Comprehensive Spending Review

Debate between Diane Abbott and Toby Perkins

Thursday 28th October 2010 Commons Chamber

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

I am very pleased to have an opportunity to contribute to this debate, as I believe that these economic issues will be the most important issues facing this Parliament. I want to talk in particular about the effects of the spending review on London and inner-city communities—the type of community that I have lived in all my life and sought to represent over the past two decades. I also want to talk specifically about the effects of the spending review on the private sector, as they are not sufficiently debated or understood, and on the public sector, and about the particular effects on housing and housing need in London, because I think the spending review and the mix of proposals on housing benefit and cutting expenditure on public sector housing will hit London harder than any other part of the country, with consequences that I do not think the Government have calculated.

It is not sufficiently understood that more than 1 million jobs in the private sector are directly dependent on public sector contracts with private sector organisations. That is the case in construction, for example, but there are also many jobs in social care and looking after young children that are basically delivered by private sector organisations. Also, when we make these cuts and people lose their jobs, demand will be taken out of the economy, so many retail and service companies in London will suffer. These cuts will have a ripple effect in the private sector in London. The Government and their supporters in the Lib Dem party may be laughing now, but they will be laughing on the other side of their faces when the effects on the private sector become clear.

The coalition Government talk about the public sector as if it is all about men in bowler hats who can easily be switched into meaningful jobs in sectors such as banking. In Hackney and the inner city generally the majority of public sector jobs are women’s jobs, however, and the majority of those women are heads of households, and far from doing peripheral or frippery jobs, they work in the heart of communities as teaching assistants or care assistants or in the voluntary sector, which will suffer because of the cuts in local government spending. These jobs are at the heart of communities. How hypocritical it is of the coalition Government to talk about the big society and then attack ordinary women working in the heart of their communities across a range of important occupations.

I have listened to what coalition Ministers have had to say, but having lived in and represented Hackney for more than 20 years, I can tell them that there are no private sector jobs for women in Hackney who will be made unemployed to step into. That is because of the structure of employment in Hackney and the inner city. Yes, we can count up the number of vacancies and the number of people who might be made unemployed, but there is a mismatch between the types of people that this coalition are going to fling into unemployment and the actual opportunities available to them, such as they are, in the City and the private sector in London generally.

We have to judge these matters on the basis not of political banter, to and fro and Punch and Judy, but of the effect on real people’s—real women’s—lives. The consequences for communities such as Hackney in the next financial year will be very serious indeed. The people in those communities will not have been impressed to see Ministers on the Treasury Bench laughing and congratulating themselves when the statement was read out. What were they congratulating themselves on—thousands of people losing their jobs and thousands more losing their homes?

That brings me on to housing. Members will be aware that since the 19th century one of the core activities of local government in London has been building housing—affordable, quality housing for rent. If hon. Members are not aware of that, I can take them to estates built in Hackney more than a century ago. Of course politicians then, even Tory politicians, recognised that decent housing was at the core of social stability and public health concerns. But what are we getting from this coalition? We are getting cuts in public sector housing expenditure, which, as I said, affect the traditional role of local government; cuts in people’s housing benefit after a year; and, above all, a cap in housing benefit.

I put it to the Government that the majority of people claiming housing benefit are not shiftless people, but working people and those looking after disabled people. These are not people who are simply unemployed. It has been argued that we have to cut housing benefit because, horror of horror, poor people are living alongside rich people in desirable areas of the city.

[Toby Perkins]

My hon. Friend is reflecting on the inequities of the changes to housing benefit. Does she agree that the Government’s focus on the cap is a red herring, because it is relevant to very few housing benefit recipients, and that the really important thing is the 10% cut that will hit housing benefit recipients in the second year?

[Ms Abbott]

I quite agree, and I am grateful to my hon. Friend for raising that issue. I have a sentence or so more to say about the cap. We have been told by the Prime Minister of the horror of poor people living alongside rich people in boroughs such as Islington and Westminster. Let me tell the Government that I can take them to the heart of the Prime Minister’s Notting Hill and show them poor but entirely respectable West Indian couples living alongside merchant bankers who have bought their houses for millions of pounds. London has always been a city where rich and poor live side by side; it has never had the perfumed stockades of the upper east side of New York or the kind of social segregation seen in American cities. This type of cleansing of poor people from what are deemed to be areas that are too good for them to live in is quite unconscionable. As my hon. Friends have said, this is not just about the cap on housing benefit, although that will also have a serious effect on ordinary people in London and may well see the end of some Lib Dem MPs now sitting on the Benches opposite us; it is also about the cuts in housing benefit after a year.

What I say to the House is that we can sit here this afternoon scoring points and doing the Punch and Judy stuff, but real people in our constituencies, whose circumstances are not understood by those on the Treasury Bench, will suffer as a result of this ill-thought-out, ill-paced and wholly ideological spending review. The credit crunch and the deficit have been the occasion of this spending review, not the reason for it.

Public Expenditure Reductions (Women)

Debate between Diane Abbott and Toby Perkins

Monday 6th September 2010 Commons Chamber

[Ms Abbott]

I was very struck to hear the Secretary of State for Work and Pensions, who has paid a lot of attention to poverty issues, saying that he thought it was important that people were prepared to move around the country from estate to estate in search of work. What family model is he thinking of? The family model he is thinking of is one where only the husband works. It did not seem to occur to him that many of these families also have women who work and who are not willing to pack up and follow their husband around the country. There are some very old-fashioned views of society here.

The Budget, together with the likely changes to the welfare system, seems to me to be more supportive of an outdated male breadwinner and dependent female carer model than the dual earner, dual carer model, which is more representative of society whether in Hackney, inner-city Newcastle or middle England. In short, it suggests that the Government are, for all the window dressing, out of touch and unwilling to move with the times.

The House will not need to be reminded that women rely more on benefits and tax credits than men. A larger share of women’s income is made up of benefits and tax credits. More women than men earn too little—because women are largely among the lower paid—to benefit from the change in income tax thresholds. Women are also more likely to work part time or unpaid, meaning they rely on benefits, particularly tax credits, to boost their income. These changes and the cuts to benefits have been dubbed the worst for women since the creation of the welfare state. I have therefore called this debate in order to put on the record the fact that I think this Budget is not just bad for Britain, but bad for women in Britain.

The Chancellor of the Exchequer insists that his Budget is a progressive Budget but, sadly, that only proves to me that this distinguished product of St Paul’s school does not understand the technical meanings of “progressive” and “regressive” in respect of economic matters. Under any analysis this is a regressive Budget because, in relative terms, it takes more from the poor than from the rich.

[Toby Perkins (Chesterfield) (Lab)]

On the comments that have been made about the Budget proving that we are all in this together, the analysis that my hon. Friend is setting out demonstrates not only that women are getting it with both barrels, but that at the same time as women are being asked to pay such a high price for the mistakes of the bankers who got the country into this financial mess, the situation of major industries will, through the cut in corporation tax, improve. Women will be expected to pay more, but big business, and particularly the banking sector, will be better off as a result of the Budget. Does that not demonstrate that we are not in fact all in this together?

[Ms Abbott]

I am grateful to my hon. Friend for that comment. It is extraordinary that this so-called progressive Budget will disadvantage women with families—and particularly poorer women with families—and advantage big business and bankers. The welfare state, which Government Members love to decry, is essential for stay-at-home mums—a strong state is essential for them—but it is also important for working mums.

Government support is essential for mothers who want to stay at home with their children. I went back to work when my son was eight days old—he voted in the Lobby when he was eight days old—but that was my choice. I have always argued—as have my own Government when Labour was in office—that women should have a choice. We should not financially disadvantage women who choose to stay at home. This Budget, in the cuts that it will make to the welfare state, will make it harder for stay-at-home mums and for working women, because of the predominant number of working women in the public sector. Even the initial decision to freeze public sector pay will hit women, because 4 million of the 6 million people who work in the public sector are women and so women are twice as likely to suffer from the pay freeze. When discussing the public sector cuts further, we must consider the number of women who are head of their household and who will be affected by the 600,000 new job cuts likely by 2016.

Widespread discrimination still takes place in the workplace. A report by the Equality and Human Rights Commission calculated that at the current rate of progress it will take 60 years for women to gain equal status on the boards of the FTSE 100 top companies. So we must ask ourselves why the Government have gone ahead with a Budget that hits women so disproportionately. We have to ask ourselves why they have used a ratio of public sector cuts to tax of 80:20, given that even the previous major Tory cuts Budget, which was under Norman Lamont, used a ratio of 50:50. The 80:20 ratio is at the heart of why this Budget hits women so hard.

The Fawcett Society, which campaigns for pay and pensions equality between men and women, has taken the Treasury to court over the Budget; it has filed papers with the High Court to seek a judicial review of the Government’s emergency Budget, and it is right to do so. Its chief executive, Ceri Goddard, has said:

“Successive governments have failed to give enough consideration to how their policies will impact on equality between men and women, but this budget shows a whole new level of disregard for the importance of equality law and everyday women’s lives.”

The public are giving this new Government an element of a honeymoon period, but Government Members must mark my words. They will see what happens as the financial impact of this Budget comes to bear on ordinary people and they realise what the plans for child benefit are, what the consequences of abolishing the child trust fund and the health in pregnancy grant are, and what effects the proposed housing benefit cuts have on children living in housing need in London—the Minister knows this better than I. London is a high-rent area, so many women and children will find themselves homeless or having to live in more overcrowded conditions, which will make it even harder for them to access work.