Amendment of the Law

Stephen Lloyd Excerpts

Tuesday 29th March 2011 Commons Chamber

[Mr Duncan Smith]

I am bowled over by that—what can I say? That was a timely intervention by my hon. Friend. I apologise for not producing that point myself. It is yet more evidence that this Budget, which was shaped by my right hon. Friends the Chancellor of the Exchequer and the Chief Secretary to ensure that Britain is open for business, has opened it for business. That is what business men are saying.

I want to bring one more person to the attention of the House. This tribute is perhaps more difficult for the Opposition to cope with. It is from none other than Duncan Bannatyne—a great name. He said:

“This Budget has convinced me that George Osborne is serious about growth and enterprise.”

I remind the Opposition that he was a huge and strong supporter of the previous Government. Even when almost every other business man had deserted them, he still supported them. To use his own wise words, he has said, “I’m in!” I think that the rest of the country is too.

Getting to grips with the public finances is just the starting point, not the destination. Of course we have to balance the Budget, but this Government are about much more than that. Our ambition is to make the next decade the most dynamic and entrepreneurial in Britain’s history. That is why we have set out plans to create the most competitive tax system in the G20. That is why we are reducing the rate of corporation tax yet further from 28% to 26% in 2011-12, and crucially, all the way down to 23% from 2014-15. That will give the UK the lowest rate of corporation tax in the G7. I thought that I would hear a cheer from the Opposition for that, because they must surely want that to happen. Perhaps they do not.

That ambition is why we are making the UK the best place in Europe to start, finance and grow a business. We are supporting small firms with a moratorium on domestic regulation, which will give them a real chance to plan and to get going. We are investing £100 million in science capital development. That ambition is also why we are encouraging investment and exports as a route to a more balanced economy. We are setting up 21 new enterprise zones with superfast broadband, lower taxes and low levels of regulation and planning controls.

From our perspective, we can see that even as the economy grew under the previous Government, too many people in this country missed out. More than half the additional jobs that were created went to foreign nationals. It is therefore hardly surprising that youth unemployment was higher when we came into office than when Labour took power. As growth picks up again, we have to ensure that this group does not miss out once more. Some 900,000 additional jobs will be created over the course of this Parliament, and our welfare reforms are about ensuring that our people are ready and able to take them.

The previous Prime Minister spoke about British jobs for British workers, but the reality is that most of the jobs did not go to British workers. That point is not about immigration, but about supply and demand. We have to ensure that British workers are ready and able to take the jobs. That is why this Budget introduces new and hugely welcome measures to provide extra support for young people. They will be helped to find sustainable jobs in the private and voluntary sector. We will fund an additional 50,000 apprenticeship places over the lifetime of this Parliament, and importantly, 40,000 of them will be targeted at the young unemployed. That is on top of the 75,000 places announced last year.

Overall, with the new measures in the Budget, the Government will deliver at least 250,000 more apprenticeships over the next four years compared with the previous Government’s plans. Those apprenticeships will be very valuable, because they will give young people in particular, but others as well, real training, real skills and a proper job at the end of it.

Alongside that, we are aiming to assist in the process of getting apprenticeships by providing up to 100,000 work experience places over the next two years. Those placements will last a minimum of eight weeks, rather than the two weeks made available under the previous Government. We will also offer employers an extra linking month when it will provide a route into an apprenticeship. If an employer says after the eight weeks that they will put a young person into an apprenticeship, or even into work, we will be prepared to give the young person an extra month of work experience so that the employer can sort out whatever is necessary without having to let them drop out of the company.

That work experience will be a crucial head start for young people. As David Frost of the British Chambers of Commerce said in January:

“Employers will be key to getting young people into work. This programme is a way of not only providing quality work experience but also of introducing individuals to the modern world of work.”

The programme has also got the backing of Hayley Taylor, star of Channel 4’s “The Fairy Jobmother” series, whom I saw the other day—a great woman. She has said:

“It’s hard to get a job with no experience, and you can’t get experience without a job. That’s why this work experience scheme is a really good idea.”

However, this Budget is not just about securing the position of workers today; it is also about securing their position in the future, as they enter retirement. We have done a great deal for current pensioners. We have restored the earnings link and given a triple guarantee that the basic state pension will rise by the highest of the growth in average earnings, the prices increase or 2.5%.

[Stephen Lloyd (Eastbourne) (LD)]

Hear, hear.

[Mr Duncan Smith]

Yes, exactly. That will provide a really generous state pension that gives a firm financial foundation. Someone retiring today on a full basic state pension will receive £15,000 more over their retirement than they would have done under the old prices link. We have also permanently increased cold weather payments from £8.50 to £25.

Notwithstanding the prospects of today’s pensioners, the prospects for the next generation are very different. I hope that Members of all parties will recognise that those who are not near to receiving their pension, and who perhaps are just starting their career, face a very difficult time indeed.

--- Later in debate ---

[Mr Byrne]

No.

Why are the Government not doing more to help? Because the cost of economic failure is sending the benefits bill through the roof. Last week we learnt from the detail of the Budget book just how big that bill has now become.

This afternoon the Secretary of State liked to boast about his reforms of housing benefit, but forgot to tell the House that the housing benefit bill is projected to rise by more than £1 billion in the next few years. In the small print of the Budget we saw something more: his benefits bill over the next few years is now projected to increase by £12.5 billion. That is £500 for every household in the country.

Almost as shocking is what will happen to the unemployment bill as a result of the Secretary of State’s great endeavours to get so many extra people back to work. When the Chancellor came to the House last year, he somehow forgot to tell us that as a result of his Budget higher unemployment figures would increase the dole bill by £700 million. Now we learn that it is going to go up again, by another £1.9 billion. In other words, since the Government came to office they have put the unemployment bill up by £2.6 billion. That is an indictment of their record in getting people back to work. In fact, £2.6 billion is the same amount that the Government are cutting from tax credits for people with children. The right hon. Gentleman is cutting support for our children in order to pay the bills for his economic failure.

What does this mean for the average British family? A single earner family with a child and an income of £23,000 will lose £400 a year. The Secretary of State may not care about what is happening to ordinary families, but I assure him that plenty of people are interested in the bills for his economic failure. Households with child care costs will be hit even harder. A family with average child care costs will lose nearly £500 a year, and for some it will be even worse. A single earner on the minimum wage with two children will lose more than £2,000 a year—6.5% of his or her income. Even for low earners, any gains that they make as a result of changes in income tax and child tax credits will be wiped out by the VAT rise. The Secretary of State is squeezing Britain’s families harder than ever to pay for his failure to get the country back to work. Does that not sound all too familiar?

[Stephen Lloyd]

In my constituency, the average family household earns £27,500. According to the BBC’s calculator, if the household contains two children under 16 and both parents are working, the family will be just over £700 per annum better off as a result of the Budget.

[Mr Byrne]

But the challenge from this Budget is that there are simply not enough winners, because the bills for sending people to the dole queue rather than back to work are now going through the roof. Surely the hon. Gentleman recognises that more than £2.5 billion in extra dole bills does not constitute a wise use of public money. If only the Chancellor would do more to get people back to work, the squeeze on working families would not be anywhere near as hard.

Finally, we must ask what the Budget means for some of the most vulnerable people in our country—the people who are in need of help from the wider community, and those who need extra support in order to live a full life in one of the world’s biggest economies. I know that, like me, the Secretary of State believes that a country as rich as Britain should have high, not low, standards of civilisation and compassion—but the Chancellor is pressing ahead with measures that will deny thousands of people their independence. The question that the House must ask is: what is the Secretary of State doing to stop it?

The right hon. Gentleman told the House yesterday that after his review of DLA had been completed the mobility component for people in care homes would still exist, but he still cannot explain why the Chancellor announced that he was taking £400 million more out of the mobility component than previously planned. The Budget confirmed that he would press ahead with his abolition of DLA. I repeat that we support the right kind of reform of DLA, but no matter how he tries to dress it up, he is taking £2.9 billion out of a well-targeted benefit, and he himself is saying that 170,000 fewer people will receive the benefit by the end of the Parliament. That is £8,500 per family. With figures like that, surely he can understand why so many people with disabilities up and down the country are so worried.

Finally, it was confirmed in the Budget that the Government are pressing ahead with their plans to limit employment and support allowance to just one year. The Secretary of State has a chance to fix that in Committee on the Bill, but the Budget confirmed an ambition to save £3.5 billion from people on ESA. However, he knows as well as I do that many people do not recover from cancer in under 12 months, and he also knows that cancer charities up and down the country are now asking him to think again.

--- Later in debate ---

[Jack Dromey]

Bankers’ bonuses and, as our Front-Bench team proposes, among other things, we would have a sensible programme of investment, just as we invested in the construction industry to get it going at a time of recession, providing 110,000 homes, 70,000 jobs and 3,000 apprenticeships. We would invest now in a fresh stimulus package of much-needed social housing, creating jobs, apprenticeships and hopes. That is what we would do, and that is the difference between them and us.

The police, too, are feeling the consequences. This Friday 300 of the most experienced police officers in the west midlands will be forced out under regulation A19. I was with five of them this morning. They included an inspector, the national champion of designing out crime, who on one Birmingham estate achieved a 97% reduction in crime levels; a sergeant leading an excellent team of neighbourhood policemen; and a detective constable, the specialist in robbery, who has put away those who robbed old people at cash points and those who robbed shops with a machete. They all now face having to leave the force against their will. The Government have said to them, “Thanks for your past loyalty, but here’s your notice.” Governments should cut crime, not the police.

With regard to the impact on the private sector, 1.2 million people in that sector depend on public expenditure, particularly the £38 billion spent on local government procurement. If local government budgets are cut by 28%, major job losses in the private sector are inevitable. The estimate for the midlands is that 67,000 jobs will go as a consequence of what is happening in local government.

On rebalancing the economy, the Government have abolished the most successful regional development agency in Britain—Advantage West Midlands—and put in its place local enterprise partnerships that have no money, no power, no statutory basis and no power over skills. The planning proposals are a cocktail of confusion and the regional growth fund has only a third of the funds that were available to the RDAs. Incidentally, the RGF is the most elastic fund in history, designed to cope with all sorts of applications according to the Government.

Then there is the impact on the voluntary sector, the good society. Billions will be lost to the voluntary sector, including, in Birmingham, the oldest citizens advice bureau in Britain and 13 advice centres—all facing closure. The CAB was founded in 1938 and is the quintessence of the good society. Excellent people give first-class advice with an army of volunteers, but, just when the people of Birmingham need their support and advice most, those centres are facing closure.

My constituency of Birmingham Erdington is one of the 10 poorest in Britain, but it is rich in talent, with young people who are deeply aspirational and want to get on. What now haunts the people of Erdington is the spectre of the 1980s and TINA: there is no alternative. I know families in Erdington, Kingstanding and Castle Vale, where excellent men and women in the 1980s were made redundant two, three, four, five times. Some of them never worked again, because they gave up hope. The idea that once again the spectre of mass unemployment should haunt north Birmingham is absolutely wrong.

[Stephen Lloyd]

Is the hon. Gentleman aware that, after 13 years of Labour Government, there are 2 million children in households where no one works?

--- Later in debate ---

[Chris Ruane]

I will deal with that shortly; the hon. Gentleman does not have to worry about that.

In my constituency, there are already six people chasing one job. If the Government implement these 10% to 25% cuts in the public sector, another 2,000 to 3,000 people will become unemployed, with 20 people chasing each job. The Government state that they want the private sector to take up the slack of jobs in the public sector. What have they done to promote that in my constituency? Nothing. One of the biggest employers in north Wales is Sharp, which has the biggest solar panel factory in the whole of western Europe. There is also Kingspan in Delyn. In my constituency, we have the Technium OpTIC centre, which has the biggest solar panel in the whole of the UK. The changes to the feed-in tariff that the Government have announced will mean that these sectors are hit, and there will be job losses, not job expansions, in my constituency. An article in today’s edition of The Guardian stated that the UK had gone from third to 13th in green technology jobs in one year. This is not a green Government.

Young people in my constituency were looking to the Chancellor to help them to gain employment. They had help from the previous Government—a Labour Government. In my constituency, the Rhyl city strategy put 450 young people back to work in the space of 12 months. They were given hope; they were given a wage packet; they were given a future. All that has ended. The last day of the future jobs fund is tomorrow; after that, there will be nothing like it in my constituency.

Another article today in The Guardian mentioned that seaside towns and communities have the worst deprivation in the country. This Government did nothing to help those seaside towns; in fact, they worked against them. The changes that they have made to housing benefit will mean, as Boris Johnson has said, a Kosovo-style clear-out of the inner cities, especially London. Where will those people go? They will go to houses in multiple occupation in towns such as Weston-super-Mare, Hastings, Margate, Jaywick, Rhyl, Colwyn Bay and Blackpool. They will be moved from areas of employment to areas of unemployment, where slum landlords will make money out of misery—helped, aided and abetted by the Conservatives, who are altering the rules and regulations on the licensing of slum landlords.

[Stephen Lloyd]

Is the hon. Gentleman aware that according to figures that I received last week on Eastbourne, which is of course a splendid seaside town, the unemployment rate for February 2011 was down by 340 compared with February 2010? We welcome anyone to whom we can hope to give jobs in Eastbourne, which has a successful economy.

[Chris Ruane]

What will the figures be in February 2012?

I speak from the perspective of a Welsh MP in a seaside town in an area with high public sector employment. We had made progress under the Labour Government, who created an extra 7,000 jobs over a 13-year period, with 3,500 in one business park alone—St Asaph business park, built by the Tories, empty under the Tories, and full under Labour. We were able to achieve that because we engaged with Europe. We applied for objective 1 funding—something that the Tories never did in their 18 years—and we got it. In my county of Denbighshire, we have had £124 million over the past seven years to create jobs, and we have done that. We have engaged with the Welsh Assembly Government; I give some credit to Plaid Cymru in this regard. Plaid Cymru and Labour, in a proper, working coalition, have pumped £38 million into five principal seaside towns along the north Wales coast: Prestatyn, Rhyl, Towyn, Kinmel Bay and Colwyn Bay. We have engaged with the Department for Work and Pensions in running national pilots in Rhyl—the Rhyl city strategy and Fit for Work.

We have put hundreds of people back to work, not by shaking a big stick at them but by engaging with them. I am talking about drug addicts, alcoholics and ex-prisoners who are now making honey on a farm in Wales. I am talking about Rhyl football club, which is using football as a means to connect with parents and children. I am talking about Rhyl college and the Hub young people’s centre, which has 1,000 young people engaged with the back-to-work agenda. We have made progress, but all that is under threat from the Budget that we have witnessed.

We saw the Tories at work in the 1980s. We have seen what they did to coal, steel and inner-city communities. Remember the riots; remember the closure of the pits and the steelworks. That legacy is still being felt in many of those communities today. I make a prediction: if specific help is not given to areas with high public sector employment, then we will be looking at those areas as the new coal, steel and inner-city communities of this Parliament. Specific help must be given; otherwise, it will be back to the future—back to the 1980s.

--- Later in debate ---

[Graeme Morrice (Livingston) (Lab)]

Thank you for calling me to speak, Madam Deputy Speaker—although I am from Scotland, I can get your title right.

The Budget has been billed as the Budget for growth and jobs, yet many right hon. and hon. Labour Members have already demonstrated ably why it has failed to live up to its billing on growth. It is also crystal clear that it is not a Budget for jobs either. Unemployment continues to rise, reaching a higher level than at any point under the previous Labour Government, yet the Chancellor’s Budget did next to nothing to address that serious issue.

The Government, like all previous Tory Administrations, basically believe that rising unemployment is a price worth paying. When they say that we are all in it together, we know that what they really mean is that the vulnerable, the unemployed and the poor are all in it together as they will bear the brunt of the Government’s reckless policies.

Labour’s priority in responding to the recession was to keep people in work. The previous Labour Government were determined to prevent the same devastation to families and communities that the Tories presided over in the 1980s and early 1990s, when unemployment rose to more than 3 million. Labour’s strategy was working and unemployment was falling, but now, less than a year into the life of this Government, unemployment is rising again, reaching its highest level for 17 years. That should have put jobs at the forefront of the Chancellor’s plans last week, but the evidence from his statement proves otherwise.

The £20 million funding allocated next year to support initiatives aimed at creating jobs is a pitiful amount in the grand scheme of things and the centrepiece of the Government’s plans for promoting the creation of new jobs, the establishment of 21 enterprise zones in England—not applicable in Scotland—simply takes us back to the failed past of the Thatcher and Major years. Indeed, entrepreneur William Chase, founder of the Chase distillery and Tyrrells crisps, described the plan for enterprise zones as a “criminal waste of cash”. He said:

“The Thatcher government wasted huge amounts of cash on enterprise zones in the eighties. They didn’t work then and I don’t see any reason why they should work now.”

According to a recent Centre for Cities report, which my hon. Friend the Member for Rochdale (Simon Danczuk) mentioned earlier, the cost to the public purse of each additional job created in an enterprise zone during the 10 years of the programme was estimated at £17,000 at 1994-95 prices or £26,000 at 2010-11 prices, yet Labour’s future jobs fund cost only £6,500 per job created and the new deal for young people just £3,500 per job.

[Stephen Lloyd]

Is the hon. Gentleman aware that recent research showed that 50% of people who had been placed through the future jobs fund were unfortunately back on benefits seven months afterwards? Does he agree that that shows that it might not have been money well spent?

[Graeme Morrice]

And 50% of those people continued in full-time employment.

The Centre for Cities report also said that most jobs had simply been displaced from elsewhere and so they may bring short-lived prosperity to one area at the expense of another. That point was ably made earlier by my hon. Friends the Members for Wolverhampton North East (Emma Reynolds), for Kilmarnock and Loudoun (Cathy Jamieson) and for Newcastle upon Tyne North (Catherine McKinnell). Given the Government’s professed enthusiasm for efficiency it seems bizarre that they should pursue such an inefficient means of creating new jobs, but when it comes to unemployment the Tories continue to be stuck in a time warp. They believe that the Thatcherite policies of the 1980s are the solution to today’s job crisis, but we know they are no more the solution now than they were then, when millions were left on the unemployment scrap heap.

The most alarming aspect of unemployment today is the UK’s high level of youth unemployment. As Members will know, the number of unemployed 16 to 24-year-olds increased by 30,000 in the last quarter to reach nearly a million—some 20% of all young people—which is the highest figure since comparable records began in 1992. The Government have been pretending that this is somehow not their problem and that they are not responsible for that record high, but let us look at what they have done since taking office last year. They have axed Labour’s future jobs fund—a criminally short-sighted decision—they have axed the education maintenance allowance, thereby disincentivising young people to stay in further education and improve their skills, and they have axed other employment schemes that were aimed at supporting into the workplace young people who have been out of work for more than six months. Let there be no doubt that this Tory Government and their Lib-Dem pals are the ones who are responsible for the record levels of our young people out of work.

Youth unemployment in my constituency stands at nearly 1,000, which is certainly not the worst figure in the country by any means, but every unemployed young person is one too many. I know from speaking to young people in my area that many feel a sense of hopelessness about their situation. They feel that little is being done to support them, that no one in Government cares about their plight and that their future is bleak. Once again, a whole generation of young people is being cut adrift by the dogmatic policies of the Members on the Government Benches.

The Government’s work experience placements will not improve young people’s employment prospects in the same way that six months of real work would. The Department for Work and Pensions has already said that

“the target group for work experience will be a very small proportion of young claimants aged 18-21”

and that it is not about guaranteeing young people a permanent job. The extra 12,500 apprenticeships a year announced in the Budget are woefully inadequate given that nearly a million young people are out of work and need help.

The Federation of Small Businesses has said that the Chancellor’s Budget did not go far enough to incentivise job creation, so action on job creation is another clear dividing line between the Government and the Opposition. The Government stick with their reckless cuts and do nothing to address the record level of unemployment, particularly youth unemployment, that they are presiding over.

--- Later in debate ---

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

I must tell the hon. Member for Witham (Priti Patel) that her speech was a bit like “all our yesterdays”. The one thing that she did not seem to think would create jobs in this country was slashing the national minimum wage, and I was surprised that she did not suggest that.

Today’s debate opened with one of the most lamentable speeches that I have ever heard the Secretary of State for Work and Pensions deliver, in which he presented—as have other Government Members—the rosy view that the Government’s proposals will automatically create jobs, that there will be people who will be qualified to fill them, and that the future will be golden. If we look at the Red Book, which Government Members have waved in our faces on many occasions, we see that what the Government are setting in train is a Budget that will create a vast increase in unemployment. Unless they intend to abolish the whole benefits system at a stroke, an astronomical amount will have to be spent on unemployment benefit and passported benefits—although, of course, they may wipe all those out as well.

Government Members have the audacity to accuse us of frightening some of the most vulnerable people in our society, but it is not us who are frightening them. In my constituency and in those of Government Members, it is the Government who seem to look at nothing but the bottom line. It is they who introduce swingeing policies which, nine times out of 10, do not mesh, and the Secretary of State responsible for delivering those policies does not know what impact they will have on the ground.

A precise example from today’s debate was what I understand to have been the initial proposal from the Department for Work and Pensions in regard to jobseeker’s allowance and housing benefit. It was proposed that 10% should automatically be slashed from the housing benefit of anyone who had failed to find a job after 12 months on jobseeker’s allowance despite doing everything demanded by the Government—and that is housing benefit which is being capped.

It is to his shame that, in his opening speech, the Secretary of State ran again with a canard that he is on record as saying he hoped would not be fulfilled: that the majority—he did not use the word “majority”, but it was implied—of people on housing benefit are living in properties where the rent is £100,000 a week. Everyone in the House, and certainly the Secretary of State, ought to know that the majority of people claiming housing benefit are pensioners, people with disabilities, or people on very low pay.

Many hard-working families in this country are entirely dependent on housing benefit. Nowhere is that more marked than in constituencies such as mine in central London, where housing, travel and training costs are vastly above the national average. However, nothing in the Budget appears to acknowledge regional variations, which will of course affect the potential for people to find jobs even if the private sector is capable of providing them.

Another remarkable feature of many speeches from Government Members was their contempt for public sector workers. It seemed that none of them wanted additional nurses in their hospitals, additional doctors in their surgeries, or additional teachers in their schools. Certainly we know that they do not want more policemen, because their numbers are being slashed all over the country, as will be the very people on whom the most vulnerable in our society depend.

That, of course, is the other great canard. This Government came into office saying that they would take tough decisions. They said the road was bumpy, but that they would protect the most vulnerable. They have betrayed the most vulnerable, however—the very young, the very old, people with disabilities. Women are a marked target for this Government. We women are clearly expected to have the broadest shoulders in the country because the cuts will fall on us. The Government are expecting women to go back to work—if there is a job to go to, of course—while at the same time taking away child care support, which is the absolute bedrock that enables a woman with children to go back to work.

The Government have markedly failed to think through their grievous policies. This is not a Budget for investment or growth. Rather, this is the Budget of a group of people who have markedly failed to understand the realities of the situation facing millions of people in this country who do want to work, who wish to take this country forward, and who have optimism and believe in all of us. The people who do not believe in the people of this country, or indeed in this country itself, are the Conservatives.

[Stephen Lloyd]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

One more Member wishes to speak, but unfortunately I cannot call him. I apologise for that. The Chancellor has also sent an apology, as he has been called away to the G20.