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28 Jun 2010 : Column 614

Yvette Cooper: My hon. Friend makes an important point, and I am happy to accept an intervention from the Secretary of State if he wants to clarify the position, because he did indeed discuss pensioners who under-occupy homes across the country. It is right that we help and support people who want to move to smaller homes as they grow older, but he needs to give us an answer. If he is telling elderly people and pensioners that they are going to have to move out of the home where they have lived all their lives, and where they have brought up their children, that has severe consequences. He must clarify his position, because my hon. Friend is right.

Simon Hughes: The right hon. Lady's attack appears to be that the measures introduced by the Government are ideologically driven-something that is difficult to justify with regard to my right hon. Friend the Chief Secretary to the Treasury; the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb); and others, who have a record of campaigning for the poor and disadvantaged. Might not the same fallacious argument explain why, for 13 years, the Labour Government never linked pensions to earnings? Was that an ideological option? I hope it was not but if it was, the right hon. Lady cannot make the argument, because it is fallacious.

Yvette Cooper: The hon. Gentleman is right that there are many members of the Government who have indeed campaigned against poverty for many years, which is why their betrayal of the people whom they have stood up for is shocking. He will recall, too, that it was the Labour party that legislated and changed the law to restore the link with earnings. He should look rather carefully at the increase that, in practice, pensioners will receive over the next few years compared with the old standards. He will find that the new proposals are rather less generous than they appear at first sight.

Chris Bryant: Is there not also a real danger that the Government are presenting us with a straw man on housing benefit? In many of the constituencies that have the biggest problems in the land in trying to get people into work, it is not a question of people being paid more than £400 or of their living in houses that are too large, but of people living in houses that are not large enough and not looked after well enough by unscrupulous landlords. What we need to do if we want to help young people to grow up in households where there is work is to give them real opportunities to work.

Yvette Cooper: My hon. Friend is right that the key is helping people into jobs, yet the Budget cuts the number of people in work, increases the number of people on the dole, cuts the help for people to get back to work, as well as cutting the income of carers and the severely disabled, cuts help for kids, and hits the elderly with a VAT hike. Nothing in the Budget will get a single extra person back to work. Instead, it cuts the number of people in work.

Kwasi Kwarteng (Spelthorne) (Con): To what degree does the right hon. Lady believe that the previous Labour Government were responsible for the massive budget deficit that we face?

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Yvette Cooper: We have been through the greatest global recession for many generations. That has had an impact on economies across the world, pushed up unemployment across the world, and pushed up borrowing across the world. We think it was the right thing to do to increase borrowing in response to the recession. That is why unemployment in this recession has been about 5%, compared with 10% in the recession of the 1980s and 1990s. Helping more people back into jobs has saved us money and also helped to put borrowing in a stronger position.

Minister after Minister has tried to pretend that this is a fair and a progressive Budget. The Liberal Democrats are clinging to the fig leaf of their increase in personal allowances, despite the fact that it is more than blown away by the hike in VAT. The Prime Minister said last year about VAT that

That, then, will be why the Government have cut council tax, cut income tax and increased VAT to pay for it. As the Institute for Fiscal Studies made clear, the Budget is regressive, no matter how many times Ministers try to pretend the opposite.

Bob Russell: Does the right hon. Lady agree with the study by the Fabian Society and the Webb Memorial Trust that shows that 20% of the population is living in poverty? Talking about betrayal and 13 years of Labour Government, the inequality in Britain today, on some measures, is at its highest since the early 1960s.

Yvette Cooper: As the hon. Gentleman knows, the level of child poverty is some 600,000 lower than it was in 1997 as a result of the action that the Labour Government took. He also knows that we deliberately made the measures of poverty by which we were judged relative measures. Of course, that makes matters harder as the economy grows, and of course there is always more to do. That is why we believed it was right to do more to help the poorest and those who were struggling-in contrast with this Budget, which does the opposite. Pensioners do not get the income tax cut, but they have to pay more in VAT. Those on the lowest incomes do not get the income tax cut, but they have to pay more in VAT.

The Ministers are like fraudsters in the fairy tale, telling gullible Liberal Democrat MPs about the beautiful progressive clothes that the emperor is wearing, if only they are clever enough and loyal enough to see them. Liberal Democrats are clinging desperately to shreds of invisible cloth, reaching deep into their Liberal and Conservative history to pretend that they can be progressive now. They are claiming that Keynes might have backed the Budget. They are calling on Beveridge for support, kidding themselves that they can call on their history and that they are following in the footsteps of great liberal Conservatives like Winston Churchill, who supported the minimum wage, but the truth is that the emperor has no clothes.

The truth is that if we look at the detail, the Budget is nastier than any brought in by Margaret Thatcher. Instead of Churchill, Keynes or the founders of the welfare state, the Liberal Democrats have signed up, with the Secretary of State for Work and Pensions and
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his Chancellor, to cut support for the poor. It is perhaps apt that in this week of World cup disappointments, it was a footballer who got it right. In 2002, after England were defeated in the World cup by Brazil, Gareth Southgate reflected ruefully on England's performance and said:

That is the reality for the Liberal Democrats now. With all their high hopes, they have betrayed the poor and the vulnerable, whom they stood up to defend.

The Minister of State, Department for Work and Pensions (Steve Webb) rose-

Yvette Cooper: I will give way to the hon. Gentleman because I know he has a history of supporting people on low incomes. I do not know why he is betraying it now.

Steve Webb: I am grateful to the right hon. Lady. Will she confirm a fact for us about the pension rise that she pencilled in for 2012? Whereas we have guaranteed a minimum of 2.5%, can she confirm that her spending plans proposed a pension rise below 2.5%?

Yvette Cooper: As the hon. Gentleman knows, the old uprating rules are that the pension should go up by either RPI or 2.5%. If he had stuck to those old rules, pensioners would be better off in 2012, 2013 and 2014. As he also knows, all parties supported restoring the link with earnings in the next Parliament, but his proposals cut the support for the additional pension for 6 million women and 4 million men by £100 a year, as a result of his upratings by CPI, rather than RPI.

Steve Webb: As a new Minister, I have had to reply to many letters complaining about what the previous Government did. One of things that people complain about is the freezing of the additional pension by the right hon. Lady's Government in April 2010. Can she confirm that under our CPI policy, the pension would have gone up in April 2010? Can she confirm that she froze that pension for millions of people?

Yvette Cooper: The hon. Gentleman will struggle to defend his progressive history if he quotes selectively from the figures. He knows that the Budget sets out the additional cuts and savings that he will make from benefits, tax credits and public service pensions from the switch to CPI indexation from 2011-12, which includes, as he well knows, the additional pension and much additional support for pensioners-and which he hid from pensioners on Budget day. That will lead to cuts of £1.17 billion in 2011, £2.2 billion in 2012, and £3.9 billion in 2013.

Perhaps the hon. Gentleman should also consider this: he had his negotiations with the Conservatives about the personal allowance that they were so keen on, yet they failed to consider extending that personal allowance increase to pensioners. They left pensioners out. If he really cared about pensioners, he might have increased the personal allowance for pensioners. As a result, all the pensioners across the country do not benefit from the increase in personal allowance, but they will pay hundreds of pounds extra every year in VAT-an increase that members of his party opposed,
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campaigned against and shouted about in the run-up to the election. Where are their principles now? Now they are ditching all those commitments and all those principles because they are happy for pensioners to pay hundreds of pounds a year more in VAT.

Ian Swales (Redcar) (LD): Can the right hon. Lady remind me, a new Member, which Government it was who gave pensioners a 75p a week increase?

Yvette Cooper: I do not think that was right. That is why it was right to increase the support for pensioners, to increase the winter fuel allowance and to bring in a floor, so that never again would pensioners face such an increase.

Members on the Government Benches jeer and call, but what are they going to do to the winter fuel allowance and to free bus passes? They are already briefing the newspapers that they plan to cut the winter fuel allowance and free bus passes, and that that is needed to protect the police and public services. I invite the Secretary of State to intervene and to confirm that he will make no cuts in the winter fuel allowance every year for the next five years.

Mr Duncan Smith: I tell the right hon. Lady that the coalition gave a commitment. We are paying the winter fuel payment.

Yvette Cooper: I hope that meant for this year, next year and future years. [Interruption.] The right hon. Gentleman says that he is paying the winter fuel payment in full. It is not clear, however, what he thinks the full level is. Perhaps he could make the same commitment about free bus travel. Will he stick with free bus travel and not cut it for the next five years?

Mr Duncan Smith: I shall tell the right hon. Lady what I am going to do. I am going to answer questions when she answers this question: what would she have reduced with a £45 billion requirement on her head to cut the deficit? Until she owns up and answers that question, she has no right to ask us any more.

Yvette Cooper: The right hon. Gentleman has gone £40 billion further. He has proposed an additional £40 billion of cuts that we do not think are the right thing to do. He asks what we would have done, but I am sure that he has read chapter 6 of the March Budget, which sets out £20 billion of saving cuts in some detail and a further £19 billion in tax increases. I shall tell him what else we would not do: we would not waste money on measures such as free schools and the married couple's allowance.

Nothing in the Government's plans will get a single extra person back to work. In fact, the opposite is true. The Budget cuts the number of jobs in the economy by 100,000 a year. It increases the number of people on the dole by up to 100,000 a year, and that is on the admission of the experts the Government appointed. At the same time, the Government are cutting 200,000 jobs and training places and the youth guarantee and job guarantee schemes. How on earth will they get more people into work if they keep cutting jobs?

Mr David Anderson (Blaydon) (Lab): Does my right hon. Friend share the concerns of the Royal College of
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Nursing, which, in relation to a Department that allegedly is protected, suggests that at least 5,500 and, possibly, as many as 30,000 front-line nurses' jobs will go?

Yvette Cooper: My hon. Friend is right that the Government's proposals do not even include the consequences of the spending review and the proposed additional £17 billion of cuts in public services.

We think that it is better for people to be in work than on the dole, and that is why we funded the future jobs fund and additional support and jobs. They were often in the community and run by the voluntary sector, and they helped young people to obtain the skills that they needed and to stay off the dole. Yet, shockingly, the Government have cut 90,000 jobs through the future jobs fund, putting all those people-additionally-back on to the dole and pushing up unemployment bills. As a result, even on the OBR's calculations, those measures will cost the Government £2 billion more over the next four years. They will have to pay additional benefits for the unemployed, and the financial, economic and social price of higher long-term unemployment will cost us more for years.

Mr Edward Timpson (Crewe and Nantwich) (Con): Will the right hon. Lady give way?

Yvette Cooper: I want to make some progress before I do.

The Secretary of State also said that he wants to make work pay. Yesterday he told Sky that there are marginal tax rates of 90p in the pound for some young people, that that was regressive and that he wanted, first, to change the system so that they are able to keep more of their own money. But, page 69 of the Red Book shows that as a result of the Budget an extra 20,000 people will lose more than 90p in the pound.

We agree that housing benefit needs reform, and we brought forward some measures in the March Budget and introduced a consultation paper last December to set out our proposals. We agree also that we have to stop some of the most excessive rents being paid, and that we should exclude some of the highest rents in every area. However, we should also consider how we provide more security and payments for people moving into work, so that work incentives are improved. There is a strong case for linking housing benefit to tax credits in the longer term, but the Government's proposals do not set out any reforms; they set out only cuts, and destructive ones at that. Their plans cut almost £1.7 billion a year from housing benefit, and there is no analysis of how many people that measure will push into poverty or homelessness.

Mr Slaughter: There are clearly no poor people left in Southwark-certainly none on housing benefit, or the hon. Member for Bermondsey and Old Southwark (Simon Hughes) would not have the temerity to support the Budget. However, there are poor people in Hammersmith, Islington, Westminster and Kensington, so does my right hon. Friend agree not only that it is wrong to force thousands of families out of London, but that such measures will do nothing to get people into jobs, nothing for family break-up figures and nothing for community cohesion in London?

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Yvette Cooper: My hon. Friend is right that those proposals will have an impact on families and on entire communities. Almost £1 billion will be taken from tenants in the private rented sector-almost 20% of their support. If tenants have on average 20% of their payments cut, how many of them does the right hon. Gentleman think will really be able to carry on paying their rent? People in Wakefield will lose £20 a week; people in Barking will lose £40 a week; and people in Broxtowe will lose £30 a week. That is before they face the cuts in tax credits and the hit from extra VAT.

Glenda Jackson: The Secretary of State cited a four-bedroom house in the private sector. My constituency is served by two local authorities, and in Brent the medium price for a four-bedroom house is £450 a week. In Camden the medium price is £1,020 a week. Currently, 42% of people claiming housing benefit in Brent and 18% of people doing so in Camden are in the private rented sector. That represents a sizeable number of families who will clearly lose their homes under the current Government.

Yvette Cooper: My hon. Friend is right to raise concerns, particularly as many people who receive housing benefit are in work. They work hard, are in low-paid jobs and cannot afford to pay their rent without the extra help that housing benefit brings. So, the Government's measures will hit people who work hard to support their families and make ends meet. They will find the rug withdrawn from under them.

I am particularly concerned about the combined proposals for lone-parent families, and I ask the Secretary of State to look at them, because he says that lone parents with five and six-year-olds will move on to jobseeker's allowance and have to look for work. However, his own documents, which were provided at the same time as the Budget, assume that only 10% of those lone parents will leave benefits because of the risk they might be less work ready or need more time to find a suitable job that fits with their caring responsibilities.

Many lone parents need additional support to find work that fits school hours, but as a consequence of these proposals about 90% of them will still be on jobseeker's allowance one year later, at which point they will suddenly be hit by the right hon. Gentleman's 10% cut in housing benefit. Lone parents with young children might work really hard to find a job that fits school hours, but suddenly an average of £500 a year will be taken from their incomes because they cannot find work and because, as a result, he wants to cut their housing benefit. That is deeply unfair on families who might work really hard to try to make ends meet. What does he expect people to do? Hundreds of thousands of people will struggle to pay their rent, and parents will have to move house, shift their kids out of school, move long distances and break up communities in order to try to find an affordable home.

Emily Thornberry: Given that the Secretary of State seems to think that we are exaggerating the position, does my right hon. Friend agree that it might be a good idea if he spent a morning with me visiting some of the Islington families who will be profoundly affected by those changes to housing benefit?

Yvette Cooper: That is a very generous invitation, which I shall pass on to the right hon. Gentleman.

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