Welfare Benefits Up-rating Bill

Debate between Toby Perkins and Charles Kennedy

Monday 21st January 2013 Commons Chamber

[Toby Perkins]

I will try to plough on if I may, because many hon. Members want to speak, and I sense the Opposition deputy Chief Whip—my hon. Friend the Member for Tynemouth (Mr Campbell)—glaring at me with intent.

In a raft of ways, tax credits cuts will hit people on low to middle incomes. By anyone’s definition, they are the thrifty, hard-working strivers that people across the political divide recognise are key to the country’s future prosperity, but they will be badly hit by the Bill.

Once again, women and children will be hit worst of all. The Government’s strivers tax will hit women particularly hard—4.6 million women who receive child tax credit will be hit by the strivers tax, including 2.5 million working women. All those will come together as the perfect storm. The 1% uplift is nothing but a blunt political instrument designed to create a political trap that has nothing to do with a nuanced benefits system, with all its complexities.

The Child Poverty Action Group has said that the 200,000 increase set out in the written answer from the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey) should be added to the increase of 800,000 in children in relative income poverty by 2020 that the Institute for Fiscal Studies found in its analysis of the coalition’s welfare cuts. Let us remind ourselves of what the Prime Minister used to say about relative poverty. In 2006, he said:

“I believe that poverty is an economic waste and a moral disgrace. In the past, we used to think of poverty only in absolute terms—meaning straightforward material deprivation. That’s not enough. We need to think of poverty in relative terms, the fact that some people lack those things which others in society take for granted. So I want this message to go out loud and clear: the Conservative party recognises, will measure and will act on relative poverty.”

That is the manifesto on which Conservative Members were elected, and that was what they used to believe, but that is what they will vote against tonight when they support the Bill and reject the very reasonable amendment moved by my right hon. Friend the right hon. Member for East Ham (Stephen Timms).

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

I shall be brief as we are all conscious that we are increasingly up against the clock. I followed the progress of the argument and analysis by the hon. Member for Chesterfield (Toby Perkins) with some interest. Had his predecessor in that seat been here tonight, he would most certainly have voted for the Liberal Democrat amendment, so I hope that the hon. Gentleman will maintain that proud Chesterfield tradition and join us in the Lobby later this evening.

As one who—like so many of my right hon. and hon. Friends—applauds so many of the initiatives that the coalition has been able to take, specifically in the field of social policy, I think that the input from the Liberal Democrats has been significant, not least from my hon. Friend the Minister of State who will have the arduous task of replying to the very wide diaspora of this debate later this evening. That input includes taking low-paid people out of tax altogether to moving in the direction of universal credit—I do not take the jaundiced view of many as to its prospects. I am delighted that the Secretary of State for Work and Pensions is in his place, because if we find, a little further down the track, that a little more constructive pressure needs to be placed on the Treasury to make things work that little bit better, he can certainly count on support from these Benches, because we think that the direction of travel on universal credit is very good. However, my hon. Friend the Member for St Ives (Andrew George) pointed out that the Bill sits at odds, both practically and philosophically, with developments of that type. He used the phrase “a blunt instrument” and I think that is a fair description. Our amendment would maintain a responsible position in relation to the wider issue of the deficit—and deficit reduction policy—in that benefits would not rise at a higher rate than earnings. That is responsible, consistent and a constructive contribution to the debate this evening.

[Toby Perkins]

The right hon. Gentleman just described his amendment as a Liberal Democrat amendment. Can he confirm that all the Liberal Democrats will vote for it?