Treasury and Work and Pensions

We come to the end of the final day of debate on what will be the Prime Minister’s final legislative programme. I am glad to see the Secretary of State for Work and Pensions in his place; I am sorry that he could not join us for more of the debate. There is a certain poignancy in his winding up this debate, because he is probably the most ultra-Blairite member of the Cabinet. Depending on which way one looks at it, he is either the most honest in expressing his view or the least nimble at repositioning himself for life under the clunking fist regime coming soon. The good news for the Secretary of State is that I have calculated that if he can hang on to his job for another 22 days, until the House rises, he will have surpassed the career average of his four immediate predecessors. The bad news is that no one is betting on his luck lasting much beyond that. Things have come to something when Conservative Members are wary of quoting a Cabinet Minister’s description of the Chancellor for fear of being rebuked for the use of unparliamentary language. We have had what can be described as a wide-ranging and extensive debate this evening, the highlight of which was the first outing of the big clunking fist since its baptism by the Prime Minister the week before last. It clattered in like a medieval war engine, and my impression was more of clunking than of fist. It looked like a bit of a primitive weapon against the rapier that my hon. Friend the Member for Tatton (Mr. Osborne) plunged into the Chancellor’s record. The Prime Minister has been promising welfare reform since 1997. The Bill that has carried over into this Session is the first sign of any serious attempt to deliver on that promise, so I will not be complaining, as some of my colleagues have had cause to do from this Bench over the last few days, of a sense of déjà vu surrounding the measure—quite the opposite. I cannot say the same about the child support Bill. We do not yet know the detail of the Government’s proposals, but we do know that they amount to an admission of failure of the 2003 reforms, in which the Government have squandered £500,000 of taxpayers’ money on a failed computer system. There are now 1.4 million families trapped in the misery of the Child Support Agency, and every Member of the House knows exactly what that means from their constituency experiences. If the Secretary of State is looking for cross-party support on CSA reform, his proposals will have to address the plight of those already in the system as well as new claimants, because we will not support any solution that denies a just and fair outcome to those 1.4 million families. We have supported and will continue to support the Government’s objectives in the Welfare Reform Bill. I hope that the Secretary of State, when he winds up the debate, will acknowledge the constructive contribution from my hon. Friends in the Committee proceedings on that Bill, which are ongoing. Similarly, we welcome the key changes to the state pension system which we expect to be introduced in the pensions Bill when it is published—tomorrow, I believe. We welcome the re-establishment of the earnings link, a policy on which we fought the last election, and the changes to the contribution rules and caring credits, which will address the unfairness suffered by women pensioners in the present system. All of that will be paid for by asking people to work until they are 68. Both those measures—and, indeed, the reform of the child support system—have the potential to contribute significantly to the anti-poverty agenda, but both require the creation of significant numbers of net new jobs, because both aim to achieve their objectives through a focus on work. That is the right focus for the British economy and for a sustainable and permanent reduction in poverty. An effective attack on poverty requires an attack on the causes of poverty and, for those who can work, work is the sustainable route out of poverty. However, as my hon. Friend the shadow Chancellor pointed out this afternoon, the backdrop to such work-focused policy initiatives does not look terribly encouraging. Unemployment is at a seven-year record and rising. Long-term youth unemployment, which according to the Prime Minister as recently as September has been eradicated on the planet he inhabits, stands at 175,000 in the world where the rest of us live. Productivity growth has halved, and Britain is sliding down the international competitiveness league tables. All that makes the targets on reduction in claimant numbers, on increase in work force participation and on delayed retirement much more difficult for the Secretary of State to achieve. I am sure that that thought gives the Chancellor many sleepless nights. We will not support the abandonment of the 2.7 million people currently on incapacity benefit. The shocking truth is that the Secretary of State plans to reduce the number of claimants almost entirely by stemming the flow of new claimants. Almost none of the intended reduction will be achieved by people coming off long-term benefits and going back into work. The Secretary of State says he has not got the money for a more extensive roll-out of the pathways to work programme. We appreciate the need for fiscal discipline, but there is a way to roll out pathways for the benefit of existing claimants without risk or cost to the Treasury by inviting the private and voluntary sector providers, who are negotiating for contracts under the Secretary of State’s programme, to take on existing claimants at their own risk. No result, no payment. The providers say they could do it; 1 million existing claimants say that they want it. It is a win-win option for claimants, for taxpayers and for the economy, so why is the Secretary of State not pursuing it, rather than turning his back on existing claimants? The Government's central poverty focus has been children, and rightly so. Tackling child poverty is the key to breaking the cycle of poverty, which from generation to generation becomes entrenched, not just as material poverty but as a poverty of hope and aspiration. However, figures published by our social justice policy group last week showed just how shallow the Government's achievements are. Their targets are focused on households that have less than 60 per cent. of median earnings, so the Government's efforts have been equally focused on moving those just below that line to just above it.