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I want to talk about the social fund. First, let me say that I am a Labour and Co-operative Member of Parliament and, as such, a long-standing supporter, member and promoter of the credit union movement. I
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am therefore pleased by the recognition that credit unions could have a role to play in providing the social fund. That is an acknowledgement that credit unions are community-based financial organisations that often serve the elements of local populations that are unable to access financial services from other providers. It is certainly possible that they could play a role. However, I could not stand here and say that credit unions provide a comprehensive and possibly better service than we have currently. We must recognise that this is both a challenge and an opportunity. My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) said that credit unions are accessed by only a relatively small proportion of the total electorate; in fact, it is about 700,000 people. Inevitably, therefore, such a service provided by credit unions alone would be subject to a postcode lottery, even if one accepts that they are likely to be embedded in communities that are perhaps more likely to use the social fund than others.

I am pleased that the Minister has nailed the canard about the interest charged on loans from the social fund. We are talking about financial institutions, albeit small and often operating on small margins, that have to survive, so there is the issue of what sort of payments the Government would make to credit unions for operating this facility.

Mr. James Clappison (Hertsmere) (Con): The hon. Gentleman is making a considered and well informed speech, but he refers to that idea as a canard. The canard actually comes from the Government’s own consultation paper, the back of which refers to charging social fund recipients interests. It sets out the impact of that and how social fund recipients would end up paying more under the Government’s proposals.

Mr. Bailey: With respect, a consultation paper is not the same as a policy proposal. I think that the Secretary of State comprehensively rebutted the idea that the hon. Gentleman refers to in earlier exchanges.

Mr. Clappison: Will the hon. Gentleman give way?

Mr. Bailey: I will not give way again, because other Members are waiting and I want to develop my argument.

The exercising of the social fund by credit unions would benefit both the Government and the unions themselves. With the right financial arrangements it could undoubtedly provide people with a more sensitive and community-based service and help the expansion of the credit union movement. The Department for Work and Pensions must work with other Departments so that there is a joined-up approach, to coin a phrase.

Credit unions need offices if they are to deliver such a service. Post offices provide a possible network of offices, and we should think about that in deciding on the future development of the post office service. The work could even be carried out in Jobcentre Plus offices, complementary to the other services that they provide. If a network could be set up, there would be a whole range of other challenges in ensuring that the necessary financial support services could be provided. My hon. Friend the Member for Warwick and Leamington expressed some original and innovative ideas about that, and I cannot help thinking that if the Government were to take those up and work with the credit union movement,
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there would be enormous potential to develop a more consumer-sensitive process, better financial support and better exploitation of the available Government resources.

Above all, there is the second potential beneficial impact. By using the loan fund facility, engaging with a financial institution and developing the saving habit, more people from hitherto financially excluded communities will become more economically resilient in future. One of the Government’s objectives is to get more and more people into the saving habit and to develop financial education, and that is a potential long-term spin-off of my suggestion.

I conclude by emphasising that the thinking behind the Bill is still only embryonic, and that pilots are needed. Judging by the proposals in the Bill, however, they will be implemented. I would like the Department to work with other Departments to take on board the implications of this suggestion and ensure that they back moves to develop the credit union movement in providing the social fund. That would be to the benefit of the policy in question and a whole range of others.

9.3 pm

Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): I rise to support the general thrust of the Government’s proposals. It was noticeable that the main Opposition party also felt that now was the right time to pursue them. I was immensely disappointed that the nationalists seemed to be the only people who said that we should not be trying to ensure that many of our people are not left behind at this difficult time. The Liberals might have said that—I have heard their spokesman before, and I always find myself losing the will to live, so I had to leave the Chamber. It was certainly noticeable that the nationalists were prepared to abandon those people. I welcome the suggestion of the hon. Member for Glasgow, East (John Mason) for a minimum wage of £7. I support £7.50—you get more with Labour. However, it is false of the nationalists to pose an increase in the minimum wage against whether we should try to get people into work. It is possible to campaign for both, as I do. The hon. Gentleman is nodding—I hope that he will endorse that and campaign with me in future on those matters.

I do not want to spend all my time praising Government policy—plenty of people here who want a job will do that. I want to consider matters about which the Government are not doing enough, especially challenging behaviour. I regret that their action on drug addicts is not extended to cover those who abuse alcohol. We have an opportunity to raise several questions about addiction and challenging behaviour. We must also examine aspects of the Department’s behaviour, especially the way in which non-judgmental positions can contain moral hazards. An example is not making judgments about how some people become disabled. Several outraged citizens in my constituency recently approached me to tell me about one particular gentleman, who can no longer use his legs because he has injected so many drugs into them that they have collapsed. Consequently, he has gone on to the higher rate of mobility allowance and now drives a better car than the vast majority of decent constituents who have worked all their lives. There is something wrong with a system that rewards that sort of bad behaviour. The Government should pick up those questions.


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Like most of my colleagues, I accept that voluntary participation in schemes such as those that we have discussed is best, if that can happen. However, substantial numbers of people are clearly not willing to participate voluntarily. Earlier today, I had a discussion with somebody who asked, “Should people have the right to say no?” Yes, people should have the right to refuse to participate, but they should not have the right to say no, not participate and get my constituents and me to pay taxes to keep them in that condition. The majority of my constituents would take that view. They do not mind paying for those who are genuinely in need, but they are not willing to contribute from, in many cases, their low incomes to those who are seen to abuse the system.

Let me consider compulsion or coercion and the provision that we make for those we wish to direct to participation. My right hon. Friend the Member for Birkenhead (Mr. Field) was a bit soft in pursuing some of the issues related to the community programme. I participated in running a community programme, as did my right hon. Friend the Member for Stirling (Mrs. McGuire). Its merits—what it did for the community, for individuals and the way in which that was linked—were enormously helpful and constructive at the time.

The Government should consider having community programmes for three groups of people. First, the innumerate and illiterate need to be involved in work experience that is relevant to teaching them numeracy and literacy. Secondly, substantial sections of youth are essentially emotionally illiterate. They have no work experience, have not been brought up in anything that anybody would describe as an appropriate family atmosphere, and many have not had adequate male or female role models. They need to be in a sheltered, semi-working environment to be given a pattern of life for the future. The third group is especially vulnerable and is much more prevalent in my constituency than I am happy to admit—it comprises ex-prisoners. There is a vicious cycle of people failing in the school system, leaving school, getting into crime, going to jail, coming out and then going back to jail. The system does not adequately deal with their educational needs.

Earlier this evening, I was on a programme about the Bill on BBC Scotland. As many of my Scottish colleagues appreciate, the BBC has a one-dimensional view of such matters. It always looks for a way in which to identify a problem between Holyrood and Westminster and to consider issues from that perspective. It was made easier for the BBC because the nationalists were unable to provide a Member of Parliament to participate, even though three of them were sitting here like craws on a dyke while the programme was on. Two others appeared later, so they are obviously alive. However, the fact that no nationalists were available at the time did not prevent people from saying that there were difficulties in Scotland about the application of this programme. These are issues that we need to take up with the Scottish Government. The speaker on behalf of single parents made it clear that child care provision was an issue. She argued that Scotland’s provision was inadequate, compared with that in England and Wales. That needs to be addressed, as does the question of drug and alcohol treatment. We need to ensure that Westminster and Holyrood work together on these issues.


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I do not accept the line that there is not enough money in Scotland. What is lacking is will and political commitment. What sort of Scotland do the present Scottish Government wish to create? As I understand it, they are about to spend £20 million buying a Titian painting for the nation, giving it to a tax-dodging duke, at a time when they are also saying that they have no money for provisions such as these. That calls into question their priorities and their commitment to ordinary Scots, particularly when the tax-dodging duke is the Duke of Sutherland, whose family gave us the highland clearances. It is inappropriate for the Scottish Government to say that they have no money in such circumstances—

John Mason rose—

Mr. Davidson: If the Member wishes to come in, he should please do so.

John Mason: The Member asked what kind of country the Scottish Government were looking for. Would he accept that they want a more caring country than the UK Government apparently want?

Mr. Davidson: No, I do not accept that for a moment. It depends what we mean by caring. I do not believe that abandoning people in the kind of slough of despond that the Tories left them in during the last recession will actually help people. I do not believe that not challenging alcoholics about their behaviour, even when they have children, is particularly caring. Similarly, I do not believe that not looking after drug addicts particularly well is caring. If I did not have a shortage of time, I would go on to lacerate the Member a bit more. The reality is that he reflects the view of Scotland held by people such as Sean Connery, who will do anything for Scotland except live there and pay taxes in that community. They think that we are all couthie and kaleyard, and that they do not have these problems. They think that caring means washing their hands of people’s problems.

I am happy to say that the United Kingdom Government are not doing that, and that we are going to challenge people. There will be some bleeding hearts who will complain and, I have to admit, there will also be some cases in which the Government will get it wrong and have to take corrective action. I hope that there will be sufficient flexibility in the system to recognise mistakes when they are made and to correct them. I am much more prepared to accept a few mistakes being made and then corrected, than nothing being done at all.

Mr. Stewart Jackson (Peterborough) (Con): The hon. Gentleman’s attacks on the previous Conservative Government would carry more weight if he were to acknowledge that there had been 62 quarters of economic growth, most of which were under his Government, and that his Government had presided over the importing of 1 million low-skilled workers from eastern European countries, while at the same time presiding over 5.1 million people becoming entrenched in poverty on out-of-work benefits. Should he not address that issue before criticising the former Conservative Government?

Mr. Davidson: I am happy to criticise former Conservative Governments, largely because it is so easy, but perhaps that is an example of sloppy thinking on my part.


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I want to raise two other points. The first is the question of accountants. The Government must be much more rigorous in pursuing the professional associations and the activities of those accountants who are clearly engaged in manipulating their clients’ affairs in order to allow them to avoid paying their share of parental maintenance for their children. We ought also to consider introducing a better standard of investigation in some cases, as well as a degree of publicity. There are perhaps a few absent fathers for whom the reintroduction of the stocks might be considered appropriate.

The final point I wanted to make—on the question of inward migration—has just been made. If we are to avoid damaging community relations, our migrant community must be integrated here at the same time as we take a more realistic view about population flows. We cannot continue to have vast numbers coming into this country from eastern Europe and elsewhere; we need restrictions, which have to be part of the whole. If we do not want community tensions, there have to be limits, so I am happy to support the Government tonight.

9.15 pm

Ms Katy Clark (North Ayrshire and Arran) (Lab): It is a pleasure to follow my hon. Friend the Member for Glasgow, South-West (Mr. Davidson). He will not be surprised to hear that I do not agree with everything he said, but as so often, he highlighted some of the central issues in the debate, as well as some of the groups that are in most in need of support by the Government at this time.

The Secretary of State said in his opening remarks that the Bill was about transparency. As with other pieces of welfare legislation, one problem is that many of the steps that will be taken are not actually built into the Bill; we often find that they come later by way of regulation. One of the risks with such enabling legislation is that Governments of a different political persuasion will also be able to bring in regulations through the same mechanism at a later date, which Parliament would not be willing to vote for now.

The Bill is of great significance to my constituency and, I believe, many other constituencies like it. I represent an area that has not really recovered from 18 years of Tory rule, as we have some of the highest levels of unemployment in Scotland. Over the 20 years of Tory power, we saw large industry after industry closed. There used to be an ICI plant in my constituency that employed 17,000 people in the 1980s, yet by Easter this year only 200 will be working there. There used to be steelworks employing thousands of people in my constituency and that of my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne). When I was at school, 10,000 people worked at the Killoch pit in south Ayrshire: those jobs have gone and in their place we have had only small industries and service sector employment.

Despite significant increases in employment in my area since 1997—more than 25 per cent. more people are in employment now than they were then; even since 2003, more than 1,000 more jobs are available in my constituency, despite some quite worrying employment figures over the course of last week—we face the difficulty that employability and skills are a major problem. The
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proposals that hon. Members have spoken about today are absolutely vital in constituencies such as mine. I have to say that the sentiments and words used by so many hon. Members about the kind of support they believe should be provided to those who need to get back to work are exactly the sort of initiatives that we need. Many such initiatives have borne real fruit over the last 10 years.

When my constituents go into their Jobcentre Plus office, they tell me that the experience they receive and feel is not such a positive one—and I find it difficult to believe that it will be much different in other parts of the country. It is a difficult time for them, not necessarily through any fault of Jobcentre Plus staff, as they do not necessarily have the resources they need to provide the personalised assistance that so many Members have spoken about. We have to incorporate that aspect into our debate and be real about the situation we face and the kind of people we are dealing with.

It was interesting to note that some of the comments made by my hon. Friend the Member for Glasgow, South-West took us back to debates that some of us hoped had been left behind many decades ago—the concept of the deserving poor, for example. The whole idea of the welfare state and the benefits system was that it should provide a safety net, and it has done that. I do not accept the notion that the safety net has simply been a trap for people. I believe that it has been a liberation for millions of people, particularly women who, for the first time ever, have been given financial independence. We should emphasise that regularly, and not allow the welfare state to be talked down.

Because time is short, I shall confine myself to three aspects of the Bill. The first is the “working for your benefits” scheme, which is linked to the general question of whether the purpose of benefits is to provide an absolute minimum to ensure that people do not live in squalor and poverty. I think it important for us to restate our belief that that is essential, that it is not acceptable for us to throw people on to the scrap heap even if they have not behaved in a particularly deserving or responsible way, and that it is unacceptable for society as a whole not to take collective responsibility for every member of society.

Some of the concerns about the language in certain parts of the Bill, and about regulations that may result from it, relate to when sanctions will be used. Particular concern has been expressed about those with responsibility for young children. I consider it unacceptable for sanctions to be imposed on the parents of younger children who are unable to carry out the work-related activity proposed in the Bill. The only effect would be an increase in poverty among both women and children. Given the huge amount of work that the Government have done in trying to meet our child poverty targets, that would be a step backwards. The fact is that not every member of society is as able to cope as others. Society contains many vulnerable people with chaotic lives, and we need a benefits system on which they can rely.

Another issue that has been raised is that of lone parents. There are 1.9 million single parents in the country, but they cannot all be lumped together. They are very different types of people who just happen to be single parents, and they should all be treated equally and fairly. Society owes it to them to support them in the work they are doing in bringing up children.


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I shall raise only one more issue, given the shortage of time: the privatisation of the public sector and the welfare state and, in particular, the externalisation of providers of the social fund, which is an emergency provision used by many people in great difficulty. We ought to question whether it is appropriate for loans of that nature to the poorest members of society to be handled by companies seeking to profit from such work. There is a risk that, given the nature of those companies, they will go about the process, particularly the process of recovering the moneys, in a very heavy-handed manner. There is real concern about that proposal, and I ask Ministers to consider it again over the coming weeks. Those who work in Jobcentre Plus have had a huge amount of training and are well aware of the needs of the most vulnerable people, and I believe that to take their work away from them and put it in the hands of private contractors would be to take a huge risk.


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