Welfare Benefits Up-rating Bill

David Miliband Excerpts

Tuesday 8th January 2013 Commons Chamber

[David Miliband (South Shields) (Lab)]

It is a pleasure to follow the hon. Member for Brent Central (Sarah Teather).

The truth is that all western economies need to refashion their social contract to cope with demographic and economic change—expanding child care versus higher child benefit; housing benefit versus house building; and long-term care versus reliefs and benefits for old age. In each case, we need to choose.

The Bill asks us to make three judgments: about fairness, affordability and politics. The Chancellor claimed in his autumn statement that the Bill was about distinguishing working people from those

“asleep, living a life on benefits.”—[Official Report, 5 December 2012; Vol. 554, c. 877.]

That has been blown out of the water by the facts that have come out since; the facts unearthed by my right hon. Friend the shadow Secretary of State today are damning.

What of the 3,120 people in South Shields on income support or the 4,200 on jobseeker’s allowance alleged to be choosing a life of Riley? I have three points. Two years ago, the Prime Minister said that he had ended the option of a life on benefits through the so-called Welfare Reform Act 2010. Secondly, the Government’s own figures about the level of fraud show it to be 0.7%—by the way, it is lower among immigrants to this country. Thirdly, the DWP’s own figures, published by the Secretary of State, show that more than 10 jobseekers in South Shields are seeking every job. In all the talk of fairness, that is what is unfair.

[David T. C. Davies (Monmouth) (Con)]

Will the right hon. Gentleman elaborate on the statistic he gave? Do immigrants not have a lower level of benefit fraud because fewer of them are entitled to the full range of benefits?

--- Later in debate ---

[David Miliband]

I do not want to give the hon. Gentleman a maths lesson—I did not get good marks in maths—but percentages are percentages; that is the whole point. If we change the denominator it plays through in the percentage that comes later. I do not want to get too diverted by that, but I thank him for the extra 50 seconds.

Let me get on to the question of affordability, which is central to the Government’s case. The Government claim that the alternative to this Bill is higher borrowing or higher taxation, but I want to show why that is not true. The Government themselves have projected the total cost of all benefits, all tax credits and all tax relief for the next few years, and I am happy to debate priorities within that envelope. I will take the envelope that they have set, but let us have a proper debate about choices, not the total sum—a priorities debate, not an affordability debate.

[Nadhim Zahawi]

rose—

[David Miliband]

Just a minute.

The measures before us raise £3.7 billion from poor and lower-middle-income people in 2015-16. The Chancellor cut tax relief for pension contributions by wealthier people, but by how much? It was by £200 million in 2013-14 and £600 million in 2015-16. The cumulative saving from the richest between now and 2015-16 is £1.1 billion; the cumulative saving from those on lower-middle incomes on benefits and tax credits is £5.6 billion. Taking five times as much from poor and middle-income Britain as from the richest in Britain—

[Kwasi Kwarteng (Spelthorne) (Con)]

rose—

[David Miliband]

I will come to the hon. Gentleman in a minute.

Taking five times as much from lower and middle-income Britain as from the richest in Britain is not equality of sacrifice. The Chancellor reminds me of the man at the top of a ladder in a 1929 election poster. The man at the bottom of the ladder has got water up to his neck, and the man at the top shouts, “Equality of sacrifice—let’s all go down one rung!” It is not equality of sacrifice when you are up to your neck in water.

[Kwasi Kwarteng]

rose—

[David Miliband]

I will come to the hon. Gentleman in a moment.

The Government have made a great deal of the point that no one should receive more on benefits than the average wage of £26,000 a year, but they offer tax relief of £40,000 for those with £40,000 spare. Just to be clear, that tax relief costs £33 billion a year, while we are talking about a total bill of £42 billion for out-of-work benefits. If tax relief on pension contributions were limited to £26,000 a year, we would not need this Bill. That is the point about priorities and choices that need to be made.

[Kwasi Kwarteng]

The right hon. Gentleman gives a very powerful speech in which he mentions lots of facts and statistics, but there is a very fundamental question that he has not answered. Is it right that people on out-of-work benefits should be receiving faster and greater increases in their income than people on very low wages? Is that fair?

[David Miliband]

Forty thousand soldiers are not on out-of-work benefits but they are being hit by this Bill. Eighty per cent. of the savings—

[Kwasi Kwarteng]

Answer the question.

[David Miliband]

I will address it directly; I am very happy to do so. If a couple on £5,500 a year or someone on £3,700 a year gets a 1% increase, that is different from someone who is on £15,000, £20,000, £25,000, £30,000 or £35,000 getting the same increase, because although the people on £15,000, £25,000 or £30,000 are making tough choices, those on £5,000 or £3,700 are making a choice between feeding their kids and heating their home.

[Nadhim Zahawi]

rose—

[David Miliband]

Let me make some progress and I will come to the hon. Gentleman if I have time.

The truth is that this rancid Bill is not about affordability; it reeks of the politics of dividing lines that the current Government spent so much time denouncing when they were in opposition in the dog days of the Brown Administration. It says a lot that within two years they have had to resort to that dividing-line politics. We know the style: you invent your own enemy, you spin your campaign to a friendly newspaper editor, you “frame” the debate. But the enemy within in is not the unemployed; the enemy within is unemployment.

I do not want to live in a society where we pretend that we can enjoy the good life while our neighbours lose their life chances. It is bad enough to have no economic growth, or 420,000 young people out of work for more than six months, or rising levels of child poverty, or declining levels of social mobility, but it is hard to stomach a Government who take absolutely no responsibility for their mistakes. It is intolerable—[Interruption.] Government Members are laughing, but I am ready to say what we did wrong; I have not heard them say a word about what they are doing wrong. It is intolerable to blame the unemployed for their poverty and our deficit. That is why I will vote for the amendment and against this rotten Bill.