Welfare Reforms and Poverty

Debate between David T C Davies and Hugh Bayley

Monday 13th January 2014 Commons Chamber

[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.

[Hugh Bayley]

It was the first 10 years.

[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.