Welfare Reform Bill

Debate between Steve Baker and Geraint Davies

Wednesday 9th March 2011 Commons Chamber

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

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

[Steve Baker (Wycombe) (Con)]

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

[Geraint Davies]

I shall come on to the reforms.

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

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