Welfare Benefits Up-rating Bill

Lord Beamish Excerpts

Tuesday 8th January 2013 Commons Chamber

[Ian Mearns (Gateshead) (Lab)]

As someone who has been in this House for two and a half years and who in the past has been unemployed and has held low-paid jobs, I think that the mirth with which parts of this debate are being greeted will be seen with dismay by many people outside this Chamber.

The Bill is yet another example of the Government demonising and punishing the most vulnerable in our society and making the poorest live in greater poverty. The most important fact to take into account is that the Bill does not target only those who are out of work, whom I refuse to refer to as skivers, but those who are in work on low wages. It does not affect just those in part-time work, but people who are in more than full-time employment—people who regularly work long hours or complicated combinations of part-time jobs just to make ends meet.

[Mr Kevan Jones (North Durham) (Lab)]

Does my hon. Friend agree that the problem is not just with the 1% cap? A constituent came to see me before Christmas who had been made redundant last year by a local factory. His wife is a cleaner and he has now taken employment in a local garage serving petrol at night. He will lose about £20 a week when the bedroom tax comes in because the family home of 30 years is now deemed to be under-occupied.

[Ian Mearns]

I could not agree more. My surgery in Gateshead is regularly populated by people with similar problems. This is a society that Government Members do not understand. In the whole town, the average income of a household is not much more than £20,000 a year. That is the income for the whole household, not for an individual.

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[Jessica Lee (Erewash) (Con)]

It is a great pleasure to follow the hon. Member for Aberdeen South (Dame Anne Begg), who brings great expertise and experience to the topic. While I may not always agree with her on how to resolve welfare benefit issues, I always respect what she has to say.

For me and many others in the House, the central motivation for being here and practising politics is simple: it is to try to improve the country in which we live, to give opportunities to everyone, and to create an environment in which businesses can flourish, jobs can be created and young people can be equipped with the education and skills that they need to do well. At the heart of every civilised society is the protection of those who cannot work or care for themselves and need help.

It is unlikely that many people will disagree with that opening statement, but, as ever, it is where the balance falls. It is how fairness is achieved that often divides us in this place. The underlying focus of the welfare state must, of course, be to help to prepare and equip people for a life back in work. My concern is that over the years—in particular, under the previous Government—the admirable and compassionate aim of the welfare state, of getting people back on their feet, in some circumstances provided an alternative lifestyle and lifelong income. That is the issue that the House has to address on Second Reading, and in other legislation.

The work ethic was a central part of my upbringing. I stand here as the first person in my family to study A-levels, let alone go on to university. I am very proud of my background. My mother was the main breadwinner in our family—she was a children’s nurse in the NHS for more than 40 years. My late father worked in shops, in retail, and unfortunately had periods when he was not in work. However, he always remained focused on the importance of getting back to work, and my parents instilled in me a strong work ethic, a desire to work hard and to achieve my goals.

Role models are important in life, and the lack of hard-working supportive role models can make the challenge of getting back to work even harder. We now have nearly 2 million children growing up in homes where no one works. Nearly 900,000 people have spent at least 10 years claiming incapacity benefit. It can be difficult to find the self-esteem and motivation to move back into work after such a period of time, but I have seen from this Government a commitment to encourage people, and to provide and facilitate a way to get them back and to reach their potential.

In my constituency of Erewash, many churches and community groups are undertaking excellent work. One church in particular, the Arena Church, undertakes a vast programme of outreach and supportive work. It tells me that it has seen people in the last year blossom, find their self-esteem and move back into employment, often after years of not working.

[Mr Kevan Jones]

What would the hon. Lady say to the 59-year-old gentleman who came to see me on Saturday at my constituency surgery who suffers from schizophrenia and has failed the work capability test? He has now been sent on a security guard course by his local jobcentre, which is totally inappropriate. Why do we have a system that is so cruel to such individuals?

[Jessica Lee]

I thank the hon. Gentleman for his intervention, and he takes up the case on behalf of his constituent in this House. However, I put the responsibility squarely on his Government, the previous Government, who expanded the welfare state with tax credits and left people on incapacity benefit who for too long were never reassessed. That is unfair to those people and we need to recreate the entire welfare system to improve it.

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[Hywel Williams]

This point has been done to death this afternoon. It says a lot about the quality of the hon. Gentleman’s argument that he repeats it continually. I do not think I will bother with it any further.

Some 6.8% of households in the south-east of England, for example, claim working tax credits. In Wales, that figure is 7.1%. In Gwynedd—my own area—9,200 families are on tax credits of some form out of 53,000 households. That is 17.5% of the population—nearly three times the Welsh rate. The point is that any cuts to in-work benefits for the low-paid will hit Wales and my constituency particularly hard.

[Mr Kevan Jones]

Does the hon. Gentleman agree that the individuals receiving those types of benefit do not save the money, but spend it in their local communities? In areas of high unemployment, such as parts of my and his constituencies, it will have a knock-on effect on the local economy.

[Hywel Williams]

Clearly, the hon. Gentleman is blessed with clairvoyance, because that is my next point. People on low incomes tend to spend locally and to spend all their money. The Welsh economy is overwhelmingly made up of small businesses. That is a point for the hon. Member for Vale of Glamorgan (Alun Cairns) to consider. Working tax credit reductions will suck demand out of local economies and make matters even more difficult for small businesses struggling to survive in the recession.

The uprating will also hit those seeking work. The Prime Minister talks of unemployed people abed while others are at work. We can almost see him in Shakespearean mode paraphrasing King Henry: “Gentlemen in England now abed shall think themselves accursed they were not out seeking work”—I can see him doing it anyway, but less extravagantly. Unlike the Prime Minister and his friends, I do not think that the overwhelming majority of unemployed people are abed; they are seeking work. They want to work; they want to improve their lives and those of their children. For those who do not seek work, there is a system of sanctions, and there has been for a long time, as the Secretary of State knows full well.

Poorer areas of Wales have long suffered from high levels of worklessness and low levels of job availability. To end the misery of unemployment, we need not only to help individuals with their skills and, in a small number of cases, their motivation, but to ensure there is real work for people to do. Recently published Work programme figures for Wales show that success there was the lowest in the UK, with only 1,380 of 42,380 people getting a job that lasted six months or more. That is a miserable success rate, at only 3%. In Wales, more than 77,000 people are looking for work and claiming jobseeker’s allowance, while only 20,000-odd vacancies are being posted in jobcentres. Across Wales, there are four people chasing every job, with 11 people chasing every job in Blaenau Gwent and 21 people chasing every job in the Rhondda.

That brings me to Labour’s amendment. I have a question, to which I would like an answer—which might persuade me to back the amendment—in the wind-ups. Long-term unemployed people might still be unable to find a job after 24 months of searching. Large-scale work opportunities are just not available in many Welsh constituencies, so my question is: under Labour’s scheme, would those people face penalties after 24 months? If Labour’s scheme were adopted, would we see benefit cuts 24 months down the road for people who are not refusing to find work, but who just cannot find a job?

We in Plaid Cymru have been as good as our word—to the extent we can be—to the people of Wales, securing thousands of extra apprenticeships as part of the Welsh Government budget deal. We are now pushing for a new procurement policy that would create 50,000 jobs by sourcing public sector contracts locally. However, Wales needs proper job-creating levers to improve our economy, not just handouts and certainly not workfare. For example—this might be a domestic matter as far as most Members in the Chamber are concerned—we want full and early implementation of part 1 of the Silk commission proposals. We also want the transfer of responsibility for Jobcentre Plus to the Welsh Government. There are answers to joblessness and dependence on benefits. At present, we in Wales look in vain to London and the London parties for those answers.

[Mr David Ward (Bradford East) (LD)]

This is not a difficult one for me. I believe that benefits are far too high—I think most people accept they are at an unsustainable level.

[Mr Kevan Jones]

Too high?

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[Kris Hopkins]

I do not think that it will. I think that the 900,000 or 1 million new jobs created by the Government represent the solution to the problem. We need to face up to the drama in the welfare state. The hon. Member for Wigan (Lisa Nandy) says that this is not about a dependency culture, but I can take her to places where people are trapped in a way of life that gives them no incentive to go and look for jobs. That is the tragedy of the situation.

[Mr Kevan Jones]

I understand what the hon. Gentleman is saying about the dependency culture—he thinks that if he repeats it enough, people will start to believe him—but what would he say to two people whom I met in a local jobcentre last week? They were made unemployed by AEI Cables in Birtley a year ago. They have the work ethic. They are aged 51 and 52, they had worked for the company since they were 16, and they have applied for literally hundreds of jobs without success. Are those people part of the dependency culture?

[Kris Hopkins]

No, obviously not, because they are going out there to seek a job. That is the key thing. I thank the hon. Gentleman for the extra time.

We have put a benefit cap at £26,000, and that is net. The vast majority of my constituents would be delighted to take home or have access to that amount of money. Far from doing something outrageous by increasing the amount of money that people are going to get by 1% in this climate, it is an admirable move by those on the Front Bench to facilitate that, bearing in mind the crisis that the previous Government left.

We have made some choices about who we are going to protect and who we will not. There is a debate about disability, but I am pleased that we are protecting pensioners. It was a commitment by this Government to protect pensioners and we have continued with that. I am very concerned that the unemployed, those who are dependent, those who are uneducated and have no skills, those with limited opportunities to offer young people, are the families that are growing in my constituency. That is a tragedy for the future of towns such as mine. We must break that cycle. It cannot be right that it pays to live on the state.

The resentment and anger are real in people who are working hard. They have seen generations continue to claim benefit. Some of those are trapped, but some have no desire to go and work. People are making life choices based on the fact that they can get money from the Government. As was pointed out earlier, that is taxpayers’ money. That cannot be right. When families see no increase in their income after their hard work and they see people on benefits receiving twice the increase, as has been shown statistically, that promotes resentment in our communities. It is not just about strivers or skivers. Failure to address the issue promotes racism and tension in communities, because somebody sees or perceives that somebody else is getting something that they are not getting. After all their efforts they do not see the benefit of working so hard.

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[Mr Aidan Burley (Cannock Chase) (Con)]

In the short time available, I want to nail a couple of myths that have come up in the debate and give the view from Cannock Chase.

The first myth is that we are giving a tax break to the wealthiest in society. The answer that the shadow Secretary of State would not give earlier is that over a 13-year period, the Labour Government had a 50p tax rate for 37 days. The idea that we are giving the rich a tax cut is just a sixth-form debating point; the Labour party had 13 years to introduce the 50p rate, and they introduced it for 37 days.

Let us nail another myth. Although many people in work get benefits, there is evidence of a culture of worklessness, whatever the Joseph Rowntree Foundation says. If hon. Members do not believe me—[Interruption.] Give me a second. Let me read the House a summary of an interview on LBC radio in December. A man called Paul phoned in to say that it was not his fault that there were no jobs out there. He said:

“Why would you work for low wages, can’t really understand that, what’s the point? I was offered a job two weeks ago; they wanted me in there at 8 am in the morning.”

The presenter said:

“And you didn’t want to do that job?”

Paul replied:

“It’s ridiculous, that time!”

The presenter asked:

“What time would you finish if you started at 8?”

Paul answered:

“Well it finished about 4, but that time in the morning is too early. Most people start at 9 don’t they?”

The presenter, getting angry now, said:

“No, people start work at all hours. If I was in charge and you turned down a job for that reason I would cut your benefits. You lied you said no work out there. There are people out there struggling every single day who would love to get that job, frankly you can’t be fagged can you?”

Paul said that he would love to have the job but he was not willing to start at 8, only at 9.30, to which the presenter replied:

“I am outraged by what you just said.”

Let us not pretend that there are not some people who cannot be bothered to work.

[Mr Kevan Jones]

I am not sure whether that anecdote should lead us to any wider conclusion. The only worklessness in the Chamber today is on the Tory Back Benches—there has been an average of only 12 Tory Back Benchers all afternoon.

[Mr Burley]

I have been here since the beginning of the debate, waiting patiently to speak.

I move on to my constituency. The House of Commons Library shows that average wages in Cannock Chase rose by 6% between 2007 and 2012. During that same period, benefits went up by 20%. Where is the fairness in benefits going up by 20% when pay has gone up by only 6%? Do not take my word for it. This is what a local police officer e-mailed me last year when we uprated benefits by 5%:

“Why has the Conservative Government given a recent rise in benefits money…to the unemployed when Nurses, Police Officers, Fire and rescue workers and all other public sector workers have not received a pay rise for over two years?”

It is a fair question, and I do not know the answer. What I do know is that if the rate of inflation is not sufficient to warrant an increase in public sector pay beyond 1% in April this year, it cannot be so high as to require an increase in benefits beyond that either.

This is what another constituent who recently contacted me said:

“I have a friend who has a partner, neither she or he work and have not worked for as long as I can remember. They are both fit and healthy and perfectly able to work they just do not want to. They openly admit there is no point in finding work as they would not have enough money to live on. She stated to me that in order to get close in wages to what they receive in benefits that they would both have to get a job.”

This is the perverse reality of where we are now—that it pays people not to work and they are better off at home on benefits even though they could work and in many cases want to. Tellingly, the constituent went on to say:

“Some time ago she”—

her friend—

“let it slip out that she claimed £500 a week in benefits, I was…astounded and furious and pointed out that it was twice my wages. I am…aware that some people are unable to work and in genuine need…but surely people on benefits who are MORE than capable of working should not be living a life of…luxury and be financially better off than those who…earn a living? These people are playing the system…whilst…genuine hard working people struggle to have a life.”

Those are the real words of a real constituent in an area where the average salary is £22,500, and Labour Members ignore those words at their peril. [Interruption.]