Personal Independence Payment: Regulations

Toby Perkins Excerpts

Wednesday 29th March 2017 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I beg to move,

That this House has considered changes to Personal Independence Payment Regulations.

Thank you, Mr Speaker, for granting this vital debate on the new personal independence payment regulations. Although I welcome the opportunity to debate this issue, it is highly regrettable that the Government have had to be dragged to the House to be held to account for this nasty piece of secondary legislation.

As the House will know, the Government have ignored two urgent questions on this matter, an early-day motion signed by 179 Members calling for these punitive regulations to be annulled, and a 38 Degrees petition, signed by more than 185,000 people, asking them not to make the changes. When pushed at business questions on Thursday, the Leader of the House said there would be a debate, but could not say when. Only late last night did it become clear that the debate has now been hastily scheduled for 19 April. What particular kind of arrogance or disregard for democracy are the Government revealing? This does not bode well for their accountability to this place in the future negotiations.

For the record, we should note that today’s debate does not allow for a substantive vote on the regulations. As the Government have failed to allow a debate before the EDM praying-against period comes to an end on 3 April, the regulations will not be automatically revoked, should the House vote against them on 19 April. I would be grateful to the Minister for Disabled People, Health and Work if she explained why, given that we have risen early twice this week, the Government have been incapable of finding time for such a debate before the Easter recess. The Government are hoping that because they have delayed the debate, the objection to the regulations will be kicked into the long grass, but it will not be.

[Toby Perkins (Chesterfield) (Lab)]

On behalf of many of my constituents, I thank my hon. Friend for securing this debate. Does she agree that the very least we owe to people who find themselves, through no fault of their own, in the most difficult of circumstances is to tell them whether we have voted for decisions made in Parliament that are having an appalling impact on their incomes?

[Debbie Abrahams]

My hon. Friend makes an excellent point. That is what we have been trying to do since the emergency regulations were laid before Parliament.

Let us remind ourselves how the emergency regulations were introduced and what they have changed. The regulations, which were laid before the House on 23 February and came into force two weeks ago, amended the legislation under which disabled people or people with a chronic condition are assessed for eligibility for personal independence payments. The new regulations followed two upper tribunal rulings. The first judgment on 28 November 2016 held that needing support to take medication and monitor a health condition should be scored in the same way as needing support to manage therapy, such as dialysis, undertaken at home. The second, also on 28 November, ruled that people who find it difficult to leave their house because of severe psychological distress should receive the enhanced rate of support under the mobility component of PIP.

In a letter to me last week, the Secretary of State for Work and Pensions said that he became aware of the rulings on 8 December. Two and a half months later, the Government laid their emergency legislation before Parliament. I am sure that the irony of something taking two and a half months in an “emergency” has not been lost on you, Mr Speaker. During those two and a half months, not only were the Government unable to bring the regulations before the House, but they also bypassed their own Social Security Advisory Committee. They have ignored SSAC’s recommendations on wider engagement, testing or piloting changes, and the analysis of impacts.

Welfare

Toby Perkins Excerpts

Monday 21st March 2016 Commons Chamber

[Stephen Crabb]

That is a really important point from my hon. Friend, who serves on the Work and Pensions Committee and is very knowledgeable about these issues. It is not just about seeing more disabled people move into work—an increase in the number—we want to see more disabled people earning higher wages, too. I confess that I was not previously aware of the initiative he mentions, but I will certainly look into it to see whether we can expand it.

[Toby Perkins (Chesterfield) (Lab)]

I think my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) was being a little generous, because I am not sure we have even heard a change of tone today—we are hearing precisely what we heard under the previous Secretary of State. As we all know, the new Secretary of State is a patron of Pembrokeshire Mencap. Is he seriously telling us that in his listening exercises with its members they would have told him that they recognise what he said today, which was that the previous Secretary of State had a record to be proud of, that he transformed the lives of disabled people and that members of Pembrokeshire Mencap would be proud of the job he had done as Secretary of State?

[Stephen Crabb]

I am not sure whether the hon. Gentleman knows anyone from Pembrokeshire Mencap or has ever been to Pembrokeshire in his life. It is made up of a special group of people doing fantastic work, and I am very proud to have been their patron for the past 11 years, supporting them in all kinds of practical ways.

Inherited Social Housing Tenancies

Toby Perkins Excerpts

Monday 24th March 2014 Commons Chamber

[Esther McVey]

My hon. Friend is right that there are quite a few local authorities that have not spent the full amount, and it is that money that can be utilised here for those who have inherited a house or a property in that way. This is what the money is there for.

[Toby Perkins (Chesterfield) (Lab)]

A few moments ago, the Minister described this policy as “reaping rewards”. The people who are victims of the bedroom tax fiasco in my constituency would not consider that they are reaping rewards. Does she have any idea of how out of touch those on the Government Benches sound when they stand up at the Dispatch Box and tell my constituents, who have been plunged into poverty by their actions, that they are reaping rewards?

[Esther McVey]

Unfortunately, the thing that Opposition Members never did was to look at this issue in the round, in the full 360°, including looking at those living in overcrowded accommodation and those on waiting lists. Yes, there are people who want to remain in their houses, and that is why discretionary housing payments have been made. Equally, there is support for people to move and to house swap. Many people have said to me, “Actually, downsizing is something that we should have done a lot earlier. We never did that, and by downsizing we have a house in which our bills are cheaper and the cost of keeping it tidy is cheaper. In fact, everything is cheaper. We can now live within our means, which is something that we never did before.” We can help people in many different ways.

Mesothelioma Bill [Lords]

Toby Perkins Excerpts

Tuesday 7th January 2014 Commons Chamber

[Mr Brown]

The answer to that is that they did take the premiums and prior to 2007 there was an assumption that pleural plaques cases could go against the insurers. It was only the High Court 2007 judgment that put a stop to all that. The premiums did not have to be refunded; they were just kept. The figure I have for that is over £1.4 billion held by the insurers. If companies have taken premiums for something they are never going to have to pay out for, that seems to me to be a pretty good business.

[Toby Perkins (Chesterfield) (Lab)]

I also want to echo the comments of colleagues who have paid tribute to the work of my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), and to pay tribute to the work done by Derbyshire asbestos support trust. It has done tremendous work in supporting asbestos victims. It had 14 new victims in the last year and they continue to come forward. I am very pleased with what my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) has said about the moral case being made for these people, and I also entirely agree that we need to work these arguments out, make the moral case for these people and make sure they get justice as quickly as possible.

[Mr Brown]

My hon. Friend will have his share of constituency cases, just as I do, and for the same reason: the industrial heritage of his constituency. We know that the profile of the victims is forecast to be different from the historical legacy, but it depends on the effectiveness of the protection measures we as a House have put in place. That was done with all-party consent—in fact, I think I was the Minister who moved the last set of regulations covering asbestos. We do not yet know how effective they are, however. As has been said from the Opposition Front Bench, we expect the number of cases to peak about now—in a year or so—but we do not know that that will be the case. I hope it will be, but we need to maintain our vigilance. The new cases will come from building contractors, people dismantling, rather than erecting, structures, and people who have come into contact through, perhaps, thinking they were dealing with a solid piece of material and who then hammered a nail into it or scratched it and breathed in the dust.

Exposure once is enough to cause mesothelioma and the consequences are fatal, so it is important that we take this issue seriously. I know the Minister is doing so and that the House is attempting to do so as well, but I think we should have it in the forefront of our minds that we may be returning to this issue in future.

The scheme before us today is targeted on people in a very particular position: they cannot find an insurer or they cannot trace an employer.

Welfare Benefits Up-rating Bill

Toby Perkins Excerpts

Monday 21st January 2013 Commons Chamber

[Charlie Elphicke]

The hon. Gentleman makes the case better than I could about the extent of the mess left by the previous Government, which was such that recovery has been choppy. As the whole Committee knows, a recovery from a debt crisis is always much tougher, particularly when we also have the eurozone plunging into crisis because of its years of mismanagement. Unless we have sound money and ensure restraint in the public finances and growth in the private sector, we will not be able to turn the corner and get the economy growing and the nation’s finances in place. The economy is now starting to heal, but part of that involves building in an extra incentive to ensure that work pays—universal credit is part of that—and ensuring an extra incentive for those who are out of work and on benefits to go into work. We do that by not continuing with the over-generous benefits or over-uprating of benefits, as compared with what people in work have received, that we have seen in recent years.

[Toby Perkins (Chesterfield) (Lab)]

The hon. Gentleman is making the point strongly that it is important that we make work pay. On that basis, is he concerned that 60% of those affected by the clauses we are discussing today are in work, and that this Bill is making precisely those hard-working people on low and middle incomes worse off by being in work?

[Charlie Elphicke]

The hon. Gentleman well knows that this Government have taken many people on low incomes out of tax altogether. That is not something that his party did. Labour froze the personal allowance and, over time, had more people in the tax system relatively speaking. We have taken people out of tax, because we do not see the point in taking money off people in taxes and then handing their own money back to them. It is better not to take it off them in the first place.

The key point is that the Opposition are proposing to impose a cost of £3.5 billion. I ask them: where are they going to find the money? How will they pay for their spending pledge? If they want to pay for it through more borrowing—which always seems to be their policy—all they will do is raise interest rates for hard-pressed mortgage holders, small businesses and borrowers.

--- Later in debate ---

[Ian Mearns]

I have no doubt that that is the case. It applies to the north-east of England where the capacity of local authorities to help out local communities has been dramatically undermined—disproportionately, by comparison with other parts of the country.

This Bill provides yet another example of the Government demonising the most vulnerable in our society, making the poorest live in relative poverty. The Government’s decision to cap uprating on certain benefits and tax credits will, as confirmed only last week by the Minister with responsibility for disabilities, result in around 200,000 more children living in poverty. Let us bear in mind the fact that this is not the only policy forcing those on the lowest incomes into poverty. We need look only at the sprouting of food banks everywhere truly to understand the impact of this Government’s welfare agenda.

According to the Child Poverty Action Group report entitled “The Double Lockout: How local income families will be locked out of fair living standards”, this Bill

“is poverty-producing and means that both absolute and relative child poverty will increase”.

How exactly? First, delinking the uprating of benefits from increases in the price of commodities such as fuel and food will obviously result in a fall in standards of living for anyone dependent on state assistance. Given that two thirds of the households affected by the Bill have children in them, it is not hard to understand why child poverty will increase. Furthermore, given that proportionately poorer households spend more on basics such as fuel, food, water and other households necessities, their rate of inflation is higher when the prices of those basic goods increase faster—a trend we have seen over recent years.

In the last few months we have seen utility companies hiking up their prices—the highest change we have seen is about 10.8 or 11%. How on earth are the low paid and those out of work supposed to heat their homes if their benefits are not increased in line with inflation? We are going to see families—we are already seeing them—having to make the difficult choice between eating or heating.

The Children’s Society estimates that the following professions are also affected: 300,000 nurses and midwives in the NHS; 150,000 staff in primary and nursery schools; 1.14 million admin workers, secretaries and secretarial assistants; 44,000 electricians and electrical fitters; 510,000 sales assistants and cashiers; and 42,000 armed forces personnel.

[Toby Perkins]

Does not that list of people in those professions that are going to be badly hit fundamentally undermine the idea that the Bill is really about incentivising lazy people to go and get a job, which will happen only if the incentive system is made a little bit nastier?

[Ian Mearns]

I think it is the ultimate insult to ordinary people’s intelligence to say that in order to incentivise those at the top end of the economy we have to pay them more, while incentivising people at the bottom end by paying them less. “We are all in this together”—I don’t think.

By no stretch of the imagination should these hard-working people—all those I have just listed—be regarded as shirkers. The Joseph Rowntree Foundation estimates the cost of child poverty to the taxpayer as £25 billion, despite the fact that 57% of children living in poverty have one parent working. Surely increasing the number of children suffering from child poverty, which is what the Bill will do, will take more out of the Treasury’s coffers in the long term than would be saved from capping the uprating.

--- Later in debate ---

[Mr Redwood]

I think it would be a good idea for us to start by working out what we agree about, because during debates such as this the House sometimes becomes very tribal. It seems to me that we agree that we hate poverty, and that that is true not just of the Opposition but of the two governing parties. We see poverty as a scourge. We come here to promote and support policies that will make people better off and improve their living standards—of course we do—and today’s debate is about how we can achieve that in very straitened and difficult circumstances.

I should have thought it was common ground that we need to ensure that it is more worth while to work. In order to ascertain whether that is common ground, I intervened on the right hon. Member for East Ham (Stephen Timms)—who was very eloquent—and he said that that was indeed Labour policy as well as Conservative and Liberal Democrat policy. So we agree that we want to get rid of poverty and that we need to make work more worth while. That is where our Ministers are faced with a difficult dilemma. Last year’s benefits uprating occurred at about the peak of the spike in inflation and so benefit recipients got the 5.2% increase whereas low-paid people working alongside them in their local communities got perhaps 1.7%, if they were lucky—that was about the average. Suddenly, in one fell swoop, people were 3.5% worse off in work than out of work because of the normal uprating.

[Toby Perkins]

What the right hon. Gentleman has just said is fundamentally untrue. Just because the percentage rise for someone on £71 a week is more than that for someone on £35,000 a year does not mean that they are better off. Will he correct the record on that point?

[Mr Redwood]

No, I am talking about people in very similar circumstances—those either in low-income employment or out of work—where the two numbers are much closer together. They are closer together than any of us would like, because we want it to be that much more worth while for people to work. The hon. Gentleman has to accept that, at the lowest income levels, there was a problem because the benefits went up by much more than the wages. What would the best answer be? It would be for all wages to go up more. The second best answer would be for the prices not to go up so much. But we are where we are and we have to work to try to come up with a fair settlement for the future.

--- Later in debate ---

[Andrew George]

But when does the crisis end? The figures produced by the Office for Budget Responsibility estimate that in three years’ time, wages will exceed CPI. One has to examine the matter over a much longer period. The Conservatives paid for some posters a couple of weeks ago to make the point that it was unacceptable for benefits to rise faster than wages, and the amendment would deal with that issue.

I said earlier that one big weakness of the Government’s proposal, and the reason why I opposed it, was the inflexibility of the 1% uprating. It takes no account of what may happen to food prices, for example, by 2015-16. It is all very well having a Bill that takes a clairvoyant view that a 1% increase will not press large numbers of working families, as well as out-of-work families, into severe and extreme hardship. However, we have experienced this year in the UK the impact of significant volatility in our climate. There has been significant climate change, which is having an impact on the food baskets of the world, including those in many developing countries and here. We therefore need to ask ourselves whether we can confidently say that there will not be food price spikes such as we saw only a few years ago. I suggest that we may see such spikes again. There is also tremendous concern about the potential volatility of energy prices. The 1% uprating figure is inflexible and somewhat arbitrary, and we cannot say with confidence that we will not need to introduce further primary legislation to revise that figure in 2016.

We must also consider the impact of the 1% uprating on housing. In their emergency Budget, the Government proposed to cut housing benefit from the 50th percentile of rents to the 30th percentile. Whether or not we like the fact that only 30% of the private rental market might be available to people in receipt of housing benefit, rather than half of it, it is essential that the rate is linked to the variation in private sector rents. The 1% uprating will break the link with what is available in the market and instead peg housing benefit back. In my area, and I know in many others, the Government’s attempt to peg it back by cutting the rate to the 30th per- centile of rents has failed to constrain private sector rents, so it has not had the desired impact. Maybe it has in some areas, but certainly not in mine or many others.

The measures that the Government have brought forward in the Bill have been ill thought through, and I fear that we will have to reconsider the figure set out in it next year or the year after. On that basis, we will listen to what the Minister says in response to the debate before we have the opportunity to divide the Committee on the amendment.

[Toby Perkins]

It is a great pleasure to follow the thoughtful and useful contribution of the hon. Member for St Ives (Andrew George) and the contributions of other hon. Members.

One thing that has come across in the speeches of Members on both sides of the Chamber is the economic illiteracy of the Government’s policy as part of a strategy for reducing the deficit. As other Members have said, one of the great things about welfare payments is that when people are living on the bread line, the money that they receive is spent in the local economy, often within their own community or on their own estate. They spend it at their local convenience store. They tend to spend it the minute they get it, rather than put it in trust funds, because they are attempting to sustain their life on the bread line.

When money is taken from the poorest in our society and at the same time given to the very wealthiest in our society, as was mentioned earlier, we are taking money away from people who will spend it in the real economy and giving it to people who are much more likely to take it out of the real economy and not spend it. It makes no economic sense, even on the basis that the Government are introducing this measure to reduce the deficit.

[Kwasi Kwarteng]

I still have not heard what exactly the Opposition would propose to reduce the deficit. Surely the hon. Gentleman will admit that there must be some reduction in public spending.

[Toby Perkins]

As Members on the Government Benches are fond of reminding us, at one point they thought that the original plans of my right hon. Friend the Member for Edinburgh South West (Mr Darling) were not paying off the deficit fast enough. We now see, however, that under those plans we were actually paying off the deficit faster than this Government are doing. The fact that the Labour party was going to make tough decisions is reflected in a whole number of ways, and we supported—with tremendous reluctance—the very small uplift in public sector pay. We heard from the hon. Member for Brighton, Pavilion (Caroline Lucas) a shopping list of things we should be asking for and ways in which she felt we did not go far enough.

The Labour party recognises that tough choices need to be made, and it agreed to a whole raft of things in all the discussions on welfare. When I go back to my local party, the members ask, “Why are we agreeing with these things?” I say, “Look, it is very difficult. We would always like to make certain different decisions but”—

[Andrew Bridgen]

rose—

[Toby Perkins]

Let me just answer the point raised by the hon. Member for Spelthorne (Kwasi Kwarteng). We would always like to make different decisions, but we are not always in a position to do so. There is a raft of things with which we have agreed that we would not have wanted. We have seen, however, from the policies that the hon. Gentleman has so loyally supported time after time, that when we pursue austerity to the extent that he has been happy to support, demand comes out of the economy. Various retail businesses have gone bust and people are losing their jobs. A huge number of people in the public sector who were consumers are now not spending money, and the level of borrowing that the Government predict is higher than the Labour party proposed under its policies.

[Mark Reckless (Rochester and Strood) (Con)]

Is the hon. Gentleman seriously blaming firms such as Jessops and HMV for going into administration on the Government’s austerity programme?

[Toby Perkins]

On the specific issue of whether HMV has gone bust purely as a result of the economic circumstances, no, that is not the case I am making. However, when a raft of retail organisations go into administration, and when we see in many town centres—happily, not in Chesterfield because of the progressive policies of the Labour council—a huge number of empty shop units, it is perhaps time to start considering whether the economic policies pursued by the Government may have some sort of link to the economic success of our businesses.

[Julie Hilling (Bolton West) (Lab)]

I am following what my hon. Friend says and I absolutely agree that cuts have to be economically competent. The International Monetary Fund has already warned the Government that the annual cut of £24 billion to benefits and tax credits will reduce economic output by up to £40 billion.

[Toby Perkins]

That very important point underlines much of what I am saying. When hon. Members talk about benefits rising faster than earnings, we have to understand that each one of us needs basic things to stay alive. We need to have enough food to eat and put in front of our children for them to survive; we need clothing so that we can go out in the street; and we must be able to afford transport to get to job interviews.

[Several hon. Members]

rose—

[Toby Perkins]

I would like to finish my point. I am glad that my comments have elicited so much excitement and that lots of people want to intervene. There are basic things that we need in order to sustain life, and if someone is on poverty money—the hon. Member for Dover (Charlie Elphicke) said there are 600,000 people in severe poverty—their 1% increase cannot be compared with a school teacher, for example.

[Mr David Anderson (Blaydon) (Lab)]

Or an MP.

[Toby Perkins]

Such increases cannot be compared with how a Member of Parliament is able to sustain small increases. There is no comparison between what someone in severe poverty is able to cut and the situation faced by public sector workers, despite their currently being hard pressed, as many will testify.

[John Howell (Henley) (Con)]

Has the hon. Gentleman taken into account in his figures the impact of universal credit, which will lift 900,000-plus people out of poverty?

[Toby Perkins]

We have heard a lot of talk about universal credit but we still lack a lot of the detail. Given the record of the Secretary of State for Work and Pensions and the most catastrophic Work programme in history, if I were the hon. Gentleman I would not have much confidence in the success of the policies pursued by the Secretary of State until he has seen what the Government deliver.

[Dr Hywel Francis (Aberavon) (Lab)]

My hon. Friend is making a series of interesting points. Does he agree that the insufficient time allowed by the Government to scrutinise these changes—eight days between Second Reading and the remaining stages of the Bill—does not allow us to scrutinise and ask the Government questions about why, for example, they are treating categories of disabled people differently and why they do not recognise that they may be breaching United Nations conventions relating to the rights of children and disabled people?

[Toby Perkins]

That is an incredibly powerful point. My hon. Friend probably thinks—as I do—that we are being given so little time to scrutinise those issues because this is an entirely political Bill. It is not an economic Bill or something put together and discussed on the Floor of the House because the law needs to be changed. It is being done for entirely political reasons, and the minute that the Opposition said—to their tremendous credit—that they were going to oppose it, the posters were already up and ready because they had been designed in advance. This was an entirely political manoeuvre that had nothing to do with comments that might be made by the United Nations or any of the details of it.

I want to return to the issue of benefits rising faster than earnings.

[Richard Graham]

rose—

[Toby Perkins]

I am pleased to see the hon. Gentleman in his place. The past two times that he has been billed to appear he has not actually been present, so now that that he is here I will definitely allow him to intervene. However—perhaps he will reflect on this—the central point of the whole debate seems to be that benefits claimed by someone on £71 a week can be compared with the earnings of a school teacher or a doctor in a hospital, and that a 1% rise is the same to someone on jobseeker’s allowance as to someone working in the public sector. Will the hon. Gentleman at least accept that they are not the same thing?

[Richard Graham]

I am very grateful to the hon. Gentleman for letting me intervene and I will come straight to his specific point. It would be interesting if he came to meet some of my constituents who work in the public sector in Gloucester. We have over 20,000 people working in the public sector—as I used to—and most of them are seeing no increase in their salary whatsoever, with a cap at a maximum of 1%. The hon. Gentleman appears to be supporting an increase of 2.2%—more than double what those in work will be getting—for those who are out of work. I would like him to respond to a constituent of mine who wrote to me. She is a retired nurse—

--- Later in debate ---

[The Temporary Chair]

Order. Will the hon. Gentleman sit down?

[Toby Perkins]

It is almost as though the last two minutes of my speech did not exist. I had answered the hon. Gentleman’s point before he made it and I have no idea why he felt the need to intervene when I had specifically dealt with that issue—[Interruption.] I have already dealt with that point. We just cannot compare what 1% means to someone on £70 a week with what it means to a doctor. People on poverty money and in severe poverty have not got lots of options as to what they can cut back. They cannot decide, “Well, I’m only going to have one holiday this year”, as those whose jobs are more lucrative might be able to do. Interruption.] I have reflected on that point and I think I have answered it at some length.

There is a particular irony in the Chancellor, who was a millionaire the day he was born, railing against the extravagance of those on £71 a week. The debate needs to be put in proper context.

[Kwasi Kwarteng]

Will the hon. Gentleman give way?

[Toby Perkins]

I will take further interventions, but I would like to crack on a bit now.

The 1% increase comes on top of a raft of difficult choices on benefits, including housing benefit cuts, tax credits cuts and council tax benefit cuts, at a time when there is increasing poverty, including severe poverty and child poverty. Specifically, there is an increase in poverty among those in work. That is the context in which this debate is held, and the reason why the Labour party has taken the stance it has. No one should be in any doubt that, in taking that stance, the Labour party recognises that there is tremendous contention about benefits, and that many feel just like the hon. Member for Gloucester (Richard Graham) and his constituent. I recognise that many people in many communities feel that way, and therefore how difficult it was for my right hon. Friend the Member for East Ham (Stephen Timms) to take that principled stance.

[Susan Elan Jones (Clwyd South) (Lab)]

I am not sure whether my hon. Friend could hear the hon. Member for Gloucester (Richard Graham) say a second ago from a sedentary position, “What’s your solution?” Surely the Opposition’s solution is to help families such as the 8,600 families in his constituency who receive in-work tax credits. The hon. Member for Gloucester seems silent now.

[Toby Perkins]

My hon. Friend makes a valuable point. Perhaps Government Members’ strategy is to follow Mitt Romney, who said that anyone who receives any welfare should be written off because they will never vote for the right-wing party. It did not work particularly well for Mitt Romney, but perhaps that is the electoral strategy of the hon. Member for Gloucester.

[Richard Graham]

rose—

[Toby Perkins]

The hon. Gentleman is about to tell us what he will do for the 8,600 people in his constituency who will be worse off as a result of the vote he will cast tonight.

[Richard Graham]

I thank the hon. Gentleman for his generosity in allowing me to intervene a second time, but the answer to him and the hon. Member for Clwyd South (Susan Elan Jones) is that, on the question we are debating, I have not heard their proposal. Does he agree with the hon. Member for Brighton, Pavilion (Caroline Lucas) that the solution is to peg those benefits for ever to the retail prices index, so that people who are out of work can continue to have annual rises three times higher than those who are in work? While the hon. Gentleman is advocating that my public sector workers should continue to lose out relative to people who are on benefits, I am proud that the Conservative party has left 35,000 people with lower tax bills.

[Toby Perkins]

The hon. Gentleman was silent on the 8,600 people in his constituency who will be worse off as a result of the vote he will cast tonight, but the Opposition’s proposals are clear in the amendment. I will touch on this in more detail, but one interesting thing is the extent to which the Chancellor, for reasons best known to himself, has chosen to handcuff himself to a level of benefit increase for year after year when he has no idea what the level of inflation will be—the hon. Member for St Ives made that point.

[Several hon. Members]

rose—

[Toby Perkins]

Let me make more progress before I let hon. Members intervene again.

One issue I have raised previously in the context of the Bill is housing benefit changes. Last week, I met Chesterfield borough council officials to discuss the impact of the bedroom tax, which will hit people across Chesterfield in April. The council knows it faces a time bomb as people who cannot afford to pay their rents are told that there is a shortage of smaller properties for them to move to. Many of those people are at the back end of their working careers, and are either not working or in part-time employment. The council is budgeting for a situation in which around a third of them will fall into arrears—their housing-related benefits will be reduced and they will no longer have enough to pay their rents—and the Government are increasing the discretionary payment to allow councils to meet the costs of some who fall into that situation, which is a totally illogical policy. People who have been council house tenants for many years will fall behind, and the Government will give money to councils to bail them out. At the same time, the Government will hit them on housing and council tax benefit, and on tax credits. They are saying, “Those payments have already been cut, but they will now be increased by less than the rate of inflation.”

[Mr Marcus Jones]

A thread running through the hon. Gentleman’s speech is how we help the lowest paid. Does he agree that the coalition Government are helping the lowest paid in his constituency, because in April 3,880 of his constituents will be lifted out of income tax altogether, like 3,168 people in my constituency?

[Toby Perkins]

I welcome any measure that makes people better off, but the hon. Gentleman is entirely wrong if he thinks those being lifted out of tax are the lowest paid—they are not. Many who are earning less than them will get no benefit from the increase in the tax threshold. The people being lifted out of tax are not the lowest paid, although I recognise that they are on modest incomes.

[Charlie Elphicke]

More than 30,000 people in the hon. Gentleman’s constituency have seen their pay go up in recent years by just 10%. They are in work and striving to get by. How can he justify asking them to pay more taxes and provide more money for people on benefits when the latter have had a 20% increase in the same period? Is that not unfair on working people?

[Toby Perkins]

One point I have laboured is that hon. Members cannot compare in percentage terms the difference the Bill will make for someone on £70 a week and someone on £35,000 a year. The hon. Gentleman seems to be attempting to make such a comparison, but as my right hon. Friend the Member for Birkenhead (Mr Field) related previously—

[Kwasi Kwarteng]

Will the hon. Gentleman give way?

[Toby Perkins]

I will answer the ill-advised point made by the hon. Member for Dover (Charlie Elphicke) before I take another intervention.

As my right hon. Friend the Member for Birkenhead has said, in cash terms—we should bear in mind that we buy food and clothing for our children with cash— people on benefits have had an increase of £12 a week; at the same time, working people have had an increase of £49 a week. It is impossible to make the comparison in simple percentage terms. That is one of the central points of my speech, but I have dwelt on it rather too much. I keep returning to it because hon. Members who intervene seem not to hear it.

[Several hon. Members]

rose—

[Toby Perkins]

I will crack on, because I have not taken a useful intervention from Government Members yet, and other hon. Members want to speak.

Many of the people I meet who face this financial calamity on the horizon have worked most of their lives. The people I meet who have worked for 30 years and then gone on to benefits are overwhelmed not by the generosity of benefits, but by the difficulty of getting by. They believe there must be an alternative benefits system that is incredibly generous—that is the one they read about in the papers—because it is tough to get by on the benefits that they receive.

When we talk about the benefit bill, the most fundamental question we must confront is where the money goes. Most of it goes not into the pockets of benefit recipients, but into the pockets of landlords. The Thatcher Government introduced the right to buy. That was a good thing, but they did not have a corresponding scheme to replace the social housing that was lost, and there was chronic under-investment in the remaining stock.

The Blair Government rightly prioritised the refurbishment of social housing up to the decent homes standard over building new homes, but many Labour Members believe they took too long to take the housing shortage seriously. Although much of that was hidden during the good times, the welcome steps introduced by the Brown Government were too late and too slow to stop the housing crisis from escalating. Whomever we blame for the huge inflation in private rents, the people who claim housing benefit, whether they are working or not, are not to blame.

[Dr Huppert]

Will the hon. Gentleman give way?

[Toby Perkins]

I will try to plough on if I may, because many hon. Members want to speak, and I sense the Opposition deputy Chief Whip—my hon. Friend the Member for Tynemouth (Mr Campbell)—glaring at me with intent.

In a raft of ways, tax credits cuts will hit people on low to middle incomes. By anyone’s definition, they are the thrifty, hard-working strivers that people across the political divide recognise are key to the country’s future prosperity, but they will be badly hit by the Bill.

Once again, women and children will be hit worst of all. The Government’s strivers tax will hit women particularly hard—4.6 million women who receive child tax credit will be hit by the strivers tax, including 2.5 million working women. All those will come together as the perfect storm. The 1% uplift is nothing but a blunt political instrument designed to create a political trap that has nothing to do with a nuanced benefits system, with all its complexities.

The Child Poverty Action Group has said that the 200,000 increase set out in the written answer from the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey) should be added to the increase of 800,000 in children in relative income poverty by 2020 that the Institute for Fiscal Studies found in its analysis of the coalition’s welfare cuts. Let us remind ourselves of what the Prime Minister used to say about relative poverty. In 2006, he said:

“I believe that poverty is an economic waste and a moral disgrace. In the past, we used to think of poverty only in absolute terms—meaning straightforward material deprivation. That’s not enough. We need to think of poverty in relative terms, the fact that some people lack those things which others in society take for granted. So I want this message to go out loud and clear: the Conservative party recognises, will measure and will act on relative poverty.”

That is the manifesto on which Conservative Members were elected, and that was what they used to believe, but that is what they will vote against tonight when they support the Bill and reject the very reasonable amendment moved by my right hon. Friend the right hon. Member for East Ham (Stephen Timms).

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

I shall be brief as we are all conscious that we are increasingly up against the clock. I followed the progress of the argument and analysis by the hon. Member for Chesterfield (Toby Perkins) with some interest. Had his predecessor in that seat been here tonight, he would most certainly have voted for the Liberal Democrat amendment, so I hope that the hon. Gentleman will maintain that proud Chesterfield tradition and join us in the Lobby later this evening.

As one who—like so many of my right hon. and hon. Friends—applauds so many of the initiatives that the coalition has been able to take, specifically in the field of social policy, I think that the input from the Liberal Democrats has been significant, not least from my hon. Friend the Minister of State who will have the arduous task of replying to the very wide diaspora of this debate later this evening. That input includes taking low-paid people out of tax altogether to moving in the direction of universal credit—I do not take the jaundiced view of many as to its prospects. I am delighted that the Secretary of State for Work and Pensions is in his place, because if we find, a little further down the track, that a little more constructive pressure needs to be placed on the Treasury to make things work that little bit better, he can certainly count on support from these Benches, because we think that the direction of travel on universal credit is very good. However, my hon. Friend the Member for St Ives (Andrew George) pointed out that the Bill sits at odds, both practically and philosophically, with developments of that type. He used the phrase “a blunt instrument” and I think that is a fair description. Our amendment would maintain a responsible position in relation to the wider issue of the deficit—and deficit reduction policy—in that benefits would not rise at a higher rate than earnings. That is responsible, consistent and a constructive contribution to the debate this evening.

[Toby Perkins]

The right hon. Gentleman just described his amendment as a Liberal Democrat amendment. Can he confirm that all the Liberal Democrats will vote for it?

--- Later in debate ---

[Steve Webb]

It is disgraceful, as my hon. Friend says.

The second question that has arisen is why the Bill is necessary. It has been suggested that the Bill is simply a political device, but that draws a veil over the fact that we are dealing with one of the biggest deficits in peacetime history. To listen to the Labour leadership, one would think that they took such matters seriously. The leader of the Labour party said on “The Andrew Marr Show”, in an interview, I think, with James Landale:

“So when it comes to the next Labour government, if I was saying to you, ‘I can absolutely promise to restore this cut or that cut’, you would say ‘Well, where is the money going to come for that?’...We are absolutely determined that Labour shows we would be fiscally credible in government.”

We have not heard a lot of that today. The shadow Chancellor has said:

“The public want to know that we are going to be ruthless and disciplined in how we go about public spending”.

In fact, we have heard speech after speech calling for the Bill to be scrapped but there has not been a hope of hearing where the money would come from.

The Bill and related measures save £3.6 billion. When I challenged the shadow Minister, the right hon. Member for East Ham (Stephen Timms), about where that money would come from, he said—I paraphrase—“We wouldn’t start from here.” I am afraid that the Opposition have to do rather better than that.

[Toby Perkins]

rose—

[Sheila Gilmore]

rose—

--- Later in debate ---

[Steve Webb]

Not for the moment.

We have a target for 2015-16 of £10 billion of spending reductions. We have not yet found that £10 billion. Even with this Bill, we are on about £6 billion, and without the Bill and related measures we would be down to about £3 billion. The challenge for Opposition Members who have said that taking money away from benefits takes spending power out of the economy is that so do other forms of spending cuts. If the money comes not from benefits but from local government, that will be money out of the local economy; if it comes from infrastructure projects, that will be money out of the local economy. There is not a free way of finding money without any impact.

Let me deal first with amendment 12, tabled by the right hon. Member for East Ham. My hon. Friend the Member for Gloucester (Richard Graham) put it very well when he said of Labour that there is a vacuum where there should be a policy. That is a metaphor for the Labour party. In relation to a Bill that says that benefits and tax credits should go up by 1%, the amendment would take out the figure of 1%, so what would be left? Presumably, “Benefits should go up” but by how much? Perhaps by a fraction of 1%—we do not know. The amendment is incoherent; it would take something out and put nothing in its place. It would remove the heart of the Bill but gives no guidelines on whether the figure should be below inflation or above inflation, below earnings or above earnings.

[Toby Perkins]

As the right hon. Member for Wokingham (Mr Redwood) and the hon. Member for St Ives (Andrew George) said, the Chancellor sets a Budget every single year, and the benefit uprating will have to be relevant to whatever else has happened in the economy by taking into account inflation, wage inflation and so on. There is no need for this Bill now because we have a Budget every single year. Surely that is the central point.

[Steve Webb]

The hon. Gentleman was not listening. The point about establishing a long-term fiscal framework is that it has to be credible; if it could be changed every year, it would not be credible. The whole reason we are able to keep interest rates low—[Interruption.] The hon. Gentleman is saying, “Why not change it every Budget?”, but that would not be credible for the long term.

[Toby Perkins]

rose—

[Steve Webb]

No, sit down. We need credibility for the long term.

[Toby Perkins]

On a point of order, Mr Amess. The Minister is misquoting me, so let me clarify this. I said that if it was all about stability, why do we have a Budget every year instead of setting three-year budgets, which would reflect that fact?

[The Temporary Chairman (Mr David Amess)]

That is not a point of order—it is a point of debate.

Remploy

Toby Perkins Excerpts

Tuesday 16th October 2012 Westminster Hall

[Mr William Bain (Glasgow North East) (Lab)]

It is a pleasure to serve under your chairpersonship, Mrs Osborne, for what I believe is the first time—I hope that it is not the last time—and it is a pleasure to have secured this debate on behalf of the more than 1,421 people at Remploy factories across the country whose jobs have gone, or will be at risk by the end of the year, in particular the staff who have worked so hard in the Springburn factory in my Glasgow constituency.

Stage 1 of the Department for Work and Pensions process is set to lead to the closure of up to 30 factories by the end of the year, with decisions still due on Barrow, Bridgend, Bristol, Chesterfield, Poole, Croespenmaen and Springburn, as well as on the Cook with Care business. A further 18 factories are under threat of closure by 2015. With as many as 6 million people across the country trapped in joblessness or under-employment because they are unable to find full-time work, and with the Office for Budget Responsibility reporting this morning that the Chancellor’s austerity measures may have stripped even more demand out of the economy than even it expected in June 2010, sustaining good-quality, full-time jobs in manufacturing, particularly for disabled workers, must be a priority for any Government.

In my constituency, 19 people are chasing every vacancy advertised in local Jobcentres Plus, but the situation is even worse for people with a disability. According to the labour force survey, the employment rate gap between disabled and non-disabled people has narrowed slightly over the past decade, by about 5.8%, but it still stands at a staggering 29.9%, in 2012. Only 46.3% of disabled people are in employment, compared with 76.2% of non-disabled people, and disabled individuals are twice as likely as the rest of the work force to need full-time rather than part-time jobs. Without alternative jobs for disabled people to go to, the effect of closing Remploy factories will be to consign those people to a greater likelihood of a future of long-term unemployment, and a greater chance of ending up in poverty, when what they want and deserve is the opportunity to work.

When the Government began the process of factory sales and closures, they relied on the figure that each job supported by Remploy involved a taxpayer subsidy of £25,000 a year, and the Sayce report came up with a figure of a £22,700 annual subsidy per job. The methodology, however, which is based on dividing the total Government subsidy for each scheme by the number of employees, has been queried as a crude measure of the cost per employment place, by the fact-checking organisation Full Fact, among others. It does not account for the different infrastructure costs and asset values that each model is likely to accrue and, similarly, the Government cannot provide data on whether those whose jobs are at risk at Remploy would necessarily find work under the Access to Work programme.

Members are already encountering testimony from constituents who have been laid off by Remploy that shows that the measures promised by the Minister’s predecessor to support them back into work have simply not yet appeared on the ground. Sacked workers with severe learning difficulties are turning up at Jobcentres Plus without a clue about what to do or what the future will hold. Surely disabled workers who have offered years, and in some cases decades, of service, deserve better than that. Should not a Government with a proper moral compass be moving more quickly to end the appalling scandal of sacked workers being given emergency tax codes and suffering the indignity of paying more than half of their final pay packets out in tax, at a time when the Government are cutting taxes for the super-rich?

Like many Members with Remploy factories in their areas, or with constituents employed in a nearby factory, I have been working with the management, the work force and excellent local GMB and Unite trade union officials to reach a settlement that will ensure a durable future for the factory. In the tendering process, the priority has to be to guarantee the viability of the job of every disabled person working for Remploy. I remain hopeful that the strength of the record of the skilled work force in Springburn, in productivity and innovation, will ensure that, once the due diligence stage is completed by Remploy Ltd, the factory will have the opportunity for long-term growth under new ownership.

The local factory in my constituency specialises in the assembly and manufacture of high-quality wheelchairs for use by NHS patients. Once the issue of ownership is settled, there is much that this Government and the Scottish Government can do to help grow the business for the future by better use of procurement processes, within the rules set by the European Union, to ensure that through the application of article 19 of the EU public procurement directive, supported employment workplaces can properly compete for public sector contracts. The Scottish Government could be more creative and proactive in their use of procurement processes within the NHS in Scotland and other public agencies to generate more contracts and more work for the Remploy factory in Springburn.

The UK Government could undertake a similar process to boost demand in supported employment workplaces elsewhere in the UK.

[Toby Perkins (Chesterfield) (Lab)]

My hon. Friend has been working incredibly hard on behalf of his constituents in Springburn, and we have been speaking a tremendous amount about this matter because both our factories—his in Springburn and mine in Chesterfield —are under the Remploy Healthcare banner. We agree entirely about the role of Government, but does he also agree that there needs to be a real collective working together by the management, the Government and the trade unions to ensure that the work force, who are under tremendous stress at the moment, feel empowered and involved in this process and have an understanding about what the long-term future might hold? Recent events have been incredibly stressful for those people, and have led to difficult working circumstances for them.

[Mr Bain]

I entirely agree with my hon. Friend. There has been an impression of a lack of transparency about the way in which this tendering process has operated, which means that lessons could be learned for stage 2 for the other factories that are under threat.

I am aware that the Minister cannot provide guarantees that there will not be any compulsory redundancies, but I hope that she will be able to assure us that the Government will strive to ensure that as many as possible of the disabled workers at Remploy Springburn and the other factories involved in the current tendering process keep their jobs under any new ownership.

Will the Minister also provide a guarantee that TUPE regulations will apply to any sale of the Springburn Remploy factory and any of the others involved in the current tendering round and in any future round of tendering for those factories potentially involved in stage 2?

The right to a fair and stable pension matters greatly, especially to disabled people with higher living costs. Will the Minister guarantee that the current accrued pension entitlements up to the point of transfer will be honoured by any new owners of Springburn Remploy and the other factories in the current tendering round? Will she further outline what minimum criteria for future pension entitlements of current staff and of any new staff in the future the Government will insist on from future Remploy factory owners, mutualisations, leases, or employee buy-outs if the fair deal for staff pensions policy is not to apply to this tendering process?

There are some serious questions to answer about the conduct of this tendering process. Given the shambles that we have seen elsewhere in government over railway franchising, is the Minister content that this process has been conducted in a procedurally and legally watertight manner? Is she sure that there are no grounds for disappointed bidders to challenge the way in which this has been conducted? Will there be a full external audit of the process that both the public and the Members of this House can have confidence in? Is she satisfied that the 90-day consultation is anywhere near adequate? The Sayce report makes it clear that a consultation period of no less than six months is required to help bidders or employee-led buy-outs put together proper business plans to save factories. Why, for example, did the Minister’s predecessor not provide me with any information on the Springburn factory’s profitability, despite repeated requests in writing, whereas she was happy to comment on the financial position of other factories in her original statement? What lesson have the Government learned about providing additional support for management-led or employee-led mutualised ownership of Remploy factories beyond that which her predecessor was prepared to offer earlier this year? Will greater consideration be given to leasing factories to local authorities, other public agencies or even the devolved Administrations, if that might help save jobs or reopen factories, as is hoped in Wrexham?

Households with a disabled person are more likely to live in poverty than those without a disabled person. The hundreds of disabled people who work for Remploy deserve more certainty about their future than the Government have been able to provide to date. The critical thing is not only the ownership of the factories and finding jobs for those Remploy workers who have already, tragically, been laid off after the Government’s wilful refusal to listen and protect proper rights at work for Remploy staff. It is also the procurement procedures that public bodies apply to ensure that supported employment workplaces get a fairer deal for the future. That is the challenge for the Government and their devolved counterparts elsewhere in the UK.

--- Later in debate ---

[Esther McVey]

Recognising the need to ensure proposals were robustly addressed, an independent panel was set up to provide independent assurance to the assessment process, and the panel is playing an active part in what went on. I can write to the hon. Gentleman with further clarification on that, but that was one of the key facts.

There was also encouragement of employees and employee-led groups to take advantage of a £10,000 support fund for expert advice, and also a time-limited tapered wage subsidy of £6,400 to successful bids to keep on disabled members of staff. That came about because of Remploy and the Department’s responses and the various people who came forward to look at that.

On the factories that the hon. Member for Chesterfield (Toby Perkins) mentioned—Chesterfield and Springburn —discussions are going forward. Information was put on the Remploy website in September. Nothing has been finalised yet. It is going through due diligence at the moment, but it is in best and final offer stage and getting all the support it needs. We are still waiting on facts.

[Toby Perkins]

To return to the process, my hon. Friend the Member for Glasgow North East (Mr Bain) asked whether the Minister was satisfied that there was no threat of legal recourse from disappointed bidders and that the process was robust. I want to clarify whether the Minister is satisfied that the process was robust and that she is happy to take responsibility for it going forward, and that, as far as she is concerned, we are not going to come back to a west coast main line situation in which everyone says, “It was not my fault”. As long as she is happy and the process is robust, she can take responsibility for it.

[Esther McVey]

I have held numerous meetings on the matter. I have asked the very same questions that the hon. Gentleman has asked. I have felt reassured by the answers I have been given. Remploy announced and published the commercial process on 20 March and the company has been following that process. We are aware that some people and some bidders may be disappointed, but we are content that the commercial process has been followed. So I hope that gives the hon. Gentleman suitable comfort about what is going on.

A substantial package of help and support for employees has been put in place. An extra £8 million has gone into that package. People will get their own personal caseworker, who will give them tailor-made support and help them to move forward.

The hon. Member for Glasgow North East asked several questions. One was about the emergency tax code. That was brought to my attention last month and immediately my team and I worked with Her Majesty’s Revenue and Customs to get it sorted so that the Remploy staff and their caseworkers knew what would happen and they would have their money back as soon as possible, so special measures were put in place absolutely immediately. I also checked that the staff would have money and would not be short. They would all have had their redundancy pay packages, so they would have money to live on—it would be fine—but this was put through as a special concession.

Specialist Disability Employment

Toby Perkins Excerpts

Tuesday 10th July 2012 Commons Chamber

[Maria Miller]

I am glad to commend my hon. Friend’s work and I am looking forward to visiting the project in his constituency. He highlights the importance of supporting young disabled people into employment. I was pleased in the past couple of weeks to announce that Access to Work will also be available in future to young people undertaking work experience.

[Toby Perkins (Chesterfield) (Lab)]

Workers at the Remploy factory in Chesterfield will be relieved to know that there is a glimmer of light—the site is one of those invited to make a bid. On that note, will bids be accepted from organisations that no longer have a policy of disabled people first? Will disabled people still be prioritised in bids from such organisations?

[Maria Miller]

In evaluating the bids that will be taken forward, our first priority is to ensure that the bids that protect most jobs for most disabled people are given priority.

Employment Support

Toby Perkins Excerpts

Wednesday 7th March 2012 Commons Chamber

[Maria Miller]

Obviously, it is important for Members to take part in this debate. I can reassure my hon. Friend that as a result of the proposals that we have announced today, some 8,000 more disabled people will be helped into employment. This is not just about the £320 million that the Government have already announced that they have protected to support this important group of people; it is about an extra £15 million on top of that, and I think that our actions speak very loudly.

[Toby Perkins (Chesterfield) (Lab)]

I think that the 54 disabled people who are losing the jobs at Remploy in Chesterfield will see through the Minister’s warm words and rhetoric. The fact is that more disabled people than able-bodied people are unemployed generally: it is a desperately difficult jobs market out there anyway. The Minister has already dodged this question twice. Will she commit herself to coming back to the House in six months and telling us where those who have lost their jobs at Remploy have gone, so that we can establish whether her warm words mean anything to the 54 people in my constituency who are losing their jobs?

[Maria Miller]

I do not doubt the hon. Gentleman’s genuine concern for his constituents, but I do not think that I have dodged that question. I have made it clear that we will monitor the progress made by disabled people, and I am always happy to come to the House and talk about the progress that the Government are making.

Oral Answers to Questions

Toby Perkins Excerpts

Monday 5th March 2012 Commons Chamber

[Maria Miller]

I entirely understand the importance of mobility and being able to get out and about for disabled people. It is our intention that Motability should continue to be linked to the new PIP scheme. I take my hon. Friend’s comments into account.

[Toby Perkins (Chesterfield) (Lab)]

Beverley Herbert in my constituency was one of six people recently employed on a work experience basis by a major pub chain. Within four weeks, four of the others had gone, and the two people who were there for eight weeks collecting glasses were given permanent jobs, but were sacked within two weeks. Does the Secretary of State agree that for the work experience programme to enjoy widespread confidence, safeguards are needed to ensure that it does not end up exploiting people and providing free labour?

[Chris Grayling]

If Labour Members really want to answer the questions about the work experience scheme, they need to talk to some of the young people who have been through it, got jobs in their thousands and are delighted by the support they have received. That is what a responsible Government do: try to tackle a real challenge, find the right way to solve it and do so in a cost-effective way for the taxpayer. It is just a shame that the Labour party is not more vociferous in its support for what we are doing.

Living Standards

Toby Perkins Excerpts

Wednesday 30th November 2011 Commons Chamber

[Mr Syms]

Clearly, and another problem in the British economy is that there is a lot of private sector borrowing. We have a high level of indebtedness, both of government and of the private sector. In Italy, they save rather more than we do, and as a country we should try to encourage more of our citizens to save and not live on the never-never in the long term.

I support what the Chancellor did in the autumn statement. We are clearly in choppy weather, but that is no reason to change course. We cannot adjust the budget down or raise taxation painlessly. The living standards of most of the population will be squeezed. As the IFS and other organisations have said, living standards have fallen by about 7% over the past two to three years. The good news is that next year the projection is for things to be fairly flat, with some modest recovery after that. It may well be that when we get to 2015—the general election year—we have lower living standards than in 2010 as a consequence of the fact that we have inherited a major deficit, very difficult problems and a pretty rotten international environment. That is no reason for going off course, but it is a reason for sticking to a very sensible policy. Labour Members may think that we cannot do things without breaking eggs, but that is not so. We have to raise the tax burden and reduce spending, and I am afraid that that has consequences.

[Toby Perkins (Chesterfield) (Lab)]

The hon. Gentleman said at the beginning that this would have happened under any Government. I congratulate him on his frankness, but the Chancellor is in complete denial about that—he wants to disown the fact that in 2007 and 2008 his policy was to follow Labour’s spending plans. The hon. Gentleman is right and his Chancellor is wrong, and I hope that he will try to get him to be a little more frank in future. No one disagrees about the need to reduce the deficit, but we are cutting more and more and yet the debt is going up way beyond what was predicted because the policy is not working.

[Mr Syms]

We have been in office for only 18 months. It will take six, seven or eight years to stabilise the debt and probably several more to start reducing debt as a proportion of GDP.

I have said some complimentary things about the right hon. Member for Edinburgh South West. I rather suspect that had Labour won the general election in 2010 and Labour Members were sitting on the Treasury Bench, they would have a policy not dissimilar from that of the current Government. The seriousness of the problem is demonstrated by the fact that we are acting as a coalition Government. For all my political life, we fought the Liberal Democrats like ferrets in a sack, yet we have managed to find some degree of agreement because of the scale of the economic problems that we face.

The Government’s policy is sensible and measured in trying to do things gradually. That means that it will take a long time to implement, but we will ultimately get to a point where we have managed to reduce debt and get the economy into a much better state. In the short term, as I say, it is going to hurt, but I am afraid that that is a consequence of where we are. I see no other way around that. Tough decisions are necessary. I am glad that the Government—Conservative Ministers and even Liberal Democrat Ministers, to my surprise—have taken some pretty tough decisions. They are doing so for the national interest and for the interests of our children and our grandchildren.

--- Later in debate ---

[Anna Soubry]

I am more than happy to give way in a moment to the hon. Lady whose constituency is next to mine in Nottingham.

What people do not do—they recognise this if they are responsible—is to borrow more. If they have reached the maximum on their credit card or their overdraft, they must pull in their horns, live within their means, and cut their expenditure to match their income. Opposition Members struggle with that concept, because they never practised it when in government. That is why we have an appalling level of debt and, worst of all, an appalling level of deficit.

[Toby Perkins]

The first thing the hon. Lady seems to be suggesting is that the national debt is a brand new concept. The country has always had a national debt. The reality is that until 2008, her party supported our spending plans. The national debt fell between 1997 and 2007 under the Labour Government. She is talking as though the issue is brand new, but the reality is that a global economic crisis caused the scale of the deficit, and she must take that into account.

--- Later in debate ---

[Hugh Bayley]

No; I will make my case, if I may.

In opposition, the Government argued against the PFI, but their investment stimulus, which was announced yesterday—I was one of those who applauded it—is going to be paid for by the same sort of off-balance-sheet private finance as financed the PFI.

Yesterday, I ran the risk of incurring anger from my colleagues by welcoming the Chancellor’s plan B. It is a small plan B, but it is £5 billion of Government money backed up by further off-balance-sheet money from the private sector to stimulate the economy. The Chancellor does not call it a plan B. That would be embarrassing, as he has spent 18 months telling us that there is no alternative to plan A: savage cuts in public investment and infrastructure. But now it is plain for all to see that there has been a U-turn.

I congratulate the Chancellor on having the courage to start to do what is right and necessary for the economy. We heard about the U-turn in relation to a road in Nottinghamshire that was cancelled by the coalition Government and has now been reinstated. The Access York scheme—a £22 million improvement to the city’s park-and-ride system—is another good illustration. It was approved by the previous Labour Government, stopped by the coalition one month after the general election, and has now been reinstated, and I thank the coalition Government for that. In the short term, that green transport system will create construction jobs in my constituency, and in the longer term it will attract more visitors to York who will spend money in the shops and the visitor economy.

Nobody so far has mentioned the situation of the NHS. The Government promised that they would not cut NHS spending in real terms. I asked the Library to look at the figures for my PCT area, where many services are being cut. Gastric band surgery for the obese is not available on the same terms in North Yorkshire and York as in neighbouring areas. Facet joint injections for back pain are available elsewhere but not in York. Assisted fertility is available in neighbouring health authority areas, but not in York.

In the last year of the Labour Government, the increase to the PCT budget was 5.8%, which, with inflation running at 3.7%, was a net increase of 2.1%. In the first year of the coalition Government, the local PCT budget was increased by 2.2% but, with RPI running at 4%, that was a 1.8% cut in real terms. Nationally, the figures tell a similar story. In 2011-12, the real-terms cut in NHS funding is 0.56% on the previous year, and in 2012-13 it is predicted to be 0.33%. The Government gave a pledge not to cut NHS funding, and with inflation running at higher levels than they were anticipating, it is necessary for the Treasury to increase NHS funding to meet that pledge. I ask the Minister to respond to that point particularly.

[Toby Perkins]

What my hon. Friend says about the NHS is absolutely right, but there was also a pledge not to have any major reorganisations of the NHS. In Chesterfield, alongside the financial pressures that the NHS would have been under anyway, additional resources are being spent on reorganisation rather than on patient care. That is the other major problem that the NHS is facing.

[Hugh Bayley]

My hon. Friend is absolutely right. The reason why, under a Labour Government, there was a 2% real-terms increase in the NHS budget is that the cost of an ageing population and the new medical technologies introduced to the NHS is roughly 2% a year. A 2% real-terms increase, therefore, is a standstill in the ability to treat patients, but adding in a costly health service reorganisation and a real-terms cut in the budget means a savage cut in the availability of care for NHS patients.