Work and Pensions (CSR)

Sajid Javid Excerpts

Thursday 4th November 2010 Westminster Hall

[Miss Begg]

There is no dispute about the fact that we would like to see the benefit bill reduced. The best way of doing that is to get those who can work into jobs so that they do not need benefits on which to live. As for pensioners, the Government, with their triple lock, have taken the decision that they do not want to see them getting less benefit. That is partly why the cuts have fallen so heavily on working-age people. The Government have protected benefits and increases in benefits for those who are on the basic state pension and other related benefits. They have made a value judgment and decided that some people deserve increases in their benefits while others do not.

Let us not forget the bigger economic argument. Poor people will spend their benefits in the local community. Problems can arise if benefits are cut: the money going into the local economy drops, jobs are lost and shops close. Cuts will cause problems in the local economy. Very often it is the benefits’ pound that keeps many things working in some of the poorer communities. There is not an absolute answer as to whether benefits should go up or down depending on the economic wealth of the country, but there is an absolute measure of poverty in which we should not expect people to live. Sometimes, some of our benefits are at a level that keeps an individual living in poverty.

[Sajid Javid (Bromsgrove) (Con)]

The hon. Lady said that when benefits are paid to individuals, the money is used in the local economy, and that that can somehow be helpful. I have heard such comments quite often and they are based, I believe, on an economic fallacy. If the Government did not make payments—benefits or otherwise—the money would not be borrowed by them in the first place, and those who had lent the money would have spent it in the economy anyway. Such a point is worth making because we should base our discussions on the known facts.

[Miss Begg]

We live in a welfare state and a civilised society, and we have benefits that are paid to people who are in work as well as to those who are out of work. One reason why we take such decisions is that we believe that it is bad for a society to have an enormous gap between the rich and the poor. That is partly why we have our tax and benefit system.