Oral Answers to Questions
Debate between Iain Duncan Smith and Emma Reynolds(12 years, 5 months ago)
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Mr Duncan Smith
I understand that it was the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who actually called for a debate, but as soon as we got a debate he told us that we were debating the wrong thing, which is rather strange.
Emma Reynolds (Wolverhampton North East) (Lab)
Many of my constituents have raised concerns with me about the forthcoming bedroom tax, especially given the lack of affordable alternative housing in Wolverhampton. Specifically, can the Secretary of State reassure me that individuals or families with disabilities who are in adapted housing, and who have waited some time to secure it, will not be subject to reductions in their housing benefit as of April next year?
Amendment of the Law
Debate between Iain Duncan Smith and Emma Reynolds(13 years, 8 months ago)
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Emma Reynolds (Wolverhampton North East) (Lab)
Will the Secretary of State give way?
Mr Duncan Smith
No. I am going to make some progress, because Mr Speaker has already told us that we need to let others speak.
Let me remind Labour Members that they were the ones who let the bankers rip as they pleased, leading to a 10-year spending spree that sent personal debt to the record level of £1.3 trillion. They let public spending rip, too, but Members should not take my word for it; strangely, Tony Blair—not now spoken about much on the Labour Benches—said that
“from 2005 onwards Labour was insufficiently vigorous in limiting or eliminating the potential structural deficit.”
Insufficiently vigorous? That is possibly the biggest understatement that I have ever read. The reality is that they did nothing at all about controlling the deficit, so it is small wonder that the No. 1 priority for this coalition Government was to get the finances straightened out, and my right hon. Friends the Chancellor and the Chief Secretary are doing just that.
Mr Duncan Smith
I will give way to the hon. Lady, and then I am going to make some progress.
Emma Reynolds
Why, then, did the right hon. Gentleman’s party pledge to match our spending plans right up until the start of the financial crisis?
Mr Duncan Smith
What we are dealing with here—[Hon. Members: “Ah!”] I will tell Labour Members what the big “Ah!” is. It is “Ah, who were in government for the past 12 years?”, it is “Ah, who left us with the worst structural deficit?”, and it is “Ah, who left us with massive debts, rising youth unemployment and a total shambles from which we are going to have to pick up the pieces?”
One of our biggest challenges was getting to grips with the welfare system, which many Members on both sides of the House will recall. Spending on working-age welfare increased by some 50% under Labour, from £48 billion to £73 billion in real terms. People talk about the problems of increasing welfare spending in difficult times, but let me remind the House that that increase took place during a period of growth. Notwithstanding that extra spending, improvements were quite poor. The universal credit is about getting the incentives right. That is the sort of reform that we have to bring through, recognising that people have to see the financial benefits from taking up employment, and simplifying the byzantine benefits system that we inherited. Alongside it, the Work programme is about supporting people to be work-ready so that British business no longer has to look abroad when it wants to commit to bringing in employees.
We are finally getting to grips with a housing benefit system that has been allowed to run out of control. The failure to reform housing benefit has left us in the absurd situation whereby some benefit claimants can claim up to £100,000 a year to live in large houses in expensive areas. The local housing allowance formula was behind all this madness. I remind Labour Members that it was their Government who introduced the local housing allowance, which pumped fuel into that growth. The difference between the average award under the LHA and under the older schemes for private deregulated tenants that it replaced was an additional £10 per week, or about 10%. As a result, the costs of housing benefit rocketed from £14 billion in 2005-06 to £21 billion in 2010-11. Left unreformed, the housing benefit budget was projected to reach £24 billion in 2014-15. That is, frankly, unsustainable and unacceptable to hard-working British taxpayers.
Housing benefit is an issue on which Labour Members have shown themselves at their very worst. First, we got ludicrous claims about social cleansing from central London, whipping up fury and fear. [Hon. Members: “That started with you.”] No, it started with them, and I know exactly who it was. Then, on top of that, we were told that the real reason was that we are a Government bent on some kind of plan for ethnic cleansing. Labour Members are not averse to a bit of dog-whistle politics when it suits them, scaring some of the most vulnerable people in society and leading them to fear what is coming next.
The problem is that the Labour Government had over 10 years to get to grips with the welfare system, and literally nothing was done about it—it was fiddle, more fiddle, and more expense. The Office for Budget Responsibility has confirmed that as a result of the changes to expenditure that we brought through, we remain on track to eradicate our structural deficit over the course of this Parliament.
It is important, too, to reflect on how the Budget for growth has gone down with people. Sir Martin Sorrell says:
“The coalition from the very beginning had said it was crucially important that Britain had a competitive tax landscape. They've gone further than I expected on corporate”
tax
“and also on personal taxation.”
He went on to say that
“it looks as though we will make that recommendation”
to return his company’s headquarters to the United Kingdom. That is a real endorsement.
A letter in The Daily Telegraph yesterday from 39 leading venture capitalists stated:
“These changes are a shot in the arm for enterprise. Thanks to them Britain is being positioned as a world-class place to launch new businesses. Now British entrepreneurs and those relocating to Britain will find it easier to raise the funds they need to do what they do best: create and expand world-beating businesses.”
John Cridland, the CBI director general, said:
“This Budget will help businesses grow and create jobs. The chancellor has made clear the UK is open for business.”