Harriett Baldwin backs the Bill as it removes the barriers that prevent people working their way out of poverty. She tells MPs that work is the only route out of poverty for most people and that is the message that needs to be got across. Harriett Baldwin (West Worcestershire) (Con): This is a profoundly important Bill. It is born out of the Secretary of State's deep passion for helping people to get out of poverty-he has spent the last decade looking at that. There are few ways in which people who are born and grow up in poverty can find a way out. I can think of some, but winning the lottery does not happen very often and it is unlikely that someone will get a surprise inheritance from a relative whom they did not know existed. Marrying a top footballer is rare, and it would probably be quite hard work. The hon. Member for Makerfield (Yvonne Fovargue) spoke of work as "a" route out of poverty, but it is "the" route out. If Opposition Members have alternatives to work as a route out of poverty, I would be interested to hear of them. The Bill removes the barriers that the welfare system puts in the way of people working their way out of poverty, which is important. We must recognise-this is why I am so disappointed that Opposition Members will not support Second Reading-that there are many barriers in the system's construction that prevent people from getting the important message that they need to go out to find a job and to work, and that that is how they will improve their economic circumstances. Ian Paisley: I appreciate what the hon. Lady says about people who are able-bodied and who can work working their way out of poverty, but how do people find their way out of poverty if their impoverishment is a result of disability? Harriett Baldwin: As the hon. Gentleman knows, there are many provisions in our welfare system for exactly that sort of situation. I do not think that anyone is suggesting that people with no capacity for work should get out and work. We should have a generous safety net, as we do for people in those situations. However, the system as currently constructed has many barriers that send the message that taking on full-time work is not worth while. With single parents facing a withdrawal rate of 96%, what kind of message does that send to people about the sense in going to work? We have all met people who work 16 hours a week. As we know, the way that working tax credits work gives people an incentive to find a job working 16 hours a week. At the moment, those working 15 or 17 hours a week find themselves financially worse off. That is why it is so important that the Bill tackles those cliff edges, ensuring a much smoother process and a linear relationship between the time that people work and the amount that they take home. At the end of the day, we all respond to the financial incentives that are inherent in the system. As we heard earlier, the current benefits system also pays couples more to live apart than to stay together. I believe that I am right in saying that 2 million people in this country would identify themselves as being in a relationship but living apart. No one can deny that, in large part, that is down to the messages and the financial incentives sent through the welfare system, which will be reformed by this Bill. I am sure that Opposition Members will welcome the fact that the distributional analysis of the universal credit shows that the vast proportion of additional money in the system will go to those in the lowest income deciles, with 85% going to those in the four lowest-paid deciles. I should point out, however, to the Secretary of State that it was still a shock to realise that even under the changes that we are discussing today, the benefit withdrawal rates for those going into work will still be 65p in the pound. That is still a shockingly high marginal deduction rate, when our higher-rate taxpayers are on 51% or 52%. The Child Poverty Action Group, the Centre for Social Justice and Family Action have all argued for a withdrawal rate of 55%, with Save the Children arguing for a 50% withdrawal rate. I hope that everyone in the House will welcome the fact that the Bill gives the Chancellor in future the ability to stand at the Dispatch Box and say that he is making a change in the marginal withdrawal rate, because we would all like it to be reduced over time. Naomi Long: I acknowledge what the hon. Lady says about the Bill giving the Chancellor the freedom to do that, but it does not require him to do it. Would it not provide people with more certainty if the Government indicated that that were the intention? Harriett Baldwin: I think that we have heard the Secretary of State put that on the record on a number of occasions. There are a few debating points that have arisen in this debate, particularly from the Opposition, that I would like to address in my few remaining minutes. On savers, we can have a debate about whether someone with £16,000 in savings ought to be in the benefits system, but we should all recognise that the welfare system should focus on those on the lowest incomes and with the lowest savings. That is one of the difficult decisions that it is worth tackling, and the Bill does that. Stephen Timms (East Ham) (Lab): That feature of the proposals will mean that, as a fine simply for having £16,000 in the bank, people will lose all their tax credits, which could amount to £5,000 a year. Surely that is not right. Harriett Baldwin: The right hon. Gentleman probably also supports the proposition that I should continue to receive child benefit. We need to make these decisions, and they need to focus on certain levels of savings. Passported benefits, on the other hand, are something that we will need to discuss in great detail. I hope that the Committee will do that, because things such as free school meals, which at the moment are passported in with other benefits, are also a trigger for early-years payments for schools and the pupil premium. It will therefore be particularly important to have clarity about how free school meals are going to work in the future. Personally, I would favour putting that in with the universal credit, where it would be affected by the same withdrawal rates. Another good point that has been raised in the debate was about entrepreneurs. We must ensure that people do not hear from the benefits system a message against entrepreneurial behaviour. The Committee needs to look closely at how the imputed income of new business start-ups will be treated for benefit purposes. We have heard allegations that the Bill has been rushed. I disagree. We are talking today about changes that will not even come into effect until 2013. However, I agree with my hon. Friend the Member for Wolverhampton South West (Paul Uppal) that they cannot come soon enough, although I know that a major computer system needs to be changed. I welcome the measures in the Bill and I look forward to supporting its Second Reading. | Hansard