Welfare Reform and Work Bill

Paul Scully Excerpts

Tuesday 27th October 2015 Commons Chamber

[Owen Smith]

I am glad I gave way, because my hon. Friend makes the excellent point that politics is always a choice. Politics is about priorities. Politics is about who we stand up for, who we speak for and whose side we are on. It is very, very clear that, in the Bill and in this House, the Conservative party is on the side of millionaires and the wealthy, and are standing up against the ordinary working people of Britain, who will not forgive them for doing so.

[Paul Scully (Sutton and Cheam) (Con)]

The hon. Gentleman talks about choices, and spoke earlier about a £4.4 billion hit. Is he proposing, instead, a £4.4 billion subsidy for the large companies that Labour Members continue to criticise on a daily basis to cover the shortfall in wages that they should be paying?

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[Neil Gray]

I welcome my hon. Friend’s contribution. As we are talking about affordability and sustainability, let me say that the Government think it feasible to press ahead with apparently £167 billion of Trident nuclear weapons, which is shocking and deplorable, while seeing fit to find £4.4 billion of cuts in tax credits. They are taking an ideological wrecking ball to our social security system in the name of a budget surplus by scandalously waging a war on low-income households.

[Paul Scully]

Does the hon. Gentleman agree that the cost of Trident is over the lifetime of the project, whereas he is talking about an annual savings figure?

[Neil Gray]

By anyone’s estimation, £167 billion is a vast sum of money, but it would also amount to £3 billion per year, which would go some way to squaring the circle on the tax credits cuts.

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[Tom Brake]

I will not give way, as I have to finish at 2.57 pm.

Tax credit cuts will hit 4,000 families in my constituency and 7,000 children. Collectively, some £4 million will be lost. The cuts will hit hard-working families who are struggling to make ends meet and, perhaps most importantly from the Government’s point of view, the changes will reduce the incentive to work, which I thought the Government favoured. Contrary to what the hon. Member for Sutton and Cheam (Paul Scully) said, I do not think that tax credits are a pat on the head. They are essential in supporting families.

[Paul Scully]

rose—

[Tom Brake]

I will give way briefly.

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[Paul Scully]

The right hon. Gentleman said that he was going to talk about this, but does he not agree that when I spoke about a pat on the head I was talking about the original tax credits, which were received by nine out of 10 families, including those with salaries up to £60,000 and not just low income families?

[Tom Brake]

Indeed, and changes were made to tax credits to take that into account. However, tax credits are now needed to support people who are in low-paid work and will not suddenly see their salaries rise dramatically to compensate them for the loss of those tax credits. The cuts are regressive and should be opposed by the House. I hope that that will happen in the vote that is about to take place on new clause 1.

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[Helen Goodman]

It depends what kind of job is being applied for and how long it takes. I do not know how many applications the hon. Lady made when she was unemployed. Obviously, if they are simple job applications, one can make more. My point was: the young man had made 27 and he was sanctioned. Does she think that a sign of somebody malingering or a sign that people in the jobcentre were playing games? I put it to her that it was not a straightforward way to treat this young man. It was not encouraging or supportive; it was demeaning and demoralising, and it should stop. Ministers should ensure that the sanctions rules are properly applied.

The big study on sanctions carried out by Glasgow University found that one person in four on JSA had been sanctioned. I am sorry, but I think there is the intention on the part of Ministers to massage down the JSA numbers. Of course, the number of people unemployed has fallen and employment has risen—everybody is pleased about that, and nobody wishes to deny it—but I think there is an attempt, through sanctions, to massage the JSA numbers and pretend that there is not an unemployment problem. When I went to the Bishop Auckland jobcentre, I was told that half the people claiming JSA there had been unemployed not for more than 12 months but for more than three years. This is a serious problem, but the Government are not addressing it in a serious way.

[Paul Scully]

The hon. Lady might make a stronger case if she were looking at the unemployment figures alone. The fact is, however, that we now have record levels of employment in this country. They are at their highest since the statistics first started to be recorded. Does she not agree that that shows a move from unemployment to employment?

[Helen Goodman]

The statistics are quite dubious, in a number of ways. Let us consider, for example, the number of people who have gone into self-employment because they have not been able to find proper jobs, and the extent of under-employment.

[Paul Scully]

As someone who has been self-employed for the best part of 20 years, I find that quite offensive. Is the hon. Lady seriously telling her constituents that self-employment is not a proper job?

[Helen Goodman]

Is the hon. Gentleman aware that self-employment has increased by 42%? How many of those newly self-employed people does he think are in sustainable small businesses? People come to my constituency surgeries who have become self-employed and are working as window cleaners. That is fine—of course everyone needs to get their windows cleaned—but there is a limit to how many window cleaners we need in society. If people are coming out of highly skilled jobs and going into very low-skilled ones—[Interruption.] Conservative Members can protest as much as they like, but when the Treasury Committee took evidence from representatives of the Bank of England, they told us that a lot of the increase in self-employment was not real employment and that it was a sign that people could not get the kind of employed jobs that they wanted. Professor Kristin Forbes said precisely that to the Committee. Conservative Members do not need to pretend that this is some kind of prejudice on my part. It certainly is not.

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[Priti Patel]

We recognise that there are people who cannot work, as a result of illness, and they will be in the support group. They will absolutely be supported in that group, as is right and proper.

It is our responsibility to ensure that the welfare system is affordable and sustainable. Those on the Opposition Benches who oppose our making difficult decisions on welfare must say what they would cut or which taxes they would put up to pay for their proposals. The Bill will correct many of the unaffordable and disproportionate increases in benefits compared with earnings by freezing most working-age benefits. As we have said throughout the passage of the Bill, this will protect taxpayers from the cost of subsidising increasing social housing rents through housing benefit. Those rents have climbed by 20% since 2010, but we will now act to reduce them by 1% a year for the next four years.

The Bill will continue to restore fairness to the system. We do not think it is fair that someone on benefits should receive more than working households earn, and 77% of the public agree. The benefit cap reintroduced fairness. Reducing the benefit cap to £20,000—and to £23,000 in Greater London—reinforces and strengthens that message. The new cap better aligns the level with the circumstances of hard-working families across the country.

[Paul Scully]

Does the Minister agree that, as well as providing a fairer deal for the taxpayer and introducing a fairer, more sustainable system in order to help to pay off the deficit, this programme will help to encourage, nudge and support people back into work? Is that not better than just wringing our hands?

[Priti Patel]

My hon. Friend is absolutely correct. That is the whole purpose of what we have been doing through our welfare reforms. We are putting people first and providing the support they need to get back into work, in contrast to what we saw during the 13 years of the Labour Government, when people were trapped on benefits in a cycle of dependency, and trapped in poverty while having opportunities denied to them.

This Government are committed to working to eliminate child poverty and to improving life chances. Our new approach focuses on transforming lives, which is what the Labour Government failed to do through their arbitrary measures on poverty. We will tackle the root causes of poverty rather than focusing on the symptoms, as existing measures do. We saw the previous Labour Government’s pursuit of short-term, narrow and expensive policy solutions that attempted to lift incomes above an arbitrary line. They increased welfare spending by 60% in real terms—[Interruption.] That is a fact. They increased spending in an attempt to chase that moving poverty line, without driving any sustainable improvements in children’s lives.

In contrast, the Bill will place a duty on the Government to report annually on the key measures of worklessness and educational attainment. In these new life chances measures, we will focus on the root causes of poverty, rather than on the symptoms. That approach has been seen to fail—[Interruption.] The hon. Member for Islington South and Finsbury (Emily Thornberry) can shout all she wants, but these new measures will drive real actions and make the biggest difference to disadvantaged children now and in the future. We have also committed to publishing a life chances strategy—[Interruption.] What is embarrassing is that during 13 years, the Labour Government systematically failed to deal with the root causes of poverty or to change people’s lives by getting them back into work.

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[Paul Scully]

I regret the fact that, on Report, we have spent a lot of time—about a third of it—on yesterday’s debate. As important as that issue is, it has meant that we did not get to speak about our measures for full employment and for improving people’s life chances, especially with our troubled families programme. What I do not regret—in fact, I positively welcome it—is the clear and direct action taken by the Secretary of State for Work and Pensions and the range of Ministers who have worked incredibly hard so that Britain can deliver this Bill tonight.

The Bill means that, when we are looking at delivering a welfare programme, people who are in work and paying their tax will have the same expectations on housing and other choices when they have children as those who are not in work. The Bill is also for our children. We must pay off the deficit and, ultimately, our debt. By saving £12 billion through our overall package, we will be able to reduce the deficit significantly. Most of all, the Bill is about helping those who are most in need of our support. We have heard a lot of empty rhetoric from the Opposition parties, but what the Secretary of State and his Ministers have done in this Bill is to look at the underlying problems and at the underlying situation so that we can push people towards work. We will nudge, support and help them back into full employment. I very much welcome this transformational Bill.