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8.20 pm
Mr. Alan Howarth (Stratford-on-Avon): The Budget is imprudent, implausible and unjust. It is imprudent in that the Chancellor has poured fuel on the flames by adding direct personal tax cuts to a consumer boom that is running ahead powerfully and with the money supply running way beyond where it should be. We are back, tragically, to the pattern of boom and bust. The Chancellor says that he is staying ahead of the game, but the game will catch up with him. The interesting political question is whether it will do so before or after next April. Assuredly, it will before long, and that will be painful not only for the Conservative party but for the country.
It is especially regrettable that the Budget does not provide for the investment that we need--perhaps above all in education. There is no more important investment
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It is especially sad that the Government have not responded more adequately to the crisis in the universities. They have given some extra resources to the universities and, to that extent, the decisions in the Budget are welcome. Our universities are among our greatest assets and the staff who research and teach in them have well-nigh achieved miracles in maintaining standards against the squeeze in their resources. We all look forward to the recommendations of Sir Ron Dearing; there is no one wiser or more widely respected in the field than he. However, the crisis is urgent and the Government should have done more to enable our universities to improve their obsolescent laboratories and anachronistic libraries.
The cuts in training are also foolish. The Government justify them on the grounds that the unemployment count is falling. The count of the long-term unemployed has not been falling. It is not sensible to add to the planned cuts in training for work or to divert money to project work, the only proven effect of which is to take people off the unemployment register. That is attractive to the Government but there is no evidence that the scheme gets more people into work.
The Budget neglects the interests of the poorest in society. We were all pleased that the widening gap between rich and poor in Britain had stopped widening; that, according to recent figures, the trend of so many years seemed to have been halted. It is as if the Government are now determined that that baleful trend should be resumed. They have lifted the threshold for the higher rate of personal taxation by £600 but widened the band for the lower rate by only £200. The richest 10 per cent. will enjoy a third of the tax cuts; the poorest, less than 10 per cent. of them. People who are earning too little to pay income tax will suffer from the increases in indirect taxation. Unemployed couples will be worse off. The fiscal tightening of the overall Budget judgment will lead to job losses, not least in the construction industry.
As chair of the all-party parliamentary group on charities and the voluntary sector, I am disappointed that the Chancellor has not seen fit to recompense charities for the £13 million loss caused by the 1p reduction in the basic rate and the additional costs of petrol and diesel. The Government do not take a coherent view of the role of charities in social provision, nor of their responsibility to charities. They only ask charities endlessly to do more. With the higher unemployment and the cuts in local authority and training and enterprise council budgets that will flow from the Budget, the work load of charities will increase yet again. Charities appreciate the concession that will enable their trading subsidiaries to gain early tax relief from covenanting profits to the parent charity but how regrettable that the Treasury has again not found it possible to do anything to compensate them for the £1 million a day that service-delivering charities pay in irrecoverable VAT.
Earlier this year, we debated the freeze on one parent benefit and lone parent premium that the Government introduced in the previous Budget and have repeated in this one. I will not dwell on that, therefore, especially as
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The new rules on benefit claims and the limits on backdating and reviews will prevent many claimants from getting the benefits that they should have. The benefits system is nothing if not highly complex and difficult for claimants to understand. The Government have abolished the freeline that helped 750,000 people each year. It will now be yet harder for people to make their claims fully and accurately in the time required.
The Secretary of State defended the policy of extending the waiting time for jobseeker's allowance to seven days. I think that he said that there were waiting days under unemployment benefit. It is also true--he will correct me if I am wrong--that there were no waiting days for income support paid to the unemployed. In his press release, he vaguely and lamely said:
The cuts in the housing programme are probably the largest proportionate cuts ever to social housing provision. It is peculiar that, in a week in which the Secretary of State for the Environment told the House that England will have 4.4 million more households by 2016, there should be drastic reductions in the public funds allocated to housing provision. Shelter has estimated that of the 4.4 million households, 2.5 million will need low-cost rented housing, but it will not be there.
The measures will be devastating for homeless people. The Government defended their policy in the debates on the Housing Act 1996, which is to be implemented on 20 January, by saying that homeless people would be at no significant disadvantage; the majority of them would reach the top of the list in two years. I fear that the cut in housing provision will make their promises look very hollow. If that policy seems deeply misguided, the further cuts in housing benefit are yet more distressing.
I understand that the Government simply cannot accept an endless explosion in the cost of housing benefit, but rent control through impoverishing tenants is no way to address the problem. By cutting out the support for half the difference between average and actual rent, the Secretary of State will seriously impoverish significant numbers of people. Many people already top up the cost of their rent from their low pay, jobseeker's allowance or income support. Income support is not even set at a decent subsistence level and should not have to be used to pay the rent.
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The Government have decided that single people aged between 25 and 60 should, like people under 25, be systematically disadvantaged, if not stigmatised--and all for the sake of £100 million. Single people already face great difficulties in the search for housing. They are on an endless waiting list if they hope to get public authority housing. The priorities of housing associations have naturally had to be to attend to those to whom they have statutory obligations, mainly families with dependent children and pensioners. Houses that are designed and intended for single people may well go to a lone parent with a young child.
Of the 4.4 million new households, we have to expect some 80 per cent., as the Government note, to be single people. The Government argue that they should not endorse that, but it is not right to punish single people and perhaps particularly those who are separated or divorced.
The Secretary of State has said that people on housing benefit will have the choice of paying from their own income for more expensive accommodation, trying to negotiate their rent down, or moving into a home that they and the taxpayer can afford. The Secretary of State has departed from the real world in making those suggestions. The Rowntree new index of private rents shows that in the second quarter of 1996 the average rent in Britain for a self-contained, one-bedroom flat was £87 for a furnished flat and £80 for an unfurnished flat, whereas the average rent for one room in a shared house was £47. That makes a difference of £40 for furnished accommodation. There can be no question of tenants negotiating their rent down by £40 or anything remotely like it.
In any case, single people will not be able to find that accommodation. There are probably five times as many young people under 25 as there are single rooms available in the rented market. It is a landlord's market and it is particularly so, as I know from my constituency in south Warwickshire, in rural areas, where there simply are not single rooms to be found for rent. My observation is endorsed by the recently published research by the Country Landowners Association and the Joseph Rowntree Foundation. In any case, landlords often do not wish to let to tenants on housing benefit. As the Department of the Environment's survey "Private Landlords in England" told us three months ago, some 53 per cent. of landlords prefer not to let to tenants on housing benefit.
I hope that the Government will consider how people will be affected in practice. It will be bad enough as it is for people under 25, but for people over that age who for a large part of their adult life, perhaps 35 years, are trying to make a home and live a settled life, this is a cruel policy. Consider the interaction of the policy with labour market conditions. There are more and more temporary and insecure jobs in our economy. If people take a job that does not work out and lose the job, they will lose housing benefit at the old rate and lose their home. If single people, conscious of that hazard, do not take the job, they will forfeit JSA. That might be described as Lilley's fork.
If someone has to move to smaller accommodation, will they be required to sell their furniture? I know that Ministers do not wish to be unkind, but they have been unimaginative in making the proposals. Consider the position of people--unhappily, numerous and becoming more numerous in our society--who are separated or divorced. Many people divorce when their children have
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Let us consider the thousands of single women who work in the caring professions such as nursing or residential care. They have been content to accept earnings that never gave them any prospect of buying their own home. Do they deserve from us the indignity and distress of being required to move into shared accommodation? Think of the loss of self-esteem for them. Their home has been their haven, and having their private home has perhaps been the condition of their ability to make and sustain relationships.
Consider--this is not a fanciful or sensational suggestion--the predicament of a single woman pressurised by her landlord to offer sexual favours in lieu of rent that she is unable to afford. Consider the position of disabled people who are not so severely disabled as to qualify for incapacity benefits but are not fit enough to fulfil the availability for work and actively seeking work conditions of JSA. With reduced housing benefit, they are now, in addition to their other problems, to lose their home, privacy, dignity and hope.
The policy will drive people into houses in multiple occupation. In 1985, the Department of the Environment conducted a survey which found that 85 per cent. of HMOs were unsatisfactory, in poor condition and perhaps unsafe. There is no reason to suppose that the situation has significantly improved since that time. The Government refused to meet the pleas of voluntary organisations and the Labour party to accept an amendment to the Housing Bill this year to introduce a mandatory licensing scheme for HMOs.
Why should poor people be driven to share with strangers while the wealthy enjoy greater tax cuts, with the promise from the Conservative party to abolish inheritance tax and capital gains tax? The Conservative party makes much of the importance of home and family values, but not, it seems, for the poor. The poor do not deserve to enjoy that happiness in life. They are to be driven into ghettos of squalid, dangerous housing without privacy or stability.
It is interesting and important that the Government have embraced the principle of spend to save. They propose to spend £470 million on an additional attack on fraud and look forward to a return of five times as much as they spend. That is an interesting departure of principle. My right hon. Friend the Member for Dunfermline, East (Mr. Brown) has not, to my knowledge, countenanced in his policy making that the Labour party embrace such a principle. I should like, however, to suggest to the House that the same principle could be applied to welfare-to-work. A sum of £470 million could be spent usefully and constructively. For the same amount, thousands of claimants could be helped to move back to work.
I have tabled a number of parliamentary questions in recent months on this subject. Let me say how grateful I am to the officials who take so much trouble to do the computations.
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Instead of removing their special benefits, some help could have been given to lone parents to overcome the barriers to employment. For only £20 million, the Secretary of State could have helped 45,000 lone parents by allowing them to earn up to £25 a week without loss of benefit. Another £10 million only could have tackled the barrier of the cost of child care by offsetting work-related child care expenses for lone parents on income support. For £150 million, the barrier faced by those leaving income support, who lose help to pay for school meals, could be ended by giving entitlement to free school meals with family credit.
"many people receive some sort of final payment which will cover them for the first week."
How many? He should not introduce the policy without knowing the proportion of people so fortunate. People who lose part-time or casual jobs, who are laid off or who have worked out a period of notice, will lose a full week's jobseeker's allowance, which may be worth well over £100. That will cause them severe difficulty. As the jobseeker's allowance is paid two weeks in arrears, many people will receive no income for three whole weeks. That is wrong.
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