Welfare Cap

Greg Mulholland Excerpts

Wednesday 16th December 2015 Commons Chamber

[Greg Mulholland (Leeds North West) (LD)]

I welcome this U-turn. Sometimes, it is right to accept that one is wrong and has made a mistake. I commend the Government for doing so on this issue.

I also commend all those who took part in what was very much a cross-party campaign, in which all the Opposition parties and some Government Back Benchers worked together. I pay tribute to the hon. Member for South Cambridgeshire (Heidi Allen) for the courageous way in which she spoke out, which was noticed around the country and did this place a real service.

I also pay tribute to the other place. Although I will always campaign for that House to be abolished in its current form and replaced, finally, with a wholly elected Chamber, which is what we should have in this country and is the only justifiable way to run a modern democracy, it did show that it has a role to play in this Parliament. I commend my Liberal Democrat colleagues in the other place, who made it clear that they would speak and vote against the tax credit cut. That was crucial in leading to the U-turn.

As a liberal as well as a Liberal Democrat, I will always be extremely proud that it was the great, reforming Liberal Government of 1906 to 1914 that brought in the very welfare state that we are discussing. That is a great achievement of my party.

However, we accepted in our five years in coalition, in difficult financial circumstances, that the welfare state had got out of control and was no longer sufficiently focused on those who needed it. I was a member of the Work and Pensions Committee for five years and that Committee, which had members from all parties, was entirely clear that there was a disincentive to work and that too many people were incentivised to be on benefits, rather than to work. I am very proud that, in the five years of the coalition, we did a lot to tackle that.

[Ian Blackford]

Will the hon. Gentleman remind us how the Liberal Democrats voted when the welfare cap came before Parliament last year?

[Greg Mulholland]

I am very happy to. As usual, the contribution from the SNP Benches contained the usual milk and honey, promising everything to everyone and not taking any difficult decisions. In the end, even in Scotland, the shine will come off and people will start to see the reality of the false veneer of the Scottish National party. That is something that the rest of us will welcome.

I am not even sure that the hon. Gentleman knows what he is talking about. There are two different issues: the household benefit cap and the welfare cap. He seemed to confuse and conflate the two things. We absolutely supported the household benefit cap, which was brought in under the coalition, because it is entirely right and all our constituents support not having a situation in which a single household can take an unlimited amount in benefits, when hard-working families are unable to raise the same amount. The welfare cap is an entirely different thing. It seeks to control the amount of money that the Treasury allocates to welfare as a whole. He does not seem to understand the distinction, which is worrying, given his position.

[Dawn Butler (Brent Central) (Lab)]

There is increasing evidence that this policy will cost the public purse more. Is it not a false economy?

[Greg Mulholland]

I am absolutely clear that there have been changes to the benefits system that were mistaken, including under the last Government, and I said so at the time. However, I absolutely support the household benefit cap. I do agree, however, that we need a sensible approach, and we must incentivise work and focus social security on those who need it. Those of us who believe passionately in the welfare state—I am sure the hon. Lady does, as do I—must be able to justify it and show that it is helping people who cannot work or are unable to find work. That must be the focus, but it has not been previously.

I am sure the hon. Lady will agree that some of the changes brought in by this Conservative majority Government, without the Liberal Democrats to restrain them, have been mistaken and ideological, particularly the cap on child benefit on the basis of the number of children that someone has, regardless of circumstance. We opposed and stopped such measures, but now people are seeing what a Conservative majority Government with an ideological policy, as opposed to a pragmatic one, will do.

We welcome the fact that the right decision was made on tax credits, and on this occasion it is right to be prepared to breach the welfare cap. In other years we would like that cap to be adhered to, but given current circumstances and the projections for what the change to tax credits will do, this is the right decision, and those on the Treasury Bench should not be criticised for being prepared to breach the welfare cap for that reason in this financial year. That would be playing politics with this issue in the way that the Chancellor did with his ideological nonsense of the fiscal charter, when he sought to stop the Treasury having the flexibility that any Chancellor—and in this case the Secretary of State—must have.

We welcome this U-turn and fully accept the need to breach the welfare cap this year. We hope that the Government will live within their means in future years, but not by balancing the budget on the backs of the poor. We will continue to take a pragmatic approach and oppose anything that we believe is draconian, ideologically driven and unfair. At the same, we hope that the Government will continue in the same vein as the coalition Government, by incentivising people to work, and by getting more people into work with fewer people on benefits. As a civilised society we must ensure that our welfare state continues to help people who are unable to work or who genuinely cannot find it. That is our position and we will continue to make that case.