Jobseekers (Back to Work Schemes) Bill

Grahame Morris Excerpts

Tuesday 19th March 2013 Commons Chamber

[Grahame M. Morris (Easington) (Lab)]

It is not often that, when I rise to oppose a Government Bill, as I do again on this occasion—for the avoidance of doubt, I will be going through the No Lobby—I follow six hon. Members in succession with whom I agree. Perhaps that is an indication that no Government Back Bencher is prepared to stand on their convictions and argue the point. Therefore, this is quite a rare occasion.

I am proud to represent the Easington constituency. This is a matter of social justice for me and I have a number of concerns about the Bill. The issue of retrospection is an important and fundamental one. I suspect that the Government are opening a Pandora’s box here. In the debates on last year's Finance Bill, I heard the same Minister warning of the dangers of retrospective measures to deal with tax avoidance and loopholes, so using this route will have consequences. If he was so confident about the quality and strength of his argument, why did he not challenge the decision in the Supreme Court, rather than using primary legislation? Perhaps he might answer that question in his response.

It is not just an issue of retrospection—the Government's arguments are wrong. They are trying to justify this measure, but they have made the mistake. It is an issue of wording. Nevertheless, the Government have made the mistake and they are seeking to sell their argument to hon. Members on both sides of the House by saying that, if the funds are not recovered from those who were incorrectly sanctioned, they will have to be recovered from elsewhere in the welfare budget. That is outrageous blackmail; I am sorry if that is not parliamentary language, but I find that deeply offensive. It goes against every grain of fairness in Members on both sides of the House. The view I am expressing is the view that has been unanimously expressed to me. I have received numerous e-mails and messages from my constituents over the past 48 hours, all of them asking me to vote against this Bill as it is unfair and unjust.

The Government, and especially Government Back Benchers, have characterised jobseekers who have been sanctioned as workshy and feckless—the sentiment expressed was “Are you really suggesting these people shouldn’t be sanctioned?” Let us have a look at the Work programme, however. It has gone from chaos to farce. We talk about “workshy”, but what about wage-shy employers who exploit the unemployed, with the connivance, approval and funding of the Government?

Many commentators have severely criticised the Work programme as not representing value for money, and so, too, I believe, has the Public Accounts Committee—I am sure the Minister will correct me if I am wrong about that. Indeed, it has been suggested that the programme is worse than doing nothing, and I am certainly aware that major retailers have exploited free labour from the Work programme to meet seasonal demand, rather than, as would otherwise have happened, employing temporary staff or, even, giving existing employees additional hours. The programme has therefore had the perverse effect of blocking real jobs, and I agree with other Opposition Members who feel it should be subjected to a root-and-branch review.

What we have is a £3-million black hole, and it seems to me that the only people profiting from it are the privately contracted organisations—some of whom were mentioned by my hon. Friend the Member for Hayes and Harlington (John McDonnell—who have done well out of the programme. I am therefore surprised that one of the Government’s principal arguments here is about the protection of the national economy, when they are seeking to introduce primary legislation to rewrite history and withhold social security payments that were denied because of unlawful sanctions. We must not beat about the bush. The judgment is clear and specific; my hon. Friend the Member for Slough (Fiona Mactaggart) read it out in her passionate and excellent speech. The Government are at fault here, in how they have implemented things.

I oppose the concept of two nations, as does my party, but what will the consequences of these measures be? The Government are creating two nations. They are seeking to penalise and punish the poor for the mistakes of the rich and powerful, in part of a continuing series of policies that are badged as “austerity”. Those policies are pushing the poorest in society further into poverty.

As my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) said, one of the most galling things is that Ministers have shown absolutely no contrition or understanding of the consequences of their actions. That might be because they do not understand the consequences, because they do not live in the real world where they would rub shoulders with some of the poorest people in society who are suffering hardship. People in my constituency in east Durham ask me, “Why are we suffering for the consequences of this crisis? Was it created in Horden, Shotton, Haswell, Blackhall or even Murton?” No, of course not; the crisis was caused by the mistakes of the banking sector and City speculators. I raise that point not only because I despise the casino bankers for the state they have reduced the economy to, but because there is another avenue that Ministers could pursue to recover the £130 million, which I will return to shortly. In fact, we touched on this issue last year in the Finance Bill Committee. Why on earth do the Government not legislate for a general principle of tax avoidance? Instead of robbing people who have been inappropriately sanctioned, the Government should consider the huge reservoir of unpaid tax that individuals could well afford to contribute to. To my mind, there was a failure by Governments.

[Kelvin Hopkins (Luton North) (Lab)]

My hon. Friend is making an excellent speech and a very good point about where money could be found. He mentioned the tax gap, which, according to Richard Murphy and others, is some £120 billion a year. We are talking today about £130 million, which is roughly one thousandth of that amount.

[Grahame M. Morris]

My hon. Friend, who is very knowledgeable and has a background as an economist, has hit the nail on the head. The general public, my constituents and many Opposition Members do not understand why the Government do not address this problem. There is a relatively straightforward way to do so: by legislating for a general principle of tax avoidance. The Government are quite happy to use primary legislation retrospectively to deprive people who have been illegally sanctioned of £130 million, but they will not use the same route to recover moneys properly due to the Exchequer.

There is a contradiction here. Although the Government have been highly critical of what has happened, they continue to push the case for further deregulation. Just yesterday, in a Delegated Legislation Committee the statutory period of notice for compulsory redundancies for employers employing more than 100 people was reduced from 90 days to 45. This Government are still very much pursuing the Beecroft agenda.

[John McDonnell]

It is worth noting that, according to the Government’s impact assessment of that delegated legislation, employers will gain £290 million and employees will lose £250 million.

[Grahame M. Morris]

That just goes to show that we are all in this together—or rather, we are not.

I have seen the graphs and the charts showing that the poorest are being hardest hit. We should consider the effect of a 5% cut in their weekly income. Other Members have spoken about the sort of cuts that individuals are going to experience. I do not know whether the Minister, other Front Benchers or even Conservative Back Benchers know what it is like to exist on £71 a week, but it is a real struggle. Taking up to £25 a week from the poorest families, most of whom are in social housing, can mean a choice between eating or having proper heating. How can this be fair, when the Government’s priority is to make millionaires richer, to the tune of £2,000 a week? Such a tax cut is unimaginable for someone who would be sanctioned under the Work programme. In fact, the £2,000 a week tax cut for millionaires that we anticipate tomorrow equates to 28 weeks’ income for somebody on jobseeker’s allowance.

[Mr John Redwood (Wokingham) (Con)]

Will the hon. Gentleman just remind the House why Labour always had a lower rate of tax for rich people than this Government?

[Grahame M. Morris]

We need to look at the situation we are in now. This is the wrong thing to do: it is unjust and unfair to give millionaires a £2,000 a week tax cut, at the same time as the right hon. Gentleman’s Government propose to deprive some of the poorest people, who have been illegally sanctioned, of large chunks of their income. It is outrageous, and it is rank hypocrisy for anyone to talk about rights with the emphasis on responsibility when it comes to workfare. If they are willing to undermine the judiciary and the rule of law, and vote for retrospective legislation to cover up the mistakes and failings of the Minister, who is asking that we legislate to place him above the law, that is a dangerous precedent to establish.

I cannot, in all conscience, support this desperate Bill, put forward by a desperate Government who have broken their own laws and now wish to forgo their legal obligations and withhold social security payments of £130 million to some of the poorest people in the country. Why do we not apply that method across the board? If the national emergency is such that it is right to deny access to social security to those who are entitled to it in order to safeguard the national economy, why do we not chase the tax exiles—those powerful individuals who own newspapers and luxury hotels, who pay no corporation tax and who have laid siege to a small Channel Island? I understand that Her Majesty’s Revenue and Customs has already paid out more than £200 million to two such individuals who are now seeking a £1 billion VAT windfall at the taxpayer’s expense. Government Members are silent about such things. As we know, there is one rule for the rich and one rule for the poor, including those who have been illegally sanctioned through the Work programme.

We are in the sorry situation of the Minister blackmailing hon. Members by threatening a collective punishment for all those in receipt of social security and welfare benefits if these changes do not go through, because the Department might have to find the money through further reductions elsewhere in its budget. I thought that it was the Secretary of State for Education and his advisers who were the bullies. It is now obvious that the Department for Work and Pensions has decided to sink to those standards by threatening Members of the House in this way, which is below what we would expect of a responsible Government and a responsible Minister.

I did not come into Parliament to penalise and punish the vulnerable and the poor for the mistakes of the Government. The Department for Work and Pensions seems to be in a state of chaos. It is trying to save money by issuing unlawful sanctions for a Work programme that is not fit for purpose. It is making arbitrary cuts to disability living allowance and employment and support allowance, and is seeking to reduce the case load by 20%. Through the bedroom tax, it is cutting the incomes of disabled people and families with children. The welfare state under this coalition Government in 2013 is failing at every turn.

What we are seeing today is an abuse of power. This is an appalling Bill. I urge the Minister to take responsibility for his actions, even at this late stage, to put a stop to the Bill and to pay those who were unlawfully sanctioned because of his failings. I will vote against the Bill and I urge other hon. Members to do the same.