Economy, Pensions and Welfare

Part of Debate on the Address – in the House of Commons at 7:17 pm on 15th December 2008.

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Photo of Frank Field Frank Field Labour, Birkenhead 7:17 pm, 15th December 2008

No, I will not give way—well, I might in a minute.

My plea to the Government is to rethink how we can get some of that precious £20 billion that will otherwise be wasted on the VAT measures into credit for firms, and thereby protect our constituents' jobs.

The other thing that limits the Government's room for manoeuvre is inflation. For the Bank of England to say that inflation is not a worry, when the current rate of inflation is well over two times higher than the top of the target range, is moonshine. The spot market in oil is already prophesying that the price of oil will be significantly higher next year than it is now. Hon. Members nodded in agreement when the Liberal Democrat spokesman pooh-poohed the worry about the falling pound. A falling pound might give our exporters a greater chance, if there are markets in which they can sell, but a falling pound pushes up import prices and therefore adds worryingly to inflationary pressures, which are already high in this country.

There are two huge restraints on the Government. I beg them before Wednesday, when we debate the order giving them the authority to make what now appears to be an absurd cut in VAT, to save that £20 billion and get it to companies, which may save some of our constituents' jobs. Before I leave this point, I too remind the House what the 1930s were like for someone who had to live through them. We now need to move together to try to get policies that will mitigate the terrible economic disaster that is about to engulf our society.

In saying that, I welcome the welfare reform measures. We have a most talented Secretary of State for Work and Pensions, but he is being wasted by the absurd programme, to which he has nailed his colours, that says that if we talk tough and start roughing up claimants, they will somehow start going to work. Claimants know that Governments have spoken like that before, and then we hardly apply any sanctions.

The one piece of information that I want to give the House, however, is this: one third more claimants were leaving jobseeker's allowance at the bottom of the last recession than were leaving it earlier this year, at the top of the boom. There is clearly something happening in our labour market to suggest that welfare reform is crucial. I make a plea that we do not get too serious about single mums, who actually have the job of raising children. However, there are large numbers of people under 25 who have never worked, who think that they have a minimum income from the Government, and who have no intention of working. That applies in my constituency and in every other constituency in the country.

The previous Labour Government introduced the community programme, which was workfare by another name. It did some useful work in our constituencies. My plea is that we should scrap all this new deal stuff—the treadmills that people are on that punish them by sending them on training, instead of regarding training as a reward to get them out of the rut that they are in—and concentrate money on reinventing the community programme. We should say to young lads, "You've been on benefit for this long. There's now a job for you on the community programme. You either take it or you lose benefit." That would smack of serious welfare reform. Given our Secretary of State's talents, I hope that he will return to that theme before too long.

The theme of this debate is, rightly, the sombre note that Dr. Cable and the hon. Member for Louth and Horncastle struck. We might be on the brink of an economic catastrophe, and we need to mitigate its effects on the lives of our constituents.

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