Welfare Cap

Debate between Shailesh Vara and Ian Lavery

Wednesday 16th December 2015 Commons Chamber

[The Parliamentary Under-Secretary for Work and Pensions (Mr Shailesh Vara)]

I beg to move,

That, pursuant to the Charter for Budget Responsibility: Summer Budget 2015 update, which was approved by this House on 14 October 2015, under Section 1 of the Budget Responsibility and National Audit Act 2011, this House agrees that the breach of the Welfare Cap in 2016-17, 2017-18, and 2018-19 resulting from the decision not to pursue proposed changes to tax credits, as laid out in the Autumn Statement 2015, is justified and that no further debate will be required in relation to this specific breach.

The motion is about the Government accounting to Parliament and the public for decisions about welfare spending. It is something we on this side of the House take very seriously. That is why in 2013 the Chancellor announced we would be bringing forward a welfare cap to control welfare spending in a way that has never been done before. The cap would be set shortly after each new Parliament and assessed each year by the independent Office for Budget Responsibility. Any breach of the cap requires my Department to come to the House to set out one of three courses of action. The first would be to propose measures to reduce welfare spending to within the level of the cap. The second would be to seek the approval of the House to increase the level of the cap. The third would be to explain why a breach of the cap was justified. The House will be aware that, following the Chancellor’s autumn statement, the cap is forecast not to be met in the short term. The motion seeks agreement that this is justified.

[Ian Lavery (Wansbeck) (Lab)]

Even this early in the debate, the Minister is saying that he is going to justify breaching the cap. Is he not somewhat embarrassed about that?

[Mr Vara]

Not at all. If the hon. Gentleman will give me time, I will explain the justification. He will be aware that there has been a huge amount of debate on this issue, and that the Chancellor has listened.

[Ian Lavery]

I must have missed that.

[Mr Vara]

The hon. Gentleman obviously did.

In making our case, I want to set out the circumstances that have led to this forecast. The cap was initially set in line with the OBR’s March 2014 forecast. In the summer Budget, the Chancellor set a lower welfare cap to help to reflect our move to a lower tax, lower welfare and higher-wage economy. Since then, as part of the autumn statement, the Chancellor took the decision not to pursue proposed changes to tax credits. This will give families longer to adjust as we make work pay and provide better support for people in work.

This change has been possible partly because of improvements in the nation’s finances, including improved tax receipts and lower debt interest payments. These are not free choices, however, and as a result of this change, we will be spending more in the shorter term than had been forecast in the summer Budget. That means that, based on current forecasts, the cap will not be met for the next three years: 2016-17, 2017-18 and 2018-19.

Employment Tribunal Fees

Debate between Shailesh Vara and Ian Lavery

Tuesday 1st December 2015 Westminster Hall

[The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)]

It is a pleasure to serve under your chairmanship, Mrs Gillan.

I congratulate the hon. Member for Ellesmere Port and Neston (Justin Madders) on securing the debate. It is an important subject, and I know that in his case it is particularly so, given his background as an employment solicitor. I thank the other contributors, the hon. Member for Glasgow South West (Chris Stephens) and the hon. Member for Cardiff Central (Jo Stevens), and the two Front-Bench spokespeople, the hon. Member for Dumfries and Galloway (Richard Arkless) and the hon. Member for Kingston upon Hull East (Karl Turner). I also thank the hon. Member for Ellesmere Port and Neston for allowing me the opportunity to put on record the Government’s position.

The Government recognise the crucial service that employment tribunals provide to those employees who have serious disputes with their employers. It is vital that people in that position have meaningful access to justice and an effective way to remedy their problems.

[Ian Lavery]

If it is that vital for ordinary people in the workplace to access justice, will the Minister explain why his Government introduced a £1,200 tribunal fee?

[Mr Vara]

I ask the hon. Gentleman to bear with me, as I will turn to that issue, and also to the issue of working people that has been mentioned by a number of colleagues.

Hon. Members will be aware that the Government were elected as a majority Government with a clear mandate to eliminate the budget deficit during this Parliament. That requires a responsible approach to funding public services, which must include the courts and tribunals, both now and in the future. When the Government introduced fees in employment tribunals in 2013 it was estimated that the cost of running the service was about £84 million per year. Before the introduction of fees, the whole burden of that cost was met by taxpayers. Fees were introduced to reduce the burden, and to ensure that those who were using the service and benefiting directly from it were making a reasonable contribution to the cost, when they could afford to do so.

At the time the fees were introduced, we also applied Her Majesty’s Courts and Tribunals Service fee remissions. That scheme is there to ensure that those on low incomes are not prevented from lodging a claim. Under the scheme, those who qualify may have their fees waived, either in part or in full, depending on their financial means. I am a little disappointed that although much has been made of the employment tribunal fees, only a passing reference was made to the conciliatory scheme introduced by ACAS, to which I will turn shortly.

As far as remissions are concerned, I am grateful for, and have very much taken on board, hon. Members’ practical comments, and I can assure colleagues that my officials are looking at how applications are made to see how the process can be made simpler and more user-friendly.