Welfare Reform Bill

Steve Baker Excerpts

Wednesday 9th March 2011 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op)]

This is a mean-minded, ill-thought-out Bill that is not designed to promote fairness or help people into work. Rather, its purpose is to punish the poor, the disabled, those with children, those trying to save and those starting a small business for the cost of the greed and recklessness of City bankers, who created our deficit. That is laid at the door of the poor, while those responsible indulge in sharing £8 billion of banker bonuses under a system propped up by the taxpayer, whereby if risks go wrong the public pay and if they go right the bankers profit.

[Steve Baker (Wycombe) (Con)]

I share the hon. Gentleman’s sense that the banking system is responsible for the greatest injustices in our society, which I fight often, but, as has been pointed out, these reforms long predate the banking crisis.

[Geraint Davies]

I shall come on to the reforms.

The deficit was the price paid to avoid a depression, and the Government had a clear choice: they could halve the deficit in four years by focusing on economic growth and making the bankers pay their fair share while also making savings over time that are fair and do not harm economic growth. The alternative, which the Government have chosen, was to cut the deficit at twice that pace, clearing it in half the time—in four years. That is a “formidable” challenge, according to the Institute for Fiscal Studies, which says that the Government need a plan B.

There is an over-reliance on savage cuts, particularly to public sector jobs and the welfare benefits we are considering today. That will throw whole communities into poverty, with a third of a million public sector redundancies triggering a further 1 million private sector job losses, which will cost an extra £7 billion a year in benefit costs and lost tax. The benefits of those thrown on to the dole will be cut, forcing them, in the worst instances, into community projects like criminals when they cannot find work. Why is this happening? It is happening because the Government have thrown a bucket of water over the embers of economic growth that Labour had kindled.

--- Later in debate ---

[Steve Baker (Wycombe) (Con)]

I rise to speak in support of the Government, very conscious that a large number of people will have legitimate and sincere concerns about the Bill. For example, I asked one local activist, who leads the Zacchaeus 2000 Trust, to critique the Prime Minister’s recent speech, and his response ran to 23 pages. I regret that due to the time I will not be able to share his concerns, but I will forward them to the Government, as a matter of interest.

I do not think there can be any doubt that the system is currently failing the very people that it is intended to help. I want to share with the House two stories from my constituents—one that shows the imperative for change and one that has slightly broader applicability.

Miss Rachel Pepin came to see me in a state of some anguish. She is a struggling single mum who wants to work more. She is in employment and the work is there for her, but she cannot take it because of the benefits system. She has two sons whose father will not support them. It seems that every time the Child Support Agency catches up with him, he drops out on to jobseeker’s allowance. Her current housing benefit receipt makes it profitable to stay on income support and actively not to seek work. She has reached the conclusion that it simply does not pay her to stay in employment. She sees her neighbours—on benefits—better off than she is.

I am glad to say that that is not how Rachel Pepin wants to live. She wants to work, and she is struggling against the treacle of the present system. It is letting her down, and that must end. Not everyone will share her admirable work ethic. Many will make the wrong choice when faced with the choice between being better off and doing the right thing. We must ensure that work is better for everyone, or we will encourage the decivilising consequences of the state encouraging bad choices.

My constituent Mr David Laws—[Interruption.] I expected that response from the House; I believe that he is not related. Mr Laws is most concerned about the recent changes that will end home loan interest payments after two years. He wishes to protest most strongly about the “unfairness of this legislation”, as he puts it. He has been out of work for some time. He says he is not workshy. He has a law degree and has experience of both public and private sectors. At the age of 51, he finds that many employers do not think him suitable for the low-paid jobs that are available. He finds himself willing to do anything but unable to find work. He therefore faces the very real possibility of losing his home if he fails to secure a job before April 2012.

That puts me in mind of two points. First, I think Mr Laws has a legitimate concern, which must be addressed. Secondly, if we cannot create an economy in which Mr Laws can find a job within a year when he is highly qualified and at the peak of his productivity, we will have failed. I urge the Government to impress on the Chancellor the need to fulfil his pledge for an enterprise-driven Budget. We simply must deliver those private sector jobs.

Given the time and the fact that other Members wish to speak, I conclude by echoing the sentiments put succinctly in the Centre for Social Justice report, “Breakdown Britain”:

“The more we struggle to end poverty through the provision of benefits, the more we entrench it. By focusing on income transfers rather than employment, the system makes people dependent on benefits. Habituation to dependency destroys individuals and communities, as well as reducing the overall competitiveness of the UK.”

I listened to my hon. Friend the Member for Truro and Falmouth (Sarah Newton), who made the case brilliantly that the moral and intellectual high ground is on the coalition side of the House, and I agree with her.

We have heard a range of Opposition speeches. I welcomed the speech by the right hon. Member for Stirling (Mrs McGuire), who accepted that the Government’s intent is good. I share her concern that the Bill, in a sense, is enabling, but unlike her I suspect that in a complex welfare system it is necessary to give the Government some flexibility.

[Mrs McGuire]

On flexibility, does the hon. Gentleman recognise that the 300-odd regulations defining what is meant by the Bill should be before us today?

[Steve Baker]

I hear the right hon. Lady, as have Ministers, but as I have so little time, I hope she will forgive me for finishing my contribution.

I was glad to listen to the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett). In an intervention, I agreed with another Member that the banking system is currently the source of great injustice, but some of the contributions from the Opposition seemed cynically opportunistic. There has previously been broad agreement across the House that there must be change. I urge Members in all parts of the House to get on board a welfare reform that is well intentioned and must be seen through.