Skip to main content

Welfare Spending

Volume 557: debated on Monday 28 January 2013

The Government have undertaken major reforms to limit Britain’s welfare spending, which over successive years ran out of control. Under the last Government, welfare bills had increased by 60% by 2010, costing every household in Britain an extra £3,000 a year. Last week, the Welfare Benefits Up-rating Bill was passed by this House. It will save £1.9 billion, restoring fairness for taxpayers in the process.

I congratulate my right hon. Friend on the progress that he has made in controlling welfare expenditure, particularly given that under the previous Government, the costs rose by no less than 60%. However, there is always more to do. Will he outline what we are doing to clamp down on welfare fraud?

My hon. Friend is right about the situation that we were left. We are already bearing down on the problem. The figures show that we are making inroads into welfare fraud. Universal credit will have a much better record in this area, because we will be able to use real-time information to check up on who is in work and what they are earning on a monthly basis, rather than having to wait until the end of somebody’s time on tax credits at the end of a year and reconcile the figures over a long period. Under the current tax credits system, £5 billion has been written off as a result of fraud and error, and it looks like another £5 billion will also be written off.[Official Report, 1 February 2013, Vol. 557, c. 8MC.]

As the Secretary of State has said, the previous Government increased welfare spending by 60%. There was not, however, a 60% increase in people getting jobs, or a 60% reduction in child poverty. Does the Secretary of State agree that we should not measure the success of our welfare system by how much we are spending on it?

I agree with my hon. Friend: we should measure our welfare system by how soon it provides support to those who need it and how it supports those who can be moved into a more productive form of life. The previous system trapped people into dependency on welfare with rising bills and, ultimately, a very poor record on child poverty.

I strongly welcome the welfare reforms that the Government are introducing, and I pay tribute to the Secretary of State for the control he is bringing to expenditure. Does he agree, however, that the provision of some of the benefits, and the terms under which they will be received, may need to be reviewed? If the parent of a young child with a complicated medical condition needs to stay in hospital for longer than 84 days, they may fall foul of the carer’s allowance. Will the Secretary of State agree to look at that?

I understand fully what my hon. Friend is saying and, of course, the parent who is caring for a child in hospital has 84 days in which that child may be in hospital. I also recognise what he is saying about broken-up periods in hospital should someone have a condition that takes them back to hospital again. I would be happy to sit down with him, and anybody else, to look at the issue and discuss whether there are ways to rectify it.

I congratulate my right hon. Friend on the reforms he is bringing in. Social mobility and poverty were manifestly not improved by 60% during the previous Government’s regime, although the bill went up by 60%. However, people such as my constituent, Mr Martin Wilsher, who is visually impaired, still have concerns about some of the reforms being introduced. What reassurances can my right hon. Friend provide to Mr Wilsher?

First, as my hon. Friend knows, this is about the disability living allowance and the personal independence payment, and the reality is that DLA will not be included in the changes. More than that, it is important to note that through discussions over the introduction of PIP, a good and warm welcome has finally come from the Royal National Institute of Blind People. After recent discussions it said that the PIP criteria include a number of

“significant improvements for blind and partially sighted people.”

The changes we are making to PIP, after guidance from that organisation and others, will help people such as my hon. Friend’s constituent.

Last week in Westminster Hall Ministers made great play of the savings that the Government might expect from the bedroom tax. In Wales there is a chronic shortage of smaller houses, so why will the Secretary of State not admit that those who are hit by this cruel policy in Wales will have to go into the insecure private sector where rents will be higher and local housing allowance rates will cost more?

What the hon. Lady and her party presided over when they were in power was a complete mess in housing—[Interruption.] It is all very well for Opposition Members to shout like a bunch of discombobulated monkeys bouncing up and down on the Benches; the reality is that their housing benefit record left many thousands of families unable to find housing because they were in a queue, while others occupied housing that had far too many rooms. We have to put that right, and that is what we are doing. The Labour party never did that when it was in government.

Although I am not a vindictive person—at least, I hope I am not—I would like to see the Secretary of State and his colleagues, plus the Prime Minister and the Chancellor of the Exchequer, try to live, just for six months, on the income of those who have been adversely affected as a result of the cuts carried out by the Government over the past two years. Try and live on that sort of income; see what it is like not having any recourse to private income.

I have known the hon. Gentleman for a long time, and the reality is that none of these decisions is taken lightly by this Government—indeed, any Government. I remind him, however, about all those people who, because of the mess in which the previous Government left the finances, have found themselves out of work or with incomes falling. When he talks about vulnerable people, it is this Government who have increased the pension and made it better for some of the most vulnerable people in society.

Under the current rules, citizens from some eastern European countries are entitled to housing benefit and working tax credit, but not to income-related jobseeker’s allowance. Will the Secretary of State set out for the House what the position of these people will be once universal credit, which will wrap all the benefits up together, has been introduced?

It is our intention to try to ensure that under universal credit the loose access to benefits that has been enjoyed by far too many people coming into this country who have no right to them will actually be limited. I will be able to brief the House much better on that as and when we complete the rules on it.

Obviously the Secretary of State has made mention of the benefits uprating being capped at a 1% increase. Has he had any discussions with the Chancellor of the Exchequer about what that will do to growth or about the impact that it will have on the economy over the next three years?

I have lots of discussions with the Chancellor on a regular basis, all very amicable. Of course we have to discuss this in a wider context, but the hon. Gentleman and his party look at this in a very narrow context. They say, “Well, you withdraw this money from people on benefits and that immediately has an effect on the high street.” If that were all that we were doing, I would agree with him, but it is not. There is a major programme for investment in industry and a huge capital spending programme, not least as will be announced in a statement later today. These will have an even bigger effect, in a positive way, on spending in the high street.