Welfare Benefits Up-rating Bill

Julian Huppert Excerpts

Monday 21st January 2013 Commons Chamber

[Mr Redwood]

No, I am talking about people in very similar circumstances—those either in low-income employment or out of work—where the two numbers are much closer together. They are closer together than any of us would like, because we want it to be that much more worth while for people to work. The hon. Gentleman has to accept that, at the lowest income levels, there was a problem because the benefits went up by much more than the wages. What would the best answer be? It would be for all wages to go up more. The second best answer would be for the prices not to go up so much. But we are where we are and we have to work to try to come up with a fair settlement for the future.

[Dr Julian Huppert (Cambridge) (LD)]

The right hon. Gentleman highlights the 5.2% increase last year. I have not yet heard Opposition Members congratulate the Government on that, but I congratulate the Government now. Does he agree that one of the worst things—for decades far too little was done to fix it—was the benefits trap, whereby people discovered that when they started to work part time, they ended up with less money than they had before? I hope that this entire House could agree that that is fundamentally wrong. It has affected some of my constituents and has not yet been fixed sufficiently.

--- Later in debate ---

[Toby Perkins]

I will crack on, because I have not taken a useful intervention from Government Members yet, and other hon. Members want to speak.

Many of the people I meet who face this financial calamity on the horizon have worked most of their lives. The people I meet who have worked for 30 years and then gone on to benefits are overwhelmed not by the generosity of benefits, but by the difficulty of getting by. They believe there must be an alternative benefits system that is incredibly generous—that is the one they read about in the papers—because it is tough to get by on the benefits that they receive.

When we talk about the benefit bill, the most fundamental question we must confront is where the money goes. Most of it goes not into the pockets of benefit recipients, but into the pockets of landlords. The Thatcher Government introduced the right to buy. That was a good thing, but they did not have a corresponding scheme to replace the social housing that was lost, and there was chronic under-investment in the remaining stock.

The Blair Government rightly prioritised the refurbishment of social housing up to the decent homes standard over building new homes, but many Labour Members believe they took too long to take the housing shortage seriously. Although much of that was hidden during the good times, the welcome steps introduced by the Brown Government were too late and too slow to stop the housing crisis from escalating. Whomever we blame for the huge inflation in private rents, the people who claim housing benefit, whether they are working or not, are not to blame.

[Dr Huppert]

Will the hon. Gentleman give way?

[Toby Perkins]

I will try to plough on if I may, because many hon. Members want to speak, and I sense the Opposition deputy Chief Whip—my hon. Friend the Member for Tynemouth (Mr Campbell)—glaring at me with intent.

In a raft of ways, tax credits cuts will hit people on low to middle incomes. By anyone’s definition, they are the thrifty, hard-working strivers that people across the political divide recognise are key to the country’s future prosperity, but they will be badly hit by the Bill.

Once again, women and children will be hit worst of all. The Government’s strivers tax will hit women particularly hard—4.6 million women who receive child tax credit will be hit by the strivers tax, including 2.5 million working women. All those will come together as the perfect storm. The 1% uplift is nothing but a blunt political instrument designed to create a political trap that has nothing to do with a nuanced benefits system, with all its complexities.

The Child Poverty Action Group has said that the 200,000 increase set out in the written answer from the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey) should be added to the increase of 800,000 in children in relative income poverty by 2020 that the Institute for Fiscal Studies found in its analysis of the coalition’s welfare cuts. Let us remind ourselves of what the Prime Minister used to say about relative poverty. In 2006, he said:

“I believe that poverty is an economic waste and a moral disgrace. In the past, we used to think of poverty only in absolute terms—meaning straightforward material deprivation. That’s not enough. We need to think of poverty in relative terms, the fact that some people lack those things which others in society take for granted. So I want this message to go out loud and clear: the Conservative party recognises, will measure and will act on relative poverty.”

That is the manifesto on which Conservative Members were elected, and that was what they used to believe, but that is what they will vote against tonight when they support the Bill and reject the very reasonable amendment moved by my right hon. Friend the right hon. Member for East Ham (Stephen Timms).