Welfare Reforms and Poverty
David T C Davies Excerpts(10 years, 3 months ago)
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Mr Meacher
I have already made slight reference to that, but my hon. Friend is entirely right. The change is quite small, but its impact can push very poor families into deep poverty.
What are the causes of the emergence of absolute poverty? The biggest cause is the huge rise in sanctioning: depriving someone of all their benefit entitlement for a month in the first instance, for three months in the second instance and, on a third infringement, for three years!
Mr Meacher
I will not give way to too many Members, for the simple reason that many want to speak, but I will give way to the hon. Gentleman.
David T. C. Davies
I am grateful to the right hon. Gentleman for giving way. Does he not agree that it is vital that those who are not looking for work are made to realise that there will be consequences to those actions, particularly at a time when 1 million people have been able to come into this country from eastern Europe and find work here?
Mr Meacher
Those who come to this country are more likely to be employed and take out less in benefits than many of the indigenous population. The real point is that these people want work. Of course the hon. Gentleman is right that people should get work if they can, but there are 2.5 million people who have been unemployed for the best part of two years, and there are 562,000 vacancies—I checked that figure today. So four out of five of those who are unemployed simply cannot get a job whatever they do.
David T. C. Davies (Monmouth) (Con)
Members of the shadow Cabinet might need a boxing referee to sort out their disputes at the moment, as we read today in the Daily Mail, but I can assure hon. Members that I believe that the Conservative party is absolutely united in supporting the coalition Government and coalition Ministers in what they are trying to achieve. We do so against the backdrop of one of the most disastrous economic situations that this country has faced outside of a war.
It is worth reminding ourselves just what we were looking at in 2010. We took office with a deficit of £160 billion and a debt that was rising rapidly to £1 trillion. That was after years of overspending in good times, as well as in bad, by Labour, a cheap money supply and lax banking regulation under the former Government. We had disastrous economic decisions, such as that to sell gold at a fraction of its real rate. Worst of all and most seriously—this is what we are dealing with today—we had a welfare system that allowed people to get into a trap of welfare dependency, leaving them on the dole for many years, but at the same time filling the consequent gap in employment by allowing mass and uncontrolled immigration into this country, which completely undercut British workers.
That was the disastrous legacy that this coalition Government faced in 2010. I am proud of the fact that, instead of shirking their responsibilities, Ministers in this coalition Government took difficult economic decisions. Of course we had to make cuts and reduce public spending. It would have been grossly irresponsible not to do so, and in the longer term it would have led to far greater poverty than we face now. The reality is that we are a nation in debt. We are having to borrow about £10 billion every month. We are also having to roll over existing debts that previous Governments left us. If for any reason the international money lending organisations that give us that £10 billion a month ever decided that we were not in a position to pay either the interest or the original sum, they would simply stop lending to us, and there would be no European bank or International Monetary Fund waiting to bail us out with the sums we would need.
We would face an economic catastrophe on a far greater scale than the one we face now, and it would lead to real poverty. Indeed, it could lead to even third-world levels of poverty, because we would simply run out of cash. That is the catastrophe that keeps me awake at night—far more so than the bogus claims about global warming, when we have seen no rise in temperature for 16 years, or than terrorism, which is a much more serious matter but which the security services have thus far been able to contain.
Hugh Bayley
Will the hon. Gentleman not acknowledge the truth that the amount spent on welfare by the last Labour Government decreased over time because we were effective in creating more jobs and getting people off welfare and into work? The national debt was some £800 billion when his party came to power, but is it not now well over £1 trillion and rising?
David T. C. Davies
Indeed, the hon. Gentleman is quite correct in his last point. He makes an important point, but I would like to find out where it was going. Is he suggesting that we are not doing enough to pay down the national debt? Is he suggesting that we should cut further and faster? If so, and if we had the support of other Opposition Members, that is exactly what the Government could do and, indeed, possibly should do. I look forward to seeing that support for getting the deficit down.
Hugh Bayley
The point I am making is simply that the Labour Government reduced the amount that taxpayers had to spend on welfare because we were effective at investing in the economy, creating jobs and thereby getting people off welfare and into work.
David T.C. Davies
I do not accept that point, but I do accept that when the last Labour Government came into office in 1997, they spent the first couple of years paying down the national debt, which is exactly what they should have done.
David T.C. Davies
No, from 2001 onwards they started overspending by an average of about £30 billion. That is an absolute fact; I have checked the figures on the national debt very carefully. From 2001 onwards, they started overspending by an average of about £30 billion a year. That is a fact. I can tell hon. Members that I have checked the figures on the national debt very carefully. As I say, from about 2001 onwards, the Labour Government decided to start overspending by approximately £30 billion a year, and they were overspending long before the financial crash happened in 2008—a crash that they, incidentally, had helped to cause.
Ministers in the coalition Government are absolute right to make cuts, and if Labour Members feel that the deficit is still too high and that further cuts should be made, I am sure we would all welcome their support. The Government are right to do this for another reason: the welfare system, which we are reforming, traps people in worklessness. Many members of my family— through marriage—are from eastern Europe, and some of them came to this country barely able to speak English and had no qualifications that would be recognised here. They were, however, able to get into work. They started in low-paid jobs and worked their way up.
I spent many years in low-paid jobs, and I am not talking about holiday jobs or a gap year, as I never even went to university. I happened to believe that, rather than wait around for whatever job people think they deserve, they should take any job available to them and use work to get better work. That is the way forward, and that is what the Government are trying to encourage through the use of sanctions and, frankly, through making it difficult for people to sit around watching the television all day. I am not suggesting that that applies to everyone who is out of work or even a majority of them, but it certainly applies to a percentage of people who are out of work. It is high time that it was tackled and stopped. I am glad that some people have the courage to do that.
We hear nothing from Labour Members except a mass of contradictions. They say that they want to be tough on welfare—tougher than the Tories, as the shadow Work and Pensions Secretary said in October 2013—and then to a different audience they complain about every single cut to the welfare budget. They complain that the Government are making cuts and then they complain, as the right hon. Member for Oldham West and Royton (Mr Meacher) did, that the deficit is too high. It is ludicrous. They say that they are against the bedroom tax, but they brought the bedroom tax in, albeit in the private sector. What they say is a mass of contractions, so I cannot understand how anyone could feel that Labour Members were fit to be put in charge of welfare benefits or indeed the economy ever again.
Stephen Mosley
Had my hon. Friend attended Work and Pensions questions this morning, he would have heard Labour Members going on about the work capability assessment. Which Government introduced it? It was, of course, the previous Labour Government.
David T. C. Davies
My hon. Friend makes a good point. I believe we would all like to see some consistency from the Opposition—both on the economy and on what they are really planning to do to benefits. In the meantime, let me commend both the Liberal Democrat and Conservative Front-Bench teams, who have been prepared to put aside their personal poll ratings—frankly, these are unpopular decisions—and do what is right for this country rather than what is right for winning elections: namely, getting the deficit down and solving the long-term problem of worklessness. That will do far more to tackle poverty than anything we hear from Labour Members tonight.
John McDonnell (Hayes and Harlington) (Lab)
The question was asked earlier about how we pay off the deficit. There was a choice when the economic crisis hit: should those who created the economic crisis pay for it, or should the others? This Government decided that the poorest in our society would pay. To enable that to happen there had to be some form of ideological attack on the poorest—the latest example is the programme “Benefits Street”—that identifies a group of people and demonstrates that they somehow stand for all those people who are dependent on benefits. That is then used as a justification to cut benefits overall.
The reality, as has been said time and time again, is that some of the people suffering hardest are those who are in work. In two weeks time in this city, the BAFTAs will be hosted again at the Royal Opera House. That weekend, the cleaners will be on strike and picketing outside. I will be joining them, because they are on just above the minimum wage, not on a living wage, and cannot afford to live in the city in which they work. A whole range of constituencies outside London have been mentioned. London and the south-east have an image of wealth, with gold pavements and so on, but there is a growing underclass in London of people in dire poverty.
The anxiety and anger we have is that in two weeks the cleaners will go on strike because they have no other option. They are trying to get their employers to negotiate a London living wage, while this week the bank bonuses will be announced. Goldman Sachs has already explained that it looks like it will have a bumper year. We are back to pre-crisis bonus levels. I raised this with the Chancellor and, to give him his due, he actually said that there is an issue that we have to address. We have been told that in one company the average bonus payment is £2.7 million per member of staff. This is the contrast we have: people in work are struggling just to maintain a roof over their heads, feed and clothe their children and have a decent standard of income. At the same time, we have the profligacy and obscene levels of bonuses returning. I think the choice was made under this Government that the poor would pay for the crisis, not the rich who caused it.
Examples have been given of the range of cuts that have been made. I will be frank: I do not know how people in my constituency survive on the income they are getting. I have no idea how they can afford to live on the minimal income that they are getting. We will have a debate in a few weeks’ time about the WOW petition and people with disabilities, who are among some of the hardest hit. However, the latest statistics show that we have 13,000 children in my borough living in poverty, and it is a relatively wealthy borough. We are a working-class area with high levels of employment and, usually, not bad levels of income, but even in my constituency we are seeing child poverty on a scale that we have not seen since the second world war, with all the problems associated with that.
One of the main problems has been touched on by others: the fact that people cannot afford a roof over their heads. House prices have gone through the roof. People cannot afford them on the incomes they are getting, but what do the Government do? They increase rents in the social sector—in council housing and social housing—and at the same time cut benefits. The argument put forward by the Government—it has some logic to it—was that if they cut benefits, somehow the landlords would stop charging higher rents, but the reverse has happened. Rents have gone up in my area. Getting a three-bedroom property in the private rented sector means spending between £1,200 and £1,600 a month, and we are not talking about high standards of property. We are just talking about the roof over people’s heads.
When people go to the council, the discretionary money that has been awarded does not meet the difference between the loss of benefits and the rents they are now being charged. What is happening, therefore—this is the irony of it—is homelessness on a scale that we have not seen for perhaps two decades and children living in bed and breakfasts again. We were promised that that would never happen again, and it is happening. Children are living in appalling conditions in bed and breakfasts, and then they are farmed out round the country, which completely disrupts their education and breaks down the connections with their wider family. That destabilises whole families as well, because people under that pressure begin to implode. It is therefore no wonder that we have family breakdown increasing in many of our areas as a result of the financial pressures that people are under.
That is the result of a whole series of reforms that have been introduced as part of an incremental development to attack the poor. Those of us on the Labour Benches should say: “No more. That’s enough now.” We are the people who invented the welfare state. We introduced it—working, yes, with Beveridge, the Liberals and others. It was not just to provide a safety net; it was to give people the opportunity to achieve their life chances. This Government are destroying that opportunity for people to thrive and enjoy the life chances that we wanted to give them.
David T. C. Davies
Given what the hon. Gentleman has just said, does he agree or disagree with his shadow Work and Pensions Secretary, who wants to be tougher than the Tories on benefits?
John McDonnell
I am not sure whether the hon. Gentleman was here under the last Government, but I was one of those who argued for a massive redistribution of wealth to tackle poverty in this country, and I will continue to argue that point. I do not think that any of the parties should get into this Dutch auction about who can be more brutal towards the poor, but from the detail of the policy being advocated by the Opposition that I have heard, it is about achieving growth, getting people back into employment, ensuring a fair system of redistribution of wealth in this country and—this is the point my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) made—ensuring that people pay their taxes. At the moment we are living in a corporate kleptocracy, where corporations steal and rob from us through tax avoidance and tax evasion. If we could have some of that back, not only could we tackle the deficit, but that redistribution of wealth could take place and we could lift people out of poverty, provide the homes they need and give them back the life chances that this Government are stealing from them.
Housing Benefit
David T C Davies Excerpts(10 years, 5 months ago)
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David T. C. Davies (Monmouth) (Con)
Since we have heard a lot of anecdotes from Labour Members, perhaps I should tell one or two myself. I was contacted by the BBC—not an organisation known for its right-wing reactionary views—and asked to meet and talk to people affected by the spare room subsidy. I went along and heard some very interesting stories. I met a lady in her late 50s who had worked her entire life. Her family had left and she lived on her own in a house with too many bedrooms. She was going to have to move. Having been made redundant, she had gone out and got herself another job in an area where it was difficult to do that. I had a great deal of respect for that lady, and I still do. I feel sorry for her. I think one would have to have a heart of stone not to feel sorry for somebody in that position. However, when a system is spending billions of pounds and looking after millions of people and that system then changes, there will always be people with unfortunate stories to tell, and I believe that she was one of them.
David T. C. Davies
I will give way once, and once only, to an Opposition Member. If the hon. Gentleman wants me to give way now, I shall be happy to do so.
Ian Murray
I am grateful to the hon. Gentleman for his generosity. There is a point that he and his hon. Friends continually miss. I have a constituent who is disabled and lives in a two-bedroom council property. Given that 660 people in my constituency are affected by the bedroom tax and 25,000 are on the housing list, the only way in which he can move to a one-bedroom property in Edinburgh is to go into the private sector. Does the hon. Gentleman not agree that that will cause the housing benefit bill to rise?
David T. C. Davies
Let me return to what I was saying. The BBC took me to meet three groups of people, whom it had chosen. The second lady whom I met was looking after four children. They were not her own children; she was their grandmother. The mother, because she was not the main carer for the children, was going to lose out on housing. What those people wanted were two large houses to look after the same family. While I felt sorry for everyone involved, including the children, I have to say that the state is not there to provide not one, but two sets of very large houses for people with large numbers of children.
Another question arose while I was meeting that lady, and it is a frank question. I never use the term “single mother” because I think that it is pejorative, and it has affected people in my own family. I think it is a generalisation. However, I have absolutely no hesitation in talking about feckless fathers. Those children had been brought into the world by a group of different males, and those males, having brought those children into the world, had disappeared and left the two ladies to try to bring them up themselves.
David T. C. Davies
No. I said that I would give way only once to an Opposition Member.
I think it absolutely outrageous that so many young men in our society feel that they can go out, get women pregnant, allow them to have children, make them bring up those children by themselves—often on benefits—and then just disappear. That is utterly shocking. I hope that Ministers will note what I am saying, and that they will get hold of some of those feckless fathers, drag them off, make them work—put them in chains if necessary—and make them pay society back for the cost of bringing up the children whom they chose to bring into this world.
I also met a young couple, 17 years old, both of whom had never worked in their lives. They were living in a two-bedroom or perhaps a one-bedroom flat, and were being expected to suffer some inconvenience—perhaps to move into a studio flat. Let me say to Ministers that, in many instances, they are being far too generous. Why should the state pay for two people to set themselves up in what is frankly a teenage love nest? When I was 17 years old, if I wanted to see my girlfriend I would go and see her on a park bench in Newport. Why are the Government paying for those young people to have a flat all by themselves at all, regardless of whether it contains one bedroom or two?
I got into a lot of trouble, because I suggested to the young man that perhaps he should go out and find himself a job. He said that there were no jobs, which, incidentally, contradicted the example of the lady whom I had seen before him: she had found work. I said, “Why do you not move to where the work is?”, and immediately received a whole load of criticism.
I was even sent an e-mail from someone who wrote “You are a Christian. You should be serving the Lord. One day you will stand by the Lord and account for this hardship.” I wrote back to him saying, “I read my Bible. I do not see anything in the Bible that says that 17-year-olds should be given a flat, but I see plenty of examples of people who have had to move to find a better way of life: Abraham going off to the promised land, or Moses, or the disciples, who toured all over Europe. They all moved.”
Victoria station is a prime bit of expensive real estate. There is Boots, Costa Coffee and Starbucks, and there is an office which is recruiting people to work for Pret A Manger. I went there one day last week, and saw that there were 100 vacancies at Pret A Manger in central London. It was just waiting to take people on. Young people with an attitude and an ability to go out and do a bit of work can find a job with no problem whatsoever, and I do not think that we should be supporting them in the way that we are.
Opposition Members have heard a few anecdotes from me, because they have liked giving anecdotes themselves. What we have not heard from them is anything with much substance. They do not want to talk about the fact that they introduced a measure like this for the private sector. None of them will answer the question put by my hon. Friend the Member for Suffolk Coastal (Dr Coffey). They do not want to talk about their disgraceful record on house building, which has led to a disgraceful level of overcrowding. Most of all, they do not want to talk about the fact that by borrowing hundreds of millions of pounds which they did not have, they created the financial crisis that forced us into this situation in the first place.
I am very happy to be here supporting the Government —the coalition Government—on this important issue today. I have only one criticism of the Front Bench, and that is this: the next time we are expected to come here and defend a policy with which all of us on these Benches agree, they should issue us with umbrellas, so that we can shield ourselves from the shower of crocodile tears that are raining down upon us from Opposition Members.
Ian Lavery (Wansbeck) (Lab)
The debate this afternoon has alarmed me. I listened to the huge divide between the two sides here in the Palace of Westminster. I am amazed at some of the contributions. As a Labour representative and as a member of the public, I resent Members of Parliament saying that I am foolish and my colleagues are foolish because we disagree with them, when all we are doing is looking to support the most vulnerable people in society.
The hon. Member for Harrow East (Bob Blackman) was outrageous in his comments. He attacked people in council houses because, he said, they lack ambition. That is so untrue. It is unbelievable. Some of the people in my constituency who live in council houses have lived there all their lives and for generations, and they have been working all their lives as well. So to think that people in council houses do not count, and that the council or anybody else can just come and move them on when they think there is a crisis, is outrageous.
This pernicious tax impacts on 600,000 people, of whom 400,000 are disabled. Some 375,000 children will suffer as a consequence of the tax. This is not about under-occupancy. It is not even about saving money, because the Government have admitted that they will not save as much as they had hoped. This is solely about Conservative ideology. It is about dogma. It is about throwing red meat to Back Benchers. It is about flexing powerful financial muscles. It is a class issue between those who have and those who have not. It is about people letting other people know where they are in the pecking order. That is what we have seen today.
Ian Lavery
The hon. Gentleman seeks to intervene. I have never heard such outrageous comments as we heard in his contribution today in my three and half years in the House.
The bedroom tax will mean more child poverty and more people looking to pay off payday loans. There will be spiralling debt and people made homeless because of the bedroom tax. This is not simply about the bedroom tax. That is just a single part of the wider welfare reform, which the Government have seen falling down around their ears. The personal independence payment has huge problems. Universal credit has hit the buffers. There are problems with employment and support allowance, and hon. Members should look at the situation that Atos is causing, with, in the main, the same sort of people.
The people we are talking about today live in homes where they have lived all their lives in many cases. It is about time that people understood that. These are homes where people and children were brought up, where families lost their loved ones and where tears of joy and sadness have been shed.
Housing Benefit (Under-occupancy Penalty)
David T C Davies Excerpts(11 years, 2 months ago)
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Steve Webb
The right hon. Gentleman is very knowledgeable about housing, so he will know that the period of the last Labour Government was not a good one for the building of affordable homes. That is part of the reason for the problems we have now.
David T. C. Davies (Monmouth) (Con)
Does the Minister agree that nobody on the Government Benches takes any pleasure whatever from these changes, which have been forced on us by the actions of the Opposition who left us with a £1 trillion debt and a £160 billion deficit?
Steve Webb
My hon. Friend is quite right. These are Labour cuts because of Labour’s deficit.
Welfare Benefits Up-rating Bill
David T C Davies Excerpts(11 years, 4 months ago)
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David Miliband (South Shields) (Lab)
It is a pleasure to follow the hon. Member for Brent Central (Sarah Teather).
The truth is that all western economies need to refashion their social contract to cope with demographic and economic change—expanding child care versus higher child benefit; housing benefit versus house building; and long-term care versus reliefs and benefits for old age. In each case, we need to choose.
The Bill asks us to make three judgments: about fairness, affordability and politics. The Chancellor claimed in his autumn statement that the Bill was about distinguishing working people from those
“asleep, living a life on benefits.”—[Official Report, 5 December 2012; Vol. 554, c. 877.]
That has been blown out of the water by the facts that have come out since; the facts unearthed by my right hon. Friend the shadow Secretary of State today are damning.
What of the 3,120 people in South Shields on income support or the 4,200 on jobseeker’s allowance alleged to be choosing a life of Riley? I have three points. Two years ago, the Prime Minister said that he had ended the option of a life on benefits through the so-called Welfare Reform Act 2010. Secondly, the Government’s own figures about the level of fraud show it to be 0.7%—by the way, it is lower among immigrants to this country. Thirdly, the DWP’s own figures, published by the Secretary of State, show that more than 10 jobseekers in South Shields are seeking every job. In all the talk of fairness, that is what is unfair.
David T. C. Davies (Monmouth) (Con)
Will the right hon. Gentleman elaborate on the statistic he gave? Do immigrants not have a lower level of benefit fraud because fewer of them are entitled to the full range of benefits?
David T. C. Davies (Monmouth) (Con)
It is never a pleasure to support any Bill that will leave some people worse off, but Members of both Government parties do so out of a heavy sense of duty and responsibility, both to those who pay taxes and to those who receive them. It is unfortunate, to an extent, that this debate has been framed, perhaps not in this House today, but in some quarters of the press, as a kind of battle between workers and shirkers or, even more regrettably, between immigrants who have come to this country and are sponging off the state and those British nationals who have been here all their lives and paid taxes.
It is true that some people have come to this country and have received too generous an amount in benefits. It is equally true that a lot of eastern Europeans—I know that both points are true from the experience of my own extended family, who are eastern Europeans—have come to this country, sometimes speaking very little English and sometimes with qualifications that are not recognised here, and have managed to find work very quickly, have used that work to get better jobs, and have ended up contributing a great deal to our society. It is true that some British people have not wanted to take on the jobs that have been snapped up by eastern Europeans.
I would have no hesitation in saying to somebody who is fairly young and in their 20s that they should be willing to accept any job going, no matter how demeaning it may appear. I have worked in nightclubs and done other low-paid work in my life. I would have more of a problem, however, with saying to people I know who spent 20 or 25 years working for Tata—British Steel as was—who lost their job through no fault of their own and who may be a father of three or four, “You have to go to work in Starbucks on the minimum wage.” It is a shame that we find it hard in our benefit system to distinguish between different types of people, but that is the way it is.
We are not here to talk about penalising people; we are here because we have a simple problem, which was put eloquently by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) when he said that we do not have any money.
Bill Esterson (Sefton Central) (Lab)
If the hon. Gentleman is saying that that is the problem, why is he supporting a Government who are only too happy to give a tax cut of £2,000 a week to everybody earning more than £1 million a year? How does that add up? How is that fair?
David T. C. Davies
Put simply, the total amount of tax that we are taking from the rich has increased, as my right hon. Friend the Secretary of State has said, and that has not been denied by any Opposition Member. The total amount of money that we are taking from the rich has increased, which means that the total amount that we have to take from those who are not so rich has gone down somewhat. That is how I would justify it.
Mrs Anne Main (St Albans) (Con)
It might be worth reminding Opposition Members about the 10p tax fiasco that they imposed on some of the poorest members of my community. They have not been forgiven for it.
David T. C. Davies
I should also like Opposition Members to recognise the economic truism of the Laffer curve, which has proved that the more we try to tax the rich, the less we get off them. That is why so many people are queuing up to come over here from France at the moment, and good luck to them. We will have their money and spend it on less well-off people here.
I have listened carefully today to Opposition Members and I have not heard any of them explain how they would manage to maintain benefits at their current level or fund the increases that they want to impose. What would they cut in order to fill that gap? What extra taxes would they impose on people? Would they simply continue to do what Labour Governments have done since the time of Attlee, which is just to borrow the money they need in order to pay for projects that they cannot afford?
Opposition Members simply have no credibility left. Government Members are going to take a difficult decision, but with absolutely no pleasure whatsoever. We are doing so because what happened in 2008 was bad, but it was nothing compared with the financial catastrophe that would engulf us if we continued to spend £120 billion a year that we do not have.
Opposition Members and their many supporters outside in the unions and the pressure groups have complained about the bankers. I could complain about bankers as well. Why is it that these people want to put more money into the hands of the bankers by borrowing money from bankers, getting us more into debt and giving them greater amounts of interest? Who are the true friends of the bankers—the people who are trying to keep down their interest payments or the people who want us to be in hock to them?
I do not want to be a Member of Parliament who presides over Britain being turned into Greece, but without the sunshine. That is why I will vote for the Bill today.
Derek Twigg
My hon. Friend makes a strong point: many people in work are being hit, and many of them would not usually be viewed by members of the public as those likely to be hit by such changes. Many families on low incomes in my constituency are having great difficulty finding the money to feed their families properly—even to provide proper meals every day. We know that some children are going to school hungry. The problem is so bad in Halton that two food banks have been set up, and I believe that that is a regular feature in many poorer parts of the country. To add to that, of course, are the appalling changes to housing benefit and the unfair cuts to local government funding, including changes to the treatment of council tax support, which will greatly increase the suffering in my constituency and others where the poorest and the weakest will be the most badly hit.
Frankly, the Government’s approach to welfare reform is cruel and vindictive, with cuts hitting the most vulnerable the hardest. That is said even in the Government’s own impact assessment, which acknowledges that the poorest will be hit the hardest. It is a disgrace that this is happening. I have been contacted, like many MPs, by many constituents who have suffered badly under the benefits system, who have lost benefits or who have been denied them or treated badly. In many cases, these people are in despair and at the end of their tether. We have to deal with such cases—day in, day out. It is therefore important to link that with what is happening today.
There are, of course, people who exploit the system, and they should be dealt with severely, but the overwhelming number of people involved are honest and want to work where they can. In my experience, those who can work want to work. I have heard many tales of constituents applying for countless number of jobs, but getting nowhere because jobs are either very hard to find or do not exist. Despite what the Secretary of State said, many want full-time employment. Many are being pushed into part-time employment because there are no full-time jobs for them. The Government have no coherent policy for growth and jobs. That is why people trust Labour more on jobs and growth. We have given greater priority to job creation, which is why I support our jobs guarantee.
Derek Twigg
I will not, because I have already given way to two Members and others wish to speak.
Let me return to the Government’s decision to cut benefits. We should not forget the announcement in the June 2010 Budget that from April 2011 the measure of price inflation used for the uprating of benefits and tax credits would be the consumer prices index rather than the retail prices index. That will have a significant impact on benefit rates and on future real-terms cuts. So in addition to what is happening today, a major cut is already taking place. The long-term assumption of the Office for Budget Responsibility is that the annual increase in RPI will be 1.4 percentage points more than the increase in the CPI. That means that after 10 years, benefits will be worth 86% as much as they would have been had they continued to be uprated in line with RPI.
The House of Commons Library research paper on the Bill states:
“A decision to limit increases in benefits to below inflation for a sustained period is historically unprecedented. If inflation averages more than 1% over the three years, families claiming the benefits and tax credits affected will experience a permanent real terms reduction in the support they receive.”
It goes on to say that
“independent estimates of “Minimum Income Standards” suggest that current out-of-work benefit rates for people of working age are significantly lower than the amounts necessary for a minimum acceptable standard of living.”
We should never forget that a large number of those who receive benefits are being paid a very small amount of money, an amount that would surprise many people. It is not the case that the majority, or anywhere near the majority, are receiving massive sums. Members should go and talk to a young person who is unemployed, or a single mum, or a couple, and ask about the benefits that they are receiving—and now disabled people are also being hit by the Government’s proposals.
The Bill clearly constitutes a tax on those who work hard and a cruel, vindictive cut in the living standards of the poorest people in our society. The Government should hang their heads in shame, and that applies especially to the Liberal Democrats.
CPI/RPI Pensions Uprating
David T C Davies Excerpts(12 years, 2 months ago)
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Guto Bebb (Aberconwy) (Con)
I will be brief. It is a pleasure to speak in this debate and to follow the hon. Member for Easington (Grahame M. Morris). I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on ensuring that this issue is debated on the Floor of the House.
Detailed rebuttals of the arguments of Opposition Members have been provided by my hon. Friends the Members for West Worcestershire (Harriett Baldwin), for Gloucester (Richard Graham) and for Eastbourne (Stephen Lloyd), who said that we have to consider the changes in context. Part and parcel of that context is what is being done by the Department for Work and Pensions, which is getting to grips with the need to reform not only the welfare state, but our pensions system. By all measurements, our pensions system was one of the best in Europe in 1997, but was left to us in 2010 in a complete and utter mess.
I have heard it said time and again in this debate that people should have security when planning for the future. I could not agree more, but I worry that the 75% to 80% of people listening to this debate who are not in the public sector will be wondering about their security and pension provision, which were attacked by the previous Labour Government in a raid worth £5 billion a year, starting in 1997 and going on for year after year. That has reduced the value of private pension provision and made it more difficult for private companies to keep that provision in place. As a result, final salary benefits are now almost unheard of. That was not the case 13 years ago.
David T. C. Davies (Monmouth) (Con)
I am delighted that my hon. Friend has given way. I congratulate him on what he is saying. Does he share my concern that some unions are in the habit of lambasting shareholders, as though shareholders are people with top hats and canes from a previous century, whereas the majority of them are people in the private sector who are dependent on private sector pensions?
Guto Bebb
Indeed. When people say that HSBC’s £14 billion profit is indefensible, I make the case that for somebody with a private pension, that profit is impressive because the greater the profits, the better the pension provision for people who are saving for their retirement.
The proposed changes have to be looked at in context. The triple lock should be welcomed. It has been semi-dismissed by Opposition Members today. They talk about the importance of the RPI link, but under the previous Government, the RPI link resulted in a 75p increase in the state pension. Under this Government, with the triple lock in place, the increase will be £5.35 in the coming financial year. Anybody who says that that change is not worth while should talk to pensioners in my constituency who are grateful for the additional £5.35 that they will receive.
We have also heard about the impact of the change from RPI to CPI on people in the public sector who are planning for their retirement. I heard about that at first hand when I took part in a phone-in programme on Radio Cymru. I was contacted by the headmaster of a very good school in the constituency of the hon. Member for Arfon (Hywel Williams). He stated that the changes were completely and utterly unacceptable because he would lose almost £80,000. People who called in to respond to that were flabbergasted that somebody could lose £80,000 as a result of the change, because it brought home to them the difference between the provision that they were able to pay for through their own saving and what was available in the public sector. The average private sector pension pot is £30,000. To hear of somebody losing £80,000 as a result of one technical change was shocking to the majority of people.
Unemployment
David T C Davies Excerpts(12 years, 4 months ago)
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Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I beg to move,
That this House believes that the Government’s policies of cutting spending and raising taxes too far and too fast have resulted in the UK economy flat-lining for 12 months, well before the recent eurozone crisis; notes that unemployment has reached a 17-year high and over-50s unemployment has risen sharply; further notes that slower growth and higher unemployment makes it harder to get the deficit down and that the Office for Budget Responsibility forecasts a further rise in unemployment to 8.7 per cent., a rise in the benefits bill of £29 billion, and an increase in projected borrowing of £158 billion; agrees with the IMF’s warning that ‘consolidating too quickly will hurt the recovery and worsen job prospects’ and that the Government should ‘have a heightened readiness to respond, particularly if it looks like the economy is headed for a prolonged period of weak growth and high unemployment’; and, in light of the Office for Budget Responsibility forecasts published on 29 November 2011, calls on the Government to reconsider its refusal to adopt the Opposition’s five point plan for jobs which includes creating 100,000 jobs for young people and building 25,000 affordable homes using funds raised from a tax on bank bonuses, bringing forward long-term investment projects, temporarily reversing the January 2011 VAT rise, a one-year cut in VAT to 5 per cent. on home improvements, and a one-year national insurance tax break for every small firm which takes on extra workers.
It is a shame that the Secretary of State for Work and Pensions has chosen not to be present for the third Opposition day debate on unemployment and living standards. We rely, I hope, on the Minister for unemployment to relay back the nature of today’s debate and discussion.
The House meets to debate the motion after more grim news on jobs this morning. Grim news on jobs this month has followed grim news on the Budget last month. Once again we have seen this morning how the Chancellor’s decision to clobber the recovery is clobbering families all over our country. Once again we have heard of families losing their jobs because of this Government’s decision to cut too far and too fast, and once again we see the consequences of this Government’s decision to stand easy while millions of people in our country are now standing idle.
Not even the Minister for unemployment could spin his way through the statistics published this morning—unemployment up by 128,000, employment down, vacancies down and the public sector now losing jobs 13 times faster than the private sector is creating them. We do not have to look very far for the root cause of this unalloyed misery for families 11 days before Christmas. The Chancellor laid it out for us just a fortnight ago. Last year he was boasting about delivering cuts that were £40 billion greater than the cuts planned by Labour. Last year he was boasting about how Britain had suddenly become a safe haven. Last year he was so pleased with himself that he said this country was out of the danger zone. How hollow those words ring today.
The autumn statement laid bare the catastrophic failure of the Chancellor’s policy—growth flat lining for a year, borrowing up £37 billion higher than the plan drawn up by my right hon. Friend the Member for Edinburgh South West (Mr Darling), welfare up by £29 billion, and debt up an extraordinary £158 billion higher than forecast, which is £6,500 more for every house in this country. Borrowing, welfare bills and national debt are all higher, but growth is nowhere to be seen.
David T. C. Davies (Monmouth) (Con)
The right hon. Gentleman appears to be criticising the Government for borrowing more money. How much more money would he have borrowed, had he been in government?
Mr Byrne
If the hon. Gentleman had been listening carefully, he would have heard me answer that question. The plan that my right hon. Friend the Member for Edinburgh South West and I set out entailed borrowing that was £37 billion lower than that outlined by the Chancellor in his autumn statement a couple of weeks ago. That is of grave concern to the number of people who are now out of work, especially young people in the hon. Gentleman’s constituency, where long-term youth unemployment has gone up by 128% this year, which must surely concern him.
David T. C. Davies (Monmouth) (Con)
The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) and many of his colleagues have basically said that the Government should change course. I listened to them with great interest but did not hear any of them say what their course should be. I heard plenty of criticisms of the Government, but there has been no mention by the right hon. Gentleman of a coherent economic policy.
David T. C. Davies
I have heard about this tax on bankers’ bonuses, which has already been spent in myriad different ways. In any case, the Government have already introduced taxes on banks, which are bringing in far more money. I point out to the right hon. Gentleman—I am sure he knows this, given what his last job was—that the financial services industry in this country is contributing about 10% of all the money that we have, or somewhere in the region of £50 billion. At this moment in time, we cannot do anything too much that will damage that.
Let me explain to the House what I think the Opposition party’s economic policy was. Up until October and the Chancellor’s statement, the economic policy of Labour Members was to borrow even more money than we are being forced to borrow at the moment. Since October, everything has changed and suddenly their policy is to borrow less money. Amazingly enough, they are not only going to borrow less money, but spend more money. The Opposition are going to borrow less money but somehow there will be no cuts in Government expenditure and no freezes on pensions and everyone will have a job. It is a totally incoherent economic policy, but completely consistent with what we have come to expect from Labour.
Albert Owen
The hon. Gentleman says that we did not outline our plans. If he reads the motion, he will find them there, and he should be speaking to the motion. He said two things that were incorrect. He said that we would be spending more than the Government. In the autumn statement, this Government said that they would spend more than Labour. One tool of employment is taxation. Does he agree that reducing VAT temporarily during the previous recession helped employment and consumers? Would he support something of that nature now?
David T. C. Davies
The hon. Gentleman ought to know that I will always support any kind of tax cut if it is affordable and I welcome his conversion to that idea. I recall him talking about what happened when Labour got in, but he forgot one or two important facts. He forgot to tell us that when Labour got in in 1997, the national debt was some £350 billion. By 2007, before the economic crash, the national debt had risen to £650 billion. Yes, the Labour Government had been paying off the national debt for two years but when the election started to loom, all of a sudden off went the spending taps and they were spending at a rate of £30 billion or so on average more than they were earning. That meant that by 2007 they already had a problem, yet they let the spending rip and we ended up with a national debt of £1 trillion and a deficit of £160 billion. Their response was to say up until October that we should borrow even more money—now, they suggest we borrow even less.
What the hon. Ladies and Gentlemen on the Opposition Benches do not understand is that it is very easy to create a little employment in the short-term by borrowing money that one does not actually have, but the problem is that that will always lead to greater unemployment in the longer term because at some point—they do not realise this—that money must be paid back. In the meantime, the interest on it, which is about £30 billion a year at the moment, has to be paid. The only way that money can be paid back is by raising taxes, which destroys jobs, or cutting public spending. That is a basic economic fact that Labour Governments throughout history have failed to comprehend.
Of course, there are more things that this Government can do. We have taken the brave decision as a coalition to get rid of the deficit as quickly as we can. It might take until 2017—[Interruption.] Yes, I accept it is not going to be an easy task, given what we have inherited. It will take a number of years, but we will stay the course and do it, and we will do more, besides.
We must consider immigration. It cannot possibly be right that 250,000 people are coming into this country at a time of recession if we have to find them all jobs, too. My wife is one of them and my sister-in-law, who is from Asia, is another. I am not in any way against those who come here; I welcome the fact that people have come here and are making a contribution, but we must consider whether that is sustainable in the long term.
We must also consider the attitude of some British people—that has to be said. Neither of my sister-in-laws had problems coming over here from Asia and eastern Europe and getting jobs, but there is unfortunately a small minority of younger British people who would prefer to stay on the dole than go out and get a job. It is a harsh fact but it needs saying and it is something that this Government will actively tackle.
We need to look at the attitudes and training of those who come out of our schools, ensuring that they can add up and have basic English and social skills, as it is often people’s attitude that gets them a job. We must consider what our universities are teaching people, because it is no good if everybody comes out with a degree in media studies. There will always be some jobs for some people in the media, but not for all those who want them.
I have spoken to a number of people working in companies that are contributing a lot to this country—gas and oil companies and so on—and they say that they have had to go abroad to find people because there are not enough with the necessary practical skills in this country. By that I mean people who do not mind getting their hands a bit dirty. I spent four or five years getting my hands a bit dirty, as did many people on the Opposition Benches. I have no problem with that whatsoever. Unfortunately, some young people in this country at the moment do.
Grahame M. Morris (Easington) (Lab)
I am grateful to the hon. Gentleman for giving way, but may I urge him to focus on the issue of joblessness rather than worklessness? I think that was an offensive remark, although I am sure that he made it unintentionally. We have Office for National Statistics data giving the numbers of vacancies and the numbers of people who are unemployed, particularly young people. In neighbouring constituencies, such as Hartlepool, which is just to the south of me—
David T. C. Davies
I take the hon. Gentleman’s point. I am focusing on the fact that there are jobs out there for some people and that there are some people who will not take jobs. I accept that there are not enough jobs and we would all like to see more.
One thing the Government can do—I think they are considering this—is look at the red tape imposed on small businesses. When I ran a small family business, I was reticent to take people on because if we took on a contract to move goods from A to B that lasted for nine or 12 months and took on some extra drivers to do that, we were stuck if we suddenly lost the contract because we found it very difficult to get rid of people. We ought to look at lifting the red tape so that companies can take a risk by taking somebody on. If that does not work out, sadly, they might have to let them go but a lot of companies would hang on to people if they could. It is not the public sector out there—things are a lot harsher. The hon. Member for Stretford and Urmston (Kate Green) is laughing, but I wonder whether she has ever tried to run a small business. We are also, I am glad to say, looking at the green taxes that have been levied on the big industries, because there is absolutely no point in hitting big manufacturing companies with carbon and environmental taxes if they are simply going to relocate to the other side of the world and make their goods over there, taking jobs with them and probably creating even more carbon as they ship back whatever it was they were making.
I have only 45 seconds left, but I must mention the right hon. Member for Birmingham, Hodge Hill, who was going to give way to me, but failed to do so, when he mentioned Clement Attlee. We all supported the grandiose schemes of—not Clement Attlee, sorry, Bevin, who was supported by Winston Churchill at the time, the Conservative leader—[Hon. Members: “Beveridge!”] Beveridge, sorry. Not Bevin, no, I accept that.
The right hon. Gentleman will know, however, that Beveridge’s plans were built on the back of a war loan from the United States, which had to be paid off for decades afterwards; that Callaghan’s Government ended in failure; that Wilson had to devalue the pound; and that his own, previous, Government were responsible for the biggest boom and bust in financial history—
Oral Answers to Questions
David T C Davies Excerpts(13 years, 9 months ago)
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Chris Grayling
The hon. Gentleman has to understand that any Administration must find a balance. If we regulate too much, there will be fewer jobs; at the same time, if we do not regulate enough, employees will be exposed to danger. We have to find the right balance between those two, and I do not believe that over the past 13 years the previous Government did that. They over-regulated, drove companies overseas and cost jobs. We will endeavour to ensure that we restore a degree of common sense, not simply to health and safety regulation but to the regulatory burden imposed on business right across government.
David T. C. Davies (Monmouth) (Con)
T5. People applying for jobs in areas that require Criminal Records Bureau checks often have to wait weeks or months for those checks to come through, and during that time they are ineligible to claim jobseeker’s allowance. Will the Minister look sympathetically at these rules, which have the unintended consequence of sometimes discriminating against British nationals?
Chris Grayling
My hon. Friend makes a very important point. There are a number of areas we have inherited from the previous Government in which there is an almighty mess to sweep up. I give him my commitment that I will look at the issue he has raised and discuss it with colleagues at the Home Office to see whether we can find a better way of streamlining the system, so that problems such as the one he has outlined do not occur.