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I wish to draw Members’ attention to the increasing complexity of the welfare state, even in the past 10 years. There are now 51 separate benefit entitlements, compared with 27 in 1979. That points to a pertinent fact: less than 20 per cent. of non-pension welfare expenditure is in any way conditional on claimants seeking employment—3 per cent. in respect of jobseeker’s allowance and new deal, and less than 16 per cent. in respect of tax credit expenditure. The figures are startling, and Members would be wise to take note of them. The number of people remaining on benefit for more than five years has risen by 600,000 since 1999 to 2.4 million, and 1.25 million young people are not in work or full-time education. Almost 50 per cent. of young jobseekers who leave the new deal for young people are back on benefits within 12 months, and 2.7 million people are on incapacity benefit—significantly higher than in 1979. We are told that we have a healthier country, but what we are talking about is nothing short of disguised unemployment by this Government.
Most academics would accept that at least half the 5.4 million welfare-dependants in this country could work if they chose to do so, but this Government have not sufficiently developed programmes and policies to enable that to happen. If people can work, why do they not choose to work? It is not because of the lack of jobs. In my constituency, the eastern region, the south-east of England and London in particular, I see that jobs are available for people to take. The sad fact is that after 10 years of a Labour Government, not taking work is a rational option for many people. Ministers know that full well.
Recently, the permanent secretary at the Department for Work and Pensions told the Public Accounts Committee that benefits were “non-sanctionable”. That means that there are no consequences for recipients who refuse to take work. What sort of benefits system is that to have in the fourth or fifth largest economy in the world? The failure to tackle welfare dependency is a national scandal, and in respect of benefit fraud it is unfair and unjust to those such as children in poverty who are truly in need of assistance and state benefits. The Chancellor of the Exchequer cried crocodile tears about children in poverty, but according to the DWP, child poverty rose last year by 100,000—before housing cost—to 2.8 million individuals, or 22 per cent. of children. If housing cost is taken into account, it rose by 200,000 to 3.8 million, or 30 per cent. of children.
Mr. Simon: May I check whether the hon. Gentleman was serious about the crocodile tears? By “crocodile tears”, I assume that he means that the Chancellor of the Exchequer and the Labour Government are pretending to be concerned about child poverty for cynical reasons when they are not concerned about it at all. I understand that child poverty was not on the agenda for 20 years until a Labour Government came to power in this country, put it in the middle of the agenda and spent a decade doing something about it. If the hon. Gentleman thinks that that is crocodile tears, perhaps he should have learned a little bit more about why.
Mr. Jackson:
The thing about the left and the Labour party is that they are rarely matched in humbug and sanctimony; it is said that only they care about the poor and dispossessed. This moral sanctimony is not backed
up by the policies that they have put into practice in government. If I may give the hon. Gentleman a history lesson, the Conservative party has been responsible for many progressive reforms over the years in social housing, public health and other areas. So I ask him to desist from lecturing the Conservative party on its moral values and beliefs. I merely contrasted the Chancellor’s rhetoric with the record, which is not a good one to defend.
In March, UNICEF rated the UK the lowest of 21 Organisation for Economic Co-operation and Development countries for children’s well-being. It was an assessment of material well-being, health and safety, educational well-being, family and peer relationships, behaviour and risks, and subjective well-being. I made the point earlier that the weekly income of the bottom 10 per cent. of the working population fell between 2005-06 from £91 to £89.
We see many examples of maladministration and error presided over by this Government. I could cite the 4,000 families overpaid tax credits in my constituency, the £1 billon-worth of tax credits fraud, and the disability living allowance fraud—a major part of the large-scale fraud that the National Audit Office has identified, which may add up to £3 billion. Even the Child Poverty Action Group has been moved to say that
“behind these figures are thousands of families struggling to survive when the overpayments are clawed back”.
What is to be done? I know that time is short, Madam Deputy Speaker. I commend to the House the work of the Adam Smith Institute in its “Working Welfare” report, which was published last week. The proposals in the document are that all people of working age who do not meet national disability criteria could face immediate work reviews; that job centres could be privatised and paid by results; that local authorities could be responsible for paying benefits; that absence from work without good cause could trigger a reduction in benefit; and that those with serious educational deficiencies could receive training and assistance, and similar treatment could be offered to those with drugs and alcohol misuse problems. [ Interruption. ] Labour Members may sneer, but that has been tried in the US, and it has resulted in a 60 per cent. reduction in welfare rolls.
Who would not wish to see people choose to work to improve their family life and future and to give them direction, instead of staying in the hinterland of welfare dependency? Certainly no one on the Conservative Benches would. In Wisconsin, there has been an 80 per cent. reduction in welfare dependency. I commend to the House the work of my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) and the Centre for Social Justice, and that of my right hon. Friend the Leader of the Opposition.
Had we had a Conservative Queen’s Speech, it would have contained legislation in favour of married couples, to increase the working tax credit and to lift 300,000 children out of poverty—
Mr. Simon:
How certain is the hon. Gentleman about what he is saying? It was notable that the Conservative Front-Bench spokesman did not mention either of the things that the hon. Gentleman has just
mentioned or any of the things that he is about to mention. In fact, the Opposition spokesman did not say a single word about anything they might do or any reason why they might do it. One would think that the Conservative party had no economic policy at all.
Mr. Jackson: I trust that the hon. Gentleman will put my speech on YouTube. He has form in making a Charlie of himself in that regard— [ Interruption. ]
Madam Deputy Speaker: Order. Perhaps we could continue with the debate on the economy and welfare.
Mr. Jackson: I have been as generous as humanly possible to the hon. Member for Birmingham, Erdington (Mr. Simon).
A Conservative welfare programme would be about tackling long-term poverty and welfare dependency, and getting people into meaningful and long-term work, not Labour’s bogus schemes to hide the real level of unemployment—
Caroline Flint: Will the hon. Gentleman give way?
Mr. Jackson: No, I have not got time to give way.
The right hon. Member for Birkenhead (Mr. Field) recommended as long as nine years ago time-limited benefits, a local focus on benefit delivery and tighter controls on immigration as ways in which the employment situation and welfare dependency could be tackled. It is a tragedy for this country and for the Labour party that the then Prime Minister did not have the courage of his convictions, think the unthinkable and listen to the right hon. Gentleman, who is a fine man who has done much good work in that area.
I look at national policies unashamedly through the prism of their effect on my constituency, which has the highest level of unemployment of any area represented by a Conservative MP. I am very concerned about that. Some 2,000 young people—26 per cent.—are not in education or training, and that figure has not changed in the past five years. One in seven young people are unemployed. Disability living allowance cases have increased by 39.7 per cent. in the last 10 years. We cannot mend a broken society—
Caroline Flint: On a point of order, Madam Deputy Speaker. The hon. Gentleman was talking about unemployment, but disability living allowance is paid to people in employment as well as those out of employment. That is an important point to recognise.
Madam Deputy Speaker: That is not a point of order for the Chair, but a matter for debate. I have no doubt that there will be further discussion of the issue in the winding-up speeches.
Mr. Jackson: I am sure that a student union debating style is de rigueur in the parliamentary Labour party. It is a shame that when I am talking about key issues that affect my constituents the Minister should follow the lead of the Prime Minister with facile, student union politics—
Madam Deputy Speaker: Order. I suggest that temperate language is used in the Chamber.
Mr. Jackson: We cannot mend a broken society without dealing with the issues, especially fractured families. It may be unpopular to say so, but we must concede that we cannot tackle those problems only through economics: what we need is a moral culture in which people have responsibilities as well as rights. My party has a proud record of progressive incremental social reform and change in the areas that I mentioned, including housing and public health. We will not have a Conservative Government for a while— [ Interruption. ] But we will have such a Government, and it will fall to them to continue that tradition and mend Britain’s broken society.
5.25 pm
John Mann (Bassetlaw) (Lab): I congratulate the hon. Member for Peterborough (Mr. Jackson) on his excellent speech, which was an accurate demonstration of the true feelings of his party. I wish him well and hope that he is promoted to his Front Bench in the near future.
It is helpful for the House to look back at what people have said and analyse why they have said it. I am not someone who stands up and calls for apologies, but I am interested in the evidence for people’s past statements. I want to consider the Budgets and the Opposition responses to them since 1997, and to take specific examples from them. I would be pleased if the Opposition would contribute to the debate by outlining the research on which they based a number of miscalculations in Budget responses from successive leaders.
In 1997, the then Leader of the Opposition stated that
“the cost of employing people with a minimum wage and social chapter will destroy jobs.”—[ Official Report, 2 July 1997; Vol. 315, c. 322.]
We are now in a position to analyse objectively what happened economically, and the number of jobs increased rather than decreased. No economists have given any suggestion that the minimum wage destroyed jobs. It is important to consider whether that was mere political rhetoric, or whether there was an economic analysis behind it.
The importance of that resonates more strongly if we take the example of the 1998 Budget. The then Leader of the Opposition stated that a
“minimum wage ‘risks generating significant levels of unemployment among young people’.”
History demonstrates that the number of jobs increased, rather than decreased, as the minimum wage came in. I will not suggest that the minimum wage created jobs, but no jobs were lost because of it. However, for a second successive Budget the Conservative economic analysis was misjudged. I do not suggest that the Conservatives should apologise for the mistake, because it was a genuine one. However, what is important is the underlying economic analysis that led to it. There was more in the 1998 Budget. The then Leader of the Opposition also said:
“The Government are pursuing employment policies that are likely to destroy jobs rather than create them.” —[ Official Report, 17 March 1998; Vol. 308, c. 1118.]
Again, history has proven that that was not the case as jobs were created after that Budget.
In 1999, the then Leader of the Opposition, who stated that “industry is in recession”, was found to have misjudged what was happening. Industry did not go into recession. He stated that
“forecasts for this country have been downgraded more sharply than in any other country in the western industrialised world”.—[ Official Report, 9 March 1999; Vol. 327, c. 195.]
After that Budget, the British competitive position improved compared with those of our main competitors. The Opposition stated that their expectation was that there would be a downward spiral relative to the rest of world and our major competitors, but the opposite happened. A trend is emerging.
In 2000, the then Leader of the Opposition said that the Government’s economic policies and Budget were creating
“a brain drain in this country”.—[ Official Report, 21 March 2000; Vol. 346, c. 876.]
In fact, the increase in the number of non-doms has meant the reverse. There has been no brain drain, so the Conservative economic projections did not occur.
There was a change of tone in the Conservative response to the 2000 Budget, however. Unlike their responses to the previous three Budgets, the Conservatives commented on general social policy, so their projection was that hospital waiting lists would become longer. In fact, hospital waiting lists went down in the year after the Budget and the position was maintained in future years, so the Conservatives were wrong.
The Conservatives predicted that the 2000 Budget would lead to “extreme damage” to the market in the City of London. In fact, in 2000 and 2001, there was a boom in the City of London relative to world financial markets that consolidated its position as a world financial leader. Again, the economic analysis behind the Leader of the Opposition’s response to the Budget was fundamentally wrong.
Mr. Crabb: I admire the hon. Gentleman’s rational, evidence-led approach to the issues, but if his central point is that the Conservatives got their calculations and analysis wrong Budget after Budget, he must recognise the irony in his speaking from the Benches of a Government with a spectacular record in missing their forecasts and getting their calculations wrong.
John Mann: I shall talk about growth forecasts in a minute. What is uncanny is how accurate the Government’s projections have been, especially on the economy. In social policy it is difficult for any Government accurately to predict what will happen in future, because many factors can influence social policy changes, and general trends can be identified more clearly than specifics, but the Government have repeatedly got their economic analysis pretty much spot-on. I shall set out some of the indicators that demonstrate that point, but I want first to consider the 2001 Budget, when the Conservatives were about to change their leader.
In the response to the 2001 Budget, the then Conservative leader told us that the Government were
“steadily destroying Britain’s competitive advantage. While they have been playing politics with the British economy our competitors have sharpened up their act.”—[ Official Report, 7 March 2001; Vol. 364, c. 314.]
In fact, what happened the next year was exactly the opposite—our competitive advantage improved vis-Ã -vis the rest of the world. Again the Conservative party’s underlying economic analysis was flawed and mistaken—the opposite happened.
There is a pattern, and I shall explain why the Conservatives have been so misguided in their economic policy analysis. In 2002, the Conservative leader said:
“Britain’s ability to compete in the world has slumped...the USA is overtaking us again.”—[ Official Report, 17 April 2002; Vol. 383, c. 598.]
In fact, the opposite happened, so one might think that it would have been sensible for Conservative economic advisers to pull back from some of their predictions. Every year, one of their fundamental, major economic predictions was wrong.
When we hold political debates we do not know what will happen, but in 2007 with the benefit of hindsight we can see what was right and what was wrong. The Conservative response to the 2003 Budget stated that as a result of the Chancellor’s new taxes one in five firms would cut jobs, but in fact the number of jobs grew. One in five firms did not cut jobs; there was no economic basis for the claim.
It is perfectly legitimate to debate what our social priorities should be and I am sure that the main parties will disagree about them—majorly or minorly—but yet again, uniquely, the Conservative party’s economic analysis was wrong.
In 2004, the Conservative leader predicted a downturn, which, by the way, rather conveniently allowed him to predict tax rises in Labour’s third term. In fact, there was no downturn that year, so one began to hear a change of tone. It was claimed that the economic analysis that led to the political projections had been wrong, presumably to demonstrate the Government’s lack of competence. However, when we look back, we see that the Opposition’s claims demonstrated the Conservative party’s lack of economic competence.
In 2005, the Conservatives made a projection about a black hole, and we have heard about that again today. Therefore, those listening to the debate might want to recall that the then leader of the Conservative party said of the 2005 Budget that such were the finances, income tax would have to increase by 3p in the pound and that national insurance contributions would have to increase by 3 per cent. I might have missed that, but I do not think so: it did not happen, because it did not need to happen, as there was no economic downturn.
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