Universal Credit

Jeremy Corbyn Excerpts

Thursday 5th September 2013 Commons Chamber

[Jeremy Corbyn (Islington North) (Lab)]

As the Secretary of State considers the operation of universal credit, will he look at the effect on people living in areas with high private sector rental costs who find that a wholly disproportionate amount of their benefit goes on such rents, rather than keeping body and soul together? We need not only to look at that, but to control private sector rents.

[Mr Duncan Smith]

I believe that universal credit will help in that regard because the idea is that, as people go back to work, they will be better off for every hour they work than they were on benefits, which should make them more able to afford to live. The vast majority of benefits under universal credit will go to the bottom 20% of earners, so it should be a net benefit to the poorest in society.

Budget Resolutions and Economic Situation

Jeremy Corbyn Excerpts

Friday 22nd March 2013 Commons Chamber

[Mr Duncan Smith]

We know about the incredible stealth taxing under the previous Government. Their tax on pension funds meant that they were worse off by £100 billion, which sounded the death knell for defined benefit pensions. The previous Prime Minister, who, as I have said, got rid of the 10p starting rate, did more to punish people than we would ever expect from a Labour Government.

[Jeremy Corbyn (Islington North) (Lab)]

I would be grateful if the Secretary of State turned his attention to the benefit cap and its effect on poor people in high-cost areas such as the one I represent. Is he aware that 1,000 children in Islington schools are affected by the benefit cap? Some of their families will be affected by as much as £200 a week. That will lead to the social cleansing of the whole of central London because of the high cost of rents. Will he look again at the benefit cap and its effect on those in private sector housing, and do something rapidly to stop the enforced movement of poor people out of central London?

[Mr Duncan Smith]

I do not agree with the hon. Gentleman, although I understand fully what he says. I keep all benefit changes under review, but people have been told for more than a year that they are the families that will come under the benefit cap when it comes in on 1 April. A large number of those families are now heading back to work and taking jobs. That is what we are seeing—the figures will be released. It is remarkable how many people are moving to control their own situation. I remind the House and the hon. Gentleman that, despite all that is said, the benefit cap is set at the average earnings in Britain. Many people who are not on benefits have to cope with that.

--- Later in debate ---

[Clive Efford (Eltham) (Lab)]

I want to talk about housing, particularly in London, but before I do let me refer to the millionaires’ tax cut that will come in in April. It will benefit 13,000 individuals who earn more than £1 million and have a combined income of £27.4 billion, and I am grateful to the trade union Unison for providing me with that figure. Those 13,000 people earn £27.4 billion, and the Government somehow think that in these times that cut should be a priority for public expenditure. It is outrageous. The Government are freezing child benefit for the third year running, and the money could have been used to benefit 12 million children if child benefit had been increased in line with the consumer prices index. I wonder what the cash injection to the economy would have been if that money had been given to families who would have spent it rather than on providing a bonanza to 13,000 people. Imagine the letter from the Chancellor of the Exchequer saying, “You’ve been selected as one of 13,000 people to share in a £1.2725 billion payout from Her Majesty’s Exchequer and all you have to do to qualify is confirm in writing that you earned more than £1 million this year.” What an absolute disgrace.

I look back on the criticisms of our benefit changes when we were in government, and on the fact that the Liberal Democrats were constantly carping, saying how mean we were, and attacking us about benefit changes and rules for people with disabilities—but now they sit there, and that tax cut is their priority. At a time like this, when the bedroom tax is being introduced, when wages are being frozen and when unemployment is going up, as we have heard, this Government’s priority is a tax cut for millionaires. I find that absolutely shocking.

Some elements of the Budget are welcome: any assistance for people who want to buy their homes, particularly those who might have to wait many years to save a deposit, is always welcome. However, I am concerned about the impact of the Government’s planned assistance in the absence of a significant improvement in the supply of housing. I know they will say that they are planning to supply housing and that they have a house building programme, but we have been hearing those honeyed words since they came into office in 2010. In London we have seen a slump in house building and we now have the lowest level of starts since the 1920s. The Secretary of State has attacked the Labour Government and made a great deal of saying that they built too few homes—they did, and they certainly built too few socially rented homes—but this Government are going even further.

For instance, in London most of the homes built under the current Mayor were started under Ken Livingstone. The current Mayor is claiming credit for homes although the plans were started under Ken Livingstone. According to the Evening Standard—I think we can rely on the Evening Standard because, as we all know, it was heavily briefed on the Budget on Wednesday—there have been only 3,332 starts for affordable homes in the past year, and only 1,357 have been completed. That is fuelling enormous problems in London, not just for people who need rented homes but for people who want to save to buy homes.

[Jeremy Corbyn]

Is my hon. Friend aware that “affordable”, as used by the Mayor’s office, is a complete misnomer? In many places where so-called affordable homes are being built, they are affordable only for people earning well over £50,000 a year and are of no help whatsoever to the average Londoner.

[Clive Efford]

My hon. Friend is absolutely right.

I want to discuss the impact of the purchasing power of overseas money on house prices in London. That not only has an impact on house prices but has a knock-on impact on land values that makes it virtually impossible to build affordable housing, particularly in large parts of central London.

The Smith Institute published a report last year called “London for Sale”, which stated:

“Anyone doubting the scale and potential impact of overseas investment in London should note that at £5.2 billion in 2011 it was a larger sum than the whole Government investment in the Affordable Housing Programme for England for four years…Two years of overseas housing investment in London would total more than the public sector funding package (£9.3 billion) for the 2012 Olympic Games.”

That is the scale of the money coming from overseas into our housing market. Savills, one of the property market agents, says that London is a prime property market that

“will rise 22.7% during the period 2012-16.”

Its comparable forecast for the mainstream market across the UK is 6%, less than the rate of inflation. What we are seeing is the huge impact of overseas money on the price of housing in London. The Government intend to compete with that money by providing assistance with mortgages. I have no objection at all to anyone being given such assistance, but if—and this argument was made on the “Today” programme the other day—12 people go for 10 houses, that is likely to drive up prices. If the Government’s incentive to provide additional help to people to put down deposits means that 15 people go for houses, but there are still only 10 houses being supplied, prices will be driven up.

The Social Market Foundation has commented on what the Government plan to do, and it says that it helps only older home buyers:

“Overall, the scheme will entice young people to load themselves up with debt to finance overpriced houses”.

The SMF goes on to say that if prices fall those people will be in a trap, and they will pay twice: they will pay for the overpriced house, but they will also have to pay increased taxes to pay back the money that the Government have put into the scheme.

I have only a minute left, but I want to tell the Government that they must make it clear that they are going to build affordable houses. I return to the point that my hon. Friend the Member for Islington North (Jeremy Corbyn) made. When we talk about affordable houses, we must make them affordable for people on the median income for London. It must not be affordable rent calculated according to a percentage that takes into account land values in places such as Kensington and Chelsea. We must remove those land values and make sure that we build houses that are affordable, not just so that people can live in those parts of London and fill the essential jobs in the economy at the lower end of the pay scale but so that they can become savers for the future. Unless we create that capacity in the rental market so that people can live in houses that they can afford to rent and, at the same time, afford to save, we will not have a sustainable private housing market or houses for sale in future.

--- Later in debate ---

[Jeremy Corbyn (Islington North) (Lab)]

I am pleased to be able to take part in this debate. My speech will relate largely to my constituency and my city, but overall the Budget will increase inequality in this country, rather than reduce it. It also contains many inconsistencies, such as spending on a carbon capture scheme while at the same time reducing restrictions on emissions and environmental costs in other industries. We need to be careful about that. If we are serious about protecting the environment, it needs to be an international initiative rather than what I suspect the Chancellor is trying to do, which is to reduce restrictions and conditions in this country, as he is doing with corporation tax. That will lead to a race to the bottom with very damaging consequences for our social infrastructure.

According to the latest unemployment count, 3,700 people in my constituency are on jobseeker’s allowance, 1,000 of whom have been on it for more than a year. Nearly 1,000 young people are also looking for work. At the same time there are enormous problems of inequality throughout London and, indeed, society. If Members look at the tax tables helpfully produced by a number of newspapers, they will see that there is no benefit whatsoever in this Budget or the planned tax changes over the next three years for most people on below average, average or even above-average incomes, and that those who earn more than £500,000 a year will gain at least £2,000 a month in most cases, while some will gain considerably more depending on their own personal circumstances.

There is no question but that this Budget will lead to greater inequality in our society, not less. At the bottom end, a lot of people are trying to survive on frozen or reduced wages in part-time work or on zero-hours contracts. At the other end of the scale, those on very high salaries or with large levels of unearned income will do extremely well out of the Budget and they are able to place their money somewhere where they pay much less tax on the savings that they manage to muster. We have to do better than that. I look to a future Labour Government to commit themselves to the principle of reducing inequality in our society, partly through taxation and partly through investment and expenditure that will help the poorest people through social spending.

My main concern—I think this is true of all other London Members—is the housing problems and the housing crisis in London. My borough of Islington is one of the smaller London boroughs, but it has at least 13,000 families on the priority needs list. The council, to its absolute credit, is doing a great deal to build new council housing, which is of high quality, innovative, energy efficient and imaginatively designed, often in restricted and small spaces. However, it is nowhere near meeting the demands and needs of large numbers of people in priority need. Therefore, my borough, like every other borough, puts people into the private sector, where rents are not restricted. The benefit cap will make it impossible for tenants to pay those rents and they will be asked to make a contribution themselves.

A local authority report notes that a large number of our schoolchildren—1,000 of them—are affected by the benefit cap and that, in the worst-case scenarios, some families are being asked to find £200 a week to contribute to their private sector rent. If they are on benefits, it is obviously impossible for them to find that money—it is £10,000 a year. The only way they can be accommodated is to move them out of the borough. Those in my borough are always offered a place in Greater London. Nevertheless, that means disruption for children in schools, and the break-up of family and community networks, which is damaging and corrosive to the whole of our society.

Other boroughs far less concerned about human needs than Islington dump people outside London. A good friend of mine who lives in north Kent tells me of the misery and poverty of large numbers of people who have been dumped in seaside towns such as Margate, in very poor quality, private rented accommodation, far away from their communities, and with obvious damaging effects to children and families as a whole.

How do we deal with the housing crisis in London? One way not to deal with it is what the Chancellor suggested this week: a charter for those with great money and resources to be subsidised into yet more purchasing of private sector homes. It is yet another escalator on the house price index, using housing as a form of investment and return on capital, rather than meeting the social needs of people in constituencies such as mine. I ask the Government to think seriously about how the housing benefit cap is being introduced and operated, and about how it acts as an agent for the social cleansing of poor and vulnerable people throughout central London to the London suburbs and further afield. It will not be long before the same process starts to happen in every other constituency in the country. This will not start and end in London; the whole process will go elsewhere.

The Government say, quite rightly, that the housing benefit bill is too big: I agree. The previous Government said it was too big: I agree. Why is it too big? Is it because council rents are so high? No, it is because of the high level of private rents in this country, and the lack of any control or real conditions on the private rented sector. We need legislation to control rents and ensure a fair rent strategy, security of tenure and decent housing for people who desperately need it.

[Kelvin Hopkins (Luton North) (Lab)]

I agree with everything my hon. Friend is saying, but does he agree that a significant proportion of the private rented sector should be municipalised so that it can be improved and proper rents charged?

[Jeremy Corbyn]

My hon. Friend is right. We need controls on the private rented sector and on the levels of rent charged, but to deal with this housing crisis—and it is a crisis—we must empower local authorities to take over private rented accommodation that is badly run or ludicrously expensive, and also give them enhanced powers to take over the large numbers of empty properties that are part of land banking throughout London. We have the insulting aspect of people in desperate need living in overcrowded accommodation while nearby properties are often deliberately kept vacant by wealthy, often foreign, investors, who see it as land banking for some speculative gain in the future. What is going on is simply wrong. Housing must be a priority and a right for everyone. If every child had somewhere decent, safe and secure to live, that would be a real legacy, not this gift to those who wish to make a great deal of money out of housing speculation, which is what the Budget offers.

--- Later in debate ---

[Kelvin Hopkins]

Throughout that time I was a member of a group called Defend Council Housing, and time and again I urged my hon. Friends on the Front Bench, as indeed did a number of my hon. Friends, to build more council houses, so in a sense I accept that point.

We have seen the policy on the deficit not working—indeed, it will get worse—but we have seen only about a quarter of the promised cuts so far. What will happen in the next three, four or five years—let us say two years, because the Conservatives will only last that long—will make matters worse. The forecasts for the deficit have been out by many billions. The deficit will be £120 billion in each of the next three years, give or take the odd billion. That compares almost exactly with the tax gap, calculated by Richard Murphy, of £120 billion a year. I am not suggesting that we could overcome the tax gap in one year, but we should start to make the billionaires and fat cats pay their taxes properly. We could make a real dent in the deficit and have money to spend to generate the economy.

[Jeremy Corbyn]

Would my hon. Friend care to comment on the question of tax avoidance and places such as the Channel Islands and other British overseas territories? Is he convinced that what the Chancellor has said will mean that those places will be properly taxed, or will they continue to be places where the wealthy can get away with not paying tax?

[Kelvin Hopkins]

I remain to be convinced that the Government are serious about dealing with tax avoidance and evasion. We have a revenue problem, not an expenditure problem. We are failing to collect taxes, and what are the Government doing? Successive Governments have cut the number of staff at HMRC. We should be increasing their number, because every additional tax collector collects many times their own salary. We should increase staffing levels at HMRC and start to collect those taxes. That would make a real difference.

The superficial analogy with personal household incomes has been drawn time and again—“You can’t spend what you don’t earn” and all that. If a person’s or family’s expenditure is greater than their income, we get the Micawber effect, because people finish up in penury, but Governments and economies are not like that. One person’s spending becomes another person’s income, and so on, and we get this circular flow of income, which generates jobs, wealth and tax revenues. Economies do not work like family incomes, as Keynes explained many times in very simple terms. I used to try and explain it to my students as well. Economies are not like households, so I hope that we can dismiss this simplistic analogy with personal incomes.

We have to invest, to start building again and to reflate the economy. We will do that by driving up employment in labour intensive areas, and the most labour intensive sectors are those such as construction and public services. We get much more bang for our buck from investing in those areas than from cutting taxes. The money saved by doing the latter leaks away to the better-off and frequently into tax havens, which brings no benefit to the economy, whereas direct spending on building more houses, for example, has beneficial and rapid effects on the economy. The other great advantage of construction and public services is that they have a low import content, which means that we do not get leakages into imports—not in the first round at least. It is a very sensible way of trying to regenerate the economy.

We also need the right parity for our currency. Successive Governments have been obsessed with keeping the pound “strong”, as they call it—in other words, overvalued—which means that we become uncompetitive. The strongest evidence that we are uncompetitive is our a £1 billion-a-week deficit with the rest of the EU. We should use our advantage in having our own currency to find an appropriate—in other words, lower—parity for sterling, so that we can regain our competitive advantage.

There is much more I wish to say, Mr Deputy Speaker, but I fear I have had my time. Thank you.

Jobseekers (Back to Work Schemes) Bill

Jeremy Corbyn Excerpts

Tuesday 19th March 2013 Commons Chamber

[John McDonnell]

Before we vote tonight, it is important we know that we will be voting to support the workfare schemes being introduced by the Government. The Bill will enable the sanctions to be continued and retrospectively made legal, because people refused to go on those schemes—I think justifiably so with regard to many of them. Let us take some examples from the Boycott Workfare website. Tesco is a classic, and one example refers to

“a fifty-six year old man who worked at Tesco for 40 hrs a week for 6 weeks for no pay.”

He was

“given the worst job, constantly filling freezers in the hope he would be taken on. After the 6 weeks were up the manager asked him if he would like to stay on for some extra weeks,”

and the man said,

“‘with pay?’”

The manager said no,

“why would he pay him when he can pick the phone up and get more unemployed people who have to work for nothing”?

That was at Tesco, and the list goes on. Poundland is a classic example of an organisation exploiting unemployed people, time and time again recruiting shelf stackers while laying off other workers. Primark is another example. One young woman who went to Primark said:

“The Jobcentre paid travel money but no lunch. I worked three days a week, 10 am to 4.30 pm or 5 pm with one half-hour break.”

Primark

“don’t pay any money. It was nearly six months, from January to June. When I finished the placement I took my CV and I asked the managers if they had any vacancies. They said, ‘Not yet—we’ll call you when we do.’ I haven’t had a call.”

[Jeremy Corbyn (Islington North) (Lab)]

Is my hon. Friend aware that there are companies that do the same, but with people who have not come through the jobcentres? People apply for a job, are asked to work for three or four weeks on probation and are then told to go and are replaced by colleagues. There are shops even in the west end using large numbers of totally unpaid staff on a permanent basis.

[John McDonnell]

The whole point of the exercise, as far as I can see—despite the arguments that it makes people job fit—is the massive exploitation of tens of thousands of people for free labour. I will not go through all the examples, but it is worth looking at the Boycott Workfare website, which gives example after example of people who have been exploited or have worked in unsafe conditions lacking health and safety, have stuck at it to try to get a job and who have never got the job. The job never materialises.

What happens if people say no or drop out? They are sanctioned. Sanctions have increased dramatically in this country. In 2009, 139,000 jobseeker’s allowance claimants were sanctioned. By 2011, the number had nearly tripled to 500,000, and it has risen again this year. Interestingly, it is private companies that recommend sanctions to the Department for Work and Pensions. The worst are Serco, Seetec, A4e and Working Links. If they do not get their pound of flesh—if they do not feel that they are getting value for money from someone who is unpaid—they recommend to the DWP that the person be sanctioned.

The irony is that despite all the pain, anxiety and suffering inflicted on unemployed people, the schemes are proven not to work, as my right hon. Friend the Member for East Ham (Stephen Timms) said. Time and time again, all the evidence—whether from the Social Security Advisory Committee, the DWP peer review, Ben Goldacre or the National Audit Office—demonstrates that not only do the schemes not work but, as others have said, they undermine wages for people in work and prevent others from getting paid jobs.

Large numbers of people are extremely angry at how they have been treated. I believe that many are now willing to stand up and say, “We’re not going to be treated in this way.” That is why the sanctions system is becoming even more rigorous, and why it is important for the Government to pass the Bill: they want to intimidate more people and force more people into work, done for free, that they do not want to undertake.

It is worth stating that this is about exploiting people. It is about ensuring that young people in particular are intimidated into unpaid work. People who were brave enough to say, “I’m not willing to take unpaid work and be exploited in this way, and if necessary, I’ll be sanctioned because of that,” have now been proven right. They were not informed of what they were getting into, but they were bright enough to understand the level of exploitation involved and they stood up against it. The Bill says to them that now they have won in court, we will try to ensure that they do not get justice. That is what it is about.

I urge Members to vote for justice. The Bill is a disgrace. It is a monument to a combination of incompetence by the Government and brutality to the poor. I look forward to hearing the Labour party consider what we are doing here today. I urge Members to vote against the Bill, because I think that people are looking to the Labour party to defend them again—to stand up for what is right and just, for the people in our society who are exploited and for those at the bottom at the moment: those who are unemployed, unable to get a job, dependent on benefits and desperate for work. Those people do not expect to be harassed and exploited by a Government using sanctions to force them into unpaid work. That is why I shall vote against the Bill, and why I urge all Members to vote against the Bill to demonstrate that someone in the House is standing up for those people.

Welfare Benefits Up-rating Bill

Jeremy Corbyn Excerpts

Tuesday 8th January 2013 Commons Chamber

[Lisa Nandy]

I could not agree more with my hon. Friend. That brings me on to the third false premise that the Bill is based on: that there are two distinct groups, the working poor and the non-working poor, who can somehow be separated out and divided when, as we know and as the research proves, most of the people we are talking about are moving in and out of work at an alarming rate. Many of the people I represent work part-time on zero-hours contracts. They are agency workers and they are in insecure employment.

[Jeremy Corbyn (Islington North) (Lab)]

Is my hon. Friend aware that in inner-London constituencies such as mine, the housing benefit cap affects people in work and out of work, and that working families are being forced out of private rented accommodation? They cannot afford the rent anymore, because the cap has been imposed and does not meet their needs. This is an attack on the poorest people in the most vulnerable parts of the country.

[Lisa Nandy]

I am grateful to my hon. Friend for helping me to illustrate that point.

We have heard the myth, repeated over and over again today, that somehow the welfare bill is too high when, as my right hon. Friend the Member for South Shields (David Miliband) said, there is a big difference between attacking the evil of unemployment and attacking the unemployed. As the Child Poverty Action Group points out, in 1979 unemployment benefit was 22% of average earnings; today, it is just 15%. It has fallen sharply over that period.

We have also heard the myth over and over again that we can bring down the welfare bill by cutting benefits to the poorest. We know that that is not true, as does the Office for Budget Responsibility, which has forecast an extra £6 billion of welfare costs as unemployment tragically continues to rise in my constituency and across the country. There are two solutions that the Government urgently need to take seriously. If the Secretary of State would stop laughing and listen for just one moment, I would like to ask him to get serious about job creation. That is not just about wage subsidies, but looking at how we use our public procurement power to ensure that we get young people into apprenticeships, and people into work and decent training opportunities.

Secondly, I ask the Secretary of State to take seriously the impact of low pay on local economies. A number of hon. Members have raised this point. The more people there are taking cuts to their tax credits and take-home pay, the fewer people there are spending in local economies. In an area such as mine, where there is a high proportion of small businesses that employ many people from the local area, that is devastating.

The Bill fails every test. It is not fair. It will not work. It will have appalling consequences for the very poorest in society, whether they are in or out of work. All of us, every single one of us, in this Chamber has a minimum household income of more than £65,000. Many of us, particularly those sitting on the Government Front Bench, have a minimum household income of much, much more. For any of us to vote for the Bill today would be simply shameful, but what is more shameful is that, as part of the debate, some of us have managed to demonise the very people who most need and deserve support from their Government.

Benefits Uprating (2013-14)

Jeremy Corbyn Excerpts

Thursday 6th December 2012 Commons Chamber

[Steve Webb]

My hon. Friend is right. Some have suggested that £2.70 is not that great a figure, but when we compare it with the figure he quotes, we can see that it is an improvement. It is higher than inflation and higher than average earnings. As I have said, it takes the pension’s real value relative to what people in work get to its highest level for 20 years. The coalition can be proud of that.

[Jeremy Corbyn (Islington North) (Lab)]

Many people in my constituency come to see me absolutely distraught at the prospect of losing their private rented flat because of the imposition of a housing benefit cut. Social cleansing is going on in all of central London because of the benefit cap. That is a disgraceful situation. It destroys communities and damages schools—need I go on? The Minister is proposing a £140 million transitional payment. That is not enough, and transition is not enough. We need rent controls in the private sector. If there is to be a benefit cap, it needs to reflect the reality of the costs of life in inner-city Britain.

[Steve Webb]

I am grateful for the opportunity to clarify where the £140 million that we have identified will be spent. The additional help will go to areas where there are local housing market pressures—areas where rents have risen rapidly or where there is a shortage of affordable housing. It is targeted support for local areas in addition to the discretionary housing money we have made available to local authorities so that the hardest cases can be properly protected.

CPI/RPI Pensions Uprating

Jeremy Corbyn Excerpts

Thursday 1st March 2012 Commons Chamber

[John McDonnell]

The hon. Gentleman is right. Jim did base his future plans with his wife on what he was told was a guarantee—a written guarantee—in the guide itself. That is not just unfortunate, but disgraceful. I agree that others should not be misled in that way in the future, and it should not have happened in the past. Thousands of pounds have been cut from Jim’s own pension. After 35 years of public service, the Government have knowingly cut his pension to pay off a deficit he did not create.

There are so many other Jim Singers. I recently met firefighters who were particularly angry that a firefighter retiring on a full pension will lose £52,000 over 20 years. This comes on top of a three-year pay freeze, after two years of only a 1% increase, which means no real increase in pension or pay for the best part of five years. The real cut in spending power for firefighters is a pre-retirement cut of 20% and a post-retirement cut of 22%. A 40% cut in income is a terrible price to pay for a crisis these people did not create.

I have met so many others, too. A Forestry Commission worker who worked for 24 years is losing £17,000; a jobcentre worker who worked at the Department for Work and Pensions for 26 years is losing £20,000; a tax inspector at Her Majesty’s Revenue and Customs with 36 years’ employment is losing £45,000. I became angry myself when I encountered examples provided by the Forces Pension Society of some horrendous losses—I do not know whether other Members have seen them. A disabled double amputee, a 28-year-old corporal, will lose £587,000 by the age of 70; a 40-year-old sergeant in the Royal Marines will lose £212,000 by the time he is 85; members of the Royal Fleet Auxiliary will lose literally tens of thousands of pounds. This is simply unacceptable.

Why, then, the change from RPI to CPI? In past discussions of this question, the Minister has been robust in his view that whether or not there was a need for cuts to deal with the deficit, CPI is a “better measure of inflation”. Numerous others have contested the suitability of CPI as an appropriate measure for pensions. The Royal Statistical Society is a particular example, and it provided us with another briefing yesterday. Its vice-president, Jill Leyland stated forcefully in a letter to the chair of the UK Statistics Authority:

“We do not feel that CPI currently serves the purpose of being a sufficiently good measure of price inflation as experienced by households to be used in uprating pensions”.

She went on to warn that its use would

“cause damage to consumer confidence in official statistics if it is perceived that uprating to pensions and other benefits is being governed by an index perceived by many as inappropriate and unfair.”

It was reiterated in the briefing sent to all Members yesterday that it is important for any index to enjoy the confidence of pensioners—and this index does not.

CPI was invented as a tool of macro-economic policy so that inflation rates could be compared across Europe, but because there was no agreement on how to calculate housing costs across European countries, that element was left out. CPI, because of its exclusion of housing costs, such as mortgages, council tax, and vehicle excise duty and TV licences, is criticised for not properly representing the real costs that pensioners face.

On top of that, as Members will know from the previous debate, there is what is described as the formula effect. CPI uses a geometric mean rather than an arithmetic mean, and we have long debates about those different means, so we have all become statisticians on this issue. In its calculations, CPI is supposed to take into account the ability of a person to shop around for cheaper goods. This—falsely in the eyes of many statisticians—assumes a sophisticated knowledge by pensioners of price variations and that consumers are sufficiently mobile to shop around. In reality, many pensioners are not the perfect shoppers of the economic model that CPI puts forward and are not mobile enough or capable of shopping around to secure the lowest price of all the goods in this basket.

[Jeremy Corbyn (Islington North) (Lab)]

I commend my hon. Friend for securing this motion. He makes the point that housing is excluded from the CPI. Particularly in London, house prices, rents and housing costs are going up well above the rate of inflation, and continue to do so. For elderly people, it is impossible to shop around: they have no choice; they have to stay where they are in the property they occupy, and they have no control over rents and associated costs. It is a double whammy on them.

[John McDonnell]

That is why—[Interruption.] As the Minister says from a sedentary position, it is mortgage costs, not rents that are excluded. However, the range of other costs that pensioners have to meet are not included—housing-associated costs such as council tax, for example. That is one reason why Age UK undertook detailed research into the real spending patterns of pensioners and arrived at a more realistic assessment in its “silver retail prices index” of what price rises pensioners face. That showed that the impact of increases in basics such as fuel costs and food were hitting pensioners harder than both the RPI and the CPI calculated.

The weaknesses of CPI have been extensively acknowledged. The EUROSTAT—the European Commission’s statistics body, which came up with the original proposals on CPI—is working on a harmonised approach to including housing costs. The Minister acknowledged some of these criticisms in the Welfare Reform Bill Committee and informed us that the Consumer Prices Advisory Committee is undertaking a detailed programme of work to look at ways of including housing costs, but that this would not be concluded in the next “year or two”. In the meantime, pensioners will lose out—significantly.

Despite all the debate about the statistics, we know that the real reason for the move from RPI to CPI is to cut public expenditure. When this matter came before the courts, the Government argued that CPI

“provides a more appropriate measure of benefit and pension recipients’ inflation experiences than RPI and a better representation of the way consumers change their consumption patterns in response to price changes.”

They argued that that was the reason for the shift. Three High Court judges agreed that, on the basis of the facts before them, the Government’s move to CPI was really the result of their desire to force through budget cuts.

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[Harriett Baldwin (West Worcestershire) (Con)]

Thank you for allowing me to speak in this important debate, Madam Deputy Speaker. I congratulate the hon. Member for Hayes and Harlington (John McDonnell) and the Backbench Business Committee on organising the provision of parliamentary time for discussion of this topic. Having been a professional pension fund manager myself, I leapt at the opportunity to speak today. It is not often that, on a Thursday afternoon, we experience the excitement of discussing the difference between the geometric and the arithmetic mean in indexing. I thought I would put in a few words, as I also represent a constituency that is inhabited by a higher than average number of pensioners.

As a former pension fund manager, I recall the days when Britain had a pension fund system that was the envy of the world. We had a terrific private sector-led system, and workers in the public sector were also in very good schemes. I believe that Britain’s leadership in that regard began to unravel in the first Labour Budget after the general election in 1997, when the then Chancellor imposed a tax on pension schemes. It was pretty apparent at the time that that would undermine a private sector pension system which, as I have said, used to be the envy of the world.

[Jeremy Corbyn]

I think the hon. Lady is in danger of misreading history. The Social Security Act 1986 promoted the destruction of occupational pension schemes, promoted personal private pension schemes, and eventually led to a gross mis-selling of pensions which had to be corrected by the incoming Government in 1997. I think the hon. Lady needs to take her historical narrative a little further back.

[Harriett Baldwin]

The hon. Gentleman has clearly forgotten the imposition of a tax on private pension schemes in that first Labour Budget of 1997, which I think many people realised at the time would be a recurrent year-on-year tax that would lead to the erosion of private pension funding over time. Private companies then acted very rationally. Many of them ceased to offer defined benefit pension schemes.

Let me give some figures which I take to be rough estimates. There are approximately 29 million people in Britain’s work force today, 23 million of whom are employed in the private sector. I was shocked to learn that only 3.2 million of those 23 million were currently active members of a pension scheme in which the employer makes any contribution. That contrasts with the position in the public sector, in which about 5.5 million of the 6 million employees are members of pension schemes. That is the proportion that we should aspire to in terms of pension provision throughout the work force. I know that our pensions Minister aspires very much towards movement in that direction.

Welfare Reform Bill

Jeremy Corbyn Excerpts

Wednesday 15th June 2011 Commons Chamber

[Yvonne Fovargue]

I shall return to the issue of domestic violence. Who will be the responsible authority? If people move overnight to interim accommodation, whose policies will prevail? There are problems at the moment with local authorities taking responsibility. I know of situations in which one local authority says, “These people can’t come back to us,” and the other says, “We don’t want to accept them.”

[Jeremy Corbyn (Islington North) (Lab)]

My hon. Friend makes an important point. This is a serious and acute problem in London. Given that the boroughs are geographically small, people who move at a time of crisis are not aware of what borough they are moving to and from, and the situation can be disastrous for their future housing options. Central Government direction is needed, and there must be complete ring-fencing and a statutory requirement on each local authority because otherwise the most vulnerable will be short-changed as a result of demands for expenditure—albeit understandable demands—in other areas of a local authority.

[Yvonne Fovargue]

I completely agree. The Government’s approach seems to be predicated on a view that local management will more accurately assess local people’s needs and use a range of local provision and services to support people in need, but that argument is flawed.

We have heard mention of credit unions and charitable support, as well as recycled furniture outlets and food banks. However, let me cite the example of an individual whose washing machine or cooker breaks down. They might be given a recycled product, but such goods are often much less energy-efficient than new goods, so that person will face higher fuel costs and will have no choice but to pay them with more of their low income. Such goods also lack a guarantee and have questionable reliability, so the approach might well be a false economy.

There is also a question of whether charities will be able to sustain continuing demand and, importantly, of whether the dignity of the individual will be adequately protected. I have heard many people—young and old—say, “I am not asking for charity. I do not want charity.” I fear that people will be deterred from applying to any scheme under which they will be referred to a charity and that they will therefore be forced into the hands of the high-cost lenders and credit companies.

--- Later in debate ---

[Jeremy Corbyn]

I am glad that my hon. Friend brings up the issue of private landlords because the majority of the people about whom we are talking—certainly in London, but possibly in the rest of the country—tend to live in private rented accommodation, which is often unregistered and usually incredibly energy-inefficient, certainly compared with council and housing association accommodation and most owner-occupied properties. These people therefore face higher energy costs and their permanency of accommodation is more vulnerable. We need to take account of the fact that we will be throwing people into the most vulnerable housing sector of all those available.

[Yvonne Fovargue]

I agree. This is no way to treat vulnerable individuals who are trying to obtain life’s necessities. I urge hon. Members not to legislate for the Government’s proposals before a robust, effective and consistent alternative, with a proper right of appeal, has been fully explored.

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[Margaret Curran]

Indeed, and there is often an impact on the wider family, not just the immediate family.

We believe that the Government are misguided in their decision to lengthen the time disabled people must wait before they are given support. The Government are also wrong to remove automatic entitlement for certain severely disabled people who currently have the automatic right to receive the higher rate of DLA. At the moment, the severely mentally impaired—that is the language that is used—double amputees and those who are deaf-blind, undergoing haemodialysis or are severely visually impaired are automatically able to receive higher rates of DLA. Under the Bill, however, only those with a terminal illness will automatically receive PIP. Obviously I welcome the Government’s commitment to protect the terminally ill, but we believe that this obligation does not go far enough. Amendment 43 would ensure that those with a severely disabling condition, who are currently eligible for automatic entitlement, would retain that right following the introduction of PIPs.

It is important that we keep in mind the group of people whom we are talking about in the amendment. Is the Minister planning to inform the House today that an individual who is severely mentally impaired or a double amputee might not now be eligible for the higher rate of PIP? That would be quite an announcement. What reason is there to force this group of severely disabled people to undergo an assessment process of which we can all safely predict the outcome? We now know that the Government plan to spend £675 million on establishing PIP, on the bureaucracy of PIP and on the reassessment of 1.8 million working-age recipients of disability living allowance.

[Jeremy Corbyn]

Does my hon. Friend have estimates of the cost of each of these interviews that will have to take place; of how many will be unnecessary; of how many will be appealed successfully; and of the incredible stress and hardship through which individuals will be put while knowing full well that unfortunately they can never get a job or go to work, and that they will have to be in receipt of benefits in the future?

[Margaret Curran]

I am afraid that I do not have specific numbers to hand, but I will make it my business to get that information because it would be very interesting. I am sure that some organisations could help us estimate those numbers and the different categories that my hon. Friend highlighted. He outlined a common-sense approach. It makes no sense to put these people through this stress, or to add to the bureaucratic costs of administering the process, when that money should be going to the disabled people themselves.

In a time of economic restraint, I am sure that everyone on both sides of the House agrees that this is a huge amount of money to spend on administration, so we should consider opportunities to reduce the costs. It is absurd to propose reassessing conditions that will clearly be eligible for the new PIPs. I have asked how much it will cost, and I will try to get answers—perhaps the Minister can give them in her reply. If the argument for retaining automatic entitlement is rooted in the avoidance of needless assessment, it is also grounded in the goal of appeasing the anxiety of many disabled people about having to undergo reassessment for PIP eligibility. As I am sure my hon. Friend the Member for Islington North (Jeremy Corbyn) knows, one of the biggest concerns disabled people tell us about is the constant reassessments they have to undergo, despite it being obvious to everybody that they have a disability. They are needless assessments.

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[Jenny Willott]

I am afraid that I shall disappoint the hon. Lady, but that is an issue for the Minister. I do not know what discussions the Minister has had with the devolved Administrations. I am a Member of Parliament for a Welsh constituency, so the issue clearly affects my constituents, too. I am sure that some discussion is going on, but the hon. Lady can ask the Minister to respond to that question.

A number of other issues are covered by the amendments before the House and have already been raised by the hon. Member for Glasgow East (Margaret Curran), including how the Government handle fluctuating conditions and the assessment requirements for PIPs. We have had a number of debates about fluctuating conditions, not least in a Delegated Legislation Committee yesterday afternoon which was attended by many Members who are in the Chamber this afternoon. Fluctuating conditions are hard to manage in the benefits system. As has been mentioned, Professor Harrington is doing work on descriptors for the work capability assessment for fluctuating and mental health conditions and on how the assessments can be improved to take them into account. I hope that the Minister can reassure us that the Government are learning the lessons from the mistakes made in the work capability assessment and that we do not replicate them when the new PIP assessment is introduced.

[Jeremy Corbyn]

Will the hon. Lady give way?

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[Maria Miller]

If the hon. Lady will forgive me, we are running very short of time.

Amendment 60 would have the unwelcome effect of allowing the automatic transfer of existing DLA claims on to PIP without any review of entitlement. PIP is a new benefit, with new entitlement criteria and a new assessment of individual need. To transfer people to PIP automatically without first determining whether they are eligible for the benefit would be inherently unfair and would perpetuate the failings of the current system. I cannot therefore accept that amendment.

I hope that I have started to give hon. Members a flavour of the scale of work that is being undertaken by the Department in putting forward a new benefit of this scale. I hear the loud reiteration of many of the arguments that I have had with disabled people and disabled people’s organisations over the previous months in hon. Members’ comments today. I am sure they will be reassured that disabled people and disabled people’s organisations are at the heart of the development of our assessment, which is now fully available for people to look at and comment on online. Some of the amendments proposed today are wholly inconsistent with the principles that I have set out for our reform of PIP, while others are unnecessary. I hope therefore that the hon. Member for Glasgow East will withdraw the amendment.

[Jeremy Corbyn]

I will be brief because many other hon. Members wish to speak, and under the timetabling motion we have to conclude by 6 pm, which is very inadequate given the seriousness of the issues. I shall speak specifically to amendments 43, 76 and 77. Amendment 43 was tabled by my Front Bench colleagues and I am happy to support it. I have added my name to it and I hope that they have noted that. Amendments 76 and 77 were tabled by my hon. Friend the Member for Aberdeen South (Dame Anne Begg).

This morning, I was at a commendable place known as Centre 404 in Islington, which provides support and activity for those with physical disabilities and learning difficulties, as well as support for their carers and families. It has been going for 60 years and is a very successful and effective organisation. The large numbers of people there this morning were discussing the introduction of PIPs and the issues surrounding carers week. Before we go into the details of the amendments, we should think for a moment about the enormous amount of work done by carers, who are inadequately recompensed and save the economy vast sums of money. If they were they not doing this work and giving up their careers and lives to care for those who desperately need their help and support, that care would simply not be provided and the costs to the state would be far greater, so we should recognise the economic contribution they make in a decent and humane way.

The Minister said that I conflated the question of jobseeker’s allowance interviews with PIPs. In a sense I did, because I was drawing attention to how people were dragged in for interview. For example, a lady told me—she is a much respected member of the community active on these issues—that her doubly incontinent adult daughter, who has learning difficulties, was told to go to a jobcentre for a jobseeker’s allowance work interview. It is expensive, unpleasant, wasteful, stressful for everyone concerned and an utter waste of time, and considerable damage and humiliation is caused to the individual and their family. That is why amendment 43, which would exempt those with prescribed medical conditions, would be a sensible, important and useful change to the Bill.

The Disability Alliance described to me how PIPs are likely to come in and how the assessments will take place, and the word that kept recurring was “continual”—continual prompting, continual help, continual assistance, continual support—which is interesting, because a person with a sporadic mental health difficulty does not need absolutely continual help and support, yet they do need help and support on a continuing basis. Do they then lose out on PIPs?

[Stephen Lloyd]

Does the hon. Gentleman agree that that definition also perfectly describes people with multiple sclerosis, which is a fluctuating condition? Someone with multiple sclerosis might need very little support one day, but literally within 24 hours might require substantial support.

[Jeremy Corbyn]

Absolutely. My hon. Friend the Member for Aberdeen South pointed out that there are some conditions that although not terminal or immediately life threatening are nevertheless very debilitating. MS fluctuates in its intensity and the intensity of care and support needed.

People with a long-term, continual and severe disability should be exempt, and should not be forced to go through this interview process. In an intervention on my hon. Friend the Member for Glasgow East (Margaret Curran), who sits on the Front Bench, I raised concerns about the costs of taking people in for interview, refusing them and then putting them through an appeals process, only for them to end up, months later, exactly where they started—with lots of costs, lots of time, lots of humiliation and lots of waste at the end of it. Amendment 43 would make a pretty appalling Bill very slightly better by recognising that those with permanent and long-term conditions should not have to go through this process. I therefore hope that the House will recognise the amendment’s importance and be prepared to pass it today.

Amendment of the Law

Jeremy Corbyn Excerpts

Tuesday 29th March 2011 Commons Chamber

[Mr Speaker]

With the leave of the House, I propose to take motions 11 to 52 together—

[Jeremy Corbyn (Islington North) (Lab)]

Read them out—every one of them.

[Mr Speaker]

I am grateful to the hon. Gentleman for his exhortation to read out the name of each motion individually, but I shall resist.

Social Security

Jeremy Corbyn Excerpts

Thursday 17th February 2011 Commons Chamber

[Dame Anne Begg]

CPI is still much less. Perhaps the average is taken from rent overall, not only in the private rented sector. That is where some of the differential might come from.

[Jeremy Corbyn (Islington North) (Lab)]

My hon. Friend has made an important argument about the level of rent increases, particularly in the private sector in London, where rent increases and demand go up by far more than any rate of inflation or any other measurement. The Government’s cap on housing benefit has the perverse effect of driving many of the poorest people out of central London because they will not be able to meet the rent demands and normal costs of living within the global cap on benefits.

[Dame Anne Begg]

My hon. Friend is right. There is a triple whammy on people who live in London in high rent areas: the local housing allowance is to be capped, possibly below the level of the rents; they will have access only to houses within the 30th percentile; and they will not see the inflationary increases in the indexation of their housing benefit to meet those conditions. They will be hit more than once with regard to the affordability of their rents. That certainly came over loud and clear when the Select Committee looked at what was happening to local housing allowance.

The effects of the Welfare Reform Bill have been mentioned. The universal credit will make it difficult to project benefit uprating into the future to work out what percentage of their incomes people are likely to loose. There will be no straight line from the current benefits to the universal benefit, because they will be mixed up. It is difficult to see what will happen. The compounding effect will probably be seen in pensions, particularly for those in receipt of the state pension, and the level of pension will be less.

In reply to my hon. Friend the Member for Eastbourne (Stephen Lloyd)—I am sorry, Madam Deputy Speaker; I always refer to fellow Committee members as hon. Friends—I said that the assumption is that the largest part of a pensioner’s income is the basic state pension, but we know that for many people that is not the case. Even if the state pension makes up a large part of their pension, it is often not all of it. Many people on the lower pension are dependent on SERPS, which of course will now be moving up in line with CPI, rather than RPI.

On the basic state pension, I accept the Minister’s figures indicating that it will rise from £97.65 to £102.15, an increase of around £4.50 a week. No one would say that that is wrong, because we all agree that £234 a year is great. However, the average public sector pension of £7,800 will be reduced by around £117 because of the difference between RPI and CPI. I am not very good at the arithmetic, but that means that instead of getting a rise in income of 4.6%, the people affected will get a rise of less than 2%. It is a rise, but it is not as much as they were expecting, and we must remember that we are living in a time when inflation is increasing.

A woman who receives the average local government pension of £2,600 will be £40 worse off than if her pension had been linked to RPI. If she has paid the small stamp, she might get no extra money through the basic state pension anyway, not even the compensatory increase in it. She might not have made full contributions and so will get some of it, but not all. The Government’s proposal is unfair to pensioners, and it is particularly unfair to women.

My right hon. Friend the Member for East Ham has already mentioned the particular unfairness of raising the state pension age to 66 by 2020. To be clear on the Opposition’s position, we have no qualms about raising the state pension age to 66 in principle, but we are concerned about the speed with which the Government are doing so. That overrides what was already in place for women who were born in the 1950s, who were going to see their pension age rise to 65 by 2020 anyway.

Women who began their working lives expecting to get a state pension at 60—that happens to include me—will now have to wait another six years for it. On a quick calculation, that will save the Government £32,000 on today’s basic state pension. It will come out of the pockets of women who are roughly my age and will stay with the Government. We will have to increase the indexation an awful lot more to make up for the £32,000 that those women will lose as a result of the increase in the state pension age by six years.

I appreciate that the measure whereby women born in 1955 would have to wait until 2020, when they were 65, to receive their income was already in train, but what about the women born between 6 October 1953 and 5 April 1955, who had already made all their financial plans but will now have to work for more than one further year before they can receive their basic state pension? The Minister has said on numerous occasions that that measure alone will save the Government £10 billion. All that is a win-win for the Government: the Government win, because they do not have to pay the money out, and because they have changed the indexation. The people who lose are those who expected to receive their pensions at a certain point, and in this case those people are women.

I would understand the Government’s rationale if the measure was part of their deficit reduction plan, but they have already said that they intend to get the deficit off the books in four years’ time, and none of this stuff comes in until after the deficit is meant to have been reduced, so it cannot be part of a deficit reduction plan. The Government should be more honest. We have heard that the change to CPI is going to be permanent, so they should say, “We’re doing this as a long-term measure, because we want to save money.” That is part and parcel of what the Government are about: saving money.

Disability Allowance

Jeremy Corbyn Excerpts

Tuesday 30th November 2010 Westminster Hall

[Gavin Barwell (Croydon Central) (Con)]

I intend to be very brief because I know that other Members still wish to speak.

I congratulate the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) on securing the debate. I think that all Members of Parliament will have had contact with our constituents on this issue. People are very concerned about what the consequences of this change will be, and he was absolutely right to remind us that the people affected by the change are those constituents to whom we have a special obligation, given their position in society.

On the other side of the coin, I have a great deal of sympathy for my hon. Friend the Minister and for Government Ministers in general, because they are having to take some incredibly difficult decisions at the moment. I have been a Member of the House only since 6 May. During the last six months, I have had to support a number of decisions that, in an ideal world, I would not have wished to support. I think that if the tables were turned, as it were, and Opposition Members found themselves in the position of being in government, they would probably have to take decisions that they would not ideally want to take.

[Jeremy Corbyn (Islington North) (Lab)]

Not this one.

[Gavin Barwell]

I will come on to that exact point about this decision.

As a Government Back Bencher, I ask myself a question when I look at each of these issues as they emerge: is there a justification for the decision that is being made? I think that the Government have a case. As I understand it, it is that there is a degree of double-counting in respect of this money and that, legally, local authority care contracts should provide the resources to meet people’s needs—and not only their medical needs but their social and emotional needs, as the hon. Member for Stretford and Urmston (Kate Green) referred to earlier. The money to meet those needs is also being provided via the mobility component of the DLA. I do not think that a case can be made that residential homes are analogous to hospital care, and the right hon. Member for Coatbridge, Chryston and Bellshill made that point very powerfully in his speech.

However, I have two caveats. The first is that if one takes the view that this support is at least nominally being provided in both ways that I cited, it would be better to strip out the local authority support mechanism. The right hon. Member for Oxford East (Mr Smith) made the point that the mobility component of DLA meets the need for personalisation of funding. However, I guess that it would have been much more difficult to identify the exact level of spending by local authorities on meeting those needs and what savings could be made on local authority contracts if we were to say that the mobility needs of people with disabilities were to be met through DLA.

--- Later in debate ---

[Mark Durkan (Foyle) (SDLP)]

Like other Members, I will keep my remarks short, given the time pressure.

I congratulate the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) on securing this important debate on an issue that affects many people and that worries many more people. The hon. Member for Banbury (Tony Baldry) referred to the observation of the hon. Member for Aberdeen South (Miss Begg), the Chair of the Work and Pensions Committee, that a lot of concerns were being expressed in the blogosphere about this issue. However, I do not think that the hon. Lady was reflecting any confusion on her part; she was reflecting the scale of the fear and concern among many people who will be affected by the change.

People are worried about who is affected by these cuts and where the cuts will extend. The proposal is currently that the cut will affect people who are local authority-funded, or who are deemed to be local authority-funded, in residential care, but not self-funders. However, people will inevitably then say, “How does the logic of that stack up? Will self-funders be targeted too, because how can you justify some people in a residential care setting getting this benefit just because they are self-funded when other people do not get it?”

[Jeremy Corbyn]

Does my hon. Friend share my concern that this cut—nasty and horrible as it is—affects about 60,000 people, but that the mobility allowance goes much wider than that? Is this the start of something much bigger, whereby the mobility allowance is removed altogether?

[Mark Durkan]

I think that many people have that concern, precisely because of the confused arguments that are now coming from the Government to justify the cut. Even in this debate, several hon. Members have suggested that this is just switching from one channel of support to another. Some hon. Members seemed to be suggesting that it might not even be a cut at all. We were told that the change was justified on the basis of the need to cut the deficit and because there had to be a cut in the welfare bill, but now we are being told that it might not be a cut at all and that the money might reach people by different means. However, does anyone seriously believe that the money that already reaches people in a highly personal and highly effective way, and that is well justified by the needs of those people, will be replaced or replicated by personalised budgets coming through hard-pressed local authorities? No, it will not.

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) asked what consultation there had been with the devolved authorities. I know that Alex Attwood, the Social Development Minister in Northern Ireland, who runs the Department that covers the social security agency, has made it very clear that he cannot pretend—to himself or anybody else—that if this cut is imposed, it will be made good by the health and social care trusts in Northern Ireland and the sort of packages of personalised budgeting that they would be able to deliver, because those trusts are already under severe pressure after going through years of efficiency saving and because they face yet more again.

There is no point in people trying to delude themselves, or anybody else, by pretending that this is not really a cut at all. Some of the arguments almost amount to a sort of “let them eat cake” answer, Some suggest that there might be something better for people than what is in place already, but people know what they use the allowance for. They use it to ensure that they are able to get accessible taxis, to continue to run their Motability car, or so they can fund powered wheelchairs to get them about in their life and to keep them connected with their family, neighbourhood, and the voluntary groups and support efforts in which they are involved. Many people in residential care homes who receive the allowance use it not just for themselves. Many of them deliver messages, collect library books or do other things for those who are in the care settings with them.

I ask the Government to think again about this cut. In the minds of the people who are making this cut, I am at a loss to understand whether it is justified by context, because of the urgency of tackling the deficit, as we are told; whether it is a convenience cut, simply because the people affected seem to be a handy group of people to get and those who are making the cut have made the mistake of thinking that they are the equivalent of people who are in hospital; or whether it is a conviction cut. Are people somehow genuinely scandalised that people in residential care settings are able to have a modicum of decency, independence and choice for themselves by virtue of this allowance? We are still getting confused and inconsistent answers from the Government, so I hope that the Minister will clarify the situation.