Welfare Reform and Work Bill

James Cartlidge Excerpts

Monday 20th July 2015 Commons Chamber

[James Cartlidge (South Suffolk) (Con)]

We hear that there is something of a quandary among Labour Members about how to vote, perhaps characterised as a decision on whether they go for political pragmatism or principles of social justice. Let me assure them that they need not worry. If they vote with us, they will be voting for social justice, because, as my hon. Friend the Member for Cheltenham (Alex Chalk) said, this Bill is based fundamentally on social justice.

I want to highlight the three key principles that show that this Bill is about social justice. The first and most important relates to the dependency culture. There is an idea among Labour Members that if benefits are reduced, that will be it: people will be static and will never be able to go out into the workplace and improve their situation. We have to accept, however, that those benefits are far too generous—£30 billion a year is huge—particularly the individual awards to workers.

I have run a small business and have seen what it is like. People earn £13,000 from work and a similar amount from tax credits. In that situation, benefits are permanent. How can someone in that position ever reduce their benefit take when the amount they need to earn from work in order to overcome it is so big? That represents a massive extension of the dependency culture, and taking the tough decisions to row it back is a socially just agenda, which I support.

The second key principle relates to fairness to taxpayers. After all, the working population have to pay for these benefits. I strongly support the benefits cap. There is a great social injustice when people in work earn less than those on benefits. That may not happen in a large number of cases, but we should never accept it. It should be a key principle of our welfare system always to seek to reduce the benefits bill and increase in-work wages. That is our agenda, which will come through in the national living wage.

The third principle is the move towards full employment. I want to focus on a point that the right hon. Member for East Ham (Stephen Timms) made several times in his speech. He said that the measures attack work incentives, but I am afraid that that simply does not stack up in the real world. I am talking not just about my experience; every other employer to whom I have spoken who, like me, has had staff on tax credits, finds it difficult. That is particularly the case with part-time staff who are on tax credits: they do not want to work any more hours and often do not even want to take pay rises, because of the dependency system. That is what we are up against.

[Stephen Timms]

I wonder whether the hon. Gentleman has reflected on the fact that in 1997 the employment rate among lone parents was less than 45%, whereas today it is getting on for 65%. Those who have looked at the matter have confirmed that that dramatic improvement is largely thanks to the additional incentive from tax credits.

[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.