Welfare Benefits Up-rating Bill

Michael McCann Excerpts

Monday 21st January 2013 Commons Chamber

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

Does the hon. Gentleman accept that since his Government were elected, they have increased borrowing by £212 billion?

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[Charlie Elphicke]

That is absolutely right. It is extraordinary that the Opposition say that it is fine to have a 1% cap on public sector pay, but not on benefits. We need parity.

[Mr McCann]

rose—

[Ian Mearns]

rose—

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[Ian Mearns]

The position in my constituency is exemplified by the fact that household income probably hovers just above £20,000 per annum. That is household income, not personal income.

[Mr McCann]

Is it not the case that people do not feel better off because since the Government took office, the price of the average weekly shopping basket has risen by 17%?

[Ian Mearns]

I could not agree more, and that, of course, has a dramatic impact on people at the lower end of the income spectrum.

Let me clarify something that I said a moment ago. The average income per household in my constituency is just above £20,000 per annum, but that average is dragged up by some relatively well-heeled neighbourhoods. An awful lot of my constituents are struggling to get by, and I have a fantastic amount of sympathy for them, but there seems to be a compassion bypass on the Government Benches.

Given that most of the people affected by the Bill are in work, perhaps the Minister should adopt my earlier suggestion and return to the idea of a living wage. That could reduce the benefits bill, and also make companies such as Starbucks pay their staff a real wage so that we, the taxpayers, would not have to subsidise multinationals that may not be paying the corporation tax that they should be paying.

The Chancellor talks of strivers and skivers, but I see something different on the ground. I see families scraping by in low-paid work, or jumping from insecure jobs to benefits and back again. I have come across people who are working with all their might and main, moving from one part-time job to another just to scrape a living, and all too often the work that they are doing is demeaning and low-paid.

The truth, unlike what the Government keep spouting, is that those who rely on benefits and tax credits are in work, have worked, or will be desperately trying to find work in the near future. They are not scroungers, but victims of a stagnated economy, and the Government are undoubtedly making the situation worse. We need to stimulate the economy rather than stagnating it. We need to provide jobs in places such as the north-east. That, rather than crippling those who are on the lowest income levels in the whole economy, is the way to reduce the benefits bill.

Let me say this to Members in all parts of the House. When they walk towards the Lobbies, they should think long and hard about whether they can vote to allow 200,000 more children to live in poverty. I know which Lobby I will choose.

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[Mr Redwood]

The hon. Gentleman shouts “Where is the work?”, and of course we need more work. There are a lot of jobs on offer and we wish people well in applying for and getting them. I accept his implied point: in some parts of the country work is very scarce and we need economic policies that promote it. That is where lower taxes can be extremely helpful, and I urge my colleagues on the Front Bench to do more, if they can, because if more money is circulating in people’s pockets, bank accounts and purses, we will have more spending in the economy, which will help.

[Mr McCann]

The right hon. Gentleman’s idea of compassion is almost as convincing as his attempts at the Welsh national anthem. Does he concede that the Government have proposed to put benefits up by 1% because of his Government’s economic failures?

[Mr Redwood]

That is not my case at all. My case is that the Government inherited an impossible financial position: the public sector was spending and borrowing far too much and the economy had been performing very badly, with a collapse in living standards towards the end of Labour’s period in office that was the biggest that any of us in this House had witnessed in our lifetimes.

My right hon. and hon. Friends on the Front Bench are trying desperately to come up with a series of policies that promote growth and restore a greater degree of normality. The Committee must recognise that the model that sustained growth from 1945 through to 2007 was comprehensively broken when Labour broke the banks and nationalised them. Until we sort that mess out, we will be dealing with very unpopular and difficult choices, whoever is in government.