Transitional State Pension Arrangements for Women
Owen Smith Excerpts(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Owen Smith (Pontypridd) (Lab)
I beg to move,
That this House notes that the e-petition 110776, Make fair transitional state pension arrangements for 1950s women, has attracted more than 150,000 signatures; and calls on the Government to bring forward proposals for transitional arrangements for women adversely affected by the acceleration of the increase in the state pension age.
I want to start today’s important debate by saying how lucky I am to come from a family in which there have always been such strong and hard-working women—my mother and grandmothers, and now my wife and daughter. If there is one thing I have learned from all of them, it is that no one should ever try to pull the wool over their eyes—to take them for fools—because I guarantee they will always be found out.
That is a lesson the Tories really should have learned back in 1991—when they first started planning to equalise the pension age for women with that for men—because that is precisely what has happened: they have been found out. They have been found to have failed in their duty to inform women properly about the changes that were planned. They have been found to have left hundreds of thousands of women ill-prepared for a decision that would see the worst affected lose up to £36,000 in pension payments. They were found to have compounded their error in 2011, when a further delay to the pension age—to 66—was rammed through with barely two years’ notice. In the words of their current Pensions Minister, they have been found to have “pulled the rug” from under 2.6 million British women. Today, Labour will speak for those 2.6 million women and demand that the Government tell us what they plan to do to make amends.
Sir Edward Leigh (Gainsborough) (Con)
Before we get too party political about this, it can indeed be said that an individual notice should have been given back in 1995. However, shortly after that, Labour came in, and there were perhaps a dozen Labour Pensions Ministers during all of Labour’s time in office. We are 20 years on. Can the hon. Gentleman not accept that we all have lessons to learn? An individual notice should have been sent out by at least one of those Governments—by the Conservative Government or the Labour Government. The hon. Gentleman had an opportunity to do that over all those years.
Owen Smith
With respect, I did not have an opportunity because I was not here at the time. The hon. Gentleman is right that successive Governments have lessons to learn from this sorry affair, but the truth, as I intend to spell out, is that a change was first mooted in 1991, and the then Tory Government made no substantive efforts between 1991 and 1997, when they left office, to offer people a proper notice. Thereafter, the Labour Government did attempt to do that, and I will enumerate exactly the ways we tried to make amends. However, the problem was compounded by the coalition Government’s actions in 2011. If anybody has lessons to learn, it is the Conservative party, which has the greatest responsibility for these changes, and which now has a duty to make amends.
Owen Smith
I will make some progress if I may, and then I will give way.
These things started back in 1991. That was when the Tory Government first consulted on their intention to shift the state pension age for women to 65 from 60, where it had been since the 1940s. Then, in the 1993 Budget, the Chancellor formally stated his intention to make this move, and he legislated for it through 1994 and 1995. The Pensions Act 1995 stipulated that the pension age would rise by five years during the decade from 2010 to 2020. That meant that women born between April 1950 and December 1959 would have to wait between one month and five years more before they could draw their pensions.
One would have thought that such a massive change—the biggest change to women’s pensions in half a century—would have been communicated with great care and, in truth, fanfare, but it was not. Some of the women concerned were as young as 39 at the time, so it is unlikely that they were looking carefully at the financial papers or paying much attention to the Government’s scant efforts to tell them about the changes.
John Glen
Does the hon. Gentleman accept that, in 2004, the Work and Pensions Committee found that three quarters of women between the ages of 45 and 54 at the time were aware of the changes in the 1995 Act? I accept that there were mistakes by parties on both sides of the House in terms of communication, but three quarters of women knew 12 years ago about the changes.
Owen Smith
I am pleased to swap stories about what people knew at the time, because the truth is that the question asked in that 2004 survey by the then Labour Government, who were concerned that the previous Tory Government had not made proper provision for women, was, unfortunately, not as straightforward as it should have been. Other surveys—five or six—from academics and others in the pensions world found that about 70% to 80% of the women involved did not know that the changes were taking place. It is no surprise they did not know, because the Conservative Government at the time spent very little money advertising the change. There were a few adverts in the newspapers, and letters were available to individuals if they requested them, but many did not.
Several hon. Members rose—
Owen Smith
I will quote one of those letters when I have given way to my hon. Friends.
Yasmin Qureshi (Bolton South East) (Lab)
Constituents have written to me saying that they have been at their current address for the last 20, 30 or 40 years, but that they have received nothing to tell them about the changes.
Owen Smith
That is an extremely common experience for MPs, because the letters sent out in 1995 by the then Tory Government were neither use nor ornament. I have got one here that was sent to a woman on 13 June 1995. This letter has five pages, and not one of them mentions that the pension age is going to rise to 65. In fact, every single page refers to the fact that the state pension age for women is 60. The final page offers the extraordinary suggestion that
“a form inviting you to claim your State Retirement Pension will be sent to you”
a few
“months before you reach 60.”
This happened in the very month that the Bill that became the 1995 Act was going through this House under that Government. That is a measure of what a desperately poor job they did of informing people.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I have lost count of the number of constituents who have contacted me to say that they had absolutely no idea about these pension changes and heard about them on the radio or the TV. Fortunately, we are raising the profile of this issue on the Government’s behalf. Is it not insulting of Government Members to suggest that these women are wrong, or lying, or that there is something wrong with them, when ultimately it is the Government’s responsibility to communicate these changes?
Owen Smith
It is wrong, it is insulting, and it compounds the more fundamental insult that women who, by and large, have smaller pensions because they had lower earnings throughout their entire lifetime while bearing a burden for the rest of us, have been told that they cannot access their pension. That is the real insult that we should be worried about.
My hon. Friend is right that it is completely insulting to suggest that proper notice was given, because the truth is that it was a botched job from start to finish. We know that because the current Conservative Pensions Minister in the House of Lords says so. She says quite clearly that
“until recently, many of these women were expecting to receive their state pension at age 60, since they were unaware of the changes made in 1995”.
The Government are damned out of their own mouths.
Nadine Dorries (Mid Bedfordshire) (Con)
I am going to be unusually helpful to the Opposition spokesman. I am one of these women. I have never received a letter, I have never been notified, and I think the Department might know where I live.
Owen Smith
I cannot believe for a minute that the hon. Lady is old enough to be one of the women concerned. It tests the credibility of the House that that could be so. I am nevertheless grateful for her intervention.
Mr Kevan Jones (North Durham) (Lab)
Does my hon. Friend recognise that there are a lot of women like Jayne Manners in my constituency, who assumed she was going to retire at 60, is now disabled, and has no ability whatsoever to make up the difference for the six years she has lost because of these changes?
Owen Smith
That is the case for thousands of women across this country. That is why this is more than a small campaign: there is a fundamental injustice that must be changed.
Derek Twigg (Halton) (Lab)
My hon. Friend is making a very good speech. Increasing numbers of women in my constituency have been coming to my surgery and writing to me about this, many of whom I have known for many years because I was born and bred in the constituency. I am absolutely convinced of their sincerity and that they knew nothing about this because of the lack of notification. We saw earlier at Prime Minister’s Question Time the Prime Minister’s complete lack of understanding, or even care, for these women.
Owen Smith
My hon. Friend is of course entirely right. He will know, because he was part of the previous Labour Government, that we tried to improve this set of circumstances. We conducted the survey that showed that there was a worryingly low level of understanding. Between 2004 and 2009, the then Labour Government instituted several million-pound advertising campaigns and sent out 800,000 personalised letters to the affected women, such as the one I have here, which, in stark contrast to the Tory letter I cited, says on the first page that the addressee will be affected by the change in age from 60 to 65.
The reality is testified to by many of my hon. Friends and by the brilliant women of the WASPI—Women Against State Pension Inequality—campaign, whose tenacity and truth-telling we should pay tribute to right across this House, because they speak for hundreds of thousands of women who did not know that they were in the firing line.
Dawn Butler (Brent Central) (Lab)
A total of 4,465 women in my constituency are going to be affected by this. Does my hon. Friend agree that it has been caused by an historical inequality in the system?
Owen Smith
Of course it has, because historical inequalities existed then and persist now. The gender pay gap affects women. Women often do not have the full stamp because of their caring duties, and that is why it is doubly unjust that they should now be asked to pay a price in their retirement.
Helen Jones (Warrington North) (Lab)
Does my hon. Friend agree that this generation of women are doubly disadvantaged, because many were at work before the Equal Pay Act 1970 came into force and had to take low-paid part-time jobs because of lack of childcare, and the Government are now heaping insult upon injury in disadvantaging them again in retirement?
Owen Smith
My hon. Friend spoke with great eloquence in the recent Westminster Hall debate after a petition of 155,000 signatures was brought to this place, with more signatures from the constituency of my right hon. Friend the Member for Leigh (Andy Burnham) than anywhere else in the country—a magnificent job by the women of Leigh.
I will quote once more the current Pensions Minister, who said:
“Across the country I’m hearing from women who are enduring that sudden sickening realisation that their destiny in retirement is not in their own hands—this is not about fairytale luxury retirement villas, this is about affording the basics.”
That is the view of the current Pensions Minister, and the Government cannot run from it.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I would like to challenge the figure that was quoted by a Member on the Government Benches. The Opposition spokesman might have the correct figure, but the figure reported from the Department for Work and Pensions investigation in 2004 was just above 40%, not 75%. Surely, given such a cataclysmic change, every single one of these women should have had a simple letter on the doormat in 1995.
Owen Smith
The hon. Lady is entirely right. Even if 40% of women were unaware, that is 40% too many. As I said, five or six other surveys were done by academics and those in other institutions that suggested that 80% of women were unaware that they were going to be affected, so the reality is that the number was far greater.
The scale of this problem only truly started to dawn on people when the Government decided to double down on their calamity with the Pensions Act 2011.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is about to come on to the injustice of the 2011 Act. Is not the real issue not only that these ladies have been hit not once but twice by an increase in their state pension age, but that no transitional arrangement was put in place? Is that not why it is absolutely right that we support the Labour motion to get the Government off the fence and provide these ladies with the transitional arrangement they deserve?
Owen Smith
This House and Government Members would do well to heed the words of my hon. Friend, because, along with my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), he has been the doughtiest campaigner in this House on behalf of these women. He speaks the truth when he says that Members from across the House should back our motion to provide transitional protections for them.
The 2011 Act not only broke the Government’s promise that the pension age for women was not going to rise until 2020, but broke the promise that no rises would occur without at least 10 years’ notice, because the women who suffered the double blow were given just two years’ notice. The former Pensions Minister, Steve Webb, has described that decision as an ill-informed “mistake”. He tried to make up for it in office, and secured some mitigation for 300,000 of the women who were due to see their state pension age go up by more than 18 months. The Minister on the Front Bench will no doubt mention this shortly, telling us that it cost £1.1 billion, but I bet he will not remind us that his predecessor was looking for £3 billion in order to offer these transitional protections. I suspect he may only say sotto voce that half of that £1 billion went not to women but to men.
Tim Loughton (East Worthing and Shoreham) (Con)
I support the motion, because I support the WASPI women and I support transitional arrangements, but I have to say that the hon. Gentleman is making it more difficult for me and for colleagues to vote for the motion by making the matter so partisan. Thirteen years of Labour government did not help the situation. May I therefore suggest that in the spirit of the motion, which I support, he could give more details of what those transitional arrangements should be, so that we can at last start the dialogue that the Government should have started some time ago to see whether there is a middle way and a compromise to help the women who desperately need it?
Owen Smith
I am sorry if I am bruising the hon. Gentleman’s feelings with my remarks. I am pleased that he has supported the campaign, and I know that he has been brave enough to speak in favour of it on several occasions. I am positive that a man of his resolve will not be put off by a few words across the Dispatch Box and will vote for the motion, irrespective of what I say; at least, I trust that he will. I will come on to talk about precisely the sorts of transitional arrangements that the Government should put in place.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
This is the third opportunity we have had to debate this important matter in the Chamber and Westminster Hall. Notwithstanding the mistakes of the past or who made them, the Government have an opportunity to do the right thing by the women of this country. Why do they not just grasp the opportunity with both hands and deliver that for those women?
Owen Smith
Why do they not do so? The Secretary of State for Work and Pensions occasionally comes to the Chamber to answer questions, but he has ducked out of the last five debates, and he is not here today. I have suggested before that we ought to sanction him for failing to turn up to work, and I think that may be a good idea. The truth is that the Government are not offering any further suggestions about how they might do what the Secretary of State promised in 2011. He said at the Dispatch Box that transitional arrangements would be put in place for these women, but he has not offered any such arrangements. The Government have offered nothing but defensive positions.
I hate to be partisan; it is really not in my nature. However, I cannot but draw Members’ attention to the guidance on the Whips’ note about Women Against State Pension Inequality that has been handed around to Government Members. It states quite clearly that the WASPI campaign is demanding that
“all women born after April 1951…be given their pension at age 60”
and that
“no one will see any reduction in their income as a result of the changes to the state pension age”.
It claims that the rise in the state pension age has been “widely communicated” and states, as the Minister will, no doubt, repeat in a moment, that absolutely nothing more can be done.
On every point, the crib sheet and the Government are wrong. Women affected have lost income—the state pension income that they would have been paid under the previous arrangements. The changes were not widely communicated, as I have made clear today. The WASPI women are not opposed to the equalisation of the state pension age. Their petition, which had 155,000 signatures, said so explicitly. They support it, but they want what the Government promised: transitional arrangements.
Jo Cox (Batley and Spen) (Lab)
One of the 4,100 women in my constituency affected by the changes recently told me that throughout her life a number of changes have impacted on her and the many thousands of women of her generation, such as unequal pay, the ability of employers to dismiss women because they were pregnant, and a lack of childcare. Does my hon. Friend agree that there is still time for the Government to correct that injustice and, in the interests of being non-partisan, to do the right thing and put in place transitional measures?
Owen Smith
My hon. Friend is entirely right. Women have suffered a million and one other injustices in the workplace and on payday for generations, and this is another injustice being heaped upon them.
Lady Hermon (North Down) (Ind)
Will the hon. Gentleman take this opportunity to acknowledge the serious injustice suffered by women who were born in the 1950s who have been offered and have accepted retirement packages from their employers that included figures based on the assumption that the retirement age would be 60?
Owen Smith
It is no surprise that the hon. Lady, who speaks with great erudition, has highlighted yet another injustice that women have suffered. I say again that the Government must recognise that and bring forward some suggestions. There are myriad ways in which they could mitigate the problem. There are lots of transitional arrangements that could be put in place, and I will list six of them.
Toby Perkins (Chesterfield) (Lab)
The case that my hon. Friend is making is absolutely right. The point is that Governments, on occasion, make mistakes. It is not too late for Ministers to stand at the Dispatch Box, put things right and end the misery of thousands of people—not only women, but their husbands, who are equally affected financially by the impact on the household. The Government could put that right.
Owen Smith
The Government could do so, and the Minister has five minutes or so to come up with what he wants to say to put it right. In case he has no ideas written down, I will give him six suggestions. The Government could delay the pension age increase until 2020 so that the pension age reached 66 by 2021. That option is favoured by the Pensions Minister in the House of Lords. The Government could cap the maximum state pension age increase from the 2011 Act at 12 months, which the predecessor of the Pensions Minister advocated. The Government could keep the qualifying age for pension credit on the previous timetable, which would help out some of the poorest women in that category, as Labour suggested in 2011. The Government could allow those affected to take a reduced state pension at an earlier age during the transition, as Alan Higham has suggested. The Government could extend the timetable for increasing the overall state pension age by 18 months so that it reaches 66 by April 2022, as John Ralfe has suggested. Finally, the Government could simply pay a lower state pension for a longer period throughout the pensionable age of the women affected. All those things would involve costs, but they are all ways in which the Government could act. What we need from the Government is not more carping but the will to get on and do something.
Mr Mahmood
All six points, yes. They would be important for the woman who wrote to me this morning to say that she never received the letter and she only found out what was going on through her workplace pension. Unfortunately, she is now unemployed and has been for 20 months. She is trying hard to get a job, but she is extremely worried about how much longer she will have to work to make up for the lost contributions. She is in a very difficult position and has no guidance from anybody. Why do the Government not help her?
Owen Smith
My hon. Friend speaks with passion and knowledge about the 4,000-odd women in his constituency who are affected. There are thousands of women in a similar position in all our constituencies, and my hon. Friend’s point is clear: one of the transitional measures must be put in place.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Constituents such as Mrs Cox in my constituency do not object to the principle of equalisation, but they object, as my hon. Friend is quite rightly saying, to the speed and scale of the changes. That is why his points about transitional arrangements are so important to Mrs Cox and many others. Will he also deal with the insidious evasion of responsibility among some Conservative Members, who are trying to blame the European Union rather than their own Government’s decision for the measures that have been taken? The same thing is not happening in other countries. It is the Government’s decision, and no one else’s.
Owen Smith
I expect that the Secretary of State is out in Europe somewhere right now blaming the European Union for his sins of inaction. Mrs Cox speaks for all the women in the WASPI campaign who are not opposed to the equalisation of the state pension age at 65 or 66, but who are opposed to the injustices that are being visited on them.
Several hon. Members rose—
Owen Smith
I am going to make a little more progress, and then I will give way. The truth is that we have had quite enough talk. The sins of omission and commission are well known, and the Government should now act. The Bills in 1995 and 2011 were their Bills, and the mistakes were their mistakes, so it is for them to put things right. Women in Britain have suffered inequality in the workplace and on payday for far too long. No Government should compound that fact when the carers and the grafters in our society, on whom we rely for so much, reach their retirement day.
There is a Budget in three weeks, and the Chancellor has a golden opportunity to rise to the challenge and put in place one of the six variants of transitional arrangements that I have talked about. He would be well advised to do so.
Alison McGovern (Wirral South) (Lab)
My hon. Friend mentions the Budget. Does he agree that, given the corporation tax cuts and the cuts to inheritance tax in the Chancellor’s most recent Budget, the Chancellor clearly has the will to spend and should now pay attention to the WASPI campaign?
Owen Smith
At the last Budget, the Chancellor happened to find £27 billion extra in tax revenues, which was a very handy little windfall to find down the back of the sofa, but the WASPI women will have heard that he did not spend a red cent of it—not a penny—on them, as he could have done. If he continues to play the WASPI women for fools and continues to take our pensioners for granted, then, as Baroness Altmann has told him already, he will live to regret it.
That is a sentiment that we can share right across the House. It is why not a single Conservative Member chose to vote against either of the previous calls for transitional arrangements in any of the debates we have held. It is why so many Conservative Back Benchers have pledged their support to the WASPI campaign. It is why this issue will not go away without action from the Government.
Barbara Keeley (Worsley and Eccles South) (Lab)
Will my hon. Friend give way?
Barbara Keeley
I am very grateful to my hon. Friend for giving way at this point because I want to make sure that we are not given the same excuses by the Minister, when he speaks in a moment, that he has previously given. We heard:
“Equalisation was necessary to meet the UK’s obligations under EU law”.—[Official Report, 2 December 2015; Vol. 603, c. 145WH.]
Conservative Members have been writing that out, but it is not true. I have raised this in a number of debates. The interesting thing in relation to changing previous legislation is that Poland is now introducing legislation to reverse its previous reforms. Its Government clearly realised that they had got it wrong, just as this Government have got it wrong.
Owen Smith
Poland has realised that it had moved too fast. France has done the same, as has Germany. Countries across Europe, Governments across Europe—including right-wing Governments in parts of Europe—have acknowledged that they made a mistake and are backtracking. Only this Government refuse to acknowledge any mistake, and refuse to acknowledge that they have any culpability or responsibility.
This issue will not go away, and when the Minister stands at the Dispatch Box in a moment, he should offer a glint of sunlight and some hope for the WASPI women that the Government have heard their campaign and will do something about it. If the Government do not, I will urge all Back-Bench Members to do so on their behalf.
Mr Vara
I will come on to the debate we had in 2011 later in my speech. If the hon. Lady wants to talk about previous Governments, may I gently remind her of the 13 years of Labour Government, with the 10 Pensions Ministers—one Minister had the job twice—and the nine Secretaries of State for Work and Pensions? In the interests of fairness, she, along with everyone else, might wish to acknowledge the limited work, if any, that was done during the 13 years of the Labour Government to put matters right, as they put it.
Owen Smith
The Minister says that the Labour Government did limited work. May I point out that, following a freedom of information request to the Government just a couple of weeks ago, it was conceded that Labour spent more than £5 million advertising the changes and sent out 800,000 letters? That was in stark contrast to the previous Tory Government, which, frankly, did damn all.
Mr Vara
If the hon. Gentleman is so proud of what the Labour Government did, why does he stand up to complain? They obviously did very little, and it must have had very little impact, because otherwise we would not be hearing the comments that Labour Members are making today.
Mr Vara
Yes, there are many people, including people in WASPI, who want to unravel the 1995 reforms. It is out there on the internet for people to see, so let us not try to deny the two options that are being debated out there. I said at the outset that I was going to talk about the substance of the matter, and I will talk about both those options.
Owen Smith
The Minister repeats the calumny that the WASPI women are saying, “Do not equalise pensions, and get rid of the 1995 Act.” That is exactly what the Whips’ crib sheet says, but he knows it is not true. That was one comment made by one woman among the hundreds of thousands on Facebook. It is not what WASPI said to the Work and Pensions Committee, and it is not what it said in its petition. It is not true. Will he withdraw it?
Mr Vara
I am simply speaking from my personal experience of speaking to women. There are women who have said to me that they want the restoration of the 1995 rules. Colleagues in this House have had people in their surgeries speaking of 1995. The hon. Gentleman may not have had that—he may be out of touch, but the rest of us are not. When we talk of £77 billion or even £30 billion, we are not talking about a few million pounds or a few billion pounds. In both contexts, we are talking of tens of billions of pounds. That situation is simply not sustainable.
Welfare Cap
Owen Smith Excerpts(9 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Vara
If we are talking about embarrassment, perhaps it is the hon. Member for Wansbeck (Ian Lavery), along with those on the Opposition Front Bench, who ought to be embarrassed. They ought to be embarrassed about the millions of people who lived in misery because they were forced to become unemployed. They ought to be embarrassed because, under Labour, the welfare cap was out of control. They ought to be pleased that this Government have the guts to take the difficult decisions to bring the welfare cap back under control.
Owen Smith (Pontypridd) (Lab)
It is Christmas, and I think the Minister would like to know that his Government have won first prize for being the first Government ever to breach £1 trillion in welfare spending over five years. That is £130 billion more than the Labour Government spent in their last five years. You have won the prize!
Mr Vara
The hon. Gentleman speaks of Christmas spirit. In that spirit, perhaps he would like to apologise to the House on behalf of his party for the mess that it left us. Perhaps he would like to apologise to the people out there—yes, the public—who endured misery and ended up being unemployed under Labour’s policies. Perhaps he would like to apologise to the taxpayers for letting the welfare budget get completely out of control. As a result, we are having to take the tough decisions. [Interruption.] I am happy to give way to the hon. Member for Pontypridd (Owen Smith) if he would like to apologise. [Interruption.] I have given him the opportunity to apologise but he would rather not do so.
Owen Smith
I rise in the spirit of the intervention made by the hon. Member for South Cambridgeshire (Heidi Allen) and to say that I absolutely welcome the decision by the Government today to breach the welfare cap in order to reverse-ferret on the cut for 3 million recipients of tax credits—low-wage workers right across Britain. It is an excellent thing the Government have done and we will be fully supportive of it. I hope that she will be supportive of us when we call for a similar reversal on universal credit work allowances.
Mr Vara
The House will have noted, as will the people who are watching at home, that still we have no apology.
The Government are determined to continue the work that we have done to date and to honour the mandate from the British people at the general election, so that we can tackle welfare dependency and fix the nation’s finances. Despite this short-term additional spending, we have made sure that, through our welfare reforms, the cap will be met later in this Parliament—by 2019-20. Let me be clear: the Government are committed to the welfare cap, and the Office for Budget Responsibility has confirmed that the cap is met in the medium term. The OBR also forecasts that welfare spending within the cap will fall as a proportion of GDP from 6% to 5% over the welfare cap period. That is a fall of 1%, in line with the 1% fall forecast at the summer Budget. By 2019-20, therefore, we will still achieve the £12 billion a year welfare savings that we said we would achieve—
Mr Vara
I will not give way to the hon. Gentleman. I have given him plenty of opportunity to apologise, and he is not doing what the nation wants. If he is not going to do that, he needs to sit quietly and contemplate what policies his party is going to produce. On policies, it is worth noting that he, along with the hon. Member for Islington South and Finsbury (Emily Thornberry), actually supported the measure that introduced this cap, as did several other welfare Cabinet Ministers when Labour was in government, so it is ironic that they now seek to make cheap political points. As I say, by 2019-20 we will have achieved our £12 billion welfare savings. That is what we pledged at the election, that is what the public gave us a mandate for and that is exactly what we will deliver. We can do this because of the permanent savings that we have already made and the long-term reforms that we are making.
The simple fact is that Labour completely overspent on welfare during its 13 years in power. Under Labour, welfare spending went up by almost 60% and the benefits system cost every household an extra £3,000 a year. Spending on tax credits increased by 330%. That is £24 billion—
Owen Smith (Pontypridd) (Lab)
Let me start by wishing a very merry Christmas to you, Madam Deputy Speaker, and to the Under-Secretary of State for Work and Pensions, the hon. Member for North West Cambridgeshire (Mr Vara) and all the Ministers on the replete Front Bench, especially the Secretary of State who I had hoped would lead the debate today. Indeed, I had hoped that it might be the Chancellor, because I seem to recall—
Owen Smith
I will certainly give way. I had not really started, but the hon. Gentleman can carry on.
Owen Smith
I was here in the Chamber, and I saw the Secretary of State arrive just before the Minister rose to speak. While we are on the subject, perhaps the Minister can clear up this matter. He said to us on Monday at Department for Work and Pensions questions that the Secretary of State had visited a food bank. We submitted a parliamentary question to the Minister asking when that had taken place. The interesting answer—in truth it was a slightly slippery answer—was that Ministers, not the Secretary of State, have attended lots of things, including food banks. I gather there is another question. Perhaps he could tell us when the Secretary of State went to a food bank. [Interruption.] Clearly, he does not want to say.
As I was saying before the Minister intervened on me, it was a year ago when, to a packed House, the Chancellor unveiled his latest wheeze, the welfare cap. He had a mile-wide smirk on his face like one of the famous cats from his Cheshire constituency. He was positively purring as he laid down what he thought would be a trap for a future Labour Chancellor. He said:
“The welfare cap marks an important moment in the development of the British welfare state…and ensures that never again can the costs spiral out of control”.—[Official Report, 26 March 2014; Vol. 578, c. 374 and 381.]
He wanted Labour Members to stand up
“and say exactly what they think of the welfare cap, and tell us that they support it, and that they should have introduced it when they were in office. They look such a cheery bunch.”—[Official Report, 26 March 2014; Vol. 578, c. 380.]
Well, we are cheery this afternoon, as we look for the soles of the feet of the Cheshire cat Chancellor who has carelessly and ignominiously fallen into his own welfare cat trap. It is less a case of being hoist by his own petard, as slipping on his own smirk. Where is he today to answer these questions? A year ago, he was insistent that it would be he who would be called to account in this House for the breach in the welfare cap. He said in the same debate:
“The charter makes clear what will happen if the welfare cap is breached. The Chancellor—
not the Secretary of State for Work and Pensions or one of his Ministers, but the Chancellor—
“must come to Parliament, account for the failure of public expenditure control, and set out the action that will be taken to address the breach.” —[Official Report, 26 March 2014; Vol. 578, c. 380.]
But cometh the hour, there is no sign of the cat. He has disappeared. Even the smirk has disappeared.
Chloe Smith (Norwich North) (Con)
Will the hon. Gentleman enlighten us about where the shadow Chancellor is—or does he disagree with him?
Owen Smith
I am sure that the shadow Chancellor is up to some extremely important business. Ostensibly, the Secretary of State for Work and Pensions is meant to account for this on behalf of the Chancellor—talk about adding insult to injury or rubbing salt in the wounds, not only has his budget been raided to pay for the embarrassing reversal on tax credits and the breach of the welfare cap, but he was asked to come here to explain it to the House. I do not blame him for one minute for deciding to attend a really important Cabinet Committee instead of coming to the House to explain about the welfare cap.
Mr Duncan Smith
As it is Christmas and I want to help the hon. Gentleman out as much as I can, because he is clearly floundering—[Interruption.] Well, he is floundering, and I do not want him to, because it would be bad for his reputation. I actually trust and support my Ministers. I believe that every one of them is capable of doing the debate better than the hon. Gentleman. Perhaps he would like to trust his shadow Ministers as well sometime.
Owen Smith
I would trust my shadow Ministers with my life. However, I thought that this was a very important subject. I thought that the welfare cap was one of those things that—what did I say earlier on?—was a great step forward in the British welfare state. I thought that the shadow Secretary of State for Work and Pensions should respond, and I cannot understand for a minute why the right hon. Gentleman wanted his junior Minister to do this belittling debate. The shadow Chancellor is not here. He has disappeared, much like the Cheshire cat—better than that, like Macavity the cat.
Owen Smith
I know, okay, the Chancellor: the right hon. Member for Tatton (Mr Osborne), in Cheshire—the Cheshire cat—and given that he is rather like Macavity, rather than the Cheshire cat, I thought that I would give the House a treat. I read that there were no Etonians on the Front Bench among the new intake, and I was worried that the lack of classical education from which the Treasury Bench normally benefits might mean that the Macavity reference went over Ministers’ heads, so I brought a little book with me, and I shall read a section from it. [Interruption.] It is not Mao; it is T.S. Eliot’s collected poems. It gives us Macavity the mystery cat, who is, of course, the Chancellor:
there’s no one like Macavity…
he’s very tall and thin;
You would know him if you saw him, for his eyes are sunken in—
I think that is the 5:2 diet—
He’s outwardly respectable
although
(They say he cheats at cards.)—
I bet he does—
And when the larder’s looted, or the jewel-case is rifled…
He always has an alibi, and one or two to spare:
At whatever time the deed took place—MACAVITY WASN’T THERE!
Macavity is not here today, is he? And the deed that he is ducking, of course, is this embarrassing, humiliating U-turn. The cap has been breached, and the Government have done it, of course, because of the spectacular, screeching U-turn on tax credits.
Ian Lavery
If my hon. Friend—he is a really good friend of mine—had done what the Chancellor has done in promising that the welfare cap would not be breached, would he have sat there and done nothing? I am sure that he would have been prepared to stand at the Dispatch Box, have the courage of his convictions and perhaps apologise.
Owen Smith
I would have been mortified had I been the Chancellor responsible for such a terrible U-turn and such an extraordinary, humiliating, screeching U-turn.
Simon Hoare (North Dorset) (Con)
Again, in this great spirit of festive tidings, let me say that if that is really the best that the Opposition Front-Bench spokesman can do on such an important issue, he and his party really have not got a cat in hell’s chance of ever being back in government.
Owen Smith
I thought I was doing rather better than that. I thought the House might enjoy a bit of Christmas spirit.
The real crime that Macavity is hiding from today is not the breach of the welfare cap, however embarrassing that may be. The real larder that has been looted is universal credit. Opening the debate, the Minister said several times that the Government would meet the welfare cap in 2019-20 and he is right that the OBR confirms that, but he signally failed to tell the House how they would do it. I suspect that that is because of the other reason that the Secretary of State did not wish to address the House today. We know precisely how he will meet the cap: through the £10 billion cut to the work allowance that we will see by 2020; a cut of £3 billion a year, nearly making up for the £3 billion that was to be taken away in tax credits, butchering the work incentives that are supposed to make universal credit worth while.
Who are the victims of this crime? The Secretary of State is for one, because he has had his budget raided once more—the seventh time, I believe. However, the true victims are the millions of constituents in Labour and Tory seats who will still lose thousands of pounds as a result of the Chancellor’s cut to universal credit. Some 500,000 people will be on UC by next April, and according to the independent Institute for Fiscal Studies, 2.6 million households will lose £1,600 by 2020. They are the victims of this crime, the people who are paying for the Chancellor’s hubris with £3 billion of their own money in 2020 and every year thereafter. They are the people being fleeced by the postcode lottery that is being created in support for low-wage workers, whereby those lucky enough to stay on tax credits will be massively better off than their neighbours on universal credit.
A single mother working full-time on the new national minimum wage with two children will be £2,981 worse off than another mother, perhaps living next door in precisely the same circumstances but still on tax credits. [Interruption.] The Secretary of State says from a sedentary position, “What about child care?” Yes, if that mother has children who are three or four, she may be better off, but if her children are one, five, seven or 12, they will not be. That is the reality and we should not be misleading the House, from a sedentary position or otherwise.
That disparity cannot be fair and cannot be right. It may not even be legal. We are seeking advice as to the legality of that move. I suspect that is not what the Chancellor told the hon. Member for South Cambridgeshire (Heidi Allen) or other Tory Back Benchers when he reassured them that he was making good the tax credit cut, even if it meant breaching the welfare cap.
Stephen Timms (East Ham) (Lab)
My hon. Friend is making some important points. Is it the case—I have seen the suggestion that it may well be—that the small number of people who are currently receiving universal credit will see the enormous reductions in their income that were to have been imposed on tax credit recipients? There has been a U-turn on tax credits, but is it the case that those who are getting universal credit will be hit?
Owen Smith
I think that is precisely the case. My right hon. Friend is right. There are currently around 140,000 recipients of tax credits, not all of whom get the work component; we do not know that precise number—it may be around 40,000. There are predicted to be 500,000 people, on the Government’s own numbers, in that circumstance by next April. When I put it to the Secretary of State at Work and Pensions questions last week that those people would lose out precisely as my right hon. Friend suggested, he said that the flexible support grant would more than make up for those losses.
I have looked at the flexible support grant and, as far as I can see, it is a £69 million grant that is available to local Jobcentre Plus managers to help people who are close to the workplace, perhaps for a new suit or a ticket to get on the bus to the interview. Even if it were permissible to use the money in that way, £69 million would in no way make up for the £100 million shortfall next year, the £1.2 billion shortfall the year after, and certainly not the £3.2 billion shortfall in 2020. It is impossible, and I fear it is also misleading for the public.
I will bet a pound to a penny that the Secretary of State and the Chancellor did not also mention that offsetting the cuts to universal credit will hit precisely the same Tory and Labour constituents just before the next election, in 2019-20. I would also wager that they still do not appreciate that the Chancellor cannot U-turn on this issue. The reverse-ferret is not available any longer, because if he does not make good his promise to make those cuts to universal credit, he will not be able to keep the promise that the Minister just made again on maintaining the welfare cap in 2020, and he will certainly not be able to deliver his other promise of a £10 billion budget surplus in the same year.
Perhaps the lesson we should all take from today’s U-turn on the welfare cap, snuck in shamefacedly at the fag end of the Parliament, is that no one should take this Chancellor’s traps and tricks, his games and gimmicks, terribly seriously any more. He can meet them or breach them—he does not mind which, because what he is really about is not sound management of the public finances but the political games of public schoolboys. That is why he cut universal credit seven times before it had even started, making a mockery of any claims to make work pay or support for the low-paid. That is why he continues with his fantastical claims, repeated by the Minister, that welfare spending is under control, even as the housing benefit bill went up by £30 billion in the previous Parliament, and even as Ministers breached £1 trillion on welfare spending for the first time.
We will back the Government in voting to secure Labour’s demand to reverse the tax credit cuts, and we will continue to press them for the same reversal for the victims of universal credit. But we should not pay too much attention to the Chancellor’s tricks and traps in future, because his flagrant breach of the welfare cap, deemed so essential just a few months ago, has exposed the true extent of his stunts. The welfare trap has caught him. Eliot’s detectives could not catch Macavity, but he has been rumbled.
Marie Rimmer
Not at the moment. Hon. Members will hear what I have to say.
We need reforms that address the structural drivers of social security spending. We need good, secure employment; we need to get rid of zero-hours contracts and low pay; and we need to ensure an adequate supply of affordable homes.
Police Reform and Social Responsibility Bill
Owen Smith Excerpts(13 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
