Budget Resolutions and Economic Situation

Nick Smith Excerpts

Friday 22nd March 2013 Commons Chamber

[Mr Duncan Smith]

I congratulate my hon. Friend on arriving at a really good statement: the aspiration nation. She is absolutely right, and the fact that she has come across it herself is testament to her brilliance on the Back Benches. This is about an aspiration nation, and the alternative—as somebody just remarked to me—is Mr Potato Head to infinity and beyond on borrowing. That is about the end of it.

The Budget also includes further measures, which I want to go through because some are really good.

[Nick Smith (Blaenau Gwent) (Lab)]

Did the Mr Potato Head comparison occur to the Secretary of State when he was looking in the shaving mirror this morning?

--- Later in debate ---

[Nick Smith (Blaenau Gwent) (Lab)]

I am pleased to be called to speak today and to follow the hon. Member for Braintree (Mr Newmark).

I shall concentrate my remarks on the need for infrastructure investment. As the economy continues to flatline, the roads and railways—the arteries of industry—are surely the key to a healthier tomorrow. A strong infrastructure will secure more jobs, hasten the end of austerity and underpin our future competitiveness. Let us listen to the IMF, the CBI, the British Chambers of Commerce, the Government’s own Business Secretary and even the Mayor of London. They are all onside for Labour’s policy of infrastructure investment. Yet Wednesday’s Budget confirmed that the Chancellor still does not have a growth plan that is fit for purpose.

In my constituency unemployment rose again last month and now stands at 3,640, and 1,250 people have been unemployed for more than a year.

[Nick de Bois]

If the hon. Gentleman thinks there is no plan for growth, can he explain why the Federation of Small Businesses

“believes this”—

the employers allowance—

“will give small firms the confidence to create thousands of new jobs in the private sector”?

When the federation was arguing only for a national insurance contributions holiday, it predicted that that would provide 45,000 jobs. It has yet to imagine how many more this measure will create. That is growth in my book.

[Nick Smith]

We want a plan B that will build houses. What the Budget measure favoured by the hon. Gentleman will deliver is a millionaires’ tax break.

In Blaenau Gwent we have 11 people chasing every job vacancy. There is 24% worklessness and 18.2% youth unemployment. That is in spite of the 4,000 jobs created by Jobs Growth Wales, which is part-funded by the European social fund and the Welsh Labour Government. So in Blaenau Gwent we know that life has got much tougher. Unemployment has not fallen there as it has done in southern England. Facing high energy, food and fuel prices, nearly 1,700 local families in Blaenau Gwent will be hit, and hit hard, by the bedroom tax next month. Food and fuel poverty will continue to blight young lives. Cuts to local services, from which the council cannot escape, will also hit us hard.

What these families need is an active Government pulling out all the stops to get our economy moving and create jobs. But in their first three years the Tory-led Government have spent £12.8 billion less in capital investment, compared to the plans inherited from Labour. The Government’s own “infrastructure pipeline” shows that only seven of the 576 projects—just seven—are completed or operational, and just 18% of the projects listed are said to have started or to be “in construction”. In the Budget the Chancellor did announce an extra £3 billion a year for infrastructure from 2015-16. He said this would get growth flowing to every part of Britain, but by now we are all used to the Chancellor’s hyperbole—fine words, but no follow-through.

My constituents want to know why the Government are not funding shovel-ready projects right now, which could get our people back to work. The British Chambers of Commerce asked the same question. It identified road maintenance as something we could do right away. We want homes and schools, too. As the National Audit Office said in its “Planning for Economic Infrastructure” report, investment may shape new patterns of demand. That is what I want for the south Wales valleys. It is an area of great potential, but we need the support to realise our talents. Road and rail investment would provide that support.

The re-opening of the Ebbw Vale to Cardiff line in 2008 is striking proof of that statement. It has been so successful that we now need funds to redouble the line, as the train frequency cannot meet demand. The Department for Transport told the Public Accounts Committee, of which I am a member, that it is looking to invest to support growth. Where? In areas of high demand, where more capacity can be delivered, and where there are schemes that can be implemented. Redoubling of the Ebbw Vale to Cardiff line meets all these criteria. I would also like to see electrification of the London to Swansea line and the complementary electrification of the valleys lines accelerated.

Much work has been done over the past year to secure a major private sector-led infrastructure project in Blaenau Gwent—a world-class motor sport and leisure facility. The developers estimate that it could create significant long-term sustainable employment for over 12,000 people. That would make a massive difference in the valleys in south Wales. The £200 million scheme would be one of the largest capital investment programmes in our region for more than 40 years. But what the developers are looking for now is the right tax-based incentive. I want the Treasury to be bold in its thinking and see how it can create the right framework to attract private investment.

Lord Heseltine was commissioned by the Government to recommend policies that leave no stone unturned in the pursuit of growth. Lord Heseltine understands that economies with a number of vibrant cities and city regions are more successful than those where the capital is dominant. The Chancellor endorses Lord Heseltine’s plan for a single pot of funding for local enterprise, but history will judge this promise—yet another post-election promise—on whether it helped the rich once again get richer.

So will the Chancellor continue to endorse this flatlining two-lane economy, or will he get the whole country in the fast lane to recovery? The Office for Budget Responsibility has said the Budget will

“have no impact on the level of GDP at the end of the forecast horizon”—

in other words, it will not provide the short-term growth that we all desperately need. The sad truth is that my constituents’ hopes for some brave new thinking from the Chancellor have been dashed. Those without jobs want the chance to work and to help the economy grow. George Osborne’s action on infrastructure has failed to meet the scale and urgency of the need. Instead, we get another downgraded Budget from a downgraded Chancellor.

Welfare Reform (Disabled People and Carers)

Nick Smith Excerpts

Tuesday 18th December 2012 Westminster Hall

[Ian Mearns]

I could not agree more. I thank my hon. Friend for making that point; it is absolutely true.

Steve Cowen, the chief officer of the Gateshead Carers Association—I cannot ignore it, because its office is next door to mine—has told me about the devastating impact that the proposals will have on carers and their families in Gateshead. Steve says that carers are the glue that holds the health and social care system together. The reforms hit them hard, and hit them again and again.

[Nick Smith (Blaenau Gwent) (Lab)]

I congratulate my hon. Friend on securing the debate. Does he agree that the bedroom tax needs to be promoted? The Government need to raise awareness of it sooner rather than later, so that families can budget and prepare for it. It will be a terrible shock for many.

[Ian Mearns]

I am grateful to my hon. Friend. He is right, but I need to make some progress, so I will move on swiftly.

A member of a couple could have a disability that means that the couple cannot sleep in the same room, for entirely appropriate reasons. A couple may need an extra room for equipment. A local authority—or a family—may have spent a considerable amount of money adapting a property for a family who are then forced to move, which not only would be distressing and disruptive to care arrangements, but could risk a greater long-term cost, because the adaptations need to be replaced in the new, smaller home. It is clearly daft.

Cuts in disability benefits imposed by the Government will, of course, affect disabled people living across the whole country, but, as with almost every other aspect of the Government’s approach to public policy, the impact is felt most keenly in areas with the greatest number of people living in relative poverty—the areas with the greatest need. Wales has the highest proportion of disabled people in the UK, with one fifth—21%—of working-age people living with a disability. It also has the highest proportion of benefit recipients for all types of benefits—20% of people of working age. Recent statistics show that just over 10% of Northern Ireland’s population are in receipt of disability living allowance.

A report prepared for the DWP by Christina Beatty, Steve Fothergill and Deborah Platts-Fowler listed the regional differences. The 20 areas with the greatest proportion of working-age people receiving DLA include Merthyr Tydfil, Neath, Blaenau Gwent, Easington, Caerphilly, Knowsley, Glasgow, and Liverpool—the list goes on. In my constituency, about 4% of people are affected. Surprise, surprise, the 10 areas with the lowest proportion of working-age people receiving DLA include Runnymede, South Northamptonshire, Kingston upon Thames, south Buckinghamshire, Windsor and Maidenhead, Surrey Heath, and Wokingham. So much for “We’re all in this together.”

The report from the Hardest Hit coalition highlighted the dismay felt by many disabled people on finding that they have become the easy target for cuts. Perhaps more shocking is the fact that the Government’s rhetoric justifying disability benefit cuts is hardening public attitudes. Many disabled people feel that the media portrayal of benefit scroungers is behind the increasing amount of disability hate crime, which is at an all-time high. That is despite the fact that estimated overpayments of DLA due to fraud make up less than 0.5% of total spending. As anyone who reads the Daily Mail will know, there are a lot of myths in the debate about welfare reform, and some are very damaging to disabled people. We need to confront those myths head-on. They are lies.

Official levels of fraud in disability and out-of-work benefits are far lower than public perceptions and polling suggest. The Office for National Statistics highlights that just 0.3% of overpayments for incapacity benefit were due to fraud. Figures on fraud for both DLA and incapacity benefit are outstripped by the figures for official error; in other words, mistakes by officials at the DWP cost the taxpayer more than fraud. Though it is true that the welfare bill grew in 10 years, disability benefits were not the main cause of that expenditure or a ballooning welfare budget.

Disabled people feel that they have been deliberately targeted, even though there is a clear alternative. Although estimates vary, tax evasion and avoidance cost the Government between £50 billion and £100 billion a year. It is estimated that a mansion tax on expensive properties, above a threshold of £2 million, would affect an estimated 74,000 people and, at face value, raise £1.7 billion. A financial transaction tax of about 0.05% on transactions such as those involving stocks, bonds, foreign currency and derivatives is possible. The bank levy introduced in January 2011 raises £2.5 billion annually, but a Robin Hood tax could raise up to 10 times that amount—£20 billion a year.

Whatever one’s view of the trade-offs, the priority should be the need to protect the poorest. In October 2010, the Prime Minister promised always to look after the sick, the vulnerable and elderly. The Chancellor said in his June 2010 emergency Budget:

“Too often, when countries undertake major consolidations…it is the poorest—those who had least to do with the cause of the economic misfortunes—who are hit hardest. Perhaps that”

has been

“a mistake that our country has made in the past. This coalition Government will be different.”—[Official Report, 22 June 2010; Vol. 512, c. 180.]

Really?

There are practical things that the Government can do over the next year. The first is to learn from the mistakes of the work capability assessments and ensure that the assessment for personal independence payments is as fair as possible. Secondly, they could review the work capability assessment, starting with the WCA descriptors, to ensure that it works consistently and fairly for all individuals with limited capability for work or work-related activity. Thirdly, they could get the fundamentals of universal credit right, ensuring that disabled people do not lose in cash terms due to the transition to universal credit from 2013. Fourthly, and most importantly, as loth as I am to implore the Government to do anything, I implore them to conduct a thorough cumulative impact assessment on the impact of all welfare reforms on disabled people, their carers and families. When the Government collect the results, they must act on them, so that no one is left floundering in unnecessarily deprived circumstances because of a welfare reform Act, the results of which were all too easy to predict.

Personal Independence Payments

Nick Smith Excerpts

Thursday 13th December 2012 Commons Chamber

[Esther McVey]

My hon. Friend is correct that that is a priority for us. However, I reiterate that this is a completely different system. PIP is a brand-new system and a brand-new benefit. It has new localised systems and it will be delivered locally. Therefore, it has been created in a much better format.

[Nick Smith (Blaenau Gwent) (Lab)]

What is the Minister’s estimate of the number of people on carer’s allowance who will lose out after this statement?

[Esther McVey]

As it stands, the same number of people will be on carer’s allowance, although they might be different people. As at the moment, people will be assessed and reassessed, and some people will move from having carer’s allowance to not having it, but the overall number will stay roughly the same.

Oral Answers to Questions

Nick Smith Excerpts

Monday 10th September 2012 Commons Chamber

[Mr Hoban]

My hon. Friend is absolutely right. There is a shared responsibility, and that requires the HSE and local authorities to work closely together. It requires them to identify the risks in their areas and take the right steps, proportionate to those risks, to tackle the risk of legionella.

[Nick Smith (Blaenau Gwent) (Lab)]

12. If he will make it his policy that Work programme providers should be allowed to share comprehensive data with local authorities on their own performance.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

From June 2012, providers have been able to share management information on referrals, attachments, job entries, and specified information on job outcomes with local authorities that have signed confidentiality agreements.

[Nick Smith]

The Government’s own Cabinet Office says that publishing data about our public services makes them better, yet the Work programme has been shrouded in secrecy. Will the new Minister let the light shine in?

[Mr Hoban]

The hon. Gentleman should listen to the answer before asking the supplementary. I made it very clear that since June 2012 information has been shared with local authorities that are prepared to sign the confidentiality agreement. We are very keen to ensure the integrity of official statistics. The information is there to be shared and I look forward to local authorities’ working with contractors to use that information to develop effective schemes at a local level.

Oral Answers to Questions

Nick Smith Excerpts

Monday 25th June 2012 Commons Chamber

[Chris Grayling]

I am pleased to say that there are 80,000 fewer people on out-of-work benefits today than there were at the time of the general election. It is worth the Opposition noting that as regards youth unemployment, when we take into account all the policy changes that have taken place, and if we strip out the ways in which the previous Government hid people and kept them off the unemployment register, youth unemployment is down as well.

[Nick Smith (Blaenau Gwent) (Lab)]

T3. A constituent has contacted me about a Work programme placement that is both unsupervised and offers no training. Is not the Minister worried that Work programme providers, such as A4e, deem that satisfactory?

[Chris Grayling]

If the Work programme providers do not deliver the right support, they will not be successful and they will not be paid. That is the joy of the system that we have put in place. The previous Government put hundreds and hundreds of millions of pounds up front into the pockets of providers. We make the providers put their own money up front in a commitment to deliver support to the long-term unemployed, get them into work and help them stay there.

Oral Answers to Questions

Nick Smith Excerpts

Monday 23rd January 2012 Commons Chamber

[Mr Duncan Smith]

That is a very good idea and I am certainly ready to discuss it with my hon. Friend. If we can make something work, it would be brilliant.

[Nick Smith (Blaenau Gwent) (Lab)]

The information technology necessary for university credit will depend on the Revenue’s new PAYE real time system. Is the Minister confident that every employer will be using the system successfully by next October?

[Mr Duncan Smith]

We are working towards that, and so far it has been a success. Small companies of nine employees or fewer will have access to free software upgrades, so those that do not have a software payroll system will not incur any great charge. We are running trials that will start in April and that will join with the DWP in October. We are on target and we will continue to work towards that date. That is our expectation and ambition.

Remploy

Nick Smith Excerpts

Thursday 15th December 2011 Westminster Hall

[Nick Smith (Blaenau Gwent) (Lab)]

I congratulate the Backbench Business Committee on selecting this important issue for debate today and my right hon. Friend the Member for Cynon Valley (Ann Clwyd) and other colleagues on their powerful advocacy in support of Remploy. I apologise, Mr Havard, for having to leave early this afternoon, because I have a long-standing appointment.

Remploy workers have my wholehearted support. I know from the packed lobby of Remploy staff in Parliament in October that there is backing for them throughout the country, and I congratulate the GMB and Unite on their sustained and high-profile campaign on their behalf. Workers at the lobby were rightly furious about the prospect of losing their jobs.

The Abertillery Remploy factory in my constituency was opened in 1949, and in 1955 one of my illustrious predecessors, Rev. Llewellyn Williams, called on Ministers to ensure that it operated at full capacity, which was then 100 workers. Today, it has just 21 workers. Abertillery Remploy manufactures upholstery for wheelchairs, and it does a good job, but it needs more contracts and a management that properly sell the skills of its first-class work force.

The world has changed much since the 1950s, and the drive for full equality for disabled people is to be supported. In her review, Liz Sayce said that she wanted employment support that would meet the future aspirations of disabled people in the context of a changing economy and the big changes in the way we all work. I wholeheartedly agree with her top-level analysis, which must be right. Others today have outlined the Sayce review recommendations, and there have been some good proposals, such as giving Remploy factories the opportunity to put forward plans to form new businesses or to retain existing ones. It is important that those ideas are independently evaluated.

Sayce also said that non-viable factories should close and that Government funding should end. However, is that really the most sensible strategy in the current economic climate and when there are few new jobs in the south Wales valleys? Recently in my home town of Tredegar in Blaenau Gwent, which is one valley over from Abertillery Remploy, 250 people applied for 25 jobs in a new Tesco store that is about to open.

Sheffield Hallam university has recently reported on the impact of incapacity benefit reforms in different parts of the UK. Its report estimates that by 2014 the reforms will cut incapacity claimant numbers by nearly 1 million, 800,000 of which will be existing incapacity claimants who will lose their entitlement. As many hon. Members are aware, people on incapacity benefits are not evenly spread throughout the UK. There are large variations from just 2.3% of the work force in Wokingham to 13.9% in Blaenau Gwent in the south-east Wales valleys. Wales, the north-west, the north-east and Scotland are the areas that will feel the greatest impact of incapacity benefit reforms. They are areas where deprivation is high, and economies are weak. I am fearful that Remploy closures in places such as Abertillery will lead to its workers moving not to private sector jobs with the appropriate support, but to joining the dole queue alongside former incapacity benefit claimants. That is the reality of what will happen in many parts of the country

The GMB has told us that the majority of Remploy workers who lost their jobs in 2008 are still unemployed, so if the factory closures go ahead by April 2013, the prospect for current Remploy workers is bleak. The Government continue to axe jobs, and their plans for growth are weak. If recovery is choked off, thousands of Remploy workers will be put on the dole alongside other workers so, as hon. Members have said, it is likely that they will claim benefits instead of paying taxes. That forecast is troubling. However, I believe that Remploy can have a future, but only if it is allowed to modernise with Government support. If we can offer Remploy more public contracts, we should do so. Above all, the Government should get back round the negotiating table with Remploy workers and trade unions.

As others have said, the Government should explore the use of Article 19 of the EU directive on public sector procurement, which specifies the right of public bodies to reserve some contracts for supported businesses such as Remploy, and I encourage other bodies involved in public procurement to utilise that directive. I have been told that in Blaenau Gwent the local council is doing what it can to boost public procurement and that it wants a meeting with Remploy management and the unions in the new year. I know that other hon. Members want to speak, so I shall draw my comments to a close. In a nutshell, it pays to care and to keep Remploy workers in work and off welfare. I hope the Government will listen today and do everything that they can to secure Remploy employment in the future.

Oral Answers to Questions

Nick Smith Excerpts

Monday 28th November 2011 Commons Chamber

[Maria Miller]

We of course always consider the availability of jobs for all people, and particularly for disabled people. Remploy’s employment services have been particularly successful in securing employment for disabled people, even over the past year in these difficult economic times.

[Nick Smith (Blaenau Gwent) (Lab)]

14. What steps he is taking to tackle youth unemployment.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

The measures that we announced on Friday build on the support that we have in place. There will be more intensive support for all 18 to 24-year-olds, including through the doubling of the work experience and sector-based work academy schemes. There will also be a wage incentive for any young person under the age of 24 who is placed in long-term employment, usually in the private sector, through the Work programme.

[Nick Smith]

In Blaenau Gwent, there has been a 70% rise in young people who have been on the dole for more than six months. The Government now acknowledge that high long-term youth unemployment is a slow-burning social disaster. How many of their private sector, subsidised work places for young people will be delivered in Wales next year?

[Chris Grayling]

Let us deal head-on with the issue of an increase in long-term youth unemployment. The only reason that the figures for long-term youth unemployment show an increase is that we no longer hide young unemployed people on Government schemes and training allowances, which created a totally misleading figure. The reality is that long-term youth unemployment on a like-for-like basis is now almost identical to what it was two years ago under the previous Administration. Every single young unemployed person in Blaenau Gwent will have access to a work experience placement through our work experience scheme or to the Work programme, through which they will receive a wage subsidy for any employer who takes them on and gives them a long-term job.

Oral Answers to Questions

Nick Smith Excerpts

Monday 24th October 2011 Commons Chamber

[Mel Stride (Central Devon) (Con)]

2. What steps he is taking to reduce youth unemployment.

[Nick Smith (Blaenau Gwent) (Lab)]

5. What his approach is to tackling youth unemployment.

[Karl MᶜCartney (Lincoln) (Con)]

13. What steps he is taking to reduce youth unemployment.

--- Later in debate ---

[Mr Duncan Smith]

My hon. Friend is right that youth unemployment rose from about 2004, regardless of a growing economy. One problem was that when the previous Government came to power, there was a guaranteed training place for all 16 to 18-year-olds, which they scrapped. That was one of the worst, most short-sighted decisions that any Government have ever made.

[Nick Smith]

Youth unemployment in Blaenau Gwent grew by a massive 12.8% last year. The Centre for Economic and Social Inclusion has highlighted the benefits of the future jobs fund, which helped 500 young people in my constituency. Will the Secretary of State look at bringing back the future jobs fund, given the current crisis of youth unemployment?

[Mr Duncan Smith]

As the hon. Gentleman should know, we made a commitment to complete the placements that had been committed to until March. That meant that there were nearly 64,000 additional places under the future jobs fund, bringing the total to 105,000 places. We believe that the future jobs fund was an expensive way to try to get people into employment. Almost half of those who went in have ended up back on benefits.

Oral Answers to Questions

Nick Smith Excerpts

Monday 13th June 2011 Commons Chamber

[Steve Webb]

My hon. Friend has raised this issue with me before in debate, and although he is correct that the savings do not fall in the comprehensive spending review period, I would draw his attention to one number. Under previous projections, the national debt at the end of this Parliament was £1.4 trillion. If we were to delay the change, we would have to add another £10 billion. Someone has to get a grip on the national debt.

[Nick Smith (Blaenau Gwent) (Lab)]

What notice does the Minister believe is required of changes to the state pension age?

[Steve Webb]

I am grateful to the hon. Gentleman for raising that question; indeed, we asked that very question in our Green Paper. We are looking at future changes to the state pension age, to 67 and 68, which are already legislated for. We believe that that needs to happen sooner. We are currently consulting and reflecting on the right balance between taking account of changes in longevity and giving people fair notice, and we would welcome the hon. Gentleman’s input on that point.