Oral Answers to Questions

Hugh Bayley Excerpts

Monday 24th February 2014 Commons Chamber

[Hugh Bayley (York Central) (Lab)]

T7. Two of my constituents—both of whom are UK citizens—went to other European Union countries to find work, but when those jobs ended and they came home they found they were no longer eligible to receive benefits in the UK. Did the Government mean to penalise UK citizens who go abroad to get off the UK unemployment register, and is not that exactly the wrong signal to give? Will the Secretary of State change the regulations?

[Mr Duncan Smith]

As the hon. Gentleman should know, we are bringing forward tougher sanctions on those who come here just to take benefits, rather than to work. Of course, British citizens working abroad are more likely to have gone abroad with a strong work record in the UK, so when they come back that is taken into account. If the hon. Gentleman is worried about a particular case, perhaps he would like to write to me and I will take it up. The sanctions are fair because they stop people coming to countries such as Britain just because they have better welfare systems than theirs.

Oral Answers to Questions

Hugh Bayley Excerpts

Thursday 30th January 2014 Commons Chamber

[Maria Miller]

The hon. Gentleman will know that it is very important that Team GB see that the British Government are behind them every step of the way. I make no apology for the fact that the Minister for sport and I are going to the winter Olympics. I hope that the hon. Gentleman will join me in saying that the team have our very best wishes.

[Hugh Bayley (York Central) (Lab)]

2. What assessment she has made of the feasibility of issuing non-gender-specific official documents to people who do not identify as a particular gender.

[The Minister for Women and Equalities (Maria Miller)]

Non-gender is not recognised in UK law. The Equality Act 2010 protects people from discrimination if it arises from their being perceived as either male or female. We recognise that a very small number of people consider themselves to be of neither gender. We are not aware that that results in any specific detriment, and it is not Government policy to identify such people for the purpose of issuing non-gender-specific official documents.

[Hugh Bayley]

There is a wider point to make. This week, when Hayley Cropper’s funeral takes place on “Coronation Street”, would it not be a good time for the Government to announce that they are taking further steps to reinforce and implement their transgender plan of action, and perhaps to consult on the format of official documents? When can we expect further thought on this matter and a statement?

Welfare Reforms and Poverty

Hugh Bayley Excerpts

Monday 13th January 2014 Commons Chamber

[Mr Meacher]

Those who come to this country are more likely to be employed and take out less in benefits than many of the indigenous population. The real point is that these people want work. Of course the hon. Gentleman is right that people should get work if they can, but there are 2.5 million people who have been unemployed for the best part of two years, and there are 562,000 vacancies—I checked that figure today. So four out of five of those who are unemployed simply cannot get a job whatever they do.

[Hugh Bayley (York Central) (Lab)]

The hon. Member for Monmouth (David T. C. Davies) does not seem to realise that many of the people who claim benefits, including jobseeker’s allowance, are people who work. I have a constituent on a very low income. He delivers newspapers to my constituency office. He has dyslexia, but he works because he wants the pride of keeping himself. He still needs to claim JSA, but he lost his allowance because his dyslexia meant that in one fortnightly period he applied for nine jobs, not 10. Can that possibly be right, when this man is already working and trying to pay his way?

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[David T. C. Davies (Monmouth) (Con)]

Members of the shadow Cabinet might need a boxing referee to sort out their disputes at the moment, as we read today in the Daily Mail, but I can assure hon. Members that I believe that the Conservative party is absolutely united in supporting the coalition Government and coalition Ministers in what they are trying to achieve. We do so against the backdrop of one of the most disastrous economic situations that this country has faced outside of a war.

It is worth reminding ourselves just what we were looking at in 2010. We took office with a deficit of £160 billion and a debt that was rising rapidly to £1 trillion. That was after years of overspending in good times, as well as in bad, by Labour, a cheap money supply and lax banking regulation under the former Government. We had disastrous economic decisions, such as that to sell gold at a fraction of its real rate. Worst of all and most seriously—this is what we are dealing with today—we had a welfare system that allowed people to get into a trap of welfare dependency, leaving them on the dole for many years, but at the same time filling the consequent gap in employment by allowing mass and uncontrolled immigration into this country, which completely undercut British workers.

That was the disastrous legacy that this coalition Government faced in 2010. I am proud of the fact that, instead of shirking their responsibilities, Ministers in this coalition Government took difficult economic decisions. Of course we had to make cuts and reduce public spending. It would have been grossly irresponsible not to do so, and in the longer term it would have led to far greater poverty than we face now. The reality is that we are a nation in debt. We are having to borrow about £10 billion every month. We are also having to roll over existing debts that previous Governments left us. If for any reason the international money lending organisations that give us that £10 billion a month ever decided that we were not in a position to pay either the interest or the original sum, they would simply stop lending to us, and there would be no European bank or International Monetary Fund waiting to bail us out with the sums we would need.

We would face an economic catastrophe on a far greater scale than the one we face now, and it would lead to real poverty. Indeed, it could lead to even third-world levels of poverty, because we would simply run out of cash. That is the catastrophe that keeps me awake at night—far more so than the bogus claims about global warming, when we have seen no rise in temperature for 16 years, or than terrorism, which is a much more serious matter but which the security services have thus far been able to contain.

[Hugh Bayley]

Will the hon. Gentleman not acknowledge the truth that the amount spent on welfare by the last Labour Government decreased over time because we were effective in creating more jobs and getting people off welfare and into work? The national debt was some £800 billion when his party came to power, but is it not now well over £1 trillion and rising?

[David T. C. Davies]

Indeed, the hon. Gentleman is quite correct in his last point. He makes an important point, but I would like to find out where it was going. Is he suggesting that we are not doing enough to pay down the national debt? Is he suggesting that we should cut further and faster? If so, and if we had the support of other Opposition Members, that is exactly what the Government could do and, indeed, possibly should do. I look forward to seeing that support for getting the deficit down.

[Hugh Bayley]

The point I am making is simply that the Labour Government reduced the amount that taxpayers had to spend on welfare because we were effective at investing in the economy, creating jobs and thereby getting people off welfare and into work.

[David T.C. Davies]

I do not accept that point, but I do accept that when the last Labour Government came into office in 1997, they spent the first couple of years paying down the national debt, which is exactly what they should have done.

[Hugh Bayley]

It was the first 10 years.

[David T.C. Davies]

No, from 2001 onwards they started overspending by an average of about £30 billion. That is an absolute fact; I have checked the figures on the national debt very carefully. From 2001 onwards, they started overspending by an average of about £30 billion a year. That is a fact. I can tell hon. Members that I have checked the figures on the national debt very carefully. As I say, from about 2001 onwards, the Labour Government decided to start overspending by approximately £30 billion a year, and they were overspending long before the financial crash happened in 2008—a crash that they, incidentally, had helped to cause.

Ministers in the coalition Government are absolute right to make cuts, and if Labour Members feel that the deficit is still too high and that further cuts should be made, I am sure we would all welcome their support. The Government are right to do this for another reason: the welfare system, which we are reforming, traps people in worklessness. Many members of my family— through marriage—are from eastern Europe, and some of them came to this country barely able to speak English and had no qualifications that would be recognised here. They were, however, able to get into work. They started in low-paid jobs and worked their way up.

I spent many years in low-paid jobs, and I am not talking about holiday jobs or a gap year, as I never even went to university. I happened to believe that, rather than wait around for whatever job people think they deserve, they should take any job available to them and use work to get better work. That is the way forward, and that is what the Government are trying to encourage through the use of sanctions and, frankly, through making it difficult for people to sit around watching the television all day. I am not suggesting that that applies to everyone who is out of work or even a majority of them, but it certainly applies to a percentage of people who are out of work. It is high time that it was tackled and stopped. I am glad that some people have the courage to do that.

We hear nothing from Labour Members except a mass of contradictions. They say that they want to be tough on welfare—tougher than the Tories, as the shadow Work and Pensions Secretary said in October 2013—and then to a different audience they complain about every single cut to the welfare budget. They complain that the Government are making cuts and then they complain, as the right hon. Member for Oldham West and Royton (Mr Meacher) did, that the deficit is too high. It is ludicrous. They say that they are against the bedroom tax, but they brought the bedroom tax in, albeit in the private sector. What they say is a mass of contractions, so I cannot understand how anyone could feel that Labour Members were fit to be put in charge of welfare benefits or indeed the economy ever again.

Housing Benefit Entitlement

Hugh Bayley Excerpts

Wednesday 23rd January 2013 Westminster Hall

[Phil Wilson]

My hon. Friend makes a valid point. As MPs, we are seeing a great increase in benefit casework. As we get closer to 1 April, the casework will get even harder.

The under-occupancy rules are the manifestation of the Government’s appalling manipulation of the welfare debate. The language is the same old narrative that we have had down the ages: to secure their own position, the Tories pit one section of the community against the other. Once, it was the deserving poor and the undeserving poor; now it is strivers versus shirkers.

This legislation is unbecoming of a civilised society: it is born of ignorance and raised by prejudice. What is deserving of a civilised society is a new house-building programme, decent jobs, a growing economy and one nation in which we truly are all in it together. The legislation is wrong and should be repealed at the earliest opportunity.

[Hugh Bayley (in the Chair)]

I intend to start the wind-ups at 3.40 pm, which gives us 53 minutes or so. Eleven Members are on my list as seeking to speak, so I will impose a time limit of five minutes to begin with. I warn Members that that might leave some of them at the end with slightly less than five minutes, and if there are interventions even less still.

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[Ian Lucas]

She does not live with David, so I am not sure whether that is relevant.

The problem is that the proposal is causing uncertainty to the family now, and there is no certainty about whether discretionary housing payments will be for an extended period or affect them permanently. I will forward full details of the case to the Minister. I do not expect a specific answer now.

I have been contacted about another case of adult parents who share a house with an individual who suffers from spina bifida and hydrocephalus. An additional room in their house is used for the storage of oxygen and other disability aids, and a separate room is used as a living room by the individual concerned, who has specific and profound additional needs. Under these proposals, none of the particular circumstances for those individuals is taken into account, and they are some of the people who we all think—and I am sure the Minister thinks—should have our support, but they have no guarantee that they will continue to receive it. The fact is that this set of proposals is creating enormous worry for people who have huge burdens in caring for people whom they care profoundly about. They have contributed enormously to society by helping to look after those people for very many years, and we are letting them down badly.

I implore the Minister to look at the particular applications of the rules in those cases to ensure that those people can be looked after. When they came to me and said, “Look into these matters,” I could not believe for one moment that the system would not include discretion to cover individual cases such as those. The proposals are ill-conceived and are causing enormous distress up and down the country. The Government, and I am sure the Minister, did not intend to create such situations. He needs to look at the proposals again.

I heard the Minister’s response yesterday, and in it, he referred to the deficit, but the reality is that the Government, at the same time as they are letting those people down, have chosen to give a tax cut to the richest people in the country. That is the type of political choice that we all have to make, and the reality is that the Minister has supported that choice. He needs to get his act together to change his approach and support the people who need support, and not the people who have most.

[Hugh Bayley (in the Chair)]

All Members have been very disciplined in their speeches, so we are almost on time. It seems to me that in a debate of this kind it would be a shame, and wrong, to cut the time for the two remaining Back Benchers, so they will each have five minutes, and the Front Benchers therefore will have nine minutes each.

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[Julie Hilling (Bolton West) (Lab)]

I start by congratulating my hon. Friend the Member for Sedgefield (Phil Wilson) on securing this most important debate. I, for one, am not surprised to see the Government Benches empty, because people cannot defend the indefensible.

I want to speak on behalf of the 2,400 tenants of Bolton at Home and more than 4,500 tenants of Wigan and Leigh Housing who will face unaffordable bills because the Government have decided that the poor should pay the price of the wrongs of the rich. The policy demonstrates an absolute lack of understanding of the nature of social housing and communities.

The majority of social housing in the north-west is three-bedroom, and families with two children have rightly been allocated three-bedroom houses so that each child can have their own room, and also, because that is the available housing stock. Please remember that many of those families have one or both parents in work, in low-paid jobs. Housing benefit is an in-work benefit.

What is going to happen now to constituents with a boy and a girl? They are currently nicely housed in a three-bedroom house. Is it the Minister’s expectation that they would move into a two-bedroom house until one of the children reaches the age of 10, when they would have to move into a three-bedroom house? What happens when one of the children moves out? Are they then expected to move back into a two-bedroom house, and then into a one-bedroom house when both the children move out? That is even if all the housing stock is available. Just imagine the monetary costs—how could people on low wages or benefits afford new carpets and curtains each time they have to move house, or does the Minister expect them to have bare floorboards and newspaper at the windows? What about the children’s schooling? Will they have to keep moving schools, or will the family have to find additional money for transport to school? Fundamentally, what about the community? Social housing is not only somewhere that you sleep; it is where you live and become part of a community—a community that will be fractured by this ridiculous, ignorant policy. The policy will also have a perverse effect. Already in Bolton, groups of three young men are applying for three-bedroom family houses, so that they can each claim shared-room rate.

Hon. Members have talked about many other aspects of this policy, so I will finish by talking about Isobel, who came to see me about her situation—I have changed her name. Isobel lives in a three-bedroom house. She has a daughter who has just moved out, into a fairly insecure relationship, and she has a 17-year old son with Down’s syndrome. Isobel is a full-time carer and she herself understandably suffers from stress and depression. Isobel’s son—I shall call him Carl—is severely affected by Down’s syndrome. He has what I can best describe as autism-like symptoms. He cannot cope with change to his routine or environment. He needs everything to be in its place and everything to be done in the same way at the same time every day. Indeed, while Isobel was visiting me in the surgery, she received two phone calls to come home as quickly as possible because Carl was becoming extremely agitated by her absence.

Isobel has told me that Carl could not cope with a move. Moreover, Isobel gets support from her community. Neighbours understand Carl’s behaviour and support her both physically and morally. What is she supposed to do? She cannot work; she cannot move. What is the Minister’s answer to that question? I hope he will not say that she could get a discretionary housing payment. Bolton at Home does not yet know how much it will get, but it has already worked out that it will not have enough money to support everyone in need.

The Government do not seem to understand that social housing is a positive choice for low-paid workers, for carers and for a number of others. It is not something that is transient. It is the home in which someone wants to live their life and to bring up their children until they move into their bungalow or sheltered housing. Surely the Minister cannot continue with this mean, ignorant and, frankly, incompetent policy.

[Hugh Bayley (in the Chair)]

We have made up a minute, so the Front Benchers now have nine and a half minutes each.

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[Hugh Bayley (in the Chair)]

Order. May I ask Members not to make remarks from a sedentary position? The Minister has quite a lot of points to respond to, and he has made it clear that he does not want to give way.

[Steve Webb]

Thank you, Mr Bayley. The second unfairness that we must tackle is the needs of people who live in overcrowded accommodation. A quarter of a million of them need to have a voice in this debate, because all too often they do not, and we must tackle that.

People have rightly said that these are family homes. They are not just houses; people have lived their lives in them. I accept that, which is why we have exempted people over state pension credit age. Essentially, someone who is a pensioner is not affected by these changes; we are talking about people of working age.

How will people respond to the change? There are a range of responses. It has been mentioned that housing benefit is an in-work benefit in some cases. Nationally, the average loss from this policy is £14 a week. For someone who is in work on a minimum wage, that is the equivalent of about two and half hours of additional work; it is not quite that because of tapers and so on, but we are talking about a few hours of extra work as one option—

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[Steve Webb]

I have just 60 seconds to go. When councils build houses of the right size to match housing need, they should be applauded and not condemned.

The hon. Member for Dudley North (Ian Austin) said that we need to manage over-occupation and under-occupation. We have had decades to do something about that, but nothing has happened. Some housing associations have welcomed the opportunity to look at the housing allocations to make better use of the precious resource of social housing. I fully accept that there will be disruption as a result of this measure, which is why we have a two-year programme looking at all this work, evaluating the impact and publishing the research. If we need to make changes to the system as we go because there are perhaps groups or impacts that we have not thought of, we will be in a position to do that. The matter will be thoroughly researched, and we will publish the results. At a time when we need to save money, being fairer to people in the social sector and the private sector and tackling overcrowding as well as under-occupation is a fair way to reduce the spending deficit that we were handed by the Opposition.

[Hugh Bayley (in the Chair)]

I congratulate all Members—Back Benchers and Front Benchers—on sticking to the time limits, so everyone was able to get in.

Welfare Benefits Up-rating Bill

Hugh Bayley Excerpts

Monday 21st January 2013 Commons Chamber

[Mr Duncan Smith]

I want to make a little progress before I give way again.

We need to remind ourselves that although the Opposition spent the debate in Committee going on and on at my hon. Friends about taxes on the wealthy coming down, we are raising more in tax from the wealthiest than they ever planned to throughout the whole of their spending programme. Hon. Members should remember that Labour was the party that said early on that it was

“intensely relaxed about people getting filthy rich”.

We will take no lessons from the party that did not raise the upper rate to 50% until the last month or two before it lost the election.

[Hugh Bayley (York Central) (Lab)]

Will the Secretary of State give way?

[Mr Duncan Smith]

I shall give way in a second, but I want to make a little more progress.

Let me deal with the point about deficit reduction, which is really important. The Opposition did not answer a key question during our debates in Committee. They have voted against every single measure to reform and reduce the overall spending on welfare so that we can get the deficit under control. Let me quote somebody whom they might remember. The quote is this:

“from 2005 onwards Labour was insufficiently vigorous in limiting or eliminating the potential structural deficit.”

That was their former Prime Minister, Tony Blair. I agree with him. In 2005 the previous Government raised spending dramatically as a device for electoral success, as we said earlier. Time and again Labour has voted against our reforms.

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[Mr Duncan Smith]

I wonder why I bothered to give way to the right hon. Gentleman. Every one of those statements was a spending commitment. They were not reductions. Every one of them would still leave a Labour Government with a vast bill to pay. I remind the Opposition that what they have opposed remains the reality. They are stacking up spending commitments without one single observation about how they would make the savings necessary to cut the deficit that they left us—one of the worst deficits, as I said before. Their proposed raid on pensions, which they wanted to talk about, would not cover it. They have already spent several times over all their little gimmicks. Voting against the Bill is another spending commitment.

[Hugh Bayley]

rose—

[Mr Duncan Smith]

I will give way to the hon. Gentleman, but first I want to deal with some of the claims that the right hon. Member for Birmingham, Hodge Hill made in the course of the debates on the Bill. The first claim that he made was that spending on out-of-work benefits was falling before 2010. That is not true. The figures published show that between 1997-98 and 2010-11 spending on out-of-work benefits rose by £2.6 billion. There we have it. Even the Opposition’s attempt to whitewash what was a very small idea is not true. Overall benefits and tax credit spending increased by £75 billion, from £122 billion to £197 billion, which is 60% in real terms.

The Opposition’s decision to vote against the Bill has financial implications equivalent to 48,000 nurses’ salaries or more than 500,000 primary school places. That is the kind of mess that they have got themselves into because they have taken the easy course in opposition, which is to oppose everything and to come up with no serious proposals.

[Hugh Bayley]

In York there is a particularly large gap between private sector rents and the levels of housing benefit because the broad rental market area for York includes a number of towns 20 miles away, such as Malton, Norton and Easingwold, where rents are about 40% lower. A new clause was tabled that suggested that the Department should analyse those gaps on an annual basis, but there was not time to discuss it. How would the Secretary of State respond to that proposal? Would he support such a proposal if it were made in another place?

[Mr Duncan Smith]

We are always analysing what we are doing with local housing allowance and housing benefit generally, so that is an ongoing process for us. We are also testing our proposals for universal credit when it comes to housing.

I know that I need to conclude, but I want to say something, as the hon. Gentleman touches on the subject. When we brought in the housing benefit changes, we heard all sorts of threats that those would lead to total disaster. One of the myths propagated by the Opposition was that 82,000 people across London would lose their homes. The reality is, so far, that the figure is up by just under 600. The myth was that 134,000 people would have to move or become homeless. The reality is that across the country, the numbers of those in temporary accommodation is up by only about 900.

In conclusion, the changes that we are putting forward are down to the first point that I made, the second point being that we need to carry them out in the fairest possible way. As my hon. Friend the Minister said earlier, we do not take this course of action lightly, but we know that if we were to go on borrowing at the rate that the last Government would have, we would punish the poorest.

I say to the Opposition that it is not good enough simply to take the easy course. When in government, they left us with the worst deficit and high borrowing that would have completely devastated those who pay their mortgages. They need to come to the Dispatch Box and tell us now how they would be fair to those who have to pay the highest tax bills.

Oral Answers to Questions

Hugh Bayley Excerpts

Monday 5th March 2012 Commons Chamber

[Mr Duncan Smith]

As ever, my hon. Friend has hit the nail on the head. Work experience is a great programme, which is helping lots of young people to get into work at a reasonable cost to the Exchequer. Those two things need to be borne in mind. It is no good the Opposition sitting quiet, watching while trade unions back these anarchists and try to stop decent people getting into work.

[Hugh Bayley (York Central) (Lab)]

People diagnosed with mesothelioma—141 former railway carriage builders in York have now died—can often claim compensation from their employer. The earlier they get compensation, the less they and their dependants need in benefits, so will the Secretary of State talk to the Secretary of State for Justice about fast-tracking these cases through the courts, as is currently done in the royal courts of justice in London, and making that a nationwide approach?

[Chris Grayling]

I am happy to have that conversation. We are also working hard with the insurance industry to make sure that we match employees who have suffered from the illness with employers who may have disappeared some years ago, to ensure that we find the employers liability insurance policies that can pay those employees the compensation that they so desperately need.

Oral Answers to Questions

Hugh Bayley Excerpts

Monday 23rd January 2012 Commons Chamber

[Hugh Bayley (York Central) (Lab)]

15. If he will set a limit on the charges which pension fund managers may levy for the administration of pension funds.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Initial evidence ahead of the roll-out of auto-enrolment later this year is that the creation of NEST, with its relatively low charges, and competition in the market are leading pension providers to offer products for auto-enrolment with lower than average charges. However, we believe that charging levels are important and have taken additional reserved powers under the Pensions Act 2011 to cap charges under auto-enrolment if that proves necessary.

[Hugh Bayley]

The report produced for the Government by Dr Christopher Sier shows that pensioners are losing out because of the excessive fees and charges levied by private pension fund managers. What action will the Government take to cap the amount that private fund managers can milk from the funds they manage on behalf of pensioners?

[Steve Webb]

I think the hon. Gentleman was a Minister in our Department under the previous Administration, and as he knows they chose not to cap charges but to give themselves powers to cap them if it proved necessary. At the moment, our judgment is that the early roll-out of auto-enrolment will deal with big firms who will give good deals and low charges and that we have more competition than was perhaps expected, with NEST coming in at around 0.5% and other providers at or below that point. We are encouraged by developments in the market but we are absolutely prepared to use the capping powers if it proves necessary.

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[Mr Speaker]

Order. I remind right hon. and hon. Members, in the light of the extensive interest in topical questions, that topical questions and answers need to be brief. Let us be collegiate towards each other.

[Hugh Bayley (York Central) (Lab)]

T2. The benefits bill this year will be some £15 billion higher than in the last year of the Labour Government, and that costs about £600 per family per year. What will the Government do to cut unemployment, which is what is pushing up the benefits bill so fast?

[Chris Grayling]

Of course, we will debate this again tonight, but as I keep saying to the House, we will sort out the problems in our public finances to deliver stability in our economy. We will deliver the best possible support to business through the various measures that we have introduced, including enterprise zones and changes to the tax system. Through the Work programme, our work experience scheme, and the youth contract, we will deliver the best possible support to get the unemployed back into the workplace.

Living Standards

Hugh Bayley Excerpts

Wednesday 30th November 2011 Commons Chamber

[Mr Duncan Smith]

The reality is that the OBR yesterday told us categorically that the position in which the Labour Government left us was significantly worse than anybody expected. It also said that unless we had taken the decisions that we took last year, we would be borrowing more than £100 billion in each year of this Parliament. On top of that, the Labour party’s measures would have resulted in even worse, but at least we had a little honesty from the shadow Chief Secretary to the Treasury, who said that borrowing would rise because she would borrow more. Given the economic situation, the Treasury estimates that such measures would cost far more—on the back of the OBR figures.

We now know what the Government at the time were doing, and what the Opposition today are about. They are determined to put hard-won interest rates, which we have held down, at risk. Last April, under Labour, our interest rates were higher than Italy’s; 18 months later, we are the only major western country to have seen its credit rating improve. Italy’s interest rates are now about three times ours, despite it having a lower deficit—actually, almost half the deficit that the previous Government left us. So, while the rest of Europe is under intense pressure, the UK remains a safe haven and the Labour Opposition are completely confused.

Yesterday the shadow Chancellor insisted that low interest rates were the sign of an economy in trouble. That is the same man who, back in 2004, described long-term interest rates as

“the simplest measure of monetary and fiscal policy credibility”.

[Hugh Bayley (York Central) (Lab)]

Will the Secretary of State give way?

[Mr Duncan Smith]

Let me lay out the facts to make things simple for the Opposition before I give way. A 1% rise in our market interest rates would add £10 billion to mortgage bills; the average family with a mortgage would have to pay £1,000 more every year; the cost of business loans would increase by £7 billion; taxpayers would be forced to find an extra £21 billion in debt interest payments—and the ex-Chief Secretary to the Treasury has the front, the absolute front, to talk about squeezing living standards. If the Opposition had their way, living standards would collapse.

[Hugh Bayley]

Does the Secretary of State not recall that at the time of the general election Britain’s national debt was significantly lower than that of Italy, France, Japan and the United States? The reason Italy faces its economic problems is that its national debt is much higher than that which this Government inherited from the Labour Government.

[Mr Duncan Smith]

It is well worth reflecting on the fact that the previous Government’s debt cannot be detached from their deficit. In case the hon. Gentleman does not understand it, I will explain that what they did was ratchet up spending before the recession began. We had the largest structural deficit of any G7 country before the recession began.

[Mr Duncan Smith]

No, I will not give way. The previous Government then went on a spending spree, ratcheting up the deficit, which now pumps the debt. It is no good playing silly games—

[Hugh Bayley]

rose—

[Mr Duncan Smith]

No, the hon. Gentleman can sit down. It is no good. He is not going to play games over the difference between the deficit and the debt. The reality is that Labour cannot weasel out of it. It left us with a tragedy that we are having to put right, which is why we will oppose the motion.

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[Stephen Williams]

We can trade statistics, but the right hon. Gentleman cannot deny what everyone is seeing and what all our constituents are saying to us. They are fed up that the people at the top of companies— Labour Members have referred to bankers, but it is not just the bankers; this also applies to others—seem to have got away with it, while people at the middle or bottom are being squeezed. I hope that the Government act on the High Pay Commission recommendations.

The Government are acting to safeguard the living standards of those at the bottom of the income scale.

[Hugh Bayley]

What would be the hon. Gentleman’s policy to reduce the incomes of those on high income, to reduce inequality?

[Stephen Williams]

I recommend that the hon. Gentleman looks at the High Pay Commission report, which is an excellent document containing many recommendations for controlling executive pay. I urge the Government seriously to consider many of those recommendations, including on the revolving door of non-executives on boards of companies effectively determining each other’s pay, where some of the most serious breaches occur.

On hard-working families, to which the motion refers, the Liberal Democrats’ No. 1 policy commitment at the last general election was that, in order to make work pay, we would raise out of income tax those on low earnings and those working part time by increasing the income tax threshold to £10,000 over the lifetime of the Parliament. Progress towards giving effect to that aspiration is being made throughout this Parliament. Let us contrast that with the last Budget of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in 2007, when, just before becoming Prime Minister, he financed an income tax cut through a tax rise for the poorest in society. I remember watching Labour Members waving their Order Papers and cheering that income tax cut—

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[Mr Robert Syms (Poole) (Con)]

At the end of the Labour period in office, when the first financial storms hit us in 2007, it was clear that the country was, at that point, living beyond its means. It had a deficit of about 3% of GDP, while at the same time the Germans had a surplus. Then we hit all the problems of the banking collapse. The hon. Member for York Central (Hugh Bayley) was right: thank God Britain had a low debt level of gross domestic product because that allowed the Government—

[Hugh Bayley]

Reduced by Labour.

[Mr Syms]

Yes, partly because of that. Traditionally in Britain it has been about 40%, so that gave the Government some room for manoeuvre. Any Government in office would have had a large increase in its deficit given what hit them in 2007 and 2008. There is no great argument about that and, as someone sitting on the other side of the Chamber, I think that many of the things that the right hon. Member for Edinburgh South West (Mr Darling) did were beneficial in trying to maintain a fragile economic situation.

Having said that, we cannot continue to increase debt year on year at the rate we were in 2009, 2010 and 2011 or we will overwhelm the British economy. The worst thing for our constituents is not paying tax; it is paying tax to pay interest on money being borrowed from someone else. The Government had to make a judgment, and their judgment was to set out an economic policy gradually to reduce our debt over five to seven years to a level that, once it tops off in 2016-17, can then start to be brought back to the level of more normal years, which is about 40% of GDP. In an environment in which the world was growing rapidly, that would be easier. In an environment in which the eurozone is blowing up, and there are high fuel and food prices, it becomes much more difficult. That is part of the problem for the Government in the short term. It is events—it is what is happening around the world.

There is nothing surprising about where the Government are. Sticking with the policy is perfectly sensible, but things do not go in a straight line in economics, and there will be OBR forecasts and Budgets where the figures for debt increase, and some where they decrease. It will depend to some extent on world events.

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[Charlie Elphicke]

I absolutely agree. The saviour has been the low interest rates, which have meant that they are less squeezed than they would have been had Labour been in power.

[Hugh Bayley]

Will the hon. Gentleman give way?

[Charlie Elphicke]

No, because I have taken three interventions, which is more than generous.

Finally, it is not the job of Government to create jobs. Jobs, wealth and prosperity are created by business. A Government who want higher living standards and economic growth are a Government who will back business to the hilt and ensure that it has a stable environment in which jobs can be created. I welcome the enterprise zones that have been created, the incentives for business to grow and create job opportunities and the measures to help business announced by the Chancellor in the autumn statement. I welcome all the reductions in corporation tax, the cut in the small companies rate, the extension of loan guarantees, the simplification of health and safety laws, the investment in science and apprenticeships and the promotion of exports through major trade missions. That is what we should be doing. We need an activist Government who are concerned with active growth and making this country this great again after 13 years in which Labour took us back to the edge of bankruptcy, just as it did in the 1970s. We want to take this country forward to better growth and living standards and better prosperity and business success across the world.

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[Hugh Bayley (York Central) (Lab)]

I am somewhat surprised by how few Members on the Government Benches seem to have realised that the Government’s policy has changed. They have spent 18 months reading out the brief from their Whips Office—or wherever it comes from—and complaining about the legacy of high debt which they inherited when they came to power. However, I say to the hon. Member for Broxtowe (Anna Soubry) that the national debt at the time of the general election was £760 billion. In the first year of the coalition Government, it rose to £905 billion. In the middle of a financial crisis, the coalition Government are doing what the Labour Government did in the middle of a financial crisis. When in opposition, they argued against the private finance initiative.

[Anna Soubry]

Will the hon. Gentleman give way?

[Hugh Bayley]

No; I will make my case, if I may.

In opposition, the Government argued against the PFI, but their investment stimulus, which was announced yesterday—I was one of those who applauded it—is going to be paid for by the same sort of off-balance-sheet private finance as financed the PFI.

Yesterday, I ran the risk of incurring anger from my colleagues by welcoming the Chancellor’s plan B. It is a small plan B, but it is £5 billion of Government money backed up by further off-balance-sheet money from the private sector to stimulate the economy. The Chancellor does not call it a plan B. That would be embarrassing, as he has spent 18 months telling us that there is no alternative to plan A: savage cuts in public investment and infrastructure. But now it is plain for all to see that there has been a U-turn.

I congratulate the Chancellor on having the courage to start to do what is right and necessary for the economy. We heard about the U-turn in relation to a road in Nottinghamshire that was cancelled by the coalition Government and has now been reinstated. The Access York scheme—a £22 million improvement to the city’s park-and-ride system—is another good illustration. It was approved by the previous Labour Government, stopped by the coalition one month after the general election, and has now been reinstated, and I thank the coalition Government for that. In the short term, that green transport system will create construction jobs in my constituency, and in the longer term it will attract more visitors to York who will spend money in the shops and the visitor economy.

Nobody so far has mentioned the situation of the NHS. The Government promised that they would not cut NHS spending in real terms. I asked the Library to look at the figures for my PCT area, where many services are being cut. Gastric band surgery for the obese is not available on the same terms in North Yorkshire and York as in neighbouring areas. Facet joint injections for back pain are available elsewhere but not in York. Assisted fertility is available in neighbouring health authority areas, but not in York.

In the last year of the Labour Government, the increase to the PCT budget was 5.8%, which, with inflation running at 3.7%, was a net increase of 2.1%. In the first year of the coalition Government, the local PCT budget was increased by 2.2% but, with RPI running at 4%, that was a 1.8% cut in real terms. Nationally, the figures tell a similar story. In 2011-12, the real-terms cut in NHS funding is 0.56% on the previous year, and in 2012-13 it is predicted to be 0.33%. The Government gave a pledge not to cut NHS funding, and with inflation running at higher levels than they were anticipating, it is necessary for the Treasury to increase NHS funding to meet that pledge. I ask the Minister to respond to that point particularly.

[Toby Perkins]

What my hon. Friend says about the NHS is absolutely right, but there was also a pledge not to have any major reorganisations of the NHS. In Chesterfield, alongside the financial pressures that the NHS would have been under anyway, additional resources are being spent on reorganisation rather than on patient care. That is the other major problem that the NHS is facing.

[Hugh Bayley]

My hon. Friend is absolutely right. The reason why, under a Labour Government, there was a 2% real-terms increase in the NHS budget is that the cost of an ageing population and the new medical technologies introduced to the NHS is roughly 2% a year. A 2% real-terms increase, therefore, is a standstill in the ability to treat patients, but adding in a costly health service reorganisation and a real-terms cut in the budget means a savage cut in the availability of care for NHS patients.

[Damian Hinds (East Hampshire) (Con)]

At what point was the £20 billion shortfall in NHS financing spotted?

[Hugh Bayley]

The hon. Gentleman should simply look at the record of the 13 years when Labour was in power. The real budget of the NHS almost doubled, but now we are seeing its real spending power being reduced, which his party promised that it would not cut.

I want to speak briefly about help for small and medium-sized enterprises. Autohorn, a successful York business, runs the Europcar franchise and other car leasing and care hire businesses in my constituency, employing 60 staff. A couple of months ago, one of the high street banks withdrew a credit line worth £750,000, which financed roughly a sixth of the company’s fleet. I wrote to the Minister with responsibility for small businesses and asked what he could do to help. He was sympathetic, but offered no practical help. I went to the bank, and I am pleased to say that it has renegotiated with the company and reinstated the credit line. The jobs in that business are now safe, and I hope that it will expand and take on more people. None the less, I say to the Government, “The rhetoric is right, but please, you must do more to back up your rhetoric.” They should make the banks do what they say they are doing and extend credit to successful businesses.

There is no time for me to say what I intended to say about the debt, but let me just say this: there is no argument between our parties about the need to reduce the deficit, but there is a sharp difference about how to do it. The Government’s plan A has made a difficult situation worse over the past 18 months. By cutting growth they have cut tax revenues, and by driving up unemployment they have increased spending. It is time for them to change their policy.

[Several hon. Members]

rose—