Jobs and Social Security

Jim Shannon Excerpts

Wednesday 28th November 2012 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Aberconwy (Guto Bebb) and more especially to follow the newly elected Member, my hon. Friend the Member for Manchester Central (Lucy Powell), who made a magnificent speech, in sharp contrast to the ragbag of rubbish that we heard from the Secretary of State, who again painted the false picture that all the problems were inherited from the Labour party and that everything is hunky-dory now.

The reality is, of course, that under the previous Labour Administration we had sustained growth to 2008, after which there was a financial tsunami, yet we kept growth going through the fiscal stimulus. Two thirds of the deficit in 2010 was due to the banking community and only a third was due to pump priming, which kept us on the move.

What did we see then? The Conservatives arrived, deflating consumer demand by immediately announcing half a million job cuts—and we have seen virtually zero growth since. Growth is the prerequisite to getting the deficit down. It cannot be done simply by cutting and cutting, particularly by targeting the most savage cuts at the poorest, which is precisely the strategy of the Tories and their Liberal accomplices.

We have heard of figures purporting to show more people going into work, but when they are analysed, they show that the number of people in part-time work is going up. There is a transition from full-time to part-time work. The people with the least are getting less—again, deflating consumer demand—and people with less spend more of their income. In the time available, I want to answer the question how the measures for the restructuring of the welfare state impact on the effectiveness of the generation of jobs, growth and getting the deficit down, and how they impact on fairness, by hitting those who are least able to afford it.

Some of the most profound changes affect housing benefit. Particularly despicable, of course, is the reduction of housing benefit for people under 25, 45% of whom are with children. The question is whether this reduction in housing benefit, sometimes thrusting people into homelessness, helps or hinders them from getting a job, so that they can care for their family and provide tax for the Exchequer—or, rather, does it throw them into a situation from which they cannot get work again because they are, frankly, out on the street?

A couple in Wales were highlighted recently. The man had worked since he was 15 for nearly 10 years continuously, but he now faces six months of unemployment. His partner is now redundant, so under the new legislation, they face homelessness. What chance will they have to secure employment and what sort of springboard for life chances will their child have? Very little, I would suggest.

[Jim Shannon (Strangford) (DUP)]

Is the hon. Gentleman experiencing in his constituency, as I am in mine, a greater demand from constituents for applications for housing benefit at a time when there is less money to go round? Does that not highlight the issue for the Government? They must provide more money for benefits and for housing benefit in particular.

[Geraint Davies]

We are seeing the perverse irony that the welfare bill is going up and up, with more people going into dependency, because the environment for job creation is not there. Meanwhile, the Government’s one-string solution is simply to give people less and less, when the focus should be on how to create new jobs, so that we can help people to get and sustain a job.

Another example—other than the targeting of under-25s who tend to have children and the escalation of child poverty into intergenerational poverty—is the empty bedroom tax. This is another horrendous idea whereby poor people—they are poor by definition as they are on housing benefit—who have an empty bedroom will lose about £7.50 a week, or £15 if they have two empty bedrooms. For example, a couple with two children, one of whom wants to go to university or get a job, will clearly have an incentive to say, “Don’t go to university,” or “Don’t leave home to get a job”—“Don’t ‘get on your bike’”, as Lord Tebbit would have it—“because, if you do, we shall end up being taxed £7.50 a week.”

A man who came to my surgery a couple of weeks ago told me that he was receiving disability living allowance, that he had a second bedroom—he used it for painting, as it happens—and that he did not have a job. Indeed, he was not a person who could have got a job. After he had paid his utility bills and all the rest, his disposable income was £20 a week. He will now lose £7.50 as a result of the bedroom tax, and next April the Government will cut the council tax rebate by 20%, which amounts to about £5 a week. His disposable income will then be down to £8 a week, which will have to cover his food, clothing and leisure.

This despicable and, in my view, socially criminal activity generates very little money from those who can least afford it, and one of the by-products will be mass homelessness. I have been a leader of a local authority, and I know that local authorities usually build family-size housing. Someone living in a two-bedroom flat or a three-bedroom house that ceases to be full when the children leave home will lose housing benefit and will then be evicted if he or she goes into arrears. Where do such people go when a local authority has not built enough one-bedroom accommodation because it is supposed to cater for families?

What if a child wants to come back from university, or to visit the family? What if there is a split in the family and the child needs to move from one place to another? The bedroom tax will cause massive disruption to communities in areas like mine throughout the country and disfigure the opportunities for us to create new jobs and get back on a sound track towards economic recovery.