasury Bench to find the time to encourage BIS to publish that report and that resolution so that Invotec can export its wares around the world and compete with our European competitors.

This Budget will be welcomed in the boardrooms and in the living rooms of Tamworth. It is a Budget for jobs—jobs that pay the mortgage, pay for the foreign holiday, and pay the taxes that pay for the schools and hospitals that we all want and need, and that must be fit for purpose in the 21st century.