Welfare Reform and Work Bill

Heidi Allen Excerpts

Monday 20th July 2015 Commons Chamber

[Sammy Wilson]

Indeed. The Policy Exchange think tank, which prepared the welfare manifesto for the Government, talked about the introduction of a two-tier cap, stating:

“The first stage in creating a regionalised system would be to create two levels of Benefit Cap, one for London and the South East where average incomes within the UK are highest, and one for the whole of the rest of the UK.”

The measure before us is the first step towards regionalisation, and we ought to be aware that in this Bill is contained the embryo of further cuts to the poorest regions of the United Kingdom, because that is where we are likely to find the pressure to try to reduce the welfare bill further.

On tax credits, I support the Government’s desire and objective to get people into work—to make work pay, to give people an incentive. That is why the proposals on apprenticeships, full employment reporting and so on are all good. But the change in universal credit, the freezing of benefits and the change in tax credits are, as the right hon. Member for Birkenhead (Frank Field) pointed out, an attack on aspiration. It is an attack on people who are in work.

[Heidi Allen]

Will the hon. Gentleman give way?

[Sammy Wilson]

I am running out of time. I would be happy to give way if I could get an extra minute out of it.

As has been pointed out, many people will not even be subject to the safeguard of the higher national living wage. Many of those who are in work will still find that the reduction in their benefits and tax credits is not compensated for by the increase in the national living wage, so the Government will not achieve what they are seeking to achieve. We are talking about people who are already on low wages and who are not in the best employment.

My final point is on the changes in employment support allowance and the work-related activity group. There are many people who do require support, but if the Secretary of State is right, he is not going to create an incentive for those people to get back into work. In response to the shadow spokesman, the right hon. Member for East Ham (Stephen Timms), the Secretary of State said, “We’ll put those with Parkinson’s and MS into the support group.” The idea may be to get people into the work-related activity group and to give them the support they need to get into work, but, if the Secretary of State says, “No, we’re going to move them to the support group”, they will not get the support they need to get into work, and he is defeating his own objective.

There are contradictions in the Bill which need to be teased out. While there may be things in it that we can support, there are many aspects which I believe will be detrimental to our constituents, which will have a disproportionate impact on regions of the United Kingdom and which, therefore, should be voted against.

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[Helen Goodman (Bishop Auckland) (Lab)]

It is a pleasure to follow the hon. Member for Gloucester (Richard Graham). Unfortunately, the £640 million that is being saved on ESA is not going to go to work-related activities; it is going to go to the Chancellor of the Exchequer.

In the last Parliament, I had the privilege, along with my right hon. Friend the Member for East Ham (Stephen Timms), who made a characteristically excellent speech, to take the Child Poverty Act 2010 through, and we had all-party support at that time. It is therefore very disappointing that this Government are abandoning that Act and even the aspiration to end child poverty. Furthermore, it is ridiculous of them to attempt to airbrush the whole concept from the statute book.

I do not believe this Government have a mandate for the changes they are making in this Bill. Throughout the election campaign the Tories refused to say how they were going to save £12 billion from the welfare bill, because they knew that the measures would be unpopular and it would hit them in the ballot box. Indeed, the Prime Minister went on national television to say that he would not be cutting tax credits. In any case, the truth of the matter is that 9 million people did not vote Tory on 7 May. The most obnoxious part of the Bill is the proposal to cut tax credit support for families with more than two children. When we were in government, Labour had a principle that Every Child Matters, and I believe that was the right principle.

[Heidi Allen]

Will my hon. Friend give way?

[Helen Goodman]

I will. [Interruption.]

[Heidi Allen]

We are friends, I believe. I think we are all friends in here—I hope we are.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Absolutely.

[Heidi Allen]

Thank you. I do not have children, so I often tread carefully in these sorts of debates because I do not want people to point the finger and say, “Well, you don’t understand.” But I am certain of one thing: a choice between one, two or three children is a choice. If you cannot afford it, why should the taxpayer subsidise you? Can she answer that? [Interruption.]

[Helen Goodman]

As my hon. Friend the Member for Warrington North (Helen Jones) described, people’s circumstances can change. People do not have a complete and perfect forecast of how their life is going to pan out, which is why we need a safety net. The problem is that a child living in a family with more than two children is 50% more likely to be living in poverty than the average. Some 35% of the children in this country who live in poverty live in those families, so these measures are precisely targeted at those children. The measures will increase the number of children affected and deepen the poverty they face.

--- Later in debate ---

[Hywel Williams (Arfon) (PC)]

I speak on behalf of Plaid Cymru.

So, we have another round of cuts to social protection and a Government unrestrained by the alleged compromises of coalition. I note that the new leader of the Liberal Democrats has already left us. The Government are unrestrained in slashing the social safety net, shrinking the state and allegedly balancing the books, and doing this, they say, to put the public finances in order—indeed, claiming that it is in the interest of working people. They no longer talk about “hard-working families”; it is just “working families”. The election is over; the election is won; now it is the Government’s turn to be hard.

Government supporters say, “Aha! We have introduced the national living wage.” We saw the jubilation of the Secretary of State for Work and Pensions when that was announced—his ugly triumphalism at having got one over on the poor old Labour party—except it is not a living wage at all, and when combined with cuts to tax credits and a host of freezes and other cuts, people will be worse off overall, as respected bodies such as the IFS and the Resolution Foundation have made clear. I welcome any rise in the minimum wage, but a genuine living wage would provide a decent living and bring down the in-work benefits bill. What we are getting is the rebranding of the higher minimum wage, while a large chunk of tax credits is cut out—giving with one hand and taking much, much more with the other.

Look at the Government’s appropriation of the term “living wage”. They steal the language of social justice and talk about full employment, but there is a crisis of under-employment, low wages, insecure employment and precarious self-employment. Without proper measures to tackle those problems and boost the UK’s woeful productivity, the foundation is not firm and a dip in the global economy could swiftly push up unemployment again here and especially in Wales. Outside the headline figures, large areas of the UK still suffer from persistently high unemployment and levels of economic inactivity—areas on the so-called periphery. I live in Caernarfon, which is in no way peripheral to the people who live there, so what does peripheral refer to? It is areas out of the sight and out of the mind of the economic and governing elites. In my constituency of Arfon, the economic inactivity rate is 23.5%—almost a quarter of all people of working age are economically inactive.

The restriction of child tax credits to only two children seems to answer the question so often posed by Government Members: why should parents get support for more than two children when others cannot afford to have more children? However, it fails to answer a more fundamental question: why should any child be denied support through no fault of its own? It is a perverse logic that ignores a child’s inability to control their parents’ reproductive abilities, then punishes them none the less.

[Heidi Allen]

Will the hon. Gentleman give way?

[Hywel Williams]

I will not. The hon. Lady should have been here from the start.

That is the reasoning of the tyrant, from one-child China to Ceausescu’s Romania. Most grim of all are the tortuous complexities involved in demonstrating that the third child is the result of rape.

We sorely need a system that pays a fair wage for a fair day’s work, and a top-up when the Government’s minimum wage policy fails to provide an adequate living for families with children.

--- Later in debate ---

[James Cartlidge]

The employment statistics are very much on the side of the agenda we have been pursuing: employment is now at a record high. The fact is that this Bill is socially just because it will enable people to stand on their own two feet and to support themselves through their wages, not rely on the state. That is a sound Conservative principle.

[Heidi Allen]

I want to reiterate two of the points my hon. Friend has made. First, I am also an employer and have lost count of the number of times part-time workers have turned down wage increases or further hours—when I know that their households are short of money—purely because of tax credits. On the flipside, just this Friday I was visited in one of my constituency surgeries by a young married lady with three autistic children—it is a very sad case—who was scared to accept payment for the precious hours she worked as a volunteer teacher, for fear of having her benefits taken away.

[James Cartlidge]

My hon. Friend corroborates my point. I repeat that this is not a fantasy: every employer to whom I have spoken is wrestling with this situation. Tax credits can work as disincentives. I accept the point made by the right hon. Member for East Ham about lone parent employment, but to be completely honest I do not have that statistic to hand. The general statistics on employment are extremely strong.

Our agenda is one whereby we will reduce benefits but raise wages. Real wages are now increasing sharply. Obviously, after the credit crunch there was a period when wages were static. It was very difficult to follow that financial shock with a strong recovery, but we have achieved economic stability. The next stage is to share our prosperity more widely and the key to that is not the benefits system or dependency, but higher wages and people supporting themselves. That is a sound Conservative agenda, but it is also socially just.