Jobseekers (Back to Work Schemes) Bill

David Anderson Excerpts

Tuesday 19th March 2013 Commons Chamber

[Mr David Anderson (Blaydon) (Lab)]

If the CPAG advice is correct, does my right hon. Friend have any idea by how much the £130 million could be reduced?

[Stephen Timms]

My hon. Friend asks a good question, and the answer is in the impact assessment that the Government have produced, which distinguishes between the amount that would be incurred because of people who were sanctioned before 6 August 2012 and the amount incurred in respect of people sanctioned since the court case, because those sanctions have been stockpiled.

The part of the impact assessment that contains those figures says that, by the look of it—to take the upper valuation—£24 million out of £130 million relates to sanctions that have been stockpiled. The CPAG view would be that of the £130 million, £106 million or £107 million would not apply, because of the Social Security Act 1998, whereas £24 million—the stockpiled sanctions—would. As I said, I am sure that the Department’s advice is different from the advice given to us by the CPAG, but it would be helpful if the Minister provided clarification so that we know the basis on which the measure has been introduced.

I would say again to the Minister that this is a helpful amendment. I do not think that it changes the position substantively, but it helps to clarify it, and to make it clear that anyone who will be presented with a stockpiled sanction will, as usual, have the opportunity to ask for a reconsideration and perhaps subsequently to appeal. That is a welcome clarification, and I am grateful to the Minister for providing it, but I would be grateful, too, if he commented on the two specific matters that I have raised.

Welfare Benefits Up-rating Bill

David Anderson Excerpts

Monday 21st January 2013 Commons Chamber

[Toby Perkins]

I would like to finish my point. I am glad that my comments have elicited so much excitement and that lots of people want to intervene. There are basic things that we need in order to sustain life, and if someone is on poverty money—the hon. Member for Dover (Charlie Elphicke) said there are 600,000 people in severe poverty—their 1% increase cannot be compared with a school teacher, for example.

[Mr David Anderson (Blaydon) (Lab)]

Or an MP.

[Toby Perkins]

Such increases cannot be compared with how a Member of Parliament is able to sustain small increases. There is no comparison between what someone in severe poverty is able to cut and the situation faced by public sector workers, despite their currently being hard pressed, as many will testify.

Atos Work Capability Assessments

David Anderson Excerpts

Thursday 17th January 2013 Commons Chamber

[Mr David Anderson (Blaydon) (Lab)]

As a member of the Backbench Business Committee, I was delighted that we scheduled this topic for debate. I believe that it is an example of the exact reason why the Committee was set up on the insistence of people who were Members way before us. This is about Parliament doing business. It is not about petty, party political point scoring; it is about issues that face thousands of our people every day. Those issues might one day face some of us or our family members. The issue also impacts on this country’s taxpayers, who are not getting value for money. It is about a system that has failed.

The Prime Minister said in May 2010:

“The test of a good society is how you protect the poorest, the most vulnerable, the elderly and the frail.”

I agree with the Prime Minister on very little, but I certainly agree with him on that. That is the test that should be held today.

People say that the jury is out on Atos, but it is not —it has been out and has come back in, and the evidence is that Atos is failing miserably. We have already heard that 40% of appeals are successful. Evidence published this week has shown that, when people are represented, 70% of appeals are successful. The system is broken. This is not just about the financial cost of appeals; the human cost and suffering of people waiting to go through appeals is drastic.

I will not go through individual cases. I want to draw the Minister’s attention to evidence from those who represent people. First, I ask the Minister whether he has read “The People’s Review of the Work Capability Assessment”, which was produced in November 2012. It contains 67 pages of indictments of the system. It was supported by people across this House and by professionals inside and outside the system.

I asked my caseworker, Sheila Stevenson, how the work capability assessment was affecting people in my constituency. She said, “How many people do you want me to tell you about?” I asked her to give me her view. This is a woman who for seven years was a legal officer for the Union of Construction, Allied Trades and Technicians and has worked for me for four years. She said that about every third call is about benefits—mainly about ESA and people being found fit for work. People are being found fit for work despite an NHS GP, a consultant or psychiatric reports saying that they are not. Atos does not seem to take medical reports into account when deciding on someone’s capability. About 90% of my work is now benefits-related, whereas two years ago the figure was about 20%. As the citizens advice bureaux and jobcentres cannot cope, they refer cases to their local MP.

Recently, the all-party parliamentary group on coalfield communities, which I chair, heard evidence from Keith Lamb from the Durham Colliery Mechanics Trust and Mick White who works for the Yorkshire miners about their experiences from decades of representing people at work. They have had a huge increase in their work load and a very low success rate in overturning these decisions. They talked about how people have been failed. Doctors have made a number of mistakes. Assessors have been used whose first language is not English, so they cannot discuss clearly with claimants what their problems are. Claimants have signed medical reports and doctors have filled them in afterwards, when they were not even present at the medical. Claimants have been told that they do not have a disease.

I will give a classic example of the last point which the Minister should know about because, like me, he comes from a part of world where diseases such as pneumoconiosis cripple people. The Americans call it “black lung”. It is where somebody has a lung full of coal dust. People who have pneumoconiosis never improve and there is no way of getting better. And yet, people who are inexperienced are saying that people with the disease are no longer suffering and are capable of work. That is utterly out of order.

I spoke last night to Dave Hopper, who is the general secretary of the Durham Miners Association, an organisation that has represented people in this country for almost 200 years. He said:

“The system is breaking down.”

He told me that decades of close, professional relationships that had been built up between the association and the examiners and the chairmen of the tribunals are being undermined by the aggressive attitude of the people from Atos. He said that claimants are in dread of examinations and many refuse to appeal because of their initial experience. Surely that has to be wrong.

We are told in this House time and again that we need evidence-based policy. The Minister has today heard evidence from both sides of the House of where the system is breaking down. I suggest that he takes the evidence on board, listens to the people out there in the real world who are dealing with this matter day in and day out, gets them to sit around the table with Professor Harrington, and puts the system right. The system has failed, we need to put it right and we need to do so now.

--- Later in debate ---

[Mr Hoban]

I welcome the hon. Lady’s candour. It would be good if more of her colleagues expressed similar candour.

One aspect of the Welfare Reform Act 2007 that has been referred to frequently throughout the debate is the establishment of the independent annual review. The last three have been undertaken by Professor Harrington, a distinguished occupational physician. What evidence has he put forward? In his first report, he stated that he did

“not believe that the system is broken or beyond repair”.

In his second report, he noted that the WCA had

“noticeably changed for the better”,

and in his third report, he said that

“real progress has been made”

and stressed that

things are beginning to change positively in the best interests of the individual.”

It is important not to lose sight of that.

[Mr Anderson]

Will the hon. Gentleman give way?

[Mr Hoban]

I want to make a bit more progress, because a lot of detailed points were raised and I want to address as many of them as possible.

Despite the improvement, it is clear—today’s debate reinforces this—that the WCA continues to generate heartfelt and passionately held views, but some of the worry experienced by claimants is a result of adverse media coverage and risks being fuelled by incorrect anecdotal information and—indeed—total myth. We have heard some of those myths today, and I want to set the record straight. This is an opportunity to address the facts behind the process and to set out what is happening in the Atos process.

Several hon. Members suggested that Atos had targets for finding people fit for work or placing them in a particular group. Let me be absolutely clear—let nobody in or beyond the House be in any doubt—there are no such targets. There are no targets for who should be put into which group. Instead—hon. Members would want this—there are quality-control checks. We want the right decisions to be made for our constituents and we want to ensure consistency between physicians and practitioners, and assessment centres. That quality control —saying that we should all be familiar with things we do and come across in our daily life—is not the same as a target. Atos has no targets to recommend that people go in particular groups.

--- Later in debate ---

[Mr Hoban]

We do ensure that those professionals receive the support that they need to assess those conditions.

Following Professor Harrington’s recommendation, Atos has 60 mental health function champions in place to spread best practice. My right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) asked whether they had specific training in autism. I can assure her that that is the case. She also asked, as did other hon. Members, whether we could review the effectiveness of the mental health champions. It is not for me to dictate the work that Professor Harrington’s successor will undertake as part of the fourth review, but I think that that is a good suggestion. We need to look at the effectiveness of the recommendations that Professor Harrington has made.

[Mr Anderson]

Will the Minister give way?

[Mr Hoban]

I am going to make some progress, as I have only a few minutes left to speak before the next debate starts.

In March 2011, we also implemented the recommendations of a Department-led review of the work capability assessment, which included the expansion of the support group to cover more people with certain communication problems and severe disability due to mental health conditions.

Hon. Members have suggested that the assessment does not take account of fluctuating conditions, but that is not the case. It gives people with a fluctuating condition the opportunity to explain how their condition varies over time. It is not a tick-box assessment, as some have suggested. There is a discussion between the health care professional and the person making the claim for ESA to determine how their condition varies over time. The questionnaire that customers are sent has been redesigned for that purpose, and people are now asked to give more details about how their fluctuating condition affects them as an individual. If a person cannot carry out a function repeatedly and reliably, they will be treated as unable to carry out that function at all. We all recognise that the capacity of people with a fluctuating condition can change, and it is important that proper regard should be given to that fact.

I want to pick up on a point made by the right hon. Member for East Ham (Stephen Timms). We have committed to a review of the descriptors for fluctuating conditions, and we are working closely with charities on that. We also need to ensure that any new descriptors are as good as, or better than, the existing ones, for the purpose of assessing someone’s condition. That work is going on at the moment.

Oral Answers to Questions

David Anderson Excerpts

Monday 10th September 2012 Commons Chamber

[Mr Duncan Smith]

Absolutely—I can give that assurance. That is exactly what we are working and consulting on at the moment. Of course, people will be concerned about it, but there are positives to take from this. The most important thing is that, by trying to move people, eventually, on to a monthly payment, that will bring them much more into line with the world of work. One of the great problems we have had is that, when people who have been unemployed go into work, they find it very difficult to cope with having suddenly to take on and manage their arrangements. The key thing is that we want to get those who can do so to that point, and we will work with the others. For some, there may be interim two-weekly payments. At the moment, we are looking to trial a whole series of arrangements to make that much easier for them, and we will make sure that that happens.

[Mr David Anderson (Blaydon) (Lab)]

Is part of the Secretary of State’s strategy to help people move on to universal credit the expansion of food banks, which is seen as a disgrace and a condemnation of this Government across the country?

[Mr Duncan Smith]

Not at all. When we came to office, I was told by the Department that despite the constant requests from a variety of people who provide food banks, in particular the Trussell Trust, to put their leaflets in jobcentres to advertise what they were doing, the last Government said no, because they did not want the embarrassment of their involvement. We immediately allowed them to do so, which is one reason for the increase in the number of people seeking food banks.

Incapacity Benefit (North-East)

David Anderson Excerpts

Tuesday 22nd November 2011 Westminster Hall

[Grahame M. Morris]

I will come to that. My fundamental point in response to the hon. Gentleman is that the big issue for us is not just worklessness; it is joblessness. We want the Government to invest in creating jobs in the private sector and generally to get the local economy moving. There seems to be little point in inflicting penury and misery on large sections of already impoverished communities when there are no jobs for them to go into. The two should go hand in glove, and I have some suggestions for achieving that.

[Mr David Anderson (Blaydon) (Lab)]

I agree with my colleague. The figure of 32,000 that the report spoke about was released about a month ago. That figure has not been challenged by the Government. We have 32,000 job losses across the public sector in the north-east. If my hon. Friend is correct, another 35,000 will be taken off incapacity benefit, which will put up the unemployment figures. There will be a 70,000 increase in those two groups alone. There is also the failure of the private sector to move into the void. Does that not make the jobs situation even more serious than it already is?

[Grahame M. Morris]

I am grateful for that intervention, which reinforces the point that I was trying to make. It is absolutely essential that we tackle joblessness; the Government have a responsibility to do that. I am concerned about the complete failure of regional policy; I am not convinced that we have an effective regional policy. We lost our regional development agency, One North East, and our regional Minister. It cost nothing to have an advocate at the top table of government, arguing the case for business, as well as for the regeneration of the whole region. It seems perverse that the coalition should abandon that, particularly when the region is doing so badly.

Jobs and the Unemployed

David Anderson Excerpts

Wednesday 7th July 2010 Commons Chamber

[Catherine McKinnell]

I do not have an ideological concern about the debt that is the current deficit, although I share the concern of all Labour Members that the deficit needs to be reduced. Fundamentally, however, it needs to be reduced in a way that does not throw thousands or millions of people on to the scrap heap, in the way that they were left there in the 1980s. I know that this is not taken very seriously by Government Members, but generations of people were left on the scrap heap.

[Mr David Anderson (Blaydon) (Lab)]

Will my hon. Friend give way on that point?

[Catherine McKinnell]

I think I need to make progress.

Finally, some additional cuts have been announced and, although they have perhaps not been talked about today, I believe that they will fundamentally affect future jobs and the ability of people in the north-east to take them up. I refer to the cuts to child tax credits. Although the Liberal-Conservative Government have announced a £150 increase in the per-child element of child tax credits, that is nothing but a fig leaf for the abolition not only of the Sure Start maternity grant, worth £500, but of the baby addition to the child tax credit and the health in pregnancy grant, as well as for the decision to reject Labour’s proposals for a £4 a week supplement—a toddler tax—for each child.

For people on low incomes, tax credits are fundamental to empowering families to support their children and ensure that they get the best start in life, thereby breaking the cycles of deprivation that we see in so many parts of the country, particularly the north-east. As the mother of two small children, I know from experience how vital financial help can be. To be honest, I have been stunned by the callous manner in which that help has simply been abandoned by the Liberal-Conservative Government. Some £3 billion-worth of cuts have been made to support for families. Such decisions will be devastating for parents, preventing them from getting out to work or creating either a work environment or the capacity to work in their households, thereby breaking the cycle of deprivation that can so often take hold in workless households.

Joined to the unfair rise in VAT—a tax that punishes the poor—those cuts will have an impact on unemployment and child poverty in my region, thereby causing further unemployment in the long term. The national economy remains weak, especially in areas of the country such as Newcastle, where large numbers of children, unemployed people and low-income families are already struggling and will struggle more under this Budget. They are the people who must be protected and not punished by the Government’s policies during this difficult time.

--- Later in debate ---

[Zac Goldsmith (Richmond Park) (Con)]

I shall keep my speech brief, Mr Deputy Speaker, as instructed.

One key element of our response to the recession and the pressing need to create jobs has to be a recognition of the value of the green economy. I think that more or less all of us now accept that it would be a mistake to try and recreate the conditions that brought us the crisis in the first place, but we have an opportunity to raise from the wreck of an economy built on housing bubbles, uncontrolled public spending and financial services an alternative that is both stable and sustainable.

Whether or not we are concerned about climate change, it is worth recognising that clean technology is an emerging global market that is expected to be worth trillions of dollars in the coming decades. In fact, that market globally is already worth hundreds of billions of dollars. This is a massive opportunity for job creation, by any standards, and Britain should be at the forefront, but unfortunately we have just a 5% stake in those clean companies.

We should be a leader in innovation: we are not, and in the past decade we have seen virtually no sign of a coherent programme. We have seen no real investment in carbon capture and storage—

[Mr Anderson]

Does the hon. Gentleman recollect the closure in 1986 of this country’s coal mining industry by the Conservative Government? That included closing the most advance clean-coal technology site in the world—at Grimethorpe colliery in Barnsley.

[Zac Goldsmith]

I thank the hon. Gentleman for that intervention. Times change: the case now for clean coal has been renewed on the back of emerging evidence for climate change. If he does not mind, I will not go back 25 years, but I shall continue with a very brief description of what I regard as a huge failure over the past 10 years.

I mentioned carbon capture and storage, but there have been no effective incentives for home owners or organisations in the commercial sector to pursue energy efficiency. There have been virtually no incentives to develop renewable energy: as a result, we have seen virtually no progress over the last 13 years.

The CBI said last year that it is politics and policy, and not the recession, that have prevented green investment in the UK, and it pleaded with the Government to just “get on with it”. When Jonathon Porritt stepped down after nine years as the chair of the Sustainable Development Commission he also accused the Government of gross failure. He added, sarcastically, that the UK had become

“a world leader in green rhetoric.”

We should broaden our economic base to include more green technologies and more engineering and high-value manufacturing. We need to reconfigure our energy systems and find a way to wean ourselves off our dependence on imported hydrocarbons. That dependence is dangerous environmentally, economically and politically. We need to turn Britain into a world leader in green innovation, and we have the chance to do that now. In my view, the existing commitments of the coalition Government will set us absolutely on the right path

Paul King, chief executive of the UK Green Building Council, described the green deal as follows:

“This is a bold and welcome move. The biggest barrier to low carbon refurbishment—the upfront cost—is set to fall. Pay As You Save is a radical scheme, which could”

create

“at least 100,000 new jobs, saving money and conserving energy.”

The green deal is just one initiative, as the Chancellor has announced plans to create a green investment bank to facilitate investment from the private sector in new clean-energy technology companies. In addition to that, we have plans to create a number of large-scale marine energy parks. It is extraordinary that this country has 14,000 miles of coastline, yet we have barely begun to tap this extraordinarily valuable resource. We have plans—indeed, we have a commitment—to roll out smart meters and the feed-in tariff. If the example that Germany has shown us is to be believed, the feed-in tariff will lead to a revolution in decentralised energy and to huge job creation.

We have plans to lay out a national recharging network. It will trigger a shift, which we absolutely need, from the traditional, conventional car to electric vehicles and hybrid plug-ins. I realise that time is short, and I could cite endless examples of Government initiatives that will foster the shift we are going to see. At every stage of the shift, we will see huge opportunities for job creation and wealth creation, and we need to tap into those.

In green policies, as in most policies, the most powerful role the state can play is not to dictate or direct, but to empower. Instead of introducing a mind-numbing array of quangos, conflicting initiatives and schemes, all aimed at micro-managing our way towards a low-carbon future, we need to establish a clear framework, set the signals and let the market deliver. In truth, that is our only option. We cannot rely on public money because, as we all know, there is none. Instead, we have to find ways of ensuring that existing money flows in a new direction and if we are successful, we will prosper on the back of an economic recovery that might last. We will have done the right thing and we will be rewarded for having done so.

--- Later in debate ---

[Nadhim Zahawi]

My hon. Friend is right. One example is the way in which the gap between the south-east and the rest of the country has grown. Labour Members just do not seem to understand what it takes to create an enterprise economy.

[Mr Anderson]

Further to the point made by the hon. Member for Peterborough (Mr Jackson), a lot of people were made wealthy in the 1980s, and 200,000 coal miners got £20,000 to go on the dole queue—paid out of the public purse.

[Nadhim Zahawi]

And your point is? At the end of the day, you only have to look at the facts. The facts are that you have left us with a legacy of £500 million a day—

--- Later in debate ---

[Mr David Anderson (Blaydon) (Lab)]

It is an old but true saying that if we do not learn the mistakes of history, we end up repeating them. For some Members of the House, this discussion is not just theoretical, because we have lived it—our families and our areas have lived it. My grandfather was sacked in 1926 for having the temerity to go on strike. He was blacklisted for eight years and died in poverty. My father was forced to go down the mines in 1935 as a 14-year-old at a time when, he has told me, miners were treated like slaves. People did not march from Jarrow to London just for the fun of it: they did it because the private sector had let them down.

In the 1930s, a miner was killed in the mines every six hours because of the success of the private sector. That was not because there was too much red tape, but because people did not invest in the mines. That is why, at the end of world war two, the people of this country, despite having a GDP-to-debt ratio of 262%—not 62%—did the right thing and threw that Government out. They then built a million houses, created the national health service and nationalised the major utilities and the railways. They did all that right and what was the result? In 1959, the Prime Minister said that this country had never had it so good—that was because of the things that Labour Governments had done in the 1940s and 1950s.

Unfortunately, in the next period there was general consensus in the country on one-nation Toryism. Of course, that was done away with in 1979 when Mrs Thatcher came along. She had a view of one-nation Tories from the Wash southwards and we ended up with people on the dole, mines closed, shipyards closed and steelworks closed. That was said to be a price worth paying only because the people represented by the Conservatives were not paying it. The price was paid by the people of my constituency and those of Scotland, Wales and other industrial areas while the yuppies in London were swanning around in their Porsches, drinking champagne and smoking big cigars. Conservative Members can smile because they were not there, but some of us were, and we were suffering. People struggled and saw communities going down the drain. People were burgled by their neighbours’ children and saw drugs in villages where there had been nothing but hard work for two centuries. We saw houses falling down that people had kept going for a hundred years. This is not a joke; it is serious stuff.

Hon. Members talk about unemployment—in the constituency where I lived before I became an MP, the highest unemployment rate in the past 13 years has been 7.8%, which is far too high, but in 1986, in the week that the mine I worked in was closed and 721 miners were put on the dole, the unemployment rate was 18.6%. The Conservatives should not come here lecturing us about unemployment when it is just some sort of theoretical debate they have had in the students union.

At the end of the 1980s, the public services were attacked, compulsory competitive tendering was introduced and people were put on wages of £1 an hour. We had a situation where people who had given their lives to organisations such as the health service were told, “We don’t want you any more—go and work for Joe Bloggs’ cleaning company.” People were underestimated and undervalued. The next thing was that the private sector came back in. We gave the utilities back to the private sector and we ended up with a utilities sector that was not fit for purpose. The reality is that we will probably end up with power cuts or running out of gas. Alternatively, we will end up, as the hon. Member for Richmond Park (Zac Goldsmith) suggested when he spoke so eloquently about green issues, being dependent on people like the Russians or the Ukrainians for gas and oil supplies. Why? It is because of lack of investment by private companies.

When Labour came back into power in 1997, we took action and used public money to put right some of those wrongs. We introduced the national minimum wage, we brought in rights for people at work and we introduced good-quality health and safety legislation that saves lives. We introduced regulations that stopped business people from exploiting people at work, and we should never move away from that or apologise for it. We also introduced the regional development agencies, which have not been successful in some regions—it is pointless to pretend otherwise—but the areas where they have been successful are probably those where they are needed more than anywhere else, such as in my region, where the RDA has been very successful. Taking RDAs away will cause a repeat of the past and will be the wrong way to go.

Some people say that we have no choice and that we are all in it together, but we do have a choice. We do not have to follow past accidents: we could introduce a financial transaction tax on the banks, we could take real action to attack tax avoidance and tax evasion, and we do not have to cut corporation tax. I know that it is highly unlikely that the Conservatives will want to do that, because they still want to be the party of business at the helm of the work force, but the Opposition will not stand for it. It is a shame that the hon. Members on the narrow Government side of the House—the Liberal Democrats—are supporting the other Government Members in doing that. They should be ashamed of what they are doing.

Capital Gains Tax (Rates)

David Anderson Excerpts

Monday 28th June 2010 Commons Chamber

[Yvette Cooper]

The right hon. Gentleman has gone £40 billion further. He has proposed an additional £40 billion of cuts that we do not think are the right thing to do. He asks what we would have done, but I am sure that he has read chapter 6 of the March Budget, which sets out £20 billion of saving cuts in some detail and a further £19 billion in tax increases. I shall tell him what else we would not do: we would not waste money on measures such as free schools and the married couple’s allowance.

Nothing in the Government’s plans will get a single extra person back to work. In fact, the opposite is true. The Budget cuts the number of jobs in the economy by 100,000 a year. It increases the number of people on the dole by up to 100,000 a year, and that is on the admission of the experts the Government appointed. At the same time, the Government are cutting 200,000 jobs and training places and the youth guarantee and job guarantee schemes. How on earth will they get more people into work if they keep cutting jobs?

[Mr David Anderson (Blaydon) (Lab)]

Does my right hon. Friend share the concerns of the Royal College of Nursing, which, in relation to a Department that allegedly is protected, suggests that at least 5,500 and, possibly, as many as 30,000 front-line nurses’ jobs will go?

[Yvette Cooper]

My hon. Friend is right that the Government’s proposals do not even include the consequences of the spending review and the proposed additional £17 billion of cuts in public services.

We think that it is better for people to be in work than on the dole, and that is why we funded the future jobs fund and additional support and jobs. They were often in the community and run by the voluntary sector, and they helped young people to obtain the skills that they needed and to stay off the dole. Yet, shockingly, the Government have cut 90,000 jobs through the future jobs fund, putting all those people—additionally—back on to the dole and pushing up unemployment bills. As a result, even on the OBR’s calculations, those measures will cost the Government £2 billion more over the next four years. They will have to pay additional benefits for the unemployed, and the financial, economic and social price of higher long-term unemployment will cost us more for years.

--- Later in debate ---

[Mr Edward Leigh (Gainsborough) (Con)]

I welcome this Budget because I believe that it is an honest Budget. I have now sat through nearly 30 Budgets, and it is often a profoundly depressing experience, because there is great excitement during the Budget statement only for us to receive a let-down the next day when we actually start to read the Red Book. There is a lot of difficulty and pain in this Budget, but what you see is what you get. What we heard on Budget day was the essence of this Budget, which is the need to try to resolve the desperate financial crisis in which we find ourselves, with a potential debt of £20,000 on every man, woman and child, and £1 out of every £4 spent being borrowed.

I accept that there are many things in the Budget that many of us do not like. Does anybody in this Chamber like a VAT rate of 20%? We are in the desperate position of having to impose that rate on everything that we buy, apart from essentials—I am not sure why newspapers are zero-rated, considering all the rubbish that they put out, but it applies to some useful things like food—because we are faced with this financial crisis. However, contrary to what the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) said, the pain is shared. I agree that a VAT rise is regressive, and we did not want to do it, but we have increased personal allowances, and in doing so ensured that is not the rich who benefit.

I pay tribute to my right hon. Friend the Secretary of State. Who has done more than him to try to raise people out of the poverty and unemployment trap? Who has done more than he in setting up the Centre for Social Justice? Who has done more than he to visit all these areas and try to create a benefit and tax system that encourages people into self-reliance, self-help and self-belief, and does not trap them in sink estates without a job and without hope for the future? He has been working on this problem for more than a decade. Now, at last, he has a chance to put some of his ideas into action, and we welcome him to the Front Bench.

[Mr Anderson]

I understand the long and proud record that the Secretary of State has in this House. Does the hon. Gentleman understand, however, that some Labour Members have not just been there for 10 years, but have lived this? We lived this same experiment in the 1980s and we saw the devastating impact on the people we represent—the people who had to pay for the failure of the Government at that time, when unemployment was not a price worth paying in the areas where I and many other Labour Members come from.

--- Later in debate ---

[Mr Jackson]

My hon. Friend is absolutely right to draw the House’s attention to that statistic. Likewise, the number of children who go from care into higher education is also a shameful figure. I therefore strongly endorse the ambition of my right hon. Friend the Secretary of State for Work and Pensions to tackle the deep-rooted causes of poverty in this country, and to tackle the twin aims of lessening the scale of social breakdown and improving the quality of life of the poorest in our society. If our Government achieve nothing less, they will have served our country in achieving that.

In my constituency, where we have recently suffered job losses, and where we also have low skill levels, lower-than-average pay and high welfare dependency, the problems are real and they are about people, not statistics. Hundreds of children in Peterborough live in dysfunctional families, their parents on welfare benefits. Those children lack ambition, a focus and, often, a moral framework, going without anything other than peremptory familial love and experiencing, through no fault of their own, an inevitable poverty of imagination, as well as, too often, material poverty. Dedicated teachers, nursery staff, health professionals and members of the extended family, such as grandparents, are often forced to assume a role in loco parentis. I believe that we have a moral duty to those children to do something about the situation, even if not to their often indolent and feckless parents.

[Mr Anderson]

rose—

[Kate Green (Stretford and Urmston) (Lab)]

rose—

--- Later in debate ---

[Lorely Burt (Solihull) (LD)]

I congratulate the hon. Members for Thurrock (Jackie Doyle-Price), for Airdrie and Shotts (Pamela Nash), for Maidstone and The Weald (Mrs Grant) and for East Surrey (Mr Gyimah). I agree with the hon. Member for Hartlepool (Mr Wright) that they bring inspiration and enthusiasm to the House. We are all here to try to make things better, and I am sure that all of them will play their part.

The coalition Budget has been described as tough but fair, and hon. Members on both sides of the House will certainly agree that it is tough. Why does it have to be so tough? It is tough because we are borrowing £1 in every £4 that we spend, because we owe £22,400 for every man, woman and child in this country and because, thanks to Labour, we have one of the largest budget deficits in the whole of Europe, so we must take the action that Labour dodged. Now that the OBR has been formed, we know the true scale of the problem that we face, and we have worked it out so that no one can fix the figures anymore.

[Mr Anderson]

Does the hon. Lady disagree with the OECD, which said that the previous Government’s actions prevented this country from going from a recession into a depression? If those actions had not been taken, we really would have been in a mess.

[Lorely Burt]

The hon. Gentleman makes a fair point. Indeed, the Liberal Democrats supported some of the steps that the Labour Government took, but that does not allow Labour Members to wash their hands completely of this country’s financial state.

--- Later in debate ---

[Katy Clark (North Ayrshire and Arran) (Lab)]

Thank you, Mr Deputy Speaker. I warmly welcome you to your position.

I congratulate the hon. Member for Pudsey (Stuart Andrew) on an eloquent maiden speech, as well as the hon. Members for Maidstone and The Weald (Mrs Grant), for East Surrey (Mr Gyimah) and for Thurrock (Jackie Doyle-Price), who also made excellent maiden speeches today. My hon. Friend the Member for Airdrie and Shotts (Pamela Nash) clearly knows her Labour history. A number of strong Labour women have represented her constituency in the past, and she showed today that she will be a powerful advocate for the community that she represents. She mentioned in her speech that her constituents have not forgiven the Conservatives for what they did in the 1980s. In my constituency, North Ayrshire and Arran, that is what I was told repeatedly during the general election.

As I listened to the debate today and as I have listened to the rhetoric from the Conservative party over the past few weeks, it reminded me of the 1980s. Fortunately I was a little older than my hon. Friend at the time. When I left school I knew nobody between the ages of 16 and 25 who had a job. Education or the youth training scheme, as it was then, were the only opportunities available. It was astonishing to hear again after 20 years the talk about getting “on yer bike”. For most people in areas such as the one that I represent, moving is not an option. For all the reasons that have been set out today, if we see the kind of attacks on our benefit system that are being outlined, that will become even less of an option.

My hon. Friend the Member for Garston and Halewood (Maria Eagle) described in detail how the changes in the benefit system would have a disproportionate effect on some of the poorest in society. The Budget is deeply regressive and will be devastating for some of the poorest communities and some of the poorest people in the country. However, it will also devastate the economy, because it is a depressive Budget. The rise in VAT, the cuts in benefits to some of the poorest in society and, perhaps even more significantly, the huge cuts in public spending will drain huge amounts of money from the economy. In other parts of Europe, more and more Governments are taking an increasingly similar approach, and that is very worrying for not just the British economy but beyond, because it does not seem obvious where we will be able to sell our goods. So this is a very dangerous Budget.

I have already said that the current debate is reminiscent of debates that took place in the 1980s. In 1979, a Government were elected saying that they had no plans to increase VAT, but not long after there was an increase from 8% to 15%; and now, of course, one of the first steps that we see is a significant increase in VAT. Until the past few weeks I had never heard it argued that increasing VAT was anything other than a regressive policy that would disproportionately affect some of the lowest earners in society.

[Mr Anderson]

I remember a similar situation. Does my hon. Friend remember also that in the 1980s people continually said, “There is no alternative”? Now, the code for that is, “This is unavoidable”, and it is sad that the Liberal Democrats have been taken in by the Conservative party. The Lib Dems are the real dupes in this House.

[Katy Clark]

I agree. I listened with care to the hon. Member for Solihull (Lorely Burt), who basically said that we could not afford the benefit system and, therefore, it was necessary to take these steps, but the House must remind itself again and again that we are a hugely wealthy country. We have the fifth wealthiest economy in the world, but the wealth and power in society are unevenly distributed, and that has to be the backdrop whenever we have these discussions.

Given the proposals that we have heard, this Budget simply seems to be a Tory Budget. I appreciate the Liberal Democrats’ points about the policies that they have tried to inject, but overall the Budget will disproportionately affect those on the lowest incomes. A few days ago the TUC commissioned a paper, which states that overall the annual loss in income and services for the poorest 10th of households is estimated to be £1,514, which is equivalent to 21.7% of their household income. The average annual loss for the richest 10th of households is estimated to be £2,685, which is equivalent to 3.6% of their overall income. No doubt a lot of work will be done on those figures, but we must consider them when we discuss not only the Budget, but the Finance Bill, which we will debate over the coming weeks.

I agreed with the hon. Member for St Ives (Andrew George), and I fully appreciate the difficulties and stress that Liberal Democrat MPs in his position must feel if they have always argued that a VAT increase would have a disproportionate impact on the poorest in society. I hope that we see some detailed work on the impact of not just the VAT increase, but all those policies on the poorest in society.

In reality, we are seeing unprecedented cuts in spending on public services, but I find it difficult to believe that any Government of any political colour will be able to make the proposed reductions, because we are talking about departmental cuts of about 20% to 25% over five years. It is difficult to imagine that the Government will be able to deliver on that, because these are such savage cuts in the services that all our constituents rely on.

This is a bad policy not only because it disproportionately affects some of the lowest-paid and lowest-earning in society, but because it risks choking off the recovery that is so vital to us all. My hon. Friend the Member for Coventry North West (Mr Robinson) was absolutely right—we needed a Budget for jobs and growth, but we have something completely to the contrary.

--- Later in debate ---

[Danny Alexander]

I will press on, if hon. Members do not mind.

At the weekend, President Obama praised the action that we have taken, describing it as necessary and courageous. Yesterday’s G20 communiqué made the situation clear when it said:

“Those countries with serious fiscal challenges need to accelerate the pace of consolidation”,

and no major country has more serious fiscal challenges than those that the previous Government left Britain. Her Majesty’s Opposition seem to have adopted the strategy of Fabio Capello: they blame everyone else and deploy the same formation of arguments, leaving a gaping hole in their own defence. They refuse to accept responsibility for their mistakes, let alone apologise.

This Budget stands for three things: responsibility—taking action to eliminate our structural deficit; freedom—helping the businesses that we rely on to rebuild our broken economy; and fairness—protecting the most vulnerable while ensuring the contribution of all. Failure to deal with the deficit is the greatest threat to growth. Failure to act now would mean higher interest rates hitting businesses, hitting families and hitting the cost of repaying the Government’s enormous debt, losing jobs and losing growth too. This Budget takes action now to restore confidence in our economy—the confidence that is needed to underpin the recovery that we all want to see. This Budget’s forward-looking fiscal mandate will eliminate the deficit in five years and puts us on track to get debt falling by 2015-16. The Office for Budget responsibility, in fact, forecasts that the measures in our Budget will lead us to meet that challenge a year early.

Before I outline our plan, let me remind the House of the previous Government’s commitments. They were planning £50 billon of cuts, about which they had nothing of substance to say. Some of their leadership contenders—I do not see any of them here—are rowing back even on that plan. Our emergency Budget sets out the path of public spending for the next five years with the following additional measures: an extra £17 billion comes from reductions in departmental spending, £11 billion from reductions in welfare spending, £3 billion from lower debt interest payments and £8 billion from net tax increases.

As has been observed by all sides in this debate, we know that this will be painful, but it is absolutely necessary to secure the growth and prosperity that this country needs in the future. The last Government’s spending plans implied a reduction in departmental budgets of 20%. We are committed to real increases in NHS spending and to protecting international aid, and this Budget implies, as the Chancellor said, that other Departments will face an average real cut of 25%. We will set out the details of those cuts in the spending review, and we will consult widely to inform those plans. In fact, we launched our consultation on Friday, and we have already had more than 20,000 substantive responses from public sector workers, setting out ideas for areas where they know savings can be found. If only we had had a single serious suggestion from the Labour party.

We have taken the tough decision to increase VAT by 2.5%. With a structural deficit some £12 billion larger than the previous Government told us, we had a difficult choice to make: whether to fill that hole by making yet more spending cuts or to increase taxes. Further spending cuts would, I believe, have made it impossible to protect the most essential services in the spending review, so the VAT rise was unavoidable.

[Mr Anderson]

Does the right hon. Gentleman agree with his colleague, the hon. Member for Bermondsey and Old Southwark (Simon Hughes), who said, only on 15 June:

“I hope we don’t get a VAT rise because it is the most regressive form of tax”?

[Danny Alexander]

No party went into the election promising to increase VAT, but the hon. Gentleman should make no mistake: the rise in VAT is a result of the public finances that we inherited from his Front-Bench colleagues. One could say that it is a Labour inheritance tax.