Welfare Benefits Up-rating Bill

Charles Kennedy Excerpts

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?

--- Later in debate ---

[Mr Kennedy]

From my time as leader, and indeed from reading the memoirs of previous leaders, I know that no leader of the Liberal Democrats worth his salt would ever dare to predict how every Liberal Democrat was going to vote at any given time. But we hope that the critical mass will be such that it will send a helpful signal to those on the Treasury Bench and give me a sentence or two for my own memoirs, if I ever get round to them.

I do not want to get into detail at this stage in the debate: my objection is more a philosophical and political observation. It is right that a party that can look back to a lineage including Beveridge and Lloyd George should make this reflection—that there is a large measure of political device about the Bill, which emanates in particular from the personage of the Chancellor of the Exchequer, aided and abetted by the Prime Minister. I say that because a tactical judgment has been made by the Conservative—not coalition—high command that this can be a very useful dividing stretch of water to place between themselves and, in particular, the Labour party with a view to the next election.

We are not against the politics of choice, argumentation and the clash of ideas—what is the point of a House of Commons and a parliamentary democracy without that? But the insidious aspect of the Bill is that, in seeking to open up a philosophical divide of that type, it becomes not an issue of political leadership, but of political pandering to some of the fears, insecurities and downright prejudices that can be stoked up in society—the “us and them” mentality and the sense of resentment and envy. When people start playing fast and loose with those factors—and we have seen early examples against the backdrop of this legislation in the last week to 10 days —they are following a very risky strategy indeed.

I was pleased that the Deputy Prime Minister—the leader of my party—spoke out robustly against the initial posters and some of the leaflets that the Conservatives were producing. However, where the temptation of Her Majesty’s Britannic and historic Conservative and Unionist party is concerned about opportunism within the welfare state historically and playing that card to their advantage and to the disadvantage of others, I would take reassurances from them on that this week as assuredly as I would take reassurances on Wednesday night from the Prime Minister about the direction of their European policy. That is the fact of the matter. But if that is the game that we are playing—and I fear it is—the Liberal Democrats should ensure a clear distance between ourselves and the Conservatives, given our political lineage.

My second point, as my hon. Friend the Member for St Ives said, is that the presence of my hon. Friend the Minister of State—and other colleagues, both in the coalition as Ministers and outside it—has added strength to the philosophical and practical arguments that we seek to bring to social policy. Before the last election, I shared a party platform at one of our conferences with the leader of my party. We were speaking about aspects of social policy, and the point I made to him and to the audience I repeat tonight. We can be tough-minded—indeed much more tough-minded than many an outside commentator ever expected the Liberal Democrats would or could be when the coalition was entered into two and a half years ago—and that has been proven. What we have to remind people of—with a view to the next election—is that our party and our cause is not just about the head, but must also be about the heart. Many people will view this Bill as hard-hearted, and many will remember that when they come to cast their votes. In part, what we are trying to do here is remind that section of our electorate, our membership, our activists, our sympathisers and our supporters whom we want to come back over the second half of this Parliament, that while the head remains rigorous in government, the heart has not been lost in the wider environ that is UK Liberal Democracy.

My final point is one that I believe my hon. Friend the Member for Argyll and Bute (Mr Reid), who has had such excellent and characteristically detailed input to our internal discussions, raised with the Prime Minister only last Wednesday at Prime Minister’s questions. In setting this arbitrary and post-2015 set of legislative strictures on what will happen to benefits uprating, what account had been taken of the difficult art of gazing into the crystal ball where future levels of inflation are concerned, not least where trends in food and energy prices are involved? The answer, frankly, in any fair-minded way, came there none from the Prime Minister to my hon. Friend.