Living Standards
Liam Byrne Excerpts(14 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 is out of touch and does not understand the impact of its policies, including the Autumn Statement, on children, parents, women and hard-working families; and further believes that these policies have resulted in a squeeze on households’ living standards.
I speak for many in the House when I say that I feel a debt to the hon. Member for Morecambe and Lunesdale (David Morris) for his bringing his 10-minute Bill before the House. I had no idea that it was so dangerous to go into a hairdresser’s, and I certainly will not return to one until his Bill becomes law. I do not know if I can speak for the Secretary of State for Work and Pensions too, but it is good to start debates on a note of consensus.
The verdict is now in. It is time to put all the excuses of the past few months—the snow, the cold, the royal wedding, the Japanese earthquake—to one side. We now see the true extent to which the Chancellor has drained the life out of the economy and its recovery. The Government are fundamentally failing to get our economy back on the move, and they demand of working people, parents and children that they should pay the price of the Government’s economic failure.
Yesterday, the Chancellor could no longer hide behind excuses. The Office for Budget Responsibility laid out the truth. Families, pensioners and businesses across the country have known for some time that his plan is hurting, but yesterday they found out that it is not working.
Mr Byrne
I will give way in a moment.
The Government are now set to put on the national credit card £158 billion more than they planned a year ago—£6,500 for every house in this country. Why? It is because they are planning to put on the dole another 250,000 people over the next year or two. They are bringing down the number of people in jobs by 300,000, and they have put up the benefits bill—that sign of welfare waste—by an incredible £29 billion over the forecast period.
Once upon a time, the Chancellor told us that we were all in this together. Not any more—it is back to the economics of, “You are on your own.”
Mr Byrne
I will give way in a moment. There are not too many speakers on the Treasury Bench today, so there will be plenty of time for interventions.
Let us consider what the Chancellor’s proposals mean for jobs. The OBR now predicts that unemployment will rise next year, and unemployment forecasts for the years ahead are up year after year until 2015. The Government say that there is no alternative, because they still believe that unemployment is a price worth paying. Unemployment is bad this year, but it will be worse in the years ahead: the OBR said yesterday that it will rise up to 8.7%, while youth unemployment already stands at over 1 million. The brutal price that our young people are paying for the Government’s failure to get people back to work is now clear to hon. Members across the House. Those young people will be at the sharp end of rising unemployment in the years ahead. I will give way to the hon. Member for Devizes (Claire Perry), who will perhaps tell me how the Government can do more to get down youth unemployment in her constituency.
Claire Perry
Does the right hon. Gentleman think that the words, “There is no money,” were sufficient excuse, or is that actually a fact?
Mr Byrne
The Chancellor said yesterday that he is putting £158 billion more on the national credit card—£8 billion more borrowing than I and my right hon. Friend the Member for Edinburgh South West (Mr Darling) set out. The Government are set to borrow £37 billion more than we set out in the Budget before the election. The tragedy is that 7,700 people in the hon. Lady’s constituency will see their tax credits cut next year to pay for the failure of those on her Front Bench to get this country back to work.
Mr Byrne
I will give way in a moment.
There have been announcements in the past few days, not, sadly, from the Secretary of State for Work and Pensions, but from the Deputy Prime Minister, who announced the youth contract, which is set to be so successful that the OBR said yesterday that it cannot count on its getting any extra people into jobs. All that we have had this week from the Minister for unemployment is a decision to blame the figures—it is all down to the statistics, not his failure to get people back to work.
Long-term unemployment among young people is going through the roof—it is up 83% this year alone—but another jobs crisis is emerging up and down the country among our most experienced workers. Among the over-50s, long-term unemployment is more than 110,000—up 20% since the start of the year. People with experience to offer, who have worked hard and paid in all their lives, deserve better than to be thrown on the scrap heap.
Charlie Elphicke (Dover) (Con)
The right hon. Gentleman’s premise is that the Opposition would not have borrowed more money, but that is fundamentally false, as the reality is that they would have borrowed billions more to deal with the eurozone crisis. In addition, interest rates would have been higher, costing home owners more money on their mortgages.
Mr Byrne
I know that the hon. Gentleman takes these matters seriously, and that he will feel bad about the fact that 10,000 families in his constituency are seeing cuts to their tax credits to pay for the failure of his Front Bench to get people back to work. He is such an assiduous attender of these debates that he will know as well as I do that the OBR’s analysis of our last Budget showed that we were set to borrow £37 billion less than the Chancellor set out to the House yesterday. He should explain that to the 10,000 families in his constituency who are seeing a cut in tax credits.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The right hon. Gentleman is being generous, as ever, in giving way. I remind him, however, that there is obviously a split between him and the shadow Chief Secretary to the Treasury, because on yesterday’s BBC programme “The Daily Politics”, she was asked this specifically:
“If you had been writing the autumn statement, borrowing would have been higher? Yes or no.”
Her answer was yes.
Mr Byrne
We do happen to believe that further action is needed to get people back to work, because we are now seeing the costs of the right hon. Gentleman’s Government over the past year and a half. We have now seen the Chancellor set out £158 billion of extra borrowing because he has drained the recovery of growth and put the benefits bill up over the course of this Parliament by £24 billion. That is the only part of his budget that is growing.
Mr Dave Watts (St Helens North) (Lab)
Does my right hon. Friend not find it strange that Government Members talk only about deficit? They do not talk about unemployment, poverty or growth. Do we not need a more balanced approach to the problem?
Angie Bray (Ealing Central and Acton) (Con)
As I have found before, the right hon. Gentleman does not like history. The fact is that a note was left saying, “There’s no money left,” and that had consequences. This country is living and breathing the consequences of how Labour managed the budget. We are in deficit, which is why we talk about it so often, and it is about time the Labour party recognised the consequences of the way in which it managed this country’s finances.
Mr Byrne
Perhaps the hon. Lady’s memory of history is suddenly faltering, because she should surely remember that in the Chancellor’s emergency Budget, borrowing turned out to be £20 billion less than my right hon. Friend the Member for Edinburgh South West projected when he was Chancellor. Unlike his, the Conservatives’ borrowing forecasts have come in £158 billion higher than originally projected. That means thousands of pounds more for every household in this country—and of course, the price of the consequences is being paid by the hon. Lady’s constituents. More than 7,000 families in her constituency are now seeing their tax credits cut to pay the higher bills of higher unemployment.
Ms Karen Buck (Westminster North) (Lab)
Can we turn from history to current affairs? One of the key messages from the Government was that they were going to make work pay. Following from my right hon. Friend’s argument about how additional spending is being generated because of the failure of their policies, would he comment on the fact that in-work benefits for working households, such as housing benefit for those in work, have risen by 42% since the general election, as 115,000 more households have been forced on to in-work benefits?
Mr Byrne
That underlines an extremely important point, and I hope that in the Secretary of State’s response he will say a little more about how he reconciles the “Budget” that we heard yesterday with his own honourable intention to ensure that work pays. Right now, in my constituency, I have working parents, especially women, coming to me and saying that they are now giving up work—because the Government are cutting benefits, meaning that it is no longer economic to work. Surely that cannot be right.
Sammy Wilson (East Antrim) (DUP)
Does the shadow Minister not find it strange that the Government argue that if we were to borrow to stimulate the economy the money markets would go mad and put up interest rates, yet the markets seem to have no problem in lending us money to pay for unemployment?
Andrew Percy (Brigg and Goole) (Con)
May I take the shadow Secretary of State back to the subject of youth unemployment? Doubtless the previous Government did some very good things in that area—they did some very bad things as well—but does he admit that the present situation was not created overnight? When Labour left office there was an upward trend in unemployment—[Interruption.] For youth unemployment, there was an upward trend from 2004. Does he accept that under Labour the number of children brought up in workless families hit record levels and the gap between the best performing and the worst performing schools widened? What he is saying is political knockabout, but this is a long-term issue, which deserves to be treated seriously.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Interventions are getting longer, and a lot of Members wish to speak. Please let us not use up the time on interventions.
Mr Byrne
I am afraid that the hon. Gentleman is simply wrong. Youth unemployment was coming down before the election; it has now gone through the roof, since his party took office. It is now up through the 1 million mark for the first time. Long-term youth unemployment in this country is up 83% since the start of the year. He would surely admit that that is a badge of shame for this Government, and demands much more urgent action from them.
George Freeman
Does the Opposition spokesman agree that his authority to talk about this subject would be heightened if it were not for the fact that during the previous 10 years, before his party lost office, youth unemployment rose to a quarter of a million—and that was during a boom? His authority to talk about this is hugely reduced by that track record.
Mr Byrne
Youth unemployment came down to record lows under the Labour Government. It was coming down before the election, because we chose to act. Now the key back-to-work scheme for young people has been taken off the shelf for the past year and a half. What is the result? Youth unemployment in the hon. Gentleman’s constituency is going up. He should explain that to young people in his constituency, and he should apologise to them. The back-to-work scheme set out by the Deputy Prime Minister last week is not even planned to come into place until next April. That shows how much his party cares about getting young people back to work.
Mr Byrne
I shall give way in a moment.
The weakness in the jobs market is not abstract; it shows up in people’s pay packets. That is exactly what the Office for Budget Responsibility confirmed yesterday. Earnings, it says, are now set to fall throughout the rest of this Parliament. By 2016 wages will be no higher than they were in 2001—£1,400 below their pre-crash peak—yet prices are not falling; they are rising. Prices are going up over the course of this Parliament. Wages are falling and prices are rising. That double whammy is now hurting families all over this country.
Not long ago, the Governor of the Bank of England said that we in this country now confront the worst squeeze on living standards since the 1920s. Yesterday, the Institute for Fiscal Studies said that the squeeze was “unprecedented”. This is the biggest fall in household income since records began. With our nation’s family budgets under such pressure, we would have thought that the Government would step in to help. Not a bit of it. Instead, working families are being asked to pick up the pieces.
Mr Redwood
The right hon. Gentleman is making a very important point—that a big squeeze on living standards started under his party’s Government. It is continuing under the coalition. As the forecasts make clear, a big element in that is energy and fuel prices. Does he have any proposals that the Government could adopt to tackle that problem?
Mr Byrne
We do think that Government should be doing more in the energy market to help to bring down prices. The right hon. Gentleman will, I know, feel strongly about that, because of the 6,500 families in his constituency who are now seeing cuts in tax credits.
When wages are falling and prices are rising, people would expect the Government to do more to help, but what we now have is a budget set out yesterday that tightens the squeeze on working families. Last Friday the Deputy Prime Minister blustered his way through an interview on the radio and said, once again:
“We will not balance the books…on the backs of the poorest”.
That is an old line, and today it rings pretty hollow, because that is exactly what the Government are doing.
Yesterday, the Government rejected any new tax on bankers’ bonuses. Instead, it is children, women and working parents who are picking up the tab for the Government’s failure to get people back to work.
Bill Esterson (Sefton Central) (Lab)
My right hon. Friend is making the case extremely well about the unfairness of what the Government announced in the autumn statement about targeting those on lower and middle incomes instead of targeting the bankers and the bonuses—a move that was successful under Labour and should be repeated by the present Government. He was asked about prices, and I am sure that he will soon say something about cutting VAT as an effective way of helping hard-pressed families through reduced prices.
Mr Byrne
I will indeed come on to that topic in a moment, but I first want to talk about the impact on children of yesterday’s Budget. We knew before yesterday’s Budget that all the gains made in reducing child poverty over the last decade were set to be wiped out by the decisions of just the last year. Once upon a time the Prime Minister told us he would not increase child poverty. That was the rhetoric, but today the Institute for Fiscal Studies has given us the reality. It has already said that almost one in four children will be in poverty by the end of the decade, thanks to this Government. That was before the attack on working families in yesterday’s Budget. A generation of children will not thank this Government because hundreds of thousands more of them are now destined to grow up poor.
Then we had yesterday’s Budget, reversing any improvement in child tax credit for the poorest, and robbing 5.5 million families of £110 per child. There will now be 13 cuts to children’s benefits beginning in March, which next year will take out £2.5 billion in benefits for children. That is almost eight times the level of benefit cuts this year. Almost £12 billion is coming out of children’s benefits over the course of this Parliament; that is £1.5 billion more than is coming off our nation’s bankers. I therefore have to ask this question: what kind of Government take more off children than they take off bankers?
Nick de Bois
Does the right hon. Gentleman not recall that in his Government’s 13 years in office between 1997 and 2010 they increased personal tax allowances by only £2,400, whereas in only 18 months we have increased people’s earnings by raising those allowances by £1,800, and we will go further by the end of this Parliament by raising the figure to £10,000? Is that not a major contribution to addressing lower pay?
Mr Byrne
No, because what comes with that is the biggest raid ever on the benefits of children and families. Let us consider the bill that will be paid by families under yesterday’s announcements. An average family on the minimum wage with two kids will lose £320 a year as a result of the changes made yesterday. They would only ever gain £120 a year through the increases in tax thresholds to which the hon. Gentleman referred. Overwhelmingly, poorer families and children in this country are now getting poorer as a result of his Government’s Budget.
No wonder Save the Children said yesterday:
“For many families the scrapped £110 increase in Child Tax Credit could mean the difference between putting food on the table for their children or having them go hungry.”
The Child Poverty Action Group said:
“Britain’s poorest families have been abandoned today and left to face the worst…the government has actively decided to let child poverty rise.”
Those on the Treasury Bench should be ashamed of themselves; they should be ashamed of what they have done to children in this country. Labour will be the party that stands up for a fair deal for working parents.
The scale of the cuts to children’s benefits is not the only story. There is more. Let us consider the cuts to working tax credits for working families. Working families are already in line for seven big cuts to their tax credits next year. That was going to lose them more than £1.7 billion, but that was not enough for the Chancellor, so yesterday they got an eighth cut to their working tax credits. They will now lose almost £2 billion next year. That is almost double the cuts they received last year.
Some 2 million families in our country now face a double hit, with the cuts to child tax credits and the freezing of the working tax credit. There is therefore a great deal of extra squeeze that will hit working families, but I want to flag up one cut in particular. It is the subject of a Westminster Hall debate secured by my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), and I want the Secretary of State to reflect on it further, as I think it will have consequences that he would not intend. One of the changes he will make next year is to increase the number of hours a working couple must work in order to get tax credits. At present, they can qualify for tax credits if they work 16 hours a week. From next April, they will need to work 24 hours a week. At present, however, companies are not handing out extra shifts. Many families that will be affected work in the retail sector. If anything, big retailers are cutting back on their employees’ hours, not increasing them. A family that is on the minimum wage for 16 hours a week might bring in just over £5,000. Working tax credits and child tax credit might increase their take-home pay to about £11,000. If they cannot get an extra shift, all of that working tax credit will be gone. Those families may well find themselves better off on jobseeker’s allowance.
We must not create a situation in which cuts to tax credits mean families are better off on benefits than in work. I am sure that is not the Secretary of State’s intention, and I urge him to look at this matter in more detail before those cuts bite in April next year.
The Minister of State, Department for Work and Pensions (Steve Webb)
I am trying to follow the right hon. Gentleman’s reasoning. I think he has argued so far that people out of work should not face cuts and that people in work should not face cuts, so who should?
Mr Byrne
The Pensions Minister should reflect on the following point. When we add together the cuts to children’s benefits and the cuts to families’ working tax credits, the total is £20 billion over the course of this Parliament. That is twice the amount of money his party is taking off the country’s bankers. Surely he would reflect on the wisdom of taking more off children and working parents than off bankers? I think he should reflect on that further.
Sajid Javid
I thank the right hon. Gentleman for giving way. When he left office, why did he leave a note saying there was no money left?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Member for Devizes (Claire Perry) is pushing her luck today. She has already intervened, and I do not mind her rising to seek to do so again, but continually to stand up and barrack is not the way forward. She has a great future in this House, and I am sure she wants to protect it.
Mr Byrne
Finally, I want to talk about the impact on women of these Budget changes. The shadow Home Secretary, my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), will say more on this in her winding-up speech. She has already set out with clarity and force how the Budget changes made by this Government have, overwhelmingly, hit women harder than men. I would just highlight to Members, and especially those on the Treasury Bench, the comment made yesterday by the hon. Member for Calder Valley (Craig Whittaker). He put it very simply when he said that of course women are paying the price most. At least someone on the Government Benches has the honesty to tell it straight. He was right: women are being hit hardest by these Budget changes, not least through the changes to child care. Some 30,000 women in this country have had to give up work in the last year because they can no longer afford the child care. That is £50 million in lost tax to the Exchequer. What a shambles.
The tragedy in this debate is that there is a different way. We have set out a different way of jump-starting growth and getting people back into work. Yes, it does start with a tax—a fair and sensible tax—on bankers’ bonuses to help get 100,000 young people back to work. What have this Government proposed instead? They have proposed a fund of about one third of the size, paid for not by those with blessings to share, but by children and families who are already feeling the squeeze. That decision alone tells us everything we need to know about who this Government stand for. That decision alone tells us how out of touch this Government have now become, and it is for that decision if no other that I say this House should support our motion.
Mr Duncan Smith
I do not agree with the hon. Gentleman. I am talking about choices. I remember a great deal of debate, even in the Select Committee, about whether the working-age unemployed would see their benefits reduced. Everybody said it would happen; newspapers predicted it. In fact, my right hon. Friend the Chancellor has stuck to increasing them by CPI at 5.2%—just one good example of making a choice about who would be affected most direly by any change or any reduction. That was a bold choice and one on which we should congratulate him.
Mr Byrne
I am grateful to the Secretary of State and I am following his argument closely. Further to the intervention from my hon. Friend, the right hon. Gentleman will no doubt have seen the analysis from the Institute for Fiscal Studies this morning. If it is true that the Government are not hitting the poorest families harder, why has the IFS said that for 2012-13 the poorest three deciles in this country are being hit three times harder than the overall average?
Mr Duncan Smith
According to the findings of the IFS and of the Treasury, the top decile pays a huge amount more in relative terms than anybody else. [Interruption]. Hon. Members should listen. Taking account of uprating, about 80% of households with children will see their tax credit awards rise at least in line with earnings next year. Members can pluck little bits out, but when they average it across, they will see that there have been some choices.
I am quite prepared to recognise that the pressure on the bottom deciles will always be tougher and harder because of where they spend their money. That is not the issue. The issue is, within the bounds of what we could afford, what were we trying to protect? The decisions we took and the changes we made, which I will come to in a moment, mean that we have protected the most vulnerable as well as we could and better than the Opposition would have done, had they been in power.
Mr Byrne
I am grateful to the Secretary of State. He is being most generous. The IFS was pretty clear this morning. It said that the richest decile would see an impact of just over 0.5%. The poorest decile would see an impact of minus 1.6%. So it is clear that the poorer families in this country are being hit much, much harder than the richer ones.
Mr Duncan Smith
I am sorry, those are not the figures that I have. The figures on the chart that I am looking at show that the richest decile has a greater proportion of its income taken, even in relative terms. Yes, I accept that, relatively, those in the bottom three deciles do quite badly in many senses, but the right hon. Gentleman should look at the Treasury figures, which show that the wealthiest decile do worse than anybody else, in absolute and in relative terms.
Mr Duncan Smith
I am grateful to my hon. Friend who, as ever, talks sense, and I agree with her.
This is an Opposition day debate and I had hoped to hear something about what they would do to fix things. My right hon. Friend the Member for Wokingham (Mr Redwood) asked a very specific question but never received an answer from the right hon. Member for Birmingham, Hodge Hill. We have today had to endure the usual waffle and confusion. On the one hand, the Opposition criticised us yesterday for borrowing too much, but on the other they seem to think that more borrowing is the only way to fix the deficit. The director of the IFS was pretty clear yesterday on the Opposition’s position on borrowing more to spend. He said:
“You would have to believe some pretty surprising things about the way the economy works to think that if you reduce tax by a pound then borrowing would go down rather than up.”
Does the right hon. Gentleman agree with the director?
Mr Duncan Smith
With respect, that is not a policy; that is just a lot of waffle. In reality, what the right hon. Gentleman has to tell us—[Interruption]—and I will give way to him again or to the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper)—is whether he agrees with the shadow Chief Secretary to the Treasury, who yesterday said that if the Opposition had made the autumn statement, they would be borrowing more.
Mr Byrne
We think that we could get more people into jobs if we had a temporary cut in VAT to get shoppers back on to the high street; if we cut national insurance for small firms to hire extra workers; if we brought forward infrastructure projects, none of which we saw yesterday; if we cut VAT on home improvements; and if we had a tax on bankers’ bonuses to get 100,000 young people into jobs.
Mr Duncan Smith
Borrowing, borrowing, borrowing. More borrowing—isn’t it wonderful? Interestingly, the Opposition were supposed to say that they would stick to the original Darling plan, but the measures just laid out involve borrowing way above that, because, as my right hon. Friend the Member for Wokingham has said, if we look at what the Opposition have opposed, out of all that that we have had to do, we find that the bill now stands at some £91 billion extra a year, or £326 billion for the next five years in which they might have been in government.
These are all the spending cuts that the Opposition have opposed; the VAT position—opposed; welfare savings—opposed; in-year spending cuts—opposed; local government reform—opposed; capital spending on education—opposed; two-year public sector pay freeze— opposed; cuts to capital investment allowances—opposed; increasing public sector employee contributions—opposed; Ministry of Justice reform—opposed; police reform— opposed; DEFRA reform—opposed; cuts to the HMRC budget—opposed. That is not a policy; that is a joke.
Mr Byrne
The truth is that the plan laid out by my right hon. Friend the Member for Edinburgh South West (Mr Darling) would have halved the deficit over four years and, according to the OBR, resulted by the end of this Parliament in borrowing £8 billion less than that which the Chancellor set out yesterday. It would have involved borrowing £37 billion less than the Chancellor over the forecast period. The truth is that he has put borrowing through the roof, because he has put welfare through the roof, because he has put unemployment through the roof.
Mr Duncan Smith
The reality is that the OBR yesterday told us categorically that the position in which the Labour Government left us was significantly worse than anybody expected. It also said that unless we had taken the decisions that we took last year, we would be borrowing more than £100 billion in each year of this Parliament. On top of that, the Labour party’s measures would have resulted in even worse, but at least we had a little honesty from the shadow Chief Secretary to the Treasury, who said that borrowing would rise because she would borrow more. Given the economic situation, the Treasury estimates that such measures would cost far more—on the back of the OBR figures.
We now know what the Government at the time were doing, and what the Opposition today are about. They are determined to put hard-won interest rates, which we have held down, at risk. Last April, under Labour, our interest rates were higher than Italy’s; 18 months later, we are the only major western country to have seen its credit rating improve. Italy’s interest rates are now about three times ours, despite it having a lower deficit—actually, almost half the deficit that the previous Government left us. So, while the rest of Europe is under intense pressure, the UK remains a safe haven and the Labour Opposition are completely confused.
Yesterday the shadow Chancellor insisted that low interest rates were the sign of an economy in trouble. That is the same man who, back in 2004, described long-term interest rates as
“the simplest measure of monetary and fiscal policy credibility”.
Mr Duncan Smith
It is well worth reflecting on the fact that the previous Government’s debt cannot be detached from their deficit. In case the hon. Gentleman does not understand it, I will explain that what they did was ratchet up spending before the recession began. We had the largest structural deficit of any G7 country before the recession began.
Mr Duncan Smith
No, I will not give way. The previous Government then went on a spending spree, ratcheting up the deficit, which now pumps the debt. It is no good playing silly games—
Stephen Williams (Bristol West) (LD)
Yesterday, I think we all agreed when listening to the Chancellor’s statement that much of what he had to say was grim news indeed. It was worse than many of us had anticipated. The situation was certainly worse than the last Government declared when they were in office, or even predicted when they could choose their own predictions. It was also worse than the independent Office for Budget Responsibility forecast when this Government came to office.
We now know that finances will be difficult throughout this Parliament. There will be a squeeze on many people’s real incomes. Perhaps more importantly, in terms of confidence, there will be a suppression of hopes and expectations. I understand absolutely why many people are anxious, and I even understand why many people are right to be angry about the situation in which we find ourselves. They are also right to think that some people are indeed “out of touch”, as the motion puts it.
We have seen in many major cities around the world the Occupy people, who are protesting against capitalism. I do not agree with much of what they say; I am a free-market liberal, and I want capitalism to work. Those of us who believe in the functioning of the market economy, however—I think that this now unites the three main parties in this country—must address the concerns that many of our constituents feel about the failure of the market economy to deliver fairness in our society. Last week, the High Pay Commission referred to the “gross inequality” that has arisen in our society, most of which arose, of course, during the period of the last Labour Government. The average pay of someone in work is now £25,900, whereas the pay of a chief executive of a top 100 company has risen to £4.2 million —145 times average pay.
Mr Byrne
The hon. Gentleman is kind in giving way, and I am following his argument closely. I am not certain which measure of inequality he is looking at, but I am sure he would accept that the Gini coefficient, which is one of the most popular measures of inequality, was practically the same at the end of Labour’s term of office as at the beginning. I am sure he would also accept that, looking around the world, the UK was one of the only countries in the OECD—I think that Turkey and Ireland were the others—where inequality was held in check. It went through the roof everywhere else.
Stephen Williams
We can trade statistics, but the right hon. Gentleman cannot deny what everyone is seeing and what all our constituents are saying to us. They are fed up that the people at the top of companies— Labour Members have referred to bankers, but it is not just the bankers; this also applies to others—seem to have got away with it, while people at the middle or bottom are being squeezed. I hope that the Government act on the High Pay Commission recommendations.
The Government are acting to safeguard the living standards of those at the bottom of the income scale.
Guto Bebb (Aberconwy) (Con)
I am pleased to follow the hon. Member for Erith and Thamesmead (Teresa Pearce) because it is important that we challenge some of the myths we have just heard. Before I was elected as Member for Aberconwy, I remember going out in the constituency with the police, and we came across people who were living rough. That was before this coalition Government came to power. From listening to Labour Members, however, one would think that poverty did not exist until May 2010. Their rewriting of history is completely unacceptable.
Mr Byrne
Is the hon. Gentleman as concerned as I am about the Institute for Fiscal Studies estimate that a further 600,000 children will be plunged into absolute poverty over the course of this Parliament, and is he worried about the Treasury’s own analysis published yesterday showing that 100,000 children may fall into child poverty over the next year or two?
Guto Bebb
There is not a single Member of this House who will not be concerned about the fact that there are people who are facing real difficulties, but this Government are trying to make sure we tackle the real poverty we have in this country. In Wales, for example, in many instances what we have is a poverty of ambition, which was fostered by 13 years of Labour Government. For 13 years the economic performance of Wales was worse than that of the rest of the United Kingdom. For 13 years, Labour Members happily threw money at an issue in order to salve their consciences—they threw money at the issue and felt they could then forget the communities that I am proud to represent.
I am part of a coalition Government who are aiming to ensure that if people are willing to work and take part in this economy, they will be better off by doing so. The Government are tackling a long-term problem with long-term solutions. It is unacceptable that the Labour party is attacking a Government who are willing to have a long-term strategy by trying to make short-term points about the past 18 months. This Government are brave enough to look not to the next electoral cycle but to the future.
I was astounded when I read the motion, which refers to the need to look after hard-pressed families. It does not read very well if one is a Welsh MP, because the Labour Assembly Government have completely forgotten about hard-pressed families. What has happened with the council tax in Wales, compared with that in England? The Westminster Government have made money available to allow council tax to be frozen, but the Labour Administration in Wales have decided that supporting hard-working families is not a priority. Some Labour Members have said to me, “The council tax saving is £12 a month. What’s £12 a month?” For people in my constituency, where the average wage is £23,000 a year, £12 a month is a lot.
Mr Byrne
The hon. Gentleman is making his argument with passion and force, as he always does. He will be worried, I am sure, that the cuts made over the past 18 months mean that in his constituency 700 families are losing help with child care, and the tax credits of nearly 6,000 people are being cut. He must surely accept that that is contributing to the squeeze his constituents are feeling.
Guto Bebb
Indeed. The problem is that the Labour party believes that the Government should be responsible for ensuring that families have money in their back pockets. I believe that my constituents want to take that responsibility for themselves. Hon. Members should be proud of the fact that this Government are trying to ensure that those who work are better off. My constituents will be able to keep more of their earnings because we are moving to higher personal allowance rates, and I welcome that.
Steve Webb
I can understand why the right hon. Gentleman did not want to deal with the issue that I raised. I can point out to him, however, that the total number of people in employment will rise from 29 million last year to 30 million in 2016 under the projections. There will be more people in employment, and a rebalancing towards a vibrant private sector, which we want to see.
As well as mortgages, Members on the Government side have talked about the council tax. Labour Members did not seem to want to talk about the council tax, as though it did not matter. The council tax is one of the most regressive taxes that we have. This Government froze it and will freeze it again. That is real help for hard-working families.
A number of hon. Members talked about fuel prices and petrol. It is this Government who cancelled the 3p rise in January. It is Labour that had the escalator, year after year, with above-inflation increases in petrol prices. Under our plans for duty, petrol prices will be 10p a litre less than under Labour’s plans.
Steve Webb
I am grateful to the right hon. Gentleman for intervening, because I asked him the question when he was speaking, and he said that he opposed cuts for people who are out of work and that he opposed cuts for people who are in work. When I asked him whom that left, he said nothing—he never answers the question—and his Back Benchers said, “The bankers”. He was in the Treasury when, before the general election, the Labour Government introduced a “temporary” bankers’ bonus tax. If Labour thought they were going to win the election, why did they not make the bankers’ bonus tax permanent? It was a one-off, pre-election gimmick, whereas this Government have introduced a banking levy that, every year, will raise more than his temporary banking tax raised in any year.
Oral Answers to Questions
Liam Byrne Excerpts(14 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Work and Pensions (Chris Grayling)
I can absolutely give my hon. Friend that assurance. We are expecting further work from Professor Harrington about fluctuating conditions shortly, but I have also extended an invitation to voluntary sector groups that specialise in particular conditions to come into Jobcentre Plus and give briefings and training sessions about those conditions to our decision makers, so that we do everything we can to ensure that we get this right.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
With the OECD forecasting that unemployment is set to spiral to more than 9% in the next year or two, it is clear that the squeeze on working families will only get tighter and tighter. Can the Secretary of State remind the House how much extra it is budgeted will come off tax credits over the next year?
Mr Duncan Smith
I have to say to the right hon. Gentleman that he needs to wait until the autumn statement to have all those figures set in place—if such a thing does exist.
Mr Byrne
I am happy to write to the Secretary of State with his own figures. Budgets laid out by the Chancellor project that more than £3 billion will come off tax credits and child benefit for working people, starting from next April. That squeeze is already serious, and that is why it is unacceptable to propose a further squeeze on tax credits in order to pay for the Secretary of State’s failure to get young people back to work.
On Friday, the Deputy Prime Minister was asked where the money for the new youth contract would come from. He said:
“Well the money clearly comes from the Government”.
He is full of insight. Will the Secretary of State confirm that he has been rolled over by the Deputy Prime Minister and that tax credits will be squeezed to pay for his failure to get young people back to work?
Mr Duncan Smith
Just in case the right hon. Gentleman has missed the point, I remind him that decisions about tax credits are a matter for the Chancellor. I am surprised that he does not know that, because he was once in the Treasury himself. That reminds me that he is the individual who left a letter saying that there was no money left. Where does he think we were going to get the money from to get our successful programmes under way? The answer is that we have made a great start through the work experience programme, the Work programme and the changes to universal credit. We as a Government are doing more to get people back to work than anything his Government did when they were in power.
Youth Unemployment
Liam Byrne Excerpts(14 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 youth unemployment has hit a record level of 991,000; further notes that slower growth and higher unemployment makes it harder to get the deficit down and that the Office for Budget Responsibility forecasts £46 billion more borrowing than the Government planned; further believes that with long-term youth unemployment up by 64 per cent. since January 2011 it was a mistake to abolish the Future Jobs Fund and urgent action is now required to stop a generation of young people being lost to worklessness; 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 calls on the Government to adopt the Opposition’s five point plan for jobs which includes using funds raised from a tax on bank bonuses to guarantee a job for 100,000 young people and build 25,000 affordable homes, bringing forward long-term investment projects, temporarily reversing January’s VAT rise, a one-year cut in VAT to five per cent. on home improvements and a one-year national insurance tax break for every small firm which takes on extra workers.
I am glad to have the opportunity to open this Opposition day debate on youth unemployment, but sad not to see the Secretary of State in his place on the Treasury Bench. This is the second such debate we have had on youth unemployment, and it is the second such debate in which the Secretary of State has not been in the Chamber to present the Government’s argument. I am glad we have the opportunity to debate the motion today because next week we will see figures that could show youth unemployment has risen above 1 million, but I hope that it will come down. Today we have a chance to force the Government to come to the House to explain their complete failure to address the crisis now unfolding in almost every community in this country: the crisis of youth unemployment and the re-emergence of scars that we thought had gone from communities, never to return.
When we debated this issue in February, we heard some pretty complacent arguments from Treasury Front Benchers. Indeed, we had the spectacle of a Minister trying to blame the rise in youth unemployment unfolding on his watch on what happened five years ago. I hope we do not have that spectacle again this afternoon, because it is about time that the Government had the guts to take responsibility for their decisions.
In the past few weeks, the chorus of voices raising the alarm about youth unemployment has grown loud and wide. Yesterday, the Trades Union Congress confirmed that youth unemployment has now risen in 97% of communities. Last Friday, the Work Foundation urged Ministers to take urgent action to help the lost generation or risk a crisis in Britain’s communities. Last week, the CBI said:
“youth unemployment presents a specific and urgent challenge.”
Last month, the chief executive of the Prince’s Trust said that the number of unemployed young people is now twice the size of the population of Manchester and:
“If we fail to tackle youth unemployment now, we risk losing this talent forever which would be a tragedy.”
My constituency has the highest level of youth unemployment in the country, and throughout the summer residents have been telling me that we have got to do more to help our young people—people like Deborah Gillespie from Shard End who said:
“I’ve been looking since June for a job for my 16 year old. No jobs for him! He is a hard-worker. No-one will give him a chance.”
One of her neighbours has said:
“As I am an older person, I must say I do feel sorry for out-of-work youth. My own 24-year-old is out on the dole. They lose what little self-respect they once had.”
When I asked what young people needed, my constituents’ answer was pretty straightforward: work and to help them feel worthy. I know that what my constituents have been saying to me will have been echoed in constituencies around the country.
Robert Halfon (Harlow) (Con)
May I ask the right hon. Gentleman why youth unemployment increased by hundreds of thousands when the previous Government were in office?
Mr Byrne
The hon. Gentleman will know that I am familiar with his constituency because it is where I grew up. What his constituents want to know is what this Government are doing about the rise in long-term youth unemployment in his constituency. I hope that he will use the opportunity of this debate to press his Front Benchers to do more for some of the young people like the people I grew up with in his constituency.
Andrew Percy (Brigg and Goole) (Con)
I thank the Minister for giving way—[Interruption.] He is now a shadow Minister and will probably never be a Minister again—[Hon. Members: “ Oooh!”] Well, I talk to my electorate and that is what they are telling me. Although the right hon. Gentleman is right that we must do more about youth unemployment, the fact is that it was under his Government, from 2000 onwards, that the trend started to rise, and it was under his Government that the gap between the top 10 and bottom 10 performing schools, one of which I was teaching at for a number of years, increased. This is not something that can be laid at the door of any particular Government; it has been happening for a considerable time.
Madam Deputy Speaker (Dawn Primarolo)
Order. For goodness’ sake, I am losing my voice. Mr Browne, you will not stand at the Bar and shout across the Chamber. Thank you.
Henry Smith (Crawley) (Con)
One of the things this Government can do, and are doing, is to provide more apprenticeship places. Does the right hon. Gentleman welcome, as I do, the 70% rise in apprenticeship places in Crawley that has just been announced?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Will my right hon. Friend please ignore Government Members? They are in denial about what is happening to young people in this country. Young people are always the ones to suffer most in a recession. Does he agree that outside some parts of London and the south-east, we are in recession? We are in recession in Huddersfield and in his constituency, and we have to do something about it, but the Government are doing nothing.
Angie Bray (Ealing Central and Acton) (Con)
I recall writing a letter to my local newspaper in November 2009 berating the then Labour Government, whom the right hon. Gentleman served, for a 59% rise in the latest unemployment figures. Although he does not want to talk about history, does he accept that context is very important and that his own Government had a lot to answer for in relation to youth unemployment?
Mr Byrne
I might finish responding to the hon. Lady first.
The question that the hon. Lady has to answer for her constituents is why under Labour, even in recession, youth unemployment was coming down by 38%, and now, over the course of this year, long-term unemployment is up by 68%—on her Government’s watch. What is she going to say to those on the Treasury Bench about what further action they must take?
Mr Jones
The right hon. Gentleman tells us how well the previous, Labour Government did on youth unemployment, but that is not how the figures look to me. From 2004, youth unemployment was rising, and when the Labour Government left office it was higher than when they took office in 1997. How does he work that one out?
Mr Byrne
Let me just answer the hon. Gentleman’s question. He will know that the worst global recession since the 1920s was under way, yet despite that, before the election, youth unemployment was coming down. He must answer this question: how is it that this Government are doing so well, when since the beginning of this year long-term youth unemployment has risen by 68%? Hundreds of constituencies around the country have seen long-term youth unemployment double. If he has the right plan, can he explain exactly what is going so well?
Mr Graham Stuart (Beverley and Holderness) (Con)
As we know, the scar of unemployment on young people lasts through their lifetime; it has a tremendously negative impact. I do not think the right hon. Gentleman is getting the tone of this debate correct. In truth, in the years of economic boom on his watch, youth unemployment stayed resolutely high before peaking and rising following the crisis. We need to look at what we can do better to understand the youth employment market. He must at least acknowledge the steps that this Government are taking on training and apprenticeships. It may not be enough, but let us not use this as a party political football; let us try to be constructive.
Mr Byrne
I am grateful, at last, for a consensual note. [Laughter.] The hon. Gentleman’s hon. Friends might laugh, but the fact that long-term youth unemployment in his constituency is up by 48% this year is not a laughing matter. This debate is an opportunity for us to interrogate this Government on what they are doing to get youth unemployment down and how, ahead of the autumn statement, they should negotiate with the Chancellor for more resources to get our young people back to work.
John Healey (Wentworth and Dearne) (Lab)
Is my right hon. Friend aware that almost one in seven young people in Rotherham are looking for work and out of a job? It is one of the 10 worst-hit areas since this Government came to office. The question that people are asking is how much worse this waste of talent has to get before the Government are shaken out of their complacency, accept that what they are doing is not working and change course.
Mr Byrne
My right hon. Friend has experience of this matter at the sharp end. Long-term youth unemployment in his constituency is up by 78% this year. I know what a difference programmes such as the future jobs fund made in his constituency. That is why it is such a tragedy that before the evaluation was in, this Government chose to cancel the project. That is why this debate is so important.
The Opposition do not believe in half measures when it comes to getting young people into work. At the end of the recession, youth unemployment was down by 38%. A year and a half into the recovery, youth unemployment is up. This year, long-term youth unemployment is up by 64%. When we were confronted by the great increase in youth unemployment, we did not stand idle but did something about it. The future jobs fund worked because it helped to create 100,000 opportunities for young people all over the country. When we met to debate this matter in February, the jury was still out on the results. We now have the Department’s own evaluation and the judgment is categorical:
“for many participants their reported experiences had been to such a high standard, that they could not think of any improvements to the scheme.”
The Government cancelled it anyway.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
In my constituency, unemployment among 20 to 24 year olds is now at nearly a quarter. Members across the House should be alert to the cohort challenge, because a whole cohort of graduates is being hit hard. The unemployment rate for new graduates in the third quarter of 2010, according to the Office for National Statistics, was 20%. One in five recent graduates who are economically active and looking for work is unable to find it. That is almost double the rate from the start of the recession, which was 10.6%.
Mr Byrne
My hon. Friend makes an extremely important point, which echoes that made by the hon. Member for Beverley and Holderness (Mr Stuart). We know that if people are out of work when they are young, they are more likely to be low paid in the course of their career, more likely to suffer ill health and more likely to be unemployed again. That is why the Prince’s Trust and others are right to focus their attention on the crisis of youth unemployment that is unfolding in our country.
Jim Shannon (Strangford) (DUP)
Not only is there the spectre of unemployment and the prospect of no jobs, but many of the young people who are not in education, employment or training are under medical supervision. Is the right hon. Gentleman aware that almost 30% of the young people who are unemployed are facing depression and are suicidal? Does he feel that we have to address that issue along with unemployment?
Mr Byrne
The hon. Gentleman makes an extremely valuable point, which I hope he will develop in the course of the debate.
When this Government were first in office, at a time when the economy was fragile, when the recovery was in its first stages, when they were launching the biggest programme of Government cuts for many years, and when there was a risk of rising unemployment, as was made obvious by the Office for Budget Responsibility, they chose, at huge expense, to take out the key back-to-work programmes that we had in place, which were keeping unemployment down. That will stand as one of the worst judgments made by this Administration.
I know that the Government will in a moment protest that they are taking action. The Secretary of State, who is not here today, reeled off a list of programmes at Question Time last month, when he said that there are
“work clubs, work experience, apprenticeship offers, sector-based work academies, the innovation fund, European social fund support,”—
it is nice to see the Secretary of State supporting Europe on something—
“the skills offer, the access to apprenticeships programme, Work Together, the Work programme, Work Choice, mandatory work activity and Jobcentre Plus.”—[Official Report, 24 October 2011; Vol. 534, c. 4.]
It is not clear how Jobcentre Plus is an innovation of this Government, but none the less it earned a place in his list.
The only problem is that none of these programmes is making a blind bit of difference, so let us take some of the key measures one by one. I want to start with the flagship package of measures launched last May. So important was it, so pregnant with opportunity, so sure was it to make a difference, that the Deputy Prime Minister himself was allowed to put out the press release. Those measures came replete with a total budget of £60 million over three years—a grand total of £20 for every unemployed young person. Or we could look at it as 5p a day to help—
Mr Byrne
I shall give way in a moment, because I would like some questions answered.
That is 5p a day to help workless young people. In total, the scheme costs less than the Department spends on stationery—what an insult! Will the Minister tell us how many people the Government have got back into work? Just give us the number.
Chris Grayling
Will the right hon. Gentleman clarify that the measures announced in May were for 16 to 18-year-olds? He is misrepresenting the statistics. Will he also acknowledge to the House that his Government provided no support to 16 to 18-year-olds?
Lorely Burt (Solihull) (LD)
Will the right hon. Gentleman advise me on the future jobs fund, which he heralds as a great creator of opportunities? Owing to EU rules on wage subsidy claims, posts offered had to be newly created; they could not be normal vacancies. How many young people got real, permanent jobs out of the future jobs fund?
Mr Byrne
The hon. Lady need only look at the statistics, including those for her area. This year, long-term youth unemployment has risen by one third in Solihull. The future jobs fund was helping to bring youth unemployment down. To return to the point made by the hon. Member for Beverley and Holderness (Mr Stuart), we have to help young people stay close to the labour market because if we let them drift into long-term unemployment, they have a bigger chance of being unemployed in the future, of being low paid and of drifting into ill health. That is why the right decision for her constituents, as well as mine, is not to do nothing, but to act.
Richard Fuller (Bedford) (Con)
The right hon. Gentleman did not answer the question from my colleague, the hon. Member for Solihull (Lorely Burt). We are fooling ourselves, if we think that this problem is simply to do with this Government or the previous one. This is a long-term, growing problem of youth unemployment. [Interruption.] The hon. Member for Dudley North (Ian Austin) is looking for the statistics for my constituency. I can tell him: it is up 24%. As we look for solutions and as economies across Europe are being destroyed because of their excessive debt, my question is: what can we do that does not incur additional debt for the Government? Will he support our schools reforms? Will he support our efforts on apprenticeships? Will he support the reductions in taxation and regulation on small businesses indicated by the Government?
Mr Byrne
Long-term youth unemployment in the hon. Gentleman’s constituency is up this year by 133%. That is a serious increase. I am happy to share with him the figures produced for us yesterday by the House of Commons Library. Those statistics speak to one key point: we need action to get youth unemployment down, and we need it now.
Paul Maynard (Blackpool North and Cleveleys) (Con)
In my constituency, the figure is 36% year on year. I was delighted to read in The Times today the figures to which the right hon. Gentleman just referred on long-term youth unemployment. I made the point of getting the figures from the House of Commons Library, so that I could see what the figure was in my seat. Is he aware that in 235 constituencies, youth unemployment, by the measure that he requested, has fallen since May 2010, and that in a further 41 constituencies, it has remained static?
Mr Byrne
I can tell the hon. Gentleman the figures in his constituency. Long-term youth unemployment in his constituency has risen by 233%, and that is an extraordinary increase, but surely he will agree with the judgment of the TUC, the CBI and the Prince’s Trust that now is the time for urgent action to get young people back to work, including young people in his constituency.
Paul Maynard
As the right hon. Gentleman has again mentioned my constituency, I note that according to the Library the unemployment figures rose from 75 in May 2010 to 100 in September 2011. I represent a coastal community. Has he ever heard of seasonal unemployment?
Mr Byrne
The figures are seasonally adjusted, as the hon. Gentleman will know, but surely he is not saying to the House and to his constituents that he is seriously relaxed about the rise in long-term youth unemployment in his constituency. I simply do not believe that that is his position.
Mr David Winnick (Walsall North) (Lab)
The reality on the ground in my constituency is, I am sure, the same as that in many other parts of the west midlands and the black country. In my constituency, a store opened recently with 20 vacancies, and I wonder how many Government Members are able to tell us how many people applied for those 20 vacancies. I shall tell the House how many: 500. That is the reality: people desperate for work—and denied it by this Government.
Nick de Bois
If the right hon. Gentleman is as interested as I am in developing sustainable long-term jobs to deal with youth unemployment in particular, does he agree with and welcome rolling back the heavy hand of employment rules and legislation, including vexatious employment tribunals, and will he commit his Front Benchers to do that and even go further, so that it is easier to employ people?
Mr Byrne
Before I became a Member, I started a business. I know what it is like to start a business with two people around a kitchen table, to grow it, build it, take on new staff and do well, but dealing with regulation was the easy bit; selling and making a profit was the tough bit, and that is why we need urgent action to get growth back into the economy.
Andrew Percy
I thank the shadow Minister for giving way. He is being very generous and deserves credit for that, but is he honestly saying that, on this important issue, to which he is doing a great disservice, the upward trend in youth unemployment under his Government, the increased gap between the best and worst performing schools and the increased number of young people growing up in families where nobody has ever worked are totally and utterly unrelated to youth unemployment today? If he is, he is being completely and utterly incredible.
Mr Byrne
The hon. Gentleman’s constituents will want to know why he is living in the past, and what he is doing to take to his Front Benchers the argument about what more they are going to do in the autumn statement to get our young people back to work.
We have heard about the great success that is the flagship youth programme. Now let us turn to the Work programme.
Mr Byrne
In a moment. I shall just tell the House a little about the Work programme.
We have debated before the virtues of the Work programme, and I understand that young people can now be referred to it early. I shall put aside for one moment the Work and Pensions Committee’s conclusion that it is one third smaller than previous programmes, because the Minister has strong views about that, and I shall put aside also the Social Market Foundation’s analysis that the DWP offers providers of successful outcomes a maximum amount of money that is 25% less than the flexible new deal, because those facts are not the worst of it. The worst of it is that the Department itself expects three quarters of people to flow straight through the programme and straight back on to the dole, so I ask the House, how is that going to make a difference?
Mr MacShane
Do we not have to nail one lie—that there is some magic deregulation out there which solves the problem? European countries such as the Nordic countries, the Netherlands and Germany—the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) is aware of this—all have stronger regulation and active labour markets, so it is a huge lie to say that the poorer young workers are and the worse they are treated, the more jobs there will be.
Mr Byrne
I will give way in a moment, because I want to turn to apprenticeships, which the Minister has mentioned. Apprenticeships have sometimes been seen in this debate as the Department’s silver bullet, so let us be clear: ours was the party that rescued apprenticeships. We inherited 65,000 apprenticeships; the figure was over 260,000 when we left office. This year, 85% of new apprentices will not be young people, but people over 25. Leaked documents seen by The Guardian show that Ministers have been warned that apprenticeships are actually a re-badging of existing jobs. It turns out that about 11,000 of this year’s new places have gone to 16 to 18-year-olds. I should point out for the House that 205,000 of those aged 16 to 17 are now on the dole. If they all applied for one of those apprenticeships, they would have a 5% success rate. Getting into Oxford university is less competitive than that. Given those figures, an ally of the Chancellor of the Exchequer has said that the Chancellor thought that apprenticeships were
“a rare piece of good news, but it’s turning out to be a con”.
The unnamed ally is right: it is a con. We have a Work programme that is all programme and no work, a youth jobs scheme that costs less than the stationery budget and an apprenticeship scheme that is harder to get into than Oxford university. No wonder overall long-term youth unemployment is going through the roof. Let us hear an answer from the Minister.
The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)
I am very happy to tell the right hon. Gentleman all about it, but I wonder whether he will acknowledge that today there are more apprentices under 25 than the total number of apprentices when his Government left office and that the two-year growth in apprenticeships for 16 to 24-year-olds over the last two years is bigger than at any time when his party was in office.
Mr Hayes
I am not sure that that is particularly relevant to the question that I asked, but I will ask the right hon. Gentleman another question. His Government commissioned the Leitch report—[Interruption.] It was probably the right hon. Member for Morley and Outwood (Ed Balls) who commissioned it—he was running the show in the Treasury then, or so he now pretends. What does the Leitch report say? It says that we need to upskill and reskill the work force and that apprentices are a critical way of doing that. Is the right hon. Gentleman now denying that? Has he changed his mind, or does he in fact think that we need to use apprenticeships for that purpose?
Mr Byrne
I want apprenticeships for young people, and it is this Government who are not delivering them. That is why, all over the country, we now see long-term youth unemployment rocketing up. Some 233 Members of this House now represent constituencies where long-term youth unemployment has risen by over 100% this year. Overall, long-term youth unemployment is up by 64% since the start of the year. All over Britain, scars that we thought were gone for ever are reappearing, and not just in Labour constituencies, but in places such as North Dorset, Aylesbury and Stevenage. Some 238 of us now speak for constituencies where, since the election, youth unemployment is up by 20%.
Mr Byrne
In a moment.
The bad news is that business is saying that it will get worse before it gets better. In October, BBC Radio 1 surveyed the business community. It found that two thirds of firms surveyed said that the situation would get worse for young workers before it got better. Half said that the Government should do more to train young workers. That is surely a sentiment that the hon. Lady will agree with.
Dr Coffey
I think everybody in this House shares the sentiment that it is a tragedy for any young person who wants to work not to be able to get a job, but we are trying on that. What I would like to understand from the right hon. Gentleman is this. Under the last Government, people who were unemployed for 12 months were moved on to a training programme. That meant that they moved out of the unemployment figures, but they went back if they were not successful in securing a job. This is an opportunity for a genuine debate about the future of our country, but I am afraid that some of the—how can I put it—casual use of certain statistics is not helping us to achieve that.
Mr Byrne
Is the hon. Lady seriously denying that a crisis in youth unemployment is unfolding now? [Interruption.] I am glad that she says from a sedentary position that she agrees that there is a crisis, because the question now is what we do about it. That is the answer we want from the Government.
Before I set out what the Opposition believe is the right next step, let us remind ourselves who is paying the bill for this failure. Since the Government came to office, the benefits bill alone is projected to rise by more than £12 billion, which is £500 for every house in this country. To pay that bill for the new workless, the Government are having to squeeze working people through cuts to child care and tax credits, and the acceleration of the rise in the state pension age. Good people who are doing the right thing and who are trying to get on and go up in life are being squeezed to pay the bill for people who have been put out of work by this Government.
Mr Sheerman
Does my right hon. Friend agree that we need a massive plan for young people in our country, because this problem will get worse? We need education and training leading to work in the community and the environment. We need something bold and imaginative. The fact is that Government Members know that it is cheaper to keep young people on the dole.
Mr Byrne
No. I could speak about this all afternoon, but I know that many hon. Members want to speak, so let me draw my remarks to a close by outlining what the Opposition believe should be done.
The Opposition believe that the starting point should be a new tax on bank bonuses. That is what this country is crying out for. There are only a few weeks left before the Chancellor’s autumn statement. The Secretary of State is not here but I hope he reads Hansard. Let me give him some advice about what he should negotiate for. He should be putting on the table the five-point plan that my right hon. Friend the shadow Chancellor has set out before the House.
Let us set out what that plan means for young people in this country. Many people in this country deserve a tax cut, but our country’s bankers are not among them. The scale of the imminent bank bonus round is already in the news. I see that there is a bonus pot of £500 million at Royal Bank of Scotland—shareholder: Her Majesty’s Government. Here is a sentiment with which most hon. Members can agree. Lord Oakeshott, the former Liberal Democrat Treasury spokesperson said:
“I don’t want my taxes going to pay for hundreds of RBS investment bankers taking home millions in bonuses as their profits tumble.”
Many hon. Members would agree with that. The Opposition advice is simple: let us have a fair and sensible tax on bankers’ bonuses. That could create a fund of £2 billion, which we believe could help to get 800,000 back to work, including 11,500 jobs here in London; 5,000 in the south-east, the region of the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling); and 8,500 in my home region, the west midlands. That is the kind of action that the Secretary of State should propose.
Mr Byrne
I will give way in a moment. Let me tell the Minister this: that policy would be popular. Over the summer, I asked my constituents whether the bankers ought to share their blessings a little more generously and whether they should do more to help get young people back to work—97% of them said yes. That policy would be popular, so why is the Minister not proposing it?
Chris Grayling
I wonder whether I could just clarify a point. The Leader of the Opposition has previously announced that the bank bonus tax money will be spent on additional infrastructure, reversing child benefit cuts and paying down debt, and, I believe, seven other commitments. Will the right hon. Gentleman confirm whether those policies have now been dropped?
Mr Byrne
If the Minister wants a full breakdown of the costs, I will be happy to provide it for him; and if he wants me to support him in his negotiations with the Chancellor, I will be right by his side.
With that policy should come an acceleration of investment in capital infrastructure, as the CBI calls for today; a temporary cut in VAT to help families up and down the country; a one-year cut in VAT on home improvements; and a tax break for small firms that take on extra workers, especially young people, as proposed by the Federation of Small Businesses.
The whole country knows that this Government are failing our young people. This year, our country has seen one of the fastest ever increases in long-term youth unemployment. When the TUC, the CBI, the Prince’s Trust and the Work Foundation are telling the Government to change course, surely it is time for them to act. Before the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts), was encumbered with the cares of office, he wrote a book about the baby boomers. In the introduction, he writes that
“the charge is that the boomers have been guilty of a monumental failure to protect the interests of future generations”.
The Secretary of State for Work and Pensions, who is not here today, is—believe me—a baby boomer. If he does not change course, and fast, he will stand before the House guilty as charged.
The Minister of State, Department for Work and Pensions (Chris Grayling)
I regard youth unemployment as one of the most difficult parts of the legacy left to us by the previous Labour Government. In 2010, at the time of the general election, 930,000 young people in this country were unemployed. When Labour left office, there were more young people not in education or employment than when it took office in 1997. Labour also left behind one of the most difficult sets of economic circumstances that any incoming Government have ever faced. Indeed, we do not need to use our own words to describe that; we remember clearly the words of the former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who left a note behind saying, “There’s no money left.”
Chris Grayling
Actually, youth unemployment—genuine youth unemployment—is not at the highest level on record. When we exclude from the figures full-time students looking for part-time jobs, the level of youth unemployment today is not the highest on record. However, I regard any level of youth unemployment as unacceptable, and something that we should work to try to solve.
Chris Grayling
My hon. Friend has highlighted one of the many challenges that the previous Government left behind for us. There was a total failure to equip young people for the workplace and for a working life, a failure in our education system and many other failures, not least of which was the disastrous economic inheritance. When the Labour Government left office, they were borrowing £1 in every £4 that they spent. Our first priority remains sorting out the challenges in our public finances. Does anyone seriously believe that, if we were in the same position as some other European countries in failing to deal with our deficit, business would want to invest in this country rather than cutting jobs and moving elsewhere? It is my clear view that, had we not taken action to deal with the deficit, unemployment would be higher than it is now, rather than lower.
Chris Grayling
The right hon. Gentleman talked about international challenges, but let me remind him that, three months ago, youth unemployment was falling and was below its level at the time of the election. He should also remember that we are now in the middle of the biggest financial crisis in the eurozone in decades, perhaps in modern times, and that our labour market is not immune to that. However, we are now turning round the set of failed programmes that existed under the previous Government and putting in place measures that will make a difference to the long-term unemployed.
Chris Grayling
As the hon. Gentleman knows, this Administration believe in localism, and a local authority is free to do what it wants to support the unemployed. I welcome any local partnerships to deliver that. I would still say, however, that the reality is that the future jobs fund cost massively more than comparable schemes, and we believe that the package we put in place is more cost-effective and likely to deliver better success rates.
Chris Grayling
I shall give way once more to the shadow Minister, but then I am going to make some progress in explaining what we are doing.
Mr Byrne
If the right hon. Gentleman believes the future jobs fund was too expensive, is he by implication saying that he is prepared to see youth unemployment go up, because that is what has happened since the election, after which he abolished the programmes? Is he saying that youth unemployment is basically a price worth paying?
Chris Grayling
One reason this country is in its financial predicament is that the previous Government did not understand value for money. They believed in throwing money at a problem, not trying to do the most cost-effective thing. That is one reason for the right hon. Gentleman leaving that note behind, saying, “No money left”.
Chris Grayling
I pay tribute to one of our providers, EOS in the west midlands, which has just achieved its 1,000th job placement. I congratulate all its staff on their success—
Chris Grayling
The right hon. Gentleman is, classically, trying to have it both ways. On one hand he tells me off about national statistics, and on the other he tells me off for not obeying the rules on national statistics. What does he want? These are national statistics, and they will be published in line with national statistics rules. He will just have to wait.
What I will say now is that so far I am encouraged by the progress that is being made. All of us—Members in all parts of the House—need the Work programme to work and to make a difference for the long-term unemployed, and I am confident that it will do that. For the first time we are giving the providers genuine professional freedom to do what works for our young people, and I believe that if we trust the professionals and do not tell them what to do, as the last Government did, we are much more likely to be successful.
Guto Bebb (Aberconwy) (Con)
My hon. Friend the Minister said that he believes strongly in localism, and so do I. However, having suffered under a Labour-led or Labour Administration in Cardiff for the past 12 years, it is sometimes difficult to keep supporting the idea of localism.
Since 2000, the level of Welsh GDP in comparison with the European average has fallen from 68.6% to 64.4%. At the same time, between 2000 and 2010, the proportion of young people aged 16 to 24 in Wales who are unemployed increased from 15.8% to 21.5%. The sad fact about this debate is that Opposition Members simply do not recognise that a failing economic performance is related to a failure to create jobs for young people.
Wales has had support from Europe on a regular basis because of the failure of the policies adopted by the Labour party in Wales. Such is the failure of the Labour Government in Wales to put together policies that make a difference that Wales is one of only eight regions out of 66 in Europe that have qualified for objective 1 funding to see its prosperity decline. To put that in context, over the past 10 years under Labour, Wales has gone backwards while even the Greeks have gone forward. That is the reality of living under Labour. I support localism, but in Wales we suffer for it.
We cannot divorce this debate from education, skills and training for young people. Recently, there was evidence from the largest inward investor in the south Wales valleys over the past five years that less than 20% of the young people who were referred for job interviews—not for high-level jobs, but for comparatively low-level jobs—had adequate skills in reading, writing and arithmetic, and, more importantly, adequate social skills. Is that a surprise when the Labour Government in Cardiff have deliberately decided to spend £600 per head less than England on educating young people? That is the reality of Labour.
We must take on board the need to create economic growth and prosperity. Jobs for young people will not appear in isolation. Opportunities for young people will come as a result of economic growth and success—something we desperately need. That is why it is crucial that we pay tribute to this Government for taking the issue seriously. The Work programme, which has been mocked by Opposition Members, will ensure that payments are made on the basis of performance. That is a move in the right direction. It means that people will have to be in position for 12, 18 or 24 months before payments are made. That is a sign of confidence in the ability of the programme to get people into private employment.
Guto Bebb
The shadow Secretary of State again makes the mistake of making a short-term point about unemployment in my constituency, without reference to the fact that the biggest employer in my constituency is the tourism industry, which is seasonal. As he wants to make an issue of youth unemployment in my constituency, it is worth pointing out that we have literally hundreds of people working in hotels, guesthouses and other tourism-related businesses there who are hard-working, successful and moving on. The sad fact is that a huge number of them are from eastern Europe. Those people have grasped their opportunity, but that opportunity has not been available to young people from my constituency because of the welfare state created by the Labour party, which is more interested in throwing money at a problem than solving it.
Mr Hayes
I will not give way.
Hearing Labour Members talk about generational joblessness reminded me of the plight that my father and my grandfather suffered in the ’30s when they were jobless. The story now, as we have heard from Members across the House, is no less tragic than it was then. That is why the Government are doing something about it.
All hon. Members who have spoken in the debate must be disappointed by the motion. Like worn-out conjuror’s paraphernalia, it is all smoke and mirrors. It resembles the economic policy that the last Government practised when the shadow Chancellor was their senior economic adviser, and we all know where that led. It led to the point at which the shadow Secretary of State, who introduced this debate, left his famous letter saying “There’s no money left”. We can see the shadow Chancellor’s footprints and fingerprints all over the motion.
Mr Byrne
I am genuinely grateful for the tone that the Minister is trying to strike, but does he understand the signal that it sends, in a debate on youth unemployment, when the Department for Work and Pensions Minister cannot be bothered to turn up for more than half the debate and the Secretary of State is nowhere to be seen?
Mr Hayes
The right hon. Gentleman obviously wants to make party political and partisan points. However, I was suggesting, perhaps unfashionably—perhaps this is not typical for the Opposition—that this matter goes beyond party divides, and that we should be united in our concern and in a call for action.
The shadow Chancellor is not without redeeming skills. I understand that, when he was at public school, he was good at playing the violin. So Balls fiddles while Byrne roams around talking down Britain’s chance to succeed.
Let me deal with the three principal points that have emerged from the debate—first, the future jobs fund. It was by far the most expensive part of the September guarantee package, at £6,500 for each individual, and 50% of the people who were under the influence of the fund found themselves unemployed eight months later. That is why we questioned its value—not because it did no good, but because it did not do enough good and was simply not cost-effective.
The second big issue that has been raised today is that of NEETS. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) and the hon. Member for Leeds West (Rachel Reeves) must know that the NEETS figures are part of a deep, long-term structural issue. Throughout the good years, the NEETs figures were at an unacceptable level. The right hon. Gentleman will see from the figures that in 2009, on Labour’s watch, the number of NEETs rose to 925,000. The truth is that youth unemployment involves long-term structural and systemic issues, and this debate was a chance for us to consider them seriously. Instead, what we have heard from the Opposition was little more than party political knockabout.
The third point to emerge from the debate relates to apprenticeships. Let us deal with them head on. I shall leave aside the fact that the right hon. Gentleman has rubbished all those in his constituency doing apprenticeships in their 20s—people like those at Jaguar Land Rover or at BT.
Mr Hayes
The right hon. Gentleman knows the answer: over two years, the growth in apprenticeships for people under the age of 19 has been 29% and for people aged between 19 and 24 it has been 64%. Labour could only dream of those figures, and would have died for them in government. The number of apprenticeships for young people is growing. There are new opportunities, and while Labour is deliberating, the Conservatives and Liberals are delivering. That is the difference.
Oral Answers to Questions
Liam Byrne Excerpts(14 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Duncan Smith
We are talking a lot to employers about that problem. My hon. Friend is right about it. I return to the answer that I gave my hon. Friend the Member for Central Devon (Mel Stride) about ending the training scheme. That really affected 16 to 17-year-olds. I have brought in the £30 million innovation fund to look at ways in which we can give people approaching the age of 16 better skills for the work force. Employers have told us that many people who leave school at that age are simply not ready for work. We have allowed jobcentres to work with many of those people to get them ready for work. My hon. Friend the Member for Lincoln (Karl MᶜCartney) is absolutely right that this matter is a priority for us.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
Youth unemployment is now the highest it has ever been. Does the Secretary of State agree with the Chancellor that Britain is now “a safe haven”?
Mr Duncan Smith
I am not quite sure what the right hon. Gentleman’s linkage is in that question. Youth unemployment is high now, which is deeply regrettable, but he needs to take some responsibility for that. We have to remember that when we came into power, after a period of growth before the recession, the level of youth unemployment was higher under the last Government than the level that they inherited back in 1997. Frankly, his lectures on youth unemployment are like crocodile tears in the desert.
Mr Byrne
Since this Government have taken office, they have closed the future jobs fund and shut down the flexible new deal, and replaced them with a youth work scheme that costs less than the Department spends on stationery and guarantees interviews, not jobs, and with a Work programme that turns out on closer inspection to be all programme and no work. Meanwhile, youth unemployment is going through the roof.
I looked for the Department’s flagship youth unemployment policy on its website this morning, and what does it say?
“Page not found. The page you are looking for may have been removed or moved to the National Archives.”
So much for the priority that the Government gave to youth employment.
The last time unemployment was this high, it was not the hon. Member for Altrincham and Sale West (Mr Brady) who was trying to bring down the Government over Europe but the Secretary of State himself, the commander-in-chief of the Maastricht rebels. Instead of today’s debate, on which the Prime Minister has wasted so much time, should we not be having a debate about how we put a proper tax on bankers’ bonuses to get 100,000 young people back to work?
Mr Duncan Smith
I must say, the right hon. Gentleman coming up with the wrong page suggests more about his ability to negotiate the website than about the Department.
I repeat to the right hon. Gentleman what I said before: it is time the Opposition took responsibility for the mess that they got us in before we took over. Since we walked through the door we have had in place work clubs, work experience, apprenticeship offers, sector-based work academies, the innovation fund, European social fund support, the skills offer, the access to apprenticeships programme, Work Together, the Work programme, Work Choice, mandatory work activity and Jobcentre Plus. He has to recognise that under Labour’s watch, youth unemployment rose to a level higher than that at which they found it in 1997. It was a disgrace.
Oral Answers to Questions
Liam Byrne Excerpts(14 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
I thank my hon. Friend for her question; it is important that we deal with people’s jobs needs in a very individual way. Jobcentre Plus has disability advisers who have special knowledge of dyslexia, and it is something that requires continued support.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
On 11 July the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), confirmed that his Secretary of State had seen analysis by the Department for Communities and Local Government suggesting that his benefit cap could make 40,000 people homeless, and actually cost more than it saved. I do not mind who answers this question, but will someone please confirm whether the Minister himself also saw that analysis?
Mr Byrne
This was a piece of analysis with enormous implications for the way in which the policy was implemented. This piece of work was so important that it was sent to the Prime Minister, the Chancellor of the Exchequer, the Deputy Prime Minister, the Chief Secretary to the Treasury and the Secretary of State. What was it that was so important about that analysis that it was not given to the Minister actually putting the legislation through this House? Will he now ensure that the analysis is produced before the House of Lords reaches the relevant debate?
Mr Duncan Smith
The right hon. Gentleman has written to me about this point and I have written back—but there is nothing like re-exercising the exchange—so he will know that the figures to which he refers were internal, not verified and out of date. Since then, as I have said to him, the DCLG and my Department agreed the impact assessment that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) stood on at the time of the Welfare Reform Bill and which we still stand on today. We should bear in mind the fact that—I do not know whether the right hon. Gentleman is aware of this—there are huge behavioural changes involved. The whole idea behind the cap—we still have no idea whether the Opposition support it or are against it—is that we believe that capping those benefits at gross £35,000 a year is reasonable. Instead of trying to dance on the head of a pin, perhaps he would like to give some leadership and tell us whether his side actually supports the cap.
Pensions Bill [Lords]
Liam Byrne Excerpts(14 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
The debate is extremely important and I am glad that the Secretary of State approached his remarks with such care. It is an important debate because our treatment of older people in our country is one of the most important ways in which we judge the health of a society. Those people have made our country what it is today, and, in their retirement, we respect and honour a lifetime’s work.
Frankly, when we came to power in 1997, too few of our older citizens enjoyed either that honour or that respect. Nearly 30% of our pensioners were forced to live in poverty. The state pension had declined from 20% to just 14% of average male earnings. That is why we set about changing that picture with such speed, passion and determination. That is why we lifted 1 million pensioners out of poverty; why we lifted gross income for our pensioners by more than 40%; why we ensured that no pensioner must live on less than £130 a week; why we introduced the winter fuel allowance, free off-peak travel on buses and free TV licences; and why we increased tax thresholds to ensure that 60% of pensioners now pay no tax. We are proud of our record. It is now set out in the Government’s own figures that pensioner poverty in this country is at its lowest level for 30 years.
In dealing with such long-term issues, the House could legitimately have hoped that the Government would have built on those changes in a careful and consensual way. Instead, they have built nothing but confusion. Last Monday, the Secretary of State had to slap down his colleague the noble Lord Freud on whether there should be a cap on benefits; on Wednesday, we had the spectacle of the Prime Minister not knowing the consequences of his own Welfare Reform Bill; and today the Secretary of State has come to the Dispatch Box when this morning’s newspapers are full of stories of how his Bill might be shredded, not in this House but in the very Treasury that pushed him out to walk this plank in the first place. It is U-turns, confusion and blunder, and the poor Secretary of State is forced to sit there in the middle as the House of Commons’s very own Captain Chaos.
Nadine Dorries (Mid Bedfordshire) (Con)
I thank the shadow Minister for giving way—I almost thanked “the Minister” in a throwback to another day.
Somebody—I am not sure who—left a note saying that all the money had been spent. Does the right hon. Gentleman agree therefore that some measures that we could not have predicted when the previous Administration were in power are now necessary, such as the ones proposed today?
Mr Byrne
Perhaps the hon. Lady would like to reflect on why, just over 12 months ago, the Government whom she is so proud to support set out a policy in direct contradiction to the one proposed in the Bill. I look forward to seeing which way she votes and how she justifies that to her constituents.
This afternoon, we must try to bring some order to that confusion, and establish which clauses we agree on, and which clauses the Government—and, I might say, the Treasury—need to rethink. The Secretary of State began with automatic entitlement, on which there is a measure of agreement—it is a rock that we should hang on to in that regard. The proposal for automatic enrolment of workers into workplace pensions is to be retained, which is important, because as a country, we under-save for pensions. In fact, 7 million could be under-saving for their retirements. Bringing those people into a pension system and creating a national pension scheme into which they might opt could lead to a step-change in savings in this country.
The previous Government were very careful to build that consensus, which we did patiently, beginning with the noble Lord Turner’s commission. I am grateful that the Government have not junked that proposal, but it is deeply regrettable that they are increasing the salary threshold to entitle an individual to auto-enrolment. It is also regrettable that they are introducing a three-month waiting period before people opt in.
I understand the trade-offs that the Secretary of State is trying to make, but frankly, he has made the wrong call. Why? The first reason is that the salary at which someone is automatically enrolled will be raised from £5,000 to nearly £7,500. The impact of that will hit 600,000 people—they will be much less likely to opt in to long-term savings. If the Government raise that threshold in line with the coalition’s ambition to increase the income tax threshold to £10,000, nearly 1 million people will be excluded, three quarters of whom will be women. Their loss, potentially, is £40 million of employer pension contributions.
The Government are proceeding in full knowledge of that. There is no defence of ignorance. Their review states:
“Many or most very low earners are women, who live in households with others with higher earnings and/or receive working tax credits. These may well be exactly the people who should be automatically enrolled.”
Yet the House has been presented today with proposals that could exclude more than 1 million people. We think, therefore, that the earnings threshold should be looked at again. And if that idea was not bad enough, the idea of a three-month waiting period makes it worse and in itself could mean 500,000 fewer people enrolling automatically in a pension scheme. The loss to them could be £150 million in employer pension contributions. Put those two things together and the average man or woman could lose nearly three years of pension saving—a 7% reduction in an individual’s fund. I am afraid that we simply cannot support that measure.
That takes me to the most audacious broken promise of the lot—the proposal to single out a group of 500,000 of our fellow citizens, all of them women, and say to them, “You know your plans for the future? Well, you can put them in the bin.” The Secretary of State might think it a relatively small and trivial number, but the Opposition do not.
Mr Byrne
I will in a moment.
This unfolding chaos has been impressive even for a Government who have presided over U-turns on forests, sentencing reform and the reorganisation of the NHS, because we thought we knew where we were. The coalition Government made a wise move in appointing the Pensions Minister to his brief—he is a man who knows a thing or two about pensions. Indeed, in one of his first major speeches, he told his audience:
“I have become known as something of a bore at pensions conferences.”
We have no problem with that. Then we had the coalition agreement. I do not know whether anyone remembers the coalition agreement—it was important once. Page 26 reads:
“We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.”
For good measure, the Pensions Minister got to his feet a month or so later and said that the Government were committed to any change not being sooner than 2020 for women. Then, 118 days later, the Chancellor arrives on the scene. He stands at the Dispatch Box and says that
“the state pension age for men and women will reach 66 by 2020.”—[Official Report, 20 October 2010; Vol. 516, c. 956.]
Yet buried in the fine print, we learnt the truth—not the Pensions Minister, the Secretary of State or the Chancellor could bring themselves to that Dispatch Box and actually tell people straight that that policy set out in the coalition agreement was absolutely worthless. The truth was set out in the depths of the spending review, page 69 of which read:
“The State Pension Age will then increase to 66 for both men and women from December 2018 to April 2020.”
That is a promise well and truly broken. At least when the Lib Dems changed their minds about increasing tuition fees, they could pretend that they were just making things up to get elected, but this was a promise they made and broke in government. Just last summer, the Pensions Minister boasted of reforms in the system that he said included
“those who the system has always missed out such as women and the lower paid.”
In his own Department’s review, he said that he wanted to look at the “particular challenge” for
“women pensioners. A group I have long worked for, and who are so often the poor relations in regard to pensions.”
I will let the House draw its own conclusions. One moment the Pensions Minister is offering to protect women pensioners, the next he is presenting proposals that will punish half a million women with a bill for up to £16,000.
Richard Fuller
The right hon. Gentleman was giving a discourse on integrity in pensions provision under the previous Government, which I think is important, because many of my constituents will be worried about this issue, and will be looking for integrity. He is very good with numbers—it is when he has to add them up that he has trouble—so I am wondering, on the point of integrity, could he answer this question? The Labour party has recommendations for how best to treat the women he is highlighting who are being impacted by the Bill, and those recommendations are costed at £10 billion. In the interest of integrity, will he please advise me and other Members where he would find the money?
Richard Fuller
I have not seen those costings, so the right hon. Gentleman can enlighten me further.
Mr Byrne
The Minister gave an interesting answer, because those costings say that if, for example, we increased the retirement age to 67 by 2035—that is, if we accelerated the reform by one year—that would save £6.9 billion. However, if the retirement age was increased to 67 by 2034, by accelerating the increase by two years, that would save £13.7 billion. Therefore, the question for us this afternoon is: how much will be saved by accelerating the reform for those women who are now having to retire later, and who therefore confront trying to find all that money magically, in the space of just four or five years? Has that been traded off against other options, such as introducing advances in the retirement age later on? That is the question that we have to get to the bottom of in this Second Reading debate.
Mr Byrne
I will give way in a moment.
Let us hear what the impact of the Government’s proposals will be, because the Secretary of State rather glided over this point. Some half a million women will receive their state pension at least 12 months later than they had previously been advised, with 300,000 women—those born between December 1953 and October 1954—experiencing a delay of one and a half years. For 33,000 women—those born between 6 March and 5 April 1954—that period increases to two years. For them, the loss in state pension will be around £10,000. For those on full pension credit, the loss will be closer to £15,000. Those women, with five years’ notice of the timetable change, have almost no time to prepare for their income loss.
Harriett Baldwin (West Worcestershire) (Con)
Will the right hon. Gentleman give way?
Mr Byrne
In a moment.
We are talking about women in the age group that was asked by a Conservative Government in 1995 to set in train the equalisation of the state pension, a reform that we accepted, because it came with time to plan. However, that cannot be said of today’s proposal. This morning, Age UK warned that
“a sizeable minority are not even aware of the 1995 changes with nearly a fifth expecting to receive their State Pension at the age of 60.”
The Secretary of State’s proposals will now make that worse.
Fiona Mactaggart
I heard the Secretary of State refer in his speech today to legal advice that said that the Government could not keep to their original proposals in the coalition agreement. He did not make the House aware of why the Government cannot legally do what they originally intended, so has he made my right hon. Friend aware of why that is?
Mr Byrne
My hon. Friend makes an extremely good point, because I think that that was news to the House. We would certainly expect that legal guidance to be published before we get to the Minister’s winding-up speech. That guidance is a material point in a debate that is important to many people, as well as many right hon. and hon. Members, because this Bill has such a poor effect on women in this country—the people we represent.
Mr Byrne
In two minutes.
Michelle Mitchell, the charity director of Age UK, has said that
“it’s difficult to see how women can plan properly when the government keeps moving the state pension age goalposts”.
The director general of Saga has said that
“to make just one cohort of women bear all the brunt of this in the very short-term will undermine the concept of planning for retirement over the long-term and cause real distress to the responsible women who have made careful financial retirement plans.”
Can hon. Members tell me how this can possibly be justified?
Harriett Baldwin
I thank the right hon. Gentleman for finally giving way. I speak with a lot of interest in this matter, as a woman in her 50s—[Hon. Members: “Surely not!”]—I know, shocking isn’t it?—who has seen her pension age increase, first by five years and now by a further year. However, does he accept that there is an issue with rising longevity and that we therefore need to push forward the retirement age of women such as myself?
Mr Byrne
Of course. The hon. Lady makes an extremely fair point, and that is why, after the Turner commission met and the Pensions Act 2007 went through this House, a clear timetable was set for how the state pension age should increase. [Interruption.] The Secretary of State is muttering from a sedentary position about how the longevity assumptions have now been increased. That is perfectly fair, and we should have a national debate about how the state pension age should be brought forward; indeed, the Pensions Minister has issued a consultation. It is just a shame that it closes on Friday, after this debate is concluded.
Richard Graham
The right hon. Gentleman made two comments about how the Bill treats women. He estimated that the cost of the changes to some women would be £10,000. Does he not recognise, however, that the change in the value of the basic state pension as a result of this Government’s commitment to linking it back to earnings will be worth more than £15,000? Will he also acknowledge that, as a result of the new flat-rate basic state pension being applied, a lot of women who would previously have lost out because of their caring responsibilities will now benefit hugely? Does he not agree that women will benefit from the changes in the basic state pension in those two ways?
Mr Byrne
Let us take the hon. Gentleman’s second point first. I understand that the proposal for a flat-rate pension is included in a Green Paper. It is therefore an early statement of the direction of Government policy. Given what the Government have managed to do to commitments in their coalition agreement, I am not sure how much water that proposal holds. The hon. Gentleman’s first point was more interesting, because he was comparing the benefit for someone on a pension under the lock introduced by the Government with a pension that is linked to prices. Going into the election, no party proposed to keep the pension linked to prices, so his calculation is purely fanciful. Indeed, the Pensions Commission said that we should re-link pensions to earnings in 2012. That was in our manifesto, and that is what we would have done if and when we were returned to office. I am afraid that the hon. Gentleman cannot make up fantasy numbers comparing the reality—
Richard Graham
The right hon. Gentleman is generous to give way again but, with all due respect to him, I am comparing the fact of what was delivered by one Government over 13 years with the fact of what has been delivered by this new Government within one year. The Gloucestershire Pensioners Forum, which was created by members of his own party precisely to campaign against the de-linkage made by the late Mrs Thatcher when she was Prime Minister—[Hon. Members: “She is still alive.”] Indeed she is. I meant to say “the former Prime Minister”. The Gloucestershire Pensioners Forum has now fully recognised the value of re-linkage, which this Government will introduce. It is a shame that the right hon. Gentleman does not recognise these facts.
Mr Byrne
I am glad to hear that correction about Baroness Thatcher. I think that the hon. Gentleman would also accept his Government’s own figures, which show that pensioner poverty is now at its lowest level for 30 years. I am sure that he would accept that pensioner incomes increased faster than gross domestic product and faster than earnings over the past 13 years. That is why we are proud of our record of delivering on pensions.
Ben Gummer
In response to an intervention by the hon. Member for Slough (Fiona Mactaggart), the right hon. Gentleman said that the legal advice was news to him. It was not news to the House of Lords, however, as it was debated there on 15 February, at which point this matter was raised. Surely the real news appeared in the weekend’s newspapers, which have provided yet another bandwagon for the right hon. Member to jump on.
Mr Byrne
I do not know how much attention the hon. Gentleman has been paying to this debate, but we championed this issue before it came to the House of Lords and as it went through the other place. We will champion it through the House of Commons as well, until this bad Bill has been thrown out.
Mr Alan Reid (Argyll and Bute) (LD)
I agree that, for a small group of women, the Bill is unfair. However, I was pleased that the Secretary of State said that he would be happy to look at transitional arrangements. The right hon. Gentleman has been very good at criticising the Government, but will he please tell the House what the Labour party’s plans are?
Mr Byrne
I am grateful to the hon. Gentleman for decoding the Secretary of State’s remarks and putting on record that there will be transitional arrangements. I heard about that only by looking this morning at certain blogs written by Liberal Democrat Members, who also expressed great confidence that there would be a compromise on this. We look forward to hearing a lot more about what that compromise will be. It is a shame that it is not in the Bill in time for this Second Reading debate. We would all understand the logic of this if we heard a little more from the Secretary of State about why the Government are introducing this measure.
The truth is that the Secretary of State used as a justification for his argument the idea that women in this position will somehow be living that much longer to enjoy their new pension. Well, they will draw cold comfort from that. The point is that it is simply not realistic for women in their late 50s, who are truly fearful about being given no time to adjust to their loss of income. Surely that is the critical point for us this afternoon. Women in their later 50s will have earned less over their lifetime; they have lower state pension and private savings than men; many have been unable to join a workplace pension and have interrupted their careers to look after their family; many will have stood down from jobs on the understanding that they would get that state pension early.
These are not simply my assertions; they are the Government’s own facts. The Pensions Minister was forced to tell my hon. Friend the Member for Leeds West (Rachel Reeves) that 40% of women aged 56 have no private pension wealth:
“The proportion of women aged 56-years-old who have no private pension wealth”,
he told the House on 10 March,
“is estimated to be 40%.”—[Official Report, 10 March 2011; Vol. 524, c. 1266W.]
What on earth are those women supposed to do with the measures in the Bill? On 4 February he admitted that the median pension saving of a 56-year-old woman is six times lower than that of a man, yet he tells us not to worry because he has a plan. He has a word of reassurance—[Interruption.] The Secretary of State should listen to the plan of the Pensions Minister. I think he will be rather pleased with it, as we were offered words of reassurance and comfort. On 14 February, the Pensions Minister said:
“One reassurance I can offer is that those women…will be eligible to apply for jobseeker’s allowance”.—[Official Report, 14 February 2011; Vol. 523, c. 681-82.]
They might, I think, call that the final insult.
There is not much that unites the House these days, but concern about this Bill is fast becoming one of those causes. I understand that even the Department for Work and Pensions Whip, the hon. Member for Norwich North (Miss Smith), who is not in her place on the Treasury Bench has said:
“I’m pressing Ministers on this because a number of women have raised it with me, and it so happens that members of my own family are in this group. It’s certainly an issue I sympathise with greatly.”
Her concern is widespread. I believe that the hon. Member for Cardiff Central (Jenny Willott) has told no less than the Deputy Prime Minister:
“I agree with the Age UK protestors: these changes should be reconsidered.”
Nearly half the Liberal Democrat MPs have signed an early-day motion that says that the Government should
“rethink its retirement timetable in the Bill so that these women have a fairer chance to plan and save for their retirement.”
Tonight, there is a chance to put a vote behind those words.
Who will vote to support the Pensions Minister? Once, he never tired of telling the Tories about the error of their ways. He was the man who once said:
“Pension policy needs to be stable and predictable years ahead, not made up on the back of a cigarette packet.”
That was still there on his website, www.stevewebb.org, on 6 October 2009. Alongside it, I found another rather apposite quote:
“It is typical of Tory policy to hit the poorest the hardest.”
That is still there on his website. This is the Pensions Minister who said:
“As ever when it comes to pensions, it is as if women are an afterthought. That is clearly not the way in which to change state pension ages.”—[Official Report, 9 March 2010; Vol. 507, c. 33WH.]
That was not on his website. That is what he said in the House of Commons in March last year. Tonight, we have the chance to help the Pensions Minister stand by his words and his record. I think that we should help him with his honour.
This is a Second Reading debate. We are supposed to be debating the principles of the Bill and we are then asked to vote on those principles. We are being asked to do this when it is perfectly clear that the Government no longer believe in the Bill. We are privy to reports in the newspapers that the Government might be working on another U-turn. I am not sure whether it is Conservative or Liberal Democrat Members who are behind it, although I know who will claim the credit. The Secretary of State told the Financial Times today that there are “issues and concerns” that need sorting out, while senior Ministers, says the Daily Mail,
“are telling the Chancellor he must think again.”
The Secretary of State, it says, is “sympathetic”. I have to ask, then: why are we voting on a Bill that the Government do not believe in? The Chief Secretary does not believe in it; the Pensions Minister does not believe in it; half of the Liberal Democrat Members do not believe in it; the Tory Whips do not believe in it. What on earth are we doing going into the Division Lobbies to vote to punish half a million women through a Bill that no one believes in? Will the hon. Gentleman answer that question now?
The Minister of State, Department for Work and Pensions (Steve Webb)
It is unclear whether the right hon. Gentleman is going to vote against Second Reading—he has not said so yet. On the assumption that he is, he would have to find not just the £10 billion that his hon. Friends want to raise, but the £30 billion that this Bill saves. Where will he find £30 billion when all the money is gone?
Mr Byrne
I am glad that the Minister has raised that point. His own consultation, which closes on Friday, is examining the question of how savings can be made through acceleration of the granting of the state pension age later in life. That is an issue that should have been brought to the House for debate before we were asked to debate egregious measures that will hit half a million women. We should re-examine the timetable for the raising of the retirement age to 67, but that must be done on the basis of equal treatment of the sexes, and the principle that people should be given time to prepare.
We are sick of this confusion. We are sick of this chaos. We say to the Government today, “No more: you need to get a grip. Take this Bill away, and bring us a plan that you have had the decency to half think through.”
“The critical factor in pension arrangements is certainty. People need to be able to plan with certainty”.—[Official Report, 11 January 2011; Vol. 342, c. 179.]
Those are not my words, but the words of the Pensions Minister who is responsible for the Bill. Tonight the House will be asked to vote on a broken promise. We urge the Government to think again. We shall vote to oppose the Bill, and I urge others to do the same.
Steve Webb
In a little while; I want to make some progress first.
The Bill’s third key element—which, again, voting it down would stop—is making judges put some money into their pensions. I think that Members were rather shocked when they discovered that the taxpayer put 32% of a judge’s salary into a judge’s pension, and that the judge in respect of their own pension entitlements puts a big fat juicy zero. This Bill will correct that. If the Opposition succeed in voting it down, they will stop us doing so. We need to make progress with the Bill, therefore. Second Reading is about the principles, and we stand firmly behind them.
In the debate, the shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne)—who has rejoined us now—glossed over the auto-enrolment provisions and said the Labour party will vote against the Bill. That would leave £30 billion to be found, as that is what the Bill would put into the Exchequer. When asked where the money would come from, he replied, “Well, we’d move a bit faster on age 67” and then added, in brackets as it were, “in the 2030s.” For a former Chief Secretary to the Treasury to tell us that the way to find money for a problem in the next Parliament is to look to somewhere in the 2030s sounds vaguely familiar. The answer is always, “Tomorrow, and tomorrow, and tomorrow”—
Steve Webb
In a second. [Hon. Members: “Give way.”] I will give way. The reason there is no money, as the right hon. Gentleman said, is because difficult decisions were always deferred to tomorrow.
Mr Byrne
I am grateful to the Minister for giving way. He is making his remarks with his customary eloquence. As the following figure has not been presented this afternoon, will he remind the House precisely how much the acceleration of the state pension age for women before 2018 will save? Is the sum about £1.2 billion—yes or no?
Steve Webb
Interestingly, the right hon. Gentleman and his colleague the shadow Minister are saying two different things. The right hon. Gentleman knows that the sum for the changes up to 2020 is £10 billion. His shadow Minister, the hon. Member for Leeds West (Rachel Reeves), says we should delay to 2020 and find £10 billion while he wants to vote against the Bill and find £30 billion at some time in the 2030s. I think the House knows where we stand on that.
I am grateful to those Members who took the trouble to address auto-enrolment, but the shadow Secretary of State glossed over that issue. He said we ought to enrol at £5,000, which is not the right figure, but let us accept it for the sake of argument. He then said we should not put up the threshold. Therefore, under his scheme with the threshold at £5,000, someone who earned £5,100 would be auto-enrolled on that £100, and as we start at 1%, they would have to put in £1—not £1 a week, but £1 a year, or 2p a week. That is what will happen if we do not let this Bill make progress. We will be requiring employers and employees to put 2p per week into the employee’s pension. Does the right hon. Gentleman think that might in any sense undermine the credibility of our proposals?
Steve Webb
I am grateful to the hon. Gentleman for recognising that there is a long-term problem, which not all his colleagues have done.
My hon. Friend the Member for Grantham and Stamford (Nick Boles) made the point that this is not about the deficit. That is quite true—these measures do not save us money in the current comprehensive spending review period. However, I have a figure to present to the House: £1.3 trillion. That is the national debt at the end of this Parliament, even after our austerity measures. That is the legacy; that is the reason we need to get a grip on these matters.
As well as the 25 Members who spoke today, there were two almost silent voices—especially silent in the Opposition’s contributions. The first silent voice was tomorrow’s taxpayer. Labour wants to put the Bill into the 2030s. If we delay the changes, all these things will have to be paid for by someone else. As long as it is not the people who write to us—somebody else will pay, and they do not write to us, so that is fine. That voice needs to be heard.
The second voice that was not really heard much in the debate—although a few coalition Members did raise it—was that of employers. Of course, many of the Bill’s measures on auto-enrolment are about easing the burden it imposes, particularly on smaller firms, which are crucial to our recovery and the fundamental improvement of the economy. These measures strike a balance. The waiting period gives employers time to get people on the payroll. The threshold enables employers to take on people on a lower wage, with less bureaucratic burden. The voice of the employer and the costs and burdens on business were issues that the Opposition almost did not raise at all.
My hon. Friend the Member for Cardiff Central (Jenny Willott) was very generous in her remarks, supporting the measures on judges and on auto-enrolment. She quite properly raised concerns about the state pension age, but she made an important point about our state pension reform agenda generally. There are two sides to the state pension deal—when people get it and what they get. One Opposition Member this evening described the state pension as a pittance, but who oversaw it at that level for 13 years? We have brought forward, in our Green Paper, proposals for a single tier of state pensions set above the level of the means test. That is one of our reform options and that is the pension, if those proposals go ahead, that every one of the women we have been talking about today would get, so there is an issue about when they get the pension, but there is also, crucially, an issue about what they get. We are actively looking into that and I am grateful to my hon. Friend for raising it.
The hon. Member for Arfon asked about Allied Steel and Wire workers and the financial assistance scheme. I can confirm that I met them along with the Secretary of State for Wales and Dr Ros Altmann, who has done a huge amount of good work in this area, back in November and that I wrote to update the Secretary of State last week. We are aiming to provide forecasts for financial assistance scheme members once the wind-up process for schemes is completed. In the case of ASW, the scheme is still winding up, so the financial assistance scheme is not yet in a position to provide forecasts, but we hope to make progress later this year. The hon. Gentleman also asked about Dr Altmann’s ideas for getting money into the scheme and we have looked at trying to release value from annuities. That is not looking as hopeful as we had hoped but we are working hard to see if that can be done and I am grateful to the hon. Gentleman for making the point.
My hon. Friend the Member for Ipswich (Ben Gummer) gets the prize for making the sharpest intervention. He pointed out to the shadow Secretary of State the legal advice and comments made by my noble Friend Lord Freud in the House of Lords on 30 March. I know that my hon. Friend reads little else and I am grateful to him for drawing those comments to our attention. [Interruption.] As the right hon. Member for Birmingham, Hodge Hill has asked the question, let me tell him the answer before he asks again. My noble Friend was responding to an amendment that would have slowed the process at which we equalise the men’s and women’s state pension age. The right hon. Gentleman will know that we are on a process of equalisation, and the legal issue is that we deviate from equalisation if at any point we widen the gap. The coalition reference to moving men in 2016 and women in 2020 would widen that gap. The issue is directive 79/7, which
“deals with the progressive implementation of the principle of equal treatment for men and women in matters of social security…Any change we now wish to make needs to be considered in relation to the position left by the 1995 Act.”—[Official Report, House of Lords, 30 March 2011; Vol. 726, c. 1279.]
That is on the record and has been for several months.
Steve Webb
If it had been self-evidently not possible, I think that the right hon. Gentleman would have pointed it out in the past 12 months, but I have not heard him do so.
The right hon. Member for Croydon North (Malcolm Wicks) made a characteristically thoughtful speech and I hope that he is on the Public Bill Committee. That would lengthen our proceedings, but in a very nice way. He raised the important issue of the entitlement of people with long years of national insurance payments to a national insurance pension. He generously referred to the fact that I taught his daughter at university; I hope that I contributed in some way to her social mobility as a result. He raised the serious issue of using long periods of national insurance records. As my right hon. Friend the Secretary of State pointed out, the records before 1975 are a mess, which the right hon. Gentleman will know as he is one of my many predecessors. Our ability to use those records is very limited and one of my concerns about his proposal, which I am happy to discuss with him in a genuinely open way, is the position of women, because they would have to be credited for times when they were not in paid work. Some of that paid work will have been before home responsibilities protection was introduced and so we simply would not know who to credit. That is only one of the issues, but as I have said, we are happy to engage with him in the spirit of openness.
Welfare Reform Bill
Liam Byrne Excerpts(14 years, 9 months ago)
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Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I am grateful for the chance to speak on Third Reading this evening. I am glad that the Bill has finally come back to the House and I wish I could say that I thought the Bill’s passage through this place had improved it. I cannot with justice say that. We said from the outset that we wanted to approach this question in a spirit of national consensus.
The Opposition are proud of our record of delivering welfare reform in this country. I am glad that the Secretary of State referred to statistics from the Office for National Statistics that were published the other day because they were the same statistics that confirmed that by 2008 the claimant count was half the level we were left by the previous Government back in 1997. The number of people claiming unemployment benefit for more than 12 months in that year was down to a quarter of the level we inherited in 1997, so, no, it is not a surprise that his own welfare Minister, Lord Freud, said that our record of delivering welfare reform was remarkable.
On Monday night, I set out how I thought that further reforms should be made to toughen the responsibility to get back into work and to enshrine a culture of work in every community in this country. Throughout the passage of the Bill, we have sought to table amendments that would have improved it and allowed it to leave this place for the better. The Government have refused to listen and have refused to accept advice and amendments. The Bill presented to this House might have started with an instinct for compassionate Conservatism in action, but we have in front of us tonight a law that cuts benefits for people with cancer when the Minister says that they will not be ready to work by the time that cut hits them.
I said that we would not oppose the Bill on Second Reading to give the Government some space to improve it. We back welfare reform that gets people back to work and that simplifies the benefit system. We support the principle of universal credit and we support sanctions for those who are not trying hard enough to get a job. We support a cap on benefits if it saves public money, but this is where the agreement ends, not least because this Bill is so cold and so hard that it ends a tradition of compassion in the welfare state that we should conserve and not consign to history.
Once upon a time, this Secretary of State knew about compassion. In 2009, he said that the welfare state is a symbol of a compassionate and civilised society. I think that he has honourable intentions, but he has not presented us tonight with a Bill that is in an honourable state. It is, frankly, a disgrace that the Government have not found additional time to debate cuts to contributory ESA that would cut benefits to people with cancer before they are fully recovered. My right hon. Friend the Member for East Ham (Stephen Timms) asked for additional time from the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), on Monday, but he refused to give the House that time.
To single out for the proposed cuts benefits that would allow cancer patients to go on receiving the benefits they need is unacceptable. It is unacceptable because it is an attack on compassion. It is unacceptable because we cannot ask people who are still battling cancer to start filling out job applications. It is unacceptable because most of us in the Chamber tonight will either have personal experience or families with experience of the truth that it takes more than courage to beat cancer and finding a job is not part of any recovery programme I have heard doctors recommend. Worse, this is a benefit that people have actually paid in for. Now, when they need it most, it is being taken away.
Ciaran Devane, the chief executive of Macmillan Cancer Support, said:
“Many cancer patients will lose this crucial benefit simply because they have not recovered quickly enough…This proposal in the Welfare Reform Bill will have a devastating impact on many cancer patients. We are urging the government to change their plans to reform key disability benefits to ensure cancer patients and their families are not pushed into poverty.”
Even at this late stage, I ask the Secretary of State to speak to his friend the Prime Minister and to sit down with cancer charities, disability groups and other campaigners to try to get this sorted out. I ask him to take heed of what Owen Sharp, the chief executive of the Prostate Cancer Charity, has said this afternoon:
“The changes to disability benefits will mean that a significant number of people with cancer will be left without vital financial support at a time when they need it the most…The current proposals in the Welfare Reform Bill will discriminate against cancer patients and should be amended.”
Perhaps the Government would be on stronger ground if only a tiny minority of people were affected, so the House is right to ask how many people will be hurt. On 16 May, the Government told us: 77% of people in the work-related activity group will not have recovered from their condition after a year, yet that is when their benefit will be cut. How on earth can that be justified? The Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell gave us his answer in Committee when he said that
“this is a sensible measure”.––[Official Report, Welfare Reform Public Bill Committee, 3 May 2011; c. 655.]
It is a decision that is, in his words, “not about recovery times”.
Perhaps I could understand that argument if I felt that the Department had its spending priorities straight, but the truth is that its message is so harsh that it has had to hire media trainers to teach the Minister with responsibility for disability, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), how to spin her lines. The Department has passed to me documents that detail the media training bill for her, which equals three and a half months’ worth of somebody’s employment and support allowance, which would be cut. It is a shame that her expensive eloquence was not more convincing this afternoon. Cutting benefits for people with disabilities and hiring media trainers instead—that tells us all we need to know about this Secretary of State’s priorities.
Mr Speaker
Order. Mr Rob Wilson, you have just toddled into the Chamber, do not shout across the Chamber in that way. [Interruption.] No, no; do not argue the point. [Interruption.] Order. I am telling the hon. Gentleman—[Interruption.] I do not need any expression; I am telling him what the situation is.
Mr Byrne
Thank you, Mr Speaker. I say to Liberal Democrat Members tonight that today is the deadline for advice on motions to their conference and one has found its way to me this afternoon. They should listen to what their grass roots are saying—that they should support the amendments that we tabled on Report. The Liberal Democrats should not be fooled by the idea that to succeed in politics one has to rise above one’s principles, and they should not betray the principles of Lloyd George, Beveridge and Keynes for the political convenience of the hour. They should show us, show people and show their grass roots that like us they have heard the voices of the vulnerable, who are calling on them to act—and to act tonight.
As if the cuts for cancer patients in clause 51 were not bad enough, they are rendered worse by the determination of this Government to leave people on disability benefits as prisoners in their own homes. On Saturday morning, my constituent Stephen McClaren came to see me. He has cerebral palsy, attention deficit hyperactivity disorder, learning disabilities and he gets these mobility payments in order to help him to see his mum, go to the gym and live the quiet miracle of a normal life. These plans have filled him with fear. He and 80,000 disabled people are now worried sick about what the Government have in store for them.
The charities say that the changes are “fundamentally unfair”, so what is going on? The Prime Minister has said that the DLA mobility component will not be cut for those in residential care homes—that is what he told the House on 23 March—but the Budget book says that cuts to the DLA mobility component will total £475 million from people in residential care by 2015. Who is telling the truth? We now know that there is a review, but today is the Third Reading of the Bill. The Government want to change the law, but what is their policy? It is a secret. The Minister for spin, the hon. Member for Basingstoke has said, with her new expensive eloquence, that the Government
“have no plans to publish the findings of this work”.—[Official Report, 9 May 2011; Vol. 527, c. 1003W.]
Tonight, we are supposed to give the Government powers to abolish the benefit when their evidence for reform is to be kept secret. What a shambles.
The Bill violates every basic test of compassion and, just as bad, it also fails the test of fostering ambition to work. I know that the Secretary of State is trying as hard as possible to introduce reforms that will help to make sure that work pays, but he cannot honourably say that and give that guarantee for anyone with children because he cannot make up his mind how much parents are going to get for child care under universal credit. We are being told that that credit will be abolished tonight with no sense of what is going to come in its place.
In February, the Secretary of State was unable to say what the Government’s plans are. He told the House, not once but twice—most recently on 24 March, I think—that he would tell us, here in the House before the Bill got through the Committee stage, that he would publish his child care policy. Leaked documents from the DWP say that the cuts could disadvantage 250,000 people, cutting support almost by half, yet tonight we are at Third Reading and the Secretary of State still has not told us what his plans are for child care.
There are new penalties in the Bill for savers. There are new penalties for the self-employed. The Bill was supposed to be a milestone in the evolution of the Government and the compassionate Conservatism they espoused, but tonight they have been found out. We have a law to hurt cancer patients and a Bill to trap the disabled, confusion for parents and penalties for savers. Whether people are ill, disabled or working hard to do the right thing, the Government are determined to attack the benefits they paid to receive. We should stand up—
Oral Answers to Questions
Liam Byrne Excerpts(14 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Duncan Smith
There is a huge amount of evidence. Two of the main providers are voluntary sector based, and getting on for half of all the subcontractors in the programme will be from the voluntary sector. This will be the biggest boost to the idea of the big society. Now that we hear Labour Members are rethinking on welfare, we hope that they will have some good things to say about it.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
The cap on overall benefits in the Welfare Reform Bill is an important part of the legislation, but yesterday the noble Lord Freud said on television that there was going to be a significant U-turn, as there were going to be exemptions. Pressed on the detail, he said:
“Well, it’s where we think that, you know, there’s something happening that is undesirable.”
I do not wish to be pedantic, but that is not a clear plan for reform. The Third Reading of the Welfare Reform Bill is on Wednesday. Will the amendments for this new proposal be on the table by then?
Mr Duncan Smith
It is good to see the right hon. Gentleman again—long time, no see. I am glad that he has finally made it to the Dispatch Box. He should not believe everything he reads in the media. The reality is that this policy is not changing because it is a good policy. The reality is that nearly half of those of working age who are working earn less than £26,000 a year, and they pay taxes to see some people on benefits earning much more than that amount. As we proceed through Report and Third Reading, I look forward to seeing the right hon. Gentleman support and vote for the Bill because he believes that those on benefits should not earn more than those who are living and working hard.
Mr Byrne
The Secretary of State’s Welfare Reform Bill would be easier to support if we knew what difference it would make in the real world. We still do not know what it will mean for child care or for people with disabilities, and now we do not know what it will mean for the benefit cap either.
Since the Secretary of State took office, the Treasury has forecast that the housing benefit bill will rise by £1 billion. If he cannot tell us what his policy on exemptions is, will he tell us what Lord Freud’s current policy will cost taxpayers?
Mr Duncan Smith
As I have said, we are not changing the policy. What my noble Friend Lord Freud was referring to was what we are already doing: making discretionary payments to ensure that the policy is eased in properly. [Interruption.] Hang on a second. The right hon. Gentleman cannot have it both ways. He has just said that we are not cutting housing benefit enough. He ought to talk to those on his Front Bench who think that we are cutting it too much. That is the problem with the Opposition at the moment: they want to have it all ways. Today the Leader of the Opposition made a speech in which he said that Labour would be tough on benefit claimants and that those who were not in work would not receive social housing. I simply say to Labour Members that this whole idea of welfare and change is a lot of wriggly-worm U-turns from the Opposition.
Amendment of the Law
Liam Byrne Excerpts(15 years ago)
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Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I know that the Secretary of State learned some time ago that attack is the best form of defence, but I expected him to do a better job of defending the Budget that we heard last week. The Budget debate started with no acknowledgement that growth was coming down—and the same is true of its conclusion. The right hon. Gentleman refused to admit that this so-called Budget for growth has knocked 0.5% off the rate of growth this year and next, put unemployment up by 200,000, and is putting the benefits bill up through the roof—and he seems to think that we are the ones in denial.
A fortnight ago, the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), who has responsibility for work, was rolled through the television studios and asked to give his progress report on how well the Chancellor had done in his first year. He was asked to report on how good a job the Chancellor was doing of getting the country back to work. Fifteen months after the end of the recession, the House could be forgiven for expecting unemployment to be falling rather than rising. However, at the very point when unemployment should be falling, the Minister was forced to report that it was actually rising. He decided to choose his words very carefully. He said that the jobs market was “stabilising”.
Last week it was left to the Chancellor to tell us that the jobs market was doing nothing of the sort. He did not dare spell it out, but in the fine print of the Budget we learned the truth: this is not even the beginning of the end. His first year has gone so well that unemployment, which should be falling, is set to rise until the summer. In fact, it is not expected to fall below 2.5 million until way through next year. Now we face the prospect that unemployment is not going to fall below 2 million for the rest of this Parliament.
Kwasi Kwarteng
Will the right hon. Gentleman remind the House which member of the previous Cabinet wrote a note saying, “There’s no money”?
Mr Byrne
I would rather have written a bad joke in public than a bad Budget in public.
Now we know—and now the Secretary of State has been forced to admit—that unemployment is not going to fall below 2 million. He will remember, just as we remember, the last time that happened. For those with long memories, what has happened is all too familiar. The last time the Tory party was in office, it took a couple of years to get unemployment above 2 million, but after that it did not fall below 2 million for 18 years, until the Labour party was elected in 1997. Now the Government have decided that that record of the 1980s is worth a rerun, or something of a repeat, because there is one thing that has not changed: the Conservative party still believes that unemployment is a price worth paying.
Alec Shelbrooke
I am grateful to the right hon. Gentleman for giving way, and I am listening carefully to him. While we are discussing the figures, does he welcome today’s news that construction grew by 2.3% in quarter four, and that productivity was also up?
Mr Byrne
Of course, and the hon. Gentleman will also recognise that, despite the fact that we are some way out of the recession, today’s figures also confirmed that in the last quarter for which records are available, the economy shrank. I am not sure that that is a record of which he can be proud.
In the circumstances, I would have thought that the House could expect to hear rather more from the Secretary of State about what the Budget would do to get people back into work. The Office for Budget Responsibility is well aware of the Secretary of State’s Work programme and the Chancellor’s tax breaks on offer for business, yet its conclusion was the cold fact that unemployment will continue to rise. Every time the Chancellor stands up at the Despatch Box to deliver a Budget, he revises down his forecast for growth and revises up his estimate for the number of unemployed people in our country. He is costing this country a fortune.
What, then, did this Budget offer for jobs? Incredibly, it said that by the first quarter of 2013, unemployment would be 200,000 higher than was forecast just last October. What a triumph! Under the circumstances, we could have expected a rather bigger push from the Secretary of State and his right hon. Friend the Chancellor to get people back to work. After all, his Minister for the unemployed, the right hon. Member for Epsom and Ewell, told the Select Committee on Work and Pensions on 14 March:
“If there was a very substantial change in the labour market, one way or the other, frankly, that is the kind of circumstance in which we might need to revisit some of the assumptions.”
Well, 200,000 more people on the dole sounds like rather a substantial change to me.
What is the Government’s response? Some £20 million for work experience. This morning I had a look at the Secretary of State’s accounts for January. It would appear that his new work placement scheme, which was so proudly trumpeted this morning, will cost less than his Department spends on stationery every year. At the very least, we would have expected more resources for the Work programme. The Prime Minister is fond of telling us that the Work programme is
“the biggest back-to-work scheme this country has seen since the 1930s.”—[Official Report, 16 February 2011; Vol. 523, c. 951.]
In fact, as the BBC has shown, there are 250,000 fewer places on it than Labour had last year, when unemployment was lower. The association of bidders for the Work programme now has so much confidence in the Secretary of State’s plans that it says:
“the design of the Work Programme is fraught with risks which may impact significantly on the number of unemployed people who can benefit from it”!
That is hardly a vote of confidence. When my hon. Friend the Member for Westminster North (Ms Buck) asked the Secretary of State how much extra he had received from the Treasury to get people back to work, he refused to give her a straight answer, and we all know what that means: that he asked for nothing and he got nothing. With unemployment now forecast to rise, the very least that we could expect from this Secretary of State is to stand up for his Department, fight his corner and get some extra help to get this country back to work.
Mr Tobias Ellwood (Bournemouth East) (Con)
The right hon. Gentleman understands that whoever had won the last election would have had to introduce some tough measures, and we are experiencing those now. Bearing in mind that all other recessions have seen unemployment rising, is he genuinely telling the House that if Labour had won the last general election, unemployment would be continuing to fall today?
Mr Ellwood
The right hon. Gentleman is being very generous in giving way, but this is an important point. Labour was in denial before the election about introducing major measures to bring the economy under control. Labour now knows—as we have known—that important measures needed to be introduced after the election. That is what is causing the difficulties now. He is now saying, “Yes, you’d be able to bring those measures in without having any effect on employment.” That is completely wrong; he misleads the House.
Mr Byrne
Well, let us go through it, shall we? The deficit plan that we put in place would have involved £57 billion-worth of discretionary action—[Interruption.] Will the Secretary of State just pause for a moment? I know that he has read all 40 pages of chapter 6 of the Budget that was published in March last year, but let me just remind him of their contents: £57 billion-worth of discretionary action; £19 billion-worth of tax rises; and £38 billion of cuts, £18 billion of which would have fallen on capital, and £20 billion of which would have fallen on current expenditure, of which £12 billion would have fallen in Whitehall, £5 billion would have fallen on lower priority projects and £3 billion would have been achieved through a pay freeze and asking public sector workers to—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I just want to clarify that the hon. Member for Bournemouth East (Mr Ellwood) meant that the right hon. Gentleman was inadvertently misleading the House.
Mr Duncan Smith
Now that the right hon. Gentleman is into the Darling plan, will he specify what those cuts are, what he supports right now, and therefore what the plan really is? After all, it was due to come into force three days from now.
Mr Byrne
I have just gone through them. They involved £57 billion-worth of discretionary action—[Interruption.] The difference between us—[Interruption.] Well, let us take the Secretary of State’s own Department. Regarding the £18 billion savings in annually managed expenditure, we said that where there is a temporary switch from RPI to CPI for the next three years, we will support that; where there is a need to reform the disability living allowance, we will support it; and where there is a need to introduce new limits on employment and support allowance, we will support that. We do not think, however, that the Government should introduce reform simply by cutting. They should couple some of those reforms with the need to look again at the support that working families actually need.
Mr Duncan Smith
Okay, now we are into this specifically. DLA reform has a line item in the Budget of about £1.4 billion in savings. Does the right hon. Gentleman consider that to be a reduction that he supports?
Mr Byrne
The Secretary of State put in place a programme to make the cut before he figured out what reform was actually needed. He is under such pressure from disability groups because he is not listening to the voices of disabled people in this country telling him what kind of support they need in order to live full and fulfilling lives. That is because he is locked into a programme that is putting more people on to the dole and sending benefits bills through the roof. He is beginning to fracture the bonds of support between the Government and the people in this country who need extra help. He should not be abolishing DLA; he should be reforming it. He should also start listening to the needs of disabled people.
Mr Duncan Smith
I am intrigued by this. The right hon. Gentleman now seems to be at odds with his shadow Chancellor, who in his opening speech in the Budget debate last week, in response to a specific question about what spending cuts he wanted in the coming year, said:
“We said…that we would go ahead with the disability living allowance gateway reforms.”—[Official Report, 24 March 2011; Vol. 525, c. 1142.]
That involves £1.43 billion. Does the right hon. Gentleman support that now?
Mr Byrne
No, because we have not specified—[Hon. Members: “Ah!”] We have not specified the level of cuts or savings that we think should come from DLA. The Secretary of State knows as well as I do that we believe that a gateway should be introduced for DLA—[Interruption.] He should listen to this, because it speaks to the concerns of millions of people with disabilities. He has said that he is going to cut £1.4 billion from DLA, and, in written answers to the House, he has said that 170,000 fewer people will receive that benefit in the future—[Interruption.] The Secretary of State might just want to listen to the implications of this. It is a bit late for him to be getting a briefing on his DLA reforms from his own Minister, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller). If he is cutting DLA for 170,000 people and cutting £1.4 billion from that benefit, £8,500 will be cut from each of those 170,000 families. Will he intervene on me again and tell me whether he understands that that is the implication of his benefit cut?
Mr Duncan Smith
I have a very simple question. The shadow Chancellor said that he supported the reform, which has a very simple line item in the Red Book. The right hon. Gentleman now says that he does not support it. This is the problem: the Opposition have no idea what they are doing. No wonder the British public are fed up with them.
Alec Shelbrooke
The right hon. Gentleman is most generous in giving way. I have just listened, as has the rest of the House, to a whole host of numbers that he reeled off relating to where cuts would be made, but he has not said where those cuts would be made, or what exactly would be cut. Will he enlighten the House?
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Does my right hon. Friend share my astonishment that the Secretary of State can produce savings figures, yet when we put specific questions to him we are told, “This is a matter for review”?
Mr Byrne
Precisely right. Indeed, the Secretary of State presented to the House of Commons a Bill that would abolish DLA before he had even bothered to finish consulting people up and down the country about what the reform of DLA should look like.
One of the greatest failures stemming from the Secretary of State’s inability to extract further money from his right hon. Friend the Chief Secretary to the Treasury is, of course, the failure to get young people back to work. I met a delegation of young people from my constituency this morning and I asked them what they thought of the Government’s plans. Their thoughts were very simple: it just seems, they said, that the Government are stopping young people being what they could be. I could put it no better myself. Youth unemployment is now approaching 1 million. The Secretary of State likes to pretend—he did it again this afternoon—that this is somehow a problem that he inherited. [Interruption.] What he fails to remind us is that in the final nine months of our term of office, youth unemployment was falling by 67,000.
I know that the right hon. Gentleman is fond of quoting figures that do not include the number of people in higher education, for example. Fine: let us look at what the figures tell us. Since the election this is what has happened: after nine months in which youth unemployment was falling, it is now going up by 60,000—and that when the economy is supposedly growing. All the good work we did is now completely undone.
Mel Stride (Central Devon) (Con)
The right hon. Gentleman said that if Labour had won the last election unemployment would, of course, be falling. He raised the issue of youth unemployment, so will he inform the House whether youth unemployment fell or rose during the period of the last Labour Government?
Mr Byrne
All unemployment fell. Then, once the scale of the global recession we confronted became apparent, it of course went back up again. What we never had under a Labour Administration is unemployment going up through the 3 million mark—not once but twice, as it did under the Conservatives. Every job lost is a tragedy for one family, and all the jobs lost are a tragedy for all of us—and, indeed, for the Exchequer. Lost jobs mean not only that our performance as a country cannot match our full potential, but that a bill is created that we all end up paying.
The Governor of the Bank of England has warned us of what is to come. He says that we now confront the biggest squeeze on living standards since the 1930s, and that because this Government’s economic plan is creating so few jobs, there is less and less demand for workers. Now there are five people chasing every job and the growth in people’s pay packets and wages is slow. The Office for Budget Responsibility forecasts 2% earnings growth this year, 2.2% next year, but when prices are growing by more than 5% this year and 3.6% next year, the squeeze on family budgets is now all too obvious.
In the circumstances, one would have thought that the Government would step in to help. Not a bit of it. Next month 10 Tory raids on the family budget get into full swing: tax credits cut for families earning more than £40,000; tougher criteria on families wanting to claim family support; reducing the income disregard; freezing basic rates of working tax credit; removing the baby element of child tax credit; reducing payable costs of child care; abolition of grants for pregnant mums; £500 taken away from families with more than one child; child benefit increases ruled out for another three years; and cancelling the child savings accounts.
This Government are proud of some of the measures foisted on them by Liberal Democrat Members. I am sure that is right. Once we take this list into account, however, £1.1 billion is going to be stripped from family budgets starting from next month, with another £300 million coming from children. By the end of this Parliament, £16.5 billion will have been taken out of family pay packets.
Mr Byrne
No.
Why are the Government not doing more to help? Because the cost of economic failure is sending the benefits bill through the roof. Last week we learnt from the detail of the Budget book just how big that bill has now become.
This afternoon the Secretary of State liked to boast about his reforms of housing benefit, but forgot to tell the House that the housing benefit bill is projected to rise by more than £1 billion in the next few years. In the small print of the Budget we saw something more: his benefits bill over the next few years is now projected to increase by £12.5 billion. That is £500 for every household in the country.
Almost as shocking is what will happen to the unemployment bill as a result of the Secretary of State’s great endeavours to get so many extra people back to work. When the Chancellor came to the House last year, he somehow forgot to tell us that as a result of his Budget higher unemployment figures would increase the dole bill by £700 million. Now we learn that it is going to go up again, by another £1.9 billion. In other words, since the Government came to office they have put the unemployment bill up by £2.6 billion. That is an indictment of their record in getting people back to work. In fact, £2.6 billion is the same amount that the Government are cutting from tax credits for people with children. The right hon. Gentleman is cutting support for our children in order to pay the bills for his economic failure.
What does this mean for the average British family? A single earner family with a child and an income of £23,000 will lose £400 a year. The Secretary of State may not care about what is happening to ordinary families, but I assure him that plenty of people are interested in the bills for his economic failure. Households with child care costs will be hit even harder. A family with average child care costs will lose nearly £500 a year, and for some it will be even worse. A single earner on the minimum wage with two children will lose more than £2,000 a year—6.5% of his or her income. Even for low earners, any gains that they make as a result of changes in income tax and child tax credits will be wiped out by the VAT rise. The Secretary of State is squeezing Britain’s families harder than ever to pay for his failure to get the country back to work. Does that not sound all too familiar?
Stephen Lloyd
In my constituency, the average family household earns £27,500. According to the BBC’s calculator, if the household contains two children under 16 and both parents are working, the family will be just over £700 per annum better off as a result of the Budget.
Mr Byrne
But the challenge from this Budget is that there are simply not enough winners, because the bills for sending people to the dole queue rather than back to work are now going through the roof. Surely the hon. Gentleman recognises that more than £2.5 billion in extra dole bills does not constitute a wise use of public money. If only the Chancellor would do more to get people back to work, the squeeze on working families would not be anywhere near as hard.
Finally, we must ask what the Budget means for some of the most vulnerable people in our country—the people who are in need of help from the wider community, and those who need extra support in order to live a full life in one of the world’s biggest economies. I know that, like me, the Secretary of State believes that a country as rich as Britain should have high, not low, standards of civilisation and compassion—but the Chancellor is pressing ahead with measures that will deny thousands of people their independence. The question that the House must ask is: what is the Secretary of State doing to stop it?
The right hon. Gentleman told the House yesterday that after his review of DLA had been completed the mobility component for people in care homes would still exist, but he still cannot explain why the Chancellor announced that he was taking £400 million more out of the mobility component than previously planned. The Budget confirmed that he would press ahead with his abolition of DLA. I repeat that we support the right kind of reform of DLA, but no matter how he tries to dress it up, he is taking £2.9 billion out of a well-targeted benefit, and he himself is saying that 170,000 fewer people will receive the benefit by the end of the Parliament. That is £8,500 per family. With figures like that, surely he can understand why so many people with disabilities up and down the country are so worried.
Finally, it was confirmed in the Budget that the Government are pressing ahead with their plans to limit employment and support allowance to just one year. The Secretary of State has a chance to fix that in Committee on the Bill, but the Budget confirmed an ambition to save £3.5 billion from people on ESA. However, he knows as well as I do that many people do not recover from cancer in under 12 months, and he also knows that cancer charities up and down the country are now asking him to think again.
The Minister of State, Department for Work and Pensions (Steve Webb)
Will the right hon. Gentleman give way?
Mr Byrne
No, because I want to make an important point to the House. The Minister’s Department knows that three quarters of cancer patients still need ESA after one year. The message from the charities to the Front-Bench team was blunt. They say:
“this proposal, rather than creating an incentive to work, will lead to many cancer patients losing their ESA simply because they have not recovered quickly enough.”
Will the Minister confirm that he will withdraw this terrible measure?
Steve Webb
I am grateful to the right hon. Gentleman for giving way. He tried to frighten disabled people by saying the average DLA loss was £8,500 per year. Does he think that figure is right?
Mr Byrne
Well, the Minister will know as well as I do how much he is cutting from DLA, and he knows as well as I do how many people he anticipates will receive the benefit in the future. He can do the maths as well as I can. The obligation is on him to come clean and be straight with people with disabilities. What will the reform of DLA mean for them? Will he drop this measure from his Bill?
This afternoon we have heard a pretty poor defence of a Budget that puts more people out of work, fails to deliver on ambitions for our young people, and hits families harder than ever to pay the bills of economic failure. Worse still, it begins to endanger the contract of a proud and civilised country with the people who need help most. This is not a big society; it is a society in which the bonds that tie us together are weaker and weaker. This is not a Budget that is working; it is a Budget that is hurting—and the Chancellor should think again.
Oral Answers to Questions
Liam Byrne Excerpts(15 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Work and Pensions (Chris Grayling)
We are doing two things. First, we are supporting the programmes in a practical sense. We already have apprentices working in the Department, but we as a Department will take a lead in providing work experience places—including something like 4,000 throughout the Department per year. We will also actively go out and encourage organisations to come forward and take part in the work experience programme. I hope every company in the country—private, public and voluntary sector organisations—will give young people the chance to take those first steps in the workplace.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
May I start by associating Opposition Members with the condolences expressed to the hon. Member for South East Cornwall (Sheryll Murray)? The circumstances that the Secretary of State outlined were extremely tragic.
May I return the Secretary of State to our debate this afternoon and ask about what the Prime Minister said to the House last week? He said that he had no plans to proceed with the removal of the mobility component of disability living allowance, and the Under-Secretary of State for Work and Pensions, his hon. Friend the Member for Basingstoke (Maria Miller) appeared to confirm that this afternoon. Yet, two hours after the Prime Minister sat down, his right hon. Friend the Chancellor said that he was ploughing ahead with making the savings. Whose side is the Secretary of State on? The Prime Minister’s or the Chancellor’s?
Mr Duncan Smith
I am on the side of both of them, to be quite frank. I make it my business to be so—although it is not always necessarily reported accordingly.
The situation, as I, the Prime Minister and even the Chancellor have outlined, is very simple. We have a requirement to look at the whole disability living allowance spectrum, of which the mobility and mobility in care homes components are part. As I said the last time I was asked about the issue, we are absolutely setting out to make sure that the current overlaps and deficiencies in an incredibly messy and complex system, whereby local authorities, care homes and the Department all tread on each other’s toes, are sorted out and do not exist, so that the mobility component that is required for people in care homes will exist after we have completed that work.
Mr Byrne
I am grateful for that answer, which is familiar to many in the House. If the proposal were to be dropped, however, the Red Book would show that from 2013 the savings would be returned. In fact, it shows no such thing. Indeed, page 44 of the Budget states that up to £500 million more will be removed from the residential care component than originally planned; and, in a parliamentary answer to me, the Secretary of State says that 100,000 fewer people will be in receipt of DLA by the end of the Parliament. Can he see now why people with disabilities are so worried about his plans?
Mr Duncan Smith
The letter I sent to the right hon. Gentleman and, I think, to others is quite clear. The point I am making, and I make again, is that the purpose of what we are doing—what the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) is engaged in—is to review a complex system, which does not work very well. Many people who need disability living allowance often do not get it; people, when they go back to work, are confused about whether they will still receive it; and people often feel that they should not take work because they think that the allowance is work-related, which we know it is not. So, that complex system, which the previous Government left to us, has to be reviewed. Many have welcomed the review, and at the end of it we will make decisions that benefit those who need DLA.