Welfare Reforms and Poverty

Peter Bottomley Excerpts

Monday 13th January 2014 Commons Chamber

[Sir Peter Bottomley (Worthing West) (Con)]

That was an interesting speech. I am glad to support the right hon. Member for Oldham West and Royton (Mr Meacher) in his suggestion that we have a commission to provide comprehensive, unbiased measures of how action changes levels of poverty—absolute and relative poverty. That should include what people spend their money on and what makes people more likely to find themselves in poverty. We know about disability and the dependency of people before they get a job. We know about people in retirement, family deformation and mental health issues. A whole range of considerations should be taken into account.

The hon. Member for York Central (Hugh Bayley) is no longer in the Chamber, but he made some comments about the national debt. Most of us know the difference between a deficit and a debt and could talk for ages about gross Government debt, public sector net debt, unadjusted measures of public sector net debt and UK net borrowing, whether as a percentage of gross national product or not.

It is better to understand that the previous Labour Government had some merits. In their first three years, they stuck to the Conservative spending plans, net debt did not go up and we all benefited. From 2001, there was a massive expansion in public sector employment of 30% that was, I think, associated with the structural deficit exposed by the recession and the bank crisis.

I started in public policy in the early 1970s when I ran a thing called the Family Allowance Movement, trying to introduce family allowances for the first child. A Labour Chancellor asked, “What is the point of having a family allowance? I am going to increase the married man’s tax allowance.” Those are the arguments we come back to 30 years later in a rather different sense. Balancing people’s resources and needs at any one time and over a life circle is how I prefer to look at it.

Let us not make any comments about any individual, as my hope is that many of the people who follow us will make fewer mistakes than we did, but if, for example, the time of family formation comes later on average and more children are born into households that can make some reasonable provision for them, we will be better off. At one stage, I looked to see who was most likely to smoke, a habit that takes £60 or £70 out of post-tax income. The answer was lone parents on income support. We would be able to give a lone-parent family an extra £50 or £60 of disposable income if a third of our teenagers did not take up smoking. As those who are most likely to take up smoking are those who were most likely to be deprived in their early lives, we could make a difference to people’s lives.

I am not absolutely certain that we should be too keen on a welfare system that guarantees independent housing to young people. My mother used to say that if someone was a lone parent, setting her up—it is normally a her rather than a him—in independent housing at the age of about 18 with a child, alone, is not the best thing as parents need to learn parenting from those who are around them.

What makes a difference to me is how we can reduce the cost of borrowing by households or individuals, which is why I strongly support the mentions of credit unions. I look forward to hearing from the Minister when credit unions will be able to charge a rate of interest per month that might look high to most of us but that is dramatically lower than the cost of door-to-door lending or some of the other sources of credit available to those who do not have assets or reliable incomes and who are in difficulty.

I recognise the point made by the hon. Member for Derby North (Chris Williamson) about how it was possible in his day for someone with ordinary earnings to buy an ordinary home. I first got a home in Worthing, my present constituency, in 1966. Almost anybody there who had a job could afford to buy a home. That has changed and it is crazy that we have an economic system in which half the value of a home is the site value. We must find some way of ensuring that ordinary people in ordinary jobs can afford to buy homes.

We can also make a difference, as I did when I was involved in a small electrical contracting business before I came into Parliament. Most people’s earnings were twice their guaranteed earnings and by putting people almost on salaries I made sure that they could have guaranteed income for the year. Three quarters of my colleagues were able to buy their own homes for the first time. There are some mechanical things that matter.

[Jeremy Lefroy]

Does my hon. Friend recognise that that is also a problem for agency workers? As they do not have a long-term guaranteed income, they are unable to get mortgages.

[Sir Peter Bottomley]

I am grateful to my hon. Friend for that intervention and I appreciated his speech, too. We ought to try to ensure that we have sources of lending in which people understand the industries in which people are working. That is where the building society movement came from—originally, it was about building homes. If we could get some mutuality back into the agency area, people would be able to decide who could be lent money and who should be deferred.

The last point in my mind concerns how we can go on preparing people for the jobs and occupations of the future. Many people’s futures will be as entrepreneurs, as they set up their own businesses; others will be in employment. I remember with pleasure Peter Thurnham, one of our former colleagues. When he was made redundant, he used his redundancy money to buy two machine tools, set up an engineering business and eventually employed 150 to 200 people. People sometimes say to me, “MPs shouldn’t have outside interests.” I would far prefer to have in Parliament people such as Peter Thurnham, who can tell us how business and employment work and how to get more people off welfare and into the kind of jobs that make them pretty independent for most of their life.

Many of us will require some support at some stage in our life; relatively few of us need support all the way through our lives. Before this Government came to office, we were getting to a stage at which too many families were in dependency from generation to generation; Keith Joseph told us quite a lot about that. Statistics show that only 10% of people who were in the bottom decile—the bottom 10%—10 years ago are in the bottom 10% this year. There is a great deal more movement among those who are poor or very poor than most people understand.

[Chris Bryant (Rhondda) (Lab)]

indicated dissent.

[Sir Peter Bottomley]

The hon. Gentleman shakes his head; when he speaks, perhaps he can give his statistics. We need a commission, with statistics that we can all rely on from the Office for National Statistics, the Institute for Fiscal Studies and the Office for Budget Responsibility.