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Second Reading

Part of Welfare Reform and Work Bill – in the House of Lords at 5:28 pm on 17th November 2015.

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Photo of Lord Blencathra Lord Blencathra Conservative 5:28 pm, 17th November 2015

My Lords, what a privilege to be present today for the maiden speech of my noble friend Lord Lansley. When I looked at the alphabetical list of speakers last week and saw my noble friend’s name, I hoped that I would not be following him since he would show up the gross inadequacies of my contribution. Naturally, my silent prayer to the Chief Whip went unanswered.

We have just seen a splendid example of how this noble House benefits from the addition of Peers such as my noble friend, who are experts in their subject and have considerable experience of government and the other place. My noble friend has told the House that he was Principal Private Secretary to my noble friend Lord Tebbitt. I assure your Lordships that he did not inherit all the views held by that noble Lord. In fact, although my noble friend was the Bernard of his time, rising to become the Minister, he often had to say, “No, Minister”, so he also did a Sir Humphrey act with my noble friend Lord Tebbitt. In addition to what he has told us today, the House will have discovered that my noble friend has brought a disarming and quiet style of delivery. I have always found this to be persuasive in the past and I am sure your Lordships will find it so in the future. We shall all look forward to his further contributions on a range of subjects. However, as a former Chief Whip, I hope my noble friend will not range too widely with the freedom he intends to exercise.

I support the Bill, which has to be seen in the context of what the Government have achieved on the economy since 2010. Employment is now at a record high of over 31 million, up 2 million since 2010. That represents a record employment rate of 73%. Crucially, the number of workless households is at a record low, down nearly 700,000 since 2010. The best thing that any Government can do to help people on welfare is to get them into paid employment and off welfare. I will touch on a few aspects of the Bill, first of which is apprenticeships. I like the idea of reporting annually on this. Apprenticeships are absolutely crucial for individuals and the economy and they are the best way to boost employment chances for young people. I am delighted that the Government have delivered over 2 million new apprenticeships over the past five years and plan to deliver 3 million more over the next five. It was wonderful to read of the brilliant A-level student who turned down Oxford or Cambridge to take up an apprenticeship with Rolls-Royce. Of course, not all apprenticeships are of the calibre of Rolls-Royce and, although we need to make sure that all apprenticeships do offer genuine skills training, we must not let cynics rubbish the less glamorous and technical end of the scale.

I am thinking of catering, for example, which is often scorned as low-grade work. I suppose that an apprenticeship to serve a skinny latte at Starbucks would be a bit thin, but what about the 15 kids Jamie Oliver took and trained to be really good chefs? That was quality training in cooking which we should not scoff at—if your Lordships will pardon the very bad pun. In 1980, when I was Food Minister, the splendid Albert Roux came to see me. He said: “Everyone, especially we French, mock English food as just roast beef and sticky brown gravy; but within 25 years English food will be regarded as the best in the world. We are training brilliant young apprentices who will one day be among the finest chefs in the world, but it all depends on training apprentices”. How right Albert turned out to be.

I welcome Clause 3 and the duty to report annually on the troubled families programme. If we are to add to the 117,000 families already helped by getting children back in school, and significantly reducing youth crime and anti-social behaviour, then we need as much information and as many facts as possible. All the research I have read shows that, when children come from a home with one or more parents who are unemployed or who have a criminal record, or from a home with absent, uncaring fathers where there is no support or encouragement to attend school, the chances of those children going bad are greatly increased. That is not making any moral or social judgment. It is a simple fact that the fewer positive factors are present during a child’s upbringing, the less chance he—and it is usually a he—has to succeed. So information is vital, and then policy can be revised accordingly.

Similarly, I like the clauses on life chances, although the phrase sounds a bit trendy. This reform is long overdue. The existing statutory framework in the Child Poverty Act, set around the four income-related targets, is a nonsensical way to measure real poverty. As the Prime Minister said,

“we are in the absurd situation where if we increase the state pension, child poverty actually goes up”.

If we focus on the number of children living in workless households and their educational attainment by the time they get to 16, and we incorporate family breakdown, problem debt and addiction, we will get a real measure of poverty, will be better informed and will be able to devise proper policies to tackle it.

?The benefit cap restores fairness to the welfare system and has incentivised work. I will not bore the House with the statistics; we shall no doubt hear a lot more today. Lowering the cap emphasises the message that it is not fair for someone on benefits to be receiving more than many people in work, and better reflects the circumstances of many working families. Tens of millions of people in work and paying taxes would love to live in a bigger house, in a better street or in a house with a nice garden, but they cannot afford to. They have to settle for what they can afford. No wonder all the polls suggest that they are outraged to see people on benefits being paid to live in housing which they, as hard-working taxpayers, simply cannot afford.

Clauses 11 and 12 will limit child tax credit and universal credit to two children from April 2017. As we have heard, this is controversial, but it has to be right. Families in work have to make tough decisions on how many children they can afford. It is probably the most difficult decision any parent can make. Therefore, families on benefits should be encouraged to make the same financial decisions as families supporting themselves solely through work. It is not fair to the working families who can afford only two children that they have to pay taxes to support those who decide to have more, on the basis that the taxpayer will pay. Some will say that this is inconsistent with child benefit paid for any number of children. Yes, it is, but in politics one has to accept political reality: no Government have dared to tackle it. There are inconsistencies in many policy areas, such as the state pension being paid to the poorest and to multimillionaires, but that does not mean that we should perpetuate, or create new, unfair regimes. We are where we are and must make incremental changes where we can.

Finally, I will mention the welfare budget generally. We have heard a lot, and will hear a lot more today, about those who may have their benefits reduced because of the Chancellor’s Budget. I pay tribute to Gordon Brown for keeping us out of the euro: it was the right decision. No doubt, at the time, he considered his plan on tax credits and child tax credits to be right also. However, that was when it was set to cost £4 billion; but it has rocketed to £30 billion and applies to nine out of 10 households. So who are all the people who were not in his original plan but became included later on? Who were the unexpected beneficiaries? Did Gordon Brown never intend some or all of those who may lose out now to be winners in the first place? I simply do not know, but I cannot imagine that he intended the costs to rocket as they have, and for so many other people to be included.

There have been intriguing suggestions about where the Chancellor could get alternative funding so that there are no losers. However, the whole point is that welfare spending is out of control and has to be cut. Taking away what has been given, even if it was not justified or intended in the first place, is never easy but we all know what the long-term sustainable solution is. It is a big hike in the minimum wage until it eventually becomes the real living wage. We cannot reduce welfare dependency while large multibillion pound companies are paying poverty wages and depending on the taxpayer to pay their employees what they should be paying them in the first place. I make no apologies for returning to this theme for the fourth time this year. We have the fastest growing economy in the G8. Business is flourishing and businesses should pay their workers a lot more than the present minimum wage. I urge the Chancellor to increase the rate still further next year and ignore the usual sob stories of the CBI. We will reduce the welfare bill when people working 40 hours per week get sufficient pay on which to live, without other taxpayers having to top it up. We have a long way to go but the Bill is another step in the right direction, and I commend it to the House.