Housing Benefit

Debate between Rachel Reeves and Philip Davies

Wednesday 26th February 2014 Commons Chamber

[Rachel Reeves]

Specifically on the bedroom tax, we have said that we would cancel it by closing the loophole in the shares-for-rights scheme, the bogus self-employment in the construction sector, and the tax credit that the Chancellor gave to hedge funds in the Budget earlier this year. We have been very clear about how we would pay for this. In the hon. Gentleman’s local authority of Birmingham, 2,100 households are being affected; I wonder whether he might speak for them and their concerns.

The implementation of the bedroom tax has been a shambles. Ministers have been unable to explain whether the policy is supposed to reduce overcrowding or whether, as their costings assume, people are expected to remain in their properties. There has been uncertainty and inconsistency, with mixed messages about who is exempt, whether it be parents with children serving in the armed forces, disabled people or carers. The truth is that none of them is exempt. Courts and tribunals have had to devote days to debating the definition of a bedroom, and as the unintended consequences become clear, the uncalculated costs are mounting.

[Philip Davies (Shipley) (Con)]

If this is causing so many problems—the Labour party in Bradford seems to think it is, too—perhaps the hon. Lady could explain why the Labour-dominated social housing provider has continued to build three-bedroom house after three-bedroom house despite claiming that it is not able to rent them out, and why Bradford council, which received £1.2 million in discretionary housing payments, has spent only £350,000 of it in the first six months and has not even bid for any of the extra funding the Government made available. If this is causing so many problems, why has the Labour council abandoned all these people?

[Rachel Reeves]

Let us see where Bradford is by the end of the financial year, not just six months into it.

Many of those who are moving because of the bedroom tax are ending up in private rented accommodation which, though smaller, is more expensive. Analysis by the university of York suggests that this could mean the Government paying out £160 million more in housing benefit than had been budgeted for.

Ministers have also been forced to admit that 35,000 of the disabled people affected have had their homes specially adapted for them with, for example, wheelchair ramps, wider doors, stair lifts and accessible bathrooms. If they are forced to move, it has been estimated that the costs of repeating those adaptations in new properties could be as much as £234 million.

According to the latest numbers from the National Housing Federation, two thirds of the households hit by the bedroom tax have already fallen into arrears, hitting the finances of the very housing providers we need to be building more homes to deal with overcrowding, and a staggering one in seven of the tenants affected have already received eviction warning letters.

Housing Benefit

Debate between Rachel Reeves and Philip Davies

Tuesday 12th November 2013 Commons Chamber

[Rachel Reeves]

The hon. Lady is absolutely right. That is the story we are hearing in all our constituencies from people who are being hit by this policy and have nowhere to turn. Is not the truth that the Secretary of State does not want to answer for the waste and chaos in his Department, his failure to deliver the great welfare reform he promised, his failure to get more people into work and his failure to get the benefits bill down? He does not want to answer to this House, or to the British people, for the distress and damage he is causing, with desperate measures designed not to control costs or build a fairer system, but merely to distract from his own incompetence.

[Philip Davies (Shipley) (Con)]

The shadow Secretary of State promised that she would be tougher on welfare than this Government. Given that it was the previous Labour Government who introduced this policy in the first place, it seems that she is going to be not only not tougher than this Government on welfare, but not tougher than the previous Labour Government.

[Rachel Reeves]

We have been very clear about how we would pay for this policy, if indeed it costs as much as the Government have said it will: we would crack down on bogus self-employment in the construction industry, reverse the tax cut for hedge funds introduced in the Budget earlier this year and cancel the Chancellor’s failed “shares for rights” scheme. We have called this debate to bring the Government to their senses and to ask Members on both sides of the House to consult their consciences and their constituents and call a halt to the havoc this heartless policy has unleashed.

Taxation Freedom Day Bill

Debate between Rachel Reeves and Philip Davies

Friday 25th November 2011 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I congratulate the hon. Member for Kettering (Mr Hollobone) on securing this debate, which is clearly of great importance to him. He referred to two dates: 1972, when tax freedom day would have been earliest in the year, and 1982, when it would have been latest.

In 1972 we had a three-day week, so there was not much happiness, and there would not have been much to celebrate on taxation freedom day. In 1982, we had unemployment of 3 million. The reason taxation freedom day came so late that year might be that there were not enough jobs and more was being paid out in benefits with not enough coming in via tax revenue.

The hon. Member for Shipley (Philip Davies) said that he would like us to be more like Cyprus and less like Belgium. The Belgian economy has grown by 1.8% over the past year, and Cyprus is one of just three countries in the European Union, along with Portugal and Greece, that has had a slower rate of growth than the anaemic growth that we have seen in the UK this year. I think that many of our constituents would rather we were a little more like Belgium, with stronger growth and lower unemployment, and a little less like Cyprus, but we may differ on that.

[Philip Davies]

I take it from what the hon. Lady has said that the Labour party’s official stance is that it would like taxation freedom day in this country to be 4 August.

[Rachel Reeves]

No, that is not our stance. If the hon. Gentleman would like us to be a bit more like Cyprus, he might want to look at it in the round, because, as I said, Cyprus is one of just three countries in the European Union that has grown at a slower rate than the UK this year.

Conservative Members have spoken about the difference between taxation freedom day in the US and in the UK. One of the reasons taxation freedom day in the US will come a little earlier is that it does not have a national health service, and, as a result, people have to pay from their own income for the health service. If hon. Members took into account how much individuals and businesses contribute towards health care insurance in the US, they might find that its taxation freedom day came a little later in the year—perhaps even later than in the UK.

My main question is why we need a Bill on this. Hon. Members, particularly the hon. Member for Kettering, have spoken about the work of the TaxPayers Alliance and the Adam Smith Institute. If they have all the facts and figures, why do they not organise a celebration for taxation freedom day? Why do we need Government legislation? If we had Government legislation on taxation freedom day as a result of passing this Bill, the day might fall a little later in the year because of the additional costs.

--- Later in debate ---

[Rachel Reeves]

I guess that we disagree on that. There are costs associated with all these things and I do not think this is a cost that my constituents and many hon. Members’ constituents would want to bear.

That brings me to my main point. This is a worrying time for businesses and families throughout the country. They are struggling with higher food prices and fuel bills, and are worried about their jobs and their children’s future. I am not convinced that the hon. Member for Kettering has explained what the Bill would do to help an ordinary family in Kettering who are struggling with stagnant wages, high unemployment and high inflation. In Kettering, there has been an increase in long-term youth unemployment of 127% since January this year.

It seems to me that the most important thing that Members of Parliament can do in representing our constituents is to put in place policies to address those issues. I am not sure that celebrating tax freedom day would help get young people back to work, help families facing a squeeze in their living standards or help businesses that are seeing demand dry up. I am certainly not sure what it would do for the 4,000 people who are unemployed in my constituency of Leeds West.

One tax that the hon. Member for Kettering might want to change is VAT. I wonder whether next Tuesday he and other Government Members will support the Opposition when we argue that VAT should be cut temporarily. That would bring forward tax freedom day and put £450 in the pocket of the average family. It would be a real step to help families and businesses across the country.

The hon. Member for Dover (Charlie Elphicke), who is no longer in his place, spoke about the tax on cigarettes. Many people would think—[Interruption.] Oh, here he is. Welcome back. It seems that if anyone mentions cigarettes, he is automatically in his place. Most of our constituents recognise that cigarettes should be taxed because they have social costs beyond the cost of producing and selling them. However, if one looks at the increase in the cost of petrol that we all face when we fill up our cars, reducing VAT back down to 17.5% would reduce the cost of petrol by 3p in the pound.

[Philip Davies]

If the hon. Lady is so keen for people to have an extra £450 back in their pocket, which I could certainly support, will her party propose a reduction in income tax to deliver that? If her party proposed cutting income tax to give £450 back to people, I might even be tempted to support it.

[Rachel Reeves]

The hon. Gentleman mentioned earlier—or it might have been the hon. Member for Bury North (Mr Nuttall), but I am sure that they agree—that the increase in the income tax threshold means that fewer people are paying income tax. The good thing about reducing VAT is that it has a progressive effect, because people on lower incomes spend a higher proportion of their income on VAT than people on higher incomes. A reduction in VAT would therefore help to get money in the pockets of the people who most need it at the moment in a way that a cut in income tax would not.

--- Later in debate ---

[Rachel Reeves]

I am afraid I only went to a comprehensive school, so I did not study Latin. Maybe the hon. Member for North East Somerset (Jacob Rees-Mogg) would like to do some interpretation.

The hon. Member for Kettering reminds me of my holidays when I was at school. As he knows, I used to go to Kettering in all my school holidays, because my grandparents lived there. I still have many family members in Kettering.

[Philip Davies]

Do they vote for him?

[Rachel Reeves]

I expect not.

I was just thinking about the lives that my grandparents led and the things that mattered to them. Every day, they benefited from what happened in both the public and private sector. They worked in the shoe factories in Kettering, as the hon. Member for Kettering knows—we have discussed it before. However, they also lived in a council house, when they were ill they used Kettering general hospital, and their children went to state schools in Kettering. My father went to Kettering grammar school.

Having a tax freedom day suggests that until that date in May, June or whenever it falls, people are contributing to someone or something else, or to the Exchequer. Actually, the money that they pay in taxes every day from the beginning of January until the end of December is used for things that matter to them, for instance building council houses such as my grandparents lived in, paying for teachers and for schools such as they went to and paying for nurses and doctors in the hospital that treated them when they were ill. It seems a little irrelevant to have a tax freedom day, because whether it is 5 February or 25 November, people need both what they pay their taxes for and disposable income to pay for things that matter to them. That is why those suggesting a tax freedom day misconstrue the situation.