Work and Pensions (CSR)

Damian Hinds Excerpts

Thursday 4th November 2010 Westminster Hall

[Miss Begg]

I thank my hon. Friend for her intervention. Certainly I recognise the 15% figure. We are not talking only about benefits for those of working age. I was briefed this morning that if occupational pensions—both private and public pensions—are to be linked to CPI, the figure of 15% is not unrealistic. In fact, people on an average occupational pension could lose the equivalent of three years’ worth of their pension if they were to live for the average time from retirement, which is 24 years.

The switch from RPI to CPI will, in the long term, mean that the amount of money that people on benefits receive is reduced. Let me explain what I find particularly perverse about the housing benefit changes. The difference between RPI and CPI is that CPI does not take account of housing costs. Again, perhaps the Minister can explain the rationale for why the CPI measure is being used for housing benefit when it does not take into account housing inflation, which runs at a higher level than consumer inflation.

As my hon. Friend the Member for Stretford and Urmston suggested, the change in uprating will also affect levels of child benefit, income support, jobseeker’s allowance and incapacity benefit, as well as the employment and support allowance and the carer’s allowance. The value of all the benefits in payment will diminish with the changing of the linking rules or the indexation to which they are subject.

There will also be reductions in what can be claimed in such things as the child care element of the working tax credits, as well as changes to the eligibility rules for the working tax credits. Some of those changes would also appear to fly in the face of the perfectly correct cause being espoused by the Government—to ensure that those who can work do work. However, some of the changes might put barriers in the way of getting people into work.

The second way that the Department can reduce spending on benefits is by changing the criteria, to prevent many people who would have previously qualified for the benefit from qualifying in future. We shall see people who have been on jobseeker’s allowance for a year losing 10% of their housing benefit, or people in residential homes no longer qualifying for the mobility component of the disability living allowance. I am glad that it is the Minister responsible for disabled people who will be winding up for the Government, because of a phrase in the CSR attached to the announcement about the mobility component of the DLA for people in residential homes being cut:

“where such costs are already met from public funds”.

Can the Minister explain what that means?

Does that phrase mean that some people in residential homes will keep the mobility DLA, if their costs of travel and transport, presumably, are not being met from public funds? However, I am not aware of any residential homes that have a travel budget. I am not aware that public funds are available. Some people in residential homes might get a taxi card, for instance, but like, I suspect, many others, my local authority is tightening its criteria: Aberdeen has decided that someone on the upper rate mobility DLA does not get a taxi card. Anything that I can think of that might be the provision of travel from public funds does not, I think, apply to people in residential care.

On the issue of residential care, it is worth remembering that, generally, people in residential care who are on the mobility DLA will be a younger cohort, because people do not qualify for a DLA once they are over 65. Many of them might be in work—their care needs might require them to be in a residential home, but they might have work or go out daily to day centres or whatever. Without the DLA, they would not be able to get out of the confines of the residential home. Sometimes there is a perception that someone who lives in a residential home is elderly and not able to lead a fulfilling life, but nothing could be further from the truth. I would welcome some clarification from the Minister on that point.

Probably the best example of the Government’s changing the criteria to exclude previous claimants is the move from incapacity benefit to employment and support allowance. This migration was always on the cards—it was introduced by the previous Government—but I get a sense that some of it is being accelerated. The other thing that is different is the numbers involved. The number of those whom the previous Government thought might lose out as a result of the migration appears to be quite different in reality, certainly in regard to the new benefits. At the moment, we do not know the actual figures for the number of people currently receiving IB who will no longer qualify for the new employment and support allowance. The first trials of the migration are taking place in Aberdeen and Burnley, and it will be at least a couple of months before we have any robust figures and find out how many people are not getting through the new gateway.

The Government expect somewhere between 30% and 40% of IB claimants will not qualify and will therefore end up on jobseeker’s allowance. For those individuals, that is a loss of £20 a week. What makes me doubt whether that is the final figure is that we know that the number of new claimants qualifying for employment and support allowance is much less than the previous Government were projecting. While they thought that 20% might end up on the support element of the ESA, the figure is much lower, at around 4 to 6%, and it looks as though around 60% will not be getting ESA at all, because either they have dropped out of the system or they have been awarded jobseeker’s allowance. As many as 60% of those who are currently on incapacity benefit might not qualify for the new ESA, therefore, but, as I said, the trials are going on in Aberdeen and Burnley, and we will have the figures in a couple of months’ time.

[Damian Hinds (East Hampshire) (Con)]

Does the hon. Lady think that the change in those numbers is as a result of a change of Government or of the experience of having run the pilots?

[Miss Begg]

The original numbers I gave were those projected by the previous Government for new claimants, but they did not work out in practice—even for the previous Government. In other words, the work capability assessment, which is the test acting as the gateway to getting the benefit, is turning out to be much tighter than either the previous Government or, I suspect, this Government were expecting.

The figures are quite different from what the previous Government expected. I do not have any evidence to suggest that the new Government were expecting anything different. However, the reality is that many fewer people than expected are getting through the gateway of the work capability assessment, and they are accessing either the support element or the work-related element of the ESA.

There has been a lot of criticism of, and a lot of research has been done by organisations such as Citizens Advice—nationally and in Scotland—about the operation of the work capability assessment. At the moment, I am not sure that it, as an assessment tool intended to look at employability, is very effective in determining who is fit for work and who is not.

I was not going to go into the issue, because it is probably a debate for another day, but part of the problem is that illness and disability are being mixed up. So, people who are ill at the moment are being declared fully fit for work when, clearly, they cannot work—but that is not to say that they would not be able to work in the future. The assessment also does not take into account the employability of an individual—because the end of the whole process is to get people into work, if they are not employable and employers will not employ them, then the process will have failed.

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[Damian Hinds (East Hampshire) (Con)]

I congratulate the Backbench Business Committee on a continuing series of important debates. I congratulate, too, the hon. Member for Stretford and Urmston (Kate Green) and the hon. Member for Colchester (Bob Russell) on their role in securing it, as well as the hon. Member for Aberdeen South (Miss Begg) on laying out the issues as she did. As she said, behind the statistics are real people and real lives, and there are concerns about many of the issues. Many hon. Members will have had correspondence about, for example, the mobility component of disability living allowance. It will be interesting to hear the Minister’s comments, and I hope we shall receive reassurance about some of those things.

Although the debate is about the effect of the CSR on the Department for Work and Pensions, I suggest that, given the bold programme of reform that is being undertaken, it is not practical fully to separate the impact of the spending review and the deficit from what I accept is theoretically a different question—that of reforming benefits for the long term. There is also a distinction to be drawn between the direct and indirect impacts of the CSR on the DWP.

Among the things that strike those of us who are new to the public sector are the crazy names that get bandied about. One is “annually managed expenditure”. It is crazy because that is precisely the expenditure that cannot be managed on an annual basis—at least not from within Departments. The key focus of the CSR, ultimately, is to build a sustainable recovery, and then steady growth, keeping interest rates low, which encourages investment and in turn creates the right atmosphere for job creation. That focus on growth could ultimately deliver the biggest single impact of the CSR on the bills that the DWP must foot; because as the hon. Member for Aberdeen South said, the best way to bring welfare bills down is for fewer people to be out of work.

The deficit that the new Government inherited requires economies. I know that the Opposition would like the running up of the deficit to be yesterday’s story, and the debate to move on to the cuts and how terrible they are; but they are not different stories. They are two sides of the same coin. If the Opposition do not like the cuts that must be made, fine, but they should tell us the alternative—not “Oh, maybe we could do it a little more slowly, or the bankers could pay a bit more” or talk of 10 or 20%. Let us see the 100%. Where are their £44 billion of cuts?

That is the last party political thing I intend to say. From now on I want to strike a more consensual tone. There are four key issues on which the Conservatives and Liberals in the coalition, and Labour—or at least new Labour—find considerable common cause. First, with an ageing population, and relatively low levels of retirement savings, too many citizens in our country have been facing old age without the security that they should be able to look forward to. Secondly, certain working age benefits have gone out of control—particularly housing benefit, the cost of which has risen from £14 billion to £21 billion in a decade.

Thirdly, a lazy approach from the state has abandoned too many people, who get reclassified as being unable to work and therefore—coincidentally, of course—are removed from the headline unemployment statistics, leaving them without practical help, support or encouragement.

Finally in my list of four factors, as a nation we have allowed a benefits system to build up that overall simply does not do enough to incentivise work. Along with other factors, that leads to pockets of multigenerational unemployment and homes where children grow up never seeing an adult go out to do a day’s work. Too easily, of course, those children can then slip into what we used to call “youth unemployment” but now, thanks to another fantastic rebranding exercise, they are called NEETS—those “not in education, employment or training”.

All of that is happening at a time when policy makers and business men bemoan their inability to find people to fill their existing vacancies, not only at the highly skilled end but at the low-skilled end. Instead, they have been looking and continue to look for people from abroad to fill those vacancies.

These issues are truly pressing because they are long-term structural issues which are quite apart from the structural deficit, although they have of course contributed to that deficit.

I am pleased to say that there is less of a partisan divide on these issues than one might imagine from reading The Guardian’s Society section since May. As I said earlier, I want to strike a bipartisan note in this debate and I am sure that Opposition Members will want to follow that approach. I know that they will want to join me in paying tribute to the spiritual fathers of these welfare reforms. Of course, I refer to the Secretary of State for Work and Pensions, my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), alongside the Opposition Members’ own erstwhile colleagues, Mr John Hutton and Mr James Purnell.

On pensions, it was the Turner report, which was commissioned by Labour, that was indeed the turning point in the debate. Automatic enrolment, increasing the rate of growth of the state pension and raising the retirement age are all changes whose origins came on the watch of the last Government and, of course, enjoyed support across the House. The new Government are moving faster and I welcome that.

Then there is the case of the retirement age. Sadly but necessarily, given that there is still increasing life expectancy—to be clear, increasing life expectancy is itself a good thing, of course—and the triple hurdle for the formula for the uprating of the state pension, the coalition is now finally starting us on what will be a long road to providing a basic state pension, with less reliance on means-testing.

On housing benefit, the 2010 Labour manifesto read:

“Housing benefit will be reformed so we do not subsidise people to live in private sector accommodation on rents that working families could not afford.”

As I do not think that I can improve on that sentence, I will not try to do so.

Of course, there will be some hard cases and that fact is recognised; indeed, it would be foolish to pretend otherwise. No one welcomes the difficult situations that some families will find themselves in, and I am also glad the Government have made extra money available in discretionary housing payments.

However, we must also recognise—even if the most extreme projections about what will happen fail to materialise —that with a change to housing benefit as extensive as this one, all the economic logic suggests that there will be downward pressure on rents.

[Alison Seabeck]

I just want to know exactly where the hon. Gentleman gets his evidence from, because the National Landlords Association, residential landlords and London Councils, which is not a Labour body, all say that there is no evidence of such a downward pressure, partly because the private rented sector is already being squeezed on account of would-be young home owners who would like to own homes but who cannot afford them moving into that sector. There is not the evidence that the Government would hope for.

[Damian Hinds]

I am grateful to the hon. Lady for that intervention and for the opportunity to comment on it. I did not talk about evidence from various bodies or organisations. I said that “all the economic logic” suggests that with a change this extensive, there will be downward pressure on rents—it does suggest that.

[Mr Heald]

According to evidence to the Work and Pensions Committee from the landlords’ bodies about 30% of landlords would reduce their rents; London Councils said that about 40% of landlords would reduce rents, and, in discussions in the Select Committee, members of the Committee were doing their arithmetic on the basis that 50% of landlords would reduce rents. So there is a body of evidence that a very significant number of landlords will negotiate lower rents.

[Damian Hinds]

I am grateful to my hon. Friend for clarifying that matter for us.

I want to turn to the coalition’s reforms of incapacity benefit. Of course, the genesis of those reforms also began in the last Government’s time in office, when Tony Blair managed to tempt Sir David Freud out of retirement and Sir David found a kindred spirit in James Purnell. In May 2009, Mr Purnell said:

“It is very important tor us to provide people with help to get back into work, and to improve the incentives for getting back into work. That is why we are re-testing everybody on incapacity benefit to make sure that they are on the right benefit. That is why we have tightened the gateway, to make sure that only the right people get on to the benefit, and that is why we will require everybody for whom it is appropriate to have back-to-work support.”—[Official Report, 11 May 2009; Vol. 492, c. 531.]

Again, I am not sure that that description of what needs to be done can be bettered and so, once again, I will not try to do so.

It is right that no targets have been set for the numbers of people who will go into the three different groups, because the programme has to be about identifying what is right for each individual, whether that is helping them directly into work, helping them to prepare for the world of work or offering them long-term and unconditional financial support at a rate that will be, of course, higher than the one that pertains today.

Clearly, there are some issues related to the early workings of the work capability assessment, as has been outlined by my hon. Friend the Member for North East Hertfordshire (Mr. Heald) and others, including issues about intermittent conditions and certain mental health conditions. Of course, it is good that there was a pilot phase, so that these issues can be studied and tackled. I know that Ministers are conscious of the need to tackle them and I welcome the Harrington review, which was referred to by my hon. Friend the Member for Stroud (Neil Carmichael), and the consultation with mental health charities.

The biggest issue of all is ensuring that work pays for everybody. It is not a new issue; it has been around for an awful long time. There is a difficult trade-off between, on the one hand, having a decent living standard for those who cannot find work and, on the other, incentives for those who can find work, and if there were a “third hand” it would be about avoiding the sort of sky-high marginal withdrawal rates, which are effectively tax rates, that create cliff-edges in terms of certain numbers of hours of work in a week or that completely discourage people from taking on some form of work. Of course, we must also try to keep the whole system simple and low-cost to administer. So it is an enormous challenge.

Twenty years ago, when I was an undergraduate and we were talking about these issues, people used to talk about the 97% effective marginal tax rates at their peak and sometimes, in extreme cases, rates that were effectively more than 100%, once the additional costs of going to work and so on had been factored in. Of course, that situation existed under a Conservative Government, so I am not making a party political point. However, not enough has changed since then.

The problem is that if we want to change that state of affairs, mathematically we either have to reduce benefits to levels that just would not be acceptable or withdraw benefits more slowly as people’s incomes rise. That second route is, of course, much more attractive but it is also extremely expensive, at least in the short term. So I am delighted that the Government, despite what has been a very difficult trade-off for them over the summer, have managed to find the £2 billion that is necessary to fund the universal credit. As hon. Members know, that new integrated benefit seeks to simplify the system, improve incentives, smooth transitions into work, reduce in-work poverty and cut back on fraud and error. I believe that that £2 billion is money very well spent.

Taken together, the reforms to incapacity arrangements and the plans to make work pay are, of course, complemented by the Work programme, which was also referred to by my hon. Friend the Member for North East Hertfordshire. That programme will treat everyone as an individual in a very practical way, while continuing the “Purnellian” principle of using non-state institutions to help people into the world of work and indeed into lasting jobs.

Collectively these measures, enabled by the comprehensive spending review and some of the difficult trade-offs that have to be made, can have an enormous impact on the DWP. That is because, as we have said already, the single biggest variable factor is the number of people who are in work compared with the number of people who are not in work. With these measures, we can encourage and help many more of our fellow citizens into work and in so doing we can create a more fulfilling future for them, a more cohesive future for our society and a much more sustainable future for our economy.

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[Margaret Curran (Glasgow East) (Lab)]

Like the hon. Member for Stroud (Neil Carmichael), I am a new Member and might struggle with constituency names, so any help will be gratefully received—please feel free to help me out.

I congratulate the Backbench Business Committee on securing this terribly important debate about the impact of the comprehensive spending review on the Department for Work and Pensions. Of course, the changes announced will shape the levels of poverty and employment in this country for years to come and it is right that we have the opportunity today to examine them in detail and to understand the impact that they will have on our welfare system and, as has been said, on communities throughout the country.

This has been an interesting debate and later I will rise to the challenge of some of the political temptations put before me, but first I want to say that welfare reform and the work undertaken in this area in the DWP has been centre-stage in the work of the new Government, so the debate on how we reform welfare and get more people into work will continue for the immediate and foreseeable future. I am sure that we shall have many discussions. Of course, that is as it should be, as the proposals announced so far will impact on the lives of so many people in great need. What may appear to be a technical point in our consideration represents in many cases a major shift in the living circumstances of a family or an individual. That should always be at the forefront of our minds and any of our discussions.

Whatever our disagreements—I will come to them—there are some starting points, as the hon. Member for Stroud said, on which we can agree. On behalf of the Opposition, I make that clear. It has been said before that we are prepared to work alongside the Government to consider the challenge of welfare reform, because we do need to reform the welfare state to face the challenges of the 21st century: an ageing population, more people in need of care and the need for a stronger work force, less dependent on benefits. As the hon. Member for Bermondsey and Old Southwark (Simon Hughes) said, if we could create a more equal society, of course we would all be up for that.

The Secretary of State has made strong commitments and promised to deliver a welfare system that will make work pay. He has acknowledged, in doing so, that he is continuing the work of the previous, Labour Government—some hon. Members referred to that—particularly by moving people from incapacity benefit to the new employment and support allowance, but there have been many other dimensions to that, too. As I understand it, there is a history of our working together when we have recognised challenges in the past. I think that the previous Government worked closely with the Opposition on pensions reform. I hope we can build on that.

The Secretary of State is familiar with Easterhouse, in my constituency. I think that visits to that area persuaded him of the need for reform. He is on record as saying that his aim in the reform is to improve the lives of others and not to reduce standards of living—that test will be centre stage as we progress with our discussions.

I pay tribute to my hon. Friend the Member for Aberdeen South (Miss Begg), the distinguished Chair of the Select Committee. I have known my hon. Friend for many years and pay tribute to her authority in this field and the respect that she commands. In her contribution, she gave a strategic outline of some of the challenges that we are facing. Unfortunately, I cannot cover all the points made in the debate, but I will refer to a few of them in my brief contribution.

One point highlighted by my hon. Friend was the depth of concern about the change in the rating, which will take place when we shift from RPI to CPI. I listened to the arguments in favour, but it is incumbent on us to understand the real impact that the change will have on the standards of living of the people that we seem to care most about. I am not terribly sure that the impact is appreciated yet, but the shift does not rest easily with a commitment to let no one’s living standards change as a result of the acts of the Government and to protect everyone. If we look at the evidence from a number of organisations, they would say, “Actually, this reflects an effective and a real cut in benefits.”

Not surprisingly, the universal credit has been mentioned by just about everyone contributing to the debate—my hon. Friend the Member for Stretford and Urmston (Kate Green) made some telling reflections. It is important that we recognise that of course there is a move to support universal credit and to simplify the benefits system, and we would support anything possible that would make work pay and encourage and incentivise people to work. However, the theme that seems to be emerging in the debate is that, while the Government genuinely seem to be driving reform in that way—I have to say that of the Minister and her colleagues—that is undercut by their other actions. I ask the Government to think about that seriously.

The hon. Member for Bermondsey and Old Southwark mentioned the changes in the council tax benefit—apart from reducing it by 10%, which alone could cause some difficulty, the very nature of devolving its decision making immediately cuts across the drive to simplicity. The change will have an impact on housing benefit, income support and jobseeker’s allowance. I am told by those involved that it is, by all definitions, very complicated—on the one hand, we have a drive to simplicity, on the other an action that complicates it.

Not surprisingly, housing benefit has concentrated a lot of minds this afternoon. There are many detailed discussions to be had. My hon. Friend the Member for Stretford and Urmston, with a notable and highly acclaimed record on child poverty, as she amply demonstrated this afternoon, spoke about some of those complications, as did my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck), when she was present.

We can have our debates about the impact on different parts of the country—I willingly acknowledge that the impact might be slightly different in my part of the country from what it would be in London—but we have to listen to the outside organisations, such as Shelter and Crisis, which are telling us that we need to think about it in great depth. Perhaps most tellingly, they are asking, “Do we need to rush at this?” There might be a principle that we need to discuss and grapple with, but let us not do it with undue haste—there might be implications that the Government do not intend. Thinking about that is important.

I wish to highlight one issue that has particular resonance for me and my constituency, to which reference has been made—the intention to reduce housing benefit by 10% for those on jobseeker’s allowance for more than one year. The Government need to acknowledge that this is one of the most contentious proposals, and one that is causing deep concern throughout the country.

Anyone with a knowledge of Easterhouse or an understanding of the regeneration within such communities will realise that housing associations are often the drivers of change. If we reduce the benefit for many people who, genuinely, cannot find work because it is not readily available, we give the housing agencies two choices—to give just one example of the problems with the proposal. Either the housing agencies can evict people, which would cause enormous difficulties and create cost in other ways, or their business plans are undercut because they cannot reap the necessary benefits, so undermining our efforts.

That illustrates, again, that what I think are genuine attempts by the Government to reform welfare are being undercut by other actions—actions by the Treasury, undercutting actions by the DWP.

I do not have much time to go into the reform of disability benefits, but I make one request of the Minister. She has indicated that she will work with disability organisations on the disability living allowance and other changes. Will she acknowledge that it is vital that we engage with the disability movement in tackling any such changes?

I want to refer to child poverty, which was mentioned by a number of hon. Members in the debate. I am so tempted to roll up my sleeves and fight for the record of the previous Labour Government, but we could continue like that for some time. Let me just say that, according to the statistics and briefings mentioned, from Barnardo’s and Save the Children, the Labour Government lifted 600,000 children out of relative poverty and made substantial progress on absolute poverty. Those organisations recognised that as a substantial achievement, which made significant progress in improving the lives of so many people.

There are real challenges in what the Government are doing across the board to tackle child poverty—that was well articulated in the debate—in particular when looking at the child care element of the working tax credit, which will now only cover 70% of child care costs rather than the previous 80%. We know that child care presents an important barrier to people returning to work, so the change again seems to contradict efforts to reform and improve the move to get people back to work.

The Institute for Fiscal Studies report, produced after the Budget, outlined how many of the measures disproportionately affected the poorest families. A number of organisations are now saying to the Government, “When you look at the impact you are having on the poorest families and at the timing of when some of your commitments will come through, particularly two, three or four years down the line, how can you possibly say that child poverty figures will be protected?”

Added to that is recent research by the House of Commons Library on the impact of the Budget on women—to which, again, reference has been made. The fact is that the cuts announced in the comprehensive spending review will hit women twice as hard as they hit men. There are big cuts in support paid directly to mothers, including cuts in child care, child benefit and tax credits. Also, the significant cuts to the public sector will, disproportionately, hit women hard—in employment and in the services they need to support families, which are vital in tackling poverty. There is much concern about that.

The Minister has already put on the record that her Department will issue an equality impact assessment of the cuts on women and, indeed, disabled people. Can she indicate when we might get that report?

That brings me to the fundamental concern about the Government’s approach. Not only will they undermine their own efforts to reform welfare, but they will destabilise growth and increase unemployment across the country. The extent of the cuts to the welfare budget announced in the June Budget and in last month’s CSR seems to reflect the political ambitions of the Chancellor rather more than those of the Secretary of State for Work and Pensions. In both those announcements, we have heard too much about cuts and not enough about reform—I acknowledge that reform was the tenor of the debate today, but it is not always like that with the Government.

I have said that we will work with the Government as they intend to progress with reform, but there is a fundamental flaw in their approach so far. Their welfare reform is based on the premise that it is best to get people back to work and that work pays—so far, so good. However, it falls down with what happens when there is no work to go to.

It cannot make sense to have people on the dole. We all know that longer dole queues mean a higher benefits bill, which cuts across the very principles of what the Government are doing. So, the Government are only continuing in part what we were doing. There are significant differences. Yes, we introduced conditionality, but the sanctions were backed up by guarantees, the youth guarantee and the future jobs fund. Yet one of the first actions of the Government in power was to abolish them. That is a colossal error for anyone committed to welfare reform. As I said earlier, it would appear that the Secretary of State is persuaded of the case for meaningful reform. However, it seems that he has not persuaded his Cabinet colleagues that such reform needs to be supported more systematically.

We were told earlier this afternoon—I am sure that I shall be told again in a moment—that the level of unemployment is unavoidable, and that what is happening in the economy is the result of our actions. Like my hon. Friend the Member for Aberdeen South, I am old enough to remember the last Tory Government. They said then that unemployment was unavoidable, but they were wrong then and I believe that they are wrong now.

For the record, between 2007 and 2009, and before the global crisis, the UK had the second lowest level of debt among the G7 countries at 36.5%. Labour reduced the debt that we inherited from the previous Tory Government, when it stood at 42.5%. It was the global economic crisis of 2008 and the resultant need to bail out the banks that caused the deficit that we have today.

[Damian Hinds]

Does the hon. Lady accept the existence of a structural deficit, quite separate from the cyclical part, and will she accept some responsibility on behalf of her party for that?

[Margaret Curran]

When looking back at the Budgets of Labour Governments, the hon. Gentleman’s own Prime Minister said that we were not bold enough with our spending plans. The hon. Gentleman cannot get away with his argument, and I hope not to hear it again. It was a global crisis that created the problems that we faced, and we had to respond to it.

[Damian Hinds]

Will the hon. Lady give way?

[Margaret Curran]

No. I hope that the Minister does not repeat that argument, because in tackling the crisis we decided not to do what had been done during previous recessions, when the unemployed paid the price. We kept people in their homes and in jobs. That was the right thing to do. If we were still in Government, we would not be making our children and our families pay more than we would make the banks pay. Even the Government’s own Office for Budget Responsibility declares that there will be substantial job losses as a direct result of the Government’s decision to slash the deficit as quickly and as steeply as they can. I repeat—this goes to the core of what we are trying to tackle—that we all know that high unemployment will mean a higher welfare bill and a bigger deficit in the long run, and will defeat genuine and well-meant efforts at reform.

I am sure that the debate may change emphasis with the publication of the White Paper. However, the benchmarks of fairness, proportionality and effectiveness in getting people back to work will be the test that we use. When the Government meet that test, we will happily work with them.