Welfare Benefits Up-rating Bill

Debbie Abrahams Excerpts

Monday 21st January 2013 Commons Chamber

[Mr Duncan Smith]

I said that I would make a little progress and then give way. I wish to make one point, which is that £4 billion has had to be written off as a direct result of this inability to get the money back, with a further £4 billion likely to be written off directly as a result of Labour’s massive failure to control that budget.

The second part of our approach is important and it relates to the issue of fairness, which my hon. Friend the Minister of State addressed. We do not do these things lightly, but we do want to make sure that those paying the tax bill for those receiving it in welfare recognise that their taxes are well spent; we want to ensure that those in work paying their taxes do not see the rises for those on welfare outstripping their own. We have already discussed the increases, so this is fundamentally an issue of fairness.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

rose—

[Mr Byrne]

rose—

--- Later in debate ---

[Mr Duncan Smith]

I will not give way. Progress on tackling child poverty stalled, and the previous Government missed their 2010 target by some 600,000 children.

[Debbie Abrahams]

rose—

[Mr Duncan Smith]

No, I will not give way yet. From 2004 until the last election the previous Government spent £171 billion trying to hit their target, and that was where the problem came from. They wrecked what might have been a good process because they turned it into a target-chasing process, which never succeeded finally.

[Debbie Abrahams]

Some 200,000 children will be pushed into poverty as a result of this uprating measure, according to the assessments, so how can the Government claim to have any commitment to reducing child poverty?

[Mr Duncan Smith]

Let me put the figures in the round within the period of spending review. My hon. Friend the Minister of State made a very good point, with which I agree and which I have made in the past—we do not trumpet our progress because we think the process of setting a target around 60% of the median income line was a recipe for nightmare problems and excess spending. We do not claim that that is the right way to measure the problem. The hon. Lady will have noticed that in answer to a parliamentary question last week, we said that we will go into full public consultation about a better way to measure real child poverty that the coalition Government will set and measure ourselves against—[Interruption.] Income will be part of it, but not the dominant part that her Government made it. If she and her party were honest—when I made this point on Second Reading, I noticed one of her Front Benchers nodding his head—they would admit that when they worked out the arbitrary target in 1997-98, they thought that they would not be in power that long and that they could achieve the targets along the way. What they ended up in doing was create a nightmare for themselves.

Some £170 billion were spent on tax credits but targets to halve child poverty by 2010 were missed by 600,000. Easier successes were found and then later the rate fell from 26% to 23%. It dropped further between 2002 and 2005 but that coincided with a 75% increase in spending on tax credits from £13.2 billion to £22.9 billion. Throughout that period, the amount of severe child poverty was absolutely static.