Public Spending (Coventry)

Geoffrey Robinson Excerpts

Tuesday 12th July 2011 Westminster Hall

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I am grateful to you, Mrs Riordan, for chairing the debate and to Mr Speaker and his office for agreeing to it. It is a very important debate, in the course of which I may be joined by two other MPs. I think that both were meant to have approached the Chair to say that if time permits—I hope it does—they would like to say a few words. We will of course leave adequate time for the Minister to reply.

The occasion of the debate arises from some work done two or three months ago, shortly after the Budget came out, by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper). She sought to show that the Budget measures, far from being progressive, as the Government had tried to imply, and far from being gender-neutral, were in fact very regressive and would impact much more severely on women than on men. The work she did initially in pursuing those points to great effect against the Government was then taken up and taken further in some excellent research work undertaken at Warwick university by two senior researchers there, Mary-Ann Stephenson and James Harrison. I am sure their work will increasingly be seen as a landmark in taking forward the points that were made by my right hon. Friend shortly after the Budget came out.

Coventry was a very suitable place to use as a test case for examination of the impact of the Budget measures on women, because in Coventry the pay gap between men and women—between the genders—is already 10 points higher than the national average. Also, as we all know, the bulk of the cuts in the immediate future must come in the public sector, and in Coventry no fewer than 78% of the city council staff are women. We can therefore measure in a very significant way, across a major part of the economy in the west midlands—the local and the regional economy—what the effect of the cuts will be. I would like to deal with each point in turn, quantifying things in so far as that is possible. We can then look forward to hearing exactly what the Minister has to say in response. But if we take the cuts as a whole, it is obvious, given that 78% of the city council staff are women, that the impact will be worst on them; they will feel it most. That is a simple fact. The cuts will disproportionately fall on women.

The child care tax credit is being cut from 80% to 70% of child care costs. Obviously, women will also suffer disproportionately as a result of that. Together with increased child care costs, that might lead to lower rates of employment for women and further increase the pay gap. That has not been quantified yet, but work is continuing. Such is the interest in the issue at the national level that when a colleague and I co-hosted a meeting to discuss it, the Members who joined us in the Committee Room came not only from the west midlands, but from all parties right across the spectrum. The room was full to capacity, and there was standing room only; it is not often that that happens in a public meeting in a Committee Room.

The second issue is housing. Single women are the main recipients of housing benefits; again, that is pretty obvious. In Coventry, about 4,360 single women and 2,085 women in couples claim local housing allowance for private rented accommodation. LHA coverage has been cut and now applies only to the bottom 30%, rather than the bottom 50% of households. It will also be linked to the consumer prices index, rather than to local rents, which will almost certainly mean—this is why the Government have also chosen CPI for their pensions calculations—that its value will go down over time. Again, women make up by far the greatest proportion of those who take up this benefit, so they will, yet again, suffer disproportionately.

This time, we can put a figure on the cost, and perhaps the Minister can confirm or contradict my figures in her reply. In the short term, the changes will cost those who are affected in Coventry between £8 and £15 a week. If that is not right, perhaps the Minister will correct me. Again, however, those are hidden effects, and they are not spelled out in any of the Government’s background notes to the Budget or anywhere else in their calculations. Those hidden effects, which the Government have tried to cover up, are impacting directly on women in Coventry and, therefore, on their families.

On incomes and poverty, it is pretty obvious that women are poorer than men—that is a statement of fact. As I have discussed, they also get a higher percentage of their income from benefits. For example, 33,595 households in Coventry receive tax credits, and 35,000 receive out-of-work benefits. The proposed changes will, once again, impact on women. The changes include cuts to benefits to pregnant women and families with new babies, the freezing of child benefit, cuts to child care tax credits and cuts to the numbers who are eligible for tax credits. Lone parents will be required to seek work once their eldest child is just five. Those changes will have big impacts, and I will quantify them in a moment.

Disability living allowance is being cut by 20%. Someone claiming for a person who loses DLA will also lose carer’s allowance. It is a pretty heartless Government who attack the most vulnerable in our society in that way. It almost seems that the Government have zeroed in on women to prove the point made by my right hon. Friend the Member for Normanton, Pontefract and Castleford.

The benefit and tax changes in the 2010 Budget will cost women in Coventry £29 million, which is an awful lot of money. On a broad calculation, that is more than £180 per woman per year, so the Budget will have a significant impact. However, the impact on the budget of the average family and the average woman was set out nowhere in the Government’s figures. The cost to men will be half the cost to women. Again, I would be happy for the Minister to try to challenge my figures—if she can.

On education, many women have to balance a job with looking after the kids and getting them to school. Like most authorities—I do not think Coventry has been unduly affected in this respect—Coventry has had its schools grant cut. The 24% cut to the schools budget has resulted in a cut to special needs and mental health support in schools—that is where the impact will be most heavily felt. In no sense is that to be taken as a criticism of the council. Indeed, I am pleased to say that in certain parts of the report, the authors go out of their way to say just how responsibly the council is trying to carry through the cuts. The council appreciates that the cuts have to be made and is trying to make them in the least regressive way it can to protect children, women and other vulnerable sectors of society. It is not picking out those with special needs, and nor is it in any sense exaggerating the cuts that have to be made; it is simply making the cuts that are necessary to stay within the law.

In passing, I have heard it said—I hope the Minister can discount this at once, and she probably can—that the Government could be in breach of Equality Act 2006 and, on an individual basis, the European convention on human rights, given the effects of so much of the 2010 Budget. I am not clear whether test cases are being brought, although I did try to find out. However, it would be interesting to learn from the Minister whether any are being brought and if so, how far they have got, because some of the Government’s measures are clearly so discriminatory—as well as being at least questionable under the terms of the 2006 Act—that they could be subject to judicial review, as I hope they will be.

On violence against women, the report produced a figure that shocked everybody—from my researchers to the report’s researchers. Let me give the numbers, shocking though they are. Some 30,397 women in Coventry are likely to have been raped or sexually abused at some point in their lifetime. If we remember that there are 310,000 people in the whole of Coventry, and we divide that by half or slightly more to reflect the percentage of women in the total population, it is clear that that statistic for the likely number of women who will face some form of sexual abuse at some point in their lifetime is frightening and really rather offensive. Some 38,537 women are likely to experience some level domestic violence in their lifetime. Again, I do not think the researchers wanted to attach any undue importance to the exactitude of their estimates, but the broad measure is shocking.

The provision that was made to deal with that situation was already inadequate, although heaven knows we pushed for a higher level of support from the council and the Labour Government—I am not pretending that the Labour party did a marvellous job. There are eight specialist domestic abuse officers to deal with the situation I have described.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

I have been waiting for my hon. Friend to get on to the section of the report that deals with violence against women, because it really is most disturbing. Organisations such as the Coventry rape and sexual abuse centre are worried about funding, although the council has agreed to give it part-time funding, which is not secure. However, it is not just a matter of the sharp end of abuse against women. If women become more dependent on men as a result of the cuts, some will be inclined to stay in homes where they are potentially vulnerable and where they may be abused. That is clearly brought out in the relevant section of this first-class piece of work.

[Mr Robinson]

I am grateful to my right hon. Friend, who is spot on. The cuts to housing benefit will make it harder for women to move from the area to get away from their attacker. That is precisely the point made in the report, and my right hon. Friend rightly emphasised it recently in the press in Coventry.

[Mr Jim Cunningham (Coventry South) (Lab)]

I apologise for having been a minute or two late, although the debate might have started early. My hon. Friend and my right hon. Friend make a valuable point. For a long time, the rape crisis centre in Coventry has struggled, to say the least, to get resources, and the cuts will make the situation worse. Do the figures for women who are abused or raped in Coventry—or anywhere else for that matter—not call into question the Government’s policy on cutting legal aid and funding for citizens advice bureaux, because vulnerable people, and particularly women, will often use those agencies?

[Mr Robinson]

My hon. Friend is exactly right. Perhaps I may take a second to say that I think my hon. Friends want to say a word, if they are able to catch your eye, Mrs Riordan, and if we have time, about the wider aspects of the issue. After all, if more women are trapped in violent relationships there will be greater mental, physical and sexual health problems for them as a result, with an increased cost to the taxpayer. The NHS will have to cope when it is already under tremendous pressure and its budget is being dramatically cut. The issue is wider than just the reduction, although the Minister needs to explain how anyone can justify cutting the number of Coventry’s specialist domestic abuse officers from eight to two and reducing rape support resources, at the same time as other measures will clearly increase the likelihood of the problem that those staff and resources are meant to deal with. It seems crude and harsh, and we wonder whether it is strictly necessary to go along that path.

I want to mention the women’s voluntary organisations. Overall, the council, in line with other councils, faces cuts of about £38 million in its grant from central Government. A number of streams from that are for voluntary organisations, and those are due to end; some have already ended. Those voluntary organisations face increasing demand from the communities they serve, for the reasons we have been analysing. As hardship increases and cuts bite in all the areas I have mentioned, demand will increase. As resources are cut there will be greater pressures on hospital services and the police, which are also being cut. There will be a double whammy—cuts on one hand and increased need on the other.

Women’s voluntary organisations appear from the study to be particularly vulnerable, with some expecting cuts of up to 70% of their funding next year. I can inform the Minister, if she wants to deal with them individually, of the types of voluntary organisations that are particularly badly affected. Can that be looked at again? We do not expect answers to everything today, but we would like some undertaking from the Minister to check out the research funding and reconsider Government policy in the light of that. She could then tell us, “Yes, that is indeed our policy, and although we did not intend the consequences, those are the consequences and you will have to live with it.” If that is the Government’s message, they should be straightforward with the people of Coventry—the women of Coventry—and say, “This is the price that we are asking Coventry women to pay to put right the faults, and the massive irresponsible financial borrowings.” That is all, of course, in the context of reducing the deficit caused by private sector bankers.

That seems a pretty harsh message to send to the women of Coventry, and if that is the best the Government can offer, I warn them now that the people of Coventry will not be impressed. They will in due course have occasion to express their own opinion about a Government who have been as hard-hearted and indifferent to the cause of women and children as the present Government appear to be.

[Mrs Linda Riordan (in the Chair)]

I remind any other Member who wishes to contribute that the Minister will need time to reply, so perhaps they can keep their comments brief.

--- Later in debate ---

[The Economic Secretary to the Treasury (Justine Greening)]

It is a pleasure to serve under your chairmanship, Mrs Riordan, in what we would all agree is an important debate in relation to the difficult challenges that we face. I congratulate the hon. Member for Coventry North West (Mr Robinson) on securing the debate, and I understand why he has raised the issues. In the time available, I shall do my best to respond. If I feel that I have not done so, and if there are specific points on which he would like further clarification, I may well also drop him a line.

We all understand that the backdrop to the debate is the need to get the economy and public finances back on to a sustainable footing over time. As a country, we were always going to have to do that. The hon. Gentleman, for whom I have a lot of respect, talked about the deficit being caused by the private sector. We would all accept that there has been a banking crisis, but many people also recognise that something more fundamental was going wrong with the working of our economy and public finances, and that was due to the fact that we had a structural deficit. Even in the boom times—the good times—when tax revenues were rolling into the Treasury as fast as they were ever going to, that money was still not enough to cover the country’s outgoings.

The Treasury Ministers dealing with public finances in the present Government are therefore in a position in which I assure the hon. Gentleman that we never wanted to be. We had to take the decision that it was in everyone’s interest to get the problem sorted out during the course of this Parliament. When we look at the problems in countries in the rest of Europe—we need only look at Greece—we see that there is still an economic crisis, and our country needs to stay out of it. Our deficit reduction plan is critical in enabling us to do that.

The hon. Gentleman raised the question of what is the fairest way to approach the situation. How can we achieve a balance between getting our public books back into order and making sure that the process is fair—that is one of the key points of the spending review and the Budget—while stimulating growth at the same time? The hon. Gentleman will be aware that one thing that we chose to do in the emergency Budget was to reduce corporation tax, and we built on that with a further cut in the most recent Budget. We tried to strike a balance between cash-flow issues—the money side—and putting ourselves in a position to ensure growth in the economy, particularly in parts of the country such as Coventry and the midlands that suffered in the recession.

Some research now shows that the west midlands in particular suffered disproportionately, and that gives us a double challenge. When I was an Opposition MP, I would have argued that, during the boom years preceding the recession, parts of the country outside the south-east did not do well enough. According to statistics, between 2002 and 2006, for every 10 jobs created in the south-east and London, just one in the private sector was created outside.

[Mr Robinson]

rose—

[Justine Greening]

I will give way in a second.

What I have described was a big problem. In addition, because of the continued hollowing-out of manufacturing in the previous decade, the west midlands suffered particularly, and I recognise that women also suffered as part of that.

I shall now give way to the hon. Gentleman, but I assure him that once he has intervened, I shall speak about some of the matters that he raised, particularly in respect of women.

[Mr Robinson]

I am sorry to interrupt the Minister. On this occasion, I am not going to disagree terribly about whether things are regressive, not fair or not sufficient, nor about whether they are too fast. The point here is to have a close look at the effect on women, as my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) has stressed—the Minister herself has a keen interest in the matter. If we could consider the impact on women, I would be very grateful.

[Justine Greening]

We were careful in the spending review not only to consider its impact on women, but to understand its impact across the deciles. The hon. Gentleman asserts that the spending review and the Budget were regressive. However, research shows that it is the very richest people in our country who are bearing the brunt—they bear the biggest load—of tackling the deficit.

We have tried to ensure that we provide support for women through tax measures and several of our public spending measures. The hon. Gentleman spoke about the difficult decisions that Coventry city council is having to make. He has doubtless raised the matter with local councillors and the council leader, and discussed especially whether the deficit reduction piece that has fallen on Coventry is being carried out locally in the right way to deal with the local people’s priorities.

I take seriously what the hon. Gentleman said about particular issues, such as rape and support for women. As a local constituency MP, I have taken a particular interest in ensuring that refuge and support are in place for women. Many of these women who need such support are not from my community, but come to it because they must get away from difficult situations. The hon. Gentleman was absolutely right to raise the matter.

The Government have allowed councils more freedom in how they spend their money. A lot of ring-fencing has been removed precisely to enable councils to take more locally focused decisions in these difficult times about where money goes.

The hon. Gentleman also spoke about voluntary organisations. I assure him that we are committed to supporting them—not because of the difficult spending review settlement and the difficult situation with public finances in which we find ourselves, but because it is the right thing to do. One of the less publicised parts of this year’s Budget was the big package on philanthropy and there was also a package in support of gift aid. We need to consider what can be done to help voluntary organisations. We also changed AMAPs—approved mileage allowance payments—to help voluntary organisations in terms of volunteers and passengers.

We have taken further equally important steps. For the first time, we published an overview of the impact of the spending review on groups protected by equalities legislation, including women. The increase in personal allowance will help 880,000 of the lowest-paid workers—they will stop paying tax altogether—and we know that the majority of those at the bottom end of the low-income scale are women. We are also pushing the personal allowance higher. One thing that we have in the back of our minds is the fact that many of those workers were hit by the withdrawal of the 10p tax rate. In a sense, my challenge to the hon. Gentleman is whether he was making such points when the Labour Government were withdrawing that rate, as that change affected a number of women.

We have also tried to support families. The hon. Gentleman mentioned the House of Commons Library research, and if I have time—no, I shall make time—I shall say why we do not agree with its analysis, although it clearly made an important contribution to the debate. We increased child tax credits because we were particularly concerned to ensure that we did not go backwards on child poverty, even in these challenging times. As he pointed out, the change will be important for the many women in single-family households.

As for pensioners, we have re-established the earnings link and put back the triple guarantee. We know that women are far more likely to rely on a state pension than men, and of course they are also likely to live longer, so that will help them, too. Those are the sorts of things that were missed in the research carried out by the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper).

[Justine Greening]

I recognise the debate that is taking place about that, but I also recognise that we have to be fair to everybody, and that means ensuring not only that our state pension system is fair to women today, particularly those nearing pensionable age, but that it will be fair to women of my age and to younger generations. They deserve to know that they can rely on state pension into which they pay through national insurance and any occupational pension that they might set up. For the women of the future who are now in our primary schools, the huge problem of our deficit and the public debt needs to be sorted out so that it does not fall on their shoulders later.

I now turn to the important point of what the hon. Member for Coventry North West said about the Library analysis. As a Government, we disagree particularly with its assumptions about where benefits go and who actually benefits from them, which were understandable but not necessarily accurate. For example, the research made the broad assumption that only the person who received a welfare payment would benefit from it. The hon. Gentleman mentioned housing benefit, but that is meant to help the whole household, not just the person who receives it.

On child benefit, the research apparently showed that the spending review and the Budget hit women particularly hard. Child benefit and child tax credit—the latter went up this year and will increase again next year—are designed principally to help the child, and the child can be of either gender, so it is not particularly accurate to say that our approach would necessarily hit women.

I recognise the hon. Gentleman’s statistic on the proportion of lone parents who are women. However, the analysis missed out the fact that in some of the areas that we have protected, such as health, women particularly benefit. We are taking steps to improve the amount of breast screening for cancer. At the moment, the breast screening programme offers screening every three years for all women in England aged 50 and over. Women aged between 50 and 70 are invited for screening routinely, while women over the age of 70 can request free three-year screening, but we are extending that programme to include women aged 47 to 49.

[Mr Robinson]

We have reached the interesting part of the debate—I wish we could have got on to it earlier. The debate is obviously about Coventry, but the points being raised are of general significance—they are major policy matters throughout the country. Will the Minister tell us on which particular points the research is weak, because I do not agree that it is? Lone parents is an obvious area to consider, because they are mainly women, and the disproportionate impact on women is precisely what we are discussing. We will not have time for that today, but will the Minister reply to the point about the research?

[Justine Greening]

I shall write to the hon. Gentleman to elaborate on those points that I cannot answer now.

We cannot consider only one aspect of the decisions taken in the spending review and ignore the weight of the rest of those decisions. They affect not only women, but everyone. I assure the hon. Gentleman that we are committed to ensuring that the difficult decisions that we have to take—they will be difficult—are fair. We have produced more analysis with the emergency Budget, the spending review and this year’s Budget to help people to understand how those decisions fall across our communities, and I hope that that is helpful to the hon. Gentleman.