Oral Answers to Questions

Owen Smith Excerpts

Tuesday 11th December 2018 Commons Chamber

[Mel Stride]

My hon. Friend is entirely right. That is why in the last Budget, Scotland benefited from £950 million in additional Barnett funding, and why we are investing £1 billion in up to six new city deals, including in the borderlands area—some of those deals have been concluded and some are under discussion.

[Owen Smith (Pontypridd) (Lab)]

One of the many flaws in the Government’s analysis of the impact of Brexit on the regions and nations of the UK is that they did not tell us precisely what the GDP reduction would be compared with the status quo. Will the Minister now correct that and tell us how much worse off in GDP terms Scotland will be if we pursue the Brexit deal compared with the present day?

[Mel Stride]

These are estimates, of course, not forecasts. I can tell the hon. Gentleman that there would be no impact on output in Scotland in the long term—15 years from the end of the implementation period—if we compare the White Paper deal with the situation as it stands today.

Leaving the EU: Economic Analysis

Owen Smith Excerpts

Wednesday 28th November 2018 Commons Chamber

[Mel Stride]

It will be for Parliament ultimately to decide whether the Government’s deal prevails. I think that the right hon. Gentleman and I are on the same side here, because I believe that the prospect of a no deal is deeply unattractive—notwithstanding the fact that we are making extensive preparations for no deal—partly for the reasons he has identified. We want a deal. We want this deal. We want a deal that is good for our country, and we want to avoid the very situations that he has elaborated on.

[Owen Smith (Pontypridd) (Lab)]

I don’t know about you, Mr Speaker, but I remember this Government lecturing Labour Members for years about the problems of saddling future generations with borrowing and debt. The Brexit deal that the Minister proposes is modelled in this bogus paper. Will he confirm that it states on page 76 that we will be borrowing an extra £37.5 billion by 2035 as a result of this deal?

[Mel Stride]

The hon. Gentleman is right to say that there are figures of that nature in this report, because it is an honest and open report about the implications of all the possible outcomes. However, we have to compare that with no deal, or with the EEA or an average FTA deal. We have negotiated with the European Union and we have to deal with politics not just as perpetual opposition but as the art of the possible and the art of doing a deal that will be good for this country, safeguard our economy and deliver on those things that the referendum result told us in 2016.

Folic Acid Fortification

Owen Smith Excerpts

Thursday 25th October 2018 Commons Chamber

[Nigel Adams]

We will be encouraging all stakeholders, as well as the public, to take part in the consultation. I will certainly look into the matter that my right hon. Friend has raised and ensure that someone writes to him.

[Owen Smith (Pontypridd) (Lab)]

Given the evidence that neural tube defects such as spina bifida emerge between the 18th and the 28th day after conception and that most women are not taking folic acid supplements in accordance with the Government’s guidelines before conception or during their first trimester, does the Minister agree that supplementation alone does not work?

[Nigel Adams]

The hon. Gentleman takes a keen interest in this matter and has done some extraordinary work on it. He makes an important point. This is why awareness is crucial for all women of childbearing age, including those who are not pregnant but might be considering becoming pregnant.

--- Later in debate ---

[Owen Smith (Pontypridd) (Lab)]

It is a pleasure to speak in this welcome debate on a welcome Government intervention. I start by paying tribute to the hon. Member for Winchester (Steve Brine), the Public Health Minister. He is not here today, but he has been excellent in listening to the evidence on this case in recent months, and he moved decisively to announce the consultation on Tuesday. As the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Selby and Ainsty (Nigel Adams), said, the consultation is welcomed on both sides of the House and, indeed, by the scientific community not just in the UK but across the world.

I pay tribute to the right hon. Member for Belfast North (Nigel Dodds), my co-chair of the all-party parliamentary group on folic acid fortification. He has spoken with great bravery and sincerity about his family’s experiences, and he and many others have played a far more important role than I have in bringing home to Members the importance of this change.

I also pay tribute to Shine, and particularly to its current chief executive Kate Steele. The charity does wonderful work to support individuals and families with spina bifida and neural tube defects, and it has played an excellent role in campaigning for fortification.

Lastly, I thank Lord Rooker. He campaigned on this issue long before I and many others did. In truth, he has been the leading advocate in Parliament for this change over a long period. This is a proud day for him.

Obviously there will be some controversial questions. The Government are proposing a big public health intervention, and it is right that they are consulting, but the Public Health Minister was right to say on Tuesday that the evidence is overwhelming and that he is convinced by the evidence.

I will spell out the scale and gravity of these conditions in the UK to bring it home to Members, and to those who might read or watch this debate. We now all know that neural tube defects are the failure of the spine to close at either end, and they happen early in pregnancy. Neural tube defects can lead either to spina bifida or anencephaly.

Anencephaly occurs in 40% of neural tube defects and is fatal. Children with anencephaly do not survive, and often they die very quickly after birth. Spina bifida is where the spinal cord does not properly form, which obviously leads to poor mobility, poor bladder control, bowel issues, often learning disabilities, mental health problems, physical health problems and lifelong disability. It is an extremely grave condition.

Neural tube defects affect around 1,000 pregnancies each year in our country. In this country, two foetuses a day are aborted following the diagnosis of a neural tube defect, and two children a week are born with such birth defects.

[Anna Turley]

My hon. Friend is making an extremely powerful case, for which I am grateful. Does he agree that one of the most frightening statistics is that young women under the age of 20 are five times less likely to take folic acid supplements? That strengthens the case for mandatory flour fortification.

[Owen Smith]

From memory, I believe that just 6% of women aged under 20 supplement their diet prior to or, indeed, during pregnancy. It is clear that this particularly affects younger women, perhaps because they have not yet read the literature, gone to classes or otherwise been informed. The other reality is that there is a much lower level of folate among women from working-class and black and ethnic minority backgrounds, which is another fundamental reason for addressing this in the manner proposed.

Shine estimates that the cost of caring for people with spina bifida and other neural tube defects is around £500,000 over their lifetime, but the point is not the financial cost to the NHS or to the taxpayer; the human cost to families and individuals is what counts. In this awareness week for spina bifida and hydrocephaly, Shine has been highlighting some of those human examples.

One example is of a young woman called Nicky, who had spina bifida. She could walk a little, but she used a wheelchair most of the time. She loved animals, and she volunteered at a local animal sanctuary and rode at weekends. At 18, before she intended to start a university degree in animal care, the shunt that controlled her hydrocephalus needed replacing. It went wrong, and she had three dreadful years of ill health during which she was largely housebound or hospitalised. She obviously could not continue with her education, and she died at 21.

That is not an uncommon case; unfortunately, it is all too common. There is no certainty, of course, that had Nicky’s mother supplemented her diet prior to conception, or indeed during pregnancy, Nicky would not have been born with spina bifida. However, we have known for almost 30 years of the clear evidence that there is a dramatically greater likelihood that Nicky would have been born without a neural tube defect had her mother had the requisite levels of folate in her system. As my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) said, it was in 1991 that the Medical Research Council first published the evidence showing a 72% reduction in the likelihood of conceiving a child with a neural tube defect if the mother supplements her diet with folic acid.

The history is interesting, because successive Governments have not responded to the evidence with fortification, on which this Government are now consulting. I make it clear that I think the last Labour Government should have done so. We did a huge amount through bold public health interventions. Smoking cessation is the best example, but there are myriad examples. The last Labour Government were very good at addressing public health needs. However, this is one area where they did not undertake to act and they should have done. The position our Government and successive Governments took was to move towards advice that diets should be supplemented with 400 micrograms of folic acid during and prior to pregnancy. As many people have said, the problem is that 40% of pregnancies are unplanned; only 30% of women take the right dose of folic acid even if they are supplementing; young women tend not to supplement at all, as my hon. Friend the Member for Redcar (Anna Turley) said; and working-class women and women from black and ethnic minority backgrounds have lower levels of folate because they do not supplement very often. Across the whole population, irrespective of demography, about 75% of women do not have the right levels of folate and therefore are at increased risk of giving birth to a child with a neural tube defect.

Other countries have been bolder than us. As the right hon. Member for Belfast North said, about 85 countries have chosen to introduce mandatory fortification, including America, Canada, South Africa and lots of countries in South America. It has not happened in Europe, but this will be another example of Britain leading the way in Europe.

[Nick Smith (Blaenau Gwent) (Lab)]

My hon. Friend has shown great leadership on this issue, and Shine has been a fantastic help to campaigners across the country on this issue. Does he agree that families in south Wales are glad the Government are moving on this but that they want this consultation to be completed much more quickly—as quickly as possible—because they think this important public health initiative should be brought in sooner rather than later?

[Owen Smith]

That is right. I understand why the Government need to consult. There has been a debate about the upper level of folate. As I may discuss briefly later, the evidence suggests that there is not necessarily any issue associated with an upper tolerable limit. A recent paper in January last year by Professor Sir Nicholas Wald, who did the original research in the early 1990s, very effectively debunked the notion that there is an upper tolerable level of folate. Other studies have done the same, but I am confident that that will come out in the consultation. The point my hon. Friend makes about families in his south Wales constituency and mine is well made. To illustrate that, using the 72% statistic, let me say that had the Labour Government introduced this measure in 1998, at the same time as the United States did, 3,000 babies would have been saved from being born with spina bifida or anencephaly.

There is no evidence from countries across the world that have undertaken this measure of ill effects in the population. There is lots of evidence to show that there are other ancillary benefits; one study in Norway has shown a diminution in the volume of autism in the population. There is huge scientific support for this measure, including from the Royal College of Obstetricians and Gynaecologists; the Royal College of Paediatrics and Child Health; the Royal College of Midwives; the British Maternal and Fetal Medicine Society; the Faculty of Sexual and Reproductive Healthcare; the British Dietetic Association; the Governments of Wales, Northern Ireland and Scotland; the chief medical officers in Wales, Scotland, England and Northern Ireland; Public Health England; Public Health Wales; the Food Standards Agency; and Professor Sir Colin Blakemore. The list goes on and on. Crucially, the Government’s own Scientific Advisory Committee on Nutrition has advocated this measure for the best part of 20 years. So it is a measure whose time has come. It will be enormously beneficial for our population, and if we in this House undertake to do it, we will contribute to saving hundreds of lives each year and thousands of lives over the years to come. I commend the Government for having the bravery and foresight to do it.

EU Customs Union and Draft Withdrawal Agreement: Cost

Owen Smith Excerpts

Monday 22nd October 2018 Commons Chamber

[John Glen]

Government is always challenging, and there are always issues that need to be resolved. It is self-evident that this is a challenging set of negotiations.

[Owen Smith (Pontypridd) (Lab)]

Will the Minister confirm that the head of HMRC estimates that the cost for British business of leaving the European Union customs union would be £20 billion a year?

[John Glen]

I am aware of that assessment. It depends on the assumptions for the final agreement we come to, but clearly the Government are taking a range of concerned parties into account throughout this process.

Oral Answers to Questions

Owen Smith Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Elizabeth Truss]

Those are fantastic figures for Scotland. We have seen good figures across the UK and the lowest unemployment for 40 years. The Labour party wants to overthrow capitalism; we want great businesses that will do well for our economy.

[Owen Smith (Pontypridd) (Lab)]

Could the Chief Secretary to the Treasury reassure the House and the people of Scotland that they will not be paying more in fuel and alcohol duty after Brexit in order to fill the post-Brexit hole in our public finances?

[Elizabeth Truss]

I am afraid to tell the House that the people of Scotland are having to pay more income tax thanks to the SNP Government. Everyone earning more than £26,000 is paying more tax under the SNP.

Leaving the EU: Higher Education in Wales

Owen Smith Excerpts

Wednesday 23rd May 2018 Westminster Hall

[Hywel Williams]

The hon. Lady makes the point that I was going to make next. In fact, when I asked a similar question in the Select Committee on Exiting the European Union, the answer persuaded me that I might have been better off researching unicorns.

Last week, in that Committee, I questioned Dr Main of the Campaign for Science and Engineering and Professor Brook of the Association for Innovation, Research and Technology Organisations—people who should know their business—about the shared prosperity fund. They both confirmed that they had not heard much about it since it was announced, so it is a fund in name only. We do know that it is under the remit of the Ministry of Housing, Communities and Local Government, which I think is significant, because that Ministry is England-only, which speaks for itself.

On research and collaboration in Wales, there has been historical under-investment in research infrastructure compared with the rest of the UK, and a lower level of science, technology, engineering and maths activity. A recent Royal Society report said that Wales has the lowest percentage of research infrastructure in Great Britain. It has benefited greatly from EU funding, however. In 2016-17, Welsh higher education institutions received about 19% of their research income from EU sources, compared with about 15% for other UK higher education institutions. We depend more heavily on them. In particular, Welsh higher education institutions received money from such programmes as Erasmus and Horizon 2020. In 2014-15, the total EU research grants and contracts income for Wales was approximately £46 million, which represented about 21% of the total research grants and contracts income in Wales for that year. Again, universities and the higher education sector in general in Wales have a greater dependence on those sources.

Horizon 2020 has a budget of about €70 billion for the period between 2014 and 2020. The Welsh higher education sector has been successful in winning funds from that highly competitive programme. Universities have accounted for nearly two thirds of the Welsh participation in Horizon 2020 so far. When the money is there we compete successfully, and universities do disproportionately better.

Interestingly, on Monday, the Prime Minister said that she wants us to be part of any future such schemes—the successor schemes of Erasmus and Horizon 2020. More surprisingly, she said that she was willing for us to pay, but that we should have a “suitable level of influence”. That exemplifies the unreal nature of the Government’s thinking. Those are EU programmes. We are leaving the EU. We will become a third country. In respect of Horizon 2020 and Erasmus, Times Higher Education has said that associate countries are not in the European Council or the European Parliament, and they have no say in the research budgets. The fantasy is that we will somehow leave, but stay in—that we will benefit and be able to fix the rules—but we will be a third country. At some point, the Government will collide with reality, and the sooner the better as far as I am concerned.

Now and again I get angry emails from frustrated Brexiteers, usually late at night, which say, “We’re leaving. Get on with it.” I only wish that the Government here would get on with it. Uncertainty is the most obvious feature of Brexit, for higher education as for everyone else, and that goes for people who are in favour of leaving and those who are in favour of remaining.

An alternative might be that the Welsh Government take charge, if they can be shaken awake on the matter. After all, Quebec, which is a province of Canada on the other side of the Atlantic, takes part in Erasmus+, so why not Wales? Needless to say, the Scottish Government are way ahead of us already, and are using their offices in Brussels, Berlin, Paris and Dublin to lead the charge. I am not sure whether we have an office anywhere apart from Cardiff these days.

Another strong pillar of our HE sector are the thousands of EU students who study in Wales and bring academic, economic and cultural benefits to our universities and our communities. That is particularly obvious in Bangor, where the population almost doubles and a large proportion of the students are from EU countries and other foreign countries. They bring enormous benefits. The latest figures for 2016-17 show that more than 6,000 EU national students were at HE providers in Wales, but applications are down. Perhaps the Minister can confirm the Institute of Welsh Affairs’ figure that there has been a drop of 8% this year.

[Owen Smith (Pontypridd) (Lab)]

I congratulate the hon. Gentleman on securing the debate. Does he agree that we are already seeing a financial impact of Brexit on our universities, in the reduction of the number of EU students? The excellent University of South Wales in my constituency had to propose laying off fully 5% of its staff last year, explicitly citing Brexit and the reduction in the number of EU students as the reason.

[Hywel Williams]

The hon. Gentleman makes a very telling point—the effects are with us already, even though we are still in.

There are also effects that are not so apparent in facts and figures, which are to do with the morale of lecturers and students from abroad and perhaps even their commitment to their work, in the face of offers that they might get from universities outside Wales and outside the UK. That effect is beginning to make itself apparent. In fact, it is one of the early signs of the impending Brexit vote hangover.

The Welsh Labour Government should give EU students who are starting courses in Wales now or in the near future some guarantees—for example on fees, loans and grants—to reassure them that Wales welcomes them to study and to contribute. The Welsh Labour Government should do that, but whether they will is yet another Welsh Labour mystery.

I come to the last pillar for today’s debate—staff from the EU who have chosen to research and teach in Wales. We have universities and individual departments of outstanding quality. That is no accident. We have built on our strengths, and EU staff and staff from other countries have been attracted here because of those strengths. The latest information I have shows that there are 1,355 staff from the EU at Welsh universities. They need to be reassured that they have a future with us, working at the forefront of their fields and building Wales’s future.

I have some brief questions for the Minister. What representations have the Welsh Government made regarding the design and implementation of the UK shared prosperity fund? I think we would all be glad to hear something about that. What representations have the Welsh Government made regarding Wales’s future participation in Horizon 2020 and Erasmus+? What discussions have Welsh Office Ministers had with the Home Secretary about immigration arrangements for EU students who might want to study in Wales? What assurances can the Minister give me that universities in Wales will still be able to attract and retain talented academics from the EU? Lastly and perhaps most importantly, will he give a guarantee that Wales will receive “not a penny less” after we leave the EU? He will recognise those words, as they were a promise by the Leave campaign.

We have great strength in our universities. We would be foolish in the extreme to allow a political vote, or a petty, clueless, split and confused Government here in London and a somewhat indifferent, somnolent one in Wales, to drag them down.

--- Later in debate ---

[Stuart Andrew]

I certainly agree, and that is exactly our ambition. As I said a moment ago, the Prime Minister has been very clear that she wants the UK to build that type of relationship. The project that the hon. Lady just mentioned sounds incredibly interesting; perhaps I could hear more about it from her in the future.

[Owen Smith]

I am pleased to hear, once more, the guarantees about access to funding and programmes for institutions and individuals that had made bids prior to our leaving the EU. However, I take it that the corollary of the guarantee that the Minister has just offered is that there is absolutely no guarantee that once we have left the EU, any of those institutions, including Welsh universities, will necessarily have access to Erasmus+ or Horizon 2020 and their successors.

[Stuart Andrew]

As I have already said, the Prime Minister made it very clear in her Mansion House speech that the UK is committed to establishing that relationship. We want to work with the EU on designing that agreement; we welcome full and open discussion about it. We are considering all sorts of ways in which the UK can participate in these EU programmes and in ways of facilitating new bilateral and multilateral collaborations with EU member states, as well as ways of opening channels of dialogue between the EU and UK experts in science and innovation. The future partnership paper published on 6 September explores how the UK and the EU can achieve that objective. We are determined to seek that agreement, and we will continue to pursue it.

On individual staff and students, we have listened and responded to the higher education sector’s concerns about their presence and role in the UK. In England, we have confirmed that current EU students, and those due to start their courses in 2017-18 and 2018-19, remain eligible for home fee status and tuition fee loans. I am pleased to say that the Welsh Government have done the same for those studying in Wales. As part of the withdrawal agreement with the EU, we have agreed that individuals resident in the UK before the end of the implementation period, including academics, will have the right to apply for leave to remain. If they subsequently apply to study at a UK university, they may also qualify for home fee status and student loans after the end of the implementation period, if they meet the eligibility criteria.

Going forward, we will continue to listen to the sector’s concerns, and the issues will be considered as part of the wider discussions on our relationship with the EU. Meanwhile, the British Council, working with our universities, will continue to promote colleges and universities in Wales and across the UK as world-class places to study and do research. The Department for International Trade is also helping higher and further education providers to establish and expand their presence in key markets abroad, and it will continue to do so.

The hon. Member for Arfon raised a few other points. First, on the structural front—I can see he is leaning forward in anticipation; I hope he is not disappointed—as we transition to longer-term arrangements, we will ensure that all parts of the UK are treated fairly and their circumstances are taken into account. We have promised to engage the devolved Administrations as we continue to develop the UK prosperity fund. I welcome the Welsh Government’s paper on regional funding. It is an important contribution to our work on EU exit.

I fully recognise the importance of EU funds to Wales. The guarantees set out by the UK Government show the importance we place on those funds, as does the position we have since reached with the EU on participating in the 2014-to-2020 EU programmes. Our manifesto was very clear in its commitment to creating the shared prosperity fund. We want it to be more effective than previous funds. Let us not forget that despite receiving £4 billion, Wales remained at the bottom of the gross value added table. We want this prosperity fund to be more effective, and to help Welsh universities.

I am conscious that time is running out, so I will move on. On student visas, the hon. Gentleman will know that we are considering the options for the future migration system very carefully. To help the Government make decisions on migration after the implementation period, they have commissioned the independent Migration Advisory Committee to report on the impact of exiting the EU on the UK labour market, and on how the UK’s immigration system should be aligned with a modern industrial strategy. That should be done by September this year. We have commissioned the committee to provide an objective assessment of the impact on EU and non-EU international students by September this year. Those are important opportunities for the sector to provide evidence, and I am pleased to say that the sector has been actively engaged in that process.

I will get back to the hon. Gentleman on a couple of the other points he raised. Time is running out, and I want to give him a much fuller answer than just one line; if it is agreeable to him, I will write to him.

We are determined to keep our higher education sector on the cutting edge, and to ensure that it continues to be a major player on the global stage. Welsh universities are very much part of that. I pay tribute once more to the hon. Gentleman and other Members who have taken part in the debate. I assure them that in this role, I will be an advocate for the higher education sector in Wales.

Question put and agreed to.

Customs and Borders

Owen Smith Excerpts

Thursday 26th April 2018 Commons Chamber

[Owen Smith (Pontypridd) (Lab)]

I begin by thanking my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) for securing today’s debate, which has been incredibly important, and my right hon. Friend the Member for Islington North (Jeremy Corbyn) for liberating me to speak. It was extremely generous of him, and I intend to make full use of it.

I want to do something unusual in my new free-speaking, freewheeling role and agree with one of the things said by my hon. Friend the Member for Vauxhall (Kate Hoey). She said that there has been a great deal of dishonesty in this debate, and she is completely right. It is pretty much the only thing that I agree with her on, but dishonesty has been the hallmark of the Brexiteers’ arguments before, during and after the referendum. I am sorry to break with the more consensual, collegiate tone that many Members have struck, but we need a bit of truth telling in this debate. We need to be clear about the risks that we face as a country and clear about some of the fibs that were told to the country during the process.

As a former shadow Secretary of State for Northern Ireland and as someone in the Labour party who feels a huge degree of pride about all we did to bring about an end to 30 years of civil war in a part of our country, we cannot countenance any return to any hard border in Northern Ireland. It would be utterly unconscionable for this place to allow that to happen. When the Chief Constable of the Police Service in Northern Ireland is warning us all publicly—a pretty remarkable thing for him to do—that we risk the return of a hard border that would jeopardise the safety and security of his officers and of the people of Northern Ireland and when that view is shared across the political divide in Northern Ireland, this place must listen.

The situation was not discussed prior to the referendum, when it was not clear that we were going to jeopardise peace in Ireland. If there is to be any sort of harder border in Northern Ireland, it is now clear that we run the risk of jeopardising that peace. That is the first and most important thing that I have to say, and that alone should cause us to pause and say, “We must stay in the customs union and the single market.” The truth is that staying in the customs union is insufficient to guarantee that we will not, over time, have a return to a hard border on the island of Ireland. Regulatory divergence unfolding over a longer period will be the one thing—more than the short-term effect of customs tariffs at the border—that will guarantee the return of the hard border, which cannot be countenanced by this place. If we allow it to happen, we would be betraying the people of the Northern Ireland and the national interests of this country

Let me turn briefly to the economic effects of Brexit, because we need some truth telling there, too. Brexit is already damaging the economic this country’s wellbeing. The International Monetary Fund said just this week that the only G7 country that will not grow at anything like the almost 4% that the world is predicted to grow at over the next period is the UK, and its view is that that is due to Brexit. The Office for Budget Responsibility, the OECD and the Government hold the same view. The Government’s own projections clearly show that with the very best outcome, which is staying in the single market and the customs union, we will still see a reduction in GDP of around 2%, which is equivalent to the change we saw after the 2008 crash.

[Norman Lamb]

Does the hon. Gentleman agree that the Brexiteers’ claim that we have to leave the customs union to grow our trade with the rest of the world is just grossly misleading? Germany exports £77 billion to China against our £22 billion, so we have every opportunity within the customs union to grow our trade wherever we want. It is down to us, not the rules of the customs union.

--- Later in debate ---

[Owen Smith]

It is frankly arrant nonsense to suggest that staying within the EU or being in the customs union or the single market is in any way, shape or form an impediment to growing our trade outside the EU. The truth is that we have succeeded in doing that over the past 30 years from within the EU, and other countries are doing it even as we speak. It is utter nonsense, and we need to call it out as such and not accept the set of lies that continues to be propagated by those who are ideologically determined to drive Brexit through.

Finally, all I have just described as truth is completely contested. I fully accept our country is still very much divided, and it is not sufficient for the Government or for the Labour party in opposition to acquiesce, in respecting the will of the people, to allowing our country to become poorer, less secure and more isolated, but nor is it sufficient for us simply to overrule the will of people. The only way we can sort this out, the only way we can act in the national interest and secure the agreement of the British people, is to give them the opportunity, once we know the final terms of the deal—what is really on offer, not the lies that have been told but the truth that is then exposed—of a final ratifying referendum, a final say, a people’s vote, or whatever we want to call it. That would bring this country together. Frankly, it would save this country from a lesser future—a less secure, less prosperous and more isolated future. That is the right thing to do, and it is what we should—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order.

Class 4 National Insurance Contributions

Owen Smith Excerpts

Wednesday 15th March 2017 Commons Chamber

[Owen Smith (Pontypridd) (Lab)]

May I commend the Chancellor for the bravery of his statement? I ask him to pass on our sincere thanks to Laura Kuenssberg for pointing out to him that it was a duff decision and to the Prime Minister for forcing him to reverse it before breakfast.

[Mr Hammond]

I have explained to the House what happened and what the view is inside Government about the tax locks that we put in place. The hon. Gentleman is entitled to his opinion and he has expressed it.

The Economy and Work

Owen Smith Excerpts

Thursday 26th May 2016 Commons Chamber

[Owen Smith (Pontypridd) (Lab)]

I am delighted to see that the Chancellor has come back to join us for the close of what has been an excellent debate today, to hear the Opposition’s view that, by any stretch of the imagination, this Queen’s Speech is a desperate missed opportunity. It could have addressed the deep-seated problems in our economy or the poor quality of work experienced by so many under this Conservative Government. Time and time again this afternoon, I have heard right hon. and hon. Members lament those problems, and ask in their different ways where the meat was last week.

Where was the Bill to address the deep-seated problems in our economy, and the yawning inequality that is spreading across Britain? For example, where was the Bill that, as my hon. Friend the Member for Bootle (Peter Dowd) put it, could boost our economy through investment in our public services? What a question to have to ask on a day when the Government have sacked 250 BIS workers in the heart of the northern powerhouse in Sheffield. The Government should reflect on that.

The Government should also reflect on the question asked by my right hon. Friend the Member for Knowsley (Mr Howarth): where was the Bill was to revive manufacturing? My right hon. Friend the Member for Don Valley (Caroline Flint) asked where the Bill on tax transparency was. My hon. Friend the Member for Jarrow (Mr Hepburn)—that mighty place—made a barnstorming speech lambasting the Chancellor and the Government for preparing to flog off the Land Registry as another private sector monopoly.

The Government should also reflect on the powerful speeches by my hon. Friends the Members for Penistone and Stocksbridge (Angela Smith) and for Aberavon (Stephen Kinnock), who are continuing their fight to stand up for steel jobs just 24 hours after the brave steelworkers came to London to petition the Government to save their jobs and protect their pensions.

As my hon. Friend the Member for Makerfield (Yvonne Fovargue) asked, where was the Bill to sort out education and the savings crisis in Britain? My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) asked where the Bill was that could deal with the rising tide of destitution that is sweeping Britain under the Tories. He reminded us that in the great city of Manchester there is now an emerging tent city. What an unbelievable token of this Government’s failure it is that people are living in tents at the heart of one of our greatest cities. Where were any of the Bills to deal with any of those problems? Where was the Bill to support the self-employed or to support carers? Where was the Bill to reverse the cuts to universal credit or to really deal with devolution?

I have my own question for the Secretary of State for Work and Pensions and the Chancellor: where was the Bill to save the steel industry? Today of all days, when we have had a half-baked announcement by the Work and Pensions Secretary—[Interruption.] I support the fact that there has been a written announcement, but decry and deplore the fact that he did not have the nerve to come to the House to explain what some of the downsides might be, because we have heard scant evidence from the Government on what this situation means for some of the steelworkers. [Interruption.] I have said I support it—he keeps chuntering. I support the production of the consultation document and the fact that he is looking at the issue, but he should have done it a year ago. That is the truth—he should have been addressing it long since.

When the Secretary of State replies to the debate, he will have the opportunity to give us some of the answers that we did not get from his right hon. Friend the Business Secretary today, such as who will definitely disbenefit as a result of the changes? What precedent will be set for other industries? Are we content to see other industries in future take a similar route and shift uprating of pension benefits from being in line with the consumer prices index to being in line with the retail prices index, with workers losing out? He needs to tell the House how he will ring-fence that so that it affects only steelworkers.

Now I come to think of it, where was any sort of industrial strategy in the Queen’s Speech? One of the most telling contributions today was made by the hon. Member for Warwick and Leamington (Chris White). I do not know whether it is just because he looks a bit like me that the brother wants to come over to our side—[Interruption.] He could be a Welshman with an inside leg that length. He sounded like a Labour man when he spoke earlier. He asked, essentially, “Where is the industrial strategy? Wouldn’t it be marvellous if the Tories had one?”

[Chris White]

rose—

[Owen Smith]

I’d love to give way—tell us, where is the industrial strategy?

[Chris White]

I remind the hon. Gentleman that at the end of my speech I said that for an industrial strategy to happen, we need a long-term economic plan.

[Owen Smith]

I heard it. There was that one soundbite, that one belated effort to draw back from the brink, but we had three and a half minutes of the hon. Gentleman attacking the Chancellor before then, and complaining that there was no industrial strategy.

What do we have in the Queen’s Speech? We have a bit of nonsense about spaceports and electric cars. In Port Talbot where people are worrying about the steelworks, they are not too bothered about spaceports unless the Government are planning to stick one in Aberavon and create 1,000 jobs. This is window dressing. Where on earth is the industrial strategy? Where is the Bill to deal with this country’s productivity crisis, which is greater than just about anywhere else in the western world? Where is the Bill to deal with disabled people who under this Secretary of State are languishing on the scrapheap? Where is the Bill to halt the spiralling of personal debt to record levels? The Chancellor used to talk about the problem of debt, but he never speaks about personal debt or the fact that consumers are the basis on which he is trying to rebuild our economy. Where is the Bill to deal with the fact that our earnings are flatlining in Britain? The Queen’s Speech contains not a sniff of any such Bills. Many Labour Members have suggested that that is because the Government have run out of ideas and the Chancellor has run out of steam, but I do not think he has—I am looking across at him and he is looking as fit as a butcher’s dog. He has his 5:2 diet and a personal trainer on-tap. He looks full of ideas—he is certainly full of it.

The real reason why none of those things were in the Queen’s Speech is because they do not fit with the narrative that says that everything is tickety-boo with our economy. We have the makers marching, jobs for everyone, and the new national living wage: “Nothing to see here, move on, move on. Let’s keep going with where we are”. Of course that is absolute nonsense, because on every measure in every serious analysis of our economy, the Government are missing their targets. The deficit was meant to be cleared long since, but it is £76 billion. The national debt is meant to be falling as a proportion of GDP, but it is now £1.6 trillion— £600 billion more than when Labour left office. The Chancellor used to talk about not bequeathing debts to future generations, but that debt has increased by £600 billion on his watch.

What about business activity? It has gone through the floor. What about corporation tax receipts? We used to be told—I remember it well—that the secret to getting all that extra foreign direct investment, receipts and investment was slashing corporation tax rates, but just this week are told that that figure is down to 5.1%. That is not the mark of an economy that is booming by any stretch, and little wonder, because our trade deficit is at a record high. The gap between our exports and imports is bigger than it has ever been. [Interruption.] It is £13 billion, if the Chancellor wants to quibble about it. That is a big problem for him, and it is happening on his watch and because of him. That is the reality of this country’s economy, and the consequences for working people are significant.

The Government continually point to the jobs market as the one bright spot, and Labour Members welcome those new jobs. [Interruption.] I welcome those jobs, as I welcome every new job. We believe that people in this country are better off if they are working, but that will not stop me asking what people are earning. What if they are taking home less than they used to, and their wallets are getting thinner at the end of the month as a result of the poor quality jobs that Britain is now generating? What if the Secretary of State for Work and Pensions is compounding those ills by cutting work allowances under universal credit?

I was at the Elephant and Castle jobcentre earlier this week, and I heard what a great problem low wages are. The Chancellor is making his savings, and the Government are going gangbusters as people move from Labour’s better resourced, more generous tax credits over to the less generous, universal credit under his Government. He will hit the £10 billion of savings that he wants, but on the backs of working people in this country. They are the people who are paying the price for this failing economy and this failing Chancellor. He looks at me across the Dispatch Box. I simply wonder when his Back Benchers are going to realise that he is failing them, as well as failing the country. If we look at the record it tells its own story: he is the third-worst-performing Tory Chancellor on growth in the past 60 years and he is the worst-performing Tory Chancellor on the economy bar none. We need to get rid of this Chancellor. We need a vote against the Queen’s Speech tonight. We need to vote for Labour.

Welfare Reform and Work Bill

Owen Smith Excerpts

Tuesday 27th October 2015 Commons Chamber

[Owen Smith (Pontypridd) (Lab)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 8—Tax credit reforms—

“The measures in this Bill and (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015 relating to the award of tax credits and the relevant entitlement within Universal Credit shall not take effect until the Secretary of State has implemented a scheme for full transitional protection for a minimum of three years for all families and individuals currently receiving tax credits before 5 April 2016, such transitional protection to be renewable after three years with parliamentary approval.”

Amendment 49, in clause 9, page 12, line 2, leave out from “relevant sums” to end of subsection and insert

“is to increase in line with the consumer price index.”

Amendment 50, page 12, line 6, leave out from “child benefit” to end of subsection and insert

“are to increase in line with the consumer price index.”

Amendment 51, page 12, line 8, leave out subsections (3) and (4).

Amendment 52, in clause 10, page 12, line 36, leave out from “relevant amounts” to end of subsection and insert

“is to increase in line with the consumer price index.”

Amendment 53, page 13, line 1, leave out clause 11.

Amendment 54, in clause 11, page 13, line 8, leave out “2017” and insert “2022”.

Amendment 55, page 13, line 31, leave out clause 12.

[Owen Smith]

I rise for a second time to speak to new clause 1 in my name and those of my hon. Friends the shadow Chancellor, the shadow Chief Secretary to the Treasury and my shadow Work and Pensions team. The new clause is very straightforward. It would repeal the Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015.

It is a shame that the Secretary of State for Work and Pensions is not in the Chamber to debate this important measure. I do not know what else he is doing, but he has been noticeable by his absence from the debate on tax credits in recent days. I have been to 25 studios and other arenas to debate the issue. I have looked high and low for any Minister of any stripe with whom to discuss it, and they have been noticeable by their absence. I am therefore delighted that there are three Ministers of the Crown on the Front Bench to contest the issue. That is a first in recent weeks, and I am very pleased to have this opportunity.

It is a shame that the Secretary of State for Work and Pensions is not in the Chamber. If he was here, I would have started by reminding him of something he has said in the House—indeed, he has said it on several occasions over the years—which is that he is a great believer in second chances. He has said that he believes that Britain should be

“a nation of the second chance”.

Opposition Members entirely agree with the Secretary of State. Indeed, that is one of the very few things on which I do agree with him. We should believe in second chances. I therefore say to Ministers and to the House that we have a second chance today. We have a second chance following yesterday’s vote in the House of Lords, which has called on this House to think again. In doing so, I think that the other place spoke not just for itself but for the entire country. It has asked us to think again and to give a second chance to repeal tax credits regulations that will hit so many people across this country.

In touring the studios in recent days, I have quite often heard the suggestion that the vote in the other place yesterday presaged a constitutional crisis in this country. In truth, what it did was to stop a financial crisis for the 3 million families who will be hit by the tax credits regulations when the changes are implemented next year. The message to us from the other place is quite simply to pause: for Ministers to pause before they lick the envelopes of the 3 million letters that they intend to post out at Christmas to tell such families across the country to anticipate a 10% reduction in their incomes, which is an average reduction of £1,300 for each of those 3 million working families. If the Government proposed to cut the salaries of Members of the House by 10%, there would be uproar on the Government Benches—indeed, on all Benches. Working families in this country, and people who are doing difficult low and middle-income jobs—there are 3 million of them, or more—are being told that next year they will face a 10% cut to their incomes at a stroke of a pen. It is not adequate.

[Mark Spencer (Sherwood) (Con)]

In 2010 the tax credit system supported people on wages in excess of £60,000. Will the hon. Gentleman say what level of income should mean that people can no longer get support through the tax credit system? How much would someone need to earn before they do not need that support?

[Owen Smith]

I will start with a different figure, because 5,000 of the hon. Gentleman’s constituents who will be hit by this change should ask him what he thinks is fair or just about asking them—hard-working families in his patch—to take a 10% cut to their income. That to me is the substantive issue, and the smoke and mirrors produced by the hon. Gentleman and other hon. Members about the constitutional crisis or the offsetting mitigating prospects for other changes elsewhere in the Government’s finances do not answer the central question: is it right or fair to ask hard-working families to take such a cut to their incomes?

Tax credits have changed enormously. It is untrue to say that they were simply the creation of the previous Labour Government because successive Governments have helped family or income support to evolve over many years—arguably, such measures were first introduced in this country in the 1920s and they have gone through different iterations. Different Governments have used different ways to try to do what we all believe in, which is to make work pay and keep people in work. Thresholds are flexed and levels have changed, and the amount of money we spend on tax credits has changed over time. However, it is a net positive for us as a society and for our economy to keep people in work, and this cut will diminish work incentives for the people that the hon. Gentleman and I hope to support.

[Mark Spencer]

The hon. Gentleman is being generous in giving way. He must recognise that the system creates circumstances in which some employees turn down promotions and overtime because that would dramatically affect their tax credits. Surely it is better to have a system where people who want to work extra hours or take a promotion would be better off if they did so.

[Owen Smith]

I have heard that argument a lot recently, and there is no evidence to support such a contention. It is nice to believe that were we to reduce the amount of money people have—withdraw the subsidy, as the hon. Gentleman would say—some employers would increase their payments to people and wages would go up, but I do not suggest that that is true or that any evidence supports it. Tax credits have been a necessary subsidy for low wages, and I welcome and applaud the decision by the Government to increase the national minimum wage. That is the right thing to do, which is why Labour called for it before the election—the Government could get on with it a little faster and stop spinning it as a national living wage when we know it is not, but it is a welcome step. There is no evidence to suggest that if we withdraw the subsidy at a stroke, employers will think, “I’d better put up wages for my workforce because they will struggle to survive on what they earn.”

[Hywel Williams (Arfon) (PC)]

Surely the answer to the first question from the hon. Member for Sherwood (Mark Spencer) is that tax credits must ensure a decent, reasonable standard of living. Such standards have been defined over many years by large numbers of people in research institutions—I will not trouble the House with those matters now, but they are well understood.

[Owen Smith]

Let me be clear: tax credits are a success. They have kept people in work in this country, and we have seen a shift in the volume of single parents in work.

[Oliver Dowden (Hertsmere) (Con)]

Will the hon. Gentleman give way?

[Owen Smith]

I will in a moment.

In 1997 about 43% of single parents were in work in this country, and today it is 65%. The reason for that is tax credits. Tax credits have made it possible for thousands of constituents in my patch—and in the constituencies of all Members—to stay in work despite the decline in wages.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

My hon. Friend is rightly making a good speech about working families, but Ministers have made little mention of the impact that cuts to tax credits will have on working family carers. A carer in receipt of carers allowance who works 16 hours a week on the minimum wage and claims working tax credits will be badly hit by these cuts. Conservative Members talk about people working more hours, but those carers are already working for a minimum of 51 hours a week and they cannot work more. Does my hon. Friend believe that working carers must be protected from Government cuts, because Ministers do not even seem to recognise that issue?

[Owen Smith]

Yes, and if the Government are to provide us with any sort of detailed, worthwhile impact assessment, they should undertake precisely that sort of calculation. They should look at what net benefit to our economy and society is made by working mothers, carers, and those whose efforts are not being calibrated by the Government, because those people will lose out as a result of the changes to tax credits.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

Does my hon. Friend agree that of the 7,700 families in my constituency who will lose £1,300 a year if the Government go ahead with this cut—three quarters of whom are working—those living in the private rented sector will find the cuts hardest to bear? The Government refuse to regulate that sector, and in my constituency people’s rent has risen by an average of 11.6% in the past year. The Government should consider further the punitive effects of this cut on those families.

[Owen Smith]

My hon. Friend is completely correct, but this cut does not affect only those who are renting and suffering from sky-high, exorbitant increases in private rent; it also affects owner-occupiers. The Government purport to speak for owner-occupiers, but those people will be proportionately harder hit by this measure than many others. Reduced eligibility for tax credits will mean that some people will receive more in housing benefit—there is an offsetting increase in housing benefit costs as a result of the decrease in eligibility for working tax credits, but owner-occupiers will not get that increase.

Earlier someone mentioned the impact of these cuts on our economy, and the self-employed will also be hard hit by these changes. Around 60% of small businesses, some 5.2 million across the country, are sole traders, and according to the Royal Society of Arts, 90% of the increase in jobs—the “jobs miracle” that the Government like to talk about—have been in self-employment in recent years.

[The Exchequer Secretary to the Treasury (Damian Hinds)]

From 2010 to 2015?

[Owen Smith]

Well that may or may not be true, but it is a very large proportion. Without doubt there has been a welcome increase in employment and self-employment, but my point is that 60% of self-employed sole traders are currently eligible for tax credits.

[Maria Caulfield (Lewes) (Con)]

Will the hon. Gentleman give way?

[Owen Smith]

I will in a moment.

That is why the Bow Group, the Adam Smith Institute, Lord Lawson and many other respected Conservative economists think that this change is a false economy. Not only will it damage the incomes of working people; it will damage our economy. The Bow Group—which you will remember well, Mr Speaker—said that these cuts will be “devastating” for our economy.

[Melanie Onn (Great Grimsby) (Lab)]

An employer contacted me this week in despair because employees have been reaching out to him and asking for more hours to mitigate the loss in income from the changes to tax credits. At the same time, he has to consider reducing staff numbers to meet the requirements of the new increased minimum wage. Does my hon. Friend agree that the changes will result in reductions to household incomes, as well as job losses?

[Owen Smith]

I fear that may be correct, and Government’s lack of forethought, analysis and scrutiny on these measures, and the way they have tried to bowl them through both Houses in double quick time, is a measure of their fear that such analysis will reveal the fundamentally misconceived economics behind these cuts, which are unfortunately designed to make an ideological political point.

[Oliver Dowden]

The hon. Gentleman talks endlessly about the success of tax credits. Will he explain why spending on tax credits under the previous Labour Government rose from £6 billion to £30 billion, while at the same time in-work poverty rose by 20%? Why does he think that happened, if tax credits have been such a great success?

[Owen Smith]

The hon. Gentleman should start by explaining to the 3,700 constituents in his constituency who will lose out as a result of the measures for which he will no doubt vote and speak today—[Interruption.] I will answer the specific question he asks. The truth is that under the previous Labour Government, when this iteration of tax credits was introduced, the steady state amount of money we spent on tax credits was £23 billion per annum. In 2009-10, after the crisis, that went up to £30 billion. The bankers’ recession saw a spike in the necessary spending on tax credits, and it has stayed at £30 billion under his Government—another measure of this Government’s rotten economic record.

[Maria Caulfield]

Many of my constituents have contacted me to say that they are just above the tax credit limit and that their hard-earned taxes are subsidising low pay. What does the hon. Gentleman say to them?

[Owen Smith]

I would first of all say to the 3,000-odd people in the hon. Lady’s constituency of Lewes who are going to be hit by the changes that they should be ringing her up and asking her why on earth she is voting for a 10% reduction in their income. I think they would be interested to hear her justification.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Does my hon. Friend agree that the changes are obviously a problem for some Government Members, and that they are in absolute denial about them? Does he agree that the Government’s inertia over intervention to save steel jobs and last night’s defeat in the Lords firmly put to bed the falsehood that the Tories are the party of the workers?

[Owen Smith]

Completely. It is one of the more risible statements I have heard from the Government. It is, once more, a measure of the contempt with which they hold certain sections of the British public that they think they can pull the wool over the eyes of people. They describe themselves, laughably, as the party of labour and the party of the workers, while they are cutting the wages of working people: 3.3 million families will be hit to the tune of £1,300; 200,000 children will be put into poverty next year, and 600,000 children over the period; and 70% of the cuts will fall on working mothers. The tax credit cuts will destroy the “economic miracle” the Tories like to talk about. Some 90% of the cuts will be devastating for the people involved. The statistics speak for themselves. After I have given way to my hon. Friend, I will describe the human impact of the cuts.

[Conor McGinn (St Helens North) (Lab)]

Does my hon. Friend agree that there is an inherent contradiction in the Government’s policy? The parents of a young family who came to see me in my constituency last week told me that they work hard, pay their way and are trying to do the right thing to set an example for their children. Should the Government not be supporting them, rather than punishing them?

[Owen Smith]

Indeed they should. I cannot understand how on earth even this Chancellor, who is pretty slipshod on occasion when it comes to analysing the impact of his measures, can have allowed this one to slip through the net. A pasty tax and a caravan tax maybe, but a £4.4 billion hit on the very workers he purports to support is truly extraordinary.

Let us look beyond the statistics for a moment. On Friday, I was out in my constituency in the village of Beddau, a former pit village at the heart of Pontypridd. Entirely by chance, I met a young woman called Kirsten who was bringing her daughter Maisie home from school. Kirsten is a nursery manager in a small private-run nursery just outside the village. She works 21 hours a week. They are all the hours available, as the nursery is open only in the morning and she works all five mornings. She then brings her daughter home from school and looks after her. She earns £611 a month. That is what she earns from her 21 hours of work at £8 an hour. That is well above the minimum wage and well above the new minimum wage we will see next year. She is set to lose £1,300 of her £7,000 earnings as a result of the cuts. That is an enormous drop for her to contemplate. She said to me that she simply did not know how she would manage. She did not understand how, without the £128 she receives in tax credits each month, she will be able to make ends meet.

I sat down with Kirsten and talked through what she needs to pay out for each month: the housing association three-bedroom house she lives in, council tax, insurance, and running her car to get back and forth to the nursery and to pick up her child. There is nothing left over. The £128 she spends from the tax credits she rightly receives pays for food, new clothes and her child’s books for school. It is just beyond the ken of ordinary people that the Government could be asking them to pay the price for the bankers’ recession, which has led to the crisis in our economy and a Tory Government cutting the incomes of working people.

[Ian Lavery (Wansbeck) (Lab)]

Does my hon. Friend agree, when the issue of family tax credits is all boiled down and the arguments have been fine-tuned, that this is simply an ideological attack by the Government on the lowest paid in our communities? Does he agree with the Institute for Fiscal Studies, which says that low-paid people are being specifically targeted?

[Owen Smith]

I completely agree. It is extraordinary for the Government to describe tax credits as “a bribe”. That is how successive Ministers, including the missing Secretary of State for Work and Pensions, have gone out of their way to describe tax credits for working people. They do not talk about protecting pensioners’ benefits as a bribe by the Conservative party to pensioners—and I would never say that; it is entirely just to protect pensioners’ benefits. By describing tax credits as a bribe, they are even seeking to demonise working people on low and middle incomes who are doing the right thing. That is entirely wrong.

[Helen Whately (Faversham and Mid Kent) (Con)]

I am listening carefully and I hear a great deal of criticism. What I have not heard from Labour Members are proposals on how welfare should be put on a more sustainable footing, on how they would like to see work pay, and on how they would reduce the deficit and the debt. Are they instead proposing cuts to public services?

[Owen Smith]

No, obviously I am not suggesting that for a minute. That is a nonsense thing to say. Let me walk through what the Government are proposing.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

Does my hon. Friend share my concern that under the coalition Government the projected savings that were meant to come from changes to housing benefit and employment and support allowance never materialised? Savings of £10 billion were not made by the previous Government. Perhaps Government Members should be challenging their Secretary of State and calling for his resignation.

[Owen Smith]

Of course they should. If they had any guts they would do precisely that. There has been an abject failure on housing benefit. The bill has gone up and up and up. If the Bill is passed—I sincerely hope it does not pass after yesterday evening’s decision—housing benefit spending will go up some more. We know the Government have failed on that and they will continue to fail in the future.

Let us look, for a moment—

[Oliver Dowden]

Will the hon. Gentleman give way?

[Owen Smith]

I have given way once. I will move on and give way again in a moment.

[Mr David Anderson (Blaydon) (Lab)]

My hon. Friend the Member for Wansbeck (Ian Lavery) mentioned the word “bribe”. Is not the real bribe in the Bill the bribe that will be given to the children of dead millionaires through the changes to inheritance tax, to the detriment of the people who will be hit by tax credit cuts?

[Owen Smith]

I am glad I gave way, because my hon. Friend makes the excellent point that politics is always a choice. Politics is about priorities. Politics is about who we stand up for, who we speak for and whose side we are on. It is very, very clear that, in the Bill and in this House, the Conservative party is on the side of millionaires and the wealthy, and are standing up against the ordinary working people of Britain, who will not forgive them for doing so.

[Paul Scully (Sutton and Cheam) (Con)]

The hon. Gentleman talks about choices, and spoke earlier about a £4.4 billion hit. Is he proposing, instead, a £4.4 billion subsidy for the large companies that Labour Members continue to criticise on a daily basis to cover the shortfall in wages that they should be paying?

[Owen Smith]

No, I am talking about £4.4 billion-worth of support that is offered to working people in this country, including 3,800 in the hon. Gentleman’s constituency. He has a choice to make on their behalf today. Is he going to stand up for them? Is he going to speak for those almost 4,000 families in his constituency, or is he going to roll over and vote with the Government to cut their wages by 10%? That is the choice he faces, and it is a very real political choice for him. As he is a new Member, he should think very carefully about that.

Let us deal with what the Government are proposing by way of mitigation. We heard a lot from the Chancellor yesterday evening. He looked a little ratty as he told the cameras that he was going to think again—he was obviously not very keen on having to do it—but there was at least some hint that there would be transitional measures. We have had hints over recent days as to what they might be. Let me run through a few of them and put the Government on notice that we will scrutinise extremely carefully, as we have done today, the net impact of any such measures.

First, there is the minimum wage. It is welcome that the Government propose to increase it from £6.50 to £7.20 next year and thereafter to get it up to £9.20 by 2020—it is a good measure. Unfortunately, however, even if the Government were to take it to £9.20 on 1 April—the day on which tax credit cuts are introduced—it would not offset the losses for average families, not by a long chalk. Most families on 40 hours a week with one parent earning would, if they were earning around £15,000, still lose £600 a year. The minimum wage increase is clearly not going to offset the losses.

The second element that has been talked about is childcare allowance. Even if the Government were to move straight away to the proposed 30 hours a week for England—again, a welcome measure, although it looks rather under-resourced to me, given that we were told it would cost us over £1 billion if we were to implement it and the Government are planning to invest around £300,000; we will see what happens with that—that same family, banking the £9 minimum wage, would still be around £500 worse off.

Let us build in the third element, which is of course the increase in the personal allowance. The Government have made other welcome measures in increasing the personal income tax allowance from £6,500 to £11,000 and they are talking about taking it up to £12,500 at the end of this Parliament. Again, that is a welcome measure, but it misses the target. Those people who earn between £3,500 and £12,500 will all be worse off if the Government start taking away their tax credit entitlement. They are two different tribes. It is completely fallacious to suggest that if we give extra money by increasing the personal allowance or the national minimum wage, we will offset the losses. Only 25% of the losses will be offset by the national minimum wage and only for 25% of the population. It is very straightforwardly a con. As we heard in the excellent evidence session before Thursday’s debate, the Resolution Foundation said very clearly that if we need to deal with the question of tax credits, the answer is, unfortunately, tax credits.

[Steve Rotheram]

Does my hon. Friend agree that the 6,700 families that will lose out from the tax credit cuts to their incomes will not be compensated, and that it is arithmetically impossible that the Government’s proposed changes would do that?

[Owen Smith]

There is no need to take just my word for that; it is precisely what Paul Johnson of the Institute for Fiscal Studies said—that it is arithmetically impossible for the Government’s offsets, which I have just listed, to compensate for the losses that these hard-working families in all our constituencies are going to face. The Government know that that is true, which is why they have been so absent from the television studios in recent days. They do not need to hear the truth from me: they know it.

[Tom Brake (Carshalton and Wallington) (LD)]

On the issue of offsetting losses, the hon. Gentleman will be aware that in my constituency, for example, 4,000 families will be affected, losing £1,000 each, which amounts to £4 million being taken out of the local economy. Has he considered the impacts of that?

[Owen Smith]

I have considered the impacts. I think that reducing aggregate demand by taking money out of the pockets of working families—the people with the highest propensity to spend money locally in the economy—is a foolish thing to do. It is a false economy. We know that to be true economically, so why on earth would the Government want to do it?

[Barbara Keeley]

I want to add a little detail. Conservative Members seem to be raising the cases of people who do not benefit from working tax credit and are questioning it on that basis. Perhaps the example I quoted earlier will help. The carer on carer’s allowance will get £62 and is able to earn a maximum of £110, which is a disregard. That is what carers are on, and they will be hit very hard by the loss of working tax credit. These people are earning a maximum of only £172. The important point is that there are 689,000 such people—those wonderful carers committed to looking after family members. Only one Conservative Member seems to have recognised that issue, which is a massive one. It is not quite as massive as the 3 million families affected, but it is still important. Ministers need to reflect on and explain why they are doing this to 689,000 carers up and down the country.

--- Later in debate ---

[Owen Smith]

Why on earth have the Government not conducted any sort of analysis to illustrate the benefits to our society and economy that those 700,000 carers are contributing? We all know in our hearts that they are making an enormous contribution, and we all know in our heads that they are precisely the people who are going to lose out. It is working mothers, carers and people who cannot expand their hours who are going to lose money, but they are doing the right thing; they are in work, striving hard. They might well be better off if they were not, and the crazy thing about the Bill is that in future they will be better off not working so hard. The work penalty and the disincentive to engage in extra hours and work harder, even once people have a higher than minimum wage, is screaming out at the heart of the Bill. It is a fundamental economic error, and it is being done for ideological purposes. The Tories are seeking to present those people—working people—as scroungers, and they are trying to present tax credits as benefits and a bribe.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Will the hon. Gentleman give way?

[Owen Smith]

I will not—I have already given way a lot—but I will quote to Conservative Members some of their own people, who have recognised how mistaken this policy is. Let us take Lord Lawson, for example—hardly a bleeding-heart liberal, and someone I remember standing next to Mrs Thatcher during those dog days for my part of the world when the pits closed in south Wales. Lord Lawson referred in the other place yesterday to

“the great harm, or a great deal of the harm”,

being done “at the lowest end”. He continued:

“That is what needs to be looked at again; that is what concerns me.”

He said that the Chancellor would, of course,

“listen to this debate, but it is not just listening that is required. Change is required.”—[Official Report, House of Lords, 26 October 2015; Vol. 765, c. 1005.]

Let me also cite the hon. Member for South Cambridgeshire (Heidi Allen), who I thought spoke brilliantly, eloquently and forcefully last week. I shall quote just one part of her speech. She said:

“To pull ourselves out of debt, we should not be forcing those working families into it.”—[Official Report, 20 October 2015; Vol. 600, c. 876.]

We should not be forcing working families into debt to deal with the debt that the country has been left by the bankers’ recession and the failure of the Tory Government to fix it.

[Oliver Dowden]

The hon. Gentleman has still not answered a very simple question. If this measure saves more than £4 billion, how will the Labour party find that money? Will it cut spending on other measures such as health and education, will it increase taxes, or will it increase borrowing? There are only three options. Which one will the hon. Gentleman choose?

[Owen Smith]

I repeat that the hon. Gentleman should really answer the question asked by the 3,700 people in his constituency who will lose out if he votes with the Government today.

[Neil Coyle]

The National Audit Office has suggested that as a result of the incompetence of the coalition Government and the Secretary of State for Work and Pensions, £140 million was wasted on the early stages of universal credit. Is my hon. Friend aware that that could have helped 108,000 people who are now being punished for that failure and face the withdrawal of tax credits, or 21,500 people over the course of the current Parliament? Should the money not have been better spent?

[Owen Smith]

That is a brilliant point, and extremely well made. There are myriad examples of waste and incompetence in the handling of our DWP budget under this Government, not least the enormous increase in housing benefit.

[Ms Karen Buck (Westminster North) (Lab)]

Does the Conservative party not fail to understand what tax credits are all about? The tax credit policy was successful in that it moved people into work, and, in particular, underpinned the major progress that was made when single parents were allowed to move into work. When we talk about saving money, should we not see that in the context of the tax credit policy’s success in moving people from worklessness into sustainable employment?

[Owen Smith]

My hon. Friend speaks with enormous experience and expertise, and she is completely right. As I said earlier, tax credits are a policy success. In 1997, 43% of single parents in Britain went out to work; today, the figure is 65%. There has been a 50% increase in the number of single parents who are in work, and that is a measure of the success of tax credits.

[Craig Williams (Cardiff North) (Con)]

rose—

[Owen Smith]

I will give way in a moment to the hon. Gentleman, who represents a great city—a working-class city—but before I do so, I ask him to reflect on the views of one of his colleagues, the hon. Member for Plymouth, Moor View (Johnny Mercer), who said last week that

“it would be remiss of me not to recount the extraordinary levels of feeling in Plymouth last weekend. This bright, vibrant, exciting and…blue collar city, where in the last general election we saw lots of new and first-time Conservative voters, has serious objections to the tax credit reforms.” —[Official Report, 20 October 2015; Vol. 600, c.882.]

The hon. Gentleman knows, and I know, that that stands for his constituency in Cardiff too, and I hope he will reflect on it when he addresses the House.

[Craig Williams]

The hon. Gentleman has talked about policy success. Cardiff truly is a working people’s city. Will he comment—so far, he has not done so—on the Government’s leadership on the national living wage? What would he say to the staff of Morrisons, Costa Coffee, Sainsbury’s, Lidl, British Gas and IKEA, who are already benefiting from those companies’ attempts to follow the lead taken by this Conservative Government and match the living wage?

[Owen Smith]

I know that the hon. Gentleman is relatively new to the House, but he really ought to be present for the beginning of debates. I said at the start of my speech, and indeed on two other occasions, that I welcomed the Government’s moves. I applaud them for what they are doing in increasing the national minimum wage, although I repeat that it is utterly bogus to describe it as a national living wage. It is not a national living wage, which is why the Living Wage Foundation will not describe it as such. I wish that the Government would give us a true national living wage, in London and elsewhere.

The hon. Gentleman has, in his wealthy, leafy part of Cardiff, more than 3,000 constituents who benefit from tax credits. I ask him to look into his heart and reflect on whether it is right, for whatever purpose—ideological or economic—to ask those hard-working families to pay this bill. It is not fair, it is not just, and I do not think that it should go ahead.

[Dr Murrison]

I am listening carefully to what the hon. Gentleman has to say. I would be extremely sympathetic to a credible case based on proper transitional arrangements and mitigation, but, as I am sure Lord Lawson would admit, it has to be paid for. I wonder whether the hon. Gentleman can shed any light on how we can close the gap in relation to the £4 billion that has been cited. All that I have heard from him so far is polemic; I have not heard any credible proposal that would enable us to square the finances.

[Owen Smith]

The hon. Gentleman could, of course, start by deciding not to do what the Government did this week when they offered an inheritance tax cut for properties worth more than £1 million. That would provide about £1 billion. He could decide to reverse the 50p tax rate cut for millionaires; that would provide another £3 billion. He could choose to do what the Chancellor has already chosen to do in the past, and delay the point at which the Government get the budget into surplus. He has moved the goalposts once; why does he not do it again? He is very good at it. He has practised. He has already had one crack at it.

[Ian Lavery]

My hon. Friend has been asked numerous times what the Labour party would do about the £4.2 billion. Will he now explain, categorically and in the simplest terms, that we would not do what the Government are doing, which is taking £4.2 billion from the lowest paid in society? People are losing £1,300 a year, and 200,000 kids are being pushed into poverty. That is not what we are going to do.

[Owen Smith]

I am delighted to say that I agree 100% with my hon. Friend. Let me be really clear: our view today is that the Government should repeal these measures. Our view is that it is wrong to seek to balance the books, in this or any country, on the back of the working poor—those with low and middle incomes who are doing the right thing. This is the wrong thing to do, and we will not do it.

Let me end by reflecting a little on what this whole unedifying spectacle means for the public, and to the public. I think we can agree that politics has been held in pretty low esteem in this country in recent years. People feel that we, as a political class, are not straight with them. They feel that we do not keep our word, or say what we mean.

[Jeremy Quin (Horsham) (Con)]

Will the hon. Gentleman give way?

[Owen Smith]

I will not give way again.

The problem with this change is that it will simply compound that fundamental mistrust. Before the last election, the Prime Minister said, on live national television, that he was not going to cut child tax credits, but he is going to do so. That was a fundamental misleading of the British public. Other Ministers also made categorical statements. When asked whether the Conservative party would cut tax credits, one of them said:

“"No; we are going to freeze them for two years; we are not going to cut them.”

That was a fundamental untruth, and the country knows it.

Unfortunately, when that is added to the Government’s smoke and mirrors and what they say about how they intend to offset the impact of these cuts, it is clear that we as a group—and the Conservatives as a political party—are deepening what is already a profound mistrust in our politics. For the Conservatives to describe themselves as the workers’ party is laughable. Theirs is the party that is cutting the incomes of the workers of Britain, and they should be ashamed of that. They should stand up today and vote with us for new clause 1, and repeal the tax credit cuts.

[John Redwood (Wokingham) (Con)]

Prosperity, not austerity: that is what we want. My consistent advice to Ministers dealing with economic matters and benefits is that they should always have at the forefront of their minds the need for everything they do to promote less austerity and more prosperity for the many, because we wish to have a more prosperous people. The outlines of how we do that are clear, and I fully support the Government’s vision and objectives.

The first thing to do is promote work. We need to make sure that people come out of unemployment and into work; that people who are working part-time but want to work full-time have the opportunity to go on to work full-time; and that people in full-time work that is not well paid have the chance to be promoted into a better-paid job, and to get better skills and training and work with their employer so that they can have a more productive and better-paid job. In that area, this Government and the predecessor coalition have been so much more successful than the Labour Government of 2005 to 2010. We know how austerity for the many is created: by following the Labour Government’s policies of 2005 to 2010, when they increased borrowing and spending, and combined that with over-lax regulation of bank capital and cash, which I warned them about prior to the crunch. When they put those three things in a heady mix, they brought the economy down, a large number of people lost their job altogether, a large number had to take a pay cut to keep their job and most people lost their bonuses or their opportunities to work overtime because the great recession that was unleashed on this country did so much damage. The first thing, therefore, that the British people want is to be secure in the knowledge that the economic policies being used are prudent and sensible, so that there is more chance of more people working and of people having better- paid jobs.

--- Later in debate ---

[John Redwood]

Yes, some people cannot increase their hours or, for good reason, do not want to increase them because they are already working long hours. I have already described the actions they or their employers can take, and that the Government can encourage. We want these people to have better opportunity and more skill, and to work with their employers to raise productivity to justify pay rises. The Government, with the full support of the Opposition, are using the force of the law to increase minimum wages, as part of the policy of driving wages upwards. But the only way we can succeed in getting wages in this country up to levels we would all find acceptable is through a productivity revolution. It has to come by working smarter and better, not necessarily by working longer hours or by working harder, with the right investment and the right back-up from employers, so that people can earn more and justify higher earnings.

[Owen Smith]

Does the right hon. Gentleman accept that we are talking about two tribes here? It is not necessarily people who are on working tax credits who are on the minimum wage—indeed, the overlap is only about 25%, so an increase in the minimum wage will miss 75% of those tax credit recipients.

[John Redwood]

I do not think it is very nice to say that people belong to “tribes”; we are in one country and we are trying to promote the greater prosperity of the many. I am surprised by that lapse of language, but the hon. Gentleman is right to say that some people who will face a reduction in tax credits are not going to benefit from the minimum wage because they are already earning more than that. That is clearly true.

[Owen Smith]

It is 75%—

[John Redwood]

If the hon. Gentleman would listen carefully, he would know that that is why I say I support a strategy for prosperity that first promotes more people into better pay. I am not just talking about those who are currently on a low wage; I want someone on a better wage also to have the opportunity for more pay. Some of my constituents do; they will be promoted, they will work for smart employers in smarter ways, and they will get pay rises, although not all will. The more the Government can do to help, encourage and support, so that many more people can get those opportunities of better pay, the more we will like it. I hope the Opposition parties will agree that that is the best way to greater prosperity. It is also the best way to better jobs. If someone goes to work every day thinking that next year they might have a better job, a pay rise or a bonus they can benefit from, they will go with more of a spring in their step than if they are going to a low-paid job with a bad employer who is not giving them any options and not giving them a break in life. [Interruption.] I see that some Opposition Members think that that is a funny idea, but I hope they would join me in recommending this approach to employers in their constituency as well as in mine, as that is how we create a more prosperous society. I am just trying to stress that we also need to get taxes down.

That deals with the second pillar of this excellent strategy. We need better work and more better-paid work, and less tax on that work so that people are more prosperous. We then come to the difficult bit, which is the point of the row today, all of last week and probably all of next week, by the looks of how Parliament is going at the moment. The issue is: at what rate do you withdraw the benefits support as people become more prosperous because they are in work, not out of work, because they are in better-paid work and because they are paying less tax? There are difficult judgments to be made, and I am very pleased that my right hon. Friend the Chancellor is in listening mode. I look forward to his autumn statement—unlike the Labour party, I will be looking at all three elements of the package. I will be looking at pay and tax, as well as benefit withdrawal.

Perhaps unlike Labour, I want to end up in a world where far fewer people are on benefits, because their pay and the tax cuts are sufficient to give them a better lifestyle. We will then have a more affordable welfare system that enables us to run an economic policy more likely to deliver better prospects, more jobs and more success for business. As some of my Conservative colleagues have sought to point out, the problem the Opposition face is that no answer is coming from them. We know that they were able to overspend, over-borrow and crash the economy. We are now waiting to hear from them about how they would get the money under control, were they to be trusted again with government. We know that they do not want to cut non-benefit expenditure, so surely they have to accept the case I am making: that we need to get more people out of benefits altogether, and that requires a combination of the good things—promoting work, promoting better pay and lower taxes—and the not-so-good things, such as actually having to make some difficult choices on benefits.

--- Later in debate ---

I am sure that the hon. Member for Bradford West (Naz Shah), like me, does not wish to see hard-working people taxed more to subsidise employers who have the capacity to pay better wages. I am sure that she does not want to see perverse incentives in the system, with tax credits sending a message to some people that they should not work more or, if they are self-employed, do more because that would adversely affect their tax credit rewards. We need to get that balance right. It clearly has not been right, because the tax credits bill has gone up too much and, until recently, there was far too much unemployment in the economy. It is certainly clear that tax credits built up very rapidly during a period of big redundancies and a big squeeze on pay. We now see those patterns reversing, with people coming back into the workforce and pay rising, in nominal and real terms, so now is the time to look at the pace of change in benefits.

[Owen Smith]

I am grateful to the right hon. Gentleman, who is being gracious in giving way. He talks about us all wanting to avoid a disincentive to work extra hours, but does he not accept that that disincentive will be increased by reducing the lower earnings threshold and increasing the taper, thereby increasing the amount of money that is taken away for every extra hour worked and every extra pound earned?

[John Redwood]

I have already been quite honest in saying that Governments face a difficult choice in this regard: do they want fewer people facing a sharper taper, or more people facing a gentler taper? There are no easy answers. I look forward to hearing the Government’s judgment when they have completed their listening and thinking. Again, the Opposition are refusing to see all three parts of the package. It is not possible to answer the hon. Gentleman’s question as simply as he would like, because working out whether people are better off or worse off, and by how much, depends on what else happens with taxation, rates of pay, inflation and all the other things that are going on.

My advice to the Government is that their strategy is absolutely right: get more from pay, more from tax cuts and then cut the benefits, because people will not need them as much. They must listen carefully to criticisms, for example if their changes are going too far and too fast, or if they catch some people we do not want to catch. I am sure that my right hon. Friend the Chancellor will want to return to those points in his autumn statement and tell us his thinking. However, the direction of travel must not be simply to make big increases in benefits again; it must be to find other answers so that more people can enjoy prosperity from work, earnings and lower taxes.

--- Later in debate ---

[Tom Brake]

I support new clause 1, although it is still not entirely clear to me what the Labour party’s position is on this question. In this place Labour has tabled new clause 1, which is in effect a fatal motion, whereas in the other place Labour would only support transitional protection. I assume that the Labour party is now fully opposed to the tax credit cut.

[Owen Smith]

rose—

[Tom Brake]

I will not give way, as I have to finish at 2.57 pm.

Tax credit cuts will hit 4,000 families in my constituency and 7,000 children. Collectively, some £4 million will be lost. The cuts will hit hard-working families who are struggling to make ends meet and, perhaps most importantly from the Government’s point of view, the changes will reduce the incentive to work, which I thought the Government favoured. Contrary to what the hon. Member for Sutton and Cheam (Paul Scully) said, I do not think that tax credits are a pat on the head. They are essential in supporting families.

--- Later in debate ---

[Owen Smith]

May I start by thanking everybody on the Opposition Benches for all the contributions they have made not just today, but during the passage of this enormously important Bill? May I also thank the Secretary of State for gracing us with his presence today? I would like to be able to thank the Minister for offering some detailed answers to the questions put to her throughout the Committee stage and today, but there were not many answers, so I will not be able to do that, I am afraid.

Labour will be opposing the Third Reading of the Welfare Reform and Work Bill. Combined with the other measures in the summer Budget, this package of tax credit and benefit reforms penalises millions of working families and will risk pushing hundreds of thousands of children into poverty. It is a cruel, pernicious Bill that breaks Tory promises in almost every clause and will hit more than 10 million families in Britain. It is also indiscriminate: it hits the young, the old, those unable to work and those working every hour they can.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I am pleased we will be opposing the Welfare Reform and Work Bill on Third Reading. Is not the real problem for the Government that their record so far on welfare reform has been entirely counterproductive? The facts speak for themselves: on this Government’s watch welfare bills have shot through the roof. They have cut welfare, but the bills have gone up.

[Owen Smith]

This is the first Government who have ever spent more than £1 trillion in a Parliament on social security. That is an extraordinary rise, and it has happened on the watch of the Secretary of State for Work and Pensions.

In this Bill we are seeing the Government break their promises repeatedly. They are breaking their promises to older people, for example. Before the election, the Conservatives’ manifesto said they would “maintain all pensioner benefits”, but after the election it appears that there is a different story. Some senior Conservatives have talked about this being a “great opportunity” for deep cuts to pensioner benefits. The Minister for Community and Social Care said that pensioner benefits should not be cut immediately, but that raises the question: when are they going to cut them?

The answer appears to be that the Government are cutting pensioner benefits now, in this Bill, because 70,000 pensioners are being hit by more than £1,000 a year through the changes to support for mortgage interest. That support is a vital lifeline for many, but through this Bill the Government are chipping away at pensioner benefits and charging a 2.9% interest rate—profiteering from pensioners. By refusing our amendment 24, the Conservative party is breaking its promise to our pensioners. We will act as the watchdog for our older people on that, as we will on pensioner freedoms. A scathing report from the Work and Pensions Committee has warned that the next great mis-selling scandal will be coming soon, after the Tories introduced pension freedoms. We will be watching that, as we are watching tonight.

Just as with older people, the Conservative Government are tonight letting down young people and our children. Before the election the Conservative manifesto spoke of

“boosting the self-esteem of young people”,

but after the election the Government are failing our children, failing young people and failing the next generation.

This Bill will push 600,000 children into poverty over the course of the Parliament while fiddling the figures and hiding the Government’s shame by abolishing the child poverty target. It is a scandal that any Government can seek to withdraw income—the money people have—from a measure of poverty. If it were not so disgraceful, it would be laughable. They are stripping housing benefit away from 18 to 21-year-olds, patronising our young people with “earn or learn” boot camps and introducing a so-called living wage that kicks in only when people are 25, and the Business Minister is running down young people, saying that they do not deserve a living wage because they are not as productive.

What about the Tory promises to the sick and disabled people of Britain? Before the election the Tory manifesto said that the Conservatives would

“aim to halve the disability employment gap: we will transform policy…so that hundreds of thousands more disabled people who can and want to be in work find employment.”

But what is the truth? After the election, they are cutting support for sick and disabled people. Half a million people in the ESA WRAG are set to lose £1,500 a year. That will reduce the likelihood of a return to work, increase the number of long-term unemployed and act as a work penalty for sick or disabled people seeking to get back into work.

[Alex Cunningham (Stockton North) (Lab)]

I was told today by Homeless Link that 50% of the charities providing specialist housing services say they will be forced to close services within one to five years because of the changes in the rent arrangements for housing associations and housing benefits. Does my hon. Friend know what will happen to the vulnerable who depend on those services?

[Owen Smith]

I suspect that their lot will be far worse, as with so many of the groups that I am talking about tonight. We know that young people, older people, disabled people and vulnerable people in our communities are going to be worse off under the Tories, because they always are.

[Mr Burrowes]

Will the hon. Gentleman give way?

[Owen Smith]

What about working families, the very group that this Tory party chooses to try to speak for? Before the election, the Tories said they would not cut tax credits. The Justice Secretary said:

“We’re going to freeze them for two years, we are not going to cut them.”

That was the promise. We know the truth. After the election, the Government are stripping £1,300 out of the pockets of 3.5 million working families—a 10% cut in the incomes of working families, putting an effective 93% tax rate on low and middle-income workers and imposing a work penalty on those families.

[Mr Burrowes]

Will the hon. Gentleman give way?

[Hon. Members]

Give way!

[Owen Smith]

I had not heard the hon. Gentleman. He needs to speak up. I give way to him.

[Mr Burrowes]

The hon. Gentleman is very kind. Will he speak up, loud and clear? He says that he and his party will oppose the Bill, so what are their alternatives? How would they meet the £12 billion savings package? What parts of it will they accept, and what are their alternatives? We want to know the basis of their opposition.

[Owen Smith]

I could, of course, refer, as I have done repeatedly, to not cutting inheritance tax for people passing on million-pound houses; I could talk about not introducing the millionaires’ tax cut; I could talk about clamping down on tax avoidance and evasion. But the real question is for the working families in the hon. Gentleman’s constituency, thousands of whom are going to see 10% of their income carved away at the stroke of a pen, in a letter arriving just before Christmas. It is a disgrace what this Government are doing. We are clear that we are opposing it tonight and will continue to oppose it. Asking working mothers to shoulder 70% of the cuts is no way for any Government to continue.

This Bill is a litany of broken promises. The risk of job loss, sickness, bereavement or retirement faces all of us at some point, yet this is a Tory bid to undermine the basic case for support and security for individuals through the collective pooling of risk. The Bill is a naked attempt to turn people against one another, in order to undermine any concept of a safety net—young against old, disabled people against non-disabled people, those in work against those looking for work.

The Opposition will not play that game. We are not interested in those divisive Tory tactics. We all want to bring down the welfare bill by making work pay, getting the homes we need built, bringing down unemployment and growing our economy, helping our foundation industries, such as the steel industry, which is being abandoned by the Government—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Mr Bacon, you are getting carried away. That is not like you. You are usually a man who wants to hear both sides of the argument. Don’t spoil it tonight.

[Owen Smith]

I am very grateful to you, Mr Deputy Speaker.

The Tories faced a humiliating and deserved defeat last night in the House of Lords, in part due to their failure to outline where cuts will fall and being less than open about their intentions. Just like their cuts to tax credits, this Bill breaks the Conservatives’ manifesto promises—pledges to protect pensioners, to support the young, to help the disabled into work and to back working families. This is a cruel Bill that shows that the Tory manifesto was not worth the paper it was printed on. It penalises children, takes money from low and middle-income workers, drives families from their homes, punishes disabled people and will push hundreds of thousands of children into poverty. We will oppose it tonight.