Welfare Benefits Up-rating Bill

Debate between Kwasi Kwarteng and Martin Horwood

Monday 21st January 2013 Commons Chamber

[Kwasi Kwarteng]

I have my own ideas about the banking collapse, which I am happy to share with the hon. Lady—although not, perhaps, tonight.

The financial crisis, which we all remember, devastated everyone. Even today, the United Kingdom economy is 3% smaller than it was in 2008. I cannot speak for everyone in the country, but the vast majority of people are much less well-off than they were in those days. What has happened to benefits since then? According to the figures that we have heard, they have increased by 20% while the earnings of people in work have risen by 10%. That is not fair.

Labour Members have talked of fairness. For instance, the hon. Member for Chesterfield argued eloquently that 1% on £70 a week was very different from 1% on £35,000 a year. However, it is not the people on £35,000 a year about whom we are worried; it is the people on very low incomes. People in my constituency who do night shifts at Heathrow come to me and ask “Why did out-of-work benefits rise by 5% last year? I earn £11,000 a year if I am lucky and work 20 hours a week, but I was not given such a big increase.” That is the sort of fairness that we are talking about. This is a really important issue, which Opposition Members have not addressed in any way.

[Martin Horwood]

Is not the answer to the hon. Gentleman’s question—which applies to people on low incomes in my constituency as much as to those in his—that those who have worked hard and have low incomes, but have paid their taxes and done the right thing, can still lose their jobs through no fault of their own and find themselves trying to subsist on 70 quid a week, and that we do not want to make things more difficult for those people? I think that very few of them are scroungers, and most want to get back to work as fast as possible.

[Kwasi Kwarteng]

I accept what the hon. Gentleman says, but I am talking about the position in general. It cannot be right, arithmetically, for benefits to rise, year after year, faster than the wages of the low-paid people to whom he has referred. However, we must look at the overall picture. The 1% increase is not very much. I know that some Government Members proposed a cash freeze, and I am glad to note that the Government have not adopted that severe option; but in the context of the European and the global financial crisis, a cash freeze is not completely off the table. We have seen other countries take extremely tough measures. Why have they done that? They have not done it because they want to limit demand, as the hon. Member for Glasgow North East suggested. They have not done it because they want to hurt people on low incomes. They have done it because they feel that the fiscal future—the future of the state: the future of their countries—requires a tough approach to public spending.