My Lords, one of the duties in which I take particular pleasure is chairing the governors at Ripon College, Cuddesdon, just outside Oxford, a theological college at which men and women are prepared for ministry. It is known by those associated with it more colloquially as a vicar factory. Notices around the college remind the residents that, after night prayer or Compline, they are expected to abide by what is known as the great silence. It is not, I suspect, adhered to with the same severity as in years past. Indeed, one has a sense that the silence masks all kinds of feverish activity, all of it associated with theology, of course.
Last week’s Budget was characterised by a great silence on two issues, and that silence too hides, I suspect, feverish activity and fevered discussions on social care and defence. On defence, I cannot help but think that behind the silence, titanic struggle is joined. We hear an echo of that struggle in the media. The new Secretary of State kept his cards close to his chest at defence Questions. My anxiety is that others will determine what cards he holds, and that he will not be dealt the hand he, or we, would hope for.
I comment on just one area on which I have touched before: capability. I endorse the Government’s rhetoric and aspiration on defence but remain concerned that we do not, and will not, have the resources to deliver on that rhetoric. We have responsibilities as a force for good in the world which we may not be able to meet. That is bad in itself for those we seek to assist and bad for our ability to combat evil, but it is just as bad for how Britain is perceived in the world, especially by those who would do us harm. This will be thrown into stark relief on Thursday: we will all stiffen with pride as HMS Queen Elizabeth is commissioned by Her Majesty in Portsmouth. Many of us will also be concerned that we do not and will not have sufficient capability to support this great ship.
My second point concerns social care—the subject of another great silence. I did not hear a syllable on it pass the Chancellor’s lips. The status quo is bad enough. The decision to link business rates to CPI, not RPI, is no arcane statistical recalibration. It may be good for business; it is surely bad for hard-pressed local authorities, reducing their already highly pressurised ability to fund social care. It goes without saying that the losers will be those who need, and deserve, care. The Government have committed to publish proposals on social care in the summer, and thereafter to consider responses. Action is not on the horizon. Somewhere over the rainbow is a long time away for a situation that is already unsustainable.
My third point is on an issue about which I have spoken before: universal credit. Here my point is also about a silence although not one, I fear, which betokens feverish activity. I recognise the care that the Government are taking over universal credit and once again confirm my support in principle for a coherent system that enables and encourages work. However, I have, alas, a degree of scepticism that the Government’s confident statement that people are moving into work faster and staying in work longer can be justified, since rollout of benefit currently covers 9% of those it will eventually apply to, and the basis for the claim is data from three years ago, albeit only published this September. Perhaps the Minister will confirm that later. This is an extrapolation too far, based on modest—to say the least—rollout and out-of-date evidence.
I also urge the Government to be careful as they consider responses to their consultation on eligibility for free school meals. One of the welcome attributes of universal credit is to encourage work and remove cliff-edge changes in support. An arbitrary, and probably low, earnings threshold for free school meals entitlement would be a return to the bad old times.
Finally, I remain animated by the moral injustice of the taper rate. I acknowledge the Government’s action in reducing it by 2% last year and that under universal credit it is lower than it was. The issue is one of equity. It is surely wrong that those on universal credit who are on the lowest incomes and are doing the right thing by going back to work are subject to a clawback or withdrawal of a minimum of 63%. That rises if you pay national insurance, to a 75% marginal rate if you earn over £11,500—a figure which is soon to rise—and are liable to income tax, and more still if housing benefit is factored in. We are invited to believe that the bulk of the population, like many in this House, behaves one way with marginal tax and national insurance rates of 32% or 42%, but those on low incomes behave in another, facing much higher rates.
The Government are showing commendable thoughtfulness in seeking to get universal credit right. These are areas where they should think again. I trust that the silence to which I have pointed will be a prelude to a burst of activity.