Baroness Patricia Hollis of Heigham Speech to House of Lords, Second Reading of Welfare Benefits Up-rating Bill 11 February 2013

Usually one can say something half way decent about some aspect of any social security bill. I think for the first time in some 20 yrs of social security bills, I can find nothing good to say about this bill at all. Nothing. It is simply a lock-in cuts bill, which to save 3b, will send a million poor children, into deeper poverty by 2020, so that the better off among us, including myself, are spared a tax rise. And while millionaire earners actually have a hefty tax cut, curiously also worth 3b. Why do I, why should we, oppose this bill? Simple really. To start with, it's entirely unnecessary. We have always had annual upratings, to respond to inflation. Now we have a 1% rise for the forthcoming year, and a bill continuing that a further 2 years. Why? The only defence offered by the impact analysis is certainty for the financial markets, the public and the recipients themselves. Certainty? Even if Government cruelly ignores inflation which the OBR believes will be almost 4% in 2015/16, benefit spend will still depend on the future number of claimants as well as on the level of their benefit, so exactly how can government give certainty to the markets? And that nice touch, certainty for the recipients who will no doubt be pleased to learn that their benefit cuts are guaranteed for the next 3 yrs. No, it's to lock in these benefit cuts for the poorest in preparation we presume for a further raid on social security benefits later. After all, if our solicitous concern for the markets and the public was driving this bill, we would offer the same certainty to tax payers for the next 3 years frozen tax allowances (no more LD raising of the thresholds, with the very real uncertainty that causes for NEST and auto-enrollment)), frozen tax rates ( no pre-election hand outs.) No the Chancellor wants to lock the poor into their cuts, while being free in an election year to adjust the taxes that fall on the rest of us. The spin surrounding this bill is deliberately and unpleasantly misleading. Suggesting that these cuts fall on the undeserving poor - so thats all right then. The ones with closed curtains. Its not all right, but in any case, it's completely untrue. We had the distinctly ugly spectacle of Ian Duncan Smith press releases while this bill progressed through the Commons, implying that these benefit cuts were morally and not just financially. Desirable, that they would help to wean the poor off benefit dependency, as though they were addicts waiting for their next benefit fix, rather than loving and responsible parents trying desperately to feed their children.

When IDS knew, as we all did, that 2/3rds of these capped benefits go to people in work on low pay with children to support. IDS smeared every poorer family in this land. I had thought better of him. And why do we need these top-up benefits, like housing benefit, and tax credits for people in work? We all know why, dont we? Because a wage that may be acceptable for a single man in a full time job on minimum wage, that wage is hopelessly inadequate for a family man with 2 or 3 children, unless topped up by tax credits. It simply can't be done. So unless employers raise wages substantially to make good well beyond the Living Wage even - and that is not going to happen, I fear, their children will now become poorer still. Which of course is why the argument that because pay is being capped to 1%, so should benefits, is utterly fake because, as IDS knows perfectly well, they are largely the same group of people, their low capped pay being topped up by low and in future artificially lowered benefits. It is precisely because earnings have fallen below inflation over the last few years during the recession that the tax credit bill has risen to compensate for that shortfall. Firms have cut hours rather than sack staff 3.5 million people are involuntarily under-employed. As one family man in Norwich said to me, at least tax credits help make up the difference. So instead of Government therefore explaining, and accepting, that the increase in tax credits is due to falling wages, and that it helps to protect families, we are instead told, that as wages have fallen, benefits must fall in real terms as well. Thus ensuring that the working poor face a double lock locked into their poverty because wages can't and tax credits, and UC won't anymore take the strain. Nonetheless, Government claims that we cannot afford not to cut benefits. Benefit expenditure over all has grown partly because tax credits help offset low pay and low hours, but mainly because pensioners are protected from any cuts, their pensions are rising, and there are more of them living longer. Really good news. The dirty news? The unemployed and the low paid, and their children, are now being blamed by IDS for what his colleague, Steve Webb is doing for pensioners. How cynical can you get? Let's be clear, this is about policy choices; and the govt already shown they are on the side of millionaires, rather than a million poor children, made poorer still by the Governments cuts. Government cheats. It, and its impact analysis, treats these cuts as though they are free-standing, one-off, so to speak, and apparently not so very large, - around 30% of households see an average cut of -3from this policy according g to the impact analysis when actually they are a further slice off income on top of the myriad other cuts since 2010 already damaging poor families. Yet we are offered no indication at all of the cumulative impact of these cuts. That is quite unacceptable. 18bn of cuts and no public analysis of how they build up, and whom they hit. We had a debate on this a couple of weeks ago. Forgive me repeating the stats, but as Government wont, I will try. With the invaluable help of CAB and Landesman Economics, we tracked the cumulative effects of all these cuts on one family - a couple, with 2 young children, he a full time security guard on minimum wage, living in a 3 bedroomed 100 pw council house. He gained 1.71 from the raising of the tax

threshold, and then went on to lose 30-35 pw in benefit cuts. If one of his children is, say, disabled, he would lose over 40pw. And under UC, the cuts increased to 50 a week if he was in work, 65 a week if he were unemployed. It gives a new meaning to the slogan, that UC will make work pay yes, by reducing the benefit floor beneath it. That was a week-ends work. With more time, I would have tracked the cumulative effect not only on the security guard family, but also on a lone parent family, on a childless couple and on a single person. Not rocket science. Standard policy analysis on standard family types, as they are called. And yet we are told that the DWP and HMRC, with what, 60 professional analysts, powerful computer modelling, and a couple of months to hand, were unable tell us what the total effect of these cuts are? I really cannot believe this: not to know what the impact of their policy initiatives are. They still won't or can't, tell us. If they dont know, its an utter dereliction of social duty, it really is; you cannot develop policy and be indifferent to its effects; but if however they do know, and are not telling us, its a deceit that I cannot believe my former Department would stoop to. And, finally, what makes me angriest of all about this bill, its grotesquely unfair on whom it falls poor children above all. Since when, as we talk about us all being in it together, do we include poor children in the We, but exclude comfortably off pensioners like me, who have experienced not a penny of cuts? These cuts are policy and political - choices, not driven by financial imperatives. Until I see the 32billion spent on pension tax relief, most of which goes to the better off, scrutinized; when I see millionaires having a tax cut their 3b gain the same as the 3 billion loss to poor children and their families I know the answer to the question, Who pays, who gains. And the effect? These cuts fall on those in rented housing who facing housing benefit cuts rightly fear losing their home, rather than those who own 2,3, or even as the papers tell us 8 homes. They fall on those who go to food banks , not to foodie restaurants. They fall on separated loving dads who have their children stay over at week-ends, rather than on fathers who refuse and lose contact. They fall on the family with a wheel chair user not on the family with a Ferrari driver. These cuts fall on the vulnerable but voiceless, rather than on those of us with resilience and resources, but who of course are more likely to vote. Its a shameful little bill. As the 17th century philosopher Hobbes might have said, this bill is nasty, brutish and short. ENDS