Welfare Benefits Up-rating Bill

Geraint Davies Excerpts

Tuesday 8th January 2013 Commons Chamber

[Mr Ward]

Yes; as a nation, our payments on benefits are, without a doubt, far too high. However, what we face in this Bill seems to be a huge lack of confidence by the coalition in its own policies and programmes to deal with that situation.

None of us is going to support scroungers, skivers or people who are fraudulently claiming disability benefits. None of us is going to say that we should not support people into work, but we on the Government Benches say, “We are doing all of that.” We on this side of the House say that we are dealing with the situation so that we can reduce the colossal welfare bill to the nation. It shows a huge lack of confidence for us then to say that we now need to go to the least well-off in the country and say, “You’ve got to make a contribution to deficit reduction,” because if our measures work—we say they are going to work; we tell people how successful they will be—what are we left with? We are left with those who want a job and cannot get one, even when they have been through the Work programme. We are talking about those who are disabled—and who have been assessed as disabled—who are not able to work. We are talking about those in work but on low incomes. Despite the confidence in our strategy, these are the people to whom we are now saying, “We’re not really sure, because we’re going to have to come to you, for you to make a contribution as well.”

I have identified three arguments for this move. The first relates to incentives, and states that work should always pay, but I thought we were going to ensure that that happened anyway. Is that not what universal credit was supposed to be about? The second argument is that we cannot afford to do otherwise, but I did not see much cutting back on the Olympics. I have heard various suggestions, and yes, there are tough decisions to be made. It has been suggested that we limit the tax relief on pensions. We are seen as being able to afford to give tax reductions to millionaires, and of course we can afford to give rich pensioners winter fuel payments. These are examples of the decisions that need to be made, and there are many more, but we need to look at all of them before we turn to the people on the lowest incomes and those with no income who are surviving on benefits.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Does the hon. Gentleman agree that the fiscal cliff deal made last week in America, which took the most money from the top 2%, gave money to those on lower incomes and is projected to increase growth by 1%, is a much better way of squaring the circle than the measures in the autumn statement, which will take money from the bottom 30% to 50% and give it to those further up the ladder, which is reducing overall consumer demand?

[Mr Ward]

We all know that. We know about the multiplier effect on consumer demand. It is not a secret; it is well researched and we all understand it.

The third reason for the proposals that I have identified relates to fairness. A national debate about fairness is taking place at the moment. I am about to get really technical: there is a difference between somebody who is unemployed and somebody who is employed. The person who is unemployed does not have a job. The person who is employed has a job. They are not the same; we cannot compare them when we are talking about fairness and a 1% increase. I will give the House another really technical fact: those people who are on low incomes and receiving tax credits are receiving those tax credits because they are on low incomes. It is very technical, this. How on earth can we compare those on low incomes or on benefits with people who are in a job? We cannot say that it is unfair—or bizarre, according to the Prime Minister—to give someone who is in a job 1%, but then give 2% to those on benefits. We cannot compare the two. There is a difference between somebody who is on benefits and somebody who has a job. The evidence for that is clear.

Of course, people who are in employment do not like the pay freezes or the 1% increase, but is anyone seriously suggesting that they would give up their job to be unemployed? Don’t be ridiculous! Let us not forget that we are eliminating the scroungers and all the rest of it. In my experience, most people in work look at those who are unemployed and say, “Thank God it’s not me!” They do not say that it is unfair that their benefits are being increased; they say, “There but for the grace of God go I.”

I have mentioned the massive lack of confidence in our proposals, but there could be another reason for these measures, although I hope that it is not true. It relates to a sense that the public at large are in favour of these welfare reforms, egged on by opinion polls, and that some people on the Government Benches see that as an opportunity to attack the unemployed. I fear that that is being driven by a deep-rooted conviction that unemployed people are unemployed by choice. This is what worries me. I hope that the explanation is in fact the lack of confidence, but I suspect, deep down, that far too many people on this side of the House believe that unemployed people are the undeserving poor, that they need to sort themselves out, and that we cannot possibly reward them with an increase. Let us remember, too, that this is not an increase. When inflation is taken into account, the measure will simply freeze the level of benefits that we have already decided will provide people with a minimum standard of living. The measure is not fair, and I will not support it.