1. What assessment he has made of the likely long-term effects of the current refugee crisis on efforts to address mass migration into and within the EU.
11. What (a) assessment he has made and (b) discussions he has had with his EU counterparts on the likely long-term effects of the current refugee crisis on efforts to address mass migration into and within the EU.
15. What assessment he has made of the likely long-term effects of the current refugee crisis on efforts to address mass migration into and within the EU.
I discussed the migration crisis with my counterparts at the EU Foreign Affairs Council earlier this month. There is rising recognition among EU member states that Europe cannot continue indefinitely to absorb very large numbers of migrants and that a comprehensive approach is needed, with much greater focus on tackling the root causes of migration as the UK has long advocated. On the issue of mass migration within the EU, my right hon. Friend the Prime Minister has made it clear that we are focused on reforming migrant access to welfare to reduce the artificial pull factors that draw migrants to the UK.
I thank the Secretary of State for that answer. Does he agree that the best long-term solution to tackling the migration crisis is to improve the living conditions of people in major source countries and that this Government’s commitment on international aid is a tangible example of our leadership in that area?
I agree with my hon. Friend. There are two distinct groups. There are those who are displaced by war and conflict, and for the period of their displacement we have to ensure they have the resources they need, usually through the United Nations, to feed themselves and to be able to educate their children and to access healthcare. Then there are those who are coming from countries where, frankly, life is very hard, and we have to work with those countries of origin to ensure economic development that gives everybody a chance to do something that gives them an incentive and a reason to want to stay.
Does my right hon. Friend agree that, important as it is to address the long-term causes of mass migration from outside the EU, it is equally critical to address the problems of mass migration within the EU caused by the artificial pull factor of our welfare system?
I agree. As I said in my opening response, that is where we are focused—dealing with the very generous access to benefits and public services that acts as a distortion in the labour market, and which encourages people to come to the UK in anticipation of net earnings far higher than the wages they could otherwise earn.
Does my right hon. Friend agree that the UK’s position outside the Schengen area is a great advantage in addressing the causes and consequences of the ongoing migration crisis?
Again, I agree. Being outside the Schengen area has allowed us to stand back from the immediate pressure of this migration crisis and take a slightly more detached view, where we have focused on helping in the upstream areas with very generous humanitarian support to the Syrian region. It is not only being outside the Schengen area; it is having the justice and home affairs opt-out that allows us to say very clearly that we will not share in any compulsory reallocation of migrants within the EU.
How will the Government ensure that the 20,000 refugees they have agreed to take from the region include some of the most vulnerable—children, disabled people, women who may have faced sexual violence—and how many of those refugees does the right hon. Gentleman expect to be here by Christmas?
The hon. Gentleman makes an excellent point. This is exactly the Prime Minister’s point: many of the people we see on our television screens walking down railway lines are fit young men coming to Europe to look for work—and that’s fine—but there are also many extraordinarily vulnerable individuals in displaced persons camps who are simply not able to try to make that difficult and dangerous crossing into Europe, and we will take those people, asking the UN to prioritise the most vulnerable.
Some of those fit young men are fleeing the conscription of Assad’s regime because they do not want to kill their own people. Turkey and Lebanon cannot continue indefinitely to absorb the millions of refugees from Syria’s crisis. What is the right hon. Gentleman going to do to respond with compassion and competence in the European Union? Will he reconsider his decision not to participate in the resettlement from within the EU, as Ireland and Denmark have done?
No, we will not reconsider that decision. We judge that the best contribution we can make is to take some of the most vulnerable. I am not saying that the fit young men do not have a reason for fleeing. I am saying that we must focus on the most vulnerable people, who do not have the option to flee. While I am on my feet, I would like to pay tribute to Turkey, Lebanon and Jordan, who have borne an extraordinary burden over many years, absorbing refugees and displaced people from Syria.
Why do the Secretary of State and the Government continue to conflate those important but separate issues? The refugee crisis—it is not a migrant crisis—is an exceptional circumstance. Those individuals and families are fleeing the region first and foremost for their own safety, but they want to go home. Does he not agree that a humanitarian plan for long-term peace in Syria would do far more to address the crisis than these short-term measures, which appear to have been designed to curry favour with the right-wing press?
I do not know where the hon. Lady has got that from. Of course we agree that addressing the upstream problem by getting a political settlement in Syria and defeating ISIL so that it cannot carry out its barbarous activities is the right way to go. I also agree with her that, when we come to build the new Syria, post-Assad, we will need those engineers, doctors and teachers who are now being encouraged to resettle in Europe. We have a responsibility to ensure that the new Syria has access to those qualified and educated people.
Is my right hon. Friend aware of the first robust piece of research undertaken among refugees in Germany, which shows that 70% of them blame Assad and his barrel bombs for their predicament? The rest blame the murderous ISIL group. Only 8% of them want to remain in Europe, with 92% wanting to return home, which speaks directly to this Government’s policy of focusing on the camps in Jordan, Lebanon and Turkey and helping people to stay there before they return to their country.
There has been a lot of focus on ISIL, but it is important to remember that it is Assad’s persistent indiscriminate attacks on his own civilian population with chlorine gas and barrel bombs that have been the principal driver of this mass migration.
The Prime Minister said in his conference speech that the problem with the EU was that it was “too big” and “too bossy”. Looking at the refugee crisis, however, we can see that his rhetoric was simply wrong. Does the Foreign Secretary not agree that the problem for the refugee crisis has not been a European Union that is too strong and overbearing, but rather one that has been too weak, too unco-ordinated and too ready to fall back into the old habit of nationalism? Do not the desperate scenes that we have witnessed all summer demand more co-operation between states rather than a retreat into the use of barbed wire and nationalism and a failure of collective, co-ordinated leadership precisely when it is needed most?
I am happy to agree with the right hon. Gentleman that co-operation between states is the right answer. Unfortunately, however, that is not what happens when competences are ceded to the EU, which results in dictation to states by the European Union. That is a distinction that he would be well advised to study.
2. If the Government will invite a Minister of the Scottish Government to join the UK delegation to the Paris climate change conference in December 2015.
Yes, my right hon. Friend the Secretary of State for Energy and Climate Change wrote to all three devolved Administrations last month to invite the relevant Ministers to join the UK delegation in Paris.
That is welcome news, as it will give the Scottish Government Minister a chance to speak about Scotland’s ambition to tackle climate change. Does the right hon. Gentleman agree that that is particularly important, given the criticisms that the UK Government are facing today from the United Nations environment programme, which has stated that their cuts to renewables are completely at odds with the pledges being made by 150 other countries ahead of the Paris summit?
I obviously welcome the participation of Scottish and other devolved Ministers in the UK delegation, but I really think that the hon. Gentleman should do a bit of homework and remind himself that the UK is well on track to achieve its emissions reduction targets by 2020, en route to the 80% reduction by 2050. And I am sorry that he did not even mention the Prime Minister’s commitment of a further nearly £6 billion in additional climate finance to help the poorest countries to adapt to the challenge of climate change.
Does the Secretary of State agree that if the devolved Assemblies are being represented at the conference in Paris, the British overseas territories should also be given representation? They are not part of the British Isles and could therefore be affected by climate change in lots of ways. Surely they should also have a voice at this important conference.
The Foreign Office will, of course, be very much involved in the UK delegation at the Paris climate change conference, and every Foreign Office Minister always keeps the interests of the British overseas territories closely in mind. We know that my hon. Friend will always make sure that we continue to do so.
At this rate, it will not matter who gets on the plane to Paris, because when they get there the UK will be a laughing stock as a result of this Government’s lack of commitment to tackling climate change. We are haemorrhaging jobs in the solar industry and in the insulation sector, and all because of a lack of Government policy. How can Foreign Office Ministers do their job if we are not taking the right action at home?
I am sorry that the hon. Gentleman did not revise his question after hearing my previous answer. I remind him that not only are we on track to meet the climate change targets we have set, but we are setting a lead by committing large sums of additional British taxpayers’ money to help the poorest countries adapt to climate change. This country is the world’s sixth largest green exporter, and the record is one of which we can be proud.
Perhaps the Minister would like to revise his answer, given that Al Gore has said: “It is time for the UK government to honour and live up to that legacy, and return to its global leadership position, domestically and abroad, by supporting an ambitious international agreement in Paris” It appears the Prime Minister may have lost interest in the subject, and the solar industry is in crisis domestically.
First, may I welcome the hon. Lady to her new responsibilities on the Opposition Front Bench For the reasons I have already given, I think that this Government continue to have a good record on climate change, and my right hon. Friend the Prime Minister takes a very close interest in this in all the international discussions. This was a major item he discussed with President Hollande during the President’s recent visit to Chequers. We are very committed to helping the French Government to deliver an ambitious outcome at Paris which commits all countries to significant emissions reductions, and to targets binding in international law and help for the poorest countries, which will struggle most to make the change.
3. What recent discussions he has had with the Government of India on outstanding payments due to British companies for work carried out during the 2010 Commonwealth games.
In the case of SIS Live, the British high commission in New Delhi has provided consistent support to the company and urged the Government of India to resolve the dispute over payment. I personally raised this issue with the Indian high commissioner just yesterday, and we will continue to press for a satisfactory settlement.
I thank the Minister for that response and for the work he has carried out on this issue. SIS Live is a perfectly respectable British company which fully delivered on its commitments in the 2010 Delhi Commonwealth games. Does he agree that the outstanding debt of £29 million should be paid to SIS Live in advance of the Indian Prime Minister’s visit to this country later this year?
Yes, we very much hope this will be resolved before Prime Minister Modi comes here shortly. The visit will be an opportunity for us to discuss a wide range of issues. Bilateral trade with India is extremely good, but what is important is the signal this matter sends to other potential British companies looking to invest in India, so we do want it resolved.
While of course accepting the need for British companies to be paid and for Indian companies to be paid by British companies with which they are doing business, may I join the Minister in welcoming the visit of Narendra Modi, which has caused huge excitement among the British Indian community in places such as London and Leicester? Will it enable the Government to send out a message that it is not just learning Chinese that is important but that a bit of Hindi will go down well in our bilateral relations?
I very much hope the right hon. Gentleman is not going to test me on my Hindi now. Of course we are all looking forward to the visit of Prime Minister Modi. Quite apart from the Government-arranged events, there is going to be a huge diaspora event, in which the Prime Minister will be able to speak—I am sure the right hon. Gentleman is closely involved in organising it. Clearly, we want more British students to study in India, but the opportunities for the provision of English language teaching in India are the ones on which we should concentrate.
Of course the Indian Prime Minister is the representative of a great democracy.
4. What discussions he has had with his Japanese counterpart on that country’s constitutional constraints on foreign policy initiatives.
I have congratulated the Japanese Diet on passing security legislation that will allow Japan to play a greater role in maintaining international peace and security. When I visited Tokyo in August, I discussed with Foreign Minister Kishida how the UK and Japan can work together to uphold the rules-based international system, once these changes have been introduced.
Following the Prime Minister’s announcement in New York that the UK will make a greater contribution to UN peacekeeping operations, does my right hon. Friend agree that we should encourage Japan to use its special defence forces to contribute to UN peacekeeping as well?
Yes, I do. By passing this legislation, the Japanese have allowed themselves more freedom to co-operate with international partners in preserving international peace, and we are very keen that that includes more Japanese peacekeepers on UN peacekeeping operations as well as Japanese logistic support to other operations carried out by partners and allies around the world.
Some of the concerns of the Japanese have centred around the activity of the People’s Republic of China in the East China sea and the South China sea regions, particularly the recent dispute with Japan over the Diaoyu-Senkaku islands. When the Foreign Secretary is in discussions with the Japanese and the Chinese, will he try to build some sense of peace and stability in that region to try to allay the concerns not just of Japan but of other countries in the region?
First, let me congratulate the hon. Gentleman on his very good pronunciation of those particular islands. Our position on this is clear: we do not take a position on the different claims to sovereignty over disputed territory in the East China or the South China seas. What we are clear about is two things: first, these disputes must be resolved in accordance with international law and peacefully; and secondly, the international right to freedom of navigation and freedom of overflight must be preserved. That is the position that we consistently take and that we consistently make to Japanese, Chinese and other south-east Asian interlocutors.
5. What assessment he has made of the progress of negotiations to reform (a) the EU and (b) the UK’s relationship with the EU.
14. What assessment he has made of the progress of negotiations to reform (a) the EU and (b) the UK’s relationship with the EU.
We are making good progress in our discussions on reform of the EU at both a political and technical level. We will continue discussions with our EU colleagues as well as with the European Parliament and Commission ahead of the December European Council. As the Prime Minister said last week, he will also be writing to the president of the European Council in early November to set out the areas of change that we wish to achieve.
Does the Minister share my concern that economic and monetary union states could force new legislation on non-EMU states by commanding a majority in the EU? What measures can be put in place to ensure that a country not in the eurozone, as Britain is proud to be, can guarantee that their voice is heard in the EU as loudly as those inside the eurozone, particularly on policy relating to the single market?
My hon. Friend is right to point out that concern. It is the case that the eurozone states will have a qualified majority between them in due course. That is why part of this negotiation is about putting in place a framework to govern relationships and decision making between eurozone and non-eurozone states so that the interests of the non-eurozone states are protected as the eurozone proceeds with the closer integration that—in our judgment—will be necessary to ensure that the euro is a successful currency. That is something that is greatly in the interests of the United Kingdom.
For the past two years, the residents of Morley and Outwood have been telling me of their concerns about EU migration, free movement of people and access to our NHS benefits and other services. What assurances can my right hon. Friend give them that those concerns will be addressed in the renegotiations?
I can assure my hon. Friend that those issues are right up there at the front of our renegotiation strategy. Whether they like it or not, our partners across Europe understand that those are the primary concerns that the British people are expressing in opinion poll after opinion poll and during the recent general election campaign. If Britain is to be able to embrace a reformed European Union, those issues will have to be addressed in the settlement.
If progress is made in all of the four areas that the Prime Minister has put forward, is the Foreign Secretary minded to vote for our EU membership?
Clearly, what I seek is a package of reform that will allow me and the British people to embrace enthusiastically Britain’s future in the European Union. The British people will, however, approach this process with a sceptical frame of mind. They will be looking for real and substantial reform, which is binding and enforceable and irreversible in the future. That is what we are seeking.
What legal advice has the Foreign Secretary had that would give him reason to believe that he can get these substantial changes that would allow non-euro countries fair representation within the architecture without treaty changes being required?
We expect that some of the changes that we are seeking—by no means all, but some—will require treaty change. We are exploring in technical discussions with the Commission’s lawyers how we might enter into binding arrangements ahead of treaty change that will have the effect of binding our partners into the agreements they have made.
17. Can the Foreign Secretary confirm that apart from some technical changes relating to the right of EU citizens to claim welfare payments, the basic principle of free movement of people is not going to change in the renegotiations?
The basic principle of freedom of movement to work is not being challenged, but I disagree with my hon. Friend that changes to access to welfare are merely technical. The point was made very well that access to extraordinarily generous in-work benefits effectively distorts the labour market and creates a pull factor towards working in the UK that we need to reverse.
The Foreign Secretary has made it clear that any changes will require treaty change. Can he tell us one member state that backs treaty change?
To be clear, I did not say that any changes will require treaty change; I said that we expect that some of the changes we are seeking will require treaty change. It is perfectly true—I do not know why the hon. Gentleman finds it so amusing, and I have said it in this House many times before—that none of our partners welcomes the idea of treaty change, but all of them accept that this is something we have to do if we are going to carry the British people with us.
21. What progress is being made to ensure that this Parliament, by itself if necessary, can say no to any unwanted EU directives, tax or regulations?
Part of our reform strategy is to look for a greater role for national Parliaments working together to block unwanted legislation so that we, the people of Europe, cannot have imposed on us by the Commission something that the majority of us do not want. But my hon. Friend knows that it is completely unrealistic to seek an individual national veto in all areas. A European Union of 28 member states with individual national vetoes simply would not work.
Will the Foreign Secretary comment on the solid progress being made on one of the five principles for the Prime Minister’s vision for a new European Union—that is, the competitiveness agenda and specifically, for instance, delivery charges for items posted within the EU, or trade deals with the US?
I do not know whether the right hon. Gentleman is privy to some information that I am not, but last time I checked with the Prime Minister he had four categories in which he was pursuing the negotiation. On competitiveness, it is true that the mood in the European Union has changed. Since the financial and economic crisis, more and more member states are focused on the need for Europe to be able to compete in the global economy, and the Juncker Commission is focused on an agenda. We think it could go further; we would like it to be more ambitious, but it is pointing in the right direction. Our challenge is to institutionalise that change and make sure that the European Union is firmly pointed in that direction as a matter of institutional structure, not of individual Commission choice.
23. The Foreign Secretary said that our renegotiation will require a treaty change. Does he see that occurring before or after the proposed EU referendum, and will that treaty change trigger a second referendum?
We are exploring with the Commission legal services and others the possibility of binding legal commitments like the protocols that were entered into by Denmark and Ireland that will be incorporated into the treaties at the next available treaty change. That will give us what the British people need, which is assurance that the agreements that have been entered into will be complied with by the other member states.
6. What recent diplomatic steps he has taken to promote peace and security in Somalia.
16. What recent diplomatic steps he has taken to promote peace and security in Somalia.
As my right hon. Friend the Prime Minister announced at the UN General Assembly last month, we are deploying up to 70 UK military personnel to assist the UN Support Office for AMISOM—the African Union Mission to Somalia.
Much of the rebuilding work in Somalia has been undertaken by Britain and led by the British Government. Will my right hon. Friend confirm that economic and infrastructure development in Somalia goes hand in hand with peace and security?
My hon. Friend is absolutely right. I was in Mogadishu in July and saw some of that work taking place. Britain’s influence there should not be underestimated. America has its embassy in Nairobi, and no other EU state has a presence in Somalia, so Britain is the only EU country with an embassy in Mogadishu. From there we give technical, logistical and planning assistance, which the Government there very much welcome.
May I pay tribute to the work of the African Union peacekeeping forces from Uganda, Burundi, Djibouti, Kenya, Ethiopia and Sierra Leone, who have lost more than 1,000 lives in returning Mogadishu and much of the rest of Somalia to a form of peace? What does the United Kingdom propose to do to continue to support these brave men and women?
My hon. Friend is absolutely right. The brave troops of the AMISOM command have been doing an incredible job, and I pay tribute to all the countries he mentioned for their involvement. When our military personnel turn up, they will be helping with engineering and logistical support. I have discussed that with our embassy and with UNSOA, the co-ordination force on the ground. It is absolutely right to pay tribute to the very brave work being done by all involved.
7. What assessment he has made of the implications for his policies of recent violence in Israel and the Palestinian territories.
We are deeply concerned by the recent violence and terrorist attacks across the occupied Palestinian territories and Israel. Our immediate focus is on urging all sides to encourage calm, take steps to de-escalate and avoid any measures that could further inflame the situation.
Does the Minister agree that there can be no justification whatsoever for random terror attacks on Israelis in the streets of Israel? They are just like us: normal people trying to go about their ordinary lives. We should be absolutely clear in condemning that sort of activity.
I absolutely concur with my hon. Friend and condemn the violence that has taken place across Israel and the occupied Palestinian territories. There is no place for the sorts of terrorist attacks we have seen, and the effect they are having on innocent civilians’ sense of safety is appalling.
Are not the deaths of an Eritrean immigrant who was just murdered in Beersheba by Israeli thugs, the deaths of seven Israelis and the deaths of 40 Palestinians the direct consequence of Netanyahu’s refusal to grant freedom to Palestine, the illegal wall, the illegal settlements, the 500 check points and the persistent desecration of the al-Aqsa mosque by Israeli settlers? Will the Government take action to get Netanyahu to the conference table?
We recognise that there are frustrations due to the lack of progress towards peace, and we share those frustrations. The peace process was launched more than two decades ago, yet we still have not achieved the two-state solution that was envisaged, but there is absolutely no justification for the sorts of attacks we have seen.
25. Does the Minister agree that it certainly does not help that the Palestinian Authority encourages incitement against Israel?
President Abbas has condemned the use of violence and reiterated the Palestinian Authority’s commitment to reaching a political solution by peaceful means. We have seen tensions spike in the past, but it does seem different this time, with young people seemingly unafraid of death and brandishing knives, knowing what the consequences will be. The pattern so far has been one of lone wolf, low-tech attacks, but the escalation and the tensions are certainly worrying.
13. What discussions has the Minister had with the Israeli Prime Minister regarding the Gaza reconstruction mechanism? One hundred thousand people have been displaced, and no homes have been built since July. What are we doing about that?
The hon. Gentleman will be aware that Prime Minister Netanyahu visited recently. We have been making every effort to promote calm. The Prime Minister and the Foreign Secretary have spoken to key regional leaders over the recent weeks, and British officials have been pressing both sides to take steps to de-escalate the situation.
22. What assessment has the Minister made about the significant damage to the holy site of Joseph’s tomb at Nablus, which was destroyed by up to 100 Palestinian rioters?
I strongly condemn the burning of the tomb of Joseph in Nablus. The basic right of freedom to worship in safety and security should be protected for all. We have called for a swift and transparent investigation into the incident and for those responsible to be brought to justice.
As Israeli civilians are being stabbed and murdered by Palestinians on virtually a daily basis, a Rafah cleric, in his sermon on 9 October, brandished a knife and called for Palestinians to slaughter Jews in a holy war. Is it not time that the nature of this incitement was recognised and combated if there is ever going to be hope for peace and justice?
As I say, the Foreign Secretary spoke to President Abbas last week. We are encouraging him to work with Prime Minister Netanyahu. We are also aware that the US is looking at the situation very closely, and Secretary Kerry is ready to visit the region when appropriate.
20. Earlier this month, Palestinian Authority President Mahmoud Abbas proclaimed:“We welcome every drop of blood spilled in Jerusalem…With the help of Allah, every martyr will be in heaven, and every wounded will get his reward.”Does my right hon. Friend the Foreign Secretary share my concern that such provocative remarks have fuelled the recent wave of deadly attacks on Israel? What more can we do to help?
There has been too much provocation on both sides. The current violence underlines the fact that a lasting resolution that ends the occupation and delivers peace for Israelis and Palestinians is long overdue. We have been round this buoy many times. The Oslo accords seem in the far distant past, and the tensions are ratcheting up again. We call on both sides to come together.
Does the Minister agree that all murders and attacks on civilians are unacceptable? That includes knife attacks on Israeli civilians and also settler attacks on Palestinian civilians that have been running into the hundreds for several years now. Will he join Amnesty International, Israeli human rights organisations and the United Nations in expressing concern at the increasing use of live ammunition by Israeli troops and police, even when life and limb are not immediately under threat, because that fuels a lot of the tension that we are seeing now?
We can recall what has happened in the past when the violence has ratcheted up to the levels that we are seeing today. That is why we are urging all sides to come together to avoid what we have seen in the past.
Does my hon. Friend recall the words of our right hon. Friend the Prime Minister in his speech to the Knesset last year? He said: “I will always stand up for the right of Israel to defend its citizens. A right enshrined in international law, in natural justice and fundamental morality” Does my hon. Friend believe that it is now time for us to review our relationship with the Palestinian authorities? Would it not be better to pay directly to the projects themselves rather than through the Palestinian authorities so that British taxpayers could have a better assurance that the money is going to Palestinians rather than being siphoned off as a stipend to terrorists?
My right hon. Friend articulates the strength of the tensions and the need for us to come together. As I say, peace has eluded that country and the Palestinian authorities for years now. It is important that we take advantage of John Kerry’s offer to visit the region in the very near future.
8. What diplomatic steps his Department is taking to secure a stable Government in Libya.
On 8 October, UN special representative Bernardino León announced details of the political settlement in Libya, urging Libyan parties to agree the deal before 21 October. Yesterday I attended a meeting of international partners hosted in the Foreign and Commonwealth Office to discuss robust support for a Government of national accord.
Everyone in this Chamber will welcome the progress towards a new national Government in Libya. However, we have been here before, so will the Minister commit to reviewing our approach to Libya in the event that the timeline for a national Government is breached?
If I may correct my hon. Friend, we have not quite been at this point before. We are on the eve of signing a peace document to get a Government of unity, but we are not there yet. That will happen next week. If it does not happen, the difficulties faced by Libya—including not only the current migration patterns, but, most importantly, ISIL developing a foothold there—will continue.
The Prime Minister used to be so proud of this country’s intervention in Libya. Surely we should be seen as taking a much stronger role in trying to bring all the parties together so that Libya can have some sort of future and its people can live in peace.
I am slightly puzzled by the hon. Gentleman’s question, because we have been at the forefront of engaging with the parties in the very difficult aftermath of Gaddafi’s fall. We offered to assist back in 2012 and 2013. We were invited to leave the country, along with other UN organisations. We have encouraged, through the UN and working with Bernardino León and the Prime Minister’s envoy, Jonathan Powell, the bringing of the parties together. No country could have done more.
Although I would not dare to try to emulate Sir Peter Tapsell, does my hon. Friend recall that originally Libya was made up of Tripolitania and Cyrenaica? Does he not believe that if the worst comes to the worst, it may be necessary, because they are two very different peoples, to divide Libya?
My hon. Friend is correct, although he misses out a third region, namely Fezzan, and it was the Italians who brought the country together. As well as those three regions, there are more than 135 tribes, including 35 main tribes. They have been sat on by a dictator for 40 years, and lifting the lid off that results in society trying to flex its muscles. That is the difficulty and challenge we face.
9. What support his Department is providing for refugees in camps along the Syria-Turkey border.
We have pledged more than £1.1 billion for humanitarian relief in Syria and neighbouring countries. Roughly half of that sum goes towards helping people inside Syria, and the other half is provided to refugees in the neighbouring countries in the region.
Does the Minister agree that the Prime Minister’s commitment that the UK will take 1,000 refugees before Christmas—which equates roughly to two refugees per constituency—is simply not good enough and represents a missed opportunity to do the right thing?
No, I do not. The hon. Lady underestimates the important fact that we shall be offering a home to people who are among the most vulnerable and traumatised as a result of the conflict. We need to ensure that they are given a proper reception and the full package of support from the national health service and, in many cases, local authority social services. They have to be properly provided for.
Given the increased terrorist activity in Turkey, what assurances can the Minister give on the support the British Government are specifically giving Turkey with respect to the migrant question?
We have made it very clear to the Turkish Government that we stand with them in resisting terrorism. We have a history of good counter-terrorist co-operation with the Turkish authorities, and we have told Turkey that we are willing to explore how we can further strengthen that.
10. What discussions he has had with his international counterparts on establishing an authoritative figure for the number of people killed in the second Gulf war and its aftermath; and if he will make a statement.
I frequently discuss Iraq with my international counterparts. The Government have not produced any estimate for the number of Iraqis killed as a result of terrorism and war-related violence since 2003, although we are aware that others do so. Our focus today is on supporting the Government of Iraq in their efforts to build a more stable and secure future for their people.
It is amazing that the British Government do not have a clue how many people have been killed by the British and American forces’ adventure in Iraq; I hope the Minister will find an accurate figure for Parliament. Does he regard the invasion of Iraq as a success?
I did say that there are others, including the Iraqis themselves, who have put together those numbers, and I am more than happy to share those with the hon. Gentleman if he wants to see them. With regard to the decision to invade Iraq, lessons have certainly been learned. We await the Chilcot inquiry, but I recall that after the invasion a diktat went around the Department for International Development saying that the war was illegal, so in Basra we went from being liberators to occupiers. That is not the way to do it. There are lessons to be learned, and we are learning such lessons and applying them in Iraq today.
12. What recent assessment he has made of the situation in Syria.
Syria is facing a humanitarian crisis as a result of the continued assault by the Assad regime on the civilian population and the brutal occupation of a significant part of the country by ISIL. The Russian intervention—purportedly to join the fight against ISIL, but in fact targeting principally non-ISIL opposition positions—is complicating the situation and risks driving much of the opposition into the arms of ISIL.
The Financial Times reported on Thursday that ISIS is making $1.5 million a day, plus racketeering, plus ransom money, plus proceeds stolen from the banks. It is a $1 billion organisation now. Where is that money going? It is not kept in shoeboxes under beds. What are the British Government doing to pursue the financial interests of ISIS?
The UK is heavily involved in that particular strand of coalition activity—intercepting financial streams—and, of course, the coalition is also taking kinetic action to try to disrupt ISIL’s revenue-generating activities. However, because we target cautiously, to avoid collateral damage and civilian casualties, there is a limit to the kinetic action that we can take.
While the Russian intervention has complicated the military situation, might the actuality of Russian and Iranian practical military support for the regime somewhat simplify the politics of this situation? They now need a solution; otherwise they will be in an indefinite war supporting the regime. Is this not now the moment to invest in a serious diplomatic effort to bring all the parties together?
It is probably too early to judge whether or not my hon. Friend’s point is valid. Let me say again that the British Government believe that we must have political engagement to find a solution to the Syrian civil war, while we certainly need a military solution to the challenge of ISIL. We are ready to engage with anyone who is willing to talk about what that political transition in Syria might look like, but we are very clear that, from our point of view, it must at some point involve the departure of Bashar al-Assad.
The Foreign Secretary clearly has his itchy fingers on the trigger of military intervention, as indeed do the Defence Secretary and the Prime Minister. With 12 other countries already bombing in Syria, what analysis has been done of what additionality or what further sorties would be flown by RAF Tornadoes, and what possible difference could they make to the military situation?
My right hon. Friend the Defence Secretary has already made it clear—I remember saying the same, when I performed that role, more than a year ago—that the point is one of military efficiency. We are already flying reconnaissance missions over Syria, but our Reapers now have to fly over Syria unarmed looking for situations, which they then relay back to call in other allies to carry out strikes. That is not the most efficient way to carry out operations.
We could drop a few bombs from our reconnaissance aircraft, but what difference would that make to the military situation? Why does the Foreign Secretary not listen to his own Back Benchers? As a non-combatant nation, there are certain advantages in being able to make diplomatic initiatives. Given that the Prime Minister is meeting the President of China—another non-combatant nation and a permanent member of the Security Council—why not discuss a joint diplomatic initiative, instead of just thinking that additional bombing is the answer?
I have discussed the situation in Syria with my Chinese counterparts on several occasions. At the moment, I judge that the Chinese are not willing to take a diplomatic initiative that would separate them from the Russians. Let me be clear that we are part of coalition activities in Syria. We are not carrying out kinetic actions, but we are flying reconnaissance and surveillance missions and feeding back the output of those missions to the coalition.
Russia’s military intervention has certainly changed things, but one thing that remains unchanged is the suffering and agony of the Syrian people. Given that we can now expect more people to flee their homes, and recognising, as we heard earlier, that the neighbouring countries are almost at bursting point, will the Foreign Secretary tell the House what discussions he has had with Foreign Ministers about the possibility of establishing safe zones for people in Syria?
As the right hon. Gentleman will know, there have been extensive discussions about safe zones, which were originally a Turkish idea, over many months. At the moment, we judge the creation of safe zones to be impractical and impossible to enforce. We are acutely conscious that if we create something called a safe zone, it must be safe. There must be someone who is willing to enforce the safety of that zone. We judge that that means boots on the ground, and we and the United States are certainly not prepared to put boots on the ground in northern Syria.
I take the point that the Foreign Secretary makes, but that does not mean that we should not try. The boots could be those of neighbouring countries. Something that there is widespread agreement on, as we have just heard, is the threat from ISIL/Daesh, with over 60 countries now being part of the coalition that opposes it. What steps are the Government taking to secure a UN Security Council resolution to authorise effective action to end the threat from this murderous organisation, including disrupting the huge flow of funds from its oil extraction and trading operations, which was revealed by the Financial Times last week and referred to by my hon. Friend the Member for Hyndburn (Graham Jones) today?
In response to the right hon. Gentleman’s response to my comments, I say that it is easy to volunteer others to put boots on the ground, but it is pretty difficult to tell people to do what we are not prepared to do ourselves UN Security Council resolutions are already in place and we will continue to test the appetite of the permanent five for going further, but the Russian intervention in Syria complicates matters not only on the ground, but in the Security Council.
T1. If he will make a statement on his departmental responsibilities.
The Foreign Office is focused on protecting Britain’s security, promoting Britain’s prosperity and projecting Britain’s values around the world. My priorities remain the struggle against violent extremist Islamism in all its forms, the containment of Russian actions that threaten the international rules-based system, and the renegotiation of Britain’s relationship with the European Union.
I thank the Foreign Secretary for that answer. The Chancellor is right to say that China is vital to our future, but in the light of its recent economic slowdown, what are the Government doing to enhance our trading relationships with the high growth-potential economies of our Commonwealth partners?
My hon. Friend is absolutely right. We very much welcome the state visit by the President of China and Madame Peng, which starts today. Of course, China is hugely important to us in terms of bilateral trade, but so is the Commonwealth This Government have unashamedly put the Commonwealth back into the Foreign and Commonwealth Office. We have reinvigorated our network within the Commonwealth and look forward to the upcoming Commonwealth Heads of Government meeting in Malta. We are an early investor in the Commonwealth Enterprise and Investment Council. Trade between two Commonwealth countries is much cheaper than trade by one Commonwealth country outside the Commonwealth. This is an area that we are concentrating on and we want to see far greater trade within the Commonwealth.
It was reported yesterday that 14 cleaners who work at the FCO were called to an investigatory meeting by the Department’s contractor, Interserve, because they had the temerity to write to the Foreign Secretary to congratulate him on his reappointment and ask to discuss the living wage. Given that a basic freedom is the right of any individual to contact us as elected representatives, without fear or favour, will the right hon. Gentleman join me in condemning this attempt to intimidate staff for having exercised that right?
The right hon. Gentleman wrote to me about that matter last night and I have investigated it. I have confirmation from Interserve that although a review meeting was held, no disciplinary action was taken against any cleaner as a result of their writing that letter. It has been reported that some of the people involved in writing the letter were the subjects of redundancies. Redundancies were unfortunately necessary because the Foreign Office is surrendering the Old Admiralty building as part of the campaign to reduce the estate footprint of Government Departments and save the taxpayer money. He will be pleased to know that all the redundancies announced by Interserve in connection with the Foreign Office contract were carried out in consultation with the Public and Commercial Services Union.
I am sorry that the Foreign Secretary did not feel able even to condemn the calling of those cleaners to a meeting—it seems to me that people should be able to write to whoever they want. One cleaner who works full time said that they want to be paid the living wage for cleaning offices in the right hon. Gentleman’s Department because they cannot afford to pay their rent without claiming housing benefit. The letter states: “I really don’t want to receive any benefits, but at the moment I have no choice.” Given that other Whitehall Departments currently pay the London living wage of £9.15 an hour, why are staff cleaning the offices of the right hon. Gentleman paid so much less?
The good news is that from next April all cleaners working for Interserve, including those on the Foreign Office contract, will receive the national living wage when it is introduced.
T2. Does my right hon. Friend agree that the UN Human Rights Council resolution on Sri Lanka achieved an historic opportunity for justice for the victims of grave human rights abuses in that country? Will his Department continue to scrutinise the implementation of that resolution?
Yes we will. We see the resolution as the start of a process, not as its end, and we withstood criticism from the Opposition Benches on our whole policy towards Sri Lanka. We have been at the forefront of getting this resolution, and we are in the right place. I met Foreign Minister Mangala Samaraweera a couple of weeks ago in New York, and Prince Zeid more recently in London. We stand ready to help and assist in the implementation of this resolution.
T3. Turkey is currently hosting 2.5 million refugees, including 2.2 million Syrians, and organisations based in Turkey are struggling to alleviate the rank poverty and conditions affecting those refugees. Does the Secretary of State agree that the UK should play its part in helping to co-ordinate a new response to take appropriate action to help those affected?
Yes, I do. My right hon. Friend the Foreign Secretary and I raised that matter with our European counterparts, and we urged other countries to commit themselves to the levels of support that the United Kingdom has already led in providing.
T5. Does the Foreign Secretary agree that the best way of bringing a long-term solution to the migration crisis is to work with our partners to ensure good governance and economic growth in the middle east?
Yes. Not only in the middle east but in all countries of origin, the long-term solution is to improve conditions and seek stability, security, good governance, the rule of law and economic growth.
T4. When was the last time that the Foreign Secretary spoke to the Russians about the situation—particularly the military situation—in Syria?
I spoke informally to the Russian Foreign Minister when we were together in New York for the UN General Assembly at the end of last month. That was the last time that I discussed the situation with the Russians.
T6. Since September there has been a worrying resurgence in intercommunal fighting in the Central African Republic after the reported beheading of a young Muslim taxi driver. Hundreds of people have been killed and thousands displaced, and there is now genuine concern that the conflict will descend into genocide, and worse. Will my right hon. Friend reassure the House that the British Government are providing political and humanitarian support to the President of the Central African Republic?
My hon. Friend is right and we fully support President Catherine Samba-Panza and her interim Government. It is striking to note that a country the size of France has a population of just 4.6 million, meaning that there is little infrastructure and almost no state outside the capital. None the less, the UK is leading with £58 million of contributions to date.
May I draw the Foreign Secretary’s attention to the worrying situation of my constituent Rebecca Prosser? She was working in the Strait of Malacca on a documentary about piracy for Wall to Wall productions. She had the right visa for Singapore and Malaysia, but it had not yet been authorised for Indonesia. She was arrested in May and has been detained there ever since. I am grateful for the opportunity to meet the Minister and I have met the Indonesian ambassador, but my constituent is on trial right now. She is a hard-working, law-abiding young woman who has committed a visa breach. Will the Foreign Office do everything it can to support her, and at least have a consular presence in the courtroom where she is on trial?
The right hon. and learned Lady came to see me about this matter, and quite rightly so. I personally raised their case with the Indonesian Foreign Minister at the UN General Assembly in September. She knows that immigration offences are taken very seriously in Indonesia. The trial is progressing at the moment. As I said to her at the time, their lawyers judge that a low media profile is the best way of bringing this immigration case to a conclusion, so it is probably better not to say more than that at the moment.
T7. Will the Minister update the House on progress on the issue of the letttori in Italy, following the recent Pontignano conference?
I discussed this issue in the margins of the Pontignano conference, and we continue to press Italian Ministers to take action to remedy this injustice that has persisted for far too long.
Can the Minister guarantee that in the EU negotiations there will be no dilution of employment laws?
In the negotiations, we are seeking to ensure that the EU is focused on greater competitiveness, but we also recognise the EU’s important role in protecting employment rights.
T8. Will the Foreign Secretary outline how many ISIL fighters remain in Iraq, and what would be required to remove that murderous organisation from that country?
It is estimated that there are 10,000 to 13,000 active ISIL fighters in Iraq. We always said, at the beginning of the intervention last summer, that it would probably take three years to defeat ISIL militarily. I spoke to General John Allen, the US President’s special envoy on this subject, just a few weeks ago. His view is that that remains correct, and we still have another two years to go to a military solution in Iraq.
Will the Foreign Secretary update the House on the case of Karl Andree and what representations have been made since the cancellation of the Saudi prison contract last week; and perhaps also on the case of Ali Mohammed al-Nimr, about whom the Leader of the Opposition has again written to the Prime Minister?
As I have said on many occasions previously when I have been asked to comment in the House on these judicial matters in Saudi Arabia, our judgment is that we achieve most by speaking privately but regularly to our Saudi interlocutors. Let me say to the hon. Gentleman that I do not expect Mr Andree to receive the lashings that he has been sentenced to, and I do not expect Mr al-Nimr to be executed.
T9. What representations have been made by Ministers to the Government of China and to the Chinese ambassador in London on the human rights situation there, particularly with regard to the recent arrest and detention of a substantial number of lawyers and rights campaigners?
The Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), met human rights defenders last week to discuss these specific issues. We raise human rights issues regularly in our meetings with our Chinese counterparts. We also have a formal UK-China human rights dialogue—twice a year, with formal meetings—committed to nothing but the discussion of human rights issues of concern.
Vice is an online news service based in Shoreditch. Recently, three of its journalists were arrested in Turkey. Thanks partly to the intervention of the Foreign Office, the two British citizens were released from jail, but Mohammed Rasool, an Iraqi citizen, is still in jail 50 days later. Will the Foreign Secretary undertake to take this matter up with the Turkish Government, and, generally, the press freedom needed in that country?
We do, as the hon. Lady knows, regularly discuss with Turkish Ministers concerns about human rights, including freedom of the press. She will also know that we, like other countries, do not lobby on behalf of citizens who are nationals of other states. It is for their Governments to take the lead in doing that.
We have today seen the well-worn exchange of differing opinions on Israel and Palestine. Whatever the tit-for-tat arguments might be, does the Foreign Secretary accept that the fundamental moral principle beneath all this is that Israel’s annexation of its neighbours’ land through settlement building is illegal, and that there is no place, either in this argument or in this House, for those who will not publicly admit to that principle?
I am not going to define who can and who cannot take part in the argument, but we believe that settlement building breaches international law and that it is essential that we do not allow the facts on the ground to make impossible a two-state solution, which we all fervently hope will be the ultimate solution to the Palestine question.
As part of ongoing discussions and negotiations with the European Commission, will the Foreign Secretary and the Secretary of State for Environment, Food and Rural Affairs ensure that the European maritime and fisheries fund is approved as quickly as possible in order to underpin fishing communities throughout the UK?
I know how important this issue is to the hon. Lady’s constituents, and I shall make sure I discuss it with my opposite number in the Department for Environment, Food and Rural Affairs so that we can continue to make those representations.
Given the momentum for Turkish accession to the EU, will the Foreign Secretary confirm that the reunification of Cyprus will be a significant condition? Amid all the other challenges, this one is surmountable, given the increasing confidence and wider benefits, not just for Cyprus but for the wider region.
I visited Cyprus a couple of months ago, and I am committed to going there again next month. I have been keeping in touch with both the Greek Cypriots and Mr Akinci, the Turkish Cypriot leader, whom I spoke to a couple of weeks ago. I am cautiously optimistic that we are seeing an alignment in Cyprus that may make a settlement possible—I do not want to over-enthuse about this, but many people think we now have a chance, the like of which we have not seen for decades.
Last, but not least, I call Mr Hendrick.
Will the Foreign Secretary give us his assessment of the current strength, effectiveness and numbers of the Free Syrian Army, a subject on which he has been very quiet recently? We want to get rid of ISIL and Assad, but there has been no mention of the FSA.
There are many groups, running into the thousands, operating in Syria, and they form together in various alliances and umbrella organisations. The non-ISIL, non-al-Nusra part of the opposition probably has a fighting strength of about 80,000 soldiers deployed across the country. That is my latest estimate.
Order. I am sorry to disappoint remaining colleagues, but as usual demand has outstripped supply.
(Urgent Question): To ask the Secretary of State for Business, Innovation and Skills if he will make a statement on the action the Government are taking to secure the future of the steel industry.
The steel industry across Europe and around the world is facing challenges on a scale unprecedented in recent history, and today we have had further devastating news of redundancies, this time at Tata. So let me begin by saying something to the people of Scunthorpe and Redcar and anyone else living in a community where the local economy is built on steel. I know that the current situation is unbearably difficult and that you are deeply worried about your future and the future of your families, but I assure you that the Government are doing and will continue to do everything within their power to support you in the weeks, months and years ahead. For decades, the United Kingdom has prospered on the back of your industry. We will not abandon you now, in your time of greatest need There is no straightforward solution to any of the complex issues involved, but the Government have no intention of simply standing by. We have already announced a package worth up to £80 million to support people who have lost their jobs as a result of SSI’s liquidation and to mitigate the impacts on the local economy; we have asked Amanda Skelton, chief executive of Redcar and Cleveland Council, to chair a local taskforce; we have ensured that money reaches workers’ pockets quickly via the redundancy payments service; we have brought workers and opportunities together at a jobs fair at which more than 1,000 vacancies were showcased by more than 50 local employers; we have provided additional flexibilities to local further education colleges to allow people to take up training to enhance their job prospects; and we have set aside money to fund those proposals from the taskforce that will make an immediate and lasting impact on the local economy We will do what we can to soften the blow of any further redundancies among steelworkers—including, of course, those in Scunthorpe. Jobcentre Plus and rapid response support will naturally be available, and we are setting up a taskforce that Liz Redfern of North Lincolnshire council has agreed to chair. I will carefully consider what the taskforce proposes by way of additional support that may be necessary Alongside our immediate help for individuals who are laid off, we are taking steps to ensure a future for Britain’s steel industry in an exceptionally difficult market. Excess capacity in global steel is enormous—more than 570 million tonnes last year, almost 50 times the UK’s annual production. The price of steel slab has halved in the past year alone. In the three years since SSI restarted production at Redcar, the plant has lost more than £600 million There are limits to what the Government can do in response. No Government can change the price of steel in the global market; no Government can dictate foreign exchange rates; and no Government can simply disregard international regulations on free trade and state aid—regulations that are regularly used to protect British workers and British industry To identify where progress can be made, I hosted on Friday a top-level summit with key players from the UK steel industry. Bringing together industry leaders, trade unions, Members of Parliament and senior figures from government, the summit created a framework for action that will help us to support steelworkers now and in the future First, we will drive up the number of public procurement contracts won by UK steel manufacturers and their partners through fair and open competition. This Government are committed to a major programme of infrastructure spending. I am determined that the UK steel industry should play a central role in its delivery. The new public contracts regulations give us more scope to offer greater flexibility around how we include social and environmental considerations in our procurement activities. We intend to help other departments and business to take full advantage of these flexibilities, building on what we learned from projects such as Crossrail Secondly, we will consider what lessons can be learned from other countries in the EU and beyond. This will include the resilience of the steel sector in competitor countries and market share of national manufacturers Thirdly, we will look at what government can do to boost productivity and cut production costs. This includes addressing energy and environmental costs, regulation, skills and training. An extensive review of business rates is already under way, and the Government will look very closely at all proposals These steps will come on top of the action we have already taken. For example, we have paid out more than £50 million in compensation to energy-intensive industries in the steel sector. We also plan to offer further compensation in respect of feed-in tariffs and the renewables obligation. This constitutes state aid, which must be approved by the European Commission. The approval process is under way, but it is taking longer than anticipated, and longer than I would like. My Department is working closely with the Commission to answer its concerns and impress upon it the importance of prompt approval. I also plan to meet European Commissioners next week to reinforce our concerns about unfair trade issues and gain their support for urgent action. We have already voted to support extensions of duties on wire rod. We will demand action wherever there is evidence of unfair trade Since Victorian times, British steel has helped to make Britain great. In 2015, it is vital that all of Britain comes together to forge a stronger future for the men and women to whom this country owes so much.
Order. Before we proceed, let me gently say to the Secretary of State that although on a one-to-one basis I always think him a very civil fellow, it is a considerable discourtesy or incompetence—or both—for a Secretary of State to take twice the length of time allocated for answering an urgent question. If the right hon. Gentleman judges that he has more material that he wishes to share with the House, which of itself could be very helpful, that is fine—but the implication of that is blindingly obvious: the right hon. Gentleman should offer to deliver an oral statement of up to 10 minutes. What he should not do is fail to communicate with me in advance, ignore the convention and greatly exceed his allotted time. It is, I am afraid, discourteous and incompetent—and it must not happen again.
We would have welcomed a statement from the Secretary of State. Today he has brought more devastating news for British steelworkers at Cambuslang, Motherwell and Scunthorpe and concerns for workers employed by Caparo, following the devastating news of the hard closure of the Redcar plant last week. May I, on behalf of the Opposition, convey our solidarity with those who have been affected—the individuals concerned, their trade unions, their families and their communities—and ask the Government to do all they can to work with every agency and jurisdiction to support them Let me say first to the Secretary of State that it does not help him to continue the spin about the £80 million. The Minister for Small Business, Industry and Enterprise admitted last week that it was £50 million, and even that is questionable. Spinning does not help the workers one little bit Let me further say to the Secretary of State that all Opposition Members understand the real and difficult problems facing the steel industry. Some of us have worked in the industry ourselves, or have family members involved in it. We know about the heat of the steel plant and the whiff of the coke ovens. We understand all too well that the industry faces huge challenges, not least as a result of not being allowed to operate on a level playing field. No one is trying to minimise those challenges. What we cannot understand is why Ministers do not appear even to have a view on what represents a minimum credible steelmaking capacity in Britain’s long-term strategic interests The overwhelming impression given by the Secretary of State and his colleagues is that, despite their high-flown rhetoric about northern powerhouses and the march of the makers, they seem content to allow Britain’s entire steelmaking capacity to disappear in the face of blatant Chinese dumping. Will the Secretary of State tell the House—and we need a direct answer to this, so I hope the Minister will stop chuntering—whether he believes that the price of the Chinese steel that is being dumped on our shores reflects the true cost of producing it? If not, what is he doing about it? Even if the workers producing steel plate at Scunthorpe offered to work for nothing, that Chinese price could not be matched While the Chinese President is riding down the Mall in a gilded state coach, British workers are being laid off because our Government are not standing up for them. What is the Secretary of State doing to ensure a level playing field so that the British steel industry can have a future? Will he immediately carry out the five emergency actions for which the industry called at the steel summit? He mentioned three actions in his statement, but I fear that they may be too little, too late. Why has he so far been so reluctant to defend the British steel industry during this crisis, when it is so important to our strategic national interests? Will he tell us now whether the Government even have a position on what represents the minimum credible steelmaking capacity in Britain’s strategic interests? If they do, what is it Notwithstanding the Secretary of State’s well-advertised laissez-faire views, will he now reverse his refusal even to accept that the Government need an industrial strategy, and stand up for Britain?
It is a shame that the shadow Minister has taken this attitude. He has decided that he wants to play politics with a very, very serious situation, and that is a real shame. I could stand here and talk about the massive job losses—thousands—during Labour’s time in government. I could talk about the decline in manufacturing. But that would be wrong, because now is a time when people in the industry—producers, manufacturers, trade unions and others—want to see politicians come together and deal with long-standing challenges to the industry The shadow Minister asked a number of questions. First, he asked whether we would do everything we could for the workers and their families who are affected. Of course we will. We have already announced a support package for the workers in Redcar, and I have talked about the taskforce that is being set up in Scunthorpe. We will listen to local people and locally led taskforces who come forward with proposals and ideas about what more we can do to support those areas, and any other area that may be affected The shadow Minister talked about China, and I referred to overcapacity. China is obviously one of the main countries with overcapacity in the market, but there are others. A recession in Brazil is leading to more steel in the market and there is overcapacity in Russia, Turkey and many other countries. The problem goes much wider than just China and requires EU-wide action. We have already voted for action and we will do so again whenever we are presented with evidence. As I said earlier, next week I will go to Brussels to meet the relevant Commissioners and push for much quicker urgent action. I am sure that the shadow Minister supports that The hon. Gentleman also talked about the industry’s suggested actions. UK Steel has five key suggestions and when we had the summit on Friday with many members of the industry—producers, manufacturers, trade unions, Members of Parliament, local leaders and others—we went through each of the actions one by one and set out exactly what we can do. I hope that the shadow Minister can take the same attitude that people took in the summit and understand that although there are some things that the British Government can do, and that where we can we are doing them right away, there are other things, such as action against unfair trade, state aid issues and so on, on which we must work with our partners in the EU. We cannot be a country that sets out to break the rules. I know that the shadow Minister is not suggesting that we break international obligations and rules, but I hope that he has had an opportunity to reflect on his attitude so that he can work much more constructively.
What consideration is my right hon. Friend giving to the creation of jobs in areas that have been struck by the closure of steelworks? In particular, I am thinking of the creation of new enterprise zones with capital allowances such as the Teesside advanced manufacturing park, which could create 2,000 new jobs near Redcar.
My hon. Friend is absolutely right. That is exactly the kind of response that can help with the impact on the ground in the affected areas. Part of the support package for Redcar is about ensuring that there are funds available to help local businesses that come forward with plans to create jobs.
It is absolutely disgraceful that the Secretary of State did not mention Dalzell works or Clydebridge in his opening remarks as steelmaking is iconic in Lanarkshire, but I will move on Today’s news is not unexpected, but the announcement by Tata will affect people across my constituency, not just the steelworkers but the local newsagents, crane drivers, lorry drivers, caterers and cleaners. Although Lanarkshire has seen grave blows to steelmaking over the years, I must tell the House that we are not finished yet. The Scottish Government have already set up a taskforce to help and the First Minister has pledged to leave no stone unturned in her efforts to keep these plants open. We need more action from the UK Government. Will the Secretary of State please speak to the Prime Minister, especially after the summit on Friday attended by my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier), and ask him to speak to China and to address energy prices now, not in April? Will he ask the Prime Minister why he did not address the issue of steel with the European Council? Finally, to echo what has already been said, when will we have an industrial strategy to move things forward?
I am pleased to tell the hon. Lady that, as the Prime Minister confirmed in the House yesterday, we will raise the question of steel with Chinese counterparts during the state visit. Understandably, she talked about the impact in Scotland of the job losses and concerns about the industry. She is right to do so. She will know that these issues are UK-wide, including high energy costs and unfair trade, and we will work with the Scottish Government on any of those issues if they come forward with proposals or ideas. She rightly refers to the taskforce being set up in Scotland, which is very good, and the Secretary of State for Scotland has offered to join it, which could be a step forward.
Will the Secretary of State confirm that although restrictive EU state aid rules prevent the Government from intervening directly in the steel industry, the Government’s efforts to support communities such as Redcar at this difficult time represent strong and decisive action?
Yes. My hon. Friend will be aware of the action we have announced to help workers and their families in Redcar with the job losses that have been announced. If there are any more, we will look into taking similar supportive action.
Caparo Industries’ entering administration is another major blow for the steel industry on top of the blow after blow it has sustained daily. That will be particularly felt in Hartlepool, where 200 people are employed by the company, which pumps millions of pounds into the local economy. Yesterday, the Minister for Small Business, Industry and Enterprise launched the metals strategy with the vision of increasing gross value added by 50% and making the steel industry the principal supplier to the UK’s infrastructure projects by 2030. What is the Secretary of State doing to bridge the gap between the short-term existential threat to the industry, with companies, skills and jobs dropping like ninepins day after day, and that long-term vision? Frankly, if he does not take urgent action now—within days—there will not be a British steel industry left by the end of the year, let alone 2030.
The hon. Gentleman is quite right to mention Caparo Industries and the news that came out in the past 24 hours about its administration. That could clearly have a significant impact on communities in West Bromwich, Wolverhampton and elsewhere. As for having a longer term focus, the metals strategy—I believe that the hon. Gentleman was at the launch yesterday—is just one of our responses. We are ensuring that we listen to industry, work with the relevant sector councils and get full support not only for the large companies but for companies all the way down the supply chain as regards steel and other British manufactured products.
This morning, according to the Department of Energy and Climate Change website, the price of electricity for large industrial users in the UK was 9p per kWh. In France and Germany, that price is 4p per kWh. That differential is such that the blast furnaces in France and Germany are not under the same pressure as those in this country. Does the Secretary of State agree that we must breach that gap and will he further agree that Labour needs to consider the fact that at every vote on differential energy prices in the last Parliament it was on the wrong side of the argument?
My hon. Friend highlights that there have been some long-running challenges not just for the steel industry but for industries that are large users of electricity. The challenge has happened under successive Governments, but he is absolutely right to raise the question of competitiveness. He will know that £50 million of compensation has already been paid directly to such industries as a result of some of the action we have taken, and once we get EU approval, which I hope will be very soon, we can pay for a lot more compensation and help.
I thank the Secretary of State for his warm words of support for the steelworkers and their families in my constituency who are coming to grips with this dreadful news today. However, we have been having warm words from this Government for more than four years while we have been saying that action is needed. We need action from the Government now on business rates, on energy costs, as the hon. Member for Warrington South (David Mowat) has just pointed out, and on Chinese dumping. Will the Secretary of State act? By requesting urgent action, I mean action before Christmas.
I thank the hon. Gentleman for joining the summit on Friday. By being there, I hope he now realises that there are areas where action can be, and is being, taken, but I hope he will appreciate that some of the areas we have talked about today, such as further energy compensation and unfair trade, require working with our EU partners. I know he understands that and I am more than happy to reassure him, and will continue to show him directly, just how seriously we are taking this issue by making sure we respond as quickly as possible.
I echo the words of my neighbour, the hon. Member for Scunthorpe (Nic Dakin). The news this morning is a hammer blow to the economy of northern Lincolnshire and many of my constituents will be affected by it. Can the Secretary of State elaborate a little more on the taskforce that has been established under North Lincolnshire council’s leadership? What Government resources will be made available to it? Echoing the earlier words about enterprise zones, an application, sponsored by both North and North East Lincolnshire councils and the LEP, is already in for enterprise zones in the area. An early decision would be helpful.
I will speak to my colleagues and push for an early decision, as my hon. Friend has suggested. On the taskforce, as he will appreciate, it has just been set up. The chair has been appointed. I want to make sure we listen to the taskforce and local leaders about what is required and how we can help. I understand that the first taskforce meeting is taking place tomorrow, so no time is being lost. We will be represented on that taskforce and listening carefully.
The Secretary of State has referred on a number of occasions to the state aid situation. I do not understand why, as a BIS official admitted at the steel summit on Friday, this was not a top priority for UK state aid clearance with the European Commission. The official also admitted that it would not make any difference now because we were so close to getting a decision. Why was it not at the top of our priorities, and why does the Secretary of State not get on a train to Brussels and stand over officials until they approve it and get the money out to the industry that needs it?
The hon. Gentleman raises an important issue about state aid, but he knows as well as anyone else that this process is not under the complete control of the UK Government. We of course made it a priority, and we made that clear in the summit. It is a priority, it remains a priority and we are making progress, but I am the first to admit that the process is too slow. We are doing everything we can to speed it up, including meeting commissioners directly.
In a world of excess supply, it is understandable that there is real concern about dumping and other restrictive practices. What steps is the Secretary of State taking to ensure that those practices do not become endemic in this market?
My hon. Friend is absolutely right to emphasise this. We have already taken a lead on this in the European Union. In recent votes we have voted for action wherever evidence has come forward, and I am glad that action has been taken, but clearly there is more to do. That is one reason why I will be visiting commissioners in Brussels next week to push for that action much more promptly.
One of the many insults the Redcar workforce have had to endure recently is the theft of their pension payments. Following action by the Community union, I understand that the issue of missing employee pension contributions is being tackled. What are the Government doing to ensure that the workers receive the missing employer contributions, and will the Secretary of State promise me here today that this will not be yet another entitlement that is disgracefully pinched from the £80 million support package, like the redundancy payments?
I thank the hon. Lady for her question, for taking part in the steel summit on Friday, and for the constructive way in which she has helped workers in her constituency and highlighted wider issues around the steel sector I know the hon. Lady welcomes the support we have already provided. I am happy to repeat that at the moment the advice is that the £80 million of support for Redcar workers and their families who are affected by this will go a long way to help the local community and local economy, but if more is required and the taskforce comes forward with a proposal, we will look at that On employer contributions to pension plans, we are happy to try to help in any way we can. I know the hon. Lady has provided some information on this and I think there is more coming. We will take a close look at that.
I thank the Secretary of State for the efforts he is making along with the Minister for Small Business, Industry and Enterprise. Can he give us an idea of the size and scale of Government procurement of UK steel over the coming months and how rapidly that will be rolled out?
The Government have already identified in their national infrastructure pipeline over 500 major infrastructure projects, some of them very large, such as HS2. We are the first country in the EU to change the rules on procurement to allow us to take social and environmental issues into account, which I think ultimately gives us more flexibility. We can start to take immediate advantage of that, and my right hon. Friend the Minister for the Cabinet Office and Paymaster General will help to take that forward.
My heart goes out to the steelworkers and their families both north and south of the border impacted by this announcement. I welcome the establishment of the Scottish steel taskforce this morning to address these issues, but it is a disgrace that the Business Secretary did not once mention Scotland in his reply to the urgent question. May I ask the Business Secretary why the Prime Minister did not raise the steel issue at the European Council last week? The Business Secretary did not answer the question from my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows). Would the Prime Minister not be better served working with our partners in Europe to save jobs, rather than falling out with them to save his own?
I am sure the hon. Gentleman has heard me talk about the challenges facing the industry; these are UK-wide challenges and of course that includes Scotland. When it comes to us—whether the Prime Minister, me or other Ministers—talking to our EU partners, we have had a number of conversations and taken action, for example by voting in the EU and the relevant EU Councils for action on unfair trade. We will, of course, continue working with the EU, because that is what is required, and when the EU does take action, it will be a lot more meaningful than if individual countries try to take action.
We need a steel industry in this country not least because it is imperative for our national security and I am grateful to Ministers for the interest they have shown in this issue. At the steel summit the Secretary of State committed to setting up three working groups. When will those groups first meet and how quickly will they report? On the additional energy compensation to which he referred, I urge him to shoot first and ask questions later.
I thank my hon. Friend for taking part in the steel summit and his contributions. These working groups have already been set up and each and every one of them has begun work. In fact, I can announce which Ministers will be chairing and leading the work for each group: it is the Minister for the Cabinet Office and Paymaster General on public procurement, the Minister for Small Business, Industry and Enterprise on international comparisons, and the Commercial Secretary on competitiveness and productivity. All these working groups will have their first meetings later this week.
It is good to see the Secretary of State here on this occasion. Has he initiated an anti-dumping investigation pursuant to the World Trade Organisation agreement, and if so, what stage is it at? If he has not, why not, and when is he going to start to stand up for Britain?
The hon. Gentleman knows that we have already started taking action. As I have said, we have voted for action at the EU. We have in fact led the way on certain products. He will also know that the process is EU-led in terms of investigations. We have provided evidence where we found it. If he is aware of any stakeholders that have evidence that he thinks we may not have, I would like to see it.
I congratulate my right hon. Friend and his team on their prompt and compassionate action on this problem and on dealing with this challenge. What consideration has he given to potentially pre-ordering steel for infrastructure projects, particularly on issues of national security?
My hon. Friend makes a good suggestion. As part of our approach to procurement, that is exactly what we are looking at. One thing that came out of the summit was that the industry understandably wants certainty about future demand. There is a commitment from the Government on major infrastructure projects involving HS2, aviation capacity, civil nuclear power and Trident, and if that kind of commitment could be more cross-party, it would help to provide that certainty.
The crisis in the steel industry has been caused not only by the fall in world demand but by the increase in the costs imposed on producers in the UK because of green energy policies that have put electricity prices up by twice those of our competitors. Can the Minister really justify fiscal policies such as the carbon floor price, which are designed to cut carbon dioxide emissions, while we are exporting jobs to countries that are more interested in the health of their economy than in King Canute’s attempts to change the world’s climate?
The hon. Gentleman is absolutely right to raise this matter, which goes to the heart of one of the competitiveness issues facing the industry—namely, the relatively high energy costs. Some of those costs are imposed here domestically, and some are imposed directly through EU policies. Where we can take action, such as through the compensation package, we are doing so. I hope I can assure him that we want to pay more of the compensation that we have already announced as quickly as possible. That is why we want to get EU approval as quickly as possible.
I really do not think that this is a party political issue, as illustrated by the fact that we have had a Backbench Business Committee debate on the matter, which led to the steel summit in Rotherham. Will the Secretary of State answer the question put to him by my hon. Friend the Member for Corby (Tom Pursglove)? He urged him to shoot first and ask questions later. Let us put in place what we think is right, and worry about whether the EU agrees with it afterwards. We need to do this now; otherwise, there might not be a steel industry left to worry about.
I understand my hon. Friend’s point, but he will know that the rules on state aid, unfair trade and compensation exist to protect British industry as well. Indeed, British industry, including steel manufacturers, would be the first to complain if other countries were violating those rules. Frankly, if we are going to complain about others violating the rules, we need to have clean hands ourselves.
If the Secretary of State really believed what he was saying today, he would have made an oral statement instead of having to be dragged here yet again to answer an urgent question from the Opposition Benches. Why is he again raising the issue of £80 million for Redcar? It is not £80 million, as he knows all too well, because his own Prime Minister has blocked access for the entire sector to get hold of EU globalisation adjustment funding, of which £5 million could have been accessed by the sector to help the 5,200 workers who are directly affected. More than that, the Secretary of State knows that our EU and US allies have personally taken action against Chinese dumping. Act now, or we might not have an industry left!
I hope that the hon. Gentleman has welcomed the written ministerial statement that we issued today. Coming to the House to respond to this urgent question gives us a further opportunity to debate the matter, as we have done here before. What matters most, however, is action, as he suggests. [Interruption.] When it comes to action, he will know that for the first time ever, a British Government have taken action in terms of supporting duties by the EU. As I have said, we will take further action, and we will not hesitate to do so once the evidence is there.
The steel industry is a vital national interest. It is also vital for many of our communities around the country, and I encourage the Secretary of State to maintain a laser-like focus on it throughout the coming years. Will he also look at another issue that the steel industry has raised—namely, the quality of the steel, particularly structural steel? There is no point in buying cheap steel and putting it into buildings, only for them to develop problems in 20 years’ time. Let us buy British steel of the right quality.
My hon. Friend is absolutely right to raise that point. I agree with him wholeheartedly about the importance of the steel industry to the economy as a whole and to our manufacturing base. It is without question a vital national asset, as he says. The important issue of quality must be considered alongside the question of markings and of ensuring that the quality is properly tested. Those issues came up in the taskforce, and we will be looking at them very closely.
I welcome today’s announcement of the £100 million Chinese investment by SinoFortone in the London Paramount theme park, but our Chinese partners need to know that this country is more than just a theme park. We need a steel industry and a manufacturing strategy. Will the Secretary of State explain what talks he is having this week with visiting Chinese officials on dumping, on state aid and on environmental regulation? When will he stand up for Britain?
This week, there will also be announcements on further incoming business from China to Britain, and on opportunities for British companies to export to China, worth a total of more than £25 billion to the British economy. That will help to sustain thousands and thousands of jobs throughout the country, including in the hon. Gentleman’s own constituency. The Prime Minister said yesterday that, when he sits down with Chinese Ministers, officials and others, the issue of unfair trade will be discussed.
As a former steelworker of 31 years’ standing, may I say that Chinese dumping and Government neglect are killing the British steel industry while the Government are simultaneously gifting future nuclear jobs to China? Is not the posture of this Government towards China today that of a supplicant fawning spaniel licking the hand that beats it?
I am sure that the hon. Gentleman wants to be reassured that we will bring up the issue of unfair trade with China. We will do so.
Is not the Minister one of the people who, at the general election a few months ago, campaigned as a representative of the workers? Well, now he has got a job and he has to prove that. The closures are spreading like wildfire across the United Kingdom. It started at Redcar and we thought it was a little disturbance, but over the past 10 days more and more closures have been forecast. He is now in the Government, and it is his job either to stop this carnage or to give way to someone who can make a fist of it.
I hope that, when the hon. Gentleman was sitting on these Benches supporting a Labour Government, he made similar noises about the halving of our manufacturing base. I hope that it was made clear in the statement today, and in my answers to other questions, that we are taking action where we can and that we will not hesitate to do so.
The hon. Member for Bolsover (Mr Skinner) is many things, but he has never been accused of being what might be called a silent lamb. I think we are clear about that.
Steel is one of our foundation industries, and it can still be saved. Will the Minister examine the European material from the North East of England Member of the European Parliament, Judith Kirton-Darling, to see just how the state can properly intervene? Will he do that before Teesside and other parts of the UK follow the same path to ruin as Ravenscraig in central Scotland, where the community has still not recovered, 25 years later?
That is a good suggestion, and we would be quite happy to meet her.
It is with a sad heart that I have to stand here today and talk about possible closures at the Clydebridge works in my constituency and the Dalzell works in the constituency of my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows). My thoughts are with all the steelworkers throughout the UK. We must do everything we can for the workers. There is never a good time for job losses; that is especially true so close to Christmas. We welcome the Scottish Government’s action to set up a Scottish steel taskforce, but we need to know what the UK Government are going to do. For months on end, MPs on both sides of the Chamber have been asking for action to save the steel industry in the UK. I am glad to hear that the three working groups are up and running, but what are the Government going to do about the dumping and about the high energy costs? When are they going to start listening to the Members in this Chamber?
May I thank the hon. Lady for taking part in the steel summit on Friday? She will know that one thing we talked about was support for workers, and I welcome the creation of a taskforce in Scotland. As I said, we will support that and help in any way we can. She is absolutely right to emphasise that we must do everything we can for the workers who have been affected and their families, and that is certainly the way that we will move forward.
Clearly, urgent action is needed to stem the flow of job losses in the steel industry, and what the Business Secretary has had to say today is woefully inadequate. What is even more inexplicable is his refusal to commit to a long-term strategy for the future of the industry. Elsewhere in government there has been a commitment to a 25-year strategy to secure the future of food and farming, so why can he not do the same for steel?
I thank the hon. Lady for joining the steel summit on Friday. We collectively discussed the issue of strategies, procurement and pipeline, and the whole supply chain. I hope she will be reassured that since that meeting we have already, for example, set out a metal strategy, which has steel as a very important part of it.
The Minister has used many words about action, getting things done and taskforces, but from my constituents’ point of view this does not look like action at all—it looks like disinterest. Five asks came out of the steel summit. Does he even know what they were? What is his response to those asks?
This is an opportunity to remind the hon. Lady of action that has already been taken—for example, the compensation of more than £50 million already provided to the steel industry for higher energy costs, and our becoming the first of all 28 EU member states to adopt new procurement rules, which will give us the kind of flexibility that I know she wants to see.
The Secretary of State will be aware that the hard closure of the Redcar steelworks will cost hundreds of millions of pounds to secure the assets that are there, and the continued bad news on closures will cost hundreds of millions of pounds more, potentially running into billions. Has he shared this information with the Chancellor of the Exchequer? Does the Chancellor understand the impact this will have on his much vaunted deficit reduction plans?
Of course the sad closure of the steelworks—the coking facilities—at Redcar is well known and understood throughout the Government, and every Department that needs to be involved in providing support and help is involved.
The steel industry is a key strategic sector for the Welsh economy—indeed, Tata Steel is considered by the Welsh Government to be an anchor company. What representations has the Secretary of State received from Welsh Ministers on the current crisis? What discussions are planned to co-ordinate Government action to ensure that all levers are used to preserve Welsh jobs?
The hon. Gentleman makes a very important point, and steel is obviously hugely important to Wales in so many ways. Edwina Hart, the Minister from the Welsh Government, was at the steel summit and played a very constructive role, and she will be working with us going forward.
Will the Secretary of State tell the House what he is doing to map out the problems facing the companies in the supply chain? Does he know who they are, where they are and how many people they employ? What more can he do to help them out?
On this issue, a number of very good suggestions were made by the industry, trade unions and others at the taskforce. One related to certain industries that are now, thankfully, going through a huge growth phase, such as the automotive industry, which is a big user of British metals, including steel. We will be working closely with each of those industries to see how we can hard-wire the requirement for British products and British steel into their products.
Caparo Wire in Wrexham is one of the businesses threatened by the news of the past 24 hours. If the Secretary of State really believes that the UK needs a strategically based steel industry for our defence purposes, how big should that industry be? Will he identify where and how he is going to retain capacity within the industry, which is under immediate threat?
On capacity for the British steel industry, we have, unfortunately, seen a steady decline under successive Governments. What we need now is to provide more certainty to steel producers, be it in relation to energy costs, their concerns about unfair trade or the supply chain, so that they can build their plans for the future. That is what we will be helping them to do.
The first thoughts of those of us on the Liberal Democrat Benches are of course with those affected by this devastating news. I must bring to the attention of the Secretary of State his predecessor’s comments in last week’s Standard, where he said that it is clear where the focus of Government attention is when all the focus during the Chinese visit is on currency convertability, to help the banking sector and not on dealing with this problem of the dumping of Chinese steel, which is affecting British manufacturing. Will he give an assurance now that the Prime Minister will raise this specifically with the Chinese premier today?
First, let me tell the hon. Gentleman that alongside the Chinese visit this week we will have an announcement of more than £20 billion of business deals which will support jobs throughout the country, including in his constituency—I know he will welcome that. On his specific question about whether the Prime Minister will raise the issue of steel with the Chinese, the answer is yes, he will.
With permission, Mr Speaker, I would like to make a statement on the assessment of the structure, roles and purpose of paramilitary organisations in Northern Ireland, which I am publishing today and copies of which I am placing in the Library. Before I turn to the assessment, it is worth reminding the House of the phenomenal progress that has been made in Northern Ireland over the past 20 years. We have moved on from a time when terrorism was an almost daily fact of life to one where the overwhelming majority have completely rejected violence as a means of trying to secure political ends. The political settlement, which sees people who were once enemies working together for the good of the whole community, has transformed life for the better. However, as the murders of Gerard Davison and Kevin McGuigan have highlighted, there are still serious legacy issues that need to be addressed, and they include the structure, role and purpose of paramilitary groups I commissioned an assessment of those matters following the statement in August by the Police Service of Northern Ireland that a line of inquiry in relation to the murder of Kevin McGuigan was the involvement of members of the Provisional IRA. The assessment has been jointly drafted by the PSNI and MI5, drawing on current intelligence, and has been reviewed by three independent figures, Lord Carlile, QC, Rosalie Flanagan and Stephen Shaw, QC. The three reviewers have confirmed today that the PSNI and MI5 engaged fully with them, consistent with their duties and constraints, and that the assessments are, in their words, “fair and balanced”, “evidence based” and “credible”. They state that they are “satisfied that the assessments meet all the requirements placed upon us” I wish to thank the PSNI, MI5, and the independent reviewers for carrying out this important work within the timeframe I gave them I would first like to set out the Government’s position on paramilitary organisations in Northern Ireland: paramilitary organisations have no place in a democratic society. They were never justified in the past, they are not justified today and they should disband. These organisations brought misery and suffering throughout the 30 years of the troubles. Together, they were responsible for more than 3,000 murders, and thousands more have been injured. Only last week a service was held to mark the 25th anniversary of the IRA murder of that great champion of freedom and democracy, Ian Gow. Today the thoughts of the House should be with all those who suffered directly at the hands of paramilitary organisations. We should also be mindful of the fact that, thanks in large part to the efforts of the police and our armed forces, along with the determination of the overwhelming majority of people across these islands, the future of Northern Ireland will only ever be determined by democracy and consent The assessment sets out the position in respect of those organisations that declared ceasefires in order to support and facilitate the political process. It does not cover in any detail the threat posed by dissident republican groupings, which is the subject of separate, regular reports that I make to this House. The assessment does, though, confirm that dissident republicans remain a severe threat and that, at any given time, a terrorist attack from them is highly likely. For our part, the Government will always give the police and security services the fullest possible backing in their efforts to keep the people in Northern Ireland safe and secure The assessment confirms that all the main paramilitary groups operating during the troubles are still in existence, including the Ulster Volunteer Force, the Red Hand Commando, the Ulster Defence Association, the Provisional IRA and the Irish National Liberation Army On structures, the assessment finds that “the majority of paramilitary organisations in this report still have leadership structures” and “organise themselves along militaristic lines.” It goes on to say: “These labels make the groups look more prepared for a campaign of violence than they are” and that “in the highly unlikely event that the groups are minded to return to terrorism, we judge they would be unable to resurrect the capability demonstrated at their peak.” On the role of these groups, the assessment concludes that “none of these groups is planning or conducting terrorist attacks”, although some INLA members have provided help to dissident republican terrorists The report also states that “members of these paramilitary groups continue to engage in violent activity, both directed by local leadership and conducted without sanction.” It says that “members of all groups have carried out murders since the 1998 Belfast Agreement.” In addition, the assessment makes it clear that “members of these paramilitary groups, to different degrees, are also involved in other serious criminal activity.” That includes: “large scale smuggling operations, fuel laundering, drug dealing and extortion.” On weapons, the report says that “although the majority of paramilitary weapons were decommissioned, some were not.” On the purpose of these groups, it concludes that “it is our firm assessment that the leaderships of the main paramilitary groups are committed to peaceful means to achieve their political objectives” but that “we judge that individual members of paramilitary groups with a legacy of violent activity still represent a threat to national security.” The report is in no doubt that these groups “cause serious harm to the communities in which they are embedded and undermine support for policing.” On the individual groups, the assessment confirms that the “structures of the UVF remain in existence and that there are some indications of recruitment.” It states that “the UVF’s leadership has attempted to steer its membership towards peaceful initiatives and to carve out a new constructive role in representing the loyalist community.” However, the assessment goes on to confirm that “a larger number of members, including some senior figures, are extensively involved in organised crime.” UVF members are also involved in paramilitary assaults In respect of the UDA, the assessment concludes that while its structures remain in existence they have “become increasingly fragmented” and are split into “discrete geographical areas” that “act almost completely autonomously.” The assessment states that “with the support of some leadership figures there are UDA members who have continued attempts to steer the group into positive community based activism.” Others, however, remain engaged in criminality and violence with individual members and some senior figures involved in organised crime, including “drug dealing, robbery, extortion, and the distribution of counterfeit and contraband goods.” There is also involvement in paramilitary style assaults, street disorder and violent protest In respect of the Provisional IRA, the assessment says: “The structures of PIRA remain in existence in a much reduced form” including “a senior leadership, the ‘Provisional Army Council’ and some ‘departments’.” The authors of the report do not believe that the group is actively recruiting. They state that, although decommissioning took place between 2001 and 2005, PIRA continues to have access to some weapons. However, the assessment judges “that PIRA has not conducted organised procurement of new weaponry in the period since the last IMC report of 2011.” While the assessment states that “PIRA members believe that the PAC oversees both PIRA and Sinn Fein with an overarching strategy”, it judges that “this has a wholly political focus.” The report points out that “individual PIRA members remain involved in criminal activity, such as large scale smuggling, and there have been isolated incidents of violence, including murders.” In conclusion, the report says: “The PIRA of the Troubles era is well beyond recall. It is our firm assessment that PIRA’s leadership remains committed to the peace process and its aim of achieving a united Ireland by political means. The group is not involved in targeting or conducting terrorist attacks against the state.” That is a direct quote from the assessment I will not seek to hide from the House that much of the assessment makes uncomfortable reading. These organisations should never have existed in the first place and, 21 years after the first ceasefires, it is clearly unacceptable that they still exist today For all that the assessment judges the leaderships of the main paramilitary groups to be committed to peaceful means, such groupings have no place in a democratic society. Members of those groups continue to exert a malign influence, which, as the assessment puts it “harms communities and damages the financial prosperity and reputation of Northern Ireland.” Inevitably, a document of this kind does not provide all the answers, but I hope that it will assist in identifying the nature and scale of the problem and in framing the debate about the way forward. Working with the main political parties, and society more broadly, we need a strategy to lead us to the point where these organisations no longer exist and their influence is removed from Northern Ireland once and for all. That is one of the two main goals of the talks that I am chairing at Stormont and it is an outcome to which all parties say they are committed The other goal is to secure the implementation of the Stormont House agreement. I believe that those talks represent the best chance of making progress on both these vital issues and of finding a way forward that builds a brighter, more secure future for everyone in Northern Ireland. We all now need to engage intensively in the talks in the days ahead, and I commend this statement to the House.
I thank the Secretary of State for advance sight of her statement and for her usual courtesy. May I also join her in thanking the members of the independent panel for their serious report, which I know will be read by the families of the victims? Those families and those victims are very much in our thoughts today Does the Secretary of State agree that at the heart of the undeniable progress that has been made in Northern Ireland is trust? I am talking about trust in the institutions, trust in the democratic process and, crucially, trust between parties and politicians. Above all, there is a belief in the principle of the rule of law. It is that core principle that has to be paramount. It is a principle that has to be at the centre of the continuing progress in Northern Ireland, and we should not forget that the work of the Police Service of Northern Ireland remains crucial to that The current political crisis in Northern Ireland was sparked by allegations surrounding the murder of Kevin McGuigan, following the murder of Gerard Davison. Will the Secretary of State tell the House what the report says about those murders and the extent of any paramilitary activity? In order to reach its conclusion, the panel will have had access to sensitive intelligence. Will she confirm that the panel has obtained all the intelligence for which it has asked? Crucially, will the Secretary of State tell us whether she believes that the assessment of the independent panel and its report today provides a basis for an end to the political crisis in Northern Ireland? If she does, what happens now and how will progress be made? Will she be convening further talks? If not, what does she expect to happen and what will she do Will the Secretary of State also update the House on the current situation with respect to the Stormont House agreement and when she intends to publish the Bill The reaction of the Northern Ireland parties to the panel’s conclusions is obviously of huge importance. Has the Secretary of State had any preliminary discussion with the parties on this matter? It is also important to know the view of the Irish Government. Will she say what discussions she has had with them Paramilitary activity has no place in Northern Ireland. The vast majority of the people do not want it and neither do their politicians. Does she agree that it is for the police to enforce the law? They should, of course, be accountable, but their independence is crucial. No paramilitary activity is acceptable, whether it is carried out by remnants of the IRA or loyalist paramilitaries. Will the right hon. Lady tell us what measures, if any, she intends to take as a result of the report? Much of the media focus has been on the IRA, but what is her view of loyalist paramilitaries? Does she believe, for example, that the establishment of the Loyalist Community Council recently was a good thing Is not one of the crucial conclusions of the report that “none of these groups is planning or conducting terrorist attacks” Does the Secretary of State agree that, as the report states, “the existence and cohesion of these groups since their ceasefire has played an important role in enabling the transition from extreme violence to political progress” If so, what does that mean for the future? Can she confirm that, as the report says, it is individual members of paramilitary groups who pose the real threat? Although much of the focus is rightly on threats to national security, is it not disgraceful and unacceptable for any individuals or groups to be involved in what the report describes as “large scale smuggling operations, fuel laundering, drug dealing and extortion of local business” It is surely right, therefore, that we in this House restate our support for the work of the PSNI in tackling these issues There can be no doubt that once again hugely difficult issues have arisen in Northern Ireland—issues that are an immense challenge to the politicians of Northern Ireland and to all of us who seek to support them as they emerge from the horror of the past. We know that time and again politicians in Northern Ireland have risen to that challenge. They have found a way forward. They have dealt with seemingly intractable problems. Is it not time again for all of us to restate the fundamentals of the agreements that have brought us to where we are, and to reassert the principles of trust, sensitivity and mutual respect on which so much progress has been made, and the primacy of the rule of law? So many people have said to me that they do not want their children or grandchildren to suffer as they have done. Let us all find a way once again to ensure that that aspiration remains a reality.
I agree with the shadow Secretary of State that trust between political parties is crucial in making progress in Northern Ireland and crucial to the effective functioning of devolved government. I wholeheartedly agree that belief in the rule of law and support for that concept is crucial in Northern Ireland, just as it is everywhere else in our country. Like the hon. Gentleman, I believe that the PSNI does a hugely important job in tackling not just the terrorism of the dissident republicans, but the criminality from the groupings about which I have been speaking today. In relation to the case of Kevin McGuigan, the assessment confirms that the view of the two organisations, the PSNI and MI5, which compiled the report, is that the Chief Constable’s statement in August remains valid, so the situation in relation to the Kevin McGuigan case continues to be as set out by the PSNI in August On the question of access by the panel to classified and sensitive intelligence, yes, members of the panel were shown classified material and they had access to individuals from MI5 and the PSNI to challenge them on the process by which the assessment and the report had been compiled The shadow Secretary of State asked whether I believe the assessment can provide a basis to move forward. Yes, I do. As I said in my statement, I do not for a moment say that it answers all the questions in relation to paramilitary organisations. There is now a pressing need in the talks for the parties together to establish what is the best way to grapple with the continuing problems associated with the existence of paramilitary organisations, but I hope the publication of the assessment will inform the decisions that will need to be made in the coming days by the leaders of Northern Ireland In response to the question about my discussions on these matters, I have had extensive discussions with the five main parties in Northern Ireland and with the Irish Government as part of the talks process and beyond that. On the hon. Gentleman’s question about the establishment of the Loyalist Community Council, I welcome initiatives designed to move groups away from criminality, but this initiative must be judged on its results I echo the shadow Secretary of State. It is correct to highlight the conclusion in the assessment that none of the groups under consideration is planning terrorist attacks. He referred to the role these groups might have played in the transition of their members from a violent past to a peaceful future. I acknowledge that the picture is mixed, but there are some aspects of the assessment that are not completely negative That covers most of the hon. Gentleman’s questions. I close by saying that I agree with him that it is unacceptable for individuals, whether they are in paramilitary organisations or not, to be involved in disgraceful activity such as the fuel laundering and smuggling that I outlined today.
The report makes for depressing reading in some ways. Has the Secretary of State had the chance to assess whether any of the money from the fuel smuggling, extortion and so forth finds its way into the political process? Does she agree that the work of these criminals is no reason to bring the institutions down, provided that the police and the other agencies have sufficient resources to track these people down and stamp out their poisonous activities? Are sufficient resources going to these agencies so that they can do exactly that?
Yes, in some ways the assessment makes for depressing reading but, as I said to the hon. Member for Gedling (Vernon Coaker), the assessment is that the statement of the Chief Constable remains valid. He emphasised in that statement that the criminality appears to be by members for personal gain and to pursue personal agendas, so there is no evidence of funds being diverted for political purposes. On police resources, it is important that the police have the resources they need to tackle criminality and terrorism. That is one of the reasons why the UK Government have provided additional security funding, and it is why we need to resolve the budget questions around the Northern Ireland Executive and implement welfare reform so that it has resources for its priorities, such as policing.
I thank the Secretary of State for advance notice of her statement. That is much appreciated I and my party very much welcome the assessment of the review panel, showing that there is little likelihood of a return to the levels of violence that we saw during the troubles. So many people have worked on that over the years and the peace has been hard won. It is very satisfying to note that, in the main, the intent among the parties and organisations is to keep that peace There are, of course, the concerns already mentioned about the ongoing criminality and the damage that can be done to communities by that. The police and security services, as mentioned, will require ongoing support in addressing that. I note, though, that the report is clear that the concerns relate to both sides of the debate. We can perhaps now leave aside the idea that one side maintains readiness and the other does not. Both sides, it seems, continue to operate at a lower level than they did previously. I offer whatever help I and my party can provide in dealing with the issues outlined In the light of the report and the other developments, including the recent development in the investigation of the murder of Kevin McGuigan, is the Secretary of State confident that the talks to put the Stormont House agreement back on track can now succeed? Does she have any indication that all the governing parties are ready to return to their ministerial posts in Stormont? In relation to her analysis of what will be required to address the criminality mentioned in the report, does the Secretary of State believe—I realise that this question has already been raised—that sufficient resources are available to the police and the security services to tackle it?
I, too, welcome the assessment’s confirmation that the intelligence services do not believe that any of these paramilitary organisations are preparing for a return to terrorism. The hon. Lady is also right to highlight the fact that the problem of criminality is common across the different organisations. She asked whether I am confident that the talks will succeed. It is difficult to say, because there are still some significant gaps between the parties, and the debate over the financial sustainability measures, which are crucial if we are to return to successful devolved government, continues to be difficult to resolve. However, I believe that all five parties participating in the talks want to find a way through and to make devolution work, so I have some hope that we might have a successful outcome, although it is not guaranteed.
I thank the Secretary of State for her statement, particularly her tribute to our military and security forces, who defended the rule of law through some very difficult decades and created the conditions in which the talks could take place. Does she agree that we cannot have a normal political process in Northern Ireland while those engaged in political activity have links to shadowy organisations that might either go to the grotesque end of murdering Kevin McGuigan, or indulge in money-raising activity that is wholly illegal, such as racketeering, money laundering and fuel smuggling? The answer is absolutely to bear down on every one of those criminal activities, regardless of where that might lead and any potential political embarrassment.
I agree that it is vital that Northern Ireland moves to a situation in which paramilitary groups are part of its past, not its present or its future. It is entirely unacceptable for those organisations still to exist, and the involvement of their members in such serious criminal acts must be a matter of grave concern. It is vital that the police follow the evidence wherever it leads them. Bearing down on the criminal activities of those individuals is how we will help Northern Ireland to move forward.
Our party sought this assessment, and it comes as a result of the pressure that we were determined to exert, whatever the criticisms or brickbats that that brought us. We therefore welcome its publication today, setting out the clear, factual position regarding paramilitaries in Northern Ireland. However, the report demonstrates the scale of the work that lies ahead in the talks process. It states that the IRA is committed to the peace process, and it recognises the lack of recruitment, procurement of weapons and so on. Nevertheless, it clearly sets out the continuing existence of its paramilitary structures—that applies to all the organisations that were looked at—and illegal activity by its members. That is totally unacceptable, and it is beyond high time that it was ended in all its forms—terrorism and criminality With regard to the account of loyalist groups, although there are no direct implications for devolved government, it is essential that transformation takes place in that regard, too. In that context, will the Secretary of State welcome the willingness of the leadership of those groups to move forward, as publicised last week? Will she work with us, and all those committed to peaceful and democratic means, to end once and for all—this must be the outcome of the talks process—all forms of paramilitarism in Northern Ireland?
I can give the right hon. Gentleman that commitment. I think it is vital that we find a way to end all forms of paramilitarism in Northern Ireland. I also agree that it is crucial that the talks currently underway succeed. All the parties need to engage intensively on this matter and on the Stormont House agreement, because without resolution of those questions it is difficult to see how we can have an effective and functioning Executive delivering on their priorities. It was very important that the assessment was produced and that we have further facts in the public domain, but I acknowledge his point that the scale of the task is great. We must not underestimate that, which is another reason why all the parties need to engage in the talks with determination to find a way forward.
I congratulate my right hon. Friend on her statement and the panel on its assessment, which offers partial reassurance, but does she agree that that reassurance must be qualified by the fact that, unlike state actors, paramilitaries do not obligingly leave an audit trail that can easily be assessed by intelligence services, however excellent they are?
Naturally, with criminal and paramilitary activity it is not easy to get an entirely clear picture. Of course, a key element of the talks will be deciding what further process of verification is needed. There has been considerable discussion of reviving a body similar to the Independent Monitoring Commission. I think that is a useful point for discussion, and I am sure that the parties will be considering it in the coming days.
I thank the Secretary of State for her statement. I know that she has tried to put as positive a spin as possible on the report, but it confirms that the report by the Chief Constable of the PSNI two months ago was accurate, that the IRA is still in place, that IRA members murdered Kevin McGuigan and that they are still involved in paramilitary and criminal activity. It actually goes further and gives more information, indicating that the IRA army council is still in place and that it oversees the IRA and Sinn Féin’s overarching strategy. Will she now indicate whether Sinn Féin accepts that the IRA is still in place, and does she accept that the IRA and Sinn Féin continue to be inextricably linked?
It will not surprise the hon. Gentleman to hear that I am unable to speak for Sinn Féin—no doubt it will provide its own response to the report—but I also take issue with him, because I am not trying to put any spin on the assessment. Today of all days, we need people to read the report and consider it objectively. Yes, there is a great deal in it to be very concerned about, but we need to use it as an opportunity to reflect on how we deal with the problem and on what more needs to be done to ensure that Northern Ireland makes progress. I have acknowledged that the situation is serious and that the task will not be easy, but I think that it is a task that can be achieved. Northern Ireland’s leaders have shown in the past that they are capable of grappling with this very difficult kind of issue.
When I was the intelligence officer in Londonderry, the discipline among paramilitary groups such as the Ulster Defence Association, the Ulster Volunteer Force, the Irish National Liberation Army and the Provisional IRA was hugely effective. The independent reviewers have clearly suggested that the leadership of such organisations are not necessarily in control of what their members are doing. I suggest that our security services should be putting huge efforts into dislocating and separating these maverick members of paramilitary organisations from their leadership, who say that they have nothing to do with the upsurge in violence.
It is certainly clear from the assessment that in many cases the leadership of the various organisations do not control or sanction what their members get up to, but I can assure my hon. Friend that Northern Ireland has an outstanding police service, supported by the intelligence services, and they will pursue crime wherever they find it. They do a fantastic job. They will pursue the individuals responsible for the sorts of crimes outlined in the report with as much vigour and determination as they pursue anyone else involved in wrongdoing in Northern Ireland.
I am very grateful indeed to the Secretary of State for making her statement to the House. I am relieved that, with regard to the Provisional IRA: “The PSNI and MI5 do not believe the group is actively recruiting.” However, what I am worried about, and very curious about, is how much seepage there is from the Provisional IRA to dissident republicans. Is there a high or low level of seepage? What is her assessment?
I am sure that the hon. Lady will accept that these are very sensitive matters and that it is not appropriate for me to go beyond the assessment. Naturally, the risk of seepage between the Provisional IRA and dissident republican groups is always a risk about which our intelligence services and the PSNI are acutely aware. One of the reasons these groupings remain a threat to national security is the danger that their expertise might find its way into the hands of dissident republicans. That is a risk that we all need to be aware of.
I welcome what my right hon. Friend has said and the work of the panel. Given the information we now have, does she believe that there should be a continuing role for such assessments going into the future?
Almost all the parties have made it clear that part of the solution on paramilitary organisations is an ongoing process of verification that is demonstrably independent, so that is likely to be part of a successful outcome to cross-party talks.
Does the Secretary of State agree that the assessment proves that there is a need for a whole community approach to making sure that we eradicate all traces of malignant paramilitarism? Does she also agree that alongside that we need a whole enforcement approach by policing and revenue channels against any level of criminality? We have to be absolutely clear that no level of crime can be treated as par for the course in a peace process. We welcome the predisposition towards peace, but we cannot accept a predilection towards crime from the members of these groups.
I agree with all of that. We do need a whole community approach to resolving this problem, and we do need a whole enforcement approach. I pay tribute to the work of groups such as the Organised Crime Task Force, which co-ordinates all the organisations working on organised crime. I wholeheartedly agree with the hon. Gentleman that there is no tolerable level of criminality. Anyone responsible for criminal activity should be pursued by the police and brought to justice.
May I remind my right hon. Friend that this is not a Northern Ireland problem but a UK problem? The offence of paramilitary violence that has been the scourge of our lives for more than 50 years in these islands has affected some of our families directly, in all parts of the House. I urge her to maintain the pressure that she has so rightly placed on the criminal actions of a few, and to encourage the PSNI, which has been extremely courageous in its work these past years, to continue its work.
I agree with my hon. Friend that this is a UK-wide issue. He is right to remind us all that victims and survivors of the troubles are not confined to the population of Northern Ireland; many of them live in Great Britain. Indeed, there are also people elsewhere in the world who share the pain of those who suffered directly at the hands of these terrorist organisations in their violent past.
I thank the Secretary of State for her statement and commend my hon. Friend the Member for Gedling (Vernon Coaker) for his response. The Secretary of State said that she wants to see the full implementation of the Stormont House agreement, and I wholeheartedly share her sentiments and support her in that. Is it the Government’s position that they wish to see agreement between all the parties before legislating on the Stormont House agreement, and how long does she anticipate it will take to get that agreement?
We have had some good discussions in the talks on the technical aspects of the legislation needed to deliver the institutions on the past. We hope to introduce that legislation soon. It is important that the Stormont House agreement is implemented in full. The parties have the opportunity to get that process back on the road, and I hope that they will engage intensively in the talks in the days to come.
I congratulate my right hon. Friend on her statement. Clearly, this is a delicate balancing act. In her assessment, has she considered whether any of the parties have breached any of the commitments they made at the Good Friday agreement or at the Stormont House agreement and have, as such, vacated their position as part of the overall strategy for Northern Ireland?
For clarification, the assessment in relation to the paramilitary organisations does not indicate that those organisations are no longer on ceasefire. However, I think that my hon. Friend’s question was primarily about the Stormont House agreement. As the House will be aware, the major blockage on the Stormont House agreement is that the two nationalist parties, having signed up at Stormont castle to welfare reform with top-ups from the block grant, then withdrew their support. That is an instance where two of the parties signed up to something and are not currently supporting it, but I hope we can find a way to get their support back in the days to come.
As the Secretary of State has indicated, dissident republicans are very active and deadly. The PSNI is on a high alert. Army units have been sent to the Province to give assistance to the PSNI. The terrorist threat is at a severe level in Northern Ireland. The law-abiding overwhelming majority of Northern Ireland citizens are sick to the back teeth of this cancer in our society. Does she agree that only by taking a ruthless and uncompromising approach to paramilitary activity can we have a real chance to heal the scars on the face of Northern Ireland once and for all?
We certainly need an uncompromising approach to pursuing criminality wherever it is found. It is also important to harness the activities of wider society. One of the problems in getting convictions for things like paramilitary assaults is that people feel afraid to come forward and give evidence. We need to reflect on what more can be done to give them the confidence to confront these individuals in their communities and to come forward and give evidence in court when those individuals commit crimes.
The assessment makes it clear that the time of large-scale mass violence by paramilitaries is a thing of the past, but there is a danger, as the years from that period to now extend, that people will romanticise that period of violence and that people who formally or informally associate themselves with paramilitary groups will take independent violent action. What steps is my right hon. Friend’s Department taking to ensure that this romanticisation is nipped in the bud and that people who aspire to relive what they perhaps believe to be some glorious bygone era have their minds set straight and do not embark on individual acts of violence?
My hon. Friend makes an important point. There is a tendency among some to try to rewrite history. That is something that this Government will never support and will always firmly oppose. There is no possible means by which one could romanticise a campaign that saw thousands of people murdered. That is at the heart of our approach to the institutions on the past to be created under the Stormont House agreement. They must be balanced, objective, fair and impartial to make sure that we establish all the facts about the history of the troubles, and do not enable anyone to seek to rewrite the history of the troubles and to draw some wholly unacceptable form of equivalence between terrorism and police officers.
The report indicates that individual IRA members remain involved in criminal activity and describes a range of acts, from smuggling right up to murder. What it does not say is that those people are defended by Sinn Féin political representatives who eulogise them, discourage people from giving evidence against them, and make excuses for their activities. Does the Secretary of State agree that one of the biggest impediments to making devolution work in Northern Ireland is the ambivalence of Sinn Féin’s political representatives to the criminality of their associates?
I can provide the hon. Gentleman with at least a degree of reassurance on that. Sinn Féin has always been very clear with me that it condemns criminal acts and criminality. It has certainly done that in relation to whoever was responsible for the murder of Kevin McGuigan.
I thank my right hon. Friend for her statement. I think it is safe to say that it would always be naive to believe that these organisations, after so many years of killing and terrorising, would just disappear. Does she agree that the biggest issue is that while they might not be planning to launch terrorist attacks against the state, they are still encouraging a culture of criminality, including murder and extortion, that terrorises local communities, and that there is no way we can have a peaceful Northern Ireland for its people if these organisations remain?
My hon. Friend puts his points very well. It is worth recalling that some paramilitary assaults have involved teenagers—young people—and in some instances such assaults are child abuse. There is a real brutality to some of the cases we have seen in Northern Ireland in recent years. That is another reason why it is vital that we see an end to paramilitary activity in Northern Ireland.
I thank the Secretary of State for her statement. Paramilitary action was never justified at any stage, whether now or in the past. All those murders and all that violence and terrorism were totally unjustified and put people in a great state of peril Will the Secretary of State outline what the paramilitary organisations could do to assist in alleviating the problems and anguish experienced by victims, and those who have lost loved ones either through the bullet or the bomb, who are anxious that the Governments and the paramilitary organisations resolve those issues to provide full truth and accountability?
I wholeheartedly agree that the terrorist activities of those groups was never justified, and I pay tribute to the role played by the hon. Lady’s party and the other parties in Northern Ireland that stood out against terrorism throughout the 30 years of the troubles. The crucial way forward for those groupings is to cease involvement in criminality. Their members should stop their criminal activities, and it is vital that the police continue to do all they can to pursue anyone who continues to be involved in such activity.
May I thank the Secretary of State and others both for their work on the report and for all the work that goes into everything for us in Northern Ireland? On PIRA, page 11 mentions the continued existence of senior leadership, the provisional army council and some departments. I assume that similar departments—which suggest to me a department of knee-capping or of smuggling—exist in other paramilitary organisations. The Secretary of State has said that she will take an uncompromising approach in future, so will she make sure that all political parties employ no one who is linked to such organisations?
As I have said on a number of occasions, anyone involved in criminal activity should expect to face justice, and the police will pursue anyone involved in such activities. On the organisational structures, the assessment provides further information beyond what the Chief Constable was able to share in his statement. Parties and individuals, however, will continue to have questions about the organisations and how they are run and structured. That is another reason why a formal ongoing verification process to try to move us forward towards resolving the problems once and for all will be an important part of a successful outcome to the talks.
I do not think it comes as much of a surprise to any Member that structures are still in place. Security forces personnel to whom I have spoken are concerned that members of the Provisional IRA who have bomb-building experience have moved to dissident organisations and that that is why there have been a number of under-car booby trap bombs in the past few weeks and months. I am sure that the Secretary of State and the security forces are investigating that.
The security forces have placed a huge priority on seeking to prevent the dissident republican groupings from carrying out lethal attacks. In recent days there have been two examples of attacks on the state by those groupings. It is crucial that the PSNI and its security partners both north and south of the border continue to do all they can to keep people in Northern Ireland safe from the terrorist threat from dissident republicans, and I am confident that they will do that.
Last but not least, I was very pleased to hear the Secretary of State say that the Government will always give the police and the security services the fullest possible backing in their efforts to keep the people of Northern Ireland safe and secure. On Thursday we learned of a murder attempt on a member of the armed forces in the constituency of my right hon. Friend the Member for Belfast North (Mr Dodds), and on Friday there was an attempted murder of PSNI colleagues in my constituency of Belfast East The Secretary of State will know that, sadly, extremism still exists on the fringes of our society, yet we discovered yesterday that Northern Ireland is specifically excluded from the Government’s counter-extremism strategy. What discussions has the Secretary of State had with the Home Secretary on that, and what assistance does she believe the strategy could give to the righteous fight against extremism in Northern Ireland and across the UK?
I have discussed this important matter with the Home Secretary on a number of occasions. I draw the hon. Gentleman’s attention to the part of the report that makes it clear that the UK Government are open to extending the strategy to Northern Ireland in the future. Given the particular circumstances, we do not think that is appropriate just now, but we are happy to work with the devolved bodies to share best practice and do all we can to counter extremism in whatever form it comes.
I beg to move, That leave be given to bring in a Bill to make further provision about the duties and responsibilities of the Victims’ Commissioner and about the Victims’ Code; to require victims’ services plans for each police service area; to establish a duty to report suspected child abuse by those working in regulated activities, a code of practice on the recording of allegations, a right of appeal by victims against a decision to cease a criminal investigation, and standards for the review of open or reopened homicide cases; to make provision about court procedures relating to vulnerable victims and witnesses; and for connected purposes Leave to introduce a similar Bill, called the Victims (Bill of Rights) Bill, was given on 4 March, but that Bill fell because of the general election. As with that Bill, I am glad to inform the House that my proposed Bill has cross-party support, for which I am very grateful. I should also indicate that the Bill does not extend to Scotland Although significant improvements have been made to our criminal justice system in the past 20 years, there is growing consensus that it does not serve victims well. Some of the problems are obvious. Many victims, particularly victims of personal or sexual violence, lack the confidence to come forward and report crime, lack adequate support if they do so, and face an unacceptable ordeal in the court room if their case gets that far. The idea of telling many strangers, many times, about an experience of sexual degradation and abuse causes many such victims to feel intense and understandable distress. It takes real courage to come forward. The response of those charged with delivering criminal justice to those who do come forward dictates the likelihood that other victims will report. Yet when they do come forward, victims of crime regularly complain that communication and treatment are consistently poor across all criminal justice agencies There are many such examples. The case of Claire Waxman, who is sitting in the Gallery, involved long-term stalking and harassment. I am grateful to her and to Harry Fletcher, who is sitting alongside her, for their help in preparing this Bill All involved in delivering criminal justice, including the police, prosecutors and the judiciary, agree that the situation needs to improve, but the question is: how? There have been plenty of codes, charters and guidance, and they have moved things on, albeit painfully slowly, and without any real legal teeth the effectiveness of such changes will always be patchy Likewise, at a time of tight pressure on the criminal justice system, there is a danger that services to victims will come a poor second to operational priorities. Most services provided to a section of the public are regulated, quality assured and monitored, but that is not the case for victims’ services. There is simply no framework around the provision of those services. As a result of the lack of overall co-ordination, the services provided are fragmented and of varying quality. Existing discrete legal protections—such as restraining orders, special measures or witness anonymity—provide essential safeguards, but there is no legal regime promoting and protecting victims’ rights from the beginning to the end of their engagement with the criminal justice system The “Code of Practice for Victims of Crime”, more generally known as the victims code, was a significant and positive development when it was first published in 2005 and it should be supported, but although its provisions remain important, they are not directly enforceable and they require clarification and strengthening in places. Similarly, the role of the Victims’ Commissioner has great potential, but it has insufficient powers, has been unfilled for considerable periods in recent years and is under-resourced Against that background, the conclusion that victims’ rights will only be taken seriously if and when they are enshrined in law is now inescapable. If the Bill is brought in, it will offer a real opportunity for change, progress and improvement. As I have said, it has received cross-party support, as evidenced by the names of the supporters to whom I hope to refer shortly. I believe that this is an issue, like the stalking and domestic violence campaigns, on which this House is united, rather than divided. We want change because victims of crime deserve better, and because such improvement will enhance our criminal justice system. I commend the Bill to the House Question put and agreed to. Ordered, That Keir Starmer, Tim Loughton, Sarah Champion, Jenny Chapman, Sir Edward Garnier, Mr Barry Sheerman, Caroline Lucas and Liz Saville Roberts present the Bill Keir Starmer accordingly presented the Bill Bill read the First time; to be read a Second time on Friday 4 December, and to be printed (Bill 80).
I beg to move, That this House calls on the Government to reverse its decision to cut tax credits, which is due to come into effect in April 2016 Today’s debate is incredibly important, but it is a shame that we have to hold it at all. It is deeply disappointing for the 3 million families across the UK who are set to lose an average of £1,300 from April that the Government have not taken the opportunity to step back, do the right thing and rethink these unfair proposals. The Conservatives omitted to mention these unfair proposals in their manifesto. Indeed, given another chance today to stop the changes—in the Welfare Reform and Work Public Bill Committee—they chose to vote against doing so Last night, we heard the latest arguments in favour of the cuts, which are already backfiring. The Government are seeking to make this a binary choice between cutting the incomes of the working poor and funding nurses, when in fact many of those in receipt of tax credits are our nurses, teaching assistants, care workers, civil servants and so many others who work day and night to keep our public services and our economy moving.
The decision to seek to reverse these reforms is an important one, but when was the hon. Lady made aware of it—on the Labour side? [Interruption.]
Just ignore him.
Order. We will not have shouting from the Back Benches. Nobody will ignore anyone in this Chamber. We will have a measured debate on an important subject.
I do not think I even need to respond to that intervention. The hon. Gentleman is seeking to trivialise this debate. We have been very clear about what we would do and about what we are calling on the Government and his party to do. His constituents will be watching him today and asking: who he is standing up for—his constituents or his party?
I will make some more progress and then give way These cuts will also hit the self-employed and those who run our local businesses. It is bizarre for the Government to take £1,300 off each family by highlighting how much more they have already taken in tax credits. Today, it has become even clearer that the Government have chosen to balance the books on the backs of the poor. The Chancellor has made this a debate about taking from the non-working poor or from the working poor, rather than a choice recognising that, in tough economic times, it is fairer that those who have more should contribute more.
The £1,300 that my hon. Friend cites is of course an average. Many working people in my constituency will get clobbered by a lot more than £1,300 a year. Is not the really serious point that only in April the Prime Minister said on TV—in the studios—that he would not cut tax credits?
My hon. Friend is absolutely right. It is not on the basis of one occasion that we are saying that the Government have changed their mind or have not told the truth; they have not told the truth on this measure step by step since it was first introduced in the Budget. They have tried to hide the impact on hard-working families across Britain. My hon. Friend is absolutely right that the £1,300 figure is an average, and many families are set to lose much more.
The hon. Lady will be aware that the Conservative manifesto made it very clear there would be £12 billion of welfare savings, so this was clearly flagged up. Will she explain where, if she opposes the measure, she will find the savings—which other benefit would she cut, or which tax would she raise?
Perhaps the hon. Gentleman needs to talk to the Prime Minister about why he said on “Question Time” during the election that he would not cut tax credits. That is a conversation for him to have with the Prime Minister.
The hon. Member for Croydon South (Chris Philp) talks about the Conservative manifesto, but the manifesto cannot have outlined that 689,000 carers might be affected. Those who care 35 hours a week and then try to work 16 hours on the national minimum wage will be hit. What do Conservative Members have to say about that?
My hon. Friend makes her point incredibly well. It is those who are working so hard to support us in every sphere—in our public services and the economy—who will be hit the hardest by this move. I hope that the Government will change their mind today. I will make some more progress before I take further interventions The Chancellor says that he wants a low-welfare, low-tax, high-wage economy—this may come as a surprise, but of course we all do—but what he says and what he does are two different things.
Will the hon. Lady give way?
I will give way in a moment The Chancellor decides to cut tax credits at the same time as cutting income tax and inheritance tax for some of the wealthiest in our society. His failure to grow wages in the last Parliament not only led to a drop in living standards, but meant that tax receipts were lower than they would otherwise have been. In addition, as the Institute for Fiscal Studies has highlighted, welfare spending was virtually unchanged during the last Parliament because of the growth in tax credit payments and the explosion in housing benefit payments caused by his low-wage economy. Indeed, the number of people earning less than the living wage has risen by 45% since 2009. The Government may seek to hide what they are doing and to make this a debate about the Labour party, but it is a debate about the quality of life for millions of families who are working hard to make ends meet.
I will give the hon. Lady another opportunity to answer the question. If she were to reverse these reforms, how would she pay for it—would she raise taxes, cut spending or simply borrow more money?
Perhaps the hon. Gentleman has not read any blogs or listened to any media in the last two days. We have been on the media repeatedly and have explained very clearly that we would do that through long-term growth, making sure that we invest in high skills and increased—[Interruption.]
Order. I cannot hear the hon. Lady, so I assume that nobody else can hear her. This is a debate and we must be able to hear the opening speeches. Everyone will have a chance to shout in their own four or five minutes.
Thank you, Madam Deputy Speaker. I hope that the hon. Member for Dartford (Gareth Johnson) heard my answer. Perhaps his constituents will also be asking whether he has heard them. I am sure they are wondering who he will stand up for today.
Will the hon. Lady give way?
I will give way in a moment if I can make some more progress It is shocking that the Government continue to avoid telling the truth about these changes, including the Prime Minister, to whom I wrote last week, asking him to clarify his comments that after all the Government’s changes a family where one earner is on the minimum wage will be £2,400 better off. He is yet to be clear about how he reached that conclusion, how many families will gain in the way he suggests or what assessment he makes of the analysis by the Institute for Fiscal Studies, the Resolution Foundation, Barnardo’s and so many others who are against these changes The Chancellor chose either not to perform or not to publish an impact assessment of these changes for the Commons—a move that was criticised in no uncertain terms by the Social Security Advisory Committee. There are only two ways to interpret that: the Government either do not want to know or do not want to tell.
My hon. Friend talks about the impact of these changes. Let me give her one simple example from my Walthamstow constituency of a working mum. When her tax credits were delayed, we had to refer her to a food bank because they were literally the difference between being on the breadline and having bread. Does my hon. Friend agree that that will happen to working people across the country if these changes go ahead?
My hon. Friend is absolutely right. She highlights, too, the impact of the Government’s appalling administrative processes on our constituents. They are left trying to make ends meet and having to go to food banks. More than 60% of the use of food banks is due to issues with benefits and benefits administration.
After an intervention, the hon. Lady asked whether Government Members had been listening to the media. I listened to an interview she gave on Radio 4 this morning. She gave only two examples of changes that she would make to the tax system. One related to inheritance tax and the other was to raise the tax threshold to 50p. In 2017-18, that would raise only £270 million. Where would she get the other £4.2 billion?
I thank the hon. and learned Lady for her comments. Perhaps she will say what she is doing for the 6,300 families in her constituency who will be affected by these changes. Perhaps she should speak to those in her party who have raised serious concerns about the changes, including Lord Tebbit Before the debate on the statutory instrument in September, the Government chose either not to perform or not to publish an impact assessment of these changes, so one was not available for the debate in the Commons. The Exchequer Secretary seemed to suggest that they had done that, when clearly they had not. The distributional analysis that the Chancellor finally submitted to the Secondary Legislation Scrutiny Committee in the other place last week has been described by my right hon. Friend the Member for Birkenhead (Frank Field), the Chair of the Work and Pensions Committee, as a “sleight of hand” and an attempt to “bamboozle”.
Will the hon. Lady give way?
I will make a little more progress first It is worth reminding hon. Members exactly what the Government propose to do with these changes. First, they will effectively halve the threshold at which claimants start to see their tax credits award tapered away, from £6,420 a year to £3,850. Secondly, they will increase the rate at which the award is tapered away to zero. That means that for every pound that is earned above the threshold, their award will be tapered away by 48p. Previously, the rate was 41p. House of Commons figures show that a family with two children and two parents who earn the minimum wage will see a fall in their income of more than £1,800 next year. By the end of the Parliament, that family will lose a devastating £7,700.
Does my hon. Friend agree that this amounts to nothing less than a penalty for those in work? Such a work penalty is typical of this Government.
My hon. Friend is absolutely right. The Conservative party claims to be there for the workers, but it is going against everything that hard-working families are doing to make ends meet. It is time for the Government to rethink what they are doing and stand up for those they pretended to stand up for at the time of the election.
rose—
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I will give way in a moment A family with one earner on the minimum wage will be more than £1,500 worse off next year and almost £7,000 worse off over the Parliament The claim that we have heard most is that working families should not be concerned because the minimum wage will see significant increases in the next few years. As the Institute for Fiscal Studies has made abundantly clear, the claim that those increases will close the gap is arithmetically impossible. Paul Johnson, the director of the IFS, summed it up: “The key fact is that the increase in the minimum wage simply cannot provide full compensation for the majority of losses that will be experienced by tax credit recipients” He said: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the budget on average.”
There are 4,200 working families in my constituency who will be affected. Given that the Prime Minister said before the election that he would not cut tax credits, does my hon. Friend think that this House and the other place would be right to vote down the proposals?
My hon. Friend is absolutely right. I hope that Government Members will make that decision today The IFS has found that, as a result of all the tax and benefit changes in the summer Budget, by 2020, households with incomes in the second, third and fourth deciles will be worse off by £1,250, £860 and £530 respectively. Indeed, the Resolution Foundation’s recent report showed that the changes are likely to result in 200,000 more children being pushed into poverty at a time when the Welfare and Work Bill is effectively erasing Labour’s Child Poverty Act 2010, the duty in it to eradicate child poverty by 2020 and the measures to monitor child poverty. Perhaps a Government Member would like to ask their own Front Benchers a question about that.
rose—
I give way to the hon. Gentleman. He has been very patient.
The hon. Lady will know that when the tax credit system was created it cost £4.4 billion to administer, whereas this year it will cost £30 billion. Will she admit that the only credible welfare system is an affordable welfare system?
Perhaps the hon. Gentleman should ask what will happen to the 4,500 working families in his constituency who are set to see an average cut in their household income of more than £1,300. What impact will that have on whether they can keep their home, put food on the table or afford clothes for their children? I suspect that he will have a lot to answer for in his constituency A million single parents who are in work are set to be £1,000 a year worse off and 1.5 million married women will be £600 poorer.
Will the hon. Lady give way?
I will in a moment These cuts will also hit the self-employed who are on tax credits. Since 2010, self-employment has grown at twice the rate of overall employment. We know that, on average, self-employed people earn 40% to 50% less than those who are in regular employment.
Will the hon. Lady give way?
I will in a moment This weekend, The Observer included the case of somebody in Manchester who is self-employed. He expects his tax credits to be reduced to virtually nothing from next April. I hope that in his response, the Exchequer Secretary will be straight about what these changes mean for the self-employed.
I thank my constituency neighbour for giving way. We have heard an impressive array of statistics, but does the hon. Lady have one proposal for reducing the deficit?
That is absolutely incredible. We have answered that point in the media and in articles, and I do not need to keep going over that ground. The hon. Gentleman might want to respond to the 3,000 families in his constituency who will be hit by these changes, and say how he will reply to institutions that have done hard research into these matters. The Government have chosen to carry out no impact assessment for what has been described as an “array of statistics”. This debate is about people’s lives, and the hon. Gentleman should stand up for his constituents, just as Labour Members will do when voting in the Lobby tonight—[Interruption.]
Order. The hon. Lady is clearly not giving way and hon. Members are wasting time in the debate.
It is clear that the Conservative party is in disarray. Lord Tebbit, the hon. Members for Uxbridge and South Ruislip (Boris Johnson) and for Telford (Lucy Allan), and others, are calling for reforms, or for the Chancellor to think again.
Does the hon. Lady agree that taxpayers’ money should be targeted at those most in need, and not used routinely to top up low pay?
I think that comment represents a misunderstanding about what tax credits are supposed to help with. I hope that the hon. Lady’s Government will be more successful this Parliament in increasing wages—hopefully to a level where people start to come off tax credits—but they do not have a very good record to date. As I said, the number of people earning less than the living wage has risen by more than 45% since 2009.
In their interventions so far, Conservative Members have already conceded the argument. They started by saying that low-paid workers were going to be better off, and that Britain needs a pay rise and will get one. They have conceded that argument, but now it is all about choices and how tough it will be to balance the books. They have lost the argument.
My hon. Friend is right, and as far as the public are concerned Conservative Members have lost the argument. It is now time for their constituents to ensure that they support the changes that we propose, and that they hold the Government to account at the next election The right hon. Member for Haltemprice and Howden (Mr Davis) has described the use of a statutory instrument as an attempt to avoid scrutiny, and on 6 October he said: “The Government has to balance the books, but the burden shouldn’t be on the poorest…I hope this doesn’t turn out to be our poll tax.” Even the Bow Group, which perhaps speaks for several Conservative Members who may not be able to speak today, has said: “Tax Credit cuts could damage Britain’s entrepreneurial economy and the Conservative Party’s claim to be the workers party”.
The hon. Lady is making a powerful case. In my constituency more than 4,500 families will be affected, in particular because of sky-high private sector rents. Does she agree that people will be hit particularly hard when cuts combine with the fact that Governments have not taken action to bring down rents in the private sector?
The hon. Lady is right, and cuts are being made without any recognition of rising rents and the cost of living that affects household budgets. We cannot make such a move without thinking about the impact on family budgets, particularly of rents.
I will continue for a moment and then I will give way New House of Commons Library analysis that we have published today shows that at least £0.5 billion will be lost to the London economy if cuts to tax credits come into effect, and that will hit nearly 410,000 low and middle-income working families in London. In my borough of Hounslow, 13,500 working families will be affected, and the local economy will be hit by about £17.5 million of reduced purchasing power if the cuts come into effect.
I know from many conversations that I have held with Conservative Members that they agree that aspiration is key. I was on tax credits before coming to this place, and I also benefited from further education, so I plead with hon. Members to consider that. Does my hon. Friend agree that by cutting tax credits and further education the Government are preventing people like me from having those aspirations?
My hon. Friend makes a powerful point and indicates through her own story how this anti-aspiration measure will hit families that are working hard not just for themselves, but to give their children a chance in the future. As they continue to struggle, these cuts will impact on those children, and it is projected that 200,000 more children will be moved into poverty I am conscious that many Members want to speak, so in conclusion I will say that this measure is set to hit the poorest the hardest. The Prime Minister is fond of saying that he supports those who work hard and do the right thing. His Conservative election manifesto stated: “The British character is renewed every day by the millions who work hard, raise their families and care for those who need help, do the right thing and make this country what it is.” He also said: “We are fixing the economy so that everyone feels the benefit”, but at the moment that could not be further from the truth. Far from being the party of the common ground or of workers, this move shows that the Government are no longer interested even in knowing how families are set to be hit by the choices they make. This decision is not just poor politics but poor economics, and families are concerned about what the impact will be as they struggle with paying the rent or their mortgage, and with putting food on the table at a time when food bank use continues to rise. The problem of low pay in the UK persists, and changes to tax credits are about to make things much worse. With 6 million people not earning enough to cover the basic costs of living, tackling in-work poverty is crucial, but we should not do that by making matters worse and hitting those who need help the most The Government have chosen to introduce these changes without even a transition plan, and when cross-Benchers and bishops start to express concern in the other place, we hear reports that No. 10 will threaten to suspend the other place if Members table and win a fatal motion. There is a chance today for every Member of the House to do the right thing and stand up for their constituents, by putting families in their constituency first and their party second. I urge Conservative Members to vote with us in the Aye Lobby today.
Protecting working people’s economic security is, and always has been, a priority for this Government. We are passionate about that, because we believe in people being allowed to meet their potential and fulfil their aspirations from wherever they come in life. Our mission is to get wages up, tax down, and welfare under control. The reforms to tax credits must be understood as part of a wider package of reforms that includes an increase to the personal allowance, increased childcare provision for working families, and of course the national living wage Next April the legal minimum pay for a full-time worker will be £1,300 higher than it was the year before. We have done that at a time when businesses have created record numbers of jobs—1,000 a day and 2 million in total, and the highest rates that we have ever reached. Coupled with strongly rising wages, more hours on offer and low inflation, our policy is delivering security and prosperity for working households up and down the country. That is what the country deserves and that is what we are doing.
Is the Minister aware of the fact that average incomes will reach their pre-recession point only in 2017, after seven years of this vile Tory Government?
As a matter of fact, living standards have this year reached beyond their pre-crisis point, or indeed any prior year We can make lasting economic reforms only because we have taken the tough decisions to get this country back on its feet after the financial crisis that crashed into Labour’s structural deficit, which was among the highest in the developed world. Some choose to indulge in a game of “What if we had unlimited money?” We face facts. In 2010, the Government inherited a deficit of £153 billion. That is almost £6,000 for every household in the country. Our budget deficit was 10.2% of GDP. For every £4 the Government were spending, £1 was borrowed. That could not be allowed to go on, because when Governments lose control of the national finances, those who lose the most are generally those who have the least.
The Minister is making some excellent points and I fully support his desire to reduce the deficit and reform tax credit. This is a listening Government, so I just wonder whether, in the coming weeks as we consider the impact of the reform and in terms of compassion, it might be worth looking at tweaking the child tax credit—or the marriage allowance, which is very low—to try to soften the blow. I do not expect the Minister to answer now, but that is surely worth considering.
As I will come on to outline, the Government are doing a number of things that have some offset against what is happening on tax credits.
Does the Minister not agree that the Opposition have completely ignored the background, which is that at the moment wages are rising at a rate of 3.5%? We are seeing wages rising. The policy is working and it would be wrong in those circumstances to continue to subsidise and act as a drag on wages by using tax credits in the way they have been used.
As a result of this Government’s strong economic management, we are indeed seeing strong wage growth coupled with strong employment growth. This is the right time to make lasting economic reform On the deficit, much progress has been made, but this year we are still having to borrow £3,300 for every household in the land. To tackle a deficit of that proportion requires all income groups to share the burden. I agree with the hon. Member for Feltham and Heston (Seema Malhotra) that it is right that those with the broadest shoulders should bear the most.
To put this issue into context, will my hon. Friend confirm that the average taxpayer is paying £1,900 extra in tax this year just for the cost of Government debt interest? Is not the only way to reduce this debt tax on ordinary taxpayers to get rid of the deficit and pay down the debt, something which the Labour party seems incapable of grasping?
It is indeed an extraordinary amount. For every month we fail to deal with the deficit, not only would we be racking up more debts for all our children but we would be incurring greater interest charges in the here and now, which means money not spent on other essential services.
I am grateful to the Minister for giving way, although I am not quite sure he will be so grateful when he hears my question. I have to admit—in fact, I am embarrassed to say—that I voted with the Government on the cut to tax credits. I did so on the clear basis and understanding that there would be mitigation in the Chancellor’s autumn statement of the worst effects of the cuts to tax credits. The Minister cannot imagine my anger as I listened to his party’s conference, and the Prime Minister and the Chancellor ruled out any such mitigation. I will be voting with the Opposition this evening, unless the Minister tells this House today what mitigation the Chancellor will guarantee in his autumn statement. I give the Minister the opportunity to persuade me to change my mind.
The hon. Lady, who is a veteran and very experienced in the House, will know I cannot pre-empt anything in the Chancellor’s autumn statement on this or on any other subject. She was right to vote with the Government on the statutory instrument. As I will be outlining in my remarks today, this is a reform package of measures for working people. It is the right thing to do for the future of those families and the future of our country.
Nobody expects the Minister to be able to provide an answer on what will be in the autumn—or November—statement, but can he confirm that the figures that the Prime Minister uses to say that eight out of 10 people will be better off as a result of the Government measures include all of us and large numbers of other people, while the two out of 10 who will not be better off are all those claiming tax credits? Will he confirm that when we go into the next general election all the current 3.2 million tax credit claimants will not be better off as a result of the measures he has announced?
I hesitate to use a double negative, but I cannot say they will not be better off. Many, many people will be better off. On the specific point of the eight in 10, that refers first to financial year 2017-18, and, as the right hon. Gentleman will know, to all working families. Obviously, the precise impact of the different measures—tax credits, national living wage, income tax personal allowance, childcare, social rents and all the other different elements—will vary with precise circumstances, but many, many families will be considerably better off. The hon. Member for Feltham and Heston herself was good enough to cite one such example of one particular type of family being £2,440 better off by 2020.
I must make some progress The tax credit reforms are an important part of fiscal rebalancing, but they are only one part. On the same day that the tax credits lower threshold and higher taper rate take effect, we are reforming dividend tax and pensions relief for those on high incomes, and initiating a further clampdown on tax avoidance. Those are three measures among a set that also includes: the end of permanent non-dom status, restrictions on landlords’ tax relief and the continuation of a top rate of tax that is higher than it was in 4,718 of the 4,753 days the Labour party was in office. If we look at how the burden of deficit reduction is spread through society, the simple fact is this: the distribution of spending among income groups is constant between 2010 and 2017, while the burden of tax has shifted towards the best-off.
Does my hon. Friend agree with the former Labour Chancellor of the Exchequer, Alistair Darling, who said that subsidising lower wages in the way that tax credits do was never, ever the intention?
My hon. Friend brings me on, quite handily, to my very next point. When tax credits first came in, their aim was entirely noble, but they quickly soared out of control. The total cost more than trebled between 1999 and 2010, ending up costing £30 billion in 2010. Scandalously, while spending spiralled under the previous Government, in-work poverty actually rose by 20%. Now, we can kick a problem down the road or we can do something about it. We chose to do something about it. Our reforms do not abolish tax credit or anything close.
Will the Minister confirm that the average tax credit bill to the Exchequer under Labour was £22 billion, whereas under the Conservative party, it has been £30 billion? So it has gone up on this Government’s watch.
I heard the hon. Gentleman make this extraordinary point on “Newsnight” last night. He talks about an average. If we have an upwards curve, and we draw a line through it, of course it is going to be lower in the middle than at the end. The point is the bill kept on rising—
indicated dissent.
Will the hon. Gentleman let me answer? The point is it kept on rising, with particular spikes just before 2003 and 2010.
Does the Minister share my astonishment that despite being asked four or five times, his opposite number failed to say how the Opposition would fund this £4 billion? Does that not demonstrate that Labour cannot be trusted with our public finances?
I am afraid I could not put it better than my hon. Friend, and I will not try Under these reforms, fully half of families will still be eligible for tax credits, and the total cost will come down only to what it was as recently as 2008. They will focus support on the lowest incomes, while taking those on higher incomes off tax credits altogether.
How would the Minister, on behalf of a party that says it is on the side of working families, explain this change to the 2.7 million children affected? It is a disgrace.
Today’s bills will be paid at some point. We believe that the challenges for this generation should be dealt with by this generation, and we believe we need to get our finances under control and eliminate the deficit, and not just pass on the problem to our children and grandchildren.
Does the Minister think that the 1% pay cap on public sector workers contradicts the Government’s policy for a high-wage economy?
I do not deny that pay restraint in the public sector is difficult, but that 1% restraint has also protected 200,000 jobs in the public sector, which is an important aim. In addition, since 2007-08, pay in the public sector has risen faster than in the private.
I keep saying I must make some progress. For the moment, I think I must mean it These reforms of tax credits go hand in hand with the new settlement for working Britain that my right hon. Friend the Chancellor set out in the last Budget. At the same time, we are introducing radical measures to put more cash where it belongs—in the pockets of hard-working people. Our increases to the tax-free personal allowance mean that a typical basic rate taxpayer—
Order. The Minister has just said he intends to make progress. Many people wish to make speeches today. If they continue to jump up and interrupt him and still wish to make a speech later, they will be disappointed.
I am grateful, Madam Deputy Speaker Our increases to the tax-free personal allowance mean that a typical basic rate taxpayer has seen their income tax bill cut by £825 since 2010. We are adding a further £80 next year and a further £40 the year after.
Will the Minister explain to the House how increasing the personal allowance has helped the very people the Labour party is claiming will be affected by this cut?
We believe in taking people out of tax, where possible, and enabling them to keep more of the money they have earned.
In my constituency, more than 31,000 children will be affected by these tax credit changes. How many more children will the Minister’s cuts push into poverty?
We are making these necessary changes for the future of all sorts of families, but more than anybody for the sake of our children. The hon. Lady will know that the best way to address poverty is through work, and that is what we have been doing. She will also know the statistics—that where a child is in poverty and a parent moves into work, in 75% of cases they move out of poverty as a result, and that where a parent moves from part-time to full-time work, 75% of children also move out of poverty From next April, we will have the national living wage, which by 2020, when it will be worth more than £9 an hour, will mean over £5,000 more in gross full-time pay for someone on the minimum wage today.
Does my hon. Friend share my frustration that the Labour party does not seem to understand that tax credits involve the taxpayer subsidising businesses paying low wages, which has to change?
As always, my hon. Friend is correct, and she brings me on to my next point. Already, more than 200 firms, including some of our biggest employers, have announced they intend to pay staff at or above the national living wage before it comes into effect, which has helped to push private sector wage growth to 4.4%, according to latest figures, at a time of low or no inflation Then there are the wider things we have done on living costs. We have frozen council tax and fuel duty. On childcare, we have already introduced 15 hours for the 40% most disadvantaged two-year-olds, which is just through its first full year of operation and still ramping up. From 2017, there will be 30 hours for working families with three and four-year-olds, and just the additional 15 hours will be worth £2,500 per child per year.
The Minister can cut the waffle. To many of my constituents, this is a matter of trust. Why does he think the Prime Minister, on 30 April, toured the television studios and told an audience at “Question Time” that he would not cut tax credits? It was seven days before the general election. Does he think that had anything to do with it?
The statutory instrument does not affect the level of child tax credits. The hon. Gentleman, being a keen student of these matters, will know about the taper for tax credit awards and the stacking effect of the different elements, but the child tax credit, as the Prime Minister said, is not being changed.
I am conscious of time and know that many people want to speak Perhaps most important is the wider effect of the national living wage. The independent Office for Budget Responsibility estimates that as the national living wage imposes upward pressure further up the scale, 6 million people will get a pay rise. That effect starts now, but it will continue rising right up to the end of the decade. We are not just talking about a lower welfare, lower tax, higher wage economy; we are seeing it happen.
The Minister has made the point repeatedly that the new national minimum wage is meant to offset the reduction in tax credits. What proportion of those on tax credits are currently on the national minimum wage? I suspect I will not get the answer, so I will tell him. It is 25%.
The hon. Gentleman’s intervention is timely. Had he been listening—that might sound as I did not mean it to sound—he would have heard me talk about the wider effects of the national living wage. It affects not just people on the national minimum wage, but a much wider distribution. Most economists estimate that it would extend about 25% up the income scale.
That does not answer my question.
It does answer the question. The hon. Gentleman was suggesting that this proportion would not benefit from a national living wage, which is incorrect. A lot of people who are not on today’s minimum wage will also benefit to a sum of about—[Interruption.] I am asked how many—the estimate is that about 6 million people will benefit directly or indirectly.
Let me ask the Minister about the subsidy point. We can all agree on the context that we need to reconfigure our labour market. Almost 6 million people are not earning a wage that they can live on. Ultimately, yes, a subsidy going to employers is not desirable, but surely the issue here is the order in which we transform our economy. The fact is that through a properly prosecuted industrial strategy—something that we have obviously not seen in our steel industry—it is possible to reconfigure the labour market. That should come first—before taking away the tax credits and support from people who are not earning enough. Ultimately, that is the difference between the two sides.
The harsh reality that we face is that we have a budget deficit equivalent to £3,300 for every household in the country. We need to take firm action on that now. It is right, as I said earlier, that the burden is spread right throughout society, but it is also right to shift the burden towards the upper end, which is what has happened with the tax burden.
The Minister will know that many Conservative Members, including me, are concerned about these changes. I will not, however, vote with the Opposition because of the nature of the vote and its non-binding effect. However, further to the reference point—[Interruption.] If a few more Labour Members had turned up at the original vote, we might have won. Let me take the Minister back to the point made by the hon. Member for North Down (Lady Hermon). Will he confirm that the autumn statement offers the opportunity for the Government to mitigate some of these effects, whether it be through a change to the order or through other tax changes? Can he confirm to me and many others on the Government side who are concerned that the Treasury is looking at other things that can be done to help this group of people?
There are a number of mitigating elements involved in the package. We have been talking about the national living wage, and there are major—[Interruption.] These things are all new. There are major extensions to childcare provision. We have reductions in social rents, and increases in the income tax personal allowance.
Before I conclude—I am very conscious of the time—I want to address a couple of points about poverty. The best route out of poverty is employment. We have created the conditions for the private sector to create record numbers of jobs—over 2 million since 2010. The best way to target in-work poverty is, first, by helping people move up the hours scale and, secondly, by increasing wages. We are seeing wages rise strongly, and we are seeing living standards rising by 3.1%, year on year.
I am not giving way again, as many people want to speak and I am coming towards the end of my remarks The number of people in in-work poverty is 200,000 lower than it was at its peak in 2008-09. Let me remind Members of the surest way to create poverty and to dash the aspirations of working families up and down the country. It is to lose control of the public finances. We are making sure that that never happens again. We are driving down the deficit; we have set out the path towards surplus; and through our Charter for Budget Responsibility, we are making sure that we insulate ourselves against any future shocks the world economy might throw at us. We do all this while delivering a new settlement for working Britain—one where decent wages are not subsidised by the public purse, but met by employers; one that says to employers, “You can have very competitive tax, but you must pay your people properly”; one that allows hard-working people to keep more of the money they earn; and one that offers a way out of reliance on benefits and top-ups through work that pays Those have not been easy decisions to make, but we face a £3,300 per household deficit, and if we reduce the level of state support people are inevitably affected. But tough decisions become necessary decisions when we are working towards the most important and the most progressive goal of all—economic security for working Britain in an uncertain world. Our new settlement for working Britain is an integral part of that. We will continue down the path of economic security, stability and opportunity for working Britain.
I am pleased to have the opportunity to debate tax credits today, particularly in light of the wholly inadequate time we had to debate tax credit changes on 15 September in connection with the statutory instrument. Would it not have been better if the proposed changes were made part of the Finance Bill so that they could have been properly scrutinised and debated and so that many Conservative MPs would not have been made deeply unhappy about what their Government have done During the week of the tax credit debate, a damning report from the House of Commons Library was published on the effect on many people of the changes consequential on these proposals. Let me state that the Scottish National party wholly opposes the changes to tax credits, which are nothing less than an attack on low-income families in this country The Prime Minister told his party conference that he wants a “war on poverty”. I would tell the Government that actions speak louder than conference rhetoric when cutting tax credits is going to increase poverty, particularly child poverty. The reality is that this is not a war on poverty, it is a war against the poor. All of us came into politics to make a difference. I say to the Government and to all Conservative Members that they should examine their consciences. Do they want to push through these cuts that will damage millions of families, increasing inequality in this country?
Will the hon. Gentleman confirm that it is now the policy of the SNP to use the new tax-raising powers shortly to be introduced to increase income tax in Scotland in a year or two’s time to increase tax credits in Scotland?
I find that extraordinary. We fought in the general election on delivering home rule to Scotland, which meant full fiscal autonomy. Given the damage that the hon. Gentleman and the Conservatives are going to do to hundreds of thousands of families in Scotland, they should give us the power over our economy and over welfare so that we can protect people in Scotland from the damage they are going to do We hear that individual Tory MPs have been summoned to speak to the Prime Minister and Chancellor to be straightened out. I appeal to them not to be bought off. They should do the right thing and support today’s motion. This is a Government who cut inheritance tax for those wealthy enough to have £1 million-plus properties and punish those on low incomes. “All in this together”?—well, we can reflect on that line.
Will my hon. Friend reflect on the fact that the Government have also refused to close what is called “the Mayfair loophole”, allowing more than 8,000 people earning more than £1 million a year to pay only 28% tax, while hammering the poor?
My hon. Friend is absolutely correct. We have seen growing inequality over the course of the last few years, and the Budget will only increase it.
Will the hon. Gentleman give way?
Let me make a little progress, and then I will Let us look at the facts of the matter. In Scotland, more than 500,000 children are in families that rely on tax credits, 350,000 of which are from the more than 200,000 low-income families who will be hit by these changes. If we take the UK as a whole, the Library tells us that 3.3 million in-work families received tax credits in April 2015, of whom 2.7 million had children. The Library tells us that the average negative impact in the reduction of the tax credit award in 2016-17 will be £1,300. As the Library puts it, the changes to tax credits will deliver savings of £4.4 billion in 2016-17. Of course, that is one way to put it; in reality, it is £4.4 billion that will be taken out of the pockets of the poor and the majority of working families, and £4.4 billion-worth of spending that will be taken out of local economies.
Do not people in lower income groups tend, in general terms, to spend money in their local communities, and will the cuts not therefore remove potential investment and growth from those communities?
Indeed, and I shall be saying more about that a little later. You do not fix the deficit by taking spending out of the economy. The point is that those hard-working families who receive tax credits tend to spend every penny that they get, injecting money into the local economy, paying tax, and so on.
The hon. Gentleman has rightly referred to inequality. Does he accept that these cuts will disproportionately affect the BME communities, thus increasing racial inequality?
That, too, is a very reasonable point. I think that what the Government are doing will pose real dangers to the cohesion of society.
Will the hon. Gentleman give way?
I will make a little progress, but then I will happily give way again The House of Commons document also states: “There is no transitional protection for existing families on tax credits.” Let us just dwell on that statement. The harsh winds of a winter chill are brought to you by Her Majesty’s Government—or, as we might put it, Ebenezer Cameron. I do not believe that any of us came into this place to put our hands on our hearts and say that we want to do this to hard-working families. We have it in our power to stop it today. Just imagine the letters dropping through constituents’ letter boxes, telling them about the massive cuts that are about to afflict them, and for what purpose! We must pause, reflect, and change course. Today is the opportunity that the House needs to recognise that we have got this one wrong. We need to be brave, be bold, and collectively do the right thing Let us stop and think about this for a minute. Low-income families, on average, will lose £1,300 a year. Let us now look more specifically at a single-earner couple with two children, working a 35-hour week on the minimum wage. That couple will see their tax credit award fall by £1,853 in 2016-17. The impact of the so-called national living wage will only modestly offset the impact of a fall in tax credit income, and the net family income will fall by £1,525.
Will the hon. Gentleman concede that the parties represented on his side of the House have made a series of apocalyptic predictions about the British economy since the 2010 general election, and that, one after another, those apocalyptic predictions have been proved wrong? Why should we believe your predictions now?
We are not making any apocalyptic predictions about the economy. What we are talking about is the impact on hard-working families. We want to see investment in our economy. We want to see investment in innovation and skills, improving productivity and improving the living standards of all, in Scotland and elsewhere. We want to work with you so that we can improve those things.
Will my hon. Friend give way?
I will give way in a second, but I want to make a little bit of progress Let me pose this question to Conservative Members. What will you say next year to constituents, hard-working, decent folk, many of whom will have voted for you, and who have just seen their incomes cut by more than £1,000? Are you going to tell them that their hard work is paying dividends—that for them, work is paying? You do not have an answer, because there isn’t one. The policy is wrong, and you have the opportunity to change it: to do the right thing for the country, and to do the right thing for hard-working families in your constituencies.
As the hon. Gentleman knows, he is making many points with which I agree. I know that he is keen to be honest with the House, but will he be clear about one thing? Tonight’s vote will not overturn the changes in tax credits, although a vote in the other place may do so at some point in the future. Today’s debate is a good opportunity for us to express our concerns, but I do not want the hon. Gentleman to lead anyone who is watching it to believe that the vote will be on tax credits. Even if the motion is passed, it will make no difference. Will the hon. Gentleman be clear about that, please?
rose—
Order. Before the hon. Member for Ross, Skye and Lochaber responds to that intervention, I must tell him that he has been talking quite a lot about “you”. I am sure that he does not mean the Chair. Perhaps it would work rather better if he addressed the Minister.
Thank you very much for those wise words, Madam Deputy Speaker I agree with the hon. Member for Brigg and Goole (Andrew Percy) that what the House has today is an opportunity to send a message to the Government that they ought to reflect on what has been proposed. I think that they have made an honest mistake. I hope that it is an honest mistake, that we can reflect on it, and that we will not punish people in the way that the tax credit changes will do.
Will the hon. Gentleman give way?
Will the hon. Gentleman give way?
I want to make some more progress, because I know that many other Members want to speak I mentioned that constituents would be coming to you, and asked what answer you would give them. I think that what we must do is the right thing: the right thing for hard-working families in all our constituencies.
I am going to make some progress Every Member of Parliament should look up the online House of Commons paper, which contains a link to the number of tax credit recipients by constituency. Any Members who support the Government’s proposals can see exactly how many of their constituents will be affected by them. We remember Mrs Thatcher saying, back in the day, that there was no alternative. That, of course, was nonsense. We also heard that there was no such thing as society. That sort of behaviour should be a thing of the past. There has to be social cohesion. We have to demonstrate that we want to help people out of poverty, not remove a ladder that would take them out of it I know what people in my constituency are saying. They do not like this. It is seen as mean-spirited. It is punishing the poor: ordinary, hard-working folk. There is no excuse for it, and we can stop it. There will be a massive impact on families, and we know that the end result will push families with children into poverty. We hear—and we have heard it in the Chamber today—that many Tory Members have voiced concerns at the impact of the changes. We should say to the Government, “You need to listen to those of us on this side of the House, as well as some of your own voices that are reacting to the impact of what you are doing.”
You asked just now—not you, Madam Deputy Speaker—
Order. I am not having this any more. I have let a lot of people get away with it today, but this is an important debate, and we must observe the rules of the House. Just say “the honourable Gentleman”!
Thank you so much, Madam Deputy Speaker. I remembered as soon as I had said it that I should not have said it. Apologies, Madam Deputy Speaker The hon. Gentleman asked just now what it was that we wanted in our constituencies. What we really want is a better future for everyone. We do not want people to be hard done by. Will the hon. Gentleman comment on this? We want more jobs, a better future, more money and better childcare, all of which the Minister has outlined today.
We all want a better future. We all want more jobs, and better-paid jobs. But the point is—the point that we cannot get away from—that you do not do that by punishing those who are in work, and who will be pushed into poverty. As the Government have often said, work must pay. You cannot do what you are doing and be consistent with your own objectives.
Does my hon. Friend agree that although it is of course indefensible for the Government to pick up the tab for employers who refuse to pay their staff decent wages, cutting the support from the working poor will not force wages up? A strong labour market will, as will rigorous enforcement of a genuine living wage and ending zero-hours contracts.
Absolutely. I hope that we will go on and have a robust debate about productivity in this country and about skills and innovation, because driving investment into the economy will drive wages up and negate the need for tax credits. None of us has a fundamental desire to see the long-term existence of tax credits, but they can only be removed when wages are driven up. What we cannot do is what the Government are doing and cut tax credits ahead of increases in wages.
rose—
I am going to make some progress, because I am aware of the time One has to ask about the moral compass of a Government who want to increase the inheritance tax threshold while the poorest in our society are being squeezed to such an extent. One nation, they tell us, but whose nation is that? It is not a country in which we want to live. Perhaps from an economic point of view we need to ask where the logic is in this policy. We are told that it is about getting the deficit down, but taking cash out of the pockets of the poorest means taking cash out of the economy and depressing economic activity. Those on low incomes tend to spend what money they have. This provision does not fix the deficit; it takes spending—[Interruption.] That is patronising? I will tell Government Members who is being patronised, and that is poor people in this country Let us make it clear, as we did during the election in Scotland, that we want to get the deficit down but that this is not the way to do it—[Hon. Members: “How?”] Members ask how we will do that, and I am happy to give them an answer since they have given me the opportunity. I remind them that we won the election in Scotland, with 56 MPs returned for the SNP, and we had a progressive message that we delivered to the people of Scotland of investing in our country by increasing spending by a modest 0.5% per annum that would have delivered additional spending in the UK of £140 billion and would have reduced the deficit to 2% of national income by the end of the decade. That is a much more responsible way to deal with the future of our country. There is a philosophical question of whether effective support through tax credits for employers paying low wages excuses those employers from paying a real living wage that offers dignity for work. I would argue that we all want to reach a situation in which work pays, to the extent that those in work have a decent standard of living. The SNP has been championing a real living wage as a response to dealing with poverty and that would mean that hard-working families would become financially sustainable, driving up tax revenues, reducing the deficit, enhancing economic activity and, ultimately, leading to an enhanced fiscal position. The desire to make work pay, which the SNP fully supports through the idea of the living wage—the real living wage, not the Tory construct—has to go hand in hand with an environment that encourages productivity, but we know that that has not happened for the past eight years, with productivity flatlining and even the OBR’s forecast for the next four years showing only limited recovery in productivity. We cannot have sustained growth in wages unless we have growth in productivity.
Will the hon. Gentleman give way?
No, I am going to make some progress We need a national debate about how we can strengthen and drive sustainable economic growth, driving up living standards and making work pay. We can only reach a high wage economy with investment in skills, innovation and business. That is not happening, and its absence is why we need the safety net of tax credits. That is why the Government must reconsider what they have voted through The Resolution Foundation has shown that the so-called living wage will boost wages by £4.5 billion by 2020, nowhere near the impact of the £13 billion of cuts to various working age benefits. It cannot be acceptable that working people pay such a price. We need to cut inequality, not drive it, which is what the Government are doing Let us come back to the example of the family losing £1,525 of their income next year. What will the Government say to such families when they are faced with difficult choices? Family budgets are already tight and something has to give.
rose—
I will not give way just now Just imagine what will happen when someone living hand to mouth faces an unexpected problem. Perhaps over the winter the central heating boiler will need to be fixed or a fridge will need to be replaced. What will Members say to their constituents when they knock on the surgery door? Where is the compassionate Conservatism we used to talk about? When their voters have their income cut by more than £1,500, all those problems will mean difficult choices. That is why this issue needs re-examining. I am appealing to the Government to listen to the many voices raising legitimate concerns The Government talk about being a one nation Government, but if that is their desire they cannot square it with the rise in inequality that will be accelerated through these measures. We know that a report published by the Resolution Foundation on 7 October estimates that the tax and benefit changes will push a further 200,000 children into poverty in 2016. Is that really a price worth paying? We cannot accept that that can be right. This is not just a question of the 200,000 who will fall into poverty next year; the figure will increase to 600,000 by 2020.
The hon. Gentleman has talked four or five times about doing the right thing, but is it not important to recognise that that includes doing the right thing by the next generation, which stands to be saddled with billions of pounds of debt that cannot be paid back?
Of course we need to make sure we are doing the right thing for people today and for the next generation, but that comes back to what I explained to the House: the position the SNP had at the general election—a responsible position of investing today and for tomorrow, a responsible position of dealing with the deficit but investing in the future of the country.
Does my hon. Friend agree that part of the problem in making today’s children suffer in the short term is that child poverty has enormous long-term consequences?
My hon. Friend is absolutely correct. We must ensure that we deal effectively with child poverty in this country, but these measures will constrain that effort.
On Friday a lady called Edith came to my surgery to complain about her daughter’s situation. She is a nursery assistant earning £8 an hour. She works 30 hours a week and cannot work any longer because she has school-age children. Edith was mortified about the effect of the cut in working tax credits on her daughter and her family’s welfare. What does the hon. Gentleman think the Prime Minister should say to people like Edith up and down the land as to how they can trust his word in the future?
The sad reality is that I do not think the Prime Minister has anything to say to Edith in the hon. Gentleman’s constituency. That is why I am appealing to hon. Members on both sides of the House to reflect on the damage that these measures will do to Edith and others. We are having a good debate today.
I want to finish off as I have spoken for quite some time Perhaps it is little wonder that the Government want to redefine poverty. The numbers being pushed into poverty are frightening. It is not a price that a civilised society can pay In conclusion, I am grateful that we are having this debate today, but it must not end here. I would plead with the Government to change course before it is too late. These millions of families should not be affected by these tax credit changes. I hope the Government act, but failure to do so would demonstrate yet again that we need full powers over Scotland’s welfare system to be in Scottish hands, not the hands of the Chancellor and the Work and Pensions Secretary. There is a clear contrast, with a Tory Government in Westminster attacking the poor and a Scottish Government using their powers to protect the poorest and most vulnerable in our society. The Scottish Government have invested £100 million to ensure no one pays the bedroom tax and invested £40 million to protect council tax benefit. That is a caring, compassionate Scottish Government. If Westminster wants to punish the poor, it should give Scotland powers over tax and spending so that we can protect our own people from this heartless Conservative Government.
I shall endeavour to give a brief speech, but I think this is a rather big occasion We have reached a stage six months into the new Parliament where we are defining the issues in terms of how we are going to conduct the responsible management of the economy over the rest of the Parliament and achieve the healthy, long-term recovery that, as my hon. Friend the Member for Cheltenham (Alex Chalk) has just said, we are trying to give to benefit our children and grandchildren, and not just ourselves We won the election because, I think, we were regarded as more credible on economic policy. People had not always agreed with what we had done, but they realised we would take the necessary difficult decisions to keep the country on course with an economy in the process of recovering The Labour party has still not woken up to the fact that it lost the election because it was not credible on the economy and was simply presenting an uncertain collection of rather populist proposals that did not add up to a responsible future. That has been illustrated today. Labour Members are having a very enjoyable time because at this difficult stage for them they have found something they can all oppose. They have found nothing they can all support and they can present no alternative, but they are enjoying opposing on a populist basis what has been put forward. I would exempt from that the hon. Member for Streatham (Mr Umunna), a former shadow Secretary of State and briefly a contender for the leadership of the Labour party, who has just left his seat, because he made an intervention conceding that he was against taxpayers subsidising pay, but the message was, “Make us virtuous, but not yet.” He was quite happy to go along for the time-being with this flawed system until some uncertain date in the future The Scottish nationalists appear simply to be taking the view that this is a good popular occasion on which to give a harrowing description of the consequences of these proposals, and to imply that they are a deliberate attack on the poor that has been chosen by the class enemy on this side of the House. Fortunately, however, I see no prospect of the Scottish National party getting a UK majority—however successful it might be electorally—and of having responsibility for the economy on which my constituents are dependent The starting point, as usual in these debates, is that in modern Britain there is a wide community of interest in where we are all going. We all think that the economy should be managed to boost the overall prosperity of the country. At the same time, however, we live in a society in which we have to seek to alleviate poverty, to ensure that people are helped when they work hard to help themselves and to ensure that we have a system whereby we can provide a decent income for those people who are so vulnerable or so unlucky that they are unable to support themselves without help. That is the starting point, and that is why we have a welfare state and a welfare system My second point is that I have always thought that tax credits were one of the most flawed innovations to be brought into our welfare system. The idea was taken from the Clinton Administration in the United States and applied slightly differently here. It might have had some worthy intentions behind it, along the lines of providing negative income tax, but I always suspected that it was in fact introduced for politically populist reasons. The new Government could be seen to be giving money to add to the pay of a wide section of the population, and we have had that system ever since.
I will give way in a moment, but I want to make some progress. I do not want to speak for long, as lots of Members want to speak. Let me just finish my outline, then I will start to give way When tax credits were introduced, the then Government were confined by their election promise to stick to the spending and tax programme that they had inherited, because of the deficit. I seem to recall—I have not looked this up—that they therefore introduced them by means of a device that treated them not as public expenditure but as a tax change. Indeed, I seem to recall being assured on the Floor of the House by the then Chancellor of the Exchequer, when I expressed my disbelief, that they constituted negative expenditure That is why the payments became the responsibility of the Treasury and were described as tax credits. The Treasury is—or was—very good at collecting money from people who do not want to pay it, but with great respect to my old Department, which I greatly admire, it was not particularly suited to handing out benefits to people on low incomes with any degree of reliability or accuracy. I still get constituency cases relating to tax credits, because the system is based on forecasting someone’s income based on the previous year, but lots of people do not notify precisely all the changes in their arrangements. Ever since the system started, one feature of it has been that perfectly ordinary working people get demands to repay thousands of pounds that have been paid to them in error. I think that the level of error has come down, but at one point it was staggering, with a very high proportion of claimants being given bills by the Treasury that they could not afford to pay These measures were usually introduced on the eve of an election, so that even more members of a grateful public could receive yet more money on top of their pay. More importantly, it rapidly became clear that a lot of this money was subsidising employers, who found that they could hold down incomes. This was happening at a time when the economy was coming out of a recession, and they could therefore hire all the staff they needed, with the taxpayer subsidising their pay. Given the objectives that we are all agreed on, and that it is quite obvious that we need welfare reform—although Labour Members are unable to think of any at the moment—I cannot think of a more obvious target for such reform than the tax credit system. I approve of the Government’s choice in that regard. Of course, electoral bribes are always difficult to reverse, but I shall explain in a moment why this is a good time to make substantial progress towards getting rid of this dreadful mistake, which the last Labour Government should never have introduced.
The right hon. and learned Gentleman makes an important point about the nature of the benefit and the difficulties some people experience in paying it back a year later. Does he accept, however, that the system of family credit was introduced by Margaret Thatcher, and that Eleanor Rathbone fought for family allowances back in 1929? There has broadly been a cross-party consensus that the welfare state has to deal with those on low incomes, particularly those who are working.
Of course the Government have a duty to look after those of all kinds who are below subsistence income—that is what we have the welfare state for. I used to support family allowances with some vigour, because in those days we had persuaded the then Government to pay it to the mother, and a high proportion of women—there probably are still some in this position—did not know what their husbands earned and it was right to pay a benefit for the children directly to them; it was a kind of social reform. I did agree with the current Government that the time had come to end it for higher-rate taxpayers—again, it was a general subsidy. Various attempts were made to do a negative income tax, but we never succeeded in finding one—I tried over the years, talking with Chancellors and also when I was Chancellor. What has been introduced—tax credit—was a Clinton invention, altered by the Labour Government, and it has never worked properly, for the reasons I have given.
I do not want to take as long as the Front Benchers, so I will make a little progress Why do this now? There is never going to be a better time again to make more substantial progress in loosening our dependence on this subsidy to pay. I will not repeat what the Minister said admirably from the Dispatch Box about all the other things that are being done in more sensible areas, where we support the income and help with the expenditure of working families. That of course has to be key. That is the alleviation that everybody is demanding of what is bound to be difficult when we move forward. I am not naive. Politically, I point out to my Conservative colleagues that this is early in a Parliament, six months in, and my guess is that if we do not take this decision now, everybody will run for the hills if we decide we are going to do it in two years’ time. If we are looking, as a governing party should do, to what we are going to be able to show to the public by way of a successful economy when we next face them in five years’ time, we will see that now is the time to take the necessary decisions to get on with this. More substantially, as has been mentioned by, among others, my hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald), the former Solicitor-General, the employment situation is extraordinarily strong. This is the time to do it, because we are never going to get all the full compensating reactions in the labour market if we do not get them at a time when employment is at a record-breaking high, unemployment is very low and real incomes are rising at an amazing 3% a year In all the figures that keep being cited about what will happen to those who lose tax credit, there is one great incalculable, although people have tried to estimate it: what will employers do as they realise that their staff are losing their tax credit? We have already seen various firms lining up to say that they are going to pay my right hon. Friend the Chancellor’s living wage, some straightaway. That is because the labour market has changed, they do not want demoralised staff and they want to race ahead of the Government and say that they are giving a big pay rise. I accept that not everybody will be able to do that, but I think that employers, finding that the subsidy of tax credit is being drained away again, are in a better position now than they have been for years to say, “Perhaps we are going to have to give—perhaps we ought to give—a reasonable pay rise to the staff working for us because we can no longer rely on the Government setting in behind us.” Again, if we do not do it when the employment market is so strong, we will never do it at all—now is the time.
I thank the right hon. and learned Gentleman for giving way, because I agree with an awful lot of his analysis of the problems caused by the whole system of tax credits. The difficulty is that we do not start with a blank sheet of paper. The fact is that the cuts are in the here and now, whereas the possible increase in wages will come only in the future. Can he really see any employer giving somebody a wage rise because they have just had a third child who will not be eligible now for tax credits?
Quite a lot of low-paying employers will realise the effect on the morale of their staff, some of whom will tell them that they are losing their tax credits. I am not naive and know that this will not mean that nobody loses. Not everyone will be able to do that. The downsides of the change—my hon. Friends on the Front Bench explained the upsides that will affect a lot of these working families—may not be totally eliminated, but there will be fewer problems now if we go ahead with this. I have already said that getting rid of electoral bribes, which most parties have given over the years, always proves to be terribly difficult. I have seen some dreadful things introduced and then nobody has the nerve to vote against them. Perhaps I should not worry. I receive a free bus pass, free television on which I do not pay a licence, and a winter fuel allowance to save me from winter poverty. I know that I was meant to say to the previous Labour Government, “God bless you, Mr Brown. You are a worthy man, and I shall vote for you from now on.” My political views are more complicated than that. Tax credits were about the Labour Government bumping up people’s income on the eve of an election.
No, now is the time to get on I will conclude by turning to the rather big question of the £4 billion that will be lost by this motion. We are having a cheery knockabout argument and £4 billion is going out the window, and neither the Labour party nor the Scottish National Party can agree on any credible explanation of what they will do about that. They will borrow the money; that is what they did and that is what they will do I think that the right hon. Member for Birkenhead (Frank Field) is trying to catch your eye, Madam Deputy Speaker. He tried to produce some alleviation; at least he is halfway there. I think his changes save only £2 billion, so another £2 billion must be found from somewhere else. Perhaps he will address that when he speaks More importantly, there is talk of Labour and Liberal peers in the House of Lords voting down the measure. That is really quite a startling constitutional innovation. They use technical arguments, saying that it is a statutory instrument, and that it was not in the manifesto. Well, Budget measures are not in manifestos, so that is not a relevant argument. If the Upper House decides that it will not accept the supremacy of this House when the Government set tax and spending matters, I advise all Members in this House of all political parties to take that extremely seriously. It is irresponsible and it should not be done. We do not want a repeat of what happened in 1911. Personally, I will become a fervent advocate of reform of the House of Lords, as I always have been, all over again if they start doing that Pay should be set by employers once we get back to a healthy and normal world. We cannot have a system where we all have a party political argument about how much subsidy the Government will give to employers for selective members of the population. We do need welfare reform, and tax credits are one of the best candidates for such a reform. The Treasury should never have been paying out on welfare. We cannot get rid of it, but it is time to make some great progress. If this matter gets lost, the path of steady recovery that we have been on, as we lead the way in the western world towards a much more balanced, sustainable and modern economy, will be seriously damaged. I support my hon. Friend the Exchequer Secretary to the Treasury, and I hope that we will reject the motion.
Order. Before I call the Chair of the Select Committee, I point out that we have less than three hours left and more than 50 Members wishing to catch my eye. Dropping the speech limit down to two or three minutes seems ridiculous at this stage. There will also be a maiden speech following the contribution of the Chair of the Select Committee, and I do not want to impose a limit until after that. Can we please keep interventions to an absolute minimum and speeches as short as possible, so that I can put the time limit on as late as possible? With that, I call Frank Field.
I am immensely grateful, Madam Deputy Speaker. It is a pleasure to follow the right hon. and learned Member for Rushcliffe (Mr Clarke). Like him, I will set the scene, but much more briefly, I hope. The record shows that even when it was not popular on the Labour Benches, I spoke about the need to reduce the deficit, so I do not come here as a Johnny-come-lately who has suddenly discovered when we are not in government that that is a crucial aspect of economic stability. Similarly, when I pleaded in this place, on both sides of the Chamber, not to build up the tax credit strategy, I never got one Conservative Member to help me to divide the House so that we could show our disapproval of a method which, in the long run, has the consequences that the right hon. and learned Gentleman explained to us—that if we subsidise wages by that means, there is an effect on employers in the long run. Most employers, like individuals, are rational creatures. Why should they increase the wages of the lowest paid when taxpayers will do the job for them? That is the setting I make three pleas to the House. Although it would be tremendous news if a large number of Conservative Members, or even if one or two, joined us in the Lobby this evening, we should not raise our hopes too high. When we were in government, it was almost a capital offence to vote with the Opposition on such motions.
Will my right hon. Friend give way?
No, I shall accept the plea of the Chair for brevity as 50 Members wish to speak There has been a cross-Bench appeal today to the Backbench Business Committee, which you used to chair with distinction, Madam Deputy Speaker, for a debate on this. We could soon have that debate and views could be expressed when Members were not voting on a motion from a particular party. We would then see what this House genuinely believes about these changes. For many Government Members this is a crunch point, although I would make the charge that the Government are wearing lightly the pledge that they made so much of before the election, to such good effect on our Benches during the election and immediately afterwards, that theirs was the party of the strivers The Chancellor painted the picture of people on very low wages getting up in the morning and passing the drawn curtains of families on welfare. That was a deadly campaign which had its effect. If I were a low-paid worker, I would have paid some attention to a party that was making a specific pledge to protect strivers. That is why I think there is such unease on the Government Back Benches today. Those on the Treasury Bench may now wear that pledge lightly, but a number of Conservative Members fought an election campaign believing that they were going to be the party that protects strivers Maybe today is not the right moment for those Conservative Members to feel able to express that view in the Lobby, but I hope that before long we will have such an opportunity, and the Government will see how seriously some of their own Back Benchers took the pledge that they would be on the side of people on very low wages who, often against their own interest, get up and make a contribution—all too often a very valuable contribution—to our society In a statement after the election, the same man who made the plea to the country to accept the Conservatives as the party that protects strivers introduced welfare reforms which are the largest-ever cut in provision for any group, let alone for those in work. In a moment I will pick up the point that the right hon. and learned Member for Rushcliffe made about the timing of that. Maybe tonight will not be the point at which Members cross over, but I hope—this is my first plea—that we will soon have a motion that we own as Back Benchers, in which we can in a civilised way express our views about supporting strivers I want to return to the point made by the Prime Minister, which the Minister so ably defended today—an almost impossible brief. I compliment him on that, and I compliment him also on the work that he is doing in the other place with the Cross Benchers, trying to persuade people not to vote as they wish to vote. The crucial piece of information that the Government will not provide is this: of the 3.2 million tax credit claimants who will be, on average, £1,300 a year worse off as a result of these changes, how many will still be worse off at the end of this Parliament, when the Government will have to face the electorate, despite all the welcome changes they are introducing on childcare and so on? Before we have that debate, when people will vote with a seriousness of intent that they might not have today—this is my second plea—will the Government please produce those data so that we will have accuracy, rather than having to rely on the snapshot we have from the figures that they have produced The Government are saying that everything will change. We know that many of those who might be better off by the end of this Parliament—one hopes that they will be—might not be in the years towards 2020, but how many will, in fact, still be losing out in 2020, 2019 and 2018, despite the Government’s welcome changes to the national minimum wage? I think that in the long term that has revolutionary implications for how we view welfare, because I agree with the right hon. and learned Member for Rushcliffe that we have lulled ourselves, without fully appreciating it, into using welfare as a way of compensating for the failures of capitalism, and we should not have done so. The pressure should be on employers to raise productivity and pay decent wages My third plea will be as brief as my first and second. The Government are holding the line at the moment. When Gordon Brown introduced that ludicrous, vicious little policy of abolishing the 10p tax rate, he did so simply to catch out the then Leader of the Opposition. He threw it in at the very end of his Budget statement so that he could then crow about it, but it would have massively affected some of the poorest people in this country, particularly women workers. The Government were going to hold the line right up until they faced a defeat of the Budget—not a debate like today’s, but the Budget. At that point, all of a sudden the coffers were opened and taxpayers’ money was spat out— almost vomited out—to almost every group bar the 10p group I can guarantee that the Government will come forward with “tweaking” measures, as we have already heard them called. I urge Tory Members not to let them get away with tweaking the national insurance or tax thresholds, because many of our constituents who will be worse off as a result of these tax credit changes will not be compensated in any way, let alone fully, if any tweaking is spread over the 30 million of us who work, compared with the 3.2 million who will be made worse off immediately as a result of this move. I welcome today’s debate and, unlike the right hon. and learned Gentleman, am rather pleased that we on the Opposition side are all together on a subject. If we are to be taken seriously, we have to say where we would like the £4.5 billion to come from if it is not to come from the very group of the electorate that we admire most: the strivers who get up every morning to work for a fraction of what we get as Members of Parliament but who still turn up, and who have been so badly treated by this Government and by this measure.
Why today? Why have I chosen today, and this debate, to break what I hoped might be the habit of a lifetime in resisting the urge to make a maiden speech? My friends and colleagues will know that I have been trying flipping hard to avoid doing it It is not because I did not want to thank my predecessor for the long and dedicated service he gave to South Cambridgeshire and to the Government, though I must admit that sometimes his shoes do feel incredibly roomy for these small feet. Andrew Lansley absolutely deserves our praise, and he will be rightly rewarded next week when he takes his seat in the House of Lords. It is not because I did not want to shout from the rooftops about my constituency. I am certain that I bore everyone rigid about the economic miracle that is South Cambridgeshire; I am so, so proud to represent its people It is because today I can sit on my hands no longer. My decision to become an MP is a very, very recent one. It was the Tottenham riots of 2011 that shook me from my comfort zone. Night after night, my television showed me a country that was falling apart—my country—with social breakdown and an economy on the verge of collapse. I felt so strongly that I had to step forward and lend a hand. Today, I feel that way again. So I picked a team—the blue team. I believed they were the party who could bring us back from the brink, and we have started to do that. This Government have taken tough but prudent decisions and employment has reached levels never seen before. Britain is back, and I am immensely proud of this Government for their role in that. So I hope that I will see again those gems of prudence and wise judgment that drew me to the Conservative party, before it is too late Too late for what? Too late to stop us getting things wrong, and the timing wrong, on changes to tax credits. Believe me when I say that I entirely agree with the principle that tax credits should not be used to subsidise wages. It is not sustainable and it sends the wrong message about the kind of country and the kind of people that we want to be. Because I know that tax credits do need to change, I cannot support the black and white motion that is in front of us today. I am sorry, but I believe that the Opposition are wrong to say that we must not touch tax credits. However, a detailed debate about them does need to be had, and I am far from being the only Member on the Government Benches who recognises that. It is right that people are encouraged to strive for self-reliance and to find work that pays for their independence from the state, but I worry that our single-minded determination to reach a budget surplus is betraying who we are. I know that true Conservatives have compassion running through their veins. I have refrained from making a speech so far because sadly most days I feel that Members on both sides of the House are firmly married to their positions regardless of the debate, and so, frankly, why prolong the agony? Why sit in the Chamber for hours when I know I could be concentrating on helping my constituents with immediate needs now? But today is different. Today, every Conservative Member who knows who we really are has a duty to remind those who have forgotten. We are the party of the working person—the person who leaves for work while it is still dark, who strives to provide for themselves and their family with pride: a pride that says, “I will go to work. Even though I still can’t quite make ends meet, I will still go to work, because to work is to have pride, and to have pride is to be British.” I am not interested in the colour of the Government who created a bloated welfare state—that is in the past. I do not care whose fault it is, but I do know one thing: it is not the fault of the recipients of tax credits. It is the responsibility of Government, whoever they may be—those who set and change policy and those who set the rules by which these families live. If we want to change those rules, we have to support the people through that change. This is not a spreadsheet exercise. This is not a Budget document on a piece of paper. We are talking about real people—working people Yes, the income tax threshold has risen and will continue to rise, and that is fantastic. The minimum wage is increasing—brilliant! I am so proud of my Government that they have made this happen. But the timing of changes to tax credits is not concurrent. When we talk about moving towards the ideal goal of a lower-welfare, lower-tax, higher-wage economy, that is right, but I also hear us talking about the financial impact on people “over the Parliament”—that is the phrase I hear. But people on the breadline cannot wait for the Parliament to pass along. Many live hand to mouth every day I suspect that you and I could weather such a transition period, Madam Deputy Speaker—we could pull in our belts—but many of the families affected by the proposed changes do not have that luxury. Choosing whether to eat or heat is not a luxury. That is the reality Conservatives pride themselves on cutting their cloth according to their means, but what if there is no cloth left to cut? How many of us really know what it feels like? How many of us have walked in those shoes To expect people to immediately find more hours or better-paid work suggests, I am afraid, a level of naivety about the skills of some of our people. Also, are we out of touch with the economies and environments of some of our towns and cities? We can support people to get there, and I believe that can be done relatively quickly, but not overnight. That is the crux of the debate and the part that many of us on the Conservative Benches cannot reconcile I became an MP to stand up for the vulnerable, to lead the way for those too tired to find it for themselves. That is the role of Government, too. My first loyalty is to those people and it is to them that I now speak. To suggest that some Conservative Members may challenge the Government’s approach only because they fear for their seats is offensive. This is not about retaining votes. Change is not always a sign of weakness; it can show strength. Did the British public, who were so concerned about immigration before the election, condemn us when we reacted to the photograph of that little Syrian boy? No, they told us to open our arms. When the International Monetary Fund decried our economic plan for not being fast enough and not showing enough growth, we remained steadfast in our belief that slow growth was sustainable. So too must be these changes Our debt has been falling consistently while those who need protection have been protected. Is now really the time to change that successful strategy? I would not be embarrassed even once—never mind five times—if we decided to review our approach Yes, being in government does mean making tough decisions, but tough decisions must also be strategic. One of the greatest challenges facing my South Cambridgeshire constituency is the affordability of housing. A constituency does not function—a country and its economy do not function—if the people who run the engine cannot afford to operate it. We need every teaching assistant, care worker, cleaner and shop worker to secure this economic recovery. To pull ourselves out of debt, we should not be forcing those working families into it The Prime Minister has asked us to ensure that everything we do passes the family test. Cutting tax credits before wages rise does not achieve that. Showing children that their parents will be better off not working at all does not achieve that. Sending a message to the poorest and most vulnerable in our society that we do not care does not achieve that, either I believe that the pace of these reforms is too hard and too fast. As the proposals stand, too many people will be adversely affected. Something must give. For those of us proud enough to call ourselves compassionate Conservatives, it must not be the backs of the working families we purport to serve.
Order. I am very sorry to say that I am going to impose a five-minute speech limit from now on.
May I first congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her remarkable, thoughtful and excellent speech? I am astonished that she will not be in the same Division Lobby as Labour Members tonight, but I congratulate her nevertheless A lot of my constituents are low-paid workers. Many are paid the minimum wage. They work very long hours. Some have two or even three jobs in order to have enough money to feed their families and pay the bills. Even then, some of those families cannot afford to put food on the table seven days a week and have to endure the humiliation of going to food banks with their families. These low-paid workers are not shirkers or skivers, and they are not lazy or feckless. As a matter of interest, they are not the people who caused the financial and banking crisis in 2008, which led to so much damage to the economy and cost the taxpayer billions of pounds to pay off the gambling debts. To go back to what the Conservatives said at the last election, if the curtains of the houses of those workers are drawn at 7 or 8 o’clock in the morning, it is not because they are skiving or being lazy; it is because they only got home from work after midnight These are the people in my constituency who rely on working tax credits to top up their poverty pay and who will suffer if these tax credit changes go through. The only crime—I do not consider it a crime—they have committed is that they are poor. I never thought that poverty was a crime. Most of them would like to get better jobs. Unfortunately, they cannot. These are the people that the House will penalise for working hard to try to sustain their families It is not just the working poor who will suffer; as has been said, so will self-employed people. I want to share with the House a constituent’s letter to me, because it encapsulates the problems facing self-employed people. Let us call the lady Isabella. She says: “I’m writing to ask you to complain as strongly as you can about the upcoming tax credit cuts and to ask what I should do. I run my own business with my husband which is growing year on year but we still only earn a small amount, our family has an income of £13,000. Last year my business turned over nearly £50,000. I receive the full amount of tax credit and it is a life saver and allows us to grow our business and become useful members of society. We have won awards for our work...and we work long hours…to try and make the business become a success.” She says she does not have a pension, but hopes the business will grow because that will be her pension. If the changes take place, her family will lose £1,700 a year, which, as a self-employed person, she says will make life virtually impossible on the income that she and her husband are making. She asks what she should do and whether the Government want her to close down her business. She says: “Am I not exactly the sort of person this government purports to be celebrating and supporting?” Do the Government want her to close down her business and join the ranks of the unemployed?
I am delighted to speak in this debate as it gives me the opportunity to speak up for the hard-working families I meet on the doorsteps of Erewash. My constituents tell me that they want a fair welfare system, one that is there for the most vulnerable in our society and provides a safety net when things do not work out. They tell me that when they pay their taxes, they want the money to be spent on the NHS, education and social care, not on subsidising employers who think they can get away with paying just the bare minimum wage. They also tell me they want to be paid a fair wage for the work they do and do not want to be dependent on state handouts. The people of Erewash are a proud people and I am proud of them That reflects the way in which I was brought up. My parents did not expect handouts from the state, but looked for ways to boost the household income. My dad worked hard during the day and took on a second job in the evening. Even when my mum was entitled to attendance allowance in her later years, she did not want to claim it because she thought that someone else would need it more The tax credit system is so complex that it is not fit for purpose. I am sure that my casework is no different from that of other hon. Members. Time and again, residents who receive tax credits get a pay rise and inform HMRC, but then find that they rack up huge debts with HMRC. Those people tell me that they would much rather earn more money than have to claim tax credits. That is exactly the environment that the Government’s changes are bringing about. We are introducing a national living wage between now and 2020, and are continuing to increase the income tax threshold.
Will the hon. Lady give way?
We are short of time, so I will move on When we include the extra childcare that is being provided by Government, virtually zero inflation and mortgage rates at an all-time low, it can easily be seen that we are putting families at the heart of our welfare changes. I also believe that we are putting women at the heart of our changes. The extra free childcare will allow more women to get back into work, and those who are already in work will be able to do more hours. That will definitely boost family incomes. Wrongly in my opinion, women tend to be in lower-paid jobs, partly owing to the sacrifices that they make to bring up their families. The introduction of the national living wage and the increases in the income tax threshold will disproportionately benefit working women I am not saying that everything is perfect. We need to continue to narrow the skills gap between men and women. That is why I am backing a project spearheaded by the Erewash Partnership in my constituency, which aims to help women to set up their own business and realise their dreams. Some may question why we need women-only support. It is well recognised that some women lack self-confidence when it comes to going it alone in business and having the self-belief that they can do it. The support is tailored to meet those specific needs and it is working I want to finish by reminding people of the principle that was set out by John Bird, who founded The Big Issue: it is far more effective to offer a hand up than a handout. The culture of tax credits has become too much of a handout, rather than a hand up. I am confident that the proposed changes will create the hand up that Erewash residents want and deserve.
I am pleased to follow the hon. Member for Erewash (Maggie Throup) because I see a very different situation. I genuinely believe that the different situations that we see and the consequences of the tax credit cuts that the Government are introducing speak volumes about the choices that the British people face I want to take up the challenge set by the right hon. and learned Member for Rushcliffe (Mr Clarke). He rightly said that those of us on this side of the House are not an Opposition. I agree with him: we are an alternative. I want to set out what being an alternative means and why we would take different decisions on tax credits First and foremost, as my hon. Friend the Member for Streatham (Mr Umunna) pointed out—I am sad he is not here—the order in which change happens is crucial to the impact that it has. There is general agreement in the House that we all want to see a higher wage, lower welfare economy and higher productivity. Surely the test of every change the Government make should be whether it will achieve those things. The simple answer is that this change will not The evidence from the Institute for Fiscal Studies shows that none of the Government’s changes to mitigate the impact of the cuts will raise family living standards. As the right hon. and learned Member for Rushcliffe pointed out, employers are raising wages. I am a little more cynical than him and suspect that they are doing so because changes in the law are coming, rather than out of benign munificence and a recognition of the benefits to productivity of paying a higher wage Nevertheless, the order in which the Government are undertaking the changes will make all the difference to the people in this country. They could decide to change the order and introduce the so-called living wage first, then look at the tax credit cuts. That would make a difference because of one matter that was sorely absent from the Exchequer Secretary’s contribution. I am surprised that he did not mention it, given that he used to be an expert on it. He is presiding over an economy in which personal debt is rising at an alarming rate. The Minister looks quizzical. He says that the burden of the Government’s changes is being distributed equally, but the burden of personal debt is not equally distributed in this country, as we see at first hand in our communities. We see families for whom borrowing on a credit card or from friends and family, or taking out a payday loan, is the only way that they can make ends meet.
My hon. Friend is making a fantastic speech and I, too, am confused about why the Minister is looking so perplexed. The Office for Budget Responsibility stated that because of measures introduced in the Chancellor’s Budget, unsecured borrowing will rise by £45 billion by the next election. My hon. Friend’s point is pertinent to the debate.
The Minister kept talking about the amount of public debt that he wanted to attribute to each household, but average unsecured personal debt is now £10,000 per household. Given the vulnerability to which families are exposed when they have that level of unsecured debt, will the changes make it more or less likely that such personal debt will rise? No one in the House would argue that the changes as currently constituted will not lead to a rise in personal debt to families, and we know the consequences of that. I pay tribute to the hon. Member for South Cambridgeshire (Heidi Allen) who honestly and openly set out the consequences of debt. She explained the worries she has when she sees families who are struggling with debt, and Labour Members share those concerns.
I applaud the hon. Lady’s passion but she is missing the context. The changes are part of a package that include a national minimum wage, 30 hours of free childcare, and a lock on tax rises. Taking that into account, wages and personal income will rise—does she not see that?
I beg the hon. Lady to read research from the independent Institute for Fiscal Studies that shows that none of those changes will compensate for the difference in income. I ask her to look into her heart and consider whether families in her constituency will end up borrowing because they find that there is even more month at the end of their money as a result of these changes and the way they are being introduced I understand the point raised by the right hon. and learned Member for Rushcliffe but there are alternative choices. We all want the deficit to go down—some of us do not want to see Governments borrowing from banks anymore—and we recognise the problems in our economy. Some of us are deeply concerned about the consequences for families of having that level of personal debt hanging over their heads. When interest rates rise—and they will—a 2% increase will lead to an extra £1,000 a year in interest payments alone that families will have to find. Families in other constituencies might have £1,000 hanging around, but not those in my constituency. With one third of people in this country having no savings at all, the changes as they stand will eat not into people’s savings or borrowings, but into their debt. That is the consequence we are facing and we need alternative ways to deal with that Let me offer some alternative ideas for how we could cut the cake and reduce this country’s debt. The Government could make changes to inheritance tax, although I recognise that Conservative Members do not like that idea. Alternatively, let us look at capital gains tax. The Chancellor made great play of putting capital gains tax on the sale of commercial property, but he left open a loophole for residential property. Were the Government to close that gap, none of these changes would need to take place Debt is a problem in itself. This Government are paying out £10 billion in public finance initiative debt repayments. Were they to get serious about renegotiating PFI debt—they would receive support for that from those on the Opposition Benches—we could save that money. The speech by the hon. Member for South Cambridgeshire was powerful because there are always choices to be made. Labour Members would make different choices and put first those people for whom £10,000 of unsecured personal debt means not only suffering the indignity of going to a food bank or going hungry every day, but that they cannot make long-term choices for their family’s future, or even entertain the idea of getting on the housing ladder. They will not be able to pay the social care costs that the hon. Member for Erewash spoke about, or let their children go into further or higher education, because they simply cannot afford it. We see the potential that will be wasted as a result We want to make choices that will help those families, help the economy to be more productive, and help this country truly to bounce back, but that is not the choice being made by the Government tonight. I urge Government Members who recognise the debt held in their communities and understand that this measure will make it worse not better, to think again and to work with us on when and how these changes come in and how we can make sure everyone benefits from a higher wage, higher productivity economy. I promise them that the families in trouble who are coming to them now need and deserve nothing less.
I wanted to speak in this debate because I believe it is important to add my voice, for what it is worth, from the Government Benches and from a first-time Conservative seat, on the tax credit reforms I represent part of the great city of Plymouth, which has for some time been a stronghold of the Opposition in recent elections. Indeed, my seat was once the domain of the Leader of the Opposition, such was the political landscape in our history. However, Plymouth is changing. We may have at times benefited from the nuances of being almost entirely state-dependent for our income, but the modernisation of the dockyard has had a profound effect on the demographics and outlook for our city. We now have second and third-order effects of long-term state dependency visible in generations of our residents In recent years, we have seen real benefits as the fundamentals of our local economy have changed. That resilient yet ever-evolving Janner character has seen us become a haven for marine science in the south-west, with companies such as MSubs, which was visited by the Chancellor in his last stop in the city. We have some genuine world leaders in hi-tech manufacturing and our charity sector is something that those of us who call Plymouth home are extraordinarily proud of. We have three fine higher education institutions. We are home to the world’s most adaptive and resilient fighting force in 3 Commando Brigade. We are a city that cares, regardless of background, and I look forward to turbo-charging this agenda in the years ahead As times have changed, so has the vote. On the Government Benches, we do not think it is right that people should be better off on a life on benefits than those with young families who work hard and contribute to the system. The welfare state is a truly remarkable thing: a system that makes me proud to be British, and a system that provides a safety net to those who need it and security for those who fall. The harsh reality, however, is that the system failed in places like Plymouth. In places like Plymouth, the system offered a life on benefits with income up to £26,000 for a family of four, such as my own. We cannot blame people for one minute for seeking this way of life, but we can look at the system that encouraged it. That is what my party is rightly doing I must urge caution with respect to these specific changes to tax credits. We all take individual journeys to this House, but mine was very clearly to represent my constituents above all else and to do what is right by my city. If I am to truly follow through on this, it would be remiss of me not to recount the extraordinary levels of feeling in Plymouth last weekend. This bright, vibrant, exciting and predominantly blue collar city, where in the last general election we saw lots of new and first-time Conservative voters, has serious objections to the tax credit reforms. It is my duty to represent them here in the people’s Parliament where they, and no one else, have sent me to work There is a general understanding out there for welfare reform. The policies are, in my experience, very welcome to many in a city that many people would see as entirely failed by the Labour party. Those of us at the coalface every weekend trying to help, encourage, gently persuade and even inspire a generation of young people, feel emboldened by the drive towards self-sustainability and independence of the Government’s reforms. However, my duty—again, I seek not to bang on to those far more experienced and capable in this House—and indeed our duty is to shout for our most vulnerable: the 10% I talked about the other night in the armed forces mental health debate in this House: those who, through no fault of their own, find themselves on the fringes of society, and who, but for a bit of bad luck and a couple of wrong decisions, could be any one of us I stand here as a compassionate Conservative, and unashamedly so. There is a good reason why I was not a member of this party before I decided to stand as an MP last year, but I have no doubt at all that the party is changing. I am proud of our current Prime Minister for the direction he is taking us in. I am one of those who thought that one of the Prime Minister’s bravest moves was to bring in same-sex marriage. I would have struggled to be here today without his personal stewardship, and, when we are winning in places like Plymouth, it is clear for all to see It is clear to me that Plymouth's view is that, while welfare, and by extension tax credits, must be reformed, these measures must be supported by mechanisms that protect our hardest hit, with precision targeting and strong messaging. I today urge the Chancellor to provide something—anything—that might mitigate the harshest effects of this policy on our most vulnerable. There are people far more intelligent than me who will provide data and statistical analyses in favour of or against the argument. Indeed, they have done just that. I seek not to go against their carefully considered arguments, but British politics is at a crossroads I seek not to denigrate Opposition Members, some of whom I know personally and have deep admiration and respect for, but we have an entirely chaotic Opposition who have so completely lost their roots in the traditional British left as to provide no stable for almost anyone in their right mind who has Britain’s best interests at heart. We must seize the opportunity to welcome to our stable people from all previous political backgrounds. Let us look again, work harder and find a way of bringing this overdeveloped and harmful tax credits system back under control, but let us do it in a way that looks after what should be our core vote.
I say to the hon. Members for Plymouth, Moor View (Johnny Mercer) and for South Cambridgeshire (Heidi Allen) that it is never easy to make a speech with which most of those on the same Benches disagree. I have been in that position myself, so I commend them on their fortitude I want to talk about the effect these proposals would have on my constituency. Paradoxically, 60% of my constituency is in Lewisham, one of the poorest boroughs in London, and 40% is in Bromley, one of the richest. Lewisham is not the richest, but it is not the poorest either—that honour, if an honour it be, resides elsewhere—but it does have the highest proportion of any of the 32 London boroughs of people above the benefits level but below average earnings. They are the working poor, and they will be the hardest hit, should these proposals go forward. Lewisham also has the highest proportion of people working outside their borough, so travel costs are a factor for those attempting to work their way out of dependency. I do not accept the false dichotomy, which some people presented, between strivers and shirkers, but the people who will suffer the most under these proposals would fall into any category definition of “strivers”. Almost 25% of families in my constituency receive tax credits; 8,600 families will be affected, while 5,500 in-work families will lose up to £1,300 from next April, according to the Library. The total loss to some of the most vulnerable people in the constituency will be something over £7 million. Strangely enough, my constituency is better off than the other Lewisham constituencies. Those of my hon. Friends the Members for Lewisham East (Heidi Alexander) and for Lewisham, Deptford (Vicky Foxcroft) have far higher numbers than mine, so the effect across the borough as a whole can be imagined The Government argue that the increase in the minimum wage, which they try to describe as a living wage though it is nothing of the sort, to £9 an hour by 2020 will offset the cuts. It will do nothing of the kind. The most pernicious element of these proposals is the decision to take money away from people from next April while not paying the so-called compensation until four years later. As others have said, it is not just the nature of the proposals but their vicious timing that will do such damage to so many people The Government say, “Let us enable people to keep more of their own money, rather than taking it off them and then giving it back”. As a general proposition, I think that is fairly sound, and it is arguably a more efficient way of running the economy, but it ignores the nature and efficacy of a progressive tax system: the Government raise taxes from those who can afford it to pay for infrastructure and other schemes, but also to ensure a minimum standard of living across the country through a benefits system that is an integral part of the welfare state—although I accept that a balance will always need to be struck between taxation and expenditure Some Government Members, such as the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke), who is no longer in his seat, and others, almost made it sound like the tax credits system was such a liability that it should be abolished altogether. That was their import, but they are wrong. The tax credits system is not there to subsidise poor employers—we are united across the House on that point; it is a crucial taper between the world of benefits reliance and the world of work. Without it, the option would not be for people to be in better-paid employment, but to be in unemployment. That would be the reality There is a case for reform of the system, and my right hon. Friend the Member for Birkenhead (Frank Field) along with many others has done a great deal of work in this area. While new claimants can be treated separately, there must be transitional protections for some of the hardest-working and most vulnerable families in the country.
I am grateful to you, Madam Deputy Speaker, for calling me to speak in this important debate Britain is home to 1% of the world’s population and accounts for 4% of the world’s gross domestic product and 7% of the world’s welfare spending. Tax credit expenditure more than trebled in real terms in the decade between 2000 and 2010. In fact, Britain has the highest expenditure on family cash benefits in the world. In 2011, we were spending twice as much as the OECD average. Without sound public finances, there can be no economic security for working families, and the country cannot pay for the hospitals and schools that people rely on Those who suffer most when the Government run unsustainable deficits are not the richest, but the very poorest. As the Prime Minister made clear in a speech at Ormiston Bolingbroke in Weaver Vale, there is nothing progressive about burdening our children or paying more in debt interest than we spend on schools. There is nothing progressive about debt.
Surely the hon. Gentleman is aware that a central portion of the national debt is owned by the Treasury and that we pay a substantial part of the interest payments to ourselves.
I am grateful to the hon. Gentleman for his intervention, but I have to say that I have a vested interest as I have three young children. Is he saying that we should increase our debt? Should the debt of £1.3 trillion be £2 trillion, £3 trillion or £4 trillion? How much more debt does he think this country should leave to our children to pay back?
rose—
Or should it be £5 trillion, £6 trillion or £7 trillion? I will give way again to the hon. Gentleman so he can tell me.
The SNP is more than willing and happy to reduce the national debt year by year and annual borrowing year by year, but I say again that something over a third of the national debt is actually owned by the Treasury, so he cannot go on saying that interest payments go to somebody else; they go to ourselves to fund hospitals, for example.
The hon. Gentleman is saying that the Scottish National party is happy to increase the national debt. That is the message: the national debt is going to go up. That is what socialism does and what socialists say. They are not concerned about the national debt, which is currently £1.4 trillion and getting higher. We can hear the message coming through loud and clear from the SNP Tax credits cost £l billion in their first full year, but have since risen to an estimated £30 billion over the last year, yet over the same period in-work poverty rose by 20%. The status quo on tax credits is clearly not working. Indeed, the former Labour Chancellor of the Exchequer, Alistair Darling, said that tax credits were “subsiding low wages in a way that was never intended.” It is vital to address the root causes of low pay rather than simply continuing endlessly to subsidise low pay through the benefit system. Reforming tax credits is crucial to achieving a sustainable welfare system that is fair both to the most vulnerable in society and to hard-working taxpayers who have to pay for it. These reforms do not stand in isolation, but are part of a joined-up, wider offer to working people by this Government. With the announcement of the introduction of a new living wage by my right hon. Friend the Chancellor during his summer Budget, and the strides taken to raise the personal allowance, people will not only earn more but keep more of what they earn. It always pays to work On top of that, we doubled the number of free childcare hours of which parents can take advantage to 30, introduced tax-free childcare and froze fuel duty, saving a family £10 every time they fill up their tank.
The hon. Gentleman is talking about how people working on low pay should be grateful for the so-called living wage. Let me make the point again that this is not a living wage: it is not £7.85; it is not enough for people to live on. Let me provide an example. On the basis of changes to the tax credit threshold and the taper, a medical secretary with two children earning £22,236 a year can be expected to be £2,109 a year, or £40 a week, worse off in 2016 than in 2015. Will the hon. Gentleman comment on that?
What I will say is that employers must step up to the plate. They must pay higher rises—rising salaries. The living wage will rise to £9 during the term of the present Parliament, and because the Government have increased the personal allowance, people will earn £12,500 before paying any tax whatsoever The combination of those changes will make eight out of 10 working families better off. A typical family in which someone is working full time on the minimum wage will be £2,400 a year better off by the end of this Parliament. By 2020, the annual income of a single parent with one child working 35 hours a week and receiving the current national minimum wage will have increased by more than £1,500 Poverty can be left behind only through work. The reforms of tax credits focus support on the families on the lowest incomes, while favouring support for working families through the tax system and earnings growth rather than through benefits. They will move Britain from a high welfare, high tax, low wage economy to a lower welfare, lower tax and higher wage economy.
I congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her honest and, if I may say so, rather courageous maiden speech. It was a pleasure to listen to I will begin with a rather strange declaration, which is that I agree with the Conservatives. I, too, believe that “work should pay”. The sad reality is, however, that in Scotland, more than 60% of children in poverty come from families who are in work. We have already heard that the proposed cuts will hit those in work the hardest, with in-work families losing, on average, £1,300 in 2016-17. We have heard, multiple times, how that financial gap will be filled with the introduction of the new so-called national living wage; but it is not a living wage. It falls 65p short of the real living wage, which, outside London, sits at £7.85 per hour. It should therefore be referred to as what it is: a new minimum wage. If we look across the board at the families, both in and out of work, who will be affected by the cuts, we see that, on average, households will lose roughly £750 as a result of social security cuts, while households that will benefit from the new minimum wage will gain only £200 from it. That means that the new minimum wage will compensate for only 26% of the total losses created by cuts in tax credits I know how much the Government like to talk about financial “black holes”, especially when it comes to the SNP, but the reality is that if they proceed with their proposals they will create a financial black hole of £550 for roughly 8.4 million people in this United Kingdom. It is clear from the figures that their policy serves no purpose other than to push more and more people into poverty, and, in particular, to push more children into poverty. In Scotland, more than half a million children are currently in families who rely on tax credits, and 350,000 of those children are from more than 200,000 low-income families who will be hit by these changes.
I have listened carefully to what the hon. Lady has said so far. Will she answer a question that her colleague the hon. Member for Ross, Skye and Lochaber (Ian Blackford) did not answer earlier? Does she support the decision by the SNP Government in Holyrood to use their new income tax-raising powers, in the next year or so, to increase Scottish income tax and increase tax credits?
There are two points to be made in response to that intervention. First, it is worth remembering that 85% of power over welfare remains at Westminster. Tax credit is a reserved issue. Secondly, I think that the use of the income powers highlights a deficiency in the initial argument. If there is a need for the Scottish Government to top up benefits, surely there must have been a fault in the benefits to begin with.
Does my hon. Friend agree that politics is always about choice? Notwithstanding the rhetoric from the Conservatives about balancing the books, they could choose not to spend £100 billion on Trident. They could choose not to raise the threshold of inheritance tax. They could choose to close the Mayfair tax loophole completely, rather than balancing the books on the backs of the working poor.
I completely agree with my hon. Friend The House of Commons Library also tells us that the proposed changes will deliver savings of £4.4 billion in 2016-17, but that means that the Government will be taking £4.4 billion out of the pockets of the poorest people in this country. If people qualify for tax credits in the first place, it is clear that their wages are considered inadequate to live on. Given that we can cite credible evidence that the new minimum wage will not compensate for the loss of income created by the cuts, we can conclude only that they exist purely for ideological purposes and to continue the madness of austerity. As was pointed out earlier, we know that when the average person has money in their pockets they spend it. By taking £4.4 billion out of their pockets, we are taking money out of local economies, further tightening the economy and increasing the pressure placed on ordinary people. The third and final point that leads me to believe that the Government should abandon these tax credit cuts is the two child policy. Are we really saying that people should count themselves lucky if they qualify for tax credits only for their first two children? In Scotland, 54% of families have only one child and poorer families are no different, so this aspect of the policy serves only to perpetuate the myth and the stereotype that the poorest in society have lots of children that they cannot afford. Not only that, but are we really making the disgraceful proposal to our citizens that, as our Government are so compassionate, we might consider helping them if they have a third child so long as they have been raped? Is that where we are now setting the bar for providing decent opportunities for our children—only if they are the product of rape? Forget the fact that that is a moral outrage from the get go; it is also completely unsustainable. How does someone qualify? Does there have to be a conviction for rape? Or could there just be a claim? This is completely unrealistic. What further damage will it do to women who have suffered a heinous sexual attack if we make them have to relive that attack by giving evidence to ministerial bodies Fundamentally, this is an ill-thought-out, illogical and harmful proposal. Even the Adam Smith Institute has just this afternoon called on the Government to remove these proposals. I am therefore proud to say that I will support the motion tonight and that the Government should abandon their current course of action immediately.
Order. The list of speakers seems to be growing rather than shrinking and almost 40 Members still want to speak, so before I call the next speaker I shall drop the time limit down to three minutes in the hope we can get as many in as possible.
The Government are pursuing the right strategic approach by moving from supporting working families through the benefit system to encouraging earnings growth and providing support through the tax system, but they need to think carefully about how they implement the policy to ensure that working families on low wages are not hit hard and unfairly. I urge them to address these worries before the changes to working tax credits come into effect next April The Government are doing the right thing by putting in place policies that in the long term will enable us to move to a high-skills, high-wage and low-welfare economy that is not concentrated in one place—London and the south-east—but offers opportunities for all across the country. The decline which these policies will address has taken place in many parts of the country, including my constituency of Waveney, over the past 30 or 40 years. They will not work overnight. They will need time and they might need to be refocused, redesigned and rebooted In the short term, there is a need for other policy initiatives to ensure that the removal of working tax credits does not indiscriminately and punitively hit those on low wages. My concern is that over the next four years the welcome initiatives that have been made so far will not on their own be enough to prevent working families on low incomes from facing significant reductions in income that could cause real hardship. They are the hard-working families doing the right thing that we can all say we support Since 2010, the coalition Government’s and this Government’s stewardship of the economy has helped to create a record number of jobs and has stimulated a genuine and seemingly sustainable growth in wages. That has improved the economic outlook and will enable people to increase the hours they work and move on to better paid jobs. However, such opportunities are not available evenly across the country; they are in some places, but not in others. The Government must do more to support working families as they pursue this right but difficult policy. Phasing in a reduction in employee national insurance contributions should be considered, as should changes to universal credit. Universal credit has the advantage of simplicity, but it could be made more flexible The Government are doing the right thing, but this policy must be introduced with more support for those who are also doing the right thing and looking to work more. That is something that I, as a one nation Conservative, ask the Government to do.
The Conservative party promised no cuts to tax credits and said people should always be better off in work, and we agree with that, yet the Government are reneging on those commitments. Some 7,300 working families with children were in receipt of tax credits in my constituency at April 2015 and all will experience an income cut in April 2016. Those with more than two children will be particularly badly hit One couple who came to see me in my surgery on Friday will face a cut in their annual income of more than £1,500 a year, and that includes the change in the personal allowance. The couple obtained the figure from the “entitled to” calculator on the direct.gov website. He is a primary school teacher earning £26,500—well above the minimum wage—and as a public servant has little expectation of a pay rise above 1%. His partner has had pregnancy-related health complications so she is not working. They are expecting their first child. They said to me that they “feel extremely disappointed that an honest young couple who have a child on the way and have never claimed a thing do not get any help.” It is not right that a second-year primary teacher is struggling to make ends meet and that low and middle-income earners like this man face the brunt of Government cuts yet again I do not dispute that employers should pay decent wages so that working families are less dependent on the taxpayer to make up the difference, and that we should strive to be a high-skill, high-wage economy, but until the wages of the lowest-paid rise, the Government should not withdraw the benefits that allow working families to feed their children and ensure that people can heat their homes and are able to afford to travel to work. The Resolution Foundation calculates that cuts to tax credits and universal credit next April will create an “overnight shock” to family incomes, plunging around 200,000 families into poverty, mostly working households. The so-called national living wage is not a living wage and will simply not compensate these families for their loss of income. Middle and low-income families will continue to need support, not spin The Government justify these cuts by saying that they need to make savings in public funds, but where is the assessment of the cost to the public purse of these drastic cuts to the income of so many low-income families? What about the greater risk of people being forced into unemployment and the additional cost to the taxpayer from that? What about the additional cost to the country of children arriving at school hungry and unable to learn? What about the greater chance of long-term illness from cold homes, and the costs of increased personal debt that my hon. Friend the Member for Walthamstow (Stella Creasy) described so clearly? Where is the assessment of the impact on local economies of these changes—the loss of £4.6 billion in the next financial year? Money spent by low-income people is spent in their community, not on playing the stock market.
The Conservative party is the party of jobs, opportunities and higher wages, not of borrowing for ever until we go bust. There is nothing whatever compassionate about running out of money. My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) made some very good points, not least that, given the conditions, this is a good time for employers to deal with the subsidy that has built up In Australia during the crisis the Government authorised the payment of $900—about £500—as a tax credit, as an absolute emergency measure to keep the economy from going into recession, and there was an almighty argument and stink over whether that was even possible Gordon Brown instigated a system that spends thousands of pounds per person every year. He bumped the figure up ahead of elections time and again, and the welfare system got out of control. This was indeed a bribe, and it was made with borrowed money. That is not fair on the general taxpayer. We are the party that wants to reform this system. This is about reducing our deficit and not burdening our children. All our children will be paying for this for ever more unless we reform the system now. It is also worth remembering that the tax credit system is one of the reasons that migration from the EU has been sucked in so hard since 2005, and if we want to deal with that, we must address this issue This is the party of incentives. We want to make the future better and enable businesses to create jobs that will pay better wages in order to give people the opportunities they need if their families are to get on. That is why we have a major infrastructure programme in the south-west. We have heard Opposition Members ask what we are going to invest in. Well, we are investing a lot. We are going to make a major difference to people in my constituency and in the south-west. These moves will enable a much broader-based rise in wages, which I look forward to. I believe that we should incentivise people even further in the next phase, and it has been suggested a few times that we should look at the national insurance system. We could raise the national insurance threshold much further, right up to the point at which income tax is collected. That reform would make work pay even more.
Thank you, Mr Speaker, for giving me the opportunity to contribute to today’s debate. During the recent general election campaign, I spoke to many families across the Merthyr Tydfil and Rhymney constituency who were already struggling to make ends meet and, in some cases, struggling to put food on the table or to heat their homes. Since the election, we have heard from the Conservatives that they are on the side of working families and want to make work pay. In recent weeks, however, I have visited food banks in my constituency and seen at first hand how the demand for support from our food banks is increasing, not decreasing. It is also deeply worrying that in many cases, food bank support is reportedly being provided to people who are in work rather than out of work If the Government continue with their severe cuts to tax credits and do not alter course, it will cause absolute misery for many families in my constituency and many other areas across the country. These measures have been described as the largest cut to family incomes ever implemented by a Government. Is that an achievement that the Conservative party wishes to aspire to We are talking about working families. These are the people whom the Government say they want to help, yet the tax credit cuts would completely pull the rug out from under them, causing misery and hardship on an unprecedented scale. The cuts will mean that work pays less, which will undoubtedly lead to further debt and to families being unable to afford their basic living and housing costs. The cuts will also lead to further direct and indirect financial pressures on local authorities, which are already struggling to cope with massive cuts to budgets and services The changes will hit working families, with 3.2 million low-paid workers losing out next year. Information released by Barnardo’s highlights that a lone parent working full time on the minimum wage—the new so-called national living wage—for 37 hours a week will lose around £1,200 a year as a result of these changes, even after accounting for the increase in the minimum wage. That cannot be fair, and these measures will not support working families as the Government say they want to do. The combination of the Government’s public sector pay policy and the changes to the tax credit threshold and the taper will mean that hundreds of thousands of public sector workers will have less income in 2016, 2017, 2018, 2019 and 2020 than they do in 2015. Again, can that be fair I say to Conservative Members that these measures will hurt working people, particularly the most vulnerable across our country. That will include not only 4,900 families in my constituency but families in all constituencies, including those represented by Conservative MPs. I urge Conservative Members to support the motion, to show that they are truly on the side of working families, and not to condemn more children into poverty.
I am very much obliged to you, Mr Speaker, for being able to speak in this debate. We have heard lots of passionate speeches and many well-argued speeches, but I wish to start by referring to the one made by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). He said that when we look at the election, we see that there was a clear choice between the Conservative party and other parties on economic credibility. It is on that rock of economic credibility that this Government are doing something that is difficult but essentially the right thing. Opposition Members have to outline where they are going to find the £4.4 billion of savings, and they have not done so in any way.
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I am not going to give way. [Interruption.] I am not frightened of the hon. Lady, but I realise that I have limited time. I am not frightened—
Order. Let us hear the good doctor.
I am not frightened with respect to this debate, but perhaps in other ways I should be The Opposition parties have a number of questions to answer. Where are they going to find the savings? More broadly, most of us agree that this system of tax credits subsidises employers, so is that subsidy to them to be paid year in, year out until kingdom come? Do we want to keep doing this for the foreseeable future, perhaps in perpetuity, or should we try to reform it and impose some conditions on employers to increase wages and share general increases in prosperity? The Government are doing the right thing. Clearly, this is a difficult decision. We cannot kid ourselves that some of these choices are easy, because they are not, but that is why we have been given the mandate—to do difficult things. If it were easy, we would have done it already and we would not have a problem. This is the right thing to do As other Conservative Members have observed, the conditions could not be more propitious to institute a reform of this kind. We have rising incomes and rising wages, and unemployment has fallen. I recall that in the last Parliament the doomsayers were saying that we would hit 5 million unemployed, but that never happened. We have good labour conditions and this is exactly the right time to bring about a reform of this nature. The last thing I would say is that although we engage in pantomime, Punch and Judy politics, this idea that the Government have done nothing for working people is ridiculous. We have to stress the fact that the national living wage has been introduced and the personal allowance has been trebled, and we also have to consider the doubling of free childcare for working parents with three and four-year-olds. This is a good comprehensive measure that helps people.
First, let me say that I do not think many people disagree with the analysis that has been made about tax credits. The question is: will the Government’s approach and the timing of their reduction solve the problem and avoid the difficulties that have been identified Let me deal with the three arguments put forward by the hon. Member for Spelthorne (Kwasi Kwarteng), the first of which was that Government credibility is at stake. In a democracy, it is not just the credibility of the Government that is important, but the fairness of the policies they are undertaking. They might argue that they are dealing with the deficit and taking tough action, and that those are good things, but those affected must also feel that they are being treated fairly. I do not believe there is fairness in this policy, because it does affect those people at the lower wage end of the economy. As has been said, we are talking about the strivers in society—the people who want to make a contribution and yet find themselves undermined.
My hon. Friend has mentioned the issue of those who are going to be hit hardest. Some 300,000 more children will be put into poverty, as has been confirmed by the children’s charities. Does he share their concerns?
My hon. Friend makes an important point. In Northern Ireland, 33,000 of those who will be affected have two or more children, and the impact is likely to be about £2,500 per year on them. The issue of fairness is therefore important The second point that the hon. Member for Spelthorne made was that this was the right time. The right hon. and learned Member for Rushcliffe (Mr Clarke) argued that the economy is buoyant, but that is not true in all sectors, or in all regions. There are many places where the labour market will not push up wages and where there is not the competition for employers to say, “We will have to hold on to workers by pushing up their wages to the national living wage or beyond.” It is not the right time in many parts or in many sectors of the economy. As the Office for Budget Responsibility has said—as has the Adam Smith Institute, which is hardly a hotbed of left-wing subversives who want to wreck the Government’s policy—the policy will price thousands of workers out of the labour market Finally, the safety nets that exist are not there for everybody. For example, the national living wage will not apply to a large group of people in society—to those who are under the age of 25. The new approach to housing benefit will not help those who are in the private rented sector, so they will face housing costs. The childcare costs will not apply right across the board. We will find similar things if we go through many of the other safety nets that the Government say they have put in place. For all the reasons that I have mentioned, this is an unfair change in policy Some Members have asked, “What is the alternative?” May I just say that I served as Finance Minister in Northern Ireland, and we had to find 5% cuts in the middle of a financial year, and then 3% cuts every year for four years? There is enough room in a budget of £400 billion to find the changes that are required to fund the phasing in of these kinds of changes. We do not have time to discuss that today, but suggestions have already been made. If this is a policy that the Government want to pursue, the real challenge is to find ways of introducing it humanely, fairly and effectively.
Much has been said today, but I wish to concentrate on two points. First, we must accept that tax credits are a failed policy. I do not think that anyone has any credibility in this debate unless they accept that the policy is a massive failure of the previous Labour Government. Even if we are generous to Gordon Brown—and there is no reason why we should be—and we adjust for prices, this is a policy that should have cost £6 billion and has ended up costing £28 billion. No economy can afford such a bill. It is wasteful. It is a byzantine merry-go-round of recycled money that has “misdirected”—to use the jargon—at least £10 billion in fraud and error. As has been said, it has enabled many employers, including some of our largest companies, to pay their staff less in the full knowledge that the state would top up weekly incomes. In doing so, the policy has depressed wages. I know that all too well from my constituency where the toxic combination of out-of-control immigration and out-of-control welfare has meant that there has been little, if any, pressure on some of my largest employers to increase wages in the past 10 or 20 years, and it is an increase that the working people of Newark want to see and to which this Government are committed.
I will not give way, because time is pressing The second question we must ask is: are we willing to put this back in the box labelled “too difficult”, or is this generation of Members of Parliament willing to take the matter on? Do we want to kick this can down the road for future MPs and constituents to deal with, or do we have the guts to take it on? Of course it is not easy. No welfare reform is painless, and any boondoggles given away before general elections are, by their nature, the most difficult things to retract, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) has said. This matter is important, because it cuts to the core of what we are here for. Are we, as Members of Parliament, elected here to leave our children and grandchildren a state that is in worse repair, less competitive and more dependent on China? I have just been to hear the President of China speak a few moments ago. I want a country that can stand on its own in the world, pay its way and ensure that work pays, where millions of working people, including 4,000 or 5,000 of my constituents—
Will the hon. Gentleman give way?
I will not, as time is against me I want a country where 4,000 or 5,000 of my own constituents are not reliant on welfare, but have the dignity of a job that pays.
I shall speak on behalf of more than half the population who have not yet been mentioned specifically. The cuts that we are discussing today will have a gendered impact, significantly affecting women much more than men. Capital and wealth continue to be concentrated in the hands of men, who tend to earn more. By contrast, women are most adversely affected by cuts to social security as they have to rely on it more. For instance, women are far more likely to be single parents, and 42% of single parents in the UK live in relative poverty after housing costs. Of those, 90% are women. Women also work as mothers and carers for elderly relatives, and when in work they are more likely to work part-time in the most underpaid, undervalued but important sectors—catering, cleaning and social care The Fawcett Society has shown that 62% of workers paid below the living wage are women. The considerable gender pay gap of 19% stubbornly continues. Tax credits are therefore a lifeline for women in low paid work and the women’s budget group has demonstrated that these cuts will undermine advances in gender equality. Although the majority of people gaining from tax credit cuts will be men, who will benefit by £1.5 billion a year by 2020, most of those losing out from tax credits will be women, who will lose £5.8 billion a year by 2020 The advances made in helping those on low pay are about to be rolled back by a party that claims to represent the interests of working people, but in practice does no such thing. The cuts are not inevitable. They are made off the back of tax cuts for multinational businesses and others, which overwhelmingly benefit the most affluent. May I suggest, from the party of Siobhain McDonagh, that if the Government are looking for a compensating saving for ameliorating the situation of the poorest families, they should look at the mortgage tax relief given to buy-to-let landlords. In the Budget the Chancellor cut it back to the basic tax rate. If the Government want £2 billion more, they should cut it a bit more, help the housing market in London and make sure that poor families and poor women do not lose out.
“We should measure welfare’s success by how many people leave welfare, not by how many are added”—so said Ronald Reagan. In 2010 nine out of 10 families in the UK were on welfare. We do not need more welfare; we need more jobs, and better jobs which will pay a national living wage of £9 by 2020, ahead of the estimated living wage at that time We have record employment in the UK. Britons have more opportunity and more jobs. During the last Parliament, we created more jobs than were created in the rest of the European Union combined. What we have not discussed in this debate is the effect of the whole package of these reforms—universal credit, tax thresholds, child care and the national living wage. They create an incentive, enabling people to do more work. All those estimates from the IFS and the Adam Smith Institute have not taken into account people’s potential to go out and work more.
I find the hon. Gentleman’s comments bizarre. This matter is close to home for me. My son and his wife are on tax credits. He does over 40 hours a week, and she is retraining and doing 12-hour bank shifts. I have a granddaughter who is going to suffer a cut of more than £100. Can the hon. Gentleman explain to me how they can retrain any more than they are, where they are going to get extra hours when they are both doing nearly 50 hours, and the impact that that has on my granddaughter? The hon. Gentleman is out of touch.
Wages have been subsidised for employers for too long. It is a crazy, convoluted system in which people pay tax and then it is returned to them in welfare. How can that be right? Employers should value their workforce and pay them more. Of course we need to look carefully at the consequences of these changes, but without the reforms in the previous Parliament the tax credits bill would have been £40 billion. We cannot afford that. We have to balance the books, and employers have to take up the slack We are still losing £73 billion a year in this country, so we must balance the books, and we can do that by building a new culture. What do I say to an employer in my constituency who employs hundreds of workers? He says that on a Friday night, when the shout for overtime goes up, it is the overseas workers who step forward. We need to build the right culture. The culture in my house was built by my parents, who worked all the hours God sent, not to line their pockets, but to benefit the next generation and set the right example for them Freud, distilling the learning from his life’s work, said that happiness depends on two things: love and work. Over the previous Parliament, 700,000 workless families went back to work. We need better jobs, we need to balance the books, and we need to build a new aspirational culture in which work pays.
I congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her passionate maiden speech—Government Front Benchers were visibly cringing with each word Michelle Dorrell, who appeared on the BBC’s “Question Time” last week, is one of the one in four people who now regret voting Tory. With tears in her eyes, she explained that she felt she had been misled by the Government. They are taking from the poor and making them suffer, and it is a false economy. On 19 April 2015 the right hon. Member for Surrey Heath (Michael Gove) said of tax credits, “we are going to freeze them for two years; we are not going to cut them” The spirit of deception goes on. The minimum wage has been renamed the living wage. Ministers claim that the cuts in tax credits will be offset by the increase in the minimum wage. Like all good cons, there is a grain of truth in that, because the cuts could be offset, but not until 2020. The cliché about hard-working families who did not cause the crash having to pay for it is unfortunately true. In Brent, 64% of families receive tax credits, which means 13,600 households will be affected by these changes. We know that there is a problem when The Sun—not a left-leaning newspaper in anyone’s imagination—starts a campaign about the cuts Conservative MPs have an opportunity tonight to listen to their conscience, vote with us and send a message to their Front Benchers that this is not right and this is not fair. If you fail to do that, shame on you.
Order. I gently remind the House that there is no shame on my part in these matters. Members should not keep using the word “you” as though it is somehow my policy. Neither is it my policy, nor is it not my policy; it is the Government’s policy.
Thank you, Mr Speaker, for giving me the opportunity to speak in this debate. I will keep my remarks brief, because I know that a number of colleagues wish to speak Specific reforms announced in the Budget should be discussed in the context of the new deal announced by the Chancellor. The problem is that some Members of the House want to pick and choose the elements of that new deal, welcoming the extra spending but never endorsing any of the difficult decisions that the Government have had to take. The current situation is this: Britain is home to 1% of the world’s population, generates 4% of the world’s income, but pays out 7% of the world’s welfare spending. We are currently spending more on family benefits than Germany, France or Sweden This Government were elected six months ago with a mandate—an instruction—to balance our books and to reform welfare, as stated in our manifesto. I have listened to Opposition Members, but we have to seek to avoid the mistakes of the past. Spending on tax credits more than trebled under Labour in 10 years, while in-work poverty rose by 20%. In 2010, 90% of families were eligible for tax credits—a disproportionate amount. After these budgetary changes, that will be reduced to five in 10, a much more sustainable number. Ultimately, these changes will return tax credit spending to pre-crisis levels—the level under the Labour Government in 2007-08—and deliver £4.4 billion of savings in 2016. That money can be invested in our national health service.
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I will not give way because time is short Where do we go from here? We can either run a high welfare, high tax, low pay economy or continue with the job of reforming our economy to have high pay, low tax and lower welfare. Controlling welfare spending is part of this Government’s wider offer to working people. We are raising the personal allowance so that by the end of this Parliament people will not have to pay anything on the first £12,500 they earn. We are introducing 30 hours of free childcare for working parents—tax-free childcare worth another £2,000 a year. We are freezing fuel duty and introducing the new national living wage. These reforms cannot be viewed in isolation. They form part of this Government’s new wider deal with the British people, supporting people into work and ensuring that we deal with our debts now rather than burdening our children, grandchildren and great-grandchildren with more debt than they can ever hope to repay. That is why I will support the Government this evening.
I look at this debate as someone who, perhaps unlike some Conservative Members who have spoken, did an ordinary job on an ordinary wage before I came to this House. Many of the people I worked alongside in the NHS relied on tax credits to make work pay and now find themselves caught in a pincer between the Government’s pay cuts and the work penalty. More than 13,000 children in my constituency are in families supported by tax credits—over two thirds of all families with children in Dewsbury and Mirfield. Literally thousands of the people I represent are now fearful for their future.
My hon. Friend is not alone. In my constituency, 4,000 working parents will be affected by the working tax credit cuts, as will 6,700 children. This is, in effect, a work penalty. I ask her to support me in telling Conservative Members, “You are not the party of working people, and shame on you.”
I thank my hon. Friend for his intervention. I absolutely agree that this is clearly a work penalty— to think that the Conservatives wanted to rebrand themselves as the party of working people, but instead we have this penalty A cleaner in my constituency with one child earning just over £13,000 a year will now lose nearly £2,000 of it. That, quite simply, is the reality of these cuts. As for the so-called national living wage, there is one simple problem: it is not actually enough to live on. That is why we had tax credits in the first place, and why the Living Wage Foundation takes account of them when it calculates the real living wage If the Conservatives were serious about an economy based on fair pay for decent work, they would be doing the opposite of what they propose in the Trade Union Bill and making sure that working people genuinely get their share of the wealth they create. The real winners will be the Tories’ paymasters in big businesses, because the most profitable companies in Britain will get the cut in corporation tax—not to mention the millionaires. We know what they really think of ordinary working people in Britain because the Minister for Employment said it herself in a book called “Britannia Unchained”: “the British are among the worst idlers in the world” who “prefer a lie-in to hard work.” If they thought that these cuts were so necessary and so reasonable, why did they not mention them before the election? Instead, we saw exactly the opposite, with the Prime Minister categorically denying on national television that any such changes would be made. We used to say, “You can’t trust the Tories with the NHS”; now we know that you cannot trust them, full stop.
At the heart of this debate lie two different views of how we should combat poverty. The first is that the state should do so exclusively through the welfare system, and the second is that the real way out of poverty is through hard work for proper, honest, decent wages I agree with Alistair Darling, the former Chancellor of the Exchequer, who has said that the unintended consequence of tax credits has been to subsidise employers who do not pay their staff enough to live on. I hope that Members on both sides of the House can agree that employers and companies that do not pay their staff a decent wage and enough to live on are behaving in a deplorable and completely unfair way. I welcome the introduction of the living wage, which moves us towards a point where people can live on their wages As a corollary and consequence of the introduction of the national living wage, I think that productivity will increase as well, because employers who pay low wages have no incentive to invest in IT and machinery. The proposal begins to move the balance away from a reliance on tax credits towards a reliance on fair wages. I understand the points that Members on both sides of the House have made about the effect of tax credit reductions on particular individuals, but while many of the analyses we have heard, including those by Unison and the IFS, take into account the national living wage and the tax threshold increase, they do not take into account extra childcare or the removal of the fuel duty escalator, which means it now costs £10 less every time we fill up the tank. Nor do they take into account the 1% reduction in social and council rents or the fact that wages are going up by 3% while inflation is zero The living wage will directly affect 3 million people and a further 3 million people on slightly higher wages will benefit from a ripple effect. In fact, 200 companies, including Morrisons and Lidl, have already adopted the national living wage Labour Members, particularly the shadow Chief Secretary, have completely failed to answer repeated questions about where the £4 billion would come from if not from this measure. The hon. Member for Feltham and Heston (Seema Malhotra) did not suggest a single idea. The SNP has not taken up the challenge, but it could increase income tax.
I tabled amendments in this House to devolve universal credit, which is exactly where tax credits sit, and they were rejected by the hon. Gentleman and his colleagues.
In a year or two the Scottish Government will assume powers to vary income tax and it will be entirely at their discretion to raise it to fund tax credits, so we will find out very shortly whether they really plan to use those powers I am conscious that time is short, so I shall conclude. The measures shift the engine of prosperity creation away from the state and towards work and pay. I welcome the proposals and will support them this evening.
I and my SNP colleagues oppose the UK Government’s continued attack on low-income and vulnerable working families. It will have a devastating impact on the majority of the 11,300 children from more than 6,000 families in Airdrie and Shotts who are in receipt of tax credits The very first lines of the July report by the Institute for Fiscal Studies state: “A package of changes to the tax, tax credit and benefit system has been announced for implementation in the current parliament…These will reduce household incomes significantly, particularly for those towards the bottom of the income distribution.”
Is my hon. Friend aware that the Tory manifesto mentioned tax credits only twice and that it did not mention the scale of the proposed cuts? Conservative Members are lining up to say that they have a mandate to cut tax credits, but they have no such mandate, especially considering that fewer than one in four of the electorate voted for this Government.
I agree with my hon. Friend that the Government do not have a mandate to implement these tax credit cuts. That is not what the people who voted Conservative voted for The changes are fundamentally regressive. They disproportionately target those in low-income households and punish them for this Government’s ideological obsession with austerity, which is failing socially and economically.
Will the hon. Gentleman give way?
No, I will not An International Monetary Fund report in June highlighted the fact that reducing income inequality not only leads to reduced poverty, but boosts growth. By extension, the policy of cutting tax credits, which will increase income inequality and drive more of our citizens into poverty, will, in fact, harm growth and therefore harm the Government’s apparent aim of reducing the deficit I absolutely agree that we need to make work pay. I believe in a fair day’s pay for a fair day’s work. I also believe that work should be a means to escape poverty, but 60% of children now living in poverty in Scotland live in working households. It was puzzling to me to see how cutting tax credits could possibly achieve the goals of making work pay and eradicating poverty The Government have absolutely no mandate for these tax credit cuts, as I have said, but I welcome the minimum wage rise that was announced in the Budget. Why, however, are the Government attempting to sabotage and undermine the real living wage campaign by giving their minimum wage the same label, especially when the Chancellor is giving once with one hand and taking twice back with the other The House of Commons Library has calculated the cumulative impact of the summer Budget on a single-earner couple with two children where the singer earner works 35 hours per week and earns the minimum wage. The Library’s independent analysis shows that a family in that situation will be £1,500 per annum worse off in 2016-17—the year all these changes will start to take effect—and more than £2,000 per annum worse off by 2020-21. How on earth can that be described as making work pay? The Government cannot reduce the deficit by waging a war on the backs of those who are least able to pay, and as the IMF has demonstrated, it makes little economic sense to do so I find it morally and socially reprehensible that these tax credit changes are being forced through by the Government without a mandate to do so. I hope that Ministers will look at this matter very carefully, and that compassionate Conservative Back Benchers will keep that in mind when the Division bell goes this evening, as they consider the full consequences of these shameful tax credit cuts.
It is a pleasure to follow the hon. Member for Airdrie and Shotts (Neil Gray). He said that the tax credits change was not why the electorate voted Conservative. I am not quite certain how he knows that.
I take it that the hon. Gentleman did not watch “Question Time” the other night?
I did indeed watch “Question Time” the other night. I sincerely hope that the reports in the press that the lady concerned had misunderstood her exact situation and will not be affected by these cuts is the case. I put it to the hon. Gentleman that Government Members have a better understanding of why people voted Conservative: they did so to sort out the mess of the past few years The Chancellor is right to continue the process of reform. As my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) said—this was echoed by my hon. Friend the Member for Spelthorne (Kwasi Kwarteng)—now is the optimal time to put forward sensible, necessary reforms: there is a strong economic backdrop, UK employment is at a record high and the economy is growing faster than anywhere else in Europe. These reforms are a package of measures that cannot be viewed in isolation.
My hon. Friend is quite right to mention that the changes are part of a package, which includes higher tax-free allowances, lower social housing rents and wage rises that are significantly higher than inflation. Does he agree that we still have not seen a full assessment of the impact of all those changes or of the tax credit changes in research by either Parliament or the IFS?
I am grateful to my hon. Friend for drawing the House’s attention to the many factors that are mitigating the tax credit reforms, including the national living wage, the fuel escalator—my hon. Friend the Member for Croydon South (Chris Philp) referred to that—and the doubling of free childcare provision. As a colleague of mine on the Work and Pensions Committee, my hon. Friend the Member for Gloucester (Richard Graham) will be well aware that it is going to look at some of the detail of how the reforms may affect people. I look forward to engaging with him on that, as well as with the right hon. Member for Birkenhead (Frank Field) and others I recognise that there are concerns. However, I urge all hon. Members to remember that we are dealing not with a static environment, but with the most dynamic economy we have known for many years. The positive reforms that the Chancellor is making will have a pronounced ripple effect. Morrisons, Costa Coffee, Sainsbury’s and Ikea are among 200 firms that have already increased pay to meet the national living wage or move above it.
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I apologise, but I have given way twice and other people want to speak Those pay increases are only part of the story. The ripple effect will continue as those who are on the national living wage see others coming on to it and the pay differentials kick in.
Will the hon. Gentleman give way?
I have already given way to the SNP and will not do so again There is currently a 4% increase in wages against a flat inflationary background. The reforms, taken overall, will deliver for working people. We will continue to deliver a vibrant economy. The Government will ensure that this generation covers the debts that have been incurred, rather than endlessly passing the buck into the future.
This morning on BBC Tees, I debated the issue of tax credits with a Conservative councillor who stood unsuccessfully at the general election. He used an expression that summed up the total lack of understanding among Government Members of how people can be in work but in need of some state support. He referred to people as being “exposed” to the process, as if it was some kind of risk. I understand that that expression might be used by a City person in relation to investments or by a chief executive about a project that his company plans to undertake. In both cases, I am sure that they would develop a plan to mitigate the risk of failure. The millions of people who will be affected by the tax credit cuts are not exposed to a risk that they have the power to mitigate. Rather, they are having cuts to their income imposed on them and there is little, if anything, that most of them can do about it.
One group that will be hit is family carers who receive carer’s allowance and work 16 hours on the minimum wage to supplement their benefit of £62. There are 689,000 carers in that position. Carers UK says that all carers who claim carer’s allowance and working tax credit will lose out under the tax credit proposals. I know that my hon. Friend cares about these things, but it seems that Government Members do not.
I am grateful to my hon. Friend for that intervention. She does tremendous work in respect of carers and I understand exactly what she is saying My hon. Friend will be interested in the case of my constituent Linda Harper, whose medical needs mean that she requires help and support in some areas of her life. Despite needing the unpaid care of her husband, who also has a job, Linda’s determination recently saw her battle against her condition to open her own craft store in the local town centre. Although the business does not yet turn a profit, she is succeeding in building a customer base and is contributing to the community by running classes, teaching others the skills of her craft and hosting social groups that add value to the lives of those who participate Linda represents the attitudes that the Conservative Government claim they want to promote. She is hard working, persevering and enterprising. Let us not forget that the Conservative manifesto at the general election promised to improve the lives of “the millions who work hard, raise their families, care for those who need help, who do the right thing” Yet, when the Government’s changes come into effect, Linda estimates that she stands to lose £2,000 a year. Paying her mortgage and putting food on the table will become significantly harder and the viability of her businesses will be severely challenged. The Government say that their demand for employers to pay people more and their tax cuts will help to restore the money that people lose from their tax credits. That is absolute nonsense. I put the following questions to the Minister. What will happen to public sector workers and self-employed people on low incomes? How can the employees of local authorities, health trusts and other public sector employers make up their income by increasing pay when the Government have said that they cannot give increases beyond 1%? How will a person who relies on tax credits and who earns less than £10,000 a year benefit from an increase in the tax threshold? How will a self-employed person with earnings of £6,000 a year give themselves a pay rise to fill the gap in their income caused by the loss of tax credits? How will a small business fulfil the Government’s promise of higher wages when it is already struggling to survive? The answers are simple: public sector workers will continue to see drastic cuts to their incomes and standard of living; self-employed individuals will be left to their own devices; and small businesses will pay people off because they cannot afford to keep them I am alarmed to hear that, despite the reservations of many Conservative Members, the Prime Minister and the Chancellor have no intention of halting these cuts. Perhaps the 70 or so Conservative Members whose majorities are smaller than the number of people in their constituencies who claim tax credits will have more to say about that in future. Several million people hope so.
I am grateful to be able to speak on this difficult and contentious issue. It is important to consider all the arguments, including economic ones, for why these changes are necessary. Only last week we debated the charter for budget responsibility, and there was unanimous support among Conservative Members for running a surplus in normal times, so that if we again strike a period of economic slowdown, we will have money for our vital services. Many Labour Members acknowledged and agreed with that. We must tackle the country’s deficit and debt, and to achieve that we must reduce public spending.
Will the hon. Lady give way?
I will not. Tackling welfare spending is key to achieving that reduction, and we cannot tackle the country’s deficit and debt by leaving welfare spending as it is. The UK is currently home to 1% of the world’s population, yet it accounts for 7% of the world’s spending on welfare. That is clearly not sustainable. If we do not save £12 billion a year by reducing the welfare bill—including £4.3 billion from changes to tax credits—where will we find those savings? From the NHS budget? By cutting social care spending or reducing the education budget? Labour Members could not give one answer when asked how they would reduce the deficit. There is no easy answer—if there were, we would be doing it Currently, taxpayers—many of whom earn just above the tax credit limit—are subsidising employers who pay low wages, and that must end. It cannot be right that someone who gets up early, goes to work, works long hours and comes home late does not earn enough to do without welfare in the form of tax credits. Instead of fighting to preserve tax credits, perhaps Labour Members should fight harder to increase wages. I dispute many of the figures that have been distributed by opponents of these changes. If we look at the facts and take into account all the changes in the recent Budget—including the increase in free childcare, the freezing of fuel duty, VAT and national insurance, the increase in tax thresholds, and the reduction in social housing rents—a typical family will be about £2,400 better off by 2020. As we have heard, pay is already up by 3% this year, and more than 200 firms have committed to paying the living wage. Having come from a poor background and struggled through hard economic times, I firmly believe that the way out of poverty is through work—
Order.
Time is short so I will focus on two areas: the effects of the changes to tax credits on my constituency, and the disproportionate effect of those changes on black and minority ethnic communities In my constituency these cuts will be devastating. Areas that are already impoverished and where many depend on tax credits will suffer far more than richer areas. Some 15,500 families in Bradford East receive tax credits, and 13,700 of those have children—four times as many as in the Chancellor’s seat. He does not understand the effect that these cuts will have, and he never will More than 5,000 families in Bradford East have three or more children. Bradford East already has above average unemployment and high levels of deprivation by any measure, and thousands of children live in families that are to be made significantly worse off. Families will have to make heart-breaking decisions about whether to pay the gas or electricity bill, or whether to buy food. Thousands of children living in families dependent on food banks; thousands of children being forced to live in ever-worsening poverty and despair—that is the reality of these proposals In terms of racial discrimination, the effects of the proposals are truly shocking. Government data show that tax credits constitute, on average, 2% of weekly household income for white households. That rises to 6% for black households and a further 10% for households of Pakistani or Bangladeshi heritage. These families are often already in poverty because of poor wages. According to Omar Khan, director of the Runnymede Trust, an independent think-tank focusing on race equality, these cuts “Will inevitably increase racial inequalities and probably increase rates of child poverty” Will the Minister tell me what this will mean for my constituency, with its large Pakistani and Bangladeshi population? What will this mean for the local economy, where poverty and despair will be further fuelled? What will this mean for local businesses, for the local corner shop whose customers are being squeezed harder and harder? I have to ask myself: is it the Government’s intention to create ghettoes in our cities? The cumulative effects of the cuts will not only have a shocking impact on Bradford’s families from all backgrounds; it will have a devastating effect on our local economy. I cannot see what is fair about any of that, I cannot see what is northern powerhouse about any of that, and I certainly cannot see how we are all in it together.
Many of those who have spoken, and indeed the Chancellor himself, are quite right to say that we have to view all the measures put forward as a package—not just the effects of the tax credit changes, but the many other measures that have been spoken about. I would like to make three points: on timing, predictability and the concept of scarcity On timing, the measures will come in at different times. It is vital that their timing should be synchronised. It is not there at the moment and I therefore ask that the timing of the introduction of the various changes to tax credits be looked at. I fully agree that we need reductions in the tax credit bills, but it is the timing that will bring great problems to many families On predictability, families want to know what their income is going to be. They want a reasonable measure of forewarning, so they can talk and negotiate with their employers, and plan their future. If their income is going to be reduced, they need time to do that.
The hon. Gentleman is making a good point about timing. I raised a point earlier about carers. Carers who work 16 hours a week on the minimum wage will lose their tax credits. They cannot change that, they cannot plan for that and they cannot find any way out of that. What does the hon. Gentleman think about that in relation to the 689,000 carers?
The hon. Lady must have read my notes, because I was going to come to that and say precisely that this is the other major issue. Those on fixed incomes do not have the ability to go out and work the two or three extra hours a week to cover the cost of the changes to tax credits. Full-time carers are not the only example, but they are the most obvious. I entirely agree with her Scarcity might seem a rather arcane concept to introduce, but studies have shown that for those who find sudden scarcity imposed on them economically, the costs are very great. The inflation rate for people on lower rates of pay is considerably higher than for those on higher rates of pay. If they suddenly receive a lower income—perhaps a cut of 10% or more—their costs will actually rise, because they will be unable to make the decisions to buy in bulk or in advance that they were otherwise able to make Finally, I am not one of those who does not want to eliminate the deficit. I absolutely do. If we have a change in timing—as I urge the Government to consider, including in relation to carers—we will need to find extra sources of revenue and we will have to take that on the chin. In particular, I have written to the Treasury to ask it to consider various income tax and corporation tax reliefs.
It is clear from what we have heard that the Government Benches are divided. We have heard from some Conservative Members that tax credits have failed—clearly they see this as unfinished business, so people on tax credits ought to fear there is more to come—but we have heard from others who are concerned about their constituents, and I would urge them not to ignore this opportunity to register their opposition to what their Front-Bench team are asking them to do This is about the choices we make and the priorities we have. We could reverse the inheritance or corporation tax cuts to reduce the impact on people on tax credits, or we could cut the nearly £2 billion that people earning more than £1 million will share in tax cuts. They will be £61,000 a year better off. People earning more than £2 million a year will be £250,000 a year better off. Come the next general election, they will have gained £1.25 million in tax cuts, but over the same period, a cleaner earning £13,500 will have lost £6,800, a patient transport driver on £17,800 will have lost more than £8,000, and a medical secretary on £22,200 will have lost £9,400. These people are strivers, they are hard workers, yet the Tory party is cutting their incomes. That is the choice people have made.
There is no mandate for this. The Tory party was asked before the general election, when it said it would cut £12 billion—
Order. We can only have one Member on their feet at once. We cannot have the whole Chamber trying to get in at once.
I am taking my time, Mr Deputy Speaker The Prime Minister and others were asked specifically, “Will you cut tax credits?”, and the answer was no.
I agree with everything my hon. Friend is saying. Does he agree that this cut is being imposed because the Conservative party, for ideological reasons, does not like poor or working people, and only wants to help and enrich the rich people?
Absolutely If I were to accuse people of lying, Mr Deputy Speaker, you would rightly rule me out of order, but the people out there will have to make up their own minds. When the Justice Secretary went on to Martha Kearney’s programme, he was specifically asked what the Government would do on tax credits, and he said, “No, we’re going to freeze them for two years.” I do not know what the definition of a lie is, but I know that people outside the House will make up their own minds—although we cannot use that language in here We know the Conservatives have lost the argument. This started at the autumn statement when the Chancellor said, “Britain deserves a pay increase, and Britain is going to get a pay increase”, but Government Members did not know when they cheered him that he was going to cut tax credits and make people worse off. Even the increase in the national minimum wage—it is not a national living wage, it is a Tory living wage—will be wiped out for those on it by the cut to tax credits. I say to those who are upset about these proposals: it is not good enough just to have a chat in private with the Chancellor or the Prime Minister. This is where they represent their constituents—here in the House of Commons—and if they do not agree with what their Front-Bench team are telling them to do, they should join us in the Lobby tonight to vote against what the Government are doing to people on tax credits.
This is a Government on the side of hard-working people, elected with a mandate and a majority to transform our country from a high-welfare, high-tax, low-wage economy to a low-welfare, low-tax, high-wage economy. The reforms brought in and passed through this House must be viewed in the wider context of the summer Budget and the broader package of help for working people. Conservative Members believe the best route for working people is to let them keep more of the money they earn. All Members should welcome our new national living wage—a pay rise for 2.5 million people—while income tax, national insurance and VAT have been frozen.
The national living wage is being phased in over five years. Surely the tax credit cuts should be phased in over the same period, rather than taking huge ill effect next April.
This is a national minimum wage that gives 2.5 million hard-working people a salary rise, which is the right approach. We have also increased the tax-free personal allowance and doubled free childcare for working people, while the fuel duty has been cut and council tax has been frozen as well. These reforms are all linked: they go hand in hand; they should not be seen or analysed in isolation. As many hon. Members have said, these are all part of a coherent, long-term economic plan, and it is simply not acceptable to deliver higher wages through the national living wage while at the same time leaving tax credits unreformed when they are such an important part of our reform package.
Will the hon. Gentleman give way?
No The hard truth is that our tax credit system is unaffordable and unsustainable. It required deep reform to make it fair to the working people who pay for it. As I said to the shadow Chief Secretary, the original tax credit cost the Government £1.1 billion; today, it costs £30 billion. We spend more on family benefits than France, Germany and Sweden. Our reforms focus tax credits on the people they were meant to help—the very poorest and those in the lowest possible income brackets. In 2010, tax credits intended to support the lowest income brackets were instead available to nine out of 10 families; under our reformed and properly focused system, it is still available to five out of 10 families—a fairer and much more sustainable approach. These changes to tax credits are not necessarily easy, but they are fair and right. They return real-terms spending on the tax credit system to the level we had in 2007-08 We must also consider these reforms in the wider economic context in which they sit. The deficit was halved over the last Parliament, but there is still more work to do. We need further savings in spending to make sure that Britain can live within its means. These tax credits go towards 50% of the total savings we are aiming for in this Parliament. They are substantial and important, and deserve our support. As many hon. Members have said, we must not leave our children and grandchildren with ever more debt. The only welfare system that is credible is a welfare system that is sustainable and affordable as part of our long-term plan to save our economy This Government can be proud of the fact that we have gone further than any other Government in introducing a living wage of £9 an hour. Some 2.5 million people will have a direct pay rise in their pay packets. At the same time, business has been incentivised to pay workers more. We have heard from the Exchequer Secretary how more than 200 businesses are already making these reforms Opposition Members opposed our welfare cap, and they opposed our fiscal charter—eventually. The only welfare system that is sustainable and credible is one that is affordable. We were elected on a mandate to transform our economy, and our reforms put that mantra into practice. I urge all Members to reject the Opposition motion.
We have already heard from our hon. Friends and colleagues about the impact of these misguided cuts to tax credits. It is right that we repeat the figures—4 million families, 7.5 million children. That is the math of who will be affected by this policy, and we must never lose sight of that.
Has my hon. Friend any idea of the extra number of children who will be pushed into poverty because of this Government’s proposed work penalty?
I shall mention it later in my speech, but I believe that there will be more than 200,000 by 2016, with the potential to rise to more than 600,000 with the culmination of the benefit and tax changes Both Barnardo’s and the Child Poverty Action Group believe that 3.2 million low-paid workers will lose, on average, £1,350 next year. Those being hit are the ones who are in work. This Government are forever telling us that work is the route out of poverty and that they will support those who do the right thing. Ministers tell us in the media, ad infinitum, that they will stand up for “hard-working families”. Well, they are not standing up for those families. According to the House of Commons Library’s analysis of the cuts, more than 580,000 of Britain’s poorest working families, earning between £3,850 and £6,420 a year, face losing 48p for every £1 that they earn as a result of the removal of tax credits I urge the Government to think again. It is not too late to do a turnaround. In fact, it would be the morally right thing to do.
Order. I am going to introduce a two-minute limit, so that everyone will have a chance to speak.
All of us who are here today share a belief in the welfare state. In a country like ours, it is right that we offer help to the most needy, and that there should be a safety net for those in difficult circumstances, but under the Labour Government the welfare system became immensely unfair in its discrepancies Today’s debate goes to the heart of who we are as a country and what we stand for as a people. It is about more than Treasury statistics: it is about real people. That is why I am proud to support these tax reforms as part of a package set out by the Chancellor. They are fundamentally the right thing to do if we are honour the true notions of what welfare is, and what it is to work I want to look back at history—
Would the hon. Lady like to comment on what was said this afternoon by the Adam Smith Institute, whose views are often quoted by the Conservative Government? It said that “working tax credits are the best form of welfare we have, and cutting them would be a huge mistake”.
I disagree with that comment, assuming that it has been rightly attributed. I believe that tax credits have distorted the very notion of what welfare was supposed to be. Let us look back to welfare’s genesis in the Beveridge report, which was published 73 years ago, in 1942. Opposition Members tend to claim a monopoly on William Beveridge, but he was not the socialist Robin Hood whom they so often cite. He was an economist, versed in the principles of contribution and industry, and his principles were very clear. They were about taking responsibility, alongside the state’s establishment of a “national minimum”. They were about ensuring that the most vulnerable were looked after, while also ensuring that the nation remained fiscally viable. We have drifted away from that concept of welfare—that it should provide occasional and temporary support for those in unemployment, sickness and retirement. We now have a system whereby the state is subsidising low pay, and that cannot be right. This Government are introducing reforms, and restoring the principle that welfare should be the safety net that it was intended to be I want to make three main points. First, the tax credit system has allowed business to act in a way that is both unpalatable and bad for the economy, facilitating the underpayment of workers and sanctioning chronic under-training and under-investment in those workers. If a business knows that low wages will be topped up by the state, what is the point in investing in them, providing extra training and more scales and promotion? The business people I meet in my constituency are crying out for more skilled work forces. Secondly, the deployment of the tax credit system was chronically dysfunctional, and very confusing for many people. Lastly, the Conservative party is nothing without social justice. This measure will restore social justice to the heart of our economic principles, and I commend it wholeheartedly to the House.
I want to make three points in the time that I have. First, I want to explain why Labour used tax credits to start with. It is extraordinary for Labour Members to hear the party that opposed the minimum wage say that we are not supporting the living wage. If, when we implemented the minimum wage, the Conservatives had been fighting on the other side and said that we were not doing enough and it was not high enough, the dynamic of the argument about poverty in work would have been completely and fundamentally different. Every single measure that the Labour party tried to implement to tackle in-work poverty was opposed by Conservative Members. We implemented the minimum wage, and in the first 10 years of the Labour Government the bottom 20% got richer faster than the top 20%. We lifted 1 million children out of poverty, but the Resolution Foundation has said today another 200,000 will be plunged back in as a direct result of the Chancellor’s Budget Secondly, Government Members have been pointing at Opposition Members today and saying that we do not support the aspiration to replace tax credits with wages. That is fundamentally wrong, as my hon. Friend the Member for Streatham (Mr Umunna), my right hon. Friend the Member for Birkenhead (Frank Field) and many others have proved. It is the right thing to do, but the Government are implementing it in the wrong way Thirdly, this change will have a fundamental negative impact on vulnerable people and on communities. Each of us has people in our constituencies who turn to us in their hour of need with problems with tax credits. We know how vulnerable they are and the Government’s policy will do nothing more than make poor people vulnerable people. It is wrong.
I have the greatest concern for anyone who loses out and finds that these measures have an impact on their household budget. I came into this place not to reduce incomes but to see them increase. However, in making good our manifesto commitment, savings in Government spending were always going to have to be made, with a proportion of our population unfortunately being affected by the need to make them Ultimately, I feel that it is right to introduce this measure to reduce tax credits for the following reasons. First, it moves the country away from a position in which Government and taxpayers subsidise the wage bills of employers, acting as a disincentive to pay rises. Secondly, as a cost-saving measure it moves the country to a position where the books are balanced and we can reduce the interest bill on Government debt.
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I will not give way just now In 1998, the amount spent by the Labour Government on tax credits was £6 billion. That figure rocketed to £30 billion by 2010. Three of our largest supermarket chains have employees who claim tax credits to the tune of almost £800 million. I contend that it is not for Government or taxpayers as a whole to contribute a portion of pay, but for employers to pay staff all their wages and to pay them properly. Of course, the Government can and should act to incentivise pay—by reducing tax for the employer and employee and not by paying a contribution to the wage packet. As for balancing the books, last week the House debated the motion for fiscal responsibility and as a result the Government have pledged to deliver a surplus by 2020 and through normal times. This measure is essential to meet that task. I recognise that we need to help those the measure will impact on and I am glad that the Government are doing so in a number of ways, which I shall not repeat. I recognise that these measures do not mitigate the cost of the tax credit changes in full. If they did, the reduction in Government spending would not be delivered, the surplus would remain out of reach and the Government interest bill would continue to be wasted.
I rise to beg Members on the Government Benches to think very hard about how they vote tonight. When I say that I am begging, I mean it. I am begging for 24,000 children in Birmingham, Yardley who will be hit by this change. By way of comparison, I did a quick search on Rightmove this lunchtime and found that from the hundreds and hundreds of homes available for sale in my constituency only four would benefit from the inheritance tax cut—just four. That means four people winning and 24,000 children losing, and the four people winning have to be dead before they win, so they are not very thankful. This is supposed to be a one nation Government. One nation? For the people in Birmingham, Yardley it looks like the people on the Government Benches are only looking after the same old people I feel the need to declare that my name is Jess and I relied on benefits. When I was 23, after the birth of my first baby 10 years ago, my husband and I received child tax credits. Our household income was £19,000. Without tax credits, I would never have been able to afford the childcare for my young son. The top-up meant that I could do small bits of paid and voluntary work and the tax credits helped me to go to work and begin to build a career I have heard all the well-rehearsed arguments from Government Members about how they are increasing wages and I welcome those increases, I really do, but in my case that would have made no difference because I was 23 and they are not offering a pay rise to anyone under 25. If the Government wish to brand the increases in minimum wage as a living wage, they must also accept that those who do not receive it cannot afford to live. That is the simple problem with that branding. So, will the Government ensure that any parent aged 25 and under is not affected by these changes, or are they willing to tell me that those families in their constituencies do not deserve to be able to live?
One of the things my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) did not mention was the income tax threshold when tax credits were introduced. Low earners who were earning just above £4,615 would have paid 20% tax on that income. I have heard the pleas from Opposition Members about allowing wages to increase before these tax credit changes take effect, but the changes in the personal tax allowance between 2003 and now mean that there is, in effect, an extra £1,197 in a family’s pocket if they earn up to the income tax threshold. That is the difference between paying tax on £4,615 as opposed to the current level of £10,000. That benefit cuts across all low earners. The important statistic that has not been quoted from the Library research is that between 58% and 64% of adults earning near the minimum wage do not receive tax credits or benefits, yet those earners, who very often are women, do receive the benefit of not paying that 20% on their income because of the rise in the income tax threshold My right hon. and learned Friend also described the introduction of the system and the complicated overpayments. I was a single parent when those changes were introduced. I did not claim because I spent my working days sorting out the debts of people who were claiming and who had built up huge arrears with Her Majesty’s Revenue and Customs.
I want to spend the short time I have focusing on the disproportionate effect these tax credit cuts will have on the black and minority ethnic communities. Some 88% of these communities are based in the poorest boroughs in the country. They tend to have larger families and these families are often sustained by people who have part-time jobs. Fresh from my Royal Statistical Society training this morning, let me give some statistics that are staggering. A recent survey found that 5% of white men had part-time jobs, as opposed to 12% of black African men and 35% of men of Bangladeshi origin. When this lifeline is taken away from these communities, racial inequality in our society will widen. When the Government talk about looking after families, they are not talking about looking after families from the BME communities We must also look at these cuts in context. We cannot view them in isolation. Hampstead and Kilburn has a housing bubble and rents are soaring higher than ever. If we couple that with taking away tax credits from people who are working, we have to ask how people will survive. Six out of 10 of my constituents are paying £288 a week for a studio flat. Are we allowing the ethnic cleansing of London? Don’t take these credits away. Join us in voting against these cuts; whether it is the Mayor of London, “ConservativeHome”, or The Sun, we must oppose these draconian measures.
I rise to speak on behalf of the 12,800 working families and the 26,000 children across Ilford who will be affected by these cuts, and I issue the following challenge to Conservative Members. This evening’s vote is crucial for a simple reason: their Whips are busy in the other place telling peers they are railing against the democratic will of this House of Commons, but when we listen to the fantastic and courageous speech of the hon. Member for South Cambridgeshire (Heidi Allen) and see the nods of many of her colleagues, we know that the majority of Members in this House do not support these changes. Peers are absolutely within their rights to put a stop to them in the House of Lords, and we expect nothing less. What a terrible indictment it is of this Chamber that it is the unelected House that is standing up for the interests of ordinary working families up and down this country! What happened to the party of the workers? What happened to the Tories’ failed modernisation project? It is already dead in the water. This is a Prime Minister who speaks from the centre but is a prisoner of the right When we have a grand coalition ranging from The Sun newspaper to my good friend the cycling socialist Owen Jones telling us that this is a work penalty that will hit the people who work hard, who get up early and who strive to earn every penny they can, we know there is a problem. This is not a benefit; it is a well-targeted tax rebate. It works better than what the Government are doing with the tax threshold, because that benefits the wealthiest. Tax credits target support effectively to the people who are doing exactly what we ask them to do: they are willing to work hard for low pay and they play by the rules. The least we can do is support them This is a terrible measure. It is a shameful measure, and Conservative Members know it. I ask them to show the courage that the hon. Member for South Cambridgeshire (Heidi Allen) showed, not only on the Floor of the House but in the voting Lobby this evening, because it is crucial that Members of the unelected House know that they have a majority of elected Members on their side and on the side of low-paid working people in Britain.
I am delighted to follow my hon. Friend the Member for Ilford North (Wes Streeting). Once again, we have a Budget from this Chancellor that was very shiny on the day he presented it but that is unravelling under closer inspection. The Treasury Select Committee took evidence on a number of the issues that people have raised today, and I want to tell colleagues on both sides of the House what we found. First, on work incentives, which Conservative Members have made much of in the debate, the taper has moved from 41p to 48p, but the effective marginal tax rate for a lone parent will increase to 93%. That means that for every extra pound she earns, she will take home only 7p. Compare that with the banker who will take home 60p in every pound The second problem relates to the interaction between the tax credits and the minimum wage. Many hon. Members have spoken about the sequencing. The national minimum wage gains will not, in the main, go to the tax credit losers. Half the cash gains from the national minimum wage will go to people in the top half of the income distribution. Sir Stephen Nickell from the independent Office for Budget Responsibility told the Select Committee: “It has been known for ages that the proportion of people in receipt of minimum wage who live in poor households is very small. It used to be 14%...In other words, minimum wage as a method of relieving poverty is completely hopeless because most people on the minimum wage do not live in poor households.” I urge Conservative Members to look at the evidence and to think again.
I congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her excellent maiden speech. Prices have risen faster than wages during the vast majority of this Government’s time in office. Working people in Grimsby have seen their earnings fall by more than £2,700 since 2010. Today, one in three of my constituents earn less than the real living wage of £7.85 an hour. Grimsby desperately needs a pay rise, but what this Government are doing instead is cutting people’s incomes by at least another £1,300 a year. People simply cannot cope with a further reduction in their incomes The Government say that people simply need to work harder for a few more hours a week in order not to lose out, but for many, that is completely unrealistic. Many people in my constituency do not have that option; some are already working two or three jobs just to make up the hours. Conservative Members were given a mandate by their constituents based on their party’s manifesto and on what the Prime Minister said during the election campaign. They do not have a mandate to cut tax credits; in fact, they have a mandate not to cut them. What does it say about the regard in which Conservative Members hold the voters of this country if, just five months later, they walk through the Lobby and do precisely the opposite of what the Prime Minister promised The irony is that I agree with what Ministers have been saying: we do need a higher-wage economy, with less being paid out in welfare as a result. We need to support and help to grow the industries of the future, but the Government are doing the opposite. Three of the UK’s solar energy companies have entered administration in the past two weeks, the green deal has been scrapped and investor confidence in the wind energy sector is drying up. The Government have failed to make any real attempt to save the thousands of jobs being lost in the steel industry. That shows what is actually developing under the Conservatives: an economy in which more and more jobs pay less than the real living wage.
As has been pointed out, this measure is very much part of the overall narrative of this Government. They have enthusiastically embraced both austerity measures that harm the poorest and the most vulnerable households in our constituencies while giving tax breaks to the better-off, and a series of ideological measures that can only increase inequality Scottish National party Members believe in progressive taxation, but these changes are not progressive. They are regressive, taking proportionately more from lower-income households than from rich ones. These changes will significantly reduce the incomes of more than 200,000 households in Scotland—that is 200,000 households where choices have to be made between eating and heating, and where families have to decide whether they will have to go to the food bank again this week. If the Government want to make cuts, I suggest they are made to the £100 billion being spent on Trident. If the Government want to make cuts, I suggest they do not increase tax breaks in respect of inheritance tax thresholds As the youngest of eight children to a widowed mother, I grew up in deep poverty—I know what it is like. I know what it does to aspiration and to motivation, and I know how corrosive it can be to every area of life. I suspect that if more Government Members had lived the life that I have lived, they would not be supporting this measure tonight. I do not want any child in Scotland to grow up in more poverty than they are already in. I do not want any child in the UK growing up in poverty. Far from the mantra of “making work pay”, this measure punishes the working poor. I ask the Government to consider the impact of this measure on our poorest families; they should consider the impact on our households and on our most vulnerable children. Anyone who truly believes in a fairer society must reject this measure. Anyone who supports this measure tonight should hang their head in shame.
This measure is not just a penalty against work; it is also a penalty against parenthood. Clearly there is a divergence of view in this House. Conservative Members have a view about how policy should support family and children that is at complete variance with mine. We heard from the Chancellor on the day of the Budget that “we on the Conservative Benches know that the wish to pass something on to your children is about the most basic, human and natural aspiration there is.”—[Official Report, 8 July 2015; Vol. 598, c. 330.] Feeding children is an even more basic aspiration than that, as is nurturing children and giving them warmth when they need it. We are talking about somebody being able to aspire to work to bring home food to their children and support to their family. These are the people who are going to be hit by the measures the Conservatives are introducing, because it is the people working very hard and trying to do the best by their children and for their neighbours who will be betrayed by this measure I do not accept the nonsense we heard from Conservative Members, with some exceptions, who were more or less trying to tell us that low-paid workers should now be the acceptable casualties of a dogmatic imperative of austerity —they should not. Nor do I accept the somewhere-over-the-rainbow nonsense that some Conservative Members were giving us that, “It is all going to work out well. It will go so swimmingly and people are going to be so much better off when they see what they are going to get.” Clearly the way these measures have been brought forward will mean that people are going to suffer in the meantime. People will also lose jobs as well as lose income, because some of us are hearing from employers in some sectors that they will not be able to give the pay increases without doing damage to the payroll that they currently have Conservative Members need to realise that labels they put on this and all the clichés they come up with are not going to give buying power to the money they are leaving people with. Clichés will not be hard currency to support families who are being driven into poverty.
It has been astonishing to hear Conservative Members stick to their desperate defence of their indefensible policy of slashing tax credits for millions of families when they know that they are neither economically justifiable, nor socially defensible. These cuts are just one more example of the Government’s policy of moving public debt, which originated in the financial sector, off their books and on to the lowest-paid and middle earners, who simply cannot afford it. Rather than moving away from an economy based on debt, which the Chancellor said that he wanted to do, he has in fact created one Unlike this Government, I believe that economic common sense and social solidarity not only go hand in hand, but are the bedrock of a healthy and functioning society. We cannot have a healthy functioning economy if our fiscal policy is to transfer debt from the public purse on to the unemployed, the lowest paid and middle income individuals and families, and if secured debt becomes unsecured and unaffordable. The Chancellor should know where that leads because the Governor of the Bank of England has spelled it out for him Over the summer, Mark Carney warned that household debt was one reason why the recession was deep and the recovery so grudging. If enough people are highly indebted, that can have big macroeconomic impacts, so that lending standards become irresponsible to reckless. Those are some of the same risk factors that led to the global credit crunch in 2007. The structural flaws remain, but we now have one very clear difference. We have a Chancellor who is exacerbating the structural flaws by heaping public debt on to the low paid, and who acts without regard to the personal economic nightmare he is visiting on the homes of working families. That is why the Labour party is so fundamentally opposed to these measures An inclusive and healthy economy cannot be built while we are hurting working people. It can only be built by investing in them and supporting them. Our party believes in that to our soul, so while the Tory party spends millions on branding itself as the party of working people, those working people who have been let down by the Prime Minister will know that the Labour party is working for them.
In my constituency, there are around 8,000 families with children claiming tax credits, 5,000 working families, and almost 10,000 children. We know from the Library briefing that they will lose more than £100 a month, but some families will lose more. One of my constituents, a mother with a disabled child, has worked out that her family will lose £200 a month from the tax credit cuts. Instead of just sitting there, perhaps Government Members can tell me how, if they back these changes, such families will manage? I do not think that they will manage. Another constituent, a single mother, told me that she uses tax credits to pay for school uniform, food and travel expenses. Those are the things that will suffer Earlier, I mentioned the impact that these tax credit cuts will have on the incomes of many thousands of unpaid carers who juggle care and work, particularly those who claim carer’s allowance and working tax credits. Carers UK told me that all carers who are claiming carer’s allowance and working tax credits will lose under the current proposals, even taking into account the introduction of the so-called national living wage Tax credit cuts will make it more difficult for working carers to balance work and care and that will hit their standard of living. They do not deserve that. Last week the Minister for Community and Social Care told me that he did not think that carers’ invaluable contribution to society had ever been better recognised. Is that hit to the income and living standard of working carers what he means by recognition? I hope the Minister will tell us when he responds what consideration the Government will now give to protecting working carers on low incomes from these unfair, savage tax credit cuts. Those cuts will hit families with disabled children. They will hit carers and millions of working people. I urge Government Members, the few who have managed to stay for this debate, to rethink this deeply unfair policy change.
When tax credits were first brought in, people were often overpaid. They would then receive a demand for an end-of-year repayment. I fought many of those cases, but Her Majesty’s Revenue and Customs would engineer the perfect excuse. Deep in its standard letter demanding repayments was this astonishing sentence: “Even though we told you that your assessment was correct, it was not reasonable for you to believe it.” That is how I view the Chancellor’s proposals—even though he tells me that there will not be any problems, it is not reasonable for me to believe him I have no problem in principle with removing low wage subsidies so long as we ensure a decent living wage; family support to make up for the variation in income when people have families of different sizes; proper affordable childcare provision available universally, particularly in deprived and rural areas, which are currently very poorly served; and support for small businesses to enable them to earn and to pay a living wage When tax credits were introduced, I asked the then Labour Treasury Minister what pilots had been carried out. Essentially, she said that none had been carried out. I fear that we are in that same position with these proposals. We know what happened then: chaos, over- payments, underpayments, misery to families and the damage to the Government’s reputation. The impact of these changes has not been thoroughly assessed, and I fear that we will all regret that at our leisure.
I know that this Government and this Chancellor in particular are fond of political cross-dressing, but robbing 6,500 children in 3,500 hard-working families in my constituency of £1,300 a year makes a mockery of all that—and that is in an affluent west London suburban constituency where the average property price is over £500,000. The Prime Minister pledged during the election campaign not to cut tax credits, but the fact that he is doing this only months after the election is not just a concern to the Opposition; it brings politics into disrepute We have heard about the so-called compensation that will come from the national living wage. It is not a living wage, and it is compensation for only 26% of people. Politicians like to go on about hard choices, but this is about whether to penalise people who are doing right and playing by the rules, or to give a tax cut to the 60,000 wealthiest estates at the expense of 200,000 working families. Some 6,500 families in Ealing Central and Acton are a chunk of 3 million families across the country. The fact that the notices informing them of the changes will arrive just before Christmas is deeply immoral. It shows the Scrooge-like attitude of this Government I have had dozens of emails about the cuts, both around the time of the emergency, that is the crisis, budget and now. I urge Members in suburban London seats like mine—the Comptroller of Her Majesty's Household, the hon. Member for Croydon Central (Gavin Barwell), the hon. Member for Harrow East (Bob Blackman), the right hon. Member for Carshalton and Wallington (Tom Brake), whom I can see, and the hon. Member for Twickenham (Dr Mathias), constituencies where those affected by the change outweigh the majority that those Members have—to join us in the Lobby tonight.
The 2015 Conservative manifesto promised to improve the lives of the millions “who work hard, raise their families, care for those who need help, who do the right thing” The tax credit changes will do exactly the opposite and instead penalise them heavily. There is no hiding from that. This is not the right thing. Why do the Government not accuse all people on tax credits of being feckless? That is what they really think. They do not bother even to make an artificial distinction between the deserving and undeserving poor. They do not care. If people are poor, deserving or otherwise, they do not care From what I can see, that is what those on the Government Benches think. They want urgent action to tackle the burden of tax credit expenditure, but take a mañana approach to tackling the issue of low pay. Some Conservative Members have expressed concern, but that is as far as it goes. Hand wringing, tutting, head shaking—conscience salved. But Conservative Members will be reminded time and again of their support for these proposals. It might get a bit tedious, but so be it The Chancellor says the changes are fair, so let me give a few facts. Facts can be stubborn. First, during this Parliament cumulative income loss will be between £6,000 and £9,500. Secondly, 3.2 million hard-working families will be hit. Thirdly, the changes will mean less pay, with some low income families keeping just 3p of every extra pound. Fourthly, child poverty will increase. Fifthly, the cuts are not compensated by other changes and have not been impact assessed. This is dreadful and the Government should think again.
Hon. Members should be aware that it is a disgraceful, shameful example of very poor governance when a Government attempt to cut £4.4 billion from the poorest people in society by a statutory instrument. It has taken the Opposition to call for this debate and to ask for the reversal of this decision Areas of my constituency have been recorded as suffering from the highest levels of employment deprivation and the sixth highest income deprivation affecting children in England. My constituency has some 7,900 families with children claiming tax credits, and many are unemployed. Some 5,800 working families claim tax credits. Many of those are on the minimum wage, with two parents working and two children. They are set to lose more than £1,800 next year and £7,700 over the life of this Parliament. Other families with one earner will lose more than £1,500 a year, or more than £7,000 over the life of this Parliament. Some 4,800 working families with children in my constituency claim tax credits, and 8,300 children in those working families benefit as a result. Many of the schools in my constituency have been forced to introduce free breakfast provision, with hundreds of children taking it up. They have done so to improve levels of concentration and learning. If our children are to get out of poverty, they need to be educated, but first they need full stomachs I call on Conservative Members to examine their consciences and not to involve themselves in this further attack on the poorest people in society.
I have some basic points to make, because so much has already been said in this debate. Constituents of mine have urged me to speak today because of the poverty they are now experiencing. They are having to go to food banks in order to feed their children, and they feel ashamed about that. They are working extremely hard to make ends meet every day, working for every penny, yet they feel that they are being punished by this Government I urge Conservative Members please to consider the impact that these changes will have on hard-working families, those that the Government say they are responsive to and care about. That is absolutely imperative, not just for my constituents but for people across the UK. These tax credit cuts are unfair to hard-working families in Scotland and across the UK. I urge Conservative Members to listen to everybody’s views tonight, take account of their constituents, who I am sure are hurting just as much as ours, and pay attention when we speak about these crucial issues that our constituents are informing us about We really must take account of those who are trying their hardest to get on that first rung of life and to protect their families and those nearest and dearest. I therefore urge the Government to vote against this measure by supporting the motion and ensure that the most vulnerable in our society, including the disabled, are protected.
We have heard from more than 50 Members in this extraordinary debate, which I think is a measure of how vital it has been, and how much we need to understand properly the full impact of the changes that the Government are proposing. Running through so many of the speeches has been the message that politics is always about choices: what are we going to prioritise; who are we going to stand up for; and what, as the hon. Member for South Cambridgeshire (Heidi Allen) said in her brave and heartfelt speech, do we stand for? This debate has laid bare those fundamental choices The simple question that the Government must face tonight, and the simple question that will be asked right across Britain, is this: is the Conservative party what it says it is? Is it a party for the workers, with the interests of the workers at its heart, or is it a party that has its own self-interest at its heart and that is set tonight to dock the pay of workers across Britain? It cannot be both—even this most Janus-faced of Governments cannot turn both ways at once. It cannot be the party of workers while cutting workers’ pay. Each Conservative Member will need to answer for how they vote this evening, because there is no plausible defence for a policy that will take, on average, £1,300 from the pockets of working families, and with 70% of the losses falling on working mothers. It is a Tory tax on workers, and a Tory tax on working mums How do the Government justify that? As we have heard from successive speakers today, they say that the tax credits bill has gone up and that it has to be cut. Well, it has gone up on the Tories’ watch. They say that the minimum wage increase will compensate, but let us have none of this nonsense about a bogus living wage.
Let me tell the hon. Gentleman that under the previous Labour Government the tax credit bill went up from £10 billion to some £30 billion and is now down to £25 billion, so I am afraid that it has not gone up on our watch. [Interruption.]
I have heard this several times over the past few weeks—[Interruption.]
Order. I presume that Conservative Members would want to hear their own Front Bencher, and I am sure that the rest of us would like to hear the Labour Front Bencher now.
I am grateful to you, Mr Deputy Speaker I have heard this nonsense from the Government several times; I heard it from the Exchequer Secretary earlier today. The truth is that when this variation of tax and child credits came in in 2003-04, the original bill was £19 billion. It went up to about £23 billion under Labour, and then in 2009, after the crash, it went up to £29 billion. Under the Chief Secretary’s Government, it has been £30 billion each year, so the largest bill we have paid for tax credits has been under the Tories. Why is that? It is because the low-welfare, low-tax, high-wage economy that he talks about is a myth—the Tories have failed to deliver it. Instead, we have a tax credit system that is a vital lifeline for working people on low and middle incomes who have relied on it to make ends meet over the past few years and still rely on it. The Tories will be pulling the rug out from under those people if they persist with this policy tonight. They know that none of the measures they have talked about—the personal income tax rise or the childcare provision—will offset the vast losses we have seen. It is an absolute con, just as it was a con from the Prime Minister when he told the country that he was not going to cut any tax credits I would like to be able to point to a Government impact assessment that would tell us the truth of this, but it is so thin it is barely worth mentioning. It is about as useful and reliable as a Volkswagen engine test. However, we have not needed an assessment because we have had one from the Chief Secretary’s own Back Benchers. Successive Back Benchers have stood up today and offered their view—their impact assessment—of what this Government are going to do to our constituents, and to Conservative constituents, across this country. I referred earlier to the hon. Member for South Cambridgeshire (Heidi Allen), who made a scintillating speech. I will quote a few words for the delectation of the Chief Secretary. She said that these measures were “betraying who we are”—that is, who the Conservatives are. She said that they would lead to working people having to choose between heating and eating The hon. Member for Plymouth, Moor View (Johnny Mercer) gave another excellent speech in which he said that his blue-collar city opposes these reforms. He pleaded with his Front Benchers, as a compassionate Conservative, to think again. The hon. Member for Stafford (Jeremy Lefroy) talked about the impact we would see on carers and on people on low incomes. The hon. Member for Waveney (Peter Aldous) said that as a one-nation Conservative he could not support these reforms without significant mitigation. We heard interventions from the hon. Members for Gainsborough (Sir Edward Leigh) and for Brigg and Goole (Andrew Percy). Those are just some of the Conservative Members who are opposed to these measures.
The hon. Gentleman has not mentioned the right hon. Member for Birkenhead (Frank Field), the Chairman of the Select Committee, who called on his own hon. Friends to take more action on the £4.4 billion savings gap that has arisen as a result of Labour deciding that it is against these reforms.
Let me start with that number of 4.4 billion, because about 4.4 thousand of the Chief Secretary’s constituents will be hit by these changes. The real question he should be answering is what he says to his constituents about the cut they are going to have. He mentions my right hon. Friend the Member for Birkenhead (Frank Field), who of course spoke with great eloquence and knowledge. The crucial thing he said was, “Think again. Mitigate these measures. Understand that your mitigation measures are not going to work or offset the losses.”
What I said in my speech was that I hoped we would soon be able to debate a motion of the House, and that is what will happen when we have a full day’s debate on Thursday week. I also said that that is when we should make proposals for how to pay for it. I did not say we should do that in today’s debate.
I am grateful to my right hon. Friend for his eloquent intervention. He reports accurately his own words, even if the Chief Secretary did not Let me be clear: tonight’s vote may not be a binding vote, but it does allow Members on both sides of the House to send a message to Conservative Front Benchers. These measures are a tax on working people The Government say that the national minimum wage increase, welcome though it is, will offset the changes, but it will not for a cleaner who is on £13,500, who will lose £7,000 over the term of this Parliament, or for a secretary with two children who is on £22,000, who will lose £9,500. Those are not small sums of money; for those people on low and middle incomes, they are enormous sums of money. It ill becomes the Government to dismiss, with the stroke of a pen, the concerns not only of their own Back Benchers, but of this country’s ordinary working people. Too many Labour Members—far too many for me to list them all—have spoken today with great passion and conviction about their knowledge of their constituencies, the contents of their postbags and how the proposal will affect their people. The Government should read their speeches and listen carefully to the views of Members It is not just the Opposition who oppose the proposal. The Mayor of London—the hon. Member for Uxbridge and South Ruislip (Boris Johnson)—and the bloke who is going to fail to succeed him on behalf of the Tories are both opposed to it. For heaven’s sake, even the Bow Group—I thought it had disappeared in 1980, before the right hon. and learned Member for Rushcliffe (Mr Clarke) was Chancellor of the Exchequer—says that the proposal represents a crisis for entrepreneurial Britain and that it will hit the self-employed. The Adam Smith Institute, the Murdoch press and, from what I have seen, most Tory Back Benchers are also opposed to it I urge the Government to think again; to look to their conscience and understand the damage they are going to do to the working people of this country; and to please vote with us tonight and offer some solutions in the forthcoming autumn statement.
We have had a heated debate, with a great deal of misinformation from Opposition Members. Time is very short There are two principal reasons for reforming tax credits. First, they no longer meet the objectives for which they were originally designed. Secondly, they are unaffordable at their present level.
rose—
I will not be giving way for a while Tax credits were introduced to help those on the very lowest incomes—a noble aim and one that we support—but the system spiralled out of control. Spending on tax credits more than trebled in real terms under Labour. By 2010, nine in 10 families with children, including MPs, were eligible for tax credits. Even now, the figure is six in 10, and the latest reforms will bring it down to five in 10 It is not even as if Labour’s spending worked: following the introduction of tax credits, in-work poverty rose by some 20%. Members need not take just my word for that; I am going to quote in detail Alistair Darling, who has been referred to this evening and who was one of my predecessors as Chief Secretary at a time when the modern tax credit system was being planned. He was interviewed this summer for an article in The Spectator entitled, “Alistair Darling: why I changed my mind on tax credits”. Crucially, it appeared after the summer Budget introduced by the Chancellor. The Spectator asked him: “So your tax credits had the unintended consequence of keeping low wages down?” “Undoubtedly,” replied Darling. The last Labour Chancellor said: “Well, undoubtedly… I think it was a good policy when it was introduced” He went on: “As Keynes famously said: when the facts change, you change your mind.”
I am really enjoying the Chief Secretary reading excerpts from The Spectator, but will he answer the fundamental question? Will he confirm that 3 million people in this country will be £1,300 on average worse off as a result of these changes? Let us not hear about the past; he should tell us about the future.
I can confirm that we have got down the cost per household of the budget deficit from about £6,000 per household per annum to about £3,500 per household per annum. Those sort of figures show what reforms we are introducing.
Will the Minister give way?
I will not give way at the moment Alistair Darling went on: “One of the unintended consequences is that we are now subsidising lower wages in a way that was never intended.” Like us, he was not calling for the end of tax credits. He made it clear: “That is not an argument for scrapping tax credits, it is an argument for making sure that you adjust the system. And it’s also an argument for making sure that we do our level best to drive up those levels of wages” We recognise that as well The second reason is that the deficit the Government inherited in 2010 was equivalent to about £6,000 for every household in the country. That was being added to the national debt every year. It is now down to £3,300 per annum. Then, we were borrowing £1 for every £4 we spent. We have got that down to £1 for every £10. The world was beginning to doubt our ability to pay our way.
Will the Minister give way?
I will not give way This Government’s mandate is to get our spending down, run a surplus and get our national debt down, and these reforms are a crucial part of that. That is what we were elected to do, and that is what the House agreed just last week. In particular, our general election mandate is to make reforms to reduce the welfare bill by £12 billion.
Will the Chief Secretary give way?
I am not giving way further. [Interruption.]
Order. I am struggling to hear the Minister. I wish to hear what the Minister has to say. Has the Minister given way?
No.
rose—
No, I am not giving way. I have just said I was not giving way. [Interruption.] I gave way to the hon. Gentleman as well Our reforms to tax credits will account for £4.4 billion in the next financial year. This is the key question for the Opposition, which they have ducked during the last five hours of debate: if they do not want to reform tax credits, where will that money come from? Will they borrow more and saddle our children with still higher debt, or will they cut other services, such as schools or the NHS? I ask the Opposition: what would they do?
Will the Minister give way?
I am not going to give way. I thank my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), who told us: “This is the time to do it”.
On a point of order, Mr Deputy Speaker.
I will hear that later.
I thank my colleagues from across the country for their thoughtful speeches In conclusion, the reforms must be considered as part of a package—the tax credit reforms, the big rise in the personal allowance and a £9 an hour national living wage by the end of this Parliament. The changes we are putting in place will deliver a new settlement for working people, one where they keep more of the money they have earned, where work pays and where employers pay decent wages without requiring them to be topped up by the state. Under Labour, tax credit spending doubled; we are bringing it back to the spending levels of 2007-08 These reforms are necessary and fair, and will deliver a lasting settlement. I urge Members to vote—
claimed to move the closure (Standing Order No. 36). Question put forthwith, That the Question be now put Question agreed to. Main Question accordingly put.
On a point of order, Mr Deputy Speaker. I was wondering whether it was disorderly or simply discourteous that in his winding-up speech the Chief Secretary to the Treasury neglected to congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her maiden speech.
If that was the case, I am sure it was not deliberate. No hon. Member would miss out a maiden speech.
With the leave of the House, we shall take motions 3 and 4 together Motion made, and Question put forthwith (Standing Order No. 118(6)), Modern Slavery That the draft Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015, which were laid before this House on 7 September, be approved International Development That the draft Asian Infrastructure Investment Bank (Initial Capital Contribution) Order 2015, which was laid before this House on 7 September, be approved.—(Margot James.) Question agreed to. Business of the House Ordered, That, at the sitting on Thursday 22 October, the Speaker shall put the questions necessary to dispose of proceedings on the motion in the name of Chris Grayling relating to Standing Orders (Public business) not later than 4.00pm; such questions shall include the questions on any amendments selected by the Speaker which may then be moved; proceedings may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Margot James.)
We now come to the Adjournment debate. May we please have fewer conversations, and will Members quickly clear the Chamber?
I would like to raise the case of my constituent, Mrs Dawn Knight, who lives in Kip Hill in my constituency. Mrs Knight is one of the 45,000 people in the UK who undergo cosmetic surgery each year. In 2012, she underwent a cosmetic procedure on her eyes. The operation was arranged by a company called The Hospital Group and the surgery was done by an Italian doctor called Arnaldo Paganelli. During the surgery, he removed too much skin from her lower eye lids, and as a result, the inner parts of her eyes, usually covered, are now exposed to the air. Following this botched surgery, she must now apply artificial teardrops into her eyes every two hours to minimise the pain. On the advice of specialists at the Royal Victoria infirmary in Newcastle, she must also tape her left eye closed every night when she goes to sleep to avoid further damage. While she sleeps, she must apply a thick ointment in both eyes, leaving her unable to see until it is washed out in the morning. Doctors have warned her that this serious condition might result in loss of sight altogether This incompetent procedure has left Mrs Knight with serious health problems and a life-changing condition, but her troubles did not cease there. A fight to get the mistake corrected and compensation for her distress have thrown up major questions about the operation of The Hospital Group and the regulation of cosmetic surgery in the UK. The Hospital Group’s website claims to run the world’s largest plastic surgery facility at its private hospital in Birmingham. It also claims to have General Medical Council-registered surgeons. Anyone looking at its adverts or website will conclude that it is running a hospital similar to a local NHS hospital, but it is not. As Mrs Knight found when she complained, she had entered into a contract not with The Hospital Group but directly with Dr Paganelli.
Last Wednesday in Parliament, there was a public meeting at which constituents from across the UK registered their concerns about cosmetic surgery, particularly eye operations. Many people have found themselves in a similar position to Mrs Knight. Last year, 100,000 cosmetic surgery operations were performed in the UK. Is it not time for full and robust regulation to monitor and reflect the risk attached to all cosmetic surgery?
The hon. Gentleman makes an important point. This is not just about Mrs Knight; it is about many more such cases, and I will be talking later about exactly the need for more regulation and information in this area Although The Hospital Group tries to give the impression it is a hospital, it is, in effect, a facilities, management and brokerage company for individuals wishing to undergo cosmetic procedures. The Hospital Group is very good at self-promotion. It even has celebrity endorsements from individuals such as Kerry Katona. I think the celebrities who appear on the website need to examine their consciences about being associated with this organisation. Clearly, their endorsements are encouraging young people to undergo these procedures, forcing people into the hands of a company that I think is, frankly, completely irresponsible. The sale of after-care packages is emphasised. In Mrs Knight’s case, hers cost £3,500, but she found that this means nothing when things go wrong. It would appear that once The Hospital Group has people’s money, it is not much interested if things go wrong Having tried to pursue a case against The Hospital Group, Mrs Knight then tried to pursue Dr Paganelli for redress, only to find that he is bankrupt, lives in Italy and flies into the UK to operate on behalf of The Hospital Group. What astounds me is that he is still doing this today, working in hospitals or clinics that are run by The Hospital Group, as we speak. The Hospital Group’s response is that it is nothing to do with them. Dr Paganelli was uninsured and The Hospital Group says that it is the patient’s responsibility to check whether the surgeon is General Medical Council-registered and holds insurance. If we look on the website today, however, we find the words: “Book a free consultation today, with our GMC registered surgeons!”, giving the impression that all the surgeons have been vetted by this organisation when that is clearly not the case. Despite this, Dr Paganelli remains licensed by the GMC, meaning that he is deemed fit and suitable to continue to operate in this country, even though he holds no insurance and if things go wrong, patients have no redress against him Having examined this case and the others to which the hon. Member for Strangford (Jim Shannon) referred, it would appear that a plumber who comes to fix someone’s kitchen sink is more heavily regulated than someone who is allowed to operate on your body. The current law allows any qualified doctor—not just surgeons—to perform cosmetic surgery, without having additional training or qualifications. My right hon. Friend the Member for Cynon Valley (Ann Clwyd) has raised many issues about GPs who have undertaken cosmetic surgery without any formal training. Clearly, there needs to be more robust regulation of these private companies, which stand to make a fortune out of the misery experienced by people such as my constituent Mrs Knight The Royal College of Surgeons believes that the GMC needs to be given new legal powers formally to recognise additional qualifications or credentials, and I fully support that call. These should be displayed publicly so that people know that the doctors are properly registered and have gone through the necessary training. Will this solve malpractice and eradicate the problem of cosmetic surgery overnight? No, it will not, but it will at least ensure that some type of regulation is in place. It would be an important and significant start, and it would allow patients and employers such as The Hospital Group to tell competent cosmetic surgeons from cowboys, or indeed from anyone who has limited or no recognised experience in cosmetic procedures There has not been inaction in this area. Legislation was drafted by the Law Commission at the request of the Department of Health in 2014, following Sir Bruce Keogh’s recommendations in the wake of the PIP scandal. The coalition Government failed to find the parliamentary time to take it forward in 2014. You will remember, Mr Deputy Speaker, that at that time the Order Paper was not exactly overflowing with legislation, so we need to answer the question why this was not brought forward. Both the RCS and the GMC are keen to bring in these changes. Again, the Government have failed to include such legislation in the Queen’s Speech. I ask the Minister to explain why that is the case, and when the Government intend to introduce such legislation. As I have said, it would have the support of both the Royal College of Surgeons and the General Medical Council, but it would also have cross-party support in the House May I also ask the Minister about the cost to the NHS? In Mrs Knight’s case, the cost of putting right the mistakes made by Dr Paganelli will have to be picked up by the NHS. As the hon. Member for Strangford said, this affects a large number of people, and the NHS is having to treat them at great expense because of the actions of organisations such as The Hospital Group and individuals such as Dr Paganelli. Is it right for the taxpayer to pick up the bill while those organisations and individuals are making absolute fortunes out of people’s misery? I do not think it is. We need to look into how the NHS can recover the cost of the treatment that Mrs Knight and others are undergoing at the taxpayer’s expense.
Some of the people who were at the meeting on Wednesday told horrifying stories about the ways in which in which the surgery had affected them. Some of them had partially lost their eyesight. There was the depression, there was the trauma, and there were all the other side effects of what had happened to them. Despite all that, however, some of the people who carried out those operations continue to perform this surgery. People are experiencing life-changing medical conditions. Something must be done, and perhaps the Minister needs to tell us that tonight.
The hon. Gentleman has made a very good point. It is not just a question of the initial cost. Some people will need lifelong treatment, which will be very expensive for the taxpayer. I think that there should be a mechanism enabling the taxpayer to recover some of the cost from private companies and individuals when things go wrong I am also concerned about the issue of regulation. These organisations produce a great many glossy brochures, set up websites and have celebrity endorsements, but it is clear that some of the people who undergo cosmetic surgery need counselling beforehand, and there is no legal or other requirement to ensure that they receive it. Surgery that may be seen as life-changing—and, in some cases, is, for the wrong reasons—may also not be appropriate for some of those involved. They are mainly women, but, according to various reports that I have read, an increasing number of men are undergoing these procedures. They are not right for everyone, and I think that counselling and advice should be a key part of the process before anyone is convinced about going under the knife. The companies involved clearly exert a great deal of pressure to ensure that a steady flow of people enables them to make the money that they do make Let me finally ask the Minister about The Hospital Group itself. It gives the impression that it is a hospital group providing healthcare services, but it is clear that it is actually a facilities management company brokering details between patient and surgeon. Its material is very misleading. For instance, its website deliberately states that its surgeons are GMC-registered. It even refers to the Care Quality Commission as though that gave it the stamp of approval, and provided some type of guarantee. A misleading impression is being given I ask the Minister to examine the way in which The Hospital Group in particular, but other groups as well, uses terminology. I think that the average man or woman in the street may get the wrong impression from the CQC symbol or the reference to the GMC registration. The fact that when things go wrong they find that The Hospital Group wants nothing to do with it, and it is up to them to decide what to do, is another matter. That is not the impression given by the misleading publicity—deliberately so, I think—that is put out My constituent’s case is one of many that have highlighted the need for regulation. The legislation is there and we should press forward as a matter of urgency because if we do not more people will suffer. If there is one thing that my constituent, Mrs Knight, wants, it is that other people should avoid the awful experiences that she has gone through because of the negligence and greed for profit of both The Hospital Group and Dr Paganelli.
I thank the hon. Member for North Durham (Mr Jones)for securing this debate on what is clearly an extremely distressing case for his constituent and an unfortunate one more generally. I want to pick up on the specific issues he raised to do with his constituent’s case before talking about the generality of the regulation of cosmetic surgery The hon. Gentleman pointed out the failure of his constituent’s doctor to have insurance and he will be pleased to know that, as of July 2014, new legislation required all surgeons providing cosmetic interventions to provide insurance and proper cover. A failure to do so would render them liable to undergo the fitness to practise tests conducted by the GMC. Those doctors operating outside the UK but in the EU who would have a temporary ability to operate in this country under the directive on mutual recognition of professional qualifications would still, under GMC regulations, be required to provide evidence of insurance cover. That legislation was brought into effect in August, which was clearly too late in the case of his constituent.
Will the Minister look specifically into the case of Dr Paganelli, as I understand that he is still practising in this country?
I will certainly look into that case, as it does not sound right. I cannot trespass on the realms of the GMC, but I will inquire into the specific case outlined by the hon. Gentleman The hon. Gentleman makes a valid point about the cost to the NHS and this is not the only area in which we have considered and continue to consider cost recovery for the NHS. It can be difficult as sometimes the cost of legal action outweighs the cost of recovery and it is not something that the service is used to doing. I am keen to explore it further, but in the context of the action we are taking, which I shall come on to, I hope that the hon. Gentleman will understand the need to take this bit by bit so that we get the process right. In principle, I certainly agree that if organisations cause a cost to fall on the NHS, as in this case, there is a good argument for seeing whether that cost can be recovered That takes me on to another part of the hon. Gentleman’s speech that was particularly striking, about the celebrity endorsements in this case. It is not for me to make policy announcements in an Adjournment debate, nor would I want to in the case of celebrity endorsements, but I agree with the hon. Gentleman that people should think carefully about how they endorse cosmetic surgery. It is a serious intervention and if anyone seeks to glamorise something to which careful thought should be given, people and the organisations using those endorsements should treat them with extreme care I would point the organisation that the hon. Gentleman is dealing with and everyone else towards the code of conduct in advertising, the Committee of Advertising Practice and the Broadcast Committee of Advertising Practice, which drew up guidance in October 2013, especially on protecting children and young people. I think it would be appropriate to make sure the organisation of which he speaks is complying with the spirit as well as the letter of that guidance, and if not I will certainly help him to ask whether anything more can be done on that The hon. Gentleman raises the issue of counselling. Any reputable organisation should seek to ensure that people undertake procedures only when they need to do so and have been properly counselled on the consequences of their actions so that they can make an informed decision. The Government believe that that should happen in every case for cosmetic surgery. There should be an informed decision, taken with serious thought Finally, on the issues to do with The Hospital Group the hon. Gentleman raised, I cannot speak without further advice, but there clearly seem to be questions about trading standards, which he raised. I hope that I and my officials will be able to meet him to look carefully at this case, to make sure if The Hospital Group is misrepresenting its position apropos its surgeons and those it seeks to represent, it is not besmirching an industry which more widely does take its duties and the way it represents itself seriously.
The hon. Member for North Durham (Mr Jones) has raised a topical issue of which we are all aware. Many people have had botched operations. Has the Minister’s Department been able to quantify how many? Optimax was one of the groups involved with a lot of the operations for laser surgery. People thought that was safe, but it was obviously not safe for all. Has the Department been able to quantify the numbers and therefore take action?
I am afraid I do not have an answer to the hon. Gentleman’s question, but I will make sure we write to him if such figures exist, although I suspect they may not. Let me inquire, and then I shall reply to his question Let me turn to the broader policy issues to which the hon. Member for North Durham referred. He referred to Sir Bruce Keogh’s review. It began in January 2012 after the PIP breast implant scandal. It covered the rapidly growing non-surgical cosmetic market. He published that review in 2013 and it highlighted the rapid growth of cosmetic interventions, and suggested safeguards among 40 recommendations to protect patients. The aim of those was to improve how surgical and non-surgical interventions were done, to set standards for training practitioners and surgeons and for how supervision from regulated healthcare professionals can support self-regulation of the industry, and to improve the quality of the information clients have to ensure they are able to make informed decisions about their treatment. The Government published their response in 2014 By the time of the publication the Government had already started work on a number of the recommendations. To address the issue of proper training for cosmetic practitioners, the Royal College of Surgeons set up an inter- specialty committee with representation from the relevant specialty associations and professional organisations including plastic surgery, ear nose and throat, oral and maxillofacial surgery, breast surgery, urology, the Royal College of Obstetricians and Gynaecologists, the Royal College of Ophthalmologists, the General Medical Council and the Care Quality Commission. The committee also includes patient and provider representation, and representatives from the devolved Administrations are invited as observers The committee established three sub-groups which are taking forward the work to implement the recommendations. They cover standards for training and certification, clinical quality and outcomes, and patient information. The committee is also in the process of developing an overarching framework for certification to improve the safety and delivery of cosmetic surgery. Individuals performing cosmetic surgery will be expected to practise within their field of specialty training. The framework for certification takes into account equivalence for non-UK-based surgeons.
I thank the Minister for giving way, and I thank my hon. Friend the Member for North Durham (Mr Jones) for bringing this important debate to the Chamber. PIP has been mentioned, along with the regulations that are in place in this country. I want to ask how we need to work with our European neighbours to ensure that we get the regulation right. We have heard about doctors coming from Italy to practise in this country, for example, and we know how PIP, which started in France, has impacted on patients in the UK. What work is the Minister doing to ensure that we co-operate across Europe to close any loopholes in this area?
The hon. Lady has touched on a complicated and diverse subject. I will happily talk to her when we have more time about what the Department is doing and what we are doing within the European Union to ensure the transferability of qualifications. A considerable amount of work is being done, and the GMC has tightened up a whole number of areas to ensure that we allow only the highest quality of practice in this country, while allowing people to travel through the European Union to practise using their qualifications I want to turn now to training for non-surgical interventions. We asked Health Education England to develop a new qualification framework for providers of non-surgical cosmetic interventions, and for those required to be responsible prescribers, that could apply to all practitioners regardless of previous training and professional background. Health Education England has now completed its review of the qualification requirements and will publish its recommendations shortly The issue of breast implants initiated the review by Sir Bruce Keogh. The review placed particular importance on systems that can precisely identify the complete cohort of patients in which a specific implant has been used. It recognised that being able to monitor the device implementation and performance for clinical outcomes and tracing of patients at risk of device failure was an important safety issue. There has been a range of responses, involving the Medicines and Healthcare Products Regulatory Agency, the Health and Social Care Information Centre, the Committee of Advertising Practice and the Broadcast Committee of Advertising Practice, and a whole series of recommendations has been enacted following the review Turning to legislation, we know that there are examples of high-quality surgical and non-surgical intervention, as I am sure the hon. Member for North Durham would agree, and it is those standards that we must make universal. I am aware of the arguments in favour of legislation as a way of reaching those standards—for example, through the statutory regulation of the non-surgical sector or new powers for the GMC. However, it does not follow that we must depend on legislation alone to meet the fundamental objectives of the Keogh review. Much has been achieved already and there is much more to do I know that the hon. Gentleman understands the pressure of competing priorities on parliamentary time. The calendar for legislation is full at the moment, as he knows, but we now have an opportunity to review and monitor the impact of non-legislative action before confirming whether new legislation would add significant value to safeguards for people choosing cosmetic procedures. We will continue to be advised on that by Sir Bruce and others as the safeguarding framework continues to develop. I can give the hon. Gentleman a personal assurance that I will ensure that the review of the non-legislative remedies is thorough, and that if it is found wanting, we will immediately look again at the subject with a view to taking further action We are grateful for the support of the Royal College of Surgeons and its partners and for the extremely thorough work that they have done so far. We are also grateful to the General Medical Council and the Care Quality Commission. In the light of the continuing work that I have outlined, I hope that the hon. Gentleman will agree that we are in a far better position now than we were before Sir Bruce’s review to help to protect the public and ensure proper training and oversight of non-surgical as well as surgical cosmetic interventions On the specific questions that the hon. Gentleman raised about his constituent, I commit to returning to him with an answer on the doctor he mentioned and the insurance that he will be required to have. I will also give him a specific answer on the cost to the NHS and any work that we might do on cost recovery, and on the specific guidance on the advertising of surgical procedures. I hope also to be able to get to the bottom of the nature of the sales techniques and the claims made by the hospital that he has mentioned, to ensure that it is practising in accordance with the standards that would be expected of a decent, reasonable organisation doing what it purports to do. I thank the hon. Gentleman very much for bringing this case to the Government’s attention.