The Government are committed to helping families in Wales through the current global economic challenges.
Figures published by the Office for National Statistics show that people who experience mental distress are three times more likely to be in debt. In its report, “In the red: debt and mental health”, Mind calls on financial services bodies to provide training and guidelines for staff who deal with people with mental health problems. Does my right hon. Friend agree that Welsh institutions such as banks, bailiffs and building societies could benefit people with mental health problems in Wales if they provided such training?
Yes, I strongly agree. I shall draw the attention of banks and building societies in Wales to the very important report that my hon. Friend mentions, which explores the relationship between debt and mental health. When that is combined with the work of Citizens Advice and the trading standards agencies in local authorities, we can specifically help individuals in those ways, particularly individuals with the problems that she has outlined. We must deal with those people with great compassion. I shall bring this matter to the attention of those bodies.
But the Government are not helping people with debt; they are pushing families further into debt. Council taxes have almost doubled over the past 11 years, petrol now costs £1.20 a litre, with another 2p increase in the pipeline, and the vehicle excise duty increases will hit families living in Wales who have family cars. Will the Secretary of State lobby the Prime Minister to scrap both those taxes?
As the hon. Gentleman knows, the Chancellor of the Exchequer will be coming back to the House of Commons with the pre-Budget review to deal with all these issues. The Chancellor has looked at the question of helping people with debt, and about 1.1 million people in Wales will benefit from the £120 for basic-rate taxpayers. It is also important to understand that all of us who represent Welsh constituencies are aware of the issues relating to family finances—including fuel, food, gas and other energy bills—but there is a limit to what a Government, of any party, can do. We must undoubtedly do our best to ensure that the families we represent are best served by the Government, but much of this is a matter for international negotiation—in relation to oil prices, for example, and to food. However, I accept the fact that these are important issues and that we have to try to address them.
Absolute salaries in Powys have gone down by an average of 4 per cent. in the past 12 months, at a time when inflation has meant that people in that area are, on average, 7 per cent. worse off. At the same time, the spectre of negative equity is rearing its ugly head again. What comfort and practical support can the Secretary of State offer to those people who are facing repossession, on what looks like the brink of a recession in Montgomeryshire and in Brecon and Radnorshire?
I accept the fact that families in the hon. Gentleman’s constituency, and in all Welsh constituencies, are facing these difficulties. However, I do not think that we are facing anything like the repossession problems that we faced in the late ’80s and early ’90s. The work that the Chancellor of the Exchequer is doing in dealing with the mortgage lenders is important, as is the work of the Welsh Assembly in helping to provide a supply of affordable housing. We need to accept that these issues reflect great global challenges, but the Government and the Assembly will do their best to ensure that the people in all our Welsh constituencies are able to face them.
But does the Secretary of State truly realise how tightly family incomes are being squeezed in Wales at the moment? Since 1997 the taxes on every family have risen by £5,400, and the poorest 20 per cent. of households now pay a higher proportion of their income in taxes than any other group. Is he at all surprised that personal debt in Wales is rising under his Government?
I am not surprised that there are problems with family finances, because of the matters to which I referred in answer to earlier questions. As a valleys MP and a Welsh Member of Parliament, when I compare what was happening when I entered the House in the late ’80s with what is happening now, I remember that there were tens of thousands of people out of work in Wales, that inflation was running at 15 per cent. and that interest rates had gone through the sky. The problem of debt at that time was hugely more difficult than it is now.
But the Secretary of State knows that the people in the valleys are not interested in a history lesson about the 1980s; they are interested in what is happening to their pockets now. Wales under Labour is the poorest part of the United Kingdom, and any financial attack on the lowest paid affects huge numbers of people. Today, we have learned that the Institute for Fiscal Studies has said that the Chancellor’s quick political fix of compensation for the abolition of the 10p tax rate has backfired, and that 18 million families in the United Kingdom—many of them in Wales—will still end up paying more tax. Why is the Secretary of State standing by and allowing his Government to push Welsh families, who are already struggling, deeper into debt?
I am sure that the hon. Lady will accept that Wales saw the biggest percentage increase per head in gross disposable household income of all the United Kingdom countries and English regions between 1999 and 2006. It was up nearly 40 per cent., compared with 33 per cent. across the United Kingdom. So we have got better off in Wales over the past 10 years. I accept the point that she is making about the problems with family finances, but I would like to point out to her that over 1 million people in Wales—22 million basic-rate taxpayers in the whole of the United Kingdom—will benefit from the changes brought in by the Chancellor last week. Furthermore, 8,000 more people in Wales are in work now than last year. That is in contrast to the thousands of people who were out of work in Wales when the Conservative Government were in power.