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 If money is withdrawn, people will lose the bonus they feel they have already gained.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.

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[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.

Battle of Jutland Centenary

Suella Braverman Excerpts

Wednesday 25th May 2016 Commons Chamber

[Mr Evennett]

I certainly endorse that point, and I was coming to it in a moment, but the hon. Gentleman has beaten me to it.

The national events will take place at St Magnus cathedral in Kirkwall—the UK’s most northerly cathedral, which was founded in the 12th century—and at the Commonwealth War Graves Commission’s royal naval cemetery at Lyness, on the isle of Hoy, which was founded in 1915, when Scapa Flow was the base of the grand fleet. The cemetery contains 445 Commonwealth burials of the first world war, 109 of which are unidentified. In the spirit of reconciliation, there will also be a wreath-laying event at sea at Jutland Bank, with the Royal Navy and the federal German navy taking part.

For those in Kirkwall not attending the cathedral service, there will be an opportunity for the general public to gather on the streets to watch the events live on a big screen. The event will be broadcast live on the BBC.

[Suella Fernandes (Fareham) (Con)]

Will my right hon. Friend give way?

[Mr Evennett]

Unfortunately, I really do not have much time.

I am really pleased that around 800 guests will attend the events in Orkney. I look forward to being present myself next Tuesday, as one of the 300 descendants attending. My grandfather, Clyde Turner, served on HMS Malaya during the battle, and I have a strong personal association with the commemoration. He often spoke about his experiences as a stoker and subsequently as a chief petty officer. He was a career naval man and a real influence on me in my early years. I shall, of course, be thinking of him and remembering the time spent with him. In his memory, my son Tom and my grandson George were given the name Clyde as one of their Christian names. I am pleased, therefore, to be the Minister responsible for the first world war centenary at this time, and I look forward to meeting other descendants at the commemoration next week.

--- Later in debate ---

[Mr Evennett]

I would certainly be delighted to endorse that comment, and I congratulate those involved.

Communities across the UK that also wish to mark the battle should be aware that the Royal British Legion has made available resources to help communities run local events, including factsheets and other useful information.

In Belfast, the last floating ship that survived the battle of Jutland—HMS Caroline—will be open to the public for the first time. It is managed by the National Museum of the Royal Navy. Thanks to £12.2 million from the Heritage Lottery Fund and the National Heritage Memorial Fund, HMS Caroline will become a significant visitor attraction, where people will discover the role she played in the war and the role of the Irish sailor.

[Suella Fernandes]

On my hon. Friend’s point about the Royal British Legion, will he join me in congratulating one of my constituents, 70-year-old veteran John Hardman, who is running his third triathlon and swimming 1,916 km at Fareham leisure centre to commemorate the battle of Jutland?

Budget Resolutions and Economic Situation

Suella Braverman Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to contribute to such an important debate and to follow so many speeches from my hon. and right hon. Friends. Although I might not have agreed with what the hon. Member for Erewash (Maggie Throup) said, I commend her focus on jobs and the importance of delivering a high-wage, job-based economy for our country. By contrast, the Chancellor opened with the mix of bluff and bravado, arrogance and malice that has become his trademark, but even so, I was absolutely astonished to hear him refer to social justice. This is a Budget with unfairness at its heart and misery in its veins. The Chancellor’s record of failure—failure to achieve any of his own debt targets, failure to deliver decent wages—

[Suella Fernandes (Fareham) (Con)]

Does the hon. Lady agree with me and the Institute for Fiscal Studies, which reported yesterday that since the Chancellor has been in place, the gap between rich and poor has narrowed because most people have got into jobs? That is the way to bring about social justice.

[Chi Onwurah]

I would thank the hon. Lady for that contribution, but it flies in the face of the lived experience of my constituents, who are in low-wage jobs, cannot make ends meet and find themselves attacked by this Chancellor’s Budget. The Chancellor has failed to deliver for working people. His failure to raise productivity has been trumped in the past few days, in media terms at least, by his failure to deliver a Budget that lasts 48 hours.

The 1,443 PIP claimants in Newcastle will, like me, be pleased at least that that cut proved an ideological attack too far, but it is undoubtedly the case that by demonising and attacking all benefits claimants, the Chancellor hoped to create an atmosphere in which it was acceptable to enrich the better-off on the backs of the poorest and most vulnerable among us. It will be some compensation for them that members of the Government are now attacking and reviling each other almost to the same extent they have attacked and undermined benefits claimants.

I do not want to focus on the 48 hours following the Budget as experienced by the Chancellor. Instead, I want to give three examples of events that I attended in those 48 hours that highlighted the huge gap at the centre of the Budget, which was a failure to address our future economy and the future of the next generation, as he put it. On Thursday I visited the Big Bang fair organised by EngineeringUK with engineering professional bodies and businesses from across the country, where 70,000 young people discovered or rediscovered the excitement offered by a career in science, technology, engineering and maths. Those are the jobs of the future, the ones I want for my constituents, high-paid—not minimum wage, minimum skill—jobs.

But where were such jobs mentioned in the Budget? Where was the investment in the future to help create those jobs? There were, it is true, tax breaks for those hiring out their assets in the digital economy, but there was nothing for manufacturing or technology. There was no investment in digital infrastructure. There was no more detail on apprenticeships, which we need to ensure that we have the skills of the future. This was a Budget that left behind the technology that we need for our future.

That evening I visited the Creative Newcastle Get Digital summit, celebrating one of the fastest-growing sectors in the north-east, only hundreds of yards from where Stephenson’s Rocket was built. That was the real northern powerhouse, powering our economy into the future. But the Budget offered a few hundred million pounds for investment in north-east transport, against the tens of billions of investment in transport in London. This Budget did not offer any investment in digital infrastructure, and we stand to lose the millions of investment from the European Union, thanks to the referendum and the chaos on the Government Benches over that.

Finally, on Friday morning I visited St Paul’s primary school, where 10 and 11-year-olds were taking on the Pioneer challenge with employers and other schools across the region to promote STEM and entrepreneurship. Those children are the future basis for our economy in the north-east. They are proud Geordies, yet what the Budget did for them was to force the academisation of their school, taking it out of the local authority and the community that it seeks to support and atomising it—in effect, privatising it and taking away responsibility from the local parents and putting it on a desk in Whitehall, which is also where the northern powerhouse is found.

This Budget offered nothing for the future of our young people, for the north-east economy or for our country.

Short Money

Suella Braverman Excerpts

Tuesday 23rd February 2016 Commons Chamber

[John Penrose]

The House will be aware that the independent Electoral Commission has undertaken a fairly careful consultation over some time and has made some recommendations. The statutory instrument I mentioned in my initial remarks implements some of those, but not all as yet. We are holding off on deciding how we proceed with the remainder of the recommendations until we have the results of the expression of views. Given the obvious parallels between Short money and policy development grant, we thought it was sensible to make sure we had one set of answers before we proceeded with the other recommendations.

[Suella Fernandes (Fareham) (Con)]

The cost of Short money has increased by 68% cumulatively since 2010. Is that really justifiable at a time when councils of all colours are making very large efficiency savings? Surely, taxpayer-funded political parties can do the same.

[John Penrose]

I could not agree more. People outside this place—outside the Westminster bubble—who are looking at our discussions today will not understand why politicians feel that they should treat themselves separately and as a special case. Those people will look at what has happened to their budgets over the last five or six years and say, “What is sauce for the goose should be sauce for the political gander as well.”

European Union Referendum Bill

Suella Braverman Excerpts

Tuesday 8th December 2015 Commons Chamber

[Mr Mak]

My hon. Friend makes a cogent point. The proceedings in this Chamber are available not only in Hansard but on parliamentlive.tv as well as BBC Parliament. I encourage all members of the public and all those who are interested in the proceedings of the House to tune in, particularly to my hon. Friend’s Committee, the European Scrutiny Committee, which he has led with distinction for many years, and other Select Committees, including my own, the Procedure Committee, which has been involved in numerous deliberations. I am delighted to see two of my distinguished Committee colleagues in the Chamber today.

The Electoral Commission undertook research as part of its statutory assessment of the type of information that the public would want to know as the referendum process began. As my hon. Friend the Member for Torbay and the hon. Member for Glenrothes (Peter Grant) said, it found that members of the public were not necessarily clear about what the consequences of the referendum would be. There was no real understanding among large sections of the public about what leaving would entail. There was not enough information about what staying in would entail. There was certainly some confusion about the very many campaign groups that have sprung up, which I mentioned as I opened my speech.

What the Electoral Commission did say, which I found heartening, was that there was a strong appetite for more information about the implications of leaving, as well as an appetite for information about the implications of remaining and, as my right hon. Friend the Member for Wokingham said, information about other models of engagement, including Switzerland, Norway, other members of the European economic area and, indeed, countries in Asia, Africa, Latin and South America. He is absolutely right: there are a number of models that can be invoked and, according to the Electoral Commission, the public are keen to have more information. As the hon. Member for Glenrothes said, there is an appetite for more information.

The Electoral Commission found that the public do not simply want dry facts. They would like contextual information, including worked examples, explanations and case studies, giving the views of right hon. and hon. Members. The Electoral Commission recommended that campaign groups, which I mentioned at the beginning of my speech, include on their websites and in their literature worked examples and real-life case studies, along with testimonies from Members of Parliament, Members of the other place and members of the public who wish to share their experience. That would help a great deal to educate the public about the choices to be made.

The Electoral Commission said in its letter that it would be reluctant to adopt the extra powers that some hon. Members believe that it should have, as it has no powers to police information that is put into the public domain alongside Government reports. It has no legislative powers to regulate such information. Finally, the Electoral Commission made a good, cogent point with which I agree. It does not have the capabilities to undertake an extension of its role, which some Members of the House of Lords and of the House of Commons have proposed that it should have. It said in its letter, referring to the extension of its powers regarding the referendum and the Government report, that

“it is also the case that we would not have the capabilities to do so”.

It also said:

“We will have no insider knowledge of the negotiations, nor the required expertise to judge a report to Parliament about the UK’s membership of the EU.”

[Suella Fernandes (Fareham) (Con)]

I thank my hon. Friend for highlighting the Electoral Commission’s extensive assessment of the amendment. Does he agree that the fatal blow for the amendment is the fact that the commission has opined that it does not have the capabilities or insider knowledge to carry out the duty that it would impose on it?

[Mr Mak]

I thank my hon. Friend and near neighbour. As a barrister, she is learned in these matters. I entirely agree that that is a persuasive argument in the commission’s letter to Members of Parliament.

Spending Review and Autumn Statement

Suella Braverman Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

Of course we support those international institutions that help us to fight crime. I want to thank the right hon. Gentleman for his support for what we have said today about our police and police funding. The Home Secretary will set out more details about how that real-terms protection will be provided. We do not just provide funding to forces but have a transformation fund, which can encourage the efficiencies that we all want to see in our police, not least the police officers themselves, and make sure that they have the capabilities they need to deal with threats such as marauding gun attacks. It is a real-terms protection, and also, as a minimum, it is a protection in cash terms for the National Crime Agency to ensure that it is funded to do its work as well.

[Suella Fernandes (Fareham) (Con)]

My constituents in Fareham will warmly welcome the Chancellor’s statement today, particularly the announcement of a national funding formula for schools. Hampshire is the third lowest funded authority in the country. Is it not right that this can be delivered only because of the difficult decisions that have been taken on the economy, and that it simply would not have been possible had we ducked those decisions?

[Mr Osborne]

My hon. Friend is right. I am delighted that she has had success in campaigning on behalf of her constituents in Fareham to deliver a fairer funding formula for her local schools and the pupils whom she represents. She is absolutely right that we would not be able to deliver the kind of protection to the schools budget that we have announced today if we did not have a strong economy. The economic security that a strong economy brings is the bedrock of everything else we are achieving.

The Economy

Suella Braverman Excerpts

Wednesday 18th November 2015 Commons Chamber

[John McDonnell]

Part of the problem is that growth has not been high enough. In addition, we have sold off so many of our assets that money is pumping out of this country, rather than being invested in it. We are not making home-grown investments in our own economy, so the money is flowing abroad. That is causing our balance of payments deficit. In addition, our trade, particularly in manufacturing, has unfortunately not picked up on the scale it should have done.

Let me press on, because a large number of Members want to speak. We know, from the drip-feed of announcements, that the Chancellor intends to make swingeing and potentially devastating cuts to Government Departments and welfare spending. Let me make it clear that austerity is a political choice, not an economic necessity. The record of this Government shows that the Chancellor’s political choices are having a devastating impact on people across the United Kingdom. In many cases, his cuts are falling on the heads of those who are least able to afford them. [Interruption.] The Exchequer Secretary is asking for examples, so let us look at local government.

Since 2010, councils have dealt with a 40% real-terms cut in their core Government grant. In adult social care alone, funding reductions and demographic pressures have resulted in a £5 billion funding gap. Where are the cuts falling? According to the Institute for Fiscal Studies, the 10 most deprived local authority areas have lost £782 per household, while the 10 wealthiest areas have lost just £48 per household. Choices have consequences for people’s incomes and lives and the services upon which they rely. As a consequence of the Chancellor’s choices, ordinary people are being left worse off. He has made those choices and still failed to meet his self-imposed fiscal targets, so I pose this question: are the choices that are being made right, moral and fair? If the answer to any of these questions is no, it is self-evident he needs to rethink, and rethink fast.

[Suella Fernandes (Fareham) (Con)]

Is the hon. Gentleman seriously preaching about making the right choices, given that his party was responsible for the highest level of public sector borrowing? Is that the choice he is recommending—more borrowing and a greater burden on British men and women, just to feed the coffers of Government?

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[Harriett Baldwin]

I will give way to the hon. Gentleman when he starts to welcome some of the positive economic facts that I was mentioning, but if he does not know whether he is coming or going, I have a hunch that he is in the right party.

The Government absolutely reject the Opposition’s accusation that we are failing to deliver for working people. Not only have we brought greater economic security, we have also delivered more growth, more jobs, and higher wages. That is what people working across this country asked us to deliver, and that is what we are doing.

[Suella Fernandes]

I echo and salute the track record and results that the Minister is outlining. A former Prime Minister, who is credited with reviving a failing economy, once said:

“The problem with socialism is that you eventually run out of other people’s money.”

Does my hon. Friend agree that what we are hearing from the Opposition Benches is a reheating of simple 1980s socialism where the results are only failure?

[Harriett Baldwin]

My hon. Friend is right to remind us of two important facts. First, no Labour Government have ever left office with the public finances in a better state than when they came to power, and secondly, no Labour Government have left office without leaving more people unemployed than there were when they came to office.

Do we agree with the other points made by the Labour party?

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[Alex Chalk (Cheltenham) (Con)]

The core message in the motion is that the Government have somehow failed to stand up for working people. I must tell the Opposition, with respect, that that message is misconceived.

Let us look at the context. The position in 2010, as we recall it, was that this country was staring into the abyss. Make no mistake: borrowing was over £150 billion a year. What does that mean, in concrete terms? We were bringing in about £600 billion, but we were spending £750 billion. It is perfectly true to say, as was said by the hon. Member for Hayes and Harlington (John McDonnell), that the crisis came and therefore the deficit became larger, but it should not be forgotten that on the eve of the crisis—as was pointed out by the Institute for Fiscal Studies—this country had one of the largest structural deficits in the developed world. That made us vulnerable, and it meant that when the crisis hit, the cupboard was bare. The point has been made—and it bears re-emphasis—that there can be no economic security, no national security and no opportunity when a country loses control of its public finances, and this country did that spectacularly in 2010.

The hon. Gentleman may not be interested in those figures, but the truth is that unemployment was up—unemployment, which has an impact on working people’s lives—and youth unemployment was up. What has happened since then, during the period in which the hon. Gentleman would have us believe the economy has gone to hell in a handcart? Well, last year more jobs were created in Yorkshire alone than were created in the whole of France, more jobs were created for young people in this country than in the rest of the European Union put together, and there were more women in jobs than ever before. Since 2010, 2,000 jobs have been created each day. That matters, because jobs bring dignity, self-worth and fulfilment. But if the hon. Gentleman is not interested even in jobs, what about living standards? Well, living standards are up as well: we are better off by £900 per household than we were in 2010.

There is also a suggestion that our growth is anaemic by comparison with that of other countries. How can that possibly be the case, when it is recognised that ours has been the fastest-growing major developed economy in the world, together with that of the United States? That is an achievement of which—I hope—Members on both sides of the House can be proud, because it is by securing that stability, that growth and that prosperity that we assist the most vulnerable in our society.

We recognise, of course, that there is more to do, but when the hon. Gentleman makes the point that the deficit is not closed—which he is perfectly entitled to do—the response should not be, “Let us widen it and make it bigger.” Instead, we should ask what we can do, in a constructive, sensible and, dare I say it, patriotic way, to close that deficit and thus secure our resilience. If we do not have a resilient economy and put money aside for a rainy day, we shall not be in a good position to weather the storm when it hits, as hit it will. The time will come when there is a global downturn, because that is the nature of events, but we must be prepared to weather it. I am sorry to say that the policies of the hon. Gentleman—if, indeed, there are any—seem to take us nowhere towards achieving that resilience.

Today we have a deficit of some £70 billion, which is not an inconsiderable figure: it is about double the defence budget. [Interruption.] I hear noises off from Opposition Members. On the one hand they say that the deficit is too large, and on the other hand they say, “Let us make it larger still.”

[Suella Fernandes]

I echo the point that my hon. Friend is making. The only way we can get to grips with debt is by tackling the deficit, and, thanks to the difficult decisions made by this Government, we have already cut it by more than half. As my hon. Friend says, there is more to do, but that is why we must carry on with the plan and finish the job.

[Alex Chalk]

I entirely agree. We must carry on in a way that is proportionate—of course—and fair—of course—but which focuses, ultimately, on the prize that is living within our means. I am sorry to say that Labour Members do not seem to be ready to adopt that approach, not least because they opposed the cap on welfare. In an article published in New Statesman in March, the hon. Member for Hayes and Harlington said that he would avoid any cuts whatsoever, and that—as we have heard again today—he thought that running a surplus was “barmy”.

I believe that there is an issue not just for our times, but for future times. There is an issue of generational justice, because we owe it to the next generation to bequeath to them an economy that can pay its way. Make no mistake: someone born this week—a young lady, say—will knock on the door of the state in 30 years’ time, having been turfed out of her home by an abusive husband, and will ask for help. It is up to this generation to ensure that we have not left the cupboard bare; otherwise, what will that young lady say to us in 30 years’ time? “She will ask, “Why didn’t you deal with the problem then?”, and if we answer, “Well, it was all too difficult”, that will be no answer at all.

Let me say again, respectfully, that the motion is misconceived, and lacks credibility. It is our duty to our country and the future to have a stable economy, and the motion should be roundly rejected.

--- Later in debate ---

[Suella Fernandes (Fareham) (Con)]

There are three main points that I wish to make about the motion. First, it is frankly absurd and reflects an Opposition who are totally out of step with the vast majority of the British people. I say that because its principles were robustly tested at the last general election in May and unequivocally rejected by the British people. The Labour party lacked all credibility on managing the economy and its proposals in May failed to persuade the country otherwise. Today we are simply seeing a defiant continuation of those principles and that attitude. Nothing has changed. Labour Members do not seem to have learned anything from the result in May. Instead, their approach has become increasingly intransigent.

The British people’s lack of confidence in Labour reflects the economic situation it left the country in 2010, including a record budget deficit. At 10.2% of GDP, public sector borrowing was at its highest since records began—£1 in every £4 spent by Government was borrowed. On welfare, Labour left us with a benefits system that was so complicated that some people saw no point in working, because they would lose more in benefits than they would earn in work. Who pays the bill for welfare spending? It is the hard-working men and women of Britain. In Labour’s last term in office, unemployment increased by about 1 million. The number of households with no one in work almost doubled. That is a shameful record for a party called Labour. That is the past and those are the facts, and that is why the British public did not trust Labour with the economy.

The motion has no substance. The picture it paints is simply not backed up by the evidence. This Government have a proud record so far. The deficit has been cut by more than a half as a share of national income. Income tax has been cut for more than 27 million people, and 3 million people have been taken out of tax altogether. In my constituency of Fareham, the jobseeker’s allowance claimant count has fallen by about 100 in the past 12 months and by about 60% in the past five years. Unemployment in this country is lower than that in Italy, France, Ireland and Spain. Productivity is rising and hundreds of thousands of people have the chance to own their own home.

Those are the statistics and numbers, but this is about our values as a country. This Government’s economic record reflects the values of the country that we want to be. It is about taking the difficult decisions so that we can safeguard our long-term security, and reinstating the relationship between effort and reward, work and dignity, and endeavour and aspiration. It is about the belief that people can get on in life through hard work, diligence and enterprise, and about making it easier for them to start their own business. Ours is an attitude of optimism and prudence. That is the country we want to build. The Conservative party gets that and we are delivering on that aim.

Welfare Reform and Work Bill

Suella Braverman Excerpts

Tuesday 27th October 2015 Commons Chamber

[Sammy Wilson]

I agree, although that is not a short-term answer either. That is a long-term answer and it is certainly not going to deal with the issue facing us today.

The tax reductions will not affect all the people who are on low wages because they will not all hit the threshold. The childcare changes will affect only a fifth of the people whose tax credits will be cut. The national living wage increases will not apply, for example, to people under 25. So there is a whole swathe of the population who will not benefit from the other changes. Many of them will have families as well, of course. The Chancellor has said that the principal way in which the issue will be addressed is an increase in the national living wage, yet a whole swathe of the population will not be affected by that. For that reason, many people will be worse off. Even when all the changes are added together—the tax credits being removed, the tax thresholds being increased, the childcare element, the housing element, which does not apply to people in the private rented sector of course, and the national living wage—it is estimated that people will still find themselves on average a third worse off. This will affect many of our constituents.

Conservative Members should be very thankful that those in the House of Lords swapped their red Benches for red flags last night. That has probably done the Conservative party a favour. Many of the people who will be affected by these changes are the natural supporters of the Conservative party; they are the strivers of society, the people who want to do better, who want to improve themselves, and who probably look to some of the Government’s other policies. They will be hit hardest. I suspect that the Government have got off the hook, therefore.

The Government’s measures should be overturned by the House tonight and the Government should have a complete rethink. If they are serious about having a rethink, they should be supporting the amendments, to enable a radical rethink rather than a tinkering with the policy, which will be detrimental.

This question is rightly asked: what is the alternative? There are many alternatives. The changes represent less than 1% of total Government spending. Surely to goodness across Departments two thirds of 1% in savings can be found to finance dropping the changes. Over the life of this Parliament we can then work towards a sensible rebalancing, where employers pay proper wages and the state has to pay less in subsidies.

[Suella Fernandes (Fareham) (Con)]

We all share a belief in the welfare state, and in a civilised country like ours it is right that we offer help to the most needy, but the amendments are myopic and ill thought out because they forget about sustainability and fairness. Our welfare system is immensely unfair in its discrepancies. The clauses that would be amended—clauses 9 and 10—together freeze the main rates of most working age benefits, child benefit and certain elements of working tax credit and child tax credit for four years, starting from 2016-17, with important exemptions to protect the vulnerable, such as pensioners and those who are disabled, reflecting compassion and proportion.

Why are we doing that? Because since 2008 wages have risen by 12%, but for most working age out-of-work benefits the rise has been 21%. How can it possibly be fair or justifiable that the amount that people receive on benefits is increasing at a faster rate, and is more, than people receive in work? The freezes contained in clauses 9 and 10 go to the heart of reversing that damaging trend.

I want to make three key points about clauses 9 and 10. They support the original concept of welfare, as designed and intended by its father, Beveridge. In 1942, when the Beveridge report was published, he enshrined the key principles of what welfare should stand for—to help those who found themselves in occasional exceptional need. It was to help people cope with unexpected and temporary afflictions of sickness and unemployment.

[Catherine West]

Is the hon. Lady aware that the Government’s proposals would affect 740,000 families in which there are children with disabilities?

[Suella Fernandes]

What I am aware of is that the reforms are part of a package that includes an increase of free childcare to 30 hours, which is worth about £5,000 and will help working families combine work and childcare. That is how we are going to help children. Work, not benefits, is the route out.

Beveridge’s guiding principles were clear—the individual has to take greater responsibility, alongside the state establishing a national minimum standard to ensure that the most vulnerable are looked after and that the system is sustainable. The main problem with the existing welfare system is that it has allowed businesses to act in a way that is both unpalatable and bad for the economy. It has facilitated the underpayment of workers, which has allowed chronic under-training and under-investment in staff. The problem is simple. If a business or an employer knows that low wages will be topped up by the state, what is the point of investing in its workforce? What is the point of investing in training or promotion?

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Does the hon. Lady think it is fair that businesses will get a taper on the increase in wages? She complains that tax credits subsidise businesses, yet the poorest in society will not get a taper—their income will be cut right away in April. How is that fair?

[Suella Fernandes]

The Government are pragmatic and sensible, and they will be responsive. They will make announcements in the autumn statement that will deal adequately with that issue. [Interruption.] I have limited time and I want to make progress. It is important that we make work pay by stopping businesses underpaying their staff.

My next point is that we need to ensure that everybody keeps in mind the fact that the reforms are part of a package. The new measures on free childcare, the rise in the personal allowance, the tax lock on income tax, VAT and national insurance, and the welcome introduction of the national living wage will all ensure that household incomes rise over the course of this Parliament. People will be able to keep more of the money that they earn, rather than pay it in tax, which would just go to more Government expenditure.

Finally, the manner in which the Opposition have behaved is shameful. Prior to the election, there were suggestions that they would back our welfare reforms, acknowledging that welfare had become unsustainable and costly. They equivocated and suggested support. Even in July the right hon. and learned Member for Camberwell and Peckham (Ms Harman) was clear in her support for the reforms. What we have seen now is opportunism and the politicisation of an issue on which consensus is required. That is shameful and underlines the Opposition’s lack of integrity and decency, when we need cross-party support on this difficult issue. I support the clauses as drafted and expect the Opposition to do so too.

Oral Answers to Questions

Suella Braverman Excerpts

Tuesday 27th October 2015 Commons Chamber

[Suella Fernandes (Fareham) (Con)]

Does the Minister agree that raising productivity is the route to raising living standards for everybody, and that this Government’s commitment to cutting corporation tax, our historically high investment in infrastructure and the planning reforms will all contribute to achieving that aim?

[Damian Hinds]

I agree with all that. It is rising productivity that underpins rising real wages and therefore improving living standards.

Tax Credits

Suella Braverman Excerpts

Tuesday 20th October 2015 Commons Chamber

[Stella Creasy]

The Minister kept talking about the amount of public debt that he wanted to attribute to each household, but average unsecured personal debt is now £10,000 per household. Given the vulnerability to which families are exposed when they have that level of unsecured debt, will the changes make it more or less likely that such personal debt will rise? No one in the House would argue that the changes as currently constituted will not lead to a rise in personal debt to families, and we know the consequences of that. I pay tribute to the hon. Member for South Cambridgeshire (Heidi Allen) who honestly and openly set out the consequences of debt. She explained the worries she has when she sees families who are struggling with debt, and Labour Members share those concerns.

[Suella Fernandes (Fareham) (Con)]

I applaud the hon. Lady’s passion but she is missing the context. The changes are part of a package that include a national minimum wage, 30 hours of free childcare, and a lock on tax rises. Taking that into account, wages and personal income will rise—does she not see that?

--- Later in debate ---

[Suella Fernandes (Fareham) (Con)]

All of us who are here today share a belief in the welfare state. In a country like ours, it is right that we offer help to the most needy, and that there should be a safety net for those in difficult circumstances, but under the Labour Government the welfare system became immensely unfair in its discrepancies.

Today’s debate goes to the heart of who we are as a country and what we stand for as a people. It is about more than Treasury statistics: it is about real people. That is why I am proud to support these tax reforms as part of a package set out by the Chancellor. They are fundamentally the right thing to do if we are honour the true notions of what welfare is, and what it is to work.

I want to look back at history—

[Ian Blackford]

Would the hon. Lady like to comment on what was said this afternoon by the Adam Smith Institute, whose views are often quoted by the Conservative Government? It said that

“working tax credits are the best form of welfare we have, and cutting them would be a huge mistake”.

[Suella Fernandes]

I disagree with that comment, assuming that it has been rightly attributed. I believe that tax credits have distorted the very notion of what welfare was supposed to be. Let us look back to welfare’s genesis in the Beveridge report, which was published 73 years ago, in 1942. Opposition Members tend to claim a monopoly on William Beveridge, but he was not the socialist Robin Hood whom they so often cite. He was an economist, versed in the principles of contribution and industry, and his principles were very clear. They were about taking responsibility, alongside the state’s establishment of a “national minimum”. They were about ensuring that the most vulnerable were looked after, while also ensuring that the nation remained fiscally viable. We have drifted away from that concept of welfare—that it should provide occasional and temporary support for those in unemployment, sickness and retirement. We now have a system whereby the state is subsidising low pay, and that cannot be right. This Government are introducing reforms, and restoring the principle that welfare should be the safety net that it was intended to be.

I want to make three main points. First, the tax credit system has allowed business to act in a way that is both unpalatable and bad for the economy, facilitating the underpayment of workers and sanctioning chronic under-training and under-investment in those workers. If a business knows that low wages will be topped up by the state, what is the point in investing in them, providing extra training and more scales and promotion? The business people I meet in my constituency are crying out for more skilled work forces. Secondly, the deployment of the tax credit system was chronically dysfunctional, and very confusing for many people. Lastly, the Conservative party is nothing without social justice. This measure will restore social justice to the heart of our economic principles, and I commend it wholeheartedly to the House.