Work and Pensions (CSR)

Simon Hughes Excerpts

Thursday 4th November 2010 Westminster Hall

[Miss Begg]

I shall call the hon. Gentleman my hon. Friend, as he is a member of the Select Committee. I shall deal with the universal credit in a moment. However, my hon. Friend is right about the Work programme.

The point is that the Work programme does not kick in until people have been out of work for a year, unless they have come through the incapacity benefit and employment and support allowance route or unless they are young and unemployed, when they will come into the Work programme after six months. The sanction will kick in before the individual has had the very expensive help that we hope the Work programme will rightly provide. It is a combination of there possibly not being a job and there not being any specialist help. Even if the youngest child has just turned five, lone parents might have been out of the workplace for 20 years looking after the older children. They will need extra help, but they will not get it because the Work programme does not kick in until the year is up.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

All Liberal Democrats support the Work programme—it is focused on the need to do things—and everyone understands incentives to get people into work and out of the benefit trap. However, I and many of my colleagues share the hon. Lady’s concern about there being an absolute rule that when people have been out of work for a certain time they will lose a certain part of their income, through no fault of their own and irrespective of the job market in their area. It is too absolute, too draconian and too firm. I hope that the hon. Lady’s measured argument about how it will have more impact on some than on others, together with the arguments put by my colleagues and me, will persuade the Government that this is one area that should be revisited in order to find a different answer.

[Miss Begg]

I echo that point. In many cases, we are not arguing about the principle but the detail.

The last way in which the Government can save money is to do away with some benefits. This aspect has both positives and negatives, as we heard from my hon. Friend, the hon. Member for North East Hertfordshire (Mr Heald). Extra money has been identified in the CSR, and £2 billion will be set aside over the next four years for the introduction of a universal credit. That will get rid of many benefits, and probably almost all working-age benefits, which will be subsumed into the universal credit. That is the right thing to do, and it certainly takes us in the right direction of travel, but as with all these matters the devil is in the detail. I look forward to the White Paper, which I hope will give more detail on how things should work. I hope that, within the next couple of weeks, the Minister will give us some indication of when it will be published. We are all waiting with bated breath, as it will make sense of some of the other things that the Government have been doing.

--- Later in debate ---

[Mr Heald]

I would contest what the hon. Lady says. Of course, it is true—I see the hon. Member for Bermondsey and Old Southwark (Simon Hughes) in his place, and I have a long connection with his constituency—that there are areas in London that have gentrified and changed over time; I agree. However, the sector of the market that we are discussing—the private rented sector—is not the one that the hon. Lady is really talking about. The private rented sector is the area of the market where people do not stay for 27 years. They move, regularly. It is a sector of the market in which people stay for a year or two. Something like 40 per cent. of that market is people who have been in their homes for less than three years.

[Simon Hughes]

The hon. Gentleman is right; he knows Southwark as I do. However, the pattern is not uniform, and the hon. Member for Plymouth, Moor View (Alison Seabeck) has a good case. To give one example, just over the bridge is a square called West square, where former Prime Ministers and Cabinet Ministers have lived. However, some of the houses, which are all privately owned, have been lived in by working-class families, who lived there all their lives. They are privately owned and rented, and have continued with private tenants. Scattered throughout my constituency, as well as Westminster and every London borough, are considerable numbers of people who have been for between 10 and 50 years in private sector rented accommodation, and who do not want to move.

[Mr Heald]

The hon. Gentleman knows Southwark like the back of his hand, and I accept that there are people who have been in the private rented sector for many years, but that is not the overall picture of that sector of the market, which is one of shorter-term lets. Of course, the nature of the contracts on those properties is short term.

Of course there should not be undue hardship. I agree with the hon. Members for Hampstead and Kilburn (Glenda Jackson) and for Plymouth, Moor View (Alison Seabeck), and with my hon. Friend the Member for Bermondsey and Old Southwark, about that. That is why there is a fund to deal with cases of hardship. The Government have not gone into it saying, “This will be a harsh regime, with no possible exceptions.” They have set aside £140 million to deal with those problems.

I think that it is wrong to overstate the problems against the background of the very difficult economic position that the country is in and the need to make cuts—any Government would have had to make cuts. There is a third point, which is that there must be fairness. We are all in it together, and I think that the balance that the Government have achieved is fair. It is wrong to view what is being done as though the overall ambition were to cut back the size of the state. The overall ambition is to get people into work. If we do that, that is how we will cut the welfare bills. I think that, with the economy and the measures that are being taken, things are looking quite encouraging.

--- Later in debate ---

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

It is a pleasure to take part in this debate. I am present almost by accident, because my hon. Friend the Member for Cardiff Central (Jenny Willott) would normally have been the Liberal Democrat spokesperson. In many ways, she is a greater expert than me. I am afraid that I have broken the spell—there would have been women leading for all three main parties, together with the Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Miss Begg) and the Chair of the Backbench Business Committee, the hon. Member for North East Derbyshire (Natascha Engel). We men would have had to muscle our way in. I apologise for that, but I hope that in spite of my lack of technical expertise, I can none the less share something from my experience. Like the hon. Member for Aberdeen South and my hon. Friend the Member for North East Hertfordshire (Mr Heald), I am one of the old hands in such a debate.

I welcome the Minister to her post, and I endorse what was said earlier. The approach taken by the Secretary of State and the Minister responsible for pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) has shown encouraging, progressive and challenging new thinking that looks to restructure an important Department. I welcome the opportunity to look at how that will be done.

I speak not only as an old-school Liberal, with Beveridge and Lloyd George as my political forebears, but as someone who has lived and represented the inner city for all of my time in this place, and half of my life. I know how important it is to have a strong welfare state, but that we must always encourage those who can to find and stay in good-quality work.

A friend of mine, the deputy head of a primary school in Leeds, once showed me how they were taking 10-year-olds to do work experience in their final year of primary school. More than half the youngsters in that school had nobody at home who went to work, so a role model who worked was missing in their lives. I hope that at the end of the five-year coalition programme, difficult though it will be in some areas because of our financial position, we will have a more equal society, a greater percentage of people in work and a higher skill base, but that we will still always protect the poor and the vulnerable from falling through the safety net.

I commend the single Work programme. I have long felt the need to pull together the ways in which people are assisted into work. From my constituency experience, I have to say that the system has not been working. As the Government implement the single Work programme, I ask them to take heed of what is stated in the coalition agreement:

“We will realign contracts with welfare to work service providers to reflect more closely the results they achieve in getting people back into work.”

The disparate contract system has not worked, and there have been some poor providers. It has been a mixed scene, and we need a more reliable network of ways in which people can go into the system.

I also commend the ambitious plan for a system of universal credit. That is what we should aim for. The system has seemed complicated, and if it is complicated for us and the Department, it will be doubly complicated for people who have to navigate themselves through it as users, often during other pressures in their lives as well.

From my experience, the “tell us once” initiative, is beginning to work. That is when someone reports a death—a bereavement—and all the systems of government are notified. That approach needs to be expanded at central and local government level so that people can feed into the system.

I am not in the Chamber to give a eulogy or a set of plaudits, because there are one or two things that the Government should take on board and improve. However, some things are really encouraging, as was the speech by the hon. Member for Gloucester (Richard Graham).

The first point in the relevant part of the Liberal Democrat manifesto is immediately to restore the link between the basic state pension and earnings:

“We will uprate the state pension annually by whichever is the higher of growth in earnings, growth in prices or 2.5 per cent.”

One of the first announcements made in the Budget and reflected in the comprehensive spending review—proving that the coalition is a partnership and that both parties contribute—was that pensions will be linked to earnings again. That is welcome because it is an important subject and one of the biggest issues that pensioners have raised with me in Parliament ever since the link was broken under Mrs Thatcher’s Government.

It is important that we are moving towards equality in pension age, as mentioned by the hon. Member for Aberdeen South, but it is right for that limit to be set at a higher level. Frighteningly, I heard the other day that average life expectancy for men is now 88. That is extremely disturbing in many respects, although of course we welcome people of that age and beyond. If life expectancy is 88 for men, it will be older for women because women are more resilient and better able to survive, do well and keep working than men.

I welcome the fact that winter fuel payments have been maintained, which was a manifesto pledge made during the election. I know that the issue is controversial and debatable, but in the end that pledge was honoured. All those initiatives are welcome, especially those relating to pensions and elderly people.

The announcement on child tax credit was good, as that will help families with children to have the funding they need. It is good that we have not backed away from our ambitions on child poverty. In her intervention, the Minister rightly said that we must start by saying how we will ensure that things do not get worse. The Labour Government were disappointing in many social ambitions, such as those on fuel poverty, child poverty and so on. They let the gap between the rich and poor widen. It is important that we hold on to our ambitions and, as the Minister said, seek to build on them and take our youngsters out of poverty.

I thought it was understandable and right to try to deal with the child benefit issue, although I know that it is controversial, particularly in the Conservative party. I understand the difficulties and I do not pretend that there is a perfect cut-off in terms of the wage level at which the benefit is set, or the choice between a one-wage or two-wage family. We can come to different conclusions about that, but there is a good case for saying that people on high incomes should not get the same level of universal benefits as everybody else. I understand the logic behind the argument for universal benefits, but when hard choices have to be made and budgets saved, everybody must share the responsibility.

I am glad that we will have permanent cold weather payments, rather than the rabbit-out-of-a-hat payments that we had under the Labour Government, when if we were lucky one year, there was an announcement. That change is positive.

I am pleased that there will be additional money for youngsters as part of the pupil premium. That scheme crosses Departments in relevance, and means that poor and disadvantaged youngsters will be better supported when they are under five, as well as when they go to primary school.

I have a couple of concerns, which I flagged up with the Deputy Prime Minister and this morning in the Department with my hon. Friend the Member for Thornbury and Yate and Lord Freud. As I pointed out in an intervention on the hon. Member for Aberdeen South, I want the Department to look again at future legislation relating to the 10% automatic cut in jobseeker’s allowance after one year of unemployment. That decision is not sustainable for some people. I understand the incentive argument, but there are some areas—they may be very different from my constituency—where there are few jobs and people have to travel a long way to find them. There are no opportunities, however hard people try. To say that there should be a reduction in the benefit seems harsh, and I hope that the Government will revisit that.

I shall make one other substantive point before leaving the Minister with a final thought or two. There may be a moment for another colleague to intervene. For me, the real issue of the moment is the housing benefit debate. I am conscious that coming down the track are regulations that will change housing benefit for next year. I shall concentrate on one of the proposals, in respect of which I hope that there is some scope for modification without breaking the superstructure of the plan and which is of more national, UK-wide significance than the capping issue. That is of more significance in central London, where of course I have an interest. I am referring to the proposal to reduce the housing benefit payment from the 50th percentile of the rents in the broad rental market area to the 30th percentile next year.

I hope that the Government will reconsider the proposal, because there are all sorts of reasons why it may not deliver the ability for people to find housing in the community they come from, and communities are important. As the hon. Member for North East Hertfordshire knows, there are communities just as much in Southwark, Westminster, Chelsea and Hounslow as there are in any other part of the country. To expect someone to move from a place that they are renting—I could cite West square, just over the bridge in Southwark, or it could be Covent Garden—and where they have lived all their life to somewhere four boroughs away, where they have no relatives, no friends, no links, no community and no history, is unreasonable.

I understand some of the issues, but there are ways in which the Government could be positive in dealing with them. As I understand it, 70% of the housing benefit claims in Blackpool are in the private sector, so by definition if the level is lowered, that has a huge effect on the market. Of course there is a difference between a place such as Blackpool and a place at the bottom of the league table such as Southwark, which is 31st out of the 33 London authorities and where only 13% of housing benefit claims are in the private sector. There, a Government change does not automatically change the culture of landlords and the market. I hope that the Government will bear that in mind.

Where demand exceeds supply, by definition there will not be available supply in a place around the corner for someone to move to. In addition, there are people whom we should not be asking to move when there are significant reductions in their benefits. I have seen the figures in the Government’s own impact study, which they produced in July. It states that the estimated percentage of losers varies from 71% in London to 90% in Yorkshire and the Humber, and the average loss per loser varies from £7 a week at the bottom end to £17 a week in the London region. Those are significant changes. Suddenly to have to find £17 extra a week in London, for example, may just not be possible, however careful people are with their household budget.

My suggestion is that the Government should consider, first, phasing any change, rather than going from the 50th percentile to the 30th. I know that it is not happening on one day, because it happens over a year on the date of the anniversary of the renewal of the claim. Secondly, they could consider treating people who are already in housing and recipients of benefit differently from new claimants. I am happy to continue to engage in debate with Ministers, as are other colleagues, to try to find a way forward. I am trying to be non-partisan; I am not making party political points, but I think that there must be a new way of being able to deal with what is an impending problem.

There are concerns among colleagues from around the country about the age for the shared room rate being put up from 25 to 35 in areas where accommodation is very difficult to find. I just pass that on, so that it can be on the agenda. There are also concerns about the transfer of council tax benefit administration to local authorities in due course, with a reduction in the amount available. That will be on the agenda of the Minister and her colleagues and the Department for Communities and Local Government.

The one thing we need to do as we implement some very radical but very good policies is to ensure that as people may be losing jobs in the public sector for a while and we are trying to create jobs in the private sector, we have in place organisations and people to assist them in moving from one form of employment to another in a very organised local and regional way. I have started to talk to colleagues about that. There is willingness on the part of the Government to consider it. If we are really to ensure that people do not feel frightened and insecure but feel encouraged and supported, we need not just changes in structure, but support systems to help people to make the life transitions from one form of work to another, or from no work to work, which are very important.

[Mr Heald]

On the idea of phasing, is the hon. Gentleman thinking that we would go to the 40th percentile? What is his idea?

[Simon Hughes]

I am seeking to explore ideas. It may be possible to move in the first place to the 40th percentile and later to the 30th. I am conscious that we do not want to force people to move twice. I do not think that would happen if there were much smaller reductions in the benefit and therefore people’s budgets were less hugely affected. I do not pretend that there is only one answer, but I am keen that we ensure that we are not uprooting people and assuming that they can find somewhere. This is all about predictive markets and how the market will respond. It is very difficult to know what the outcomes will be. Whatever the experts say, I do not think that we can predict things with surety. Therefore we need to err on the side of caution rather than risk, because we are dealing with people’s lives and homes, and for people with insecure lives and insecure incomes, having secure homes is very important.

Housing Benefit

Simon Hughes Excerpts

Wednesday 13th October 2010 Westminster Hall

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I thank the right hon. Member for Barking (Margaret Hodge) for introducing this important subject and congratulate her on her election success. Importantly, she saw off the British National party. I also congratulate the hon. Member for Westminster North (Ms Buck) on her deserved promotion, and I welcome my good and hon. Friend the Minister, whom I am sure does not have the attitude that our Opposition Friends are suggesting.

I shall not develop the argument, but there is an issue with the housing legacy. I understand the point made by the right hon. Member for Greenwich and Woolwich (Mr Raynsford), but the failure to build enough houses, particularly in London, left a terrible legacy for the new Government. We must be honest about that. The waiting list in Southwark is 15,000, and Labour Members cannot back off from that.

We must all face the fact that the population in London is rising significantly all the time, so the social challenge for the Government is extremely difficult. I am sure that it is not in their mind to drive people from one part of the country and forcibly to move them elsewhere, but there is a risk of unintended consequences. In the final week before the announcement of the comprehensive spending review—I know that some of the decisions on housing are not yet finalised—I want to take the opportunity to influence my hon. Friend and our colleagues through this debate and more widely to make the best possible decisions. There is clear evidence that forcing people away from their communities does long-term damage to children and the next generation in their relationships, and to the social fabric and community cohesion.

The campaign for homes in central London, with which I, the hon. Member for Islington North (Jeremy Corbyn) and others are associated, recognises that some people are born and brought up and have their home and being in the centre of our cities. They should be able to expect to remain there, even if they are not on high incomes, which most of them are not.

I am conscious of the time, but I want to mention three acute issues. The first is the housing benefit changes planned for next year. The Budget statement in June proposed that housing allowance rates be capped in April. Secondly, from October next year, rates will be set at the 30th instead of the 50th percentile of local rents. The method of working them out is complex, but the previous Labour Government set up broad market rental areas, so that they are considered in the community context.

Thirdly, further down the track,

“Housing benefit awards will be reduced to 90 per cent of the initial award after 12 months for claimants receiving Jobseekers Allowance. This will be introduced in April 2013.”

That policy is wrong. It is too inflexible and must be changed. One cannot presume that someone who has been trying to find work has not been able to do so because of their own failure, and that they must therefore move. The consequence of that and some of the other proposals risks forcing people from where they are, and by definition they then become a burden on the local authority if they are in any of the vulnerable categories or have priority needs. The problem does not go away; it simply moves, with trauma to those concerned.

What should our policy be? I can only summarise, but of course we need a policy that delivers more homes at affordable rents in London and elsewhere, including short-term homes, as other Governments have realised, perhaps on brownfield sites and the like. We absolutely need to make sure that empty homes are filled, and that people with spare space are encouraged to move so that that space can be released to others. We must not shake the security of tenure principle, because that is not the right approach.

We must ensure that we do not discourage people who are currently living in private rented accommodation from going into work because the rents are so high that should they start work, or should their partner come to join them, they might suddenly discover that they cannot stay in their property. That is a terrible failure which we must correct, and I have heard the Minister and other people say that they intend to do so.

In the view of London Councils—I stress that this is a cross-party view held not just by the Conservative Mayor but by all three parties that lead councils in London—there must be a review and change to the 90% rule, and a change to the rules currently planned for implementation next year. In its submission, which I hope the Minister has received and which I endorse, London Councils asks the Government to

“reconsider the level of the national cap in London and for the Central Broad Rent Market Area (BRMA) in particular”

and my own area. London Councils goes on to ask for the introduction of a transitional scheme. It also asks us to ensure that

“Current claimants…be subject to the 30 percentile change from April, but not to the national cap”

and that only new claimants who could find a property would be subject to the national cap. London Councils wants a progression—a transition—so that London has an opportunity to work out a solution with the Government, rather than be told the solution by the Government.

The June proposals were over-hasty and need to be revisited. They are not fair. I do not think that the Minister would want the Government to be known for a policy that was draconian and most adversely affected the poor and the disadvantaged. That is not the housing policy that he or I signed up to, and I hope that the Government will not sign up to it either.

Oral Answers to Questions

Simon Hughes Excerpts

Monday 19th July 2010 Commons Chamber

[Mr Duncan Smith]

I do not recognise that. The right hon. Gentleman was in a Government who completely failed to deal with youth unemployment. They ended up leaving office with higher youth unemployment than they inherited. That is not something that we want to crow about, but it is the reality. We need to do better than that, but we also face the challenge of reducing the deficit that his party’s Government left us. I recognise his interest and his compassion, but unless we put the economy right, we will not be able to exercise either.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Will my right hon. Friend look this summer particularly at the 16-year-olds who are leaving school, to make sure that the jobcentre works not just with Connexions but with the relevant parts of the youth service to provide a much more integrated and much better informed set of opinions and advice than have been offered to young people in the past? There is an urgent need for 16-year-olds to have good advice between jobs and apprenticeships and further education.

[Mr Duncan Smith]

I absolutely guarantee to do that, and I will talk to my right hon. Friend the Minister of State about it. It is worth bearing in mind what a real challenge this is for us. I have to repeat that, over the past 14 years, that group particularly was most failed by the previous Government. Before they carry on giving us lectures about it, they should recognise that failure and probably apologise for it.

Capital Gains Tax (Rates)

Simon Hughes Excerpts

Monday 28th June 2010 Commons Chamber

[Mr Duncan Smith]

Indeed, we will. We shall launch a strategy in March next year and I promise my hon. Friend that I shall inform him about how it goes. As I pointed out, child poverty has risen by more than 100,000 since 2004, so when the Opposition lecture us about child poverty they ignore the facts. They spent a lot of money but they failed to meet even their targets.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Does my right hon. Friend agree that although the welfare state is obviously necessary to protect the poor and vulnerable, it has often acted as a disincentive for people to go from being out of work to work? I know that from my constituency. Will he ensure that over the next few weeks, when we consult on the future of the welfare state, all the relevant charities, agencies and local councils, which are very knowledgeable about such things, are fully involved so that the outcome is informed by the facts and not by prejudice?

[Mr Duncan Smith]

I give my hon. Friend absolute confirmation that we shall consult widely. As he knows, we are planning to reform the benefit system so that it no longer acts as a major disincentive for people to go back to work. We have had to take decisions in the Budget, but beyond that we want to bring forward changes that make work pay—significantly for those going to work for the first time, as they understand. My comments at the weekend were about the need to recognise that often people want to move 10 or 15 miles to take a job, but they worry about the cost of travel to work or losing their house. The coalition has to look at that sort of thing to see whether we can make it easier for people to make decisions and take risks without being punished every time, as with the last Government. It is worth remembering that, of all social housing tenants—it is a falling figure—only 5% change their houses during the year, whereas 35% of low-income private tenants change. That is the problem: they are static, and they are stuck in what they do.

--- Later in debate ---

[Yvette Cooper]

My hon. Friend makes an important point, and I am happy to accept an intervention from the Secretary of State if he wants to clarify the position, because he did indeed discuss pensioners who under-occupy homes across the country. It is right that we help and support people who want to move to smaller homes as they grow older, but he needs to give us an answer. If he is telling elderly people and pensioners that they are going to have to move out of the home where they have lived all their lives, and where they have brought up their children, that has severe consequences. He must clarify his position, because my hon. Friend is right.

[Simon Hughes]

The right hon. Lady’s attack appears to be that the measures introduced by the Government are ideologically driven—something that is difficult to justify with regard to my right hon. Friend the Chief Secretary to the Treasury; the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb); and others, who have a record of campaigning for the poor and disadvantaged. Might not the same fallacious argument explain why, for 13 years, the Labour Government never linked pensions to earnings? Was that an ideological option? I hope it was not but if it was, the right hon. Lady cannot make the argument, because it is fallacious.

[Yvette Cooper]

The hon. Gentleman is right that there are many members of the Government who have indeed campaigned against poverty for many years, which is why their betrayal of the people whom they have stood up for is shocking. He will recall, too, that it was the Labour party that legislated and changed the law to restore the link with earnings. He should look rather carefully at the increase that, in practice, pensioners will receive over the next few years compared with the old standards. He will find that the new proposals are rather less generous than they appear at first sight.

--- Later in debate ---

[Mark Durkan (Foyle) (SDLP)]

It is a privilege to follow the hon. Member for East Surrey (Mr Gyimah). He not only reflected on the beauty of his constituency but let us know that, just because people live in idyllic settings, that does not mean that their family or work circumstances are ideal. He has also given us a trailer for the many lively contributions he will make in this House, seasoned with strong personal reflections, which many Members will have taken on board.

Claims have been made that, with the coalition Government, we have a new politics. That new politics, we are told, is about honesty and rebuilding trust. However, we have at the heart of the Budget the departure of honesty, with parties justifying doing what they said they would not do. Parties campaigned to get votes on the basis that the last thing we wanted was a VAT increase, but it is the first thing imposed by this Budget. It is a Tory Budget with Liberal Democrat accessories. I concede that some of those Liberal Democrat accessories are attractive—and that is part of the political calculation behind the Budget—such as the triple guarantee on pensions, which is there so that the coalition can say to Labour opponents, “We have done something that you didn’t do, we have restored the earnings link and better.” I regret that Labour Ministers did not listen to all their Back Benchers during their 13 years in government and do something about the pensions earning link.

We need honesty all round. I welcome the intensity that is coming from some of my hon. Friends on the Labour Benches, but I hope it comes with a measure of honesty, point by point.

[Simon Hughes]

The hon. Gentleman’s views are much respected, but may I say that I was always clear on this point? We did not want a VAT increase, although we had it under the last Government when it went up and then came down again. We were hoping that it would not happen, but certainly I said—as did all my colleagues, as far as I know—that it could never be ruled out. For many of us, the current position is that it may be one of the least worst options.

[Mark Durkan]

I am not sure if that was the least worst defence of a significant U-turn on a significant campaign issue. People did not just imagine that the Liberal Democrats campaigned aggressively on the issue of VAT increases, so to mount new politics on the basis of honesty and trust against that background is dangerous indeed.

I acknowledge that the Budget has Liberal Democrat accessories that are attractive, as are other aspects, such as the increase in personal allowances. But Liberal Democrats perhaps need to consider that this may be as good as it gets in the coalition. I recall a famous observation in Irish politics by a member of the Irish Labour party. Some time next year, the self-image of Liberal Democrats will change. They will realise that they are no longer in the vanguard of social justice and civil liberty, but instead have become the mudguard of a hard cutting Conservative Government. That will be their role in this Government.

It is not the case that the whole Budget is wrong, and from a study of the Budget notes it is significant how many of the measures build on aspects of the Finance Act 2009 and other Acts passed in the last Parliament. There are tweaks here and there, of the good, bad and neutral variety, but we should not pretend that there is no continuity. When the Chancellor made his statement, he said we would not have to look anywhere else for the Budget, because we would get it from him. He said that there would be no details hidden in the Red Book. However, when we compare his speech with the Red Book, we see that it is littered with phrases such as “We will produce proposals on this”, or “Other proposals will be published after we have the spending review in the autumn.” The details are all to come elsewhere, so we did not actually get them straight from the Chancellor.

This Government gave us some show-cuts on 22 June. Those cuts were for purely presentational purposes to show that this is a new Government, and to try to mark difference. The Chancellor even told us last week that that was one of the messages he wanted to go out from the Budget, so that people would know there was a difference. That is why the shadow Secretary of State was right to say that the Budget had an underlying ideological push. The scale of the cuts that will come in the autumn is there to drive a political narrative that pain has to be imposed, change will happen and those who do not like it should blame Labour, rather than the Government who are imposing that change. That is the narrative that the Government want, and that is why significant cuts will come in the autumn.

Where will we be then? The poor, who are being asked to pay more in VAT, will then see the services on which they rely squeezed. That is when the full toll of this Budget will be felt, contrary to what the Chancellor told us about getting it straight from him on the day in his statement. We know that this will be pain and penury by instalments, over time, so that they can maintain the narrative of blaming it all on Labour.

I agree with the hon. Member for Gainsborough (Mr Leigh) about the need for a Budget committee in this House. When we consider the scale of the banking issues that this House has to deal with, they should not all be left to the Treasury Committee. The scale of the public expenditure issues we will have to cope with means that we need a discrete Budget committee that has a full and proper handle on them, as well as one for the banking issues. If we are serious about giving priority to cutting waste in government, we should also have a committee that tests Government expenditure in real time. The Public Accounts Committee looks at spending post hoc, and there is nobody who challenges spending plans in real time. We do not have a committee that permanently interrogates waste in government, proofing for good priority and busting waste, but that is what we need. There is no point setting up ever more independent offices of this and independent offices of that, when we do not give this House the tools it needs to provide joined-up scrutiny. We hear a lot about joined-up government, but we do not have joined-up scrutiny. We should take added measures, on top of those put through in the last Parliament.

I urge the Government to lead us in changing the Budget by reclassifying the Budget lines, so that we have one for front-line services, say, and one for spending that does not go fully to front-line services but broadly supports them. We should have three or four, but no more than five, classes of Budget line so that we know immediately if a measure affects front-line services or just administrative spend. We could then be more honest when we say that we are defending front-line services, because we would have a Budget information system that allowed us to do just that.