The Economy and Work

Suella Braverman Excerpts

Thursday 26th May 2016 Commons Chamber

[Yvonne Fovargue (Makerfield) (Lab)]

I would like to concentrate my remarks on the help to save scheme—or should I call it the reinvigorated savings gateway? It is welcome that the Government have recognised the importance of saving and particularly of matched saving—one of the best ways of encouraging people to save. Analysis by StepChange shows that 44% of people on low incomes have a lower chance of getting into debt if they have savings of about £1,000—that is half a million people who would be prevented from falling into debt.

However, I have a few issues with the design of the scheme. For example, two years is a very long time in which to have to save regularly. Some 14 million people experienced at least one income shock in the past 12 months —that might be because of a job loss, a cut in hours, illness or a new baby. If money is withdrawn, people will lose the bonus they feel they have already gained. People on low incomes know they are going to experience some income shocks, and that could discourage them from saving.

We all know that it is good to save and that it is very worthy, and we all start things with good intentions. For example, when we join a gym, we intend to go every week—of course would do—but imagine if we had a two-year contract saying we had to go every week. Crucially, therefore, there should be some measures in the Government’s proposals to allow for irregular savings, where people cannot afford to put money into the scheme one month—after all, we have all missed the odd week at the gym. Things do crop up, and we should allow a couple of withdrawals.

We also need to look at the behavioural economics of people in relation to the scheme. People may need some encouragement and some incentives to join—for example, prize draws. We all know that people spend the odd pound on a lottery ticket in the hope of winning something, and encouraging people to save by offering them the incentive of a prize would be important.

I would like to say a quick word about financial education, which is really important. I am pleased that academisation has been taken out of the Queen’s Speech. However, there is a lack of financial education in the curriculum, and it should start earlier. My experience is that primary education is really important. I had a great scheme with a great tutor, Vernon Fuller, who ran a wonderful course for primary students over 10 years ago. I would love to see how they are getting on now.

[Suella Fernandes (Fareham) (Con)]

Will the hon. Lady join me in congratulating the all-party parliamentary group on financial education for young people, which this week launched its report, of which I was the chair, calling for more Government support for financial education for primary school children, because children form their money habits at the age of seven?

[Yvonne Fovargue]

I will indeed. I read that report with interest, as financial education has always been an interest of mine, but I have to say that it is not a silver bullet.

All efforts need to be made to keep people out of the hands of the payday lenders and the rent-to-own sector. We need to make sure that support is given to alternative providers of finance such as Fair for You, and that they have a level playing field. For example, real-time data from everyone, including the banks, must be available to new market entrants so that they can make fair assessments of lending. We must also make sure that those data are accurate, as I have had reports of data from various companies being quite inaccurate.

Talking of fairness and level playing fields, I support the calls for transitional arrangements to help the women who have been adversely affected by the mishandled increasing of the state pension age. Perhaps I should declare an interest in this as a woman who was born in the 1950s. I urge the Under-Secretary of State for Work and Pensions, the hon. Member for North West Cambridgeshire (Mr Vara), to revisit this unfairness during the passage of the pensions Bill.

I welcome the savings scheme, but I would like it to be designed to reflect the real lives of people on a low income: the real life that has bumps in the road on quite a few occasions; the real life where sometimes buying a new pair of shoes or going out for the day with the family is more important than putting money away for a rainy day. I hope that the Government will recognise this in the design of the scheme.

--- Later in debate ---

[Fiona Bruce (Congleton) (Con)]

It is a pleasure to follow my colleague on the International Development Committee—the Chair of the Committee—the hon. Member for Liverpool, West Derby (Stephen Twigg).

To have a strong economy, we need a strong society. That is why I welcome the many references in the Gracious Speech to improving life chances, especially for the young and disadvantaged. The Children and Social Work Bill and the prisons and courts reform Bill are particularly welcome in helping to give a second chance to those who, in so many cases, never had a first chance.

Last week, the review of prison education by Dame Sally Coates, “Unlocking Potential”, proposed that to improve the life chances of prisoners, a holistic vision of education is needed for them, including family and relationship learning and practical advice on parenting and financial skills. It is heartening to note that the Government have agreed to implement the review in full.

Another excellent report that has also just been published is Lord Laming’s “In Care, Out of Trouble”, in which he says:

“Remedial work and rehabilitation are essential but prevention is so much more rewarding and fruitful for the young person and wider society.”

He says that good parenting “creates the solid foundation” to give the child the best start, and that the “essential ingredients” are security and stability. He says that

“in this context…young children develop self confidence, trust, personal and social values and optimism. Loss, neglect or trauma at this early stage in life often result in profound and enduring consequences.”

That is why the commitment in the Gracious Speech to

“increase life chances for the most disadvantaged”

by tackling

“poverty and the causes of deprivation, including family instability”

is so welcome.

Addressing this challenge is urgent. The needs are widespread, and not just for those at risk of entering the care or criminal justice systems. Years of evidence-based research by the Centre for Social Justice has shown it is demonstrably the case that growing up in a family where relationships are dysfunctional, chaotic or insecure is not only a key driver of poverty in itself, but a driver of other causes of poverty such as addiction, mental health problems, behavioural problems, poor educational attainment, worklessness, depression and debt. Teachers and mental health charity workers in my constituency tell me that disturbingly increasing levels of poor mental health among children, including very young children, frequently result from insecure family relationships.

[Suella Fernandes]

Does my hon. Friend agree that the recently announced change to the measurement of life chances—from one based on an arbitrary relative income to one that takes into account worklessness in households and educational attainment—reflects the multifaceted nature of poverty and achievement?

[Fiona Bruce]

I do indeed. I also think that we should include family instability in that statutory footing.

Yesterday, Relate published a report on couple relationship distress in the UK. It states:

“Good quality, couple, family and social relationships are the basis of a thriving society…central to our health and wellbeing…poor quality relationships have far-reaching consequences. Inter-parental relationships have…been recognised…as a major determinant of children’s life chances.”

However, Relate’s analysis estimates that almost one in five of adult couple relationships in the UK could be characterised as a distressed relationship, meaning one with a severe level of relationship problems that has a clinically significant negative effect on a partner’s wellbeing. The figure for partners with children under 16 is even higher. Encouragingly, however, Relate also says:

“A broad range of relationship support services are effective at improving relationship quality.”

I hope Ministers will read the report and note its recommendation that we need to

“expand access to a spectrum of support for good quality relationships, overcoming barriers of accessibility, availability, and affordability to ensure that anyone who needs it can benefit from support.”

I look forward to the publication of the Government’s life chances strategy. I hope that it recognises that poverty of relationships is a severe limiter of life chances, and that substantially increased support for stronger family relationships is needed in every local community. It is important to provide somewhere in every locality where people can go for such support and advice, at any stage in their family life—whether they are starting a family, bringing up toddlers or teenagers, coping with supporting an elderly parent, or simply a couple going through a rocky patch.

The troubled families initiative has been successful in providing intervention and support at a crisis stage. Let us learn from that, but provide support much earlier, when families feel they need help. Let us normalise asking for help and providing it. There cannot be a family in the land that would not benefit.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I must confess I thought the Queen’s Speech was fairly awful. It was not awful in its individual proposals on things such as prison reform or bus regulation, all of which have some merit. It was certainly not awful because of the delivery of it by Her Majesty the Queen, who even sounded reasonably excited by the news of a forthcoming state visit from the Colombians—something we can all get behind. It was awful because it lacked any sense of big thinking and any grand design for the state of our nation. As a constituency MP I see so many challenges and so many things I want to change that listening to the modest list of measures we heard last week only left me frustrated.

What makes me so impatient about those shortcomings is that I believe that with better leadership and a better Government, we could do so much better. We are a country where the divide between the very affluent and everyone else is too great, and where owning a home, having a decent job and being able to have a good family life are increasingly unattainable for too many people. Eight years after the financial crisis, our economy is still too dependent on the financial services sector, house prices and consumer spending, and is still too reliant on London and the south-east. There are obscene levels of extreme poverty and destitution, and homelessness is almost back to 1980s levels.

We have an ageing population, but core public services such the NHS and social care simply do not have enough money. Our welfare system is not fit for purpose; it gives too little support to many people while creating welfare dependency in a small group of others. We have chronic skills shortages in several major industries; that in turn fuels record immigration levels. Our lack of any kind of industrial policy has left several key sectors such as steel facing the abyss.

Some parts of our economy are overtaxed, particularly through the outdated business rates system, and other parts do not pay the tax they should. I could go on, because nothing in this Queen’s Speech made me feel as if our Government are considering these problems; in fact, nothing in it made me feel that the Government have a desire to do anything more than try to hold the Conservative party together over the next 12 months.

[Suella Fernandes]

I note the hon. Gentleman’s criticism of the Queen’s Speech. Does he share the same opinion about Labour’s future as that written by a member of his party, which said that Labour lacks credibility on the economy?

[Jonathan Reynolds]

I am grateful to the hon. Lady for the extra time, and I will come on to those wider criticisms.

In some respects the Queen’s Speech was frankly dishonest. Whatever one’s view of the necessity of austerity, or the success of the Government’s deficit reduction programme, it is simply not true to say that public services are being reformed to help the hardest to reach—they are being reformed to remove them from the hardest to reach. It is also not true to say some of the deepest social problems in society are being tackled when some—homelessness, for example—are clearly getting worse. In Greater Manchester, one of the most dynamic parts of England, as my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) has said, an entire community of people are now living in tents in Manchester city centre. That is not what success looks like. I am all for measuring life chances better, but we do not need a new set of indicators to understand that taking money from people who have serious disabilities—as the Government have repeatedly tried to do—will make their lives harder, not better.

If I were writing the Queen’s Speech, I would ask for it to include three things. First—this was echoed by the hon. Member for Warwick and Leamington (Chris White)—we need a formal industrial strategy in the UK that is focused on making British industry as globally competitive as it can be. Secondly, we need a royal commission on the welfare state, to consider what will be required in an age of rapid technological change and digital self-employment. Thirdly, we need serious democratic reform, so that future Queen’s Speeches are much better than this one.

The tail-end of the Queen’s Speech contained a miserly reference to the supremacy of the Commons. If the Government do not want to lose so much legislation in the Lords, they should try to make better legislation. I do not believe the Lords to be the hotbed of democratic socialism that Ministers seek to portray. This Queen’s Speech was not a programme to transform our nation or tackle our biggest problems. It was all filler and no killer—a pick ‘n’ mix of pet projects; a holding card until the next Conservative leadership contest reveals that party’s true direction. Britain deserves a legislative programme that engages our public, ignites our economy, and inspires our future. Britain deserves a lot better than this.