House of Commons Hansard Debates for 1 Dec 1997 (pt 18)

Mr. Gibb: How does the hon. Lady envisage the abolition of tax credits for dividends paid to pension funds, which will extract £5 billion a year from our nation's private sector pension funds, helping people to enjoy their retirement?

Caroline Flint: I believe that that fiscal reform helps to reform the corporate tax system. We are setting out to ensure that the many people with private and personal pensions are protected by safeguards that guarantee that their pensions are in the hands of those who will invest them wisely. That will sit nicely alongside a number of reviews that will take the pension arrangements for everyone into the 21st century.

I am proud that new Labour is beginning to prioritise work over welfare and opportunity over waste. I am proud that we will give effect to our principles in the face of enormous social change. This Government will face up to the growing number of women who need and want to work, to the changing nature of family life and to the consequences of family breakdown. There are few jobs for life, and the tax and benefits system must meet the challenge of changing work patterns and frequent movements from job to job.

I have heard Opposition Members suggest that the Government should be embarrassed that we opposed Conservative benefit cuts in opposition, but are accepting them now we are in government. That taunt is nothing but

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hypocrisy of the highest order. As the previous Government offered nothing to lone parents--no job opportunities, no help, no new deal--but just blamed them for society's problems, it is quite right that they should now stand charged by Labour as offering nothing but increased child poverty.

If the Conservative Government had offered active support for lone parents, if they had offered a national minimum wage, if they had offered a new deal financed from a windfall levy, if they had offered a national child care strategy, they may have deserved Labour support, but Britain's lone parents and their children have had to wait too long for a Labour Government who will begin to support them in overcoming the obstacles to work and help them to do better for their families.

New Labour never said that social security cuts would be restored. In the past few days I have made it my business to check all the daily briefs that I received when I was a candidate, as well as our policy handbook and guide, and none of them contained that commitment. It was not contained in the manifesto on which our candidates fought and won the general election. Our pledge was to stay within spending limits rather than raise income tax and to begin a thorough reform of the welfare state.

I should remind hon. Members on both sides of the House who believe that we should have restored the cuts that a long line of people who come to my surgeries saw their living standards cut during the Tory years and would like help today if the public purse were deep enough. What we offered the public was to use the country's taxes better. We promised lone parents new pathways to work, a national child care strategy, better training and a proactive employment service. There have been many comments today--

Mr. Letwin rose--

Caroline Flint: I am sure that the hon. Gentleman is rising to say something.

There have been many comments today about our pilot schemes and how succesful or otherwise they have been. As one who has been working hard on the new deal this summer, I know that we are fighting against a backlog of cynicism and mistrust because our employment services have not been used effectively over the past 18 years. It is therefore no wonder that there may be a slow move forward, but it is important that the people who have come forward have gained something from the service. I am confident that they will spread the word to other people who have yet to come forward.

Mr. Letwin: As the hon. Lady develops her interesting line of argument, will she explain how the imposition of a national minimum wage, which will exclude from work some of the lone parents of whom she talks by pricing them out of it, will assist them?

Caroline Flint: There is no evidence that a national minimum wage, which will be set at a reasonable rate by the Low Pay Commission, will put people out of work. Conservatives argued that equal pay legislation would lead to women not taking up jobs, but that did not come to pass. As has been recognised by employers, the national minimum wage will raise the floor on wages so that

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employers can be seen to offer a decent wage for a decent job. During the general election campaign, many employers, from both small and medium businesses, told me that they wanted to offer a decent wage, but were being undercut by other employers who thought that, if they provided poverty pay so that the Government could bail them out with family credit, that would be a nice little earner. We have moved on from that discussion.

Mr. Letwin: In the light of that interesting answer, will the hon. Lady explain the Deputy Prime Minister's views on the matter?

Caroline Flint: The Deputy Prime Minister supports my policy and I am sure that he will be able to answer any question that the hon. Gentleman may like to put. I am here to represent Back Benchers today--I might like to represent the Front Bench in the near future.

I believe strongly that the new Government deserve support and praise for their Budget to reform tax and benefits, their policy to reduce taxation for those on the lowest incomes and the proposed national minimum wage. Those measures will make a difference.

Some hon. Members have suggested that some of the jobs on offer to lone parents are not very attractive. Many people, particularly when they return to the job market after a long break, do not move into jobs that are the best paid, the most satisfactory or the most in keeping with their skills or experience. Many of my constituents do jobs that few in this House or, dare I say it, in the Press Gallery have experienced. They work for the sake of their families. In work, even lone parents will be, on average, £50 a week better off. Once in work, their chances of moving to better paid or more satisfying jobs, to find work with more suitable hours or to have training, will improve dramatically.

Mr. Webb: Will the hon. Lady confirm that the £50 figure that has been supplied to her is based on a sample of lone parents who are already working, not those who are not working? By definition, it was worth those lone parents' while working; if that were not true, they would not have had those jobs in the first place. As a group, they have, on average, lower child care costs and higher maintenance costs than other lone parents. Can the hon. Lady confirm that a lone parent who is currently unwaged would not, on average, receive £50 a week?

Caroline Flint: That is why we need a national minimum wage. It would seem strange to promote a policy that suggests that someone should not be better off in work than on benefit.

Others have argued that in lone parent families it is detrimental to the child's welfare for the only parent to move into work, but the evidence is clear: when asked, lone parents place child care at the top of their list of demands. They do so because they know that, with work, comes a better standard of living than would ever be provided on benefits, now or in the future. The feeling of self-worth that comes with work not only benefits the mother, but provides a role model for the child.

As we move into the next century, today's and tomorrow's lone parents have better prospects of a decent quality of life than they would ever have had under a Tory Government. In four years' time, this Government will

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stand judged by their record of support for lone parents, by the impact of the new deal and by the revolution that we shall see in the working of our social security system. I have every faith that the new Labour Government will pass that test.

6.6 pm

Mr. Nick Gibb (Bognor Regis and Littlehampton): I am looking forward to the hon. Member for Don Valley (Caroline Flint) joining the Government Front Bench, as is her wish. I believe that there will be a vacancy there shortly.

The Prime Minister has said:

"A strong society cannot be built on soft choices. It means fundamental reform of our welfare state, of the deal between citizen and society."

The Secretary of State's speech gave no sign of any such fundamental reform. It was an inadequate speech, designed to save her from the claws of many of her Back Benchers, but it failed to achieve even that. The Government will be unable to pass through the House any significant welfare reform because of the views of their Back Benchers.

The Government's welfare policy and welfare reforms have become all spin and hype and no substance. One such example involves the Taylor review of the merger--the integration--of tax and benefits. When that review was announced back in June, the press lauded it. The Times of 19 June stated:

"The commission, established under Martin Taylor by Gordon Brown, the Chancellor, to look at reforming tax and benefits, may well examine the integration of tax and NIC."

The Sunday Times of 18 May stated:

"The aim will be to save billions in administration costs, cut down on people simultaneously paying tax with one hand and receiving benefits in the other . . . Tony Blair has agreed that Brown should 'consider all options' for reform, including ultimately merging the separate tax and benefit operations into a new streamlined system."

The Financial Times of 20 May stated:

"Mr. Taylor's appointment was welcomed by business, with tax experts predicting that the Barclays chief could recommend radical reform, including full-scale merger of the tax and benefit systems.

Mr. Taylor did little to dampen expectations".

Are the Government proposing the full-scale merger of the tax and benefit systems? Perhaps the Secretary of State or the Minister of State could respond to that point at the end of the debate.

On 20 May the Financial Times stated: