Universal Credit Roll-out
Steve Reed Excerpts(7 years ago)
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Mr Steve Reed (Croydon North) (Lab/Co-op)
I congratulate the hon. Member for Banff and Buchan (David Duguid) on a really powerful maiden speech. He made a good case for getting up to visit Banff and Buchan, so I will be booking a trip there as soon as possible to taste the whisky and see the wildlife that he talked about. He is a wonderful advocate for the area.
The hon. Gentleman also looked incredibly confident and relaxed as he gave his speech. I think back to how nervous I felt when I gave my maiden speech, but he made his like an old pro—[Interruption.] Seasoned might be a better term. We can look forward to many more excellent contributions from him and I wish him very well in his career in this House.
I thank my right hon. Friend the Member for Birkenhead (Frank Field), who is no longer in the Chamber, for securing this important debate. Croydon was one of the first boroughs to experience the roll out of universal credit, so we have had longer to see what a total and utter disaster it is. A long and growing stream of people have come to my office, many of whom have been close to tears because universal credit has forced them into debt. It has made it harder for them to stay in work and left many of them facing eviction for rent arrears.
Our local council has had to spend £3 million so far to stop people from being evicted because of late rent payments. Local food banks are running out of food because of the vast increase in demand from people who are going hungry because of what the Government’s scheme has done to them. More than 1,000 tenants in Croydon have over three months’ rent arrears and are at risk of losing their home because of the failures of universal credit.
Stephen Timms
Does my hon. Friend agree that one of the problems—it is certainly not the only one—although it is denied by Ministers, is the fact that the IT system for universal credit is not yet working properly?
Mr Reed
I absolutely agree with my right hon. Friend. I cannot for the life of me understand why the Government insist on ploughing ahead when it is quite clear that the IT system is not fit for purpose. They should pause the process and fix that before they inflict this damage on any more people.
According to my council’s figures, a tenant on housing benefit—the legacy system—had an average rent account that was £42 in credit. Under universal credit, a tenant has an average balance of £722 in arrears. This is supposed to be a system that helps low-income families, but it is instead forcing them into debt and out of their homes.
I wish to share just a few short examples from my own casework, and I suspect that we will hear many, many more throughout the debate. One constituent told me that he had £1,400 of debt and two months’ rent arrears because of errors with her universal credit. She had no money to buy food for her family or to heat her home.
A mother of five children was left waiting nine weeks for her first payment. She works part time and is desperate to keep working. She wants to do exactly what the Government tell her that she should be doing, but the new system has let her down and pushed her into debt.
A pregnant mother with two young children came to see me. She was not eating properly because of debt, which posed a serious risk to not only herself, but her unborn child. She had no option but to take out several high-interest payday loans and has been threatened with eviction because of underpayments. It is outrageous to leave anyone in those circumstances, let alone a pregnant woman.
Severely disabled people face the particular problem that universal credit does not include a severe disability premium. Although the Work and Pensions Committee raised its concerns about precisely that earlier this year, as yet the Government have done absolutely nothing.
Under the current system, a person with severe disabilities in receipt of income-related employment and support allowance with a severe disability premium gets £172 a week. Under universal credit, that is cut to just £146 a week. I became aware of that when our citizens advice bureau referred to me the case of a claimant with severe mental ill health who was moved on to universal credit when he became liable for housing costs. The effect was that he lost more than £100 from his benefits to cover his living expenses, and he had no transitional protection because he had experienced a change of circumstances. When a person has so little income, financial loss on such a scale is utterly devastating.
Universal credit is an unmitigated disaster for hundreds of the most vulnerable people in Croydon North. If the roll-out continues before the system is fixed, those hundreds will become thousands. People just cannot cope. What kind of system penalises the poor, and forces people out of jobs and on to benefits and into food banks? The Secretary of State for Work and Pensions and the Minister for Employment must do what this House instructed them to do in a recent vote: pause and fix the system before it devastates any more lives.
Jobs and Work
Steve Reed Excerpts(10 years, 5 months ago)
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Vince Cable
The fact that youth unemployment has fallen by 100,000 in the last year is significantly owing to the youth contract, as is the advance in apprenticeships—and the shadow Secretary of State’s comments on apprenticeships were an absolute travesty. We know that there has been a big increase in terms of both quantity and quality, and, of course, the support given to employers so that they can take on young people has been an important and extremely positive element of the youth contract.
Mr Steve Reed (Croydon North) (Lab)
One of the problems is that all too often under this Government work simply does not pay enough. Does the Secretary of State accept any responsibility for the fact that since the Government came to power, the number of working people claiming housing benefit in Croydon has increased by 1,100%?
Mr William Bain (Glasgow North East) (Lab)
Like many right hon. and hon. Members, I have been troubled, particularly in the past few months, by the growing disconnect between the politics in this House or the constitutional politics of the referendum in Scotland and the real-life experiences of our constituents. With wage growth yet to take hold in any sustained way after the longest period of falling real wages in our history, and with productivity remaining weak and investment low, it is no wonder that claims made by Ministers in this House about a recovery for all count for so little with real Britain.
This Queen’s Speech was this Government’s last opportunity to deal with the huge underlying problems in our society that mean, as the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), admitted in a rare bout of candour from this Government, that ordinary people are not experiencing any kind of recovery in their living standards. The failure of this Government over the four Queen’s Speeches of this Parliament will make even worse the sense of alienation that people feel in communities up and down this country.
However, my discussions with 2,500 constituents on the doorstep in the past month have shown me that people have not given up. Civil society is helping to fill the yawning gaps that this Government are leaving—for example, with the explosion in the use of food banks. They need and deserve a Government who are listening, have a plan for change and are in touch with their lives.
Just as it was Labour in opposition in 1945, 1964, 1974 and 1997 that offered hope that Britain could be better, so it falls to Labour Members now to speak up for the millions of ordinary people who yearn for change and yearn for them to be their voice. In this debate, let us be the voice for the 1.4 million people in this country, including the 120,000 in Scotland, who work part time but need full-time work because of declining wages. Let us be the voice for the tens of thousands of young people suffering for years on end from mass unemployment whom I have encountered in my constituency in the past few months. Let us be the voice for the low-paid and low-skilled workers who need a workplace skills revolution to boost their wages now and to secure greater prospects for the future. Let us be the voice for the 5 million people in this country who go to work and do the right thing, but take home less than the living wage—working longer and longer hours, but finding less and less to show for it.
Mr Steve Reed
My hon. Friend makes a very important point about the living wage. Will he join me in congratulating the six boroughs in London—all of them Labour—that are already living wage employers, and in welcoming Croydon’s intention to join them, now that Croydon also has a Labour council?
Mr Bain
I am most happy to congratulate Labour borough councils up and down the country on those efforts. That shows what Labour can do when it has power. It also shows the difference between the values of Labour and the Scottish National party at Holyrood, which had the opportunity to extend the living wage several weeks ago, but failed resoundingly in that task.
With three in 10 of my constituents who are in work taking home less than the living wage, a Queen’s Speech for the many would have changed the remit of the Low Pay Commission to raise the minimum wage in line with trends in average wages for the next five years.
A Queen’s Speech for the many would have begun the task of reorganising the banks to ensure that they serve ordinary people and businesses, not the other way around. There should be new challenger banks to introduce more competition in the retail banking sector; new regional banks to support SME lending, as the Sparkassen have done for decades in Germany; a national investment bank, modelled on the successes in Germany, France, the United States and South Korea; and an unshackled green investment bank that is able to drive investment in the renewables sector, with the potential to create tens of thousands of skilled jobs in our economy.
To secure fairness for the disadvantaged, there should have been a Bill to raise the taxes on bank bonuses to help pay for a jobs guarantee for long-term unemployed young people and other jobless people, who are crying out for the opportunity to work and who have been let down so badly by this Government and their Work programme. Perhaps when the Prime Minister was trying to rock the boat with Chancellor Merkel and the Swedish and Dutch Prime Ministers over the EU the other day, he should have taken a steer from them about how jobs guarantee policies in Sweden have benefited employers, given opportunities to young people and helped the public finances.
With 1.4 million people in insecure jobs with no guaranteed hours, a Queen’s Speech for the many would have offered the right to defined working hours after a short period in a job. People in Glasgow have told me about the uncertainty that a lack of guaranteed hours is causing them—uncertainty in their family finances, uncertainty over whether they can pay the bills and uncertainty in planning for a decent future.
Given the increasingly skewed jobs market and the lack of skilled service, construction and manufacturing jobs, a Queen’s Speech for the many would have contained measures to boost exports, which remain desperately weak, and to boost investment by businesses, particularly in research and development.
For a stronger recovery that reaches every part of these islands, we need a Queen’s Speech that expands opportunity, boosts incomes and cuts inequality. We need a fresh start and a new Government to replace this tired and clapped-out coalition—a Labour Government for the many, by the many and of the many.
Oral Answers to Questions
Steve Reed Excerpts(11 years ago)
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Mr Duncan Smith
I agree with my hon. Friend. The reality is that of more than 19,000 householders capped in mid-September 2013, 60% were lone parents and 78% were capped by £100 or less a week. This is a system that is returning fairness to the whole programme. The Opposition opposed the cap, and it is worth remembering that even though the trade union leaders opposed it, 80% of Unite members support our policy on welfare reform, as I discovered from a poll the other day.
Mr Steve Reed (Croydon North) (Lab)
6. What progress he has made on delivering his target of 160,000 Youth Contract wage incentives by April 2015; and if he will make a statement.
Barbara Keeley (Worsley and Eccles South) (Lab)
13. What progress he has made on delivering his target of 160,000 Youth Contract wage incentives by April 2015; and if he will make a statement.
Mr Reed
As the Secretary of State is well aware, in the first 14 months of this programme his Department delivered less than 3% of what he promised. Together with the appalling underperformance of the Work programme, and with Ministers and civil servants at each other’s throats over the chaotic introduction of universal credit, is this not yet another example of how this Secretary of State promises much but delivers little?
Esther McVey
I am quite sure that what the hon. Gentleman was reading out was a piece of fiction and I would like to give him the correct figures. The Youth Contract is made up of many component parts. One is wage incentives, and there is a wage incentive for apprenticeships, and another is for work experience. Of the 113,000 people who went on work experience, 50% have a job, and 21,000 have wage incentives, and that figure is rising by 4,000 a month. Youth unemployment has fallen for 17 consecutive months. In the hon. Gentleman’s constituency, it has fallen 35% in the last year. Perhaps he wants to congratulate us on that.
Jobs and Business
Steve Reed Excerpts(11 years, 6 months ago)
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Vince Cable
There is no such activity in Britain. There were cases of people working without pay and my colleague, the Secretary of State for Work and Pensions, intervened to stop that practice operating on the back of the benefits system.
We acknowledge that there is one category of people among whom unemployment is worryingly high: young people. The Leader of the Opposition focused on that issue. About 1 million young people are unemployed. That figure is worrying, but we should recall that the level of young people’s unemployment, which is approaching 20%, is virtually the same as the level we inherited.
It is also worth recalling that a third of the figure is made up of full-time students. It has always struck me as a little odd that we regard full-time students as unemployed, but that is what the statistics show. If we strip that out, there is still a significant level of youth unemployment, which is worrying.
It is useful, as I did on the wider figures, to contrast youth unemployment in this country with that in comparable countries. In France, youth unemployment is 24%, in Sweden, which perhaps should be a role model, it is 24%, in Italy it is 35% and in Spain it is 45%. The Economist, as some Members will know, has been running a series on the global problem of youth unemployment. We share that problem, but in many ways we are outperforming comparable economies.
Mr Steve Reed (Croydon North) (Lab)
I hope that the right hon. Gentleman understands that in seeking to justify the unacceptably high figures on youth unemployment he will sound incredibly complacent to long-term unemployed young people in constituencies such as mine, whose numbers over the past 12 months have increased by more than 100%.
Vince Cable
It is not complacent to acknowledge the extent to which we have serious problems, which is where I started, or to compare the country with economies that are suffering similar problems. For those who are rightly focused on unemployment among young people, the simple truth is that long-term youth unemployment rose by 40% in the boom years when the Labour party was in power. Labour Members are therefore not in a strong position to lecture us on how to deal with it.
We have focused on two policy areas to deal with the problem of youth unemployment. I am most closely involved in the growth of apprenticeships and my colleague, the Secretary of State for Work and Pensions, will talk about the other. We have all embraced apprenticeships, including, rather belatedly, the Opposition. There is a recognition among employers and young people that it is an excellent model for training. Under this Government, the number of apprenticeship starts has increased by 86%. There were 160,000 last year. There has been a 42% growth in the number of young people starting apprenticeships. We are making reforms that will improve the system further, notably the employer ownership system, under which apprenticeship training will be channelled through employers so that there is the demand for real jobs. We are also introducing a staged approach through traineeships, so that young people have a route into proper training.
A difficult area is that what has kept unemployment down in the UK is the fact that real wages have not risen. Indeed, they have fallen. That was the main focus of attack from the Leader of the Opposition. We need to understand and explain what has happened. The British economy was hit massively by the financial crisis. We are a significantly poorer country than we were before that time, although we are now recovering. The impact of that has been felt predominantly through the reduction of wages in real terms.
We are trying to mitigate that impact in two major ways. The first is by lifting low earners out of tax, which increases their disposal income even though their pre-tax income may have fallen. The effect of that is that people on the minimum wage are paying half the income tax that they paid before we embarked on that reform. We have also taken 2.7 million out of income tax altogether. Secondly, and this is my direct responsibility, we have ignored the advice from some quarters to abandon the minimum wage or to dilute it. I have followed the advice of the Low Pay Commission on the minimum wage.
One of the points that the Leader of the Opposition made in his speech—
Vince Cable
Yes, I do. It is, of course, important to train people in the UK where possible, and one of the drivers behind the apprenticeship programme is that of ensuring we build up our scandalously neglected skills base. Where there are genuine vacancies, it is important that people are able to move freely. If the hon. Lady is able to bring cases to my Department, we will try to work with the Home Office to ensure that those people are able to come.
The third group of people are not immigrants at all but visitors. We wish to maintain our reputation as an economy that is open for business, and millions of people come to the UK to do business, shop, visit family and friends, or as tourists. It is important that they can do that with as few visa restrictions as possible, and where there are visa restrictions, we must ensure they are dealt with quickly and effectively. The Government are currently working hard, particularly with countries such as China, to ensure that the system works better.
Finally, there is the issue of the so-called single market within the EU. When the single market was introduced, it was made clear that one core element is the so-called four freedoms: the freedom of trade in goods; the freedom of trade in services; the freedom of capital movements; and the freedom of worker movements. They are at the heart of free trade. I am often baffled by people outside the Chamber who clamour for free trade with Europe but denounce the free market, because they are the same thing.
Modern trade relationships—there are very few restrictions on physical trade in goods these days—frequently involve people moving backwards and forwards. That is the nature of modern trading relationships, and we must uphold it within the EU.
Mr Steve Reed
Does the Secretary of State recognise that many immigrants are extremely entrepreneurial? One reason the London borough of Lambeth has the highest number of new business start-ups of any borough in the country is the relatively high immigration there.
Vince Cable
That is essentially the point I am trying to make. Perhaps the hon. Gentleman can communicate his message to the shadow Home Secretary, who has a slightly different take on those things.
My essential point is that there are positives, and we need to stress them in the current atmosphere. However, we also need to provide reassurance, which is what the Government are seeking to do in two main ways. First, when people come to this country, we should acknowledge a distinction between the rights to work and to claim benefits, which is at the heart of people’s sense of citizenship and belonging. My colleague the Secretary of State for Work and Pensions will explain how we want to ensure that British citizens and not people from overseas receive benefits. The sense of abuse in that sector fuels much of the current anxiety.
The second source of concern is the belief that the laws and restrictions we have should be enforced. There are measures in the Immigration Bill to try to ensure that the private sector, particularly the property sector, plays its role in enforcing them. Those restrictions will have to be subject to a proper regulatory impact assessment and, under the one in, two out principle, they will have to demonstrate that they do not impose red tape on small business. Provided that happens, I hope the combination of actions that have been taken in respect of the benefits system and enforcing the law will be sufficient to reassure the public, or those people who are willing to be reassured, that managed immigration is very much in the national interest.
Vince Cable
The hon. Gentleman is right that myth-busting is an important part of what we need to do. However, in order to deal with myth-busting, we must also deal with genuine abuses. I hope he understands that. I am grateful for his first comment—I am trying to lower the temperature of the debate and to get us to deal with fact rather than myth. I am trying to have a proper balance that recognises the very substantial economic importance of managed migration to this country alongside the measures we must take to deal with abuse.
A large part of the Leader of the Opposition’s speech was devoted to the continuing problems in banking and the financial sector, and many of the current problems with the economy relate to the aftermath of the banking crisis. We have got to a situation in which banks—partly under pressure from regulators, and partly as a result of learning from their mistakes—have moved to a position of fairly extreme risk aversion. If we are to ensure that credit flows to small business, which is the motor of the economy, that needs to change.
There is some evidence that the situation is beginning to change. Some banks, such as Lloyds, HSBC and the trade finance market, are showing positive trends, as is Barclays. The head of Royal Bank of Scotland made it clear at the weekend that he has £20 billion-worth above his liquidity buffers and capital requirements available for small and medium-sized enterprise loans. We hope SMEs take advantage of that.
However, the position we are dealing with is genuinely difficult. In the light of banks’ previous misfortunes, they are operating what I call a pawnbroker model of banking, under which people need collateral, whether a gold watch or property, to secure a business loan. That is massively inhibiting for, for example, a creative industry that does not have such collateral, or an export company that is trying to trade on the basis of orders, or simply for a good company with a good business idea and a good business plan that is unable to get into expansionary mode because of the crippling effects of bank credit restriction.
The Government are trying to deal with the problem in a series of practical steps. We clearly need to do more, but it is worth summarising some of the steps we are taking. We have a sophisticated system of developing supply chain finance—the advanced manufacturing supply chain initiative. Work is being done with Kingfisher and others in the private sector to support trade finance outside the banking system. We have a £1 billion fund that now supports non-bank finance, which is proliferating rapidly. We have crowd-sourced funding, invoice finance and non-conventional forms of lending. The Financial Services Authority and, currently, the Financial Conduct Authority, relaxed rules on the establishment of new banks. Within the next year or so, we will hopefully have a lot more banks, based on the model of Aldermore and Handelsbanken.
Probably the most important step, and one that underpins the others, is the work we are doing with the business bank. We have £1 billion of start-up capital. The first £300 million is being marketed to support new banks and long-term patient capital, which can be raised in the City, and to support equity through angel networks. A crucial test of our policy in the coming months will be the speed with which we can get that capital into the market to relieve the genuine constraints.
I listened carefully to try to establish what, if anything, Opposition Members wanted to add to the debate, because the problem is a genuinely difficult one, and because Labour presided over the banking collapse. If I understand them correctly, the big new idea is regional banking. It is a good idea, and I want it to be explained and developed. It has been forgotten that, 15 years ago, we had regional banking—they were called building societies. I have a vivid recollection of that period because I was chairman of Save Our Building Societies, working with one or two Opposition colleagues, particularly the hon. Member for Edmonton (Mr Love), to try to stop the demutualisation of building societies.
I believe demutualisation began originally with Lord Lawson, but it is worth recalling that, in the first five years of the Blair Government, we lost most of our regional banks. It is worth itemising what happened to them: Bradford and Bingley collapsed and was nationalised, and is now part of Santander; Birmingham Midshires bank is now part of Lloyds; Northern Rock in Newcastle collapsed and is now part of the Virgin group; Woolwich is now part of Barclays; Halifax is now part of Lloyds; and Alliance and Leicester is now part of Santander. We had regional banking, and it went. I would love to see it recreated, but that is like turning omelettes back into eggs. I am all ears as to how that can be done. If it can be done, I am very much in favour of it, because we need much more diversity and competition in banking.
Mr Steve Reed
I thank the Secretary of State for being so generous with his time. He talks about the banking sector as though it is wholly independent when, in fact, large swathes of it are nationalised. Why does he not use the power that that gives him to compel banks to lend more to small businesses that are seeking finance to grow?
Vince Cable
There is one major bank that has predominant Government ownership. That does not give the Government powers to lend, because there are significant independent shareholders and the hon. Gentleman will be familiar with the corporate governance problems that presents. We would like RBS to lend more, and Mr Hester explained this weekend that he has a significant amount of capital available.
Mr Steve Reed (Croydon North) (Lab)
I am delighted to follow that passionate and insightful speech from my hon. Friend the Member for Burnley—for Bolton West (Julie Hilling). [Interruption.] I am still learning the constituencies!
As a relatively new MP, I found it a privilege to be present at the Queen’s Speech for the first time. There was a sense of occasion and history; the sight of Her Majesty on the throne; Black Rod hammering on the door of the Chamber—so much to see everywhere except, unfortunately, in the Queen’s Speech itself, which was remarkably light on content. Outside in the real world there is a financial crisis. People cannot find work, living standards and incomes are being squeezed, and vital public services are being cut to the bone. Long-term youth unemployment in Croydon North, which I represent, is at a record level and continues to rise. That destroys people’s futures and crushes their life chances. How disappointing to hear a Queen’s Speech that fails to meet the challenge for jobs and growth or find new ways to provide the services and support that people need.
As a Labour and Co-operative Member of Parliament I want to focus my contribution on co-operatives. There was little support in the Queen’s Speech for the co-operative economy, but that sector is a significant and growing part of the overall UK economy, and is worth more than £35 billion. It is owned by nearly 13 million adults in the UK and has grown by nearly 20% since the start of the credit crunch, while the rest of the economy has shrunk. Start-up co-operative businesses have a 50% greater chance of surviving past three years than other businesses. That means jobs and growth, which is what we are looking for.
In the words of the managing director of the International Monetary Fund, growth versus austerity is a
“false debate…Countries can choose a strategy that is good for today and good for tomorrow.”
Countries can make that choice, and co-operatives are part of it. Unfortunately, however, our Government have chosen not to do that, despite all the evidence that their current economic policy is not working.
Co-operatives and the principles of co-operation have more to offer than just economic resilience. Co-operation offers an approach that we can use to transform public services so that we can do better for less. Co-operative housing offers a means for first-time buyers to get a foot on the housing ladder, as well as a safe way for people on lower or fixed incomes to build up a share of equity in their home. Energy co-ops offer a way to generate energy more sustainably, while lowering prices for hard-pressed households and helping to break the stranglehold of big energy corporations.
Labour-led co-operative councils, such as Oldham, show how more co-operative approaches to tackling unemployment can get people back to work. Instead of forcing unemployed people on to prescriptive DWP programmes that rarely lead to jobs, such councils are sitting down with unemployed people and asking what support they need within the financial envelope available. Instead of endless courses on how to write a CV, people can choose training in a profession such as plumbing, be given a bag of tools, and go out and find work. That gets them off benefits and allows them to make a positive contribution to the community of which they are part.
In Lambeth—another co-operative council—the local authority is tackling violent youth gang crime by sharing its power with the community through a new youth services trust—the Young Lambeth co-operative. Instead of putting vulnerable young people on courses and programmes that do not cut offending by anywhere near enough, it is helping communities choose the support their young people need. That is proving far more effective at getting young people out of gangs and away from crime, and steering their lives back on track.
Mr Reed
I know how passionately my hon. Friend supports empowering communities to tackle the problems they face, such as violent youth crime. Like him, I have noticed the absence of such a Bill, which is a huge disappointment, because that agenda offers huge opportunities for the Government and people to reconnect to start to deal with the problems that disfigure some of our communities. The problem is not just violent youth crime. I hope he agrees that the examples I have outlined deliver better outcomes for citizens, and that those measures will save money, which we are desperate to do when resources are so constrained.
Co-operation means handing power to the people who use public services so that their insights help to make those services more efficient and effective. It hands back to people control of their lives, so that they can break free from dependency on others’ decisions. The Queen’s Speech does nothing to promote such models more widely. Co-operation offers a vision for greater economic security, more resilient communities and more effective public services, but, instead of a vision that meets the challenge of our times, the Queen’s Speech is one that my nan would have described as all mouth and no trousers. There is plenty of glitz and glamour, but no answers to the questions our country faces.
Rushanara Ali
I could not agree more with my hon. Friend. The crux of the matter is that the economy is flatlining and there is no prospect of people having a chance to get a foot on the employment ladder. Such opportunities as are available are too few. We need an economy that can grow and a Government who can act as quickly as possible to boost demand and reverse the trend we have seen. We need more genuine training and employment opportunities, particularly for young people.
I raised with the Business Secretary the issue of graduate unemployment, as this is another pool of talent that is being wasted in our country. I was the first in my family to go to university and many in my constituency are in the same position. They have worked hard, played by the rules and just want to make a contribution.
Mr Steve Reed
Has my hon. Friend noticed that the Secretary of State for Work and Pensions likes to claim that his benefits cap is responsible for the number of people moving off benefits into work, yet he does not comment on the fact that roughly the same number of people are moving out of work and on to benefits, with both those aspects being part of the usual cyclical change? His interventions have made not a blind bit of difference to any of that.
Rushanara Ali
What can I say? The Secretary of State made some interventions earlier, but they provided very little room for optimism. We need to look at how people’s everyday lives are affected by these issues. As I was saying, in my constituency, graduates, school leavers and those who have left further education just want an opportunity. They want this Government to answer their needs, but that is what is failing. Whatever our political leanings and whichever parties we happen to be in, the critical thing is to get people into work so that they can make their contributions. The fact that that is not happening is the Government’s failure, and they need to take responsibility for it and think again about their policies, which are not working adequately.
Let me deal in more detail with graduate unemployment. In a constituency such as mine, numerous family members are coming out of university, often having been the first in their families to have gained degrees, but they are often struggling to get into work. Despite some major economic opportunities around the City and Canary Wharf, there is a mismatch between people’s potential and their skills and the opportunities to get into those institutions. I believe the Government could do more to support graduates and those leaving further education by making it easier for them to make the transition into those institutions that are traditionally not easy to enter—financial organisations, the creative industries and many other sectors in our city. The cost of graduates being out of work and claiming benefits when they could be making a contribution and lifting their families out of poverty is an example of the missed opportunities. Taking action to deal with that could provide an easy win.
I therefore hope that the Business Secretary will think again about how to get a large number of graduates back into work, as they get very little help when they leave university to make that transition. Graduate unemployment among those from working-class or ethnic minority backgrounds is disproportionately higher than it is for other groups, but it is a real struggle for all graduates. I ask the Secretary of State for Work and Pensions to think about this issue and to highlight in his response whether he has any proposals to deal with it.
I should like the Government to think again about whether they have set the right priorities in giving tax breaks to millionaires at a time when working families are losing so much as a result of the changes that they are making. It is proving incredibly difficult for those families to make ends meet, and to pay for such things as child care and heating. The increasing number of people who are going to food banks in constituencies all over the country shows just how much they are struggling.
It is strange that the Government have stuck to their commitment to give tax breaks to millionaires rather than, for instance, introducing the mansion tax on which the Business Secretary was so keen before the election. I hope that he can persuade his colleagues in the Conservative party to take on board an excellent policy idea, which is supported by both my party and his. It would raise additional revenue and help us to meet some of the vital challenges that we face, especially in relation to getting people back to work.
As some of my hon. Friends have already pointed out, a temporary cut in VAT could help to stimulate the economy. When we were in power, there was evidence that a VAT cut could make a significant difference by boosting consumer demand. We desperately need to establish ways to stimulate demand in the economy. The Government should think again about how to generate growth and create jobs. That is not happening, and it has been not happening for too long, despite the promises that were made in 2010 and despite all the forecasts—which, thanks to the Government’s policies, have turned out to be wrong.
I want to make two points about the impact of unemployment on women in particular. The unemployment figures highlight its disproportionate impact on women, and the position is worsening. The Government’s attempt to water down the powers provided by the Equality Act 2006 is very worrying, given that in the current downturn the impact on ethnic minorities and women is greater than ever before. We need organisations that can ensure that those unequal impacts do not become even worse, and I hope that the Government will think again about their strange decision to water down the powers of the Equality and Human Rights Commission.
The pay gap between men and women—as well as the fact that women are more likely to lose their jobs and remain out of work—is deeply worrying. I hope that the Secretary of State for Work and Pensions will tell us what his Department is doing to address the real concern that is felt about the effects of that on women.
The content of Queen’s Speeches is ever-diminishing, and this year’s is particularly disappointing. It is clear that the Government have run out of ideas and energy in just a few years. My constituents, and constituents throughout the country, desperately need a plan for jobs, a plan for growth and a plan for economic recovery, none of which the Government are providing. If they cannot be bothered even to come up with a decent legislative programme in the Queen’s Speech, we have to wonder why the public should trust them to restore our economic future and create jobs and growth. I hope very much that the public will see through the Government and their failure, in these very difficult times, to understand and respond to their needs and to the fact that they are struggling.
Budget Resolutions and Economic Situation
Steve Reed Excerpts(11 years, 8 months ago)
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Steve Reed (Croydon North) (Lab)
The people of Croydon North were looking to the Chancellor to kick-start the economy with the Budget. With long-term unemployment up again, they need more jobs. With homelessness and overcrowding on the rise, they need more affordable homes. With more children living in poverty, they need action to cut the cost of living. But we saw almost none of this. We will not get more jobs in Croydon North until the Chancellor abandons his failed economic policy, which has prevented the economy from growing.
The OBR has halved this year’s growth forecast, and when the UK’s triple A rating was humiliatingly downgraded, the ratings agency Moody’s cited subdued prospects for growth as a key reason. Growth will come when people start spending again, and we are more likely to get people spending if we put money back in the pockets of people on average and lower incomes. Labour’s proposed temporary VAT cut, which would help to do precisely that, is far more sensible than the Government’s tax cut for millionaires in just over two weeks. The wealthy are more likely to save that money or, if they do spend it, to spend it on expensive imports, but as my hon. Friend the Member for North Durham (Mr Jones) said, people who earn less are more likely to spend it in local shops, on everyday goods that sustain local businesses and help the local economy to grow. They do not have enough of a surplus to save, so they end up re-circulating the money in the economy.
Growth will come when the Chancellor starts to invest in decent affordable and social housing. First, however, he cut the affordable house building budget by 60%, and then he refused to intervene early enough as the housing market froze. Housing starts last year fell by 11%, and more than 500,000 people are on the council housing waiting lists in London alone.
As well as boosting new build supply—which he also needs to do—why does the Chancellor not support projects such as the one run by London Youth, which puts unemployed people back to work by training them to bring empty and derelict homes back into use? It creates jobs and homes, as well as saving money in the longer term, but it needs funding to get going on a wider scale.
Growth will come when the Chancellor starts to invest in public infrastructure—the kind of schemes that generate jobs and boost business confidence, so that the private sector starts to invest as well. I saw that effect time and time again when I led a council in south London. In Brixton, we showed how a partnership between public sector landowners and small businesses can regenerate a once declining market in spectacular style, creating jobs, bringing in investment and helping to make the town centre what it is now—one of the fastest growth areas anywhere in London. As co-chair of the Vauxhall-Nine Elms regeneration partnership—which extends all the way from Vauxhall Cross to Battersea power station—we showed how the public sector can lever in private sector investment, in a project that has become the biggest generator of new jobs and new homes anywhere in the country. The Government need to support local government to forge more partnerships like that and offer funding for public sector infrastructure that can get schemes going in areas where land values as not as high as they are on the south bank of the Thames, and I hope very much that they will carry out the Heseltine proposals, including providing adequate funding, so that this can work.
The reason so many people are living on benefits is not that they are skivers or shirkers, as the Chancellor likes to tell us, but that they do not have the opportunities that people such as him took for granted when they were growing up. I meet people in Croydon North week in and week out who are desperate for a job so that they can make more of their lives. I met a young mum on the steps of a supermarket in South Norwood who burst into tears when she told me that she and her husband, both in low-paid work, could no longer make ends meet because of the rising cost of housing, heating and child care, all of which have been made worse by the Government’s decision to clobber them with the strivers tax and a hike in VAT. She told me that they had done everything the Government had asked them to—worked hard for qualifications, got themselves jobs and bought a modest home—but now they felt desperate and abandoned by a Government who do not seem to care. This Government do not offer them aspiration, only desperation.
Such people are victims of the Chancellor’s failed economic policies. It is not just growth that is down and borrowing that is up; hope is down and despair is up. Year after year, the Chancellor fails to meet his own targets. That is because what he is doing is hurting, but it is not working; yet instead of recognising his failings, he tried to distract attention by demonising and blaming the very people who are the victims of his failure. It is time to change course, because people in Croydon North, like everywhere else, deserve better than this.