Welfare Benefits Up-rating Bill

Lord Jackson of Peterborough Excerpts

Tuesday 8th January 2013 Commons Chamber

[Debbie Abrahams]

I cannot because I do not have the figures to hand, but I am happy to provide them later. The evidence is there. Scenario modelling has been done—[Interruption.] If I could finish the point. Scenario modelling is available showing exactly how many have been assessed.

[Mr Stewart Jackson (Peterborough) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I will not give way at the moment. I will finish my point and then make some progress.

The Children’s Society’s analysis shows that between £500 and £400 will be lost per annum by key workers such as a second lieutenant in the armed forces or a primary school teacher.

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[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I apologise for being absent for part of the debate while attending duties at the Home Affairs Committee.

The one inescapable fact is that however much the Chancellor talks about shared pain, we are discussing real cuts to benefits at a time when he thinks it is okay to prioritise tax cuts for millionaires. We should no doubt be grateful that pensioners have been spared this cut in their benefits, but that is probably down to Lord Ashcroft having identified what a key group they are and putting their benefits off limits.

I am afraid that these proposals look like an ambition to create division between those who have little and those who have less. That sits comfortably with the values and politics of a particular kind of Conservatism. This is called an uprating, but 1% rises over three years really represent a cut of 4% in the spending power of those already struggling. Citizens Advice estimates that when we take tax changes into account, a family with two children paying £130 per week in rent and earning just above the minimum wage will be almost £13 per week worse off. That is before we take food and energy inflation into account. No wonder people are being driven into the arms of payday loan sharks.

Income transfers for those on modest incomes, for example, are recognised throughout developed economies as exactly the kind of fiscal stimulus needed when recessionary pressures are highest, but the Chancellor is doing the exact opposite. A total of 4.6 million women will lose their tax credits, including 2.5 million working women and more than 1 million who care for their children while their partner works—the same people who are also having their maternity benefits cut. Lord Ashcroft calls them “suspicious strivers”. In his words, they fear they are one more redundancy, one interest rate rise or one tax credit change away from real difficulty, and they would not want to rely on a Conservative Government if they found themselves in trouble.

[Mr Stewart Jackson]

For the record, 42,654 people in the Peterborough constituency will be better off under the tax changes in April. Is the hon. Gentleman not ashamed that under his Government, who presided over 16 years of economic growth, more than 1,000 people in my constituency were parked on invalidity and incapacity benefit for more than 10 years. That is shameful and it is his Government’s record.

[Steve McCabe]

I cannot wait for the hon. Gentleman to have to meet all those people who are better off at his advice centre.

The International Monetary Fund regularly warns about the dangers of cutting the automatic stabilisers in these economically fraught times, yet that is exactly what is happening. It is estimated—the IMF is the source —that these benefit cuts will contribute to a £40 billion reduction in the country’s output when we desperately need the opposite to happen.

As well as implementing benefit cuts that defy economic logic, the Chancellor has set up a special hotline for Tory MPs who are confused about his benefit changes. Special hotlines for Tory MPs, Government cars to cushion Ministers from rail-fare rises, and specially arranged meetings to cover the transport costs if they want to watch the European cup final—yes, they are definitely all in it together.

My contention is that these decisions do not make economic sense, are not fair and will punish the very people who are striving and struggling to make ends meet while the Chancellor’s millionaire friends are prioritised for tax cuts. That tells us all we need to know about this Government’s values.

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[Mr Stewart Jackson (Peterborough) (Con)]

I do not criticise Labour Members for their aspirations. There is nothing ignoble in the positions that they are taking; I just happen to believe that they are wrong. They know that the picture of despair and hopelessness that my right hon. Friend the Secretary of State saw in Easterhouse in 2002 was the same picture that the right hon. Member for Birkenhead (Mr Field) saw in 1997, when there was an historic opportunity for the then Labour Government to tackle welfare dependency and rebalance work and welfare. Unfortunately, they did not take that action.

People out there are decent; they care and their attitude is, “There but for the grace of God go I.” They do not want to stigmatise people, and nor do Government Members. I accept that there has been some rhetoric on both sides of the House, but people do care. They also care about the dependency culture, and about fairness. In all honesty, they feel that the previous Labour Government tested their patience on this issue.

It is disingenuous to talk about cruelty. I think that it was cruel to park 1,000 of my constituents on invalidity or incapacity benefit for more than 10 years without the opportunity—[Interruption.] I should remind Labour Members that this was in 2010. Those people were given no opportunity to inform anyone of their needs. People suffering from depression or other mental health problems, and people with physical afflictions, were simply parked and forgotten. I am not saying that the Labour Government did that because they were cruel or heartless; they did it because they were incompetent. We are taking the tough decisions that will make work pay, through the Work programme and through apprenticeships that will tackle youth unemployment, which the previous Government doubled. Work is the No. 1 determinant in taking people out of poverty and breaking the cycle of children seeing their parents unemployed, living in a half-life of hopelessness and poverty and lacking ambition. That has been demonstrated across the world.

[Christopher Pincher]

My hon. Friend is quite right to say that work provides the best way out of poverty. Does he agree that the 5.2 million people who were trapped in dependency when the economy was growing in the boom years under Labour are evidence of the previous Government’s structural failure to deal with poverty?

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[Mr Jackson]

My hon. Friend is absolutely right. In retrospect, I think that it was a tragedy to import thousands of low-wage, low-skilled people from eastern Europe while we parked our own indigenous young people who needed skills and training and who needed educators and businesses to put their the faith and trust in them. I have nothing against the people who wanted to come to this country to make a better life for themselves and their families, but at what cost did they do so? Even the Scottish Trades Union Congress says the same thing.

Some of the arguments being used are disingenuous because they do not fully understand the context. We have uprated benefits by 5.2%, we have brought in apprenticeships, and we are trying to deal with these issues through the Work programme. I am on the Public Accounts Committee and I know that the programme is not perfect. We are at the beginning of a process and there are some difficulties with appeals, with people’s understanding of the system, and with advocacy. I understand that. However, my blue-collar constituents do not understand how it can be right, when their average salary is about £24,000, for a party that aspires to government to say that it will not countenance a benefit cap of £26,000. My constituency has some of the poorest super-output areas and wards in the eastern region, and my constituents are decent, salt-of-the-earth people who want to work. They are not shirkers.

[Mr MacNeil]

rose—

[Mr Jackson]

I will not give way to the hon. Gentleman, even though he is a terribly charming fellow.

Those people in my constituency want to work, but they want the Government to give them a positive message about the future. It is cruel to park people and to forget them.

[James Wharton (Stockton South) (Con)]

I want to back up what my hon. Friend is saying. When I went around my constituency at the last election, the issue of making work pay came up time and again, and the communities in which it came up were the poorest ones. They had seen the damage that long-term welfare dependency could do to a community. The reason that my hon. Friend and I welcome the reforms is that the Government are finally tackling this long-term problem, which hits the poorest in our country the hardest.

[Mr Jackson]

That was eloquently put by my hon. Friend, who is even younger and better looking than the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). We take a pinch of salt for a party that has no coherent fiscal alternative. Frankly, “Tough on Coco Pops and tough on the causes of Coco Pops” does not make a fiscal policy. The 10p tax rate was a debacle, while re-spending over and over again bankers’ bonuses and pensions credit does not cut the mustard.

Let me give some free advice to Labour Members. We did the same as them in 1998 and 1999 when we said that the downturn was made in Downing street, but it did not help us because we were not seen as credible. I respectfully invite Labour Members, if they are going to vote against Second Reading, to say what they would cut and what they would spend as an alternative. The Bill will save the best part of £2 billion. Politics is about choices, as Aneurin Bevan said 50-odd years ago, and he was right. It is disingenuous to keep repeating the issue of tax cuts to millionaires, when we have taken millions of people out of tax and cut the taxes of many low-paid working people. This Bill is about giving a message—that work pays and that it is better than welfare. We should give people the life they need and deserve—a life of work and a better future.

[Several hon. Members]

rose—