Universal Credit Roll-out: Nottingham

Chris Leslie Excerpts

Wednesday 14th November 2018 Westminster Hall

[Alex Norris]

The hon. Gentleman is right that what I have to say about Nottingham is informed by the experience of other parts of the country, so it will be true for every community in the land. Yes, the system is supposed to be simple—we want a simple system that promotes work—but there are lots of pitfalls, which people with the best of intentions are falling into. I completely share his view that such people ought to be supported.

In June, I was startled to read that the National Audit Office had found that universal credit might end up costing more than the existing system, that it cannot prove that it gets claimants into work, and that it is unlikely ever to deliver value for money. We should all look at that.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

As my hon. Friend knows, the false economy of some of the new systems worries me. That is one of the reasons why I have always argued that advice services should be a statutory function. Citizens Advice states that for every £1 invested in advice services, we can save £10 from people falling out of the benefits system because of mistakes and so forth. Is not the worry about this particular form of the universal credit roll-out that it is leaving people confused and in a messy situation, without proper advice from the system to fall back on?

[Alex Norris]

I thank my hon. Friend—my neighbour—for his contribution. I absolutely agree with that. I am passionate about advice services. As he knows, in October last year I led a debate in Westminster Hall on advice services in our city. They do incredible work to help people find a way through that fog, but they are clearly under real pressure. Our council is also under extraordinary financial pressures, but has put more into the area, trying to support it when many other services are not being treated similarly. I am pleased it is doing that, but a real need is clearly building up. I will cover much of that.

It is important to understand the context of what has happened elsewhere. The Trussell Trust found that 12 months after roll-out, on average, food banks see a 52% increase in demand, compared with 13% in areas that have had universal credit for three months or less. The Children’s Society has estimated that under the proposal for an earnings threshold, about 1 million children living in poverty will miss out on free school meals. That will almost entirely affect working families. Furthermore, under universal credit, £175 million for families with disabled children will be cut. Analysis by Contact suggests that because of the 50% cut to the child disability payment under universal credit, 100,000 families with disabled children will be worse off by more than £1,750 per year. Also, a report by Policy in Practice has indicated that 750,000 households on “disability benefits” will lose, on average, £76 per week.

Financial Guidance and Claims Bill [Lords]

Chris Leslie Excerpts

2nd reading: House of Commons
Monday 22nd January 2018 Commons Chamber

[The Secretary of State for Work and Pensions (Ms Esther McVey)]

I beg to move, That the Bill be now read a Second time.

The Bill will reform the current financial guidance service landscape to improve outcomes for people in their everyday lives. It will bring about two changes. First, it will restructure the financial guidance landscape for members of the public by creating a new single financial guidance body and providing funding to the devolved authorities for locally commissioned debt advice. Secondly, it will move the regulation of claims management services from the Ministry of Justice to the Financial Conduct Authority. Both measures will benefit members of the public and provide a sustainable legislative framework for public financial guidance and the future regulation of claims management companies.

Ensuring that people, especially those who are struggling, are easily able to access free and impartial financial guidance to help them to make more effective financial decisions and to improve their confidence in dealing with financial service providers is an important step towards improving people’s financial capability. In addition, ensuring that people are able to access high-quality claims management services speaks to the Government’s commitment to ensuring that action is taken when markets work against consumer interests.

The provisions in part 1 of the Bill follow three consultations, conducted by the previous Conservative Government, on the provision of pensions and money guidance and the provision of advice on debt management. In particular, the consultations examined the demand for such services, how their provision should be structured and how to make that provision more effective for consumers. The final consultation revealed a broad consensus for a single body for financial guidance. As a result, the Bill will bring together the important work done by the Money Advice Service, the Pensions Advisory Service and Pension Wise to create a single financial guidance body. The relevant measures have received strong support from industry, stakeholders, charities and consumer groups.

[Mr Chris Leslie (Nottingham East) (Lab/Co-op)]

It is vital that we all work across party lines on financial guidance. I encourage the Secretary of State to place on the new financial guidance body a duty to promote financial resilience. Every year in Britain, 2 million people have unforeseen sickness absence. They cannot cope as their income suddenly falls. Eight out of 10 people in this country have very little savings, or none at all. It would be a real step forward to have a body that promotes financial resilience.

[Ms McVey]

The hon. Gentleman makes an important point. Once the new body is set up, it will be able to see what is needed in the public arena and shape and craft what it does. That is important, as is debt advice for vulnerable people, who need to be able to plan a path for their future.

--- Later in debate ---

[Debbie Abrahams]

My hon. Friend makes a very valuable point that I will come to later. This is what we are seeing: we saw it with the BSPS and are now seeing it with Carillion and the pension savers there.

Last year’s statistics from the FCA make shocking reading. Of those over 55 planning to retire in the next two years, only 10% had used the Pensions Advisory Service, and only 7% had used Pension Wise. The new SFGB will have to do much better than that. Eight million people in the UK are over-indebted, according to a Money Advice Service report from last March, and less than one in five of these individuals currently seeks advice. Many are among the most vulnerable: over half the clients seen by MAS-funded debt advice projects have had a diagnosed mental health condition. It is vital that those people continue to be supported during the transition period, and that the SFGB develops strategies to identify and reach people who do not currently use any services. The impact assessment talks about “long-term…savings” once the SFGB has been established. It is difficult to see how such savings will be made if the new body is to fulfil all its objectives, particularly its objective of ensuring that information, guidance and advice are available to those who most need them. Have the Government considered what resources the SFGB will need to identify and support those who do not currently access advice or guidance? Has the Minister considered what arrangements will be put in place to ensure that people can continue to access existing services during the transition period?

The five areas on which the SFGB is expected to concentrate include provision of debt advice, and provision of information and guidance relating to occupational and personal pensions, accessing defined contribution pots and retirement planning. We welcome the Government’s decision, at the urging of our colleagues in the other place, to make it explicit in the Bill that the information, guidance and advice will be impartial, and that it will continue to be provided free to members of the public.

The SFGB will also help consumers to avoid financial fraud and scams; give information on wider money matters, and co-ordinate and influence efforts to improve financial capability; and co-ordinate non-governmental financial education programmes for children and young people. It also has a strategic function: to support and co-ordinate a national strategy. Given the appointment of a Minister with responsibility for financial inclusion, that needs to be strengthened to a “develop and deliver” function.

We welcome the focus on the provision of financial education for children and young people, but we think that the Government should be bolder, as recommended by the House of Lords Financial Exclusion Committee report “Tackling financial inclusion”. The new body will have to cope against a backdrop of rising prices and stagnant wage growth, a fall in real incomes and saving levels that have crashed. Evidence provided to the Lords Select Committee referred to fears expressed by debt agencies about the rise in queries concerning rent arrears, energy and water bills, telephone bills and council tax.

Then there is the impact of universal credit. As I have mentioned on numerous occasions inside and outside the House, we support UC’s aims of simplifying the benefit system, making transitions into work easier and, fundamentally, reducing child poverty. However, the Citizens Advice report “Universal Credit and Debt” showed that some aspects of UC risk causing or exacerbating personal debt problems. UC clients are more likely to have debt problems than those on legacy benefits. A quarter of the people that Citizens Advice helped with UC needed help with debt. UC clients are also struggling to pay off their debts. More than two in five debt clients on UC have no spare income to pay creditors.

Citizens Advice makes a number of recommendations, which are particularly pertinent in the context of the Bill. They include the need for more funding for free, impartial debt advice to meet existing increases in demand resulting from UC. In addition, Citizens Advice wants the Financial Conduct Authority actively to monitor the roll-out of UC. Has the Minister considered the impact of UC on personal debt, and its implications for the resourcing of the new SFGB? Taking up the Citizens Advice recommendations would alleviate some of the problems caused by UC. Fundamentally, as I have said, the Government must stop the roll-out of the programme and reverse the cuts to UC, which mean that it is failing to make work pay and failing the very people it is meant to help.

The SFGB will have to cope with an increasingly complex pensions sector. The growth of auto-enrolment brings more and more people within the scope of occupational pensions. The other major change has been the introduction of pension freedoms. In that context, we welcome the Government’s commitment in the other place to the delivery of the pensions dashboards. However, given the increasing issues that pension scheme members face—including those of British Steel, and now Carillion —in addition to a much tougher pension regulation framework, I want the Government to tackle the appalling abuse perpetrated by opportunistic financial scammers, who have targeted BSPS and Carillion pension members. I will say more on that later.

[Mr Leslie]

Does my hon. Friend agree that it would be useful to have a connection between the new financial guidance body and the Financial Conduct Authority? I slightly regret the fact that we are moving away from Treasury involvement in this whole issue. My hon. Friend may know that some of the products that people are investing in with asset managers and insurers, having got their pensions freedoms, are known as PRIIPs—packaged retail and insurance-based investment products. New regulations came out this month, but there is a risk of these products opening a whole new mis-selling scandal, because they are creating all sorts of wild projections about the amounts that could be earned. Does my hon. Friend agree that the guidance body needs to keep on top of this with the FCA?

[Debbie Abrahams]

My hon. Friend has made an absolutely key point. To go back to my urgent question, things are slipping through the net, and those links need to be tightened up. Again, this is something we need to explore in Committee.

As it stands, the SFGB will provide advice to the self-employed on their personal finances and debts only, and not on their business finances or debts. The Money Advice Trust, which helped more than 38,000 people last year, says that, for many self-employed people, there is simply no distinction between their personal and business finances. To exclude business finances and debts from the SFGB’s remit is a missed opportunity, particularly given the significant growth we have seen in self-employment in recent years. The self-employed as a group have also seen falling incomes since the recession. Will the Minister consider extending the SFGB’s remit to cover business finances and debts?

On the changes regarding claims management companies, we agree that the current arrangements regulating the industry are unsatisfactory. The current situation has been characterised by poor value for money, information imbalances, nuisance calls and texts, and the progression of speculative and fraudulent claims. We accept the proposition that there is a public interest in having an effective claims management market operating in the interest of consumers, as that can provide access to justice for those who are unwilling or unable to bring a claim for compensation.

Further, as the Carol Brady review asserts, a well-functioning CMC market can act as a check and balance on the conduct and the complaints-handling processes of individual businesses. We note that the Brady review considered that a move to the FCA would represent a step change. That seems the right decision, especially as 99% of turnover relates to financial services—PPI, packaged bank accounts or insurance.

Let me turn now to the content of the Bill. While we generally support the Bill, there are several aspects that we will look to strengthen, particularly in relation to clauses 4, 5, 25 and 28.

Oral Answers to Questions

Chris Leslie Excerpts

Monday 27th March 2017 Commons Chamber

[Richard Harrington]

My hon. Friend is absolutely right to ask that question. The Government take the threat posed by scams very seriously indeed. We run campaigns to highlight the risk posed by scams to savers, and we have established a cross-government taskforce to gather and share intelligence, and to co-ordinate enforcement action. We have also consulted on further measures to tackle scammers, including a proposal to ban cold calling in relation to pensions. Our next step will be announced very soon.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Well, that is the point I was going to ask the Minister about. Will he tell us when he will crack down on cold calling? These people are trying to scam others out of their hard-earned life savings, taking advantage of the notion that there are these freedoms, but potentially putting pensioners at great risk. When will the legislation be brought forward?

[Richard Harrington]

As is to be expected, the hon. Gentleman asks a pertinent question; very soon, is the answer.

Jobcentre Plus Offices: Closure

Chris Leslie Excerpts

Monday 30th January 2017 Commons Chamber

[Caroline Nokes]

We are seeking to ensure that we consult our staff, local stakeholders and claimants to understand what is best for them. This is part of a process brought about because the prime contract expires in March 2018. It would be grossly irresponsible of us not to reflect on how we make best use of our DWP estate, particularly when up to 20% of it is underutilised.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the Minister give it a rest with the jargon about relocating or co-locating, because she is actually closing jobcentres? Hyson Green jobcentre in Nottingham, where we have twice the national average unemployment and are in the 5% least employed, was opened by Lord Heseltine after civil disturbances in the city. It has been important in matching people with vacancies. Please will she think again?

[Caroline Nokes]

It is important to match people with vacancies, but it is also important to reflect on making the best use of our estate. This is an opportunity to reflect on the fact that 20% of our space is underutilised. I am sure the hon. Gentleman would agree that this comes at a time when we should not be wasting taxpayers’ money.

Supported Housing: Benefit

Chris Leslie Excerpts

Wednesday 20th July 2016 Commons Chamber

[Maggie Throup]

I want to make some progress.

Too often, we view one cost in isolation, and we often view one policy in isolation as well. Two Departments are working together on this policy, which I think is definitely the right approach, but we need to do even more of that joined-up policy making. Yesterday, NHS England published its implementation plan for the mental health five year forward view. The costs of mental ill health—to the individuals concerned, their families or carers, the NHS, and society more widely—are huge. It is not uncommon for mental health problems to result in homelessness, and a subsequent need for supported housing to put people back on track.

A great example of supported housing working well is the Canaan Trust, based in my constituency. It is a Christian charity which provides safe, secure and healthy supported accommodation for homeless males aged between 16 and 54, often giving them the fresh start in life that they never expected to have. It provides 24/7 support, with staff permanently on site. I have seen for myself how person-centred its support is, with a tailored approach for each individual. The team at the Canaan Trust makes everyone feel special, and that is probably a feeling that they have not experienced for a very long time.

Yesterday I chatted to the key man at the Canaan Trust, Kevin Curtis. His enthusiasm is infectious. Indeed, he managed to persuade quite a few of us—including me and the leader of the council—to sleep out in February and March to raise money for the charity, and I can tell the House that at two o’clock in the morning the pavements in Long Eaton get really hard and cold!

Kevin told me what happens when supported housing is not available. It is a revolving door. Vulnerable people, many of whom have addiction problems, are housed in sub-standard accommodation in communities where the temptation of drink and drugs is around every corner. Inevitably, eight out of 10 find themselves back on the streets within three to six months—and all because there is no one there to watch their backs, and to provide the extra guidance and support that makes all the difference. We fail as a society if we do not stop those people falling through the net, and I urge the new Minister to make that one of her top priorities.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

The hon. Lady’s constituency is near mine: we are both in the Nottinghamshire-Derbyshire area. As she knows, providers such as Framework, which does fantastic work on supported housing, have made real efforts to provide help for the most vulnerable. Should this not be a cross-party issue? Should not those in all corners of the House press the Government to change their position and do the right thing?

[Maggie Throup]

I entirely agree. That is why the review is so important. We need to reach out to organisations to find out what is needed and will be sustainable for the future.

The extra support that is provided by such organisations, including charities like the Canaan Trust, means that for their clients the outcome is a very different story from the revolving door that sends eight out of 10 back on to the streets. Just 2% of their clients go through that revolving door, which is a huge reduction. That, along with other evidence of good outcomes, shows just how important it is for supported housing to be available to the most vulnerable people. It should also be borne in mind that this is not just about the costs associated with the type of provision found at the Canaan Trust; it is also about the savings made for the NHS, the police and other support agencies.

Let me end by reminding Opposition Members that, as my hon. Friend the Member for Mid Derbyshire (Pauline Latham) mentioned earlier, it was this Conservative Government who, in the 2015 autumn statement, committed £40 million to services for victims of domestic abuse, three times as much as had been provided in the previous four years. I am proud of that.

Oral Answers to Questions

Chris Leslie Excerpts

Monday 9th May 2016 Commons Chamber

[Mr Vara]

We have applied clarity, as I have said at the Dispatch Box on many occasions during the course of many debates.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

The younger generation are more likely to be self-employed, and 15% of the workforce are now self-employed, yet only one third are saving into a pension pot. Will the Minister look at the recommendations from the Federation of Small Businesses, which is calling for incentives and support for self-employed pension provision?

[Mr Vara]

The hon. Gentleman raises a good point about a particularly important sector of our economy, and we will certainly look at anything put forward. I emphasise that the Government are keen to ensure that people, including the self-employed, think about and prepare for a better future in terms of their pension.

Welfare

Chris Leslie Excerpts

Monday 21st March 2016 Commons Chamber

[Stephen Crabb]

The can-do principle that my hon. Friend describes is very important, and it is at the heart of everything we are trying to achieve in all our welfare reforms. In the area of disability, the central understanding that my predecessor brought to the Department, along with the sense of mission and purpose, was to focus on what people can do. For people who genuinely cannot work and need the support of the state, we need to reorient resources to make sure that those who are the most vulnerable and need them most get those resources.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

The Secretary of State would do well, though, to recognise that there are a lot of very upset and unsettled disabled people who, having heard the Chancellor on Wednesday, were very concerned indeed. The new Secretary of State says that he wants to “reset the conversation”. Does he not think he would do well to apologise for this appalling upset that people have felt over recent days? Will he use the word “sorry”?

[Stephen Crabb]

I am not sure that the hon. Gentleman’s line of questioning is particularly fruitful. I made a very clear statement about what I am trying to achieve on day one in this new role. If he is looking for apologies, he should look to his own party’s Front Benchers and ask for an apology for the scandalous state in which they left the public finances in 2010.

Housing Benefit and Supported Housing

Chris Leslie Excerpts

Wednesday 27th January 2016 Commons Chamber

[John Healey]

My hon. Friend the Member for Pontypridd and I called the debate to give voice to widespread concerns, to try to make the Government think again and to say that they must make exemptions from the cut. I shall set out in a moment why Ministers need to take a decision immediately.

Let me explain how the process will work. The Chancellor’s decision caps housing benefit for social tenants at a new rate, which is the same amount that private rental tenants receive through the local housing allowance. For most general council and housing association homes, this will not cause tenants any immediate concerns as their rents are lower than that level. However, specialist housing services and schemes that provide extra care and support involve much higher housing costs, with their higher rents and service charges often covered by housing benefit. The Government know that from their 2011 report on supported housing, which listed the main reasons:

“providing 24 hour housing management cover…providing more housing related support than in mainstream housing…organising more frequent repairs or refurbishment…providing more frequent mediating between tenants; and providing extra CCTV and security services”.

That is why rents in that type of accommodation do not mirror the rates in general private rented accommodation in the local area, but that is the level of the Chancellor’s cut and cap.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

My right hon. Friend will know that, in Nottingham, the housing charity Framework is appalled at the impact of the change on the supported accommodation it provides for some of the most vulnerable people in my constituency. It says that hundreds and hundreds of spaces will have to close by 2018 if the change goes ahead. This is a very real problem facing some of the most deprived and vulnerable people in the country, and I applaud the fact that he has called this Opposition debate.

[John Healey]

I thank my hon. Friend and applaud his effort to talk to providers in his constituency. The fears that Framework expressed are widely voiced and shared by providers who offer that type of housing and support. I do not know what figures he has for Nottingham, but Homeless Link cites figures in Birmingham that expose the shortfall. The average national rent in a homeless hostel is about £180 per week. The local housing allowance rate in Birmingham is half that figure, at £98.87 a week. The local housing allowance rate for a room in a shared house, which is all that single people under 35 are entitled to, is just £57.34 a week—a shortfall of over £120 per week, per tenant.

Supported housing is not just an emergency bed or a roof over someone’s head; the support helps people to get their lives back together. Last year, 1,500—or two in five—people housed by St Mungo’s in its hostels moved on from supported housing into individual accommodation. Last year, St Vincent’s—the Manchester-based housing charity—saw 15 of its young Foyer residents go on to university, one to Oxford. For thousands of other people with severe autism, learning disabilities, dementia and mental illness, living as independently as possible in supported housing, there is no alternative but hospital and residential care, which are much more institutionalised for the residents and much more expensive for the taxpayer. This policy risks turning the clock back on people’s lives and standards of care by 40 years.

--- Later in debate ---

[Brandon Lewis]

The hon. Gentleman highlights the terrible mess that the coalition Government inherited. There was no fairness for hard-working taxpayers in such a system. There was nothing progressive in trapping people in lives without hope for a brighter future. The welfare system that his party left was broken, yet the Opposition have since then opposed every single decision we have taken to fix it. We have never heard from them proposals for alternative reforms, which can mean only that they oppose making any difficult decisions at all. It is easy to make noise, but much harder to do the right thing by the British people. We have seen one tactic time and again—scaremongering, exploiting the concerns of the very people they claim to represent, and playing politics with the lives of vulnerable people. Today’s debate is no exception.

[Chris Leslie]

If the Minister wants a specific proposal to save money on housing benefit and welfare, why does he not look at the £4.6 billion lost through fraud and error in the administration of our housing benefit system? Why does he not get a grip on that and introduce some better credit rating agency checks for applications? That is where the savings should be made, rather than on the backs of the most vulnerable people in our society.

[Brandon Lewis]

We have been clear about protecting the most vulnerable people in our society; I will come to that in a moment. The hon. Gentleman is right. We need to continue to make progress in cracking down on fraud and error, and in local government as well—something that the Labour Government did nothing about.

Budget Resolutions and Economic Situation

Chris Leslie Excerpts

Thursday 9th July 2015 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Good morning, Madam Deputy Speaker.

When one cuts through the rhetoric and the headlines that the Chancellor spun, one sees that yesterday’s Budget leaves working people worse off. It is the working families of Britain on low incomes, trying their hardest to do the right thing, who will pay the price for the gap between what the Chancellor said and the truth of what his Budget actually means. The Office for Budget Responsibility has flatly contradicted the right hon. Gentleman’s claim to have lowered taxes, pointing out on the first page of its analysis that tax increases are twice as big any tax cuts over the course of this Parliament. It is a Budget that is entirely concerned with chasing headlines to further the Chancellor’s well known political ambitions, rather than putting the working people of Britain first.

Pulling the rug from under people on low incomes with a hefty work penalty in the tax credits system— 3.3 million working families will lose out from these changes, with 500,000 families losing tax credits entirely—despite Tory denials before the election, will hurt those in work.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

Will the hon. Gentleman give way?

[Chris Leslie]

The hon. Lady is very keen, and I give way to her enthusiasm.

[Mrs Murray]

Will the hon. Gentleman confirm that former Chancellor Alistair Darling told a meeting this morning:

“Labour is in disarray… We are paying the price of not having a credible economic policy”?

[Chris Leslie]

I did not realise that the hon. Lady was a conduit for the former Labour Chancellor of the Exchequer. I will certainly look closely at what he said, but I did not hear him say those words this morning.

I want to ask Ministers about the work penalty that they have introduced into the tax credits system. Did they know before the election that they were going to hit those who needed tax credits to make work pay, or was it deliberately hidden from public view because of the shock that such a cut to incomes would create? This was a Budget that exposed the Chancellor’s skewed priorities—a Budget that failed to build the more productive economy that we need, that ducked long-term decisions on vital infrastructure projects, and that sought to substitute spin for the support people need to go to work.

[Several hon. Members]

rose—

[Chris Leslie]

I will give way to the very eager Conservative Members in a moment, but I want to make a little progress.

We do recognise that sensible savings are needed to get the deficit down, and we will support measures that tackle tax avoidance and control overall household benefit levels. We regret that the Budget fails to address the overpayments and errors in welfare expenditure, which have ballooned in recent years during the welfare Secretary’s time in office, let alone his lamentable record on delivering the mythical universal credit, for which so many people are still waiting. As my right hon. and learned Friend the acting Leader of the Opposition said yesterday, we will be a responsible Opposition; we will not oppose for opposition’s sake, and we welcome a number of the Budget measures.

[Several hon. Members]

rose—

[Chris Leslie]

Let me pick who I want to give way to. I give way to the hon. Member for Thornbury and Yate.

[Luke Hall (Thornbury and Yate) (Con)]

Alistair Darling used a very simple set of words. He said:

“Labour is in disarray”

and is

“paying the price of not having a credible economic policy.”

Does the hon. Gentleman agree?

[Chris Leslie]

I have not used those words. The hon. Gentleman is reporting words that have apparently been said.

I believe it is important that the Opposition today look at the spin and the headlines that the Chancellor created in his Budget yesterday. Less than 24 hours later, the Budget is beginning to unravel—[Interruption.] Have I said something wrong? The Budget is beginning to unravel and I will explain why, but in the spirit of magnanimity I want to explain that there are Budget measures that we welcome. The Budget fails to address the long-term challenges Britain faces—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am desperate to hear what Mr Leslie is going to tell us. Keep shouting and you will not even be able to ask the right questions.

[Chris Leslie]

Thank you, Mr Deputy Speaker.

Many parts of the Budget were suggested by Labour in recent months. Abolishing permanent non-dom status—that sounds very familiar to my hon. Friends. Increasing the minimum wage—again, we have repeatedly called for that. We welcome any action on low pay—by the way, the Conservatives opposed the creation of the national minimum wage in the first place—but this so-called national living wage is unravelling as it becomes clear that it is nothing of the sort. It is the rebranding of an increase in the national minimum wage—as I say, Labour created that in the first place—which, with the tax credit changes, will still leave working families worse off.

We will support steps to tackle tax avoidance—again, we have consistently pressed the Government on that—but this Chancellor has a poor record on hitting tax avoidance targets, with the amount of uncollected tax increasing to £34 billion last year and his so-called tax deals continually failing to bring in the revenues he predicted. In yesterday’s Budget, the Conservatives broke their manifesto promise to deliver £5 billion of savings by 2017-18. The Chancellor made that promise at the last general election, and he is now saying that we might perhaps get it by the end of this Parliament. We will file the supposed £5 billion of tax avoidance measures in the “believe it when we see it” category.

[Frank Field (Birkenhead) (Lab)]

May I say how much I welcome my hon. Friend’s statement that Labour welcomes the Government’s announcement yesterday to move towards a living wage? Will he confirm in the Chamber what he has said elsewhere—that we will engage very constructively, looking imaginatively at the Red Book, to try to make this more comprehensive and to extend it to the public sector? Does he accept that the more success we have in developing this idea with the Government, the fewer people will be eligible for means tests, and that our aim is not to change means-tested benefits in line with such increases, but to make sure that people can earn enough not to be eligible for means-testing?

[Chris Leslie]

My right hon. Friend is right that we should be thoughtful about the Government’s proposals. It is sometimes difficult to see through the political fog of the games that the Chancellor is trying to play and the tactics he is trying to use. Oh, the look of innocence on his face! My right hon. Friend is right that it is important to take on questions of welfare reform and work through them methodically. We will not oppose everything just for the sake of it. My right hon. and learned Friend the acting Leader of the Opposition was right to say yesterday that while that might be the temptation, we will look at the proposals and be reasonable about those we can support.

We welcome the steps taken in the Budget to reduce pension tax relief for the highest earners, and of course the rise in the personal allowance threshold, as we support steps to cut taxes and try to get a better settlement for those in work.

[Mr Nigel Evans (Ribble Valley) (Con)]

Does the shadow Chancellor agree that the Government are absolutely right to work towards a situation in which nobody is better off out of work than in work? If so, why did Labour do nothing about it when it was in power?

[Chris Leslie]

The hon. Gentleman was doing so well until the little barb at the end of his intervention. Of course we want a situation—there is more political consensus on this than people perhaps realise—in which people in work are better off than they otherwise would be. The problem, which I will come on to later, is the Chancellor’s approach with this particular set of Budget measures. He is pulling the rug from beneath people’s feet while higher wages are not yet available. When we look at the package as a whole, we see that people will be worse off during that period. He cannot just shovel that beneath the rug.

[Several hon. Members]

rose—

[Chris Leslie]

I want to make some progress, but I will give way again in a minute. [Interruption.] I will give way now to the hon. Member for Rossendale and Darwen (Jake Berry) if he wants to intervene. [Interruption.] He complains that I am not giving way, but he does not want to intervene.

We will not support self-defeating false economies in the Government’s approach to social security. We do not support an approach that will leave more than 3 million working families poorer, and in turn mean that the poorest children are more likely to grow up into poor adults, which will cost society far more in the longer run.

The Chancellor and Ministers on the Front Bench have a track record when it comes to false economies, particularly during the last Parliament. They scale back nurse training, and then spend a fortune hiring nurses from private agencies, as my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) knows. They cancel major road schemes, such as the one involving the A14, and then revive them later on at vast expense. They pay redundancy to senior officials at the Ministry of Defence or the Foreign Office, and then rehire them at higher cost. They restrain local councils from tackling fraud in housing benefit, and then the level of overpayments escalates to £1.5 billion. They reduce the number of Her Majesty’s Revenue and Customs staff so that phone calls go unanswered from businesses that need to get through, and then are surprised when the tax gap gets wider and revenues go uncollected. And we have a Chancellor with the gall to boast of a northern powerhouse while simultaneously pulling the plug on the electrification of major commuter rail lines.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My hon. Friend will understand the dismay of many across Greater Manchester and the wider northern regions, not just at the pause in the electrification of the line between Manchester and Leeds—and the implications that will have for rolling stock in the north of England—but at the insult yesterday when we were told that we will get an Oyster-style piece of plastic to use on our Pacer trains.

[Chris Leslie]

It has been said many times, but the powerhouse has become a power cut. As time goes on, many—not just in the north but in the midlands—will see through the rhetoric to the reality that they are experiencing.

The Government are undercutting, not supporting, a productive economy. It says everything about the Chancellor that the impact of his Budget has been to worsen the outlook for productivity in our economy over the rest of this Parliament rather than to improve it. The OBR has done the calculations and its prediction is on page 77 of its report. Its conclusion is stark. The Opposition know that more productive businesses, and a more productive economy, are the key to a virtuous circle of higher growth, higher living standards and, as a consequence, more effective deficit reduction. For the Conservatives, productivity springs magically from thin air, but for us it is decent infrastructure and decent public services that can make all the difference to business success.

In his March Budget, the Chancellor did not even mention productivity, so perhaps we should be glad that he at least found time to mention it yesterday, even if we are still waiting for the much trumpeted productivity plan. I gather that it will be published on Friday, although the House is not actually sitting that day so we will not be able to scrutinise the details. Under this Chancellor, UK productivity has, in the words of the Office for National Statistics, undergone a period of “unprecedented” stagnation.

[Rebecca Pow (Taunton Deane) (Con)]

I have spoken to leading businesses in Taunton Deane this morning and the Chancellor’s Budget has been broadly described as “great stuff”. It will load the scales in favour of hard-working people. Surely the shadow Chancellor must consider that a positive policy, unlike the disarray of the Labour party’s economic policy, as mentioned today by the former Labour Chancellor.

[Chris Leslie]

I am astonished: a Conservative Member of Parliament reports positive feedback on the Chancellor’s Budget. I never thought I would hear that: I am aghast.

[Alex Salmond (Gordon) (SNP)]

The shadow Chancellor may remember that during the Scottish referendum debate last year I described Alistair Darling as “a Tory front-man”. Given what we have heard this morning, might there have been a grain of truth in that remark?

[Chris Leslie]

I have not read the comments by the former Chancellor, although I keep hearing about them from Members. I will have a good look at them, but it is important that we scrutinise the Government’s record on productivity. Unless we improve productivity in our economy, we will not generate the revenues to deal with the deficit and raise living standards. In 2012 and 2013, our productivity growth was negative, and last year it was just 0.2%. That compares with an average of 2.2% under the Labour Government from 1997 until the global financial crisis hit. It is, therefore, almost beyond belief that on the OBR’s analysis the Budget could lead to lower productivity growth, now estimated to be 0.4% lower than the forecast for next year, 0.2% lower in 2017, 0.1% lower in 2018 and 0.2% lower in 2019—productivity down next year, the year after, the year after that and the year after that.

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

Is not one of the reasons for that the fact that the Government are creating lots and lots of low-paid jobs and substituting them for high-paid jobs? In particular, there are 800,000 fewer people earning over £20,000 now than there were in 2010. Is that not a catastrophic record of falling productivity? We want to stand up for the middle earners rising, not just the lowest earners.

--- Later in debate ---

[Chris Leslie]

Government Members will not be interested in scrutinising the compositional issues that are arising in our economy, but the share of jobs that are high-skilled is shrinking back, according to the Office for National Statistics, and being replaced by an increasing share of low-skilled jobs. That is definitely something to be concerned about. In fact, the OBR has voiced its concerns about the productivity threat to our economy, saying:

“If productivity fails to recover as predicted but wage growth continues to accelerate, the MPC could be forced to raise interest rates more quickly”

and wage growth will fall short of its forecast.

[Craig Whittaker (Calder Valley) (Con)]

Having worked in retail for 30 years before coming to this place, I regularly saw good, hard-working people who wanted to work extra hours being prohibited from doing so because of the loss of tax credits. Does the hon. Gentleman agree that the announcements yesterday on reforms of tax credits and on a living wage will finally break the shackles for those people and let them take control of their own destiny?

[Chris Leslie]

Hold on. Let us just pause to scrutinise that. I think the hon. Gentleman just said that people should be grateful that they are having those tax credits taken away because that will free them up and make work pay—[Interruption.] Hon. Members speaking from a sedentary position call those tax credits a perverse incentive. I just do not think they understand the lives of those on low pay who are struggling to make ends meet and who rely on the support that tax credits have been able to give. That work penalty is going to cause real problems.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

If only what the hon. Member for Calder Valley (Craig Whittaker) said was true and there was an incentive. Actually, the former Chancellor stated that the tapers on tax credits would become worse, so that for every pound over tax credit level that people earn, more of it will be taken away—they will have to pay marginal tax rates of 90% on every extra pound they earn, making it harder for them to get off benefits, not easier.

[Chris Leslie]

That is very much our critique of the Government today. Of course we want a higher-wage environment and of course we want those jobs to be there, but if we take away that support at that crucial moment, we are going to make people’s lives much, much harder.

[Several hon. Members]

rose—

[Chris Leslie]

I would like to make a little progress if I may, because a lot of Members want to get in. In particular, I want to continue to focus on productivity, because there were a number of ways in which the Chancellor’s Budget fell short.

[Alan Mak (Havant) (Con)]

Will the hon. Gentleman give way?

[Oliver Dowden (Hertsmere) (Con)]

Will the hon. Gentleman give way?

[Chris Leslie]

No, not yet.

There was no mention of science or research and development in the Budget speech and no steps to increase mobility in the housing market. In fact, the OBR says that 14,000 fewer affordable homes will be built by 2021. How on earth that helps to reduce the housing benefit bill, I do not know. At the same time, the Government are delaying rail improvements, systematically decimating renewable energy investment and kicking the decision on airports into the long grass. There are tough choices to be made, and lower priorities where savings can be made, but the Chancellor has failed to prioritise those public services that boost productivity, and that will cost the country more in the longer run.

Seven Budgets on, it is time that that this Chancellor took some responsibility for his failure to eliminate the deficit this year, as he promised; for the drag on our economy and public finances caused by woeful performance on productivity; for the stagnation in living standards; and for the overruns in the social security budget. Growth has been revised down by the OBR, as has capital investment. These are incredibly difficult times for the wider global economy, but where is the urgent help to support our exports and productivity to tackle that other deficit, which has worsened significantly under this Chancellor—

[Several hon. Members]

rose—

[Chris Leslie]

I shall give way in a moment; I just want to talk about the other deficit: the current account deficit, where our trade gap with the EU has worsened and our balance of payments problems have set alarm bells ringing at the Bank of England. The Chancellor’s priority should be to build up the productive capacity of our economy so we can pay our way in the world, but we are still too vulnerable to external turbulence. It should not be neglected in this way. Britain’s current account deficit has widened to 5.9% of GDP, which the OBR states is

“the largest annual peacetime deficit since at least 1830”.

The OBR also reveals that the Chancellor is £367 billion short of his £1 trillion goal on exports that he promised by the end of this Parliament.

[James Cleverly (Braintree) (Con)]

The hon. Gentleman has said several times that he is willing to support sensible measures to reduce the welfare bill. Can he assure the House that that comment will survive the imminent leadership elections in his party? [Interruption.]

[Chris Leslie]

Is the hon. Gentleman talking about the imminent leadership elections in the Conservative party or the Labour party? I do not know what is going to happen in the Conservative party leadership contest. There were of course a few little jokes about the hon. Member for Uxbridge and South Ruislip (Boris Johnson), and we will see how that pans out. I know that other Cabinet Ministers are a little concerned about the way that the Budget panned out for them; it is going to be difficult for them over the next few years.

This was the Chancellor’s second Budget in four months. He said in March that that was his Budget for the longer term, yet four months on he has delivered a different plan to a different agenda. He has been chopping and changing, with three different sets of figures in the past nine months alone—so much for his consistency. We learned more about the Chancellor and the nature of this Government in one hour of his Budget speech than we learned in the months of the election campaign. In March, when the Work and Pensions Secretary was pressed about where their £12 billion of welfare cuts would fall, he said:

“As and when the time is right, we will make it very clear what our position is.”

Is it any coincidence that the time is right for these Conservatives two months after an election rather than two months before it?

Before the election, the Conservative manifesto assured us that there would be only a two-year freeze in working benefits, but yesterday the Chancellor doubled that to a four-year freeze in most working-age benefits which will take £4 billion from households by 2020-21. That is one of the fastest-broken promises in political history. [Interruption.] There is an awful lot of noise from Conservative Members. I shall give way to the hon. Member for Richmond (Yorks) (Rishi Sunak) because he has been trying to intervene.

[Rishi Sunak (Richmond (Yorks)) (Con)]

The shadow Chancellor mentioned the election campaign. In that campaign, the Opposition suggested that they would raise the rate of corporation tax—a move that would damage jobs and growth. Will he confirm that that is still Labour’s policy, or will he start backing British businesses?

[Chris Leslie]

I think the hon. Gentleman will find that we said in the election that we wanted to focus in particular on business rates. He will know from talking to small firms in his constituency that companies are concerned about the pressures on business rates, but where did the Chancellor mention business rates in yesterday’s Budget? We felt—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. There is far too much noise. In the end, I want to hear, I will hear, and I am sure that you agree with me. Let Mr Leslie speak. He will give way as and when. We do not need be told that he has to give way; it is his choice.

[Chris Leslie]

We felt at the election that it was more important to prioritise support for businesses through business rates than through a change in corporation tax—but we lost the election. [Hon. Members: “Hooray!”] Conservative Members feel the need to crow about these things, but the public will be concerned that they said one thing before the election and have done totally different things after it. Yes, the Conservatives did win a majority, but they hid their specific cuts from the electorate—they concealed them. It was a secret agenda, only now partly revealed.

[Several hon. Members]

rose—

[Chris Leslie]

I will not give way because Conservative Members are not being reasonable and letting me make progress with my speech.

The impact of the work penalty in the tax credits system should have been set out at the election. A lone parent with two children working 16 hours a week on the minimum wage would gain just over £400 from the move to the new national living wage, as the Chancellor calls it, but would lose twice that—£860—from the change to tax credits next year. A couple on the minimum wage who work full time and have two children will gain £1,500 from the change to the minimum wage but lose over £2,200 next year from the changes to tax credits. As the Government were hitting the low-paid, the Secretary of State for Work and Pensions was punching the air. Working families did not vote for that, and they will not be fooled by the Chancellor’s hollow words.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

rose—

[Chris Leslie]

Is the Secretary of State going to punch the air? [Interruption.] There we go.

[Mr Duncan Smith]

May I just take the hon. Gentleman up on the case that he set out? I want to get the figures right. A lone parent with two children who works 16 hours on the minimum wage will, when we add in everything including childcare, actually be better off on the net figures after the Budget.

[Chris Leslie]

I will give way to the right hon. Gentleman again if he will confirm that the childcare promise, which was supposed to happen this summer, has been shelved until at least 2017. Is that correct? I will give way to him. This is a debate, so I will give way to him. He wanted to talk about the case studies. He thinks it is—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order on both sides, I cannot hear!

[Chris Leslie]

The Secretary of State has shot himself in the foot. He should read the small print of the Chancellor’s announcement. Without much fanfare, he left that childcare—

[Mr Duncan Smith]

rose—

[Chris Leslie]

I have not finished. [Interruption.]

[Mr Deputy Speaker]

Order. The Whip needs to relax a little, and we cannot have two people standing at the Dispatch Box, as entertaining as that may be.

[Chris Leslie]

It is quite entertaining to see the Secretary of State struggle in this way.

[Mr Duncan Smith]

rose—

[Chris Leslie]

Wait for it. Can the Secretary of State confirm—

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

On a point of order, Mr Deputy Speaker. Is it in order for the shadow Chancellor to say that he will give way to the Secretary of State and then not give way? [Interruption.]

--- Later in debate ---

[Chris Leslie]

I relish giving way to the Secretary of State, but he has to answer this question. We have given him a bit of time to think of an answer. He needs to explain the shelving of the childcare support. Will the support come in this summer—yes or no?

[Mr Duncan Smith]

I remind the hon. Gentleman that the figures I gave were for 2016-17 and they included the childcare.

[Hon. Members]

Ah!

[Chris Leslie]

So the Secretary of State is saying that the childcare change will come in at the beginning of that financial year—in 2016. We have heard it from the Secretary of State’s mouth, so it must be true: the childcare changes will come in in 2016. That is the announcement from the Government. It is a bit of an improvement on the announcement we heard from the Chancellor yesterday, who I thought said that the childcare changes were being pushed back to 2017.

The reasons that the cost of social security is £25 billion higher than the Conservatives expected are the underlying drivers of low pay, higher housing costs and insecure work. For all the Chancellor’s spin, this is a Budget that attacks the low-paid and will leave many people in the lurch, unable to make ends meet. If the Conservatives think a solution is to pull the rug from beneath the poorest, stigmatise claimants, rub out the statistics that measure child poverty and hope that the issue will go away, they are deeply mistaken.

We have to deliver a practical route out of poverty, provide a ladder of opportunity and view this challenge as integral to our long-term economic prosperity. We must help people into decent jobs that can be sustained. Cutting tax credits in this way and taking far more with the one hand than is being given with the other will leave too many people trapped on low incomes with low living standards. The ladder is being pulled away from those who want to get on. The achievement of the Labour Administration in significantly reducing child poverty staved off billions of pounds of longer-term welfare expenditure. Those who are in work pay taxes and improve the public finances as a result.

[Several hon. Members]

rose—

[Chris Leslie]

I have given way quite generously to Government Members and I would like to make some progress, if they do not mind.

The Institute for Fiscal Studies confirms that the introduction of tax credits played an extremely powerful part in the movement in the child poverty figures. The Conservatives cannot call themselves the party of working people, as they now do, when their Budget leaves millions of working people worse off. How exactly does decreasing their work-related assistance help those who become too sick to work and are on employment and support allowance? Does that policy not run the risk of increasing the number of people who are placed in the more expensive ESA support group, as has been the case in recent years, when the Government have overspent by £4.5 billion on their original plans?

What motivation has a council tenant to get a better job and work for promotion if he or she is on the living wage and the Government take that money away immediately? That is the crude nature of the rent rise that they are proposing. Seeking a contribution from higher earners is, of course, important, and it is one solution, but, as the Government’s own analysis pointed out before the election, going about it in the wrong way will result in perverse incentives and penalties for work.

This was more a Budget of tax rises than a Budget of tax cuts. A rise of more than 50% in the rate of insurance premium tax to raise £8 billion over this Parliament will be a tax hit on the insurance for the family home, the family holiday and the family car. The new car tax will be a surprise that raises £1.5 billion by the end of this Parliament, and—much to the Secretary of State’s surprise—the Government have shelved the childcare tax support that was due this summer until 2017, even if the Secretary of State has now brought that forward by a year.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does my hon. Friend agree that these measures will further divide communities in high-value constituencies such as those in London, where there are huge gaps between incomes—people with very low incomes are living in the same constituencies as people with very high incomes—and will increase our sense of massive inequality? One of the problems is the failure to deal with the need for a proper living wage. I have experience of introducing a living wage, and it is very hard work. It takes years to achieve, and it means working with businesses. [Interruption.]

[Chris Leslie]

I do not think that was a very polite reaction from Conservative Members. My hon. Friend worked very hard during her time in local government to try to support the low-paid by introducing a London living wage, and I think it commendable that local authorities and businesses in London, in particular, have tried to make headway with that. Of course, a real living wage now needs to be about £12 to compensate for the reduction in tax credits.

[Andrew Bridgen (North West Leicestershire) (Con)]

rose—

--- Later in debate ---

[Kevin Hollinrake (Thirsk and Malton) (Con)]

rose—

[Chris Leslie]

I will give way one final time. It is a very difficult choice, but the hon. Member for Havant (Alan Mak) seems particularly keen.

[Alan Mak]

I am grateful to the hon. Gentleman. Will he confirm that if a Labour Government were ever to return to power, they would increase tax credits, and if so, which taxes on working people would they raise to pay for that increase?

[Chris Leslie]

When we are writing our manifesto for the 2020 election, I shall give the hon. Gentleman a call. I am afraid that we lost the most recent election, but I think it important for us to reflect on what the Government propose and what the Chancellor announced in his Budget. It is our job as an Opposition to make sure that his spin does not necessarily colour the view of the realities.

The Budget statement revealed that the Chancellor has the wrong priorities for Britain: headlines for himself rather than help for low-income households. We have a chronic shortage of affordable housing, and home ownership is increasingly out of reach for first-time buyers, but the Chancellor’s main housing policy was to reduce the number of affordable homes by 14,000. We need to encourage young people from poorer backgrounds to aim for higher education, but axeing student grants for the least well-off—and, by the way, taking the cap off tuition fee rises, which was not particularly trumpeted by the Chancellor—will make it harder, not easier, for them to do so.

This should have been a Budget to support working people, and to tackle the long-term challenges that our economy faces. The Chancellor is already crowing at his own perceived success in the headlines, but his work penalty in the tax credit system will hit those in work, and leave working people worse off. The Government have failed to make the big decisions that are needed to deliver the modern infrastructure that can make our businesses more productive. They have done nothing to address our alarming and widening trade deficit, and their rhetoric of a living wage has begun to unravel in less than 24 hours.

These are difficult times, and they require tough choices. The deficit needs to fall year on year, our debts need to be reduced, and sensible social security savings are also necessary. But this Budget made the wrong choices for working people and prioritised political gains over the long-term needs of our economy. As ever with this Chancellor, it will be the British people who pay the price for his ambitions.

--- Later in debate ---

[Mr Duncan Smith]

The answer is that the incomes of 2.5 million people will increase, but it is not me who introduced that policy—I give all the credit to my right hon. Friend the Chancellor. Let me also say to the right hon. Member for Nottingham East—

[Chris Leslie]

I am not “right honourable”.

[Mr Duncan Smith]

I apologise. That is a matter for his leader but—what can I say? Labour has no leader at the moment.

The hon. Member for Nottingham East was talking about the minimum wage and the living wage, and I want to pick up on something he said a fortnight ago:

“Do not the Government need a serious strategy to address low pay and boost productivity? They should be providing incentives for a living wage and new opportunities for high-quality skills, as a more positive route out of poverty.”

Absolutely. He went on to speak about the Chancellor’s Budget before it had been delivered and said:

“Unless he is planning a rise of 25% in the minimum wage, that will not happen.”—[Official Report, 25 June 2015; Vol. 597, c. 1038.]

Well, my right hon. Friend the Chancellor listened to that and initiated a rise of 38% to the minimum wage. The hon. Gentleman must be overjoyed, and will want to tell the House what a great man the Chancellor is and what a great Government we are.

[Chris Leslie]

Let me be clear: we are glad to see an increase in the minimum wage, but the problem emerges with the one-step-forward, two-steps-backward strategy. We cannot consider this question in the round by just brushing away the work penalty that has been introduced into the tax credit system. The Secretary of State must admit that people who depend on tax credits will lose out in the immediate period from April. Is that the case?

[Mr Duncan Smith]

No, there is a clear question that needs to be answered. The hon. Gentleman has been asked it but he has not answered, and it would be helpful for us if he would: will he vote against the changes, and do the Opposition plan to reverse the changes on tax credits?

[Chris Leslie]

I cannot be much clearer in my opposition to the work penalty to the tax credit system. I do not think that it is right at this time to hurt those who are in work and in low pay. Of course we oppose the work penalty, but we support increases in the minimum wage. After all, it was our creation and something that Labour campaigned on in the election. We are delighted that Conservative Members now feel that they can adopt that policy when they campaigned so vociferously against it.

[Mr Duncan Smith]

I notice that the hon. Gentleman said “at this time” when talking about tax credits. We can take note of that. It suggests to me—indeed, I am sure of it—that after the next couple of years Labour will have abandoned its opposition to the measure.

The measures that I set out in the Budget are vital to delivering the commitments that this Government have always made. We are committed to ensuring that a renewed economy goes hand in hand with a renewed social settlement, yet consider what we inherited in 2010: nearly one in five households with no—[Interruption.] Labour Members really do not like listening to this, but they have to hear it—[Interruption.] I will give way in a minute. Perhaps the hon. Member for Bishop Auckland (Helen Goodman) will sit down. Let me remind her what Labour left behind when it left government: nearly one in five households had nobody working; 1.4 million people had been on benefits for most of the previous decade; the number of households where no one had ever worked had doubled; and close on half of all households in the social rented sector had no one in work. Surely that is a shameful record.

--- Later in debate ---

[Mr Duncan Smith]

I have to say to my hon. Friends that I really have to make some progress, because lots of Members want to speak. They will have a chance to speak later.

With universal credit, people will get up to 85% of their childcare costs paid, which is up from 70% under the previous system. In addition, there will be 15 hours of free childcare if someone has a two-year-old, or a three or four-year-old, and if they are working, while the 30 hours of free childcare a week will be worth £5,000 a year. By the way, the 30 hours of free childcare will start exactly when I said it would—it will be cutting in in the 2016-17 period.

[Chris Leslie]

indicated dissent.

[Mr Duncan Smith]

It is not delayed.

[Chris Leslie]

rose—

[Mr Duncan Smith]

No, it is not. I am telling the hon. Gentleman it is not, so he can sit down.

[Chris Leslie]

On a point of order, Mr Deputy Speaker. It is important that the record is correct. I think the Secretary of State said that the childcare provisions were coming in in 2016 and that this was not a delay to the planned date of 2015. Am I right, Mr Deputy Speaker?

[Mr Duncan Smith]

rose—

Child Poverty

Chris Leslie Excerpts

Thursday 25th June 2015 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Work and Pensions if he will answer a question about the state of child poverty.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The latest low-income statistics, based on the “Households Below Average Income” report, are published today, covering April 2013 to March 2014. They show that the percentage of individuals and children in relative low income is at its lowest since the 1980s. The latest figures also show that the proportion of people in both relative and absolute low income remained flat on the year for children, working-age adults and disabled people. For pensioners, there is a statistical change, but the proportion in relative and absolute low income has increased slightly.

The figures that I have quoted are measured against the retail prices index. As the House will know, the RPI has become a discredited measurement anyway, as the consumer prices index is used everywhere else in the world. Therefore, I have also taken the liberty of putting into the publication what the UK Statistics Authority has also produced: the effects when measured against CPI, which is much more widely used. Those figures are even more positive than the others we have seen today. Today’s figures demonstrate that if we deal with the root causes of poverty—as I believe this Government are doing—then even under a measure of poverty that I have consistently over the last few years described as flawed, we can still have an impact.

Let me remind the House of some of the important things that my Government have done to help families on low income through tackling root causes. In education, we have introduced the pupil premium and tackled failing schools with the free schools programme. There is our commitment to supporting families through the groundbreaking troubled families programme, which is turning really difficult families around in difficult communities. There is our investment in early-years support and childcare and our unprecedented back-to-work programmes that have helped support hundreds of thousands of people, once written off, back into work. We have also raised the tax threshold, which means that those on the lowest incomes often do not pay any tax, or if they do, they pay a lower rate of tax and keep more of their own income. Finally, there is our fundamental belief that the most powerful way to change lives is by creating a welfare system that makes work pay, writes no one off and supports people into work.

That is what we have been doing and what the left has failed to understand—particularly the Labour party. If you deal with the root causes of poverty, of which work is a critical component, many of the symptoms start to sort themselves out. Today’s figures show, I believe, how important it is to both balance the books and continue reforming welfare.

[Chris Leslie]

This morning’s statistics show a depressing slowdown in the progress that we should be making as a country towards the abolition of child poverty in the UK. Will the Secretary of State confirm that the numbers of children in absolute poverty have risen over his time in office? Will he confirm that last year, 19% of children were in absolute poverty, and that this year, 19% of children are still in absolute poverty? Will he also confirm that this year, 17% of children were in relative poverty, and that there are still 17% of children in relative poverty today?

Has the Secretary of State dropped the ambition to end child poverty by 2020? This is not a time for complacency. The Social Mobility and Child Poverty Commission has warned that there is now “no realistic hope” of that target being met. The Prime Minister says that he will be

“judged on how we tackle poverty”,

so what is the Government’s plan to catch up on the lost ground? Will the Secretary of State pause and reflect on the fact that nearly one in five children in this country is still growing up without some of the basics? We are talking about the lives of children up and down this country—about whether their parents can put money in the meter to keep their home warm in winter, and about whether they have something or very little for their tea.

The Child Poverty Act 2010, which Ministers opposite supported, placed one of the most important duties on the Government: to ensure that in the 21st century, children do not grow up suffering deprivation or lacking the necessities that most of us take for granted. Yet progress has now slowed to a snail’s pace. Would it not be shocking if the Government departed from the consensus that children should be free from such disadvantage by the end of this decade? I therefore ask the Secretary of State to give a straight answer to the House today: does he remain committed to the Child Poverty Act or not?

Do not the Government need a serious strategy to address low pay and boost productivity? They should be providing incentives for a living wage and new opportunities for high-quality skills, as a more positive route out of poverty. But what does this Secretary of State do when faced with an end to the progress in reducing child poverty? He threatens to cut £5 billion from the tax credits of children, which would mean 3.7 million working families losing, on average, £1,400 a year. That will not address child poverty; it will add to it.

Does the Secretary of State realise that it is parents who are already working who would be hit by such a decision? How does it help to make work pay to pull the rug from underneath them in that way? Why is he trying to kid people into thinking that such a hit to incomes can be easily replaced? Unless he is planning a rise of 25% in the minimum wage, that will not happen.

Labour lifted more than 1 million children out of relative poverty and more than 2 million children out of absolute poverty. On the Secretary of State’s watch, progress has stalled. Is it true that, instead of developing policies to tackle low pay, the Government, faced with statistics that show such poor progress, will try to erase the figure altogether, redefine the measure and pretend that the problem has gone away? Is he really going to propose that statistical redefinition? The Conservative party manifesto promised that they would

“work to eliminate child poverty and introduce better measures to drive real change”.

Nobody realised that meant that they would just change the measure. Instead of shifting the goalposts when things get uncomfortable, Ministers should take responsibility and tackle low pay, not attack the low-paid.