Amendment of the Law Debate
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Liam Byrne
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Amendment of the Law
Liam Byrne Excerpts(13 years, 7 months ago)
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Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I know that the Secretary of State learned some time ago that attack is the best form of defence, but I expected him to do a better job of defending the Budget that we heard last week. The Budget debate started with no acknowledgement that growth was coming down—and the same is true of its conclusion. The right hon. Gentleman refused to admit that this so-called Budget for growth has knocked 0.5% off the rate of growth this year and next, put unemployment up by 200,000, and is putting the benefits bill up through the roof—and he seems to think that we are the ones in denial.
A fortnight ago, the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), who has responsibility for work, was rolled through the television studios and asked to give his progress report on how well the Chancellor had done in his first year. He was asked to report on how good a job the Chancellor was doing of getting the country back to work. Fifteen months after the end of the recession, the House could be forgiven for expecting unemployment to be falling rather than rising. However, at the very point when unemployment should be falling, the Minister was forced to report that it was actually rising. He decided to choose his words very carefully. He said that the jobs market was “stabilising”.
Last week it was left to the Chancellor to tell us that the jobs market was doing nothing of the sort. He did not dare spell it out, but in the fine print of the Budget we learned the truth: this is not even the beginning of the end. His first year has gone so well that unemployment, which should be falling, is set to rise until the summer. In fact, it is not expected to fall below 2.5 million until way through next year. Now we face the prospect that unemployment is not going to fall below 2 million for the rest of this Parliament.
Kwasi Kwarteng
Will the right hon. Gentleman remind the House which member of the previous Cabinet wrote a note saying, “There’s no money”?
Mr Byrne
I would rather have written a bad joke in public than a bad Budget in public.
Now we know—and now the Secretary of State has been forced to admit—that unemployment is not going to fall below 2 million. He will remember, just as we remember, the last time that happened. For those with long memories, what has happened is all too familiar. The last time the Tory party was in office, it took a couple of years to get unemployment above 2 million, but after that it did not fall below 2 million for 18 years, until the Labour party was elected in 1997. Now the Government have decided that that record of the 1980s is worth a rerun, or something of a repeat, because there is one thing that has not changed: the Conservative party still believes that unemployment is a price worth paying.
Alec Shelbrooke
I am grateful to the right hon. Gentleman for giving way, and I am listening carefully to him. While we are discussing the figures, does he welcome today’s news that construction grew by 2.3% in quarter four, and that productivity was also up?
Mr Byrne
Of course, and the hon. Gentleman will also recognise that, despite the fact that we are some way out of the recession, today’s figures also confirmed that in the last quarter for which records are available, the economy shrank. I am not sure that that is a record of which he can be proud.
In the circumstances, I would have thought that the House could expect to hear rather more from the Secretary of State about what the Budget would do to get people back into work. The Office for Budget Responsibility is well aware of the Secretary of State’s Work programme and the Chancellor’s tax breaks on offer for business, yet its conclusion was the cold fact that unemployment will continue to rise. Every time the Chancellor stands up at the Despatch Box to deliver a Budget, he revises down his forecast for growth and revises up his estimate for the number of unemployed people in our country. He is costing this country a fortune.
What, then, did this Budget offer for jobs? Incredibly, it said that by the first quarter of 2013, unemployment would be 200,000 higher than was forecast just last October. What a triumph! Under the circumstances, we could have expected a rather bigger push from the Secretary of State and his right hon. Friend the Chancellor to get people back to work. After all, his Minister for the unemployed, the right hon. Member for Epsom and Ewell, told the Select Committee on Work and Pensions on 14 March:
“If there was a very substantial change in the labour market, one way or the other, frankly, that is the kind of circumstance in which we might need to revisit some of the assumptions.”
Well, 200,000 more people on the dole sounds like rather a substantial change to me.
What is the Government’s response? Some £20 million for work experience. This morning I had a look at the Secretary of State’s accounts for January. It would appear that his new work placement scheme, which was so proudly trumpeted this morning, will cost less than his Department spends on stationery every year. At the very least, we would have expected more resources for the Work programme. The Prime Minister is fond of telling us that the Work programme is
“the biggest back-to-work scheme this country has seen since the 1930s.”—[Official Report, 16 February 2011; Vol. 523, c. 951.]
In fact, as the BBC has shown, there are 250,000 fewer places on it than Labour had last year, when unemployment was lower. The association of bidders for the Work programme now has so much confidence in the Secretary of State’s plans that it says:
“the design of the Work Programme is fraught with risks which may impact significantly on the number of unemployed people who can benefit from it”!
That is hardly a vote of confidence. When my hon. Friend the Member for Westminster North (Ms Buck) asked the Secretary of State how much extra he had received from the Treasury to get people back to work, he refused to give her a straight answer, and we all know what that means: that he asked for nothing and he got nothing. With unemployment now forecast to rise, the very least that we could expect from this Secretary of State is to stand up for his Department, fight his corner and get some extra help to get this country back to work.
Mr Tobias Ellwood (Bournemouth East) (Con)
The right hon. Gentleman understands that whoever had won the last election would have had to introduce some tough measures, and we are experiencing those now. Bearing in mind that all other recessions have seen unemployment rising, is he genuinely telling the House that if Labour had won the last general election, unemployment would be continuing to fall today?
Mr Ellwood
The right hon. Gentleman is being very generous in giving way, but this is an important point. Labour was in denial before the election about introducing major measures to bring the economy under control. Labour now knows—as we have known—that important measures needed to be introduced after the election. That is what is causing the difficulties now. He is now saying, “Yes, you’d be able to bring those measures in without having any effect on employment.” That is completely wrong; he misleads the House.
Mr Byrne
Well, let us go through it, shall we? The deficit plan that we put in place would have involved £57 billion-worth of discretionary action—[Interruption.] Will the Secretary of State just pause for a moment? I know that he has read all 40 pages of chapter 6 of the Budget that was published in March last year, but let me just remind him of their contents: £57 billion-worth of discretionary action; £19 billion-worth of tax rises; and £38 billion of cuts, £18 billion of which would have fallen on capital, and £20 billion of which would have fallen on current expenditure, of which £12 billion would have fallen in Whitehall, £5 billion would have fallen on lower priority projects and £3 billion would have been achieved through a pay freeze and asking public sector workers to—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I just want to clarify that the hon. Member for Bournemouth East (Mr Ellwood) meant that the right hon. Gentleman was inadvertently misleading the House.
Mr Duncan Smith
Now that the right hon. Gentleman is into the Darling plan, will he specify what those cuts are, what he supports right now, and therefore what the plan really is? After all, it was due to come into force three days from now.
Mr Byrne
I have just gone through them. They involved £57 billion-worth of discretionary action—[Interruption.] The difference between us—[Interruption.] Well, let us take the Secretary of State’s own Department. Regarding the £18 billion savings in annually managed expenditure, we said that where there is a temporary switch from RPI to CPI for the next three years, we will support that; where there is a need to reform the disability living allowance, we will support it; and where there is a need to introduce new limits on employment and support allowance, we will support that. We do not think, however, that the Government should introduce reform simply by cutting. They should couple some of those reforms with the need to look again at the support that working families actually need.
Mr Duncan Smith
Okay, now we are into this specifically. DLA reform has a line item in the Budget of about £1.4 billion in savings. Does the right hon. Gentleman consider that to be a reduction that he supports?
Mr Byrne
The Secretary of State put in place a programme to make the cut before he figured out what reform was actually needed. He is under such pressure from disability groups because he is not listening to the voices of disabled people in this country telling him what kind of support they need in order to live full and fulfilling lives. That is because he is locked into a programme that is putting more people on to the dole and sending benefits bills through the roof. He is beginning to fracture the bonds of support between the Government and the people in this country who need extra help. He should not be abolishing DLA; he should be reforming it. He should also start listening to the needs of disabled people.
Mr Duncan Smith
I am intrigued by this. The right hon. Gentleman now seems to be at odds with his shadow Chancellor, who in his opening speech in the Budget debate last week, in response to a specific question about what spending cuts he wanted in the coming year, said:
“We said…that we would go ahead with the disability living allowance gateway reforms.”—[Official Report, 24 March 2011; Vol. 525, c. 1142.]
That involves £1.43 billion. Does the right hon. Gentleman support that now?
Mr Byrne
No, because we have not specified—[Hon. Members: “Ah!”] We have not specified the level of cuts or savings that we think should come from DLA. The Secretary of State knows as well as I do that we believe that a gateway should be introduced for DLA—[Interruption.] He should listen to this, because it speaks to the concerns of millions of people with disabilities. He has said that he is going to cut £1.4 billion from DLA, and, in written answers to the House, he has said that 170,000 fewer people will receive that benefit in the future—[Interruption.] The Secretary of State might just want to listen to the implications of this. It is a bit late for him to be getting a briefing on his DLA reforms from his own Minister, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller). If he is cutting DLA for 170,000 people and cutting £1.4 billion from that benefit, £8,500 will be cut from each of those 170,000 families. Will he intervene on me again and tell me whether he understands that that is the implication of his benefit cut?
Mr Duncan Smith
I have a very simple question. The shadow Chancellor said that he supported the reform, which has a very simple line item in the Red Book. The right hon. Gentleman now says that he does not support it. This is the problem: the Opposition have no idea what they are doing. No wonder the British public are fed up with them.
Alec Shelbrooke
The right hon. Gentleman is most generous in giving way. I have just listened, as has the rest of the House, to a whole host of numbers that he reeled off relating to where cuts would be made, but he has not said where those cuts would be made, or what exactly would be cut. Will he enlighten the House?
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Does my right hon. Friend share my astonishment that the Secretary of State can produce savings figures, yet when we put specific questions to him we are told, “This is a matter for review”?
Mr Byrne
Precisely right. Indeed, the Secretary of State presented to the House of Commons a Bill that would abolish DLA before he had even bothered to finish consulting people up and down the country about what the reform of DLA should look like.
One of the greatest failures stemming from the Secretary of State’s inability to extract further money from his right hon. Friend the Chief Secretary to the Treasury is, of course, the failure to get young people back to work. I met a delegation of young people from my constituency this morning and I asked them what they thought of the Government’s plans. Their thoughts were very simple: it just seems, they said, that the Government are stopping young people being what they could be. I could put it no better myself. Youth unemployment is now approaching 1 million. The Secretary of State likes to pretend—he did it again this afternoon—that this is somehow a problem that he inherited. [Interruption.] What he fails to remind us is that in the final nine months of our term of office, youth unemployment was falling by 67,000.
I know that the right hon. Gentleman is fond of quoting figures that do not include the number of people in higher education, for example. Fine: let us look at what the figures tell us. Since the election this is what has happened: after nine months in which youth unemployment was falling, it is now going up by 60,000—and that when the economy is supposedly growing. All the good work we did is now completely undone.
Mel Stride (Central Devon) (Con)
The right hon. Gentleman said that if Labour had won the last election unemployment would, of course, be falling. He raised the issue of youth unemployment, so will he inform the House whether youth unemployment fell or rose during the period of the last Labour Government?
Mr Byrne
All unemployment fell. Then, once the scale of the global recession we confronted became apparent, it of course went back up again. What we never had under a Labour Administration is unemployment going up through the 3 million mark—not once but twice, as it did under the Conservatives. Every job lost is a tragedy for one family, and all the jobs lost are a tragedy for all of us—and, indeed, for the Exchequer. Lost jobs mean not only that our performance as a country cannot match our full potential, but that a bill is created that we all end up paying.
The Governor of the Bank of England has warned us of what is to come. He says that we now confront the biggest squeeze on living standards since the 1930s, and that because this Government’s economic plan is creating so few jobs, there is less and less demand for workers. Now there are five people chasing every job and the growth in people’s pay packets and wages is slow. The Office for Budget Responsibility forecasts 2% earnings growth this year, 2.2% next year, but when prices are growing by more than 5% this year and 3.6% next year, the squeeze on family budgets is now all too obvious.
In the circumstances, one would have thought that the Government would step in to help. Not a bit of it. Next month 10 Tory raids on the family budget get into full swing: tax credits cut for families earning more than £40,000; tougher criteria on families wanting to claim family support; reducing the income disregard; freezing basic rates of working tax credit; removing the baby element of child tax credit; reducing payable costs of child care; abolition of grants for pregnant mums; £500 taken away from families with more than one child; child benefit increases ruled out for another three years; and cancelling the child savings accounts.
This Government are proud of some of the measures foisted on them by Liberal Democrat Members. I am sure that is right. Once we take this list into account, however, £1.1 billion is going to be stripped from family budgets starting from next month, with another £300 million coming from children. By the end of this Parliament, £16.5 billion will have been taken out of family pay packets.
Mr Byrne
No.
Why are the Government not doing more to help? Because the cost of economic failure is sending the benefits bill through the roof. Last week we learnt from the detail of the Budget book just how big that bill has now become.
This afternoon the Secretary of State liked to boast about his reforms of housing benefit, but forgot to tell the House that the housing benefit bill is projected to rise by more than £1 billion in the next few years. In the small print of the Budget we saw something more: his benefits bill over the next few years is now projected to increase by £12.5 billion. That is £500 for every household in the country.
Almost as shocking is what will happen to the unemployment bill as a result of the Secretary of State’s great endeavours to get so many extra people back to work. When the Chancellor came to the House last year, he somehow forgot to tell us that as a result of his Budget higher unemployment figures would increase the dole bill by £700 million. Now we learn that it is going to go up again, by another £1.9 billion. In other words, since the Government came to office they have put the unemployment bill up by £2.6 billion. That is an indictment of their record in getting people back to work. In fact, £2.6 billion is the same amount that the Government are cutting from tax credits for people with children. The right hon. Gentleman is cutting support for our children in order to pay the bills for his economic failure.
What does this mean for the average British family? A single earner family with a child and an income of £23,000 will lose £400 a year. The Secretary of State may not care about what is happening to ordinary families, but I assure him that plenty of people are interested in the bills for his economic failure. Households with child care costs will be hit even harder. A family with average child care costs will lose nearly £500 a year, and for some it will be even worse. A single earner on the minimum wage with two children will lose more than £2,000 a year—6.5% of his or her income. Even for low earners, any gains that they make as a result of changes in income tax and child tax credits will be wiped out by the VAT rise. The Secretary of State is squeezing Britain’s families harder than ever to pay for his failure to get the country back to work. Does that not sound all too familiar?
Stephen Lloyd
In my constituency, the average family household earns £27,500. According to the BBC’s calculator, if the household contains two children under 16 and both parents are working, the family will be just over £700 per annum better off as a result of the Budget.
Mr Byrne
But the challenge from this Budget is that there are simply not enough winners, because the bills for sending people to the dole queue rather than back to work are now going through the roof. Surely the hon. Gentleman recognises that more than £2.5 billion in extra dole bills does not constitute a wise use of public money. If only the Chancellor would do more to get people back to work, the squeeze on working families would not be anywhere near as hard.
Finally, we must ask what the Budget means for some of the most vulnerable people in our country—the people who are in need of help from the wider community, and those who need extra support in order to live a full life in one of the world’s biggest economies. I know that, like me, the Secretary of State believes that a country as rich as Britain should have high, not low, standards of civilisation and compassion—but the Chancellor is pressing ahead with measures that will deny thousands of people their independence. The question that the House must ask is: what is the Secretary of State doing to stop it?
The right hon. Gentleman told the House yesterday that after his review of DLA had been completed the mobility component for people in care homes would still exist, but he still cannot explain why the Chancellor announced that he was taking £400 million more out of the mobility component than previously planned. The Budget confirmed that he would press ahead with his abolition of DLA. I repeat that we support the right kind of reform of DLA, but no matter how he tries to dress it up, he is taking £2.9 billion out of a well-targeted benefit, and he himself is saying that 170,000 fewer people will receive the benefit by the end of the Parliament. That is £8,500 per family. With figures like that, surely he can understand why so many people with disabilities up and down the country are so worried.
Finally, it was confirmed in the Budget that the Government are pressing ahead with their plans to limit employment and support allowance to just one year. The Secretary of State has a chance to fix that in Committee on the Bill, but the Budget confirmed an ambition to save £3.5 billion from people on ESA. However, he knows as well as I do that many people do not recover from cancer in under 12 months, and he also knows that cancer charities up and down the country are now asking him to think again.
The Minister of State, Department for Work and Pensions (Steve Webb)
Will the right hon. Gentleman give way?
Mr Byrne
No, because I want to make an important point to the House. The Minister’s Department knows that three quarters of cancer patients still need ESA after one year. The message from the charities to the Front-Bench team was blunt. They say:
“this proposal, rather than creating an incentive to work, will lead to many cancer patients losing their ESA simply because they have not recovered quickly enough.”
Will the Minister confirm that he will withdraw this terrible measure?
Steve Webb
I am grateful to the right hon. Gentleman for giving way. He tried to frighten disabled people by saying the average DLA loss was £8,500 per year. Does he think that figure is right?
Mr Byrne
Well, the Minister will know as well as I do how much he is cutting from DLA, and he knows as well as I do how many people he anticipates will receive the benefit in the future. He can do the maths as well as I can. The obligation is on him to come clean and be straight with people with disabilities. What will the reform of DLA mean for them? Will he drop this measure from his Bill?
This afternoon we have heard a pretty poor defence of a Budget that puts more people out of work, fails to deliver on ambitions for our young people, and hits families harder than ever to pay the bills of economic failure. Worse still, it begins to endanger the contract of a proud and civilised country with the people who need help most. This is not a big society; it is a society in which the bonds that tie us together are weaker and weaker. This is not a Budget that is working; it is a Budget that is hurting—and the Chancellor should think again.