Rachel Reeves

Member of Parliament for Leeds West

Tory Welfare Waste

Speech at Redbridge, 26 November 2014

 

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Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary, in a speech today in Redbridge, said:

It’s a pleasure to be here in Redbridge.

Here in May this year, thanks to the hard work and brilliant campaigning of local activists, you showed that One Nation Labour can win in every part of the country.

Throwing out a Tory and Lib Dem coalition to win the borough for Labour for the first time in our history.

Redbridge’s new council leader, Jas Athwal, is already working to deliver key manifesto pledges on issues that matter to local families, from extra school places to regulating rogue landlords.

And his deputy, Wes Streeting, is now campaigning as Parliamentary Candidate for the constituency of Ilford North - a fight I have every confidence we can win at the general election in six months’ time.

As in Redbridge, in Westminster in six months’ time, a Labour government will replace a failing Tory Lib Dem coalition

Because here in Redbridge and Ilford North, as in so many other places around the UK, there is a deep hunger for change.

Anger at the way this Tory-led government is letting our country down but also ambition, and aspiration, for the better Britain we know we can be.

Just look at the energy and entrepreneurialism we can see in just this one constituency:

More than 3,000 businesses, mostly small and medium sized.

50,000 hardworking men and women - 9,000 of them self-employed, an even higher percentage than the national average, which is rising fast.

4,500 young and mature students studying to boost their skills and qualifications.

But while David Cameron and George Osborne boast that their economic plan has worked, and the economy is fixed for ordinary working people here as elsewhere it is getting harder, not easier, to keep up with the cost of living and get ahead in a country that just doesn’t seem to be working for them.

In Ilford North the median wage is less than £27,000 a year, higher than the UK average of £22,000, but still failing to keep pace with rising house prices, rents, bills and food prices.

More than one in four workers earn less than a living wage.

And more than 3,000 working families are reliant on in-work tax credits to make ends meet because they aren’t taking enough home in wages to cover the rising cost of living.

Many people are on zero-hours or short-hours contracts meaning unpredictable and irregular hours and earnings that can make it almost impossible to plan their lives or manage their finances – especially if you have children or caring responsibilities.

And while we welcome the falls in overall unemployment we must not forget the people being left behind.

In Ilford North, over 1,200 people looking for work, over a quarter of them under 24, almost a quarter of them still looking after more than a year and 3,100 people on Incapacity Benefit or Employment Support Allowance, many of whom could be working and want to work but aren’t getting the chances they need.

So while we see in communities like this so much evidence of the potential our country has, we also see the same problems faced by hardworking families everywhere:

Wages squeezed, down £1,600 a year on average across the country since 2010.

Record numbers of working people on low pay – more than five million in total – with jobs in low-paying sectors growing at twice the rate of jobs in other sectors in the last five years.

Three million workers who want to work more but can’t get the shifts or the hours. In total, 43 million hours of work our economy is missing out on every week.

Too many young people, disabled people, and older workers out of a job and not getting the help they need.

A widely shared sense that for more and more people, especially the younger generation, it is getting harder, not easier, to find decent, steady work that gives you a fair chance to save for a home or a pension and build a secure and comfortable life for your family.

This isn’t just a waste of talent and lost opportunities - it’s a waste of money too.

Because building an economy that works for working people and controlling the costs of social security are two sides of the same coin.

Last week Ed Balls and I released new analysis, commissioned from the House of Commons Library, which shows that the failure of this government to help people boost their earnings, or tackle the lack of affordable housing, has resulted in £25 billion extra welfare spending, including £1.4 billion more than they budgeted for on housing benefit for people in work over the life of this parliament.

An overspend that is set to continue as the number of working people reliant on housing benefit to pay their rent is now set to double by 2018-19, as rents rise faster than wages, and as wages rise more slowly than prices.

Today I am releasing further new analysis showing that the government has also spent £5 billion more than they planned on tax credits over the course of this parliament.

Indeed, total spend on in-work benefits is now set to rise in real terms into the next parliament too.

These figures are all the more astonishing when you remember that George Osborne and Iain Duncan Smith have spent the entire parliament trying to cut spending on benefits and tax credits by reducing their value and making them harder to claim – for millions of people in work as well as those out of work.

Overall their changes to taxes and benefits have left families £974 a year worse off on average. So families are worse off, but the country is worse off too.

Because the experience of the past four years shows that you can’t control spending on benefits and tax credits if you’ve got an economy in which people are struggling to work and earn enough to make ends meet.

You have to tackle low pay and insecure work if you are going to get a grip to control spending on social security.

That’s why we have a growing problem of Tory Welfare Waste. 

And at the same time as failing to deal with these root causes of rising benefit bills, this Government’s flagship reforms have been beset by delays and delivery problems resulting in more Tory Welfare Waste that we have been highlighting this week.

More than 900,000 people waiting for sickness and disability benefits.

In fact, if you add up the months they are waiting it comes to an astonishing 118,000 years of waiting. What a waste of people’s time, what a cost to sick and disabled people waiting for the support they desperately need and what a waste of taxpayers’ resources too.

And we also know that with more than half a billion spent on Universal Credit, including £140 million written off or written down, we have no assurance about when or whether this programme will be viable or value for money - with £2 billion now at risk because of more delays and mistakes, according to the NAO.

But instead of learning the lesson, the Tories are proposing more of the same.

No plan to tackle low pay, or exploitative zero hours contracts.

No hope for those who have been let down by their failing back-to-work schemes, or lost in the chaos of their disastrous mismanagement of disability assessments.

Their big idea for making work pay, Universal Credit, is still stuck at the starting block with today’s NAO report only confirming our worst fears about whether this government has a viable plan to deliver this major reform within a reasonable timescale, and without racking up massive extra risks and costs to claimants and taxpayers.

And because they have failed to deliver their promise to deal with the deficit in one parliament, so they’ve set out further deep cuts to tax credits for millions of working families even as they refuse to rule out another tax cut for millionaires.

The Tory philosophy is the same as it ever was: look after a few at the top - and let everyone else fend for themselves.

We in the Labour Party know differently.

We know our future success as a country depends on harnessing the talents of everyone.

Everyone who can be working should be working.

Those in work should be able to provide for their families with a wage they can live on.

And those who need support because of sickness or disability should be afforded the dignity they deserve.

We know that unless we build a recovery that leaves no one behind, we will never bring to an end the waste of talent, time and money that we are seeing under this Tory-led government.

And so we have set out our plans to deliver the change this country needs.

In social security and employment policy, this means:

A new Youth Allowance to ensure young people are equipped with the skills they need to succeed, and a Compulsory Jobs Guarantee so they can never again be left without a job for years on end.

Sorting out the mess that Iain Duncan Smith has made of disability benefit assessments, ensuring the right support for those who can work, and dignity for those who cannot.

A better deal for older workers who get made redundant, including an higher rate of Jobseekers Allowance for those who have paid enough contributions and a Basic Skills Test to ensure early intervention on maths, English and IT skills deficits to help people get back to work quickly.

Better support for Britain’s growing army of self-employed people, redesigning Universal Credit so it works for them and ensuring they have access to pensions and mortgages.

Reinforcing the fairness and integrity of the system – including our plan to ensure migrant workers have to work and contribute before claiming that child benefit does not go to children living abroad, and that our in-work benefits do not serve to subsidise and perpetuate employers’ reliance on cheap temporary labour from overseas.

And critically these reforms go hand-in-hand with wider changes Labour will deliver in other areas, so our social security system isn’t just serving to prop up an economy that isn’t working for the majority:

A plan to raise the minimum wage to £8 before the end of the parliament, get more people paid a living wage, and end the abuse of zero hours contracts.

A plan to help more parents start or stay in work with 25 hours free childcare for children age 3-4 and guaranteed wraparound care at schools.

A plan to tackle the housing crisis with fairer rules for renters and another 200,000 homes built every year by the end of the parliament.

A plan to transform opportunities for the next generation with new vocational routes through education, high quality apprenticeships and technical degrees.

A plan to support small businesses and entrepreneurs, with lower business rates and radical reform of our banking system so it supports innovation and job creation.

This is the plan we need to ensure we as a country can benefit from the talents, ideas and hard work of people in places like Redbridge - and to restore the faith of those who no longer believe mainstream party politics is in touch with their lives or can deliver real solutions to the problems that they face.

A week today George Osborne will deliver the last Autumn Statement of this Parliament and will confirm the depth of the failure of this government to deliver for ordinary working families.

David Cameron’s failure to deliver a recovery that works for all working families has left a legacy of Tory Welfare Waste with billions more spending on benefits for people who are working all the hours they can but still can’t make ends meet.

Labour will get a grip on Tory Welfare Waste by tackling low pay and job insecurity, building more homes, supporting small businesses, and building an economy that works for everyone, not just a privileged few.

The challenge we face is a tough one.

We know we have a hard campaign to fight.

And that the damage this government has already done will make our task in government a daunting one.

But even in times as tough as these, hardworking people in Redbridge and around the country have not given up on trying to make a better life for themselves and their families.

And we in the Labour Party should never give up on the fight to build a better Britain that works for all.

 

http://press.labour.org.uk/post/103630513969/speech-by-rachel-reeves-on-tory-welfare-waste

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