Welfare Benefits Up-rating Bill

David Rutley Excerpts

Tuesday 8th January 2013 Commons Chamber

[David Rutley (Macclesfield) (Con)]

Will my hon. Friend remind the House what steps the Labour party took to bring benefit increases closer to the world of work when it was in office?

[Alun Cairns]

I am grateful to my hon. Friend for that useful reminder that the Labour party did nothing on the issue. Few individuals—if any—would reject a benefit payment, even if in their hearts they were confused about why they were receiving it or uncomfortable with that. The then Chancellor knew well what he was doing and that withdrawing a payment after issuing it in the first place would create a difficult and almost impossible situation—the situation we are in now. Dependency on the state became more widespread, and with that came a significant political shift to the left. The centre ground of politics moved at that moment. It is, therefore, little wonder that £90 billion is now spent on welfare for people of working age.

During the seven years before the last general election, tax credit spend increased by a staggering 258%—that is the context I wished to create in response to the hon. Member for Edinburgh East (Sheila Gilmore). Adding insult to taxpayers’ injury, the tax credit regime was one of the most inefficient benefit systems ever devised, leading to £2 billion of fraud each and every year. Today’s Bill will lead to savings of £1.9 billion over two years, with the pain shared by those recipients whose increases in benefits will be limited. Although £1.9 billion is a significant sum, it does not go anywhere near the increases in spending introduced by the previous Government, particularly leading up to the 2010 general election.