Welfare Reform Bill

John Redwood Excerpts

Wednesday 1st February 2012 Commons Chamber

Of course, if child benefit were excluded from the cap, a household in work would have to earn a gross salary of around £40,000 a year to receive as much as a household with four children would get in benefits.

[Mr John Redwood (Wokingham) (Con)]

I am sure that my right hon. Friend has seen that, in recent years, a large number of new jobs in this country have gone to people who have recently arrived. They have not seemed to be attractive to people who have been settled here longer and are unemployed. Does he think that is because it is not worth their while, as benefits are too high relative to pay?

[Chris Grayling]

That is exactly the problem. Many people are taking a hard look at the financial situation and asking, “Why would I return to work?” Surely that has to end.

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[Mr Redwood]

I am interested in the right hon. Gentleman’s idea; I presume that the regulator would be called Ofcap, or conceivably Doffcap. Would his party tell Doffcap that it would have exactly the same amount of money as the Government are proposing, or does he think that there ought to be more money because the amount is not really generous?

[Mr Byrne]

As we have seen, the budgets are moving around all over the place; we have just had £80 million put in this year, and £50 million will be put in next year, so it is not quite clear what the baseline is.

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[Mr Byrne]

The Minister with responsibility for pensions asks what we did about it; again, in the Conservative party’s briefing for today’s debate, there are some interesting figures about the rise in housing benefit over the past few years, but of course closer inspection of the DWP forecast for the next few years shows that housing benefit is set to rise, year on year, at the same rate as in the past 13 years. That is why Labour has been right to expose the dangers of cutting investment in new housing and the lack of any policy making from the Government on what should happen to the private rental market.

This afternoon, Labour has set out its proposal for a benefit cap that will work in practice. We hope to press it to a vote and that the Government will think again about giving the other place a chance to vote on it—just to reinforce that point.

[Mr Redwood]

This is rightly difficult territory. I am relieved to hear that Ministers have reconsidered the transitional arrangements, and I am pleased that the Opposition welcome that. In the noise and heat of the debate, important truths are getting lost or ignored. We are not generous enough towards the disabled, and I was pleased to hear that they are completely exempted from the proposals, which should be widely welcomed across the House. The exemption of war widows, who often have very little to live on and whose former husbands sacrificed so much to help our country, is extremely welcome, as both parties in government have asked their loved ones to go into battle on our behalf.

I am also pleased to hear that anybody in work is exempted. The Government’s case revolves around something with which I believe the Labour party normally agrees: working should always be worth while. In today’s debate, there has been more heat than light. If the Labour party, the Conservative party and the Liberal Democrat party all believe that it should be more worth while to work, we need such a provision to achieve the desired effect. It comes down to the last-minute proposal that there should be some regional differentiation of the cap. We are no longer arguing for or against caps—we all now believe in that type of headgear—but Labour believes that there should be different fashions of cap across the country whereas, on the Government Benches, the passion is apparently for uniform caps.

[Harriett Baldwin]

Does my right hon. Friend agree that it is difficult to set a cap if one is not prepared to name a level for it?

[Mr Redwood]

My hon. Friend is ahead of me in my argument. So far, I think I have carried an expectant and worried Labour party with me. Labour agrees with all the exemptions, agrees with the delayed transition and agrees that we need to make working worth while.

[Mr Byrne]

I was not sure whether the right hon. Gentleman was about to propose himself as the head of Ofcap in practice.

[Mr Redwood]

No, I like representing my constituents and I suspect that the two jobs would not be compatible. I am very grateful for the kind offer, however, and I notice that the right hon. Gentleman prefers the name Ofcap to Doffcap. As Labour has not yet put forward proposals to deal with the people it describes as fat cat landlords, I think it might well be a case of Doffcap to the landlords, as we seem to be discussing how much money we will route to the landlords through the housing benefit mechanism.

I suspect that if I strayed into the subject of proposals for the housing market and landlords, you would rule me out of order, Mr Deputy Speaker, but perhaps that is a debate for another day. There might be common ground on how we can get better value for the public money being spent while ensuring that we do not cut off the supply of housing, which would be a very stupid thing to do by clumsy intervention. We need more housing at an affordable level for people on modest incomes.

We are talking about a group of people on very modest incomes, and it ill behoves people on decent incomes, such as Members of the House, to be too mean about it. We have the conundrum, however, that we always want to make it worth while for those people to work. We all accept that there will be a cap, but, if it is to be a regional cap, before deviating from the Government’s proposal to the Labour proposal we would need to know what Labour has in mind for the total costings and how the proposal would work fairly within an area as well as between areas.

[Sheila Gilmore]

One thing that the right hon. Gentleman has not mentioned is that when we compare the working family with the non-working family, all too often in this debate we are not comparing apples with apples. The working family would have child benefit for their children on top of the wage that is constantly mentioned and, depending on the number of children they have, they might well qualify for child tax credit. We are not comparing properly, so simply saying that the situation is unfair to those working families gives the wrong impression. Does he not agree?

[Mr Redwood]

I thought it was now common ground that for a large number of people on certain kinds of benefit, work is not worth while. We are trying to solve that problem, so despite all those things that the hon. Lady truthfully reports to the House, we still have that problem, with which both parties are wrestling. That is why the Labour party is not here today saying, “There is no problem: we are going to vote against the whole thing,” but is here with an alternative proposal at the 11th hour—the last possible chance to consider this.

Let us go back to Labour’s argument on the regional cap. If it had come with a properly costed and working proposal, I might have been sympathetic to it, but we do not yet know from Labour what is the total package of money available. We have not even been told whether it wants to live within the budget that the Government have come up with for the proposal or whether it thinks the overall proposal is too mean. If it wants to spend much more, it will not solve the “Why work?” problem because provision will become too generous again and it will have a public spending problem.

[Mr Byrne]

Can the right hon. Gentleman tell us what the budget actually is because although we have heard some figures from the Minister today, he has not set out, for example, whether the grace period will cost any money?

[Mr Redwood]

Ministers are very capable of setting out their own figures. I do not have, at the top of my mind, all the detailed figures the right hon. Gentleman wants, which are properly things for Ministers to report to the House, but they have detailed the total savings overall and they are trying to live within that budget. As has rightfully been reported to the House today, they have given up some of the savings to accommodate the transitional period. It is entirely fair to ask the right hon. Gentleman, who is a specialist, as is the Minister he shadows, to tell us how much difference there would be in his proposals. Clearly, Labour has not yet thought through what the total should be.

There is another, very difficult, issue to consider with regionalism: there are big divergences in house and flat prices within, as well as between, regions. We should recognise this point, which in some ways makes this policy a bit easier to stomach than some on the Labour Benches suggest. I heard a former Westminster councillor saying that she had done some work on the situation of families who would be caught by the cap in Westminster. Naturally I was worried and wanted to hear what her answer was. She said she had found a considerable number of properties that she thought would be suitable for those families, quite close to where they were currently living, which happened to be rather better value than those in which they were currently living, supported by benefits. That seemed rather good news to me. Members from London constituencies will know that within London there is a huge variety of cost in property—often street by street, not merely borough by borough—so I do not think the proposal is quite as penal as some on the Labour Benches suggest. That makes it quite difficult to set a regional cap because such a cap might be no more appropriate as an average than the national cap.

[Naomi Long (Belfast East) (Alliance)]

I thank the right hon. Gentleman for making this point, which a number of Opposition Members from Northern Ireland have concerns about. I represent a Belfast constituency and there are massive disparities between rents in the Greater Belfast area and those in more rural constituencies. If this sort of regionalisation was driven down to a very local level, it could distort people’s ability to seek work in the city or outside it.

[Mr Redwood]

I am grateful to the hon. Lady.

I am conscious that others want to speak so I shall not extend my argument further. I just want to make the point that in order to consider fairly what is an interesting proposal from Labour, the minimum we would need to know is the overall cost in comparison to the Government scheme and how these difficult problems of judgment within areas or regions would be settled. That is an important consideration.

[Mr Byrne]

Presumably, the fact that homelessness will not be created, which is what the Secretary of State has argued over the past year, is the reason why he has had to find another £80 million—to solve a problem that does not exist. In direct answer to the challenge put by the right hon. Member for Wokingham (Mr Redwood), our amendment suggests that the right place to start this debate is by having a level for London and a level for outside London. That would begin to address the problem he is highlighting.

[Mr Redwood]

That is something we need to think rather more about, but unfortunately we have little time to do so. That suggestion might have been helpful, but there is also the problem of the big variety of levels within London. We need to know the extent to which the Labour party wants to validate the current high rents and whether there might be some other solution to the problem of very high rents that lies behind some of this difficulty.

The conclusion I must come to is that the best offer on this issue at this late stage is the Government’s. Something must be done to move things in the right direction and make it more worth while to work. All of us, on both sides of the House, are extremely concerned that in recent years, under both parties, although quite a lot of jobs have been generated a very large proportion of them have gone to people who have recently arrived, because they think the jobs are good enough and that the pay is high enough. There have been reasons—perhaps very good reasons—why people who are settled here and out of work have not wanted those jobs or been able to take them, but part of the answer must be that we have the wrong balance between benefit and work income, and we need to do something about that.