I beg to move,
That this House condemns successive Conservative Governments for their mismanagement of the economy over 13 years; regrets that this has resulted in the UK being the only G7 economy that is still smaller than before the pandemic, with squeezed wages and higher mortgage rates that have increased costs by £500 a month for some households; further regrets that successive Chancellors have made working people pay for the Government’s economic failure with 24 tax rises since 2019, creating the highest tax burden in 70 years, while refusing to abolish the non-domicile tax loophole; is extremely concerned about the impact on household budgets of an inflation rate of more than 10 per cent with food prices rising at their fastest rate in 45 years; therefore calls on the Government to ease the cost of living crisis by freezing council tax this year, paid for by an extended windfall tax on oil and gas company profits; further calls on the Government to cut business rates for small businesses and support energy intensive industries including food manufacturers with their energy bills to help bring down the cost of everyday items; and finally calls on the Government to adopt Labour’s economic mission to secure the highest sustained growth in the G7 with good jobs in every part of the country.
It astonishes me that the Conservatives are acting like the cost of living crisis is over and their economic plan is working. The Chancellor is proudly boasting that Britain is back. He has even said:
“The declinists are wrong and the optimists are right. We stick to the plan because the plan is working.”—[Official Report, 15 March 2023; Vol. 729, c. 847.]
What planet does the Chancellor live on? Does he understand the reality on the ground for all of our constituents? Does he understand that on the Prime Minister’s watch, our economy is weaker, with the UK forecast to have the worst growth in the G7 this year? Real wages are lower than they were 15 years ago, with families in the UK going into the cost of living crisis significantly poorer than those in comparable European countries. The price of everyday essentials has risen by an eye-watering £3,000 since 2020, and never before have people in this country paid so much money for so little value from their public services.
The disconnect between this Conservative fantasy and the experiences of ordinary people could not be wider. Decent, hard-working people across the country are being forced to cut back on the things that underpin a good life. Mr Deputy Speaker, I will explain what I mean by a good life: a meal out once in a while with close friends, the special annual family holiday that you look forward to all year round, and a decent home to call your own. Those are increasingly things of the past; instead, people are left worrying about how they are going to pay their household bills at the end of the month and their rocketing mortgage costs.
I thank my hon. Friend for that intervention. She is a doughty champion for the children from deprived families who live in her constituency. We have surgeries where people line up to speak to us who cannot afford to eat because, as my hon. Friend says, they are saving their money to buy one meal for their children. This is Britain in 2023. We should not be in this situation.
It is important to remember how we got here in the first place. The Government have mishandled the cost of living crisis at every turn. Indeed, we will never forget the Conservatives crashing the economy last year, and we will never forgive them for it.
The hon. Lady is totally right about the perverse choices that people are having to make. A young mum in Abingdon who has her kids in childcare is having to decide whether she pays the debt that she owes to the childcare provider, pays her prescription charges, or buys food for herself and her children. How is that a country that we can be proud of? It is because the Conservatives mismanaged the economy, is it not?
I thank the hon. Member for her intervention. She has outlined lots of situations that we hear about every day from our constituents, yet the Conservatives say that their economic plan is working—it is clearly not working. The resulting rise in interest rates and the economic instability have added £500 a month to first-time buyers’ bills. For too many, dreams of home ownership and starting a family have been destroyed—another pillar of the good life knocked away.
My hon. Friend is absolutely right to point to the Chancellor’s suggestion that the Government are the optimists and we are the declinists. In fact, are the optimists not those people who have taken on a mortgage and achieved that dream of home ownership, and who are being so cruelly let down by the incompetence of this Government?
My hon. Friend is absolutely right. We have to ask the Conservatives how they can continue to live in this fantasy world, because it does not match the reality on the ground. Let us not forget the impact of rising prices. Food prices are growing 50% faster than anywhere else in the G7, putting Britain’s food inflation rate at 19.2%, compared with an average of 12.8%. The price of sugar is up by an incredible 42%. Milk is up by more than 33%, and pasta is up by 25%. The UK has the highest inflation level in western Europe. That is a national scandal.
I assume that the hon. Gentleman is not proud of all the figures I am outlining and the high inflation that is coming up. The Conservatives can manipulate the stats all they want, but they cannot run away from the fact that we are falling behind our peers. That is not something I am proud of, and they should not be either.
Since 2020, the cost of a typical food shop is up by £700 a year. Clothing and footwear are up by £140. Household goods and services are up by £360. Transport is up by £800. [Interruption.] I do not know why Government Members are laughing; these are real figures that our constituents are dealing with. The essentials of housing, fuel and power are up by a shocking £1,480.
I will come to energy shortly. If the hon. Member were able to answer, I would ask him whether he thinks 50% is enough, because it is not enough. If he speaks to people on the ground, he will see how much they are struggling. The rising costs of everyday essentials mean that families across the country are making cutbacks just to stay afloat. That has been devastating for local economies, with communities losing the businesses and institutions that bind us together.
It is a fact that the village of Altnaharra in my constituency is every year the coldest place in the entire United Kingdom. We already have pensioners having to make the invidious decision to wrap themselves up in blankets and put the heating off. No one should face that sort of decision.
I thank the hon. Member for his intervention. The situations being described are not what we want to hear about in our country in 2023, and we should not be proud of this record; we should be trying to do better.
Under this Government, more than 6,000 pubs, nearly 4,000 local shops and 9,000 bank branches have closed on our local high streets. That is nothing to be proud of.
My hon. Friend is making a powerful speech, and I am sure we have all been concerned by stories from our constituents who are missing out on meals, eating out-of-date food or unable to clean their clothes as often as they want. Does she share my concern that that is having a devastating impact on the development of young children in the early years? We need to know that those children are fed and have heating.
My hon. Friend is always fighting for her constituents, and she is absolutely right. As someone who was on the shadow Education team before I came to this role, I know that if our young children are not fed or looked after properly, they will not fulfil their potential in this country. We should be looking at the future generations, and the Government are ignoring them.
The Government’s mishandling of the cost of living crisis is just another chapter in the long story of 13 years of economic failure. More than a decade of Conservative rule has seen our country fall behind as the British economy has experienced low growth, rock-bottom productivity rates and chronic under-investment.
My hon. Friend is making an important speech. I find it deeply offensive that Conservative Members are laughing at some of these statistics. That just shows how out of touch they are with the reality of life for so many people across this country. Does she agree that it is an absolute travesty in 2023 that we have families where children are having to share beds, sleep on the floor or sleep in the bathtub because people cannot afford to move house, to pay their rent and to pay for food for their families? That is not a laughing matter.
I thank my hon. Friend for her intervention. Having campaigned in her constituency, I know there are huge levels of poverty in certain places. Someone from the back said that we are lucky here because we are MPs and get paid a decent salary. We certainly should not be laughing at people who are struggling to make ends meet.
I remind the House that, when Labour was in government, real GDP growth averaged 2%. If growth had continued at the same rate under this Tory Government, we would have £40 billion more to spend on our public services, without having to raise a single tax. Instead, a lack of strategic policy making, economic uncertainty and the absence of an industrial strategy mean that the UK is going through the slowest economic recovery in the G7.
The hon. Lady is asserting that the UK economy has fallen behind since 2010. Does she recognise the figures that show that this country has actually grown faster than Italy, Japan and France since 2010 to date and that, since 2016—since the Brexit vote—it has grown at about the same pace as Germany?
The Conservatives can manipulate the stats as much as they want, but they cannot run away from the fact that we are falling behind our peers. [Laughter.] I do not care how much Conservative Members want to laugh; I know that is the truth. It is families who are bearing the brunt of the low growth. A decade of stagnant wages has left the British people highly exposed to rising prices. If the hon. Member who just intervened can dispute this figure, he is welcome to intervene again: the average French and German family are now 10% and 19% richer than their respective British counterparts. If we continue down this path of managed decline and our growth rate stays where it has been over the past decade, families in the UK will be poorer than those in Poland by 2030 and poorer than those in Hungary and Romania by 2040. I see the hon. Member—
It is a great pleasure to be given the role of the Opposition spokesman from the Back Benches here, but there is a difference between economic data that is factual, has happened and can be verified, and straight-line projections of the future between now and 2030 that have not happened and will not happen.
As I figured, the hon. Member did not have a response to the question I asked. If we do not break with the Tories’ failed economic model, the necessary underpinnings of a good life—as I have mentioned, fair wages, secure work, a decent home—will be further eroded.
The hon. Lady is making a powerful case and making a salient point. Does she agree that the constituents she has already mentioned, who are dealing with all these price hikes—the worst in 45 years—and who come to our constituency offices every week, do not care that we grew faster than Italy in 2010, but they care that they cannot heat their homes now and cannot feed their children and they are worried about their elderly parents? The blame can be laid at nobody’s door but this Conservative Government’s.
I thank the hon. Member for her intervention. She is absolutely right. This Conservative fantasy just does not match up to the reality on the ground.
Instead of putting forward a comprehensive plan for growth, successive Conservative Chancellors have made hard-working families pay for their economic failure. The Conservatives have become the party of tax rises for the hard-working majority. Since 2019, the British people have been hit with 24 tax rises. It is the highest tax burden in 70 years. Earlier this month, we saw council tax bills rise above £2,000—some Members might think that is funny; it is not funny for my constituents—for the first time, as the Chancellor effectively forced councils to put up rates by reducing their funding. That saw families who were already struggling hit with an additional average tax hike of 5.1%—[Interruption.] If Conservative Members have something to say, instead of chuntering from a sedentary position, they should intervene. They should not shout from the front.
My hon. Friend is making a powerful speech and outlining exactly what Labour did in government to make a difference for working people. In Labour-led Wales, where the hon. Member for Clwyd South (Simon Baynes) is also an MP, we have just increased the education maintenance allowance, which was scrapped in England, to give students the opportunity not to have to choose between buying books and going to school, and having to find a job to support themselves.
I hope hon. Members hear that before they start criticising any sort of Labour Government.
Things are only set to get worse. The Government’s stealth tax and freeze on income tax and national insurance contribution thresholds will, according to the Resolution Foundation, cost households £25 billion a year by 2027-28.
Not now, as I want to make some progress. At the same time, the Chancellor has given the 1% wealthiest pension savers a £1 billion handout, and he has continued to defend the indefensible: the non-domicile tax loophole. Instead of growing the economy and boosting wages, the Conservatives have resorted to hammering ordinary people with tax rises. It is time for a radically different approach.
I will make a bit of progress. We need a bold plan for growth that confronts the problems of the UK’s declining economy head on. That is why the Government must adopt Labour’s mission to secure the highest sustained growth in the G7, with job creation and productivity growth in every part of the country, making everyone, not just a few, better off. That may seem ambitious, but Britain has so much potential.
I am just about to come to the part of my speech about the windfall tax and business rates, so if the hon. Gentleman listens carefully, he will hear. The talents and efforts of working people and British businesses mean that we lead the way in financial and legal services, and the tech and life sciences sectors. With a proper industrial strategy, the UK economy will not just lead the pack again, but communities written off by the Conservatives will have the backing they need to make their full contribution to our great nation. Labour will achieve that by forging a new covenant between Government and industry, bringing in public investment through our green prosperity plan to support new industries. That will include investment in areas such as fuel cell manufacturing, nuclear, hydrogen and home insulation to bring down energy prices and create well-paid jobs in the industries of the future across the UK, while fixing the holes in the Brexit deal and bringing in a proper supply chain strategy will help to tackle inflation and build the resilient trading economy we need to get ahead.
Labour will work in partnership with businesses to help people get the skills and opportunities they need. We will not leave potential untapped. We will fix the apprenticeship levy, improve local employment services and help first-time buyers get on the housing ladder through a comprehensive mortgage guarantee scheme to boost local living standards. Only Labour, through our plan to grow the economy, will create the conditions for a good life in every part of the country. We will create well-paid jobs, bring home ownership back within reach for young families and ensure that the NHS delivers for all.
The hon. Member may want to sit down and hear the next bit because I am sure he is going to ask the same question.
However, we also recognise that people need help today. That is why, if Labour were in government today, we would freeze council tax this year to stop bills from rising above £2,000, paid for by an extended windfall tax on oil and gas company profits. Even though Office for National Statistics figures confirm that 2022 was a record year for North sea oil and gas profits—even though the ONS confirmed that—the Conservatives are again choosing to protect the energy giants’ windfalls of war.
I think the hon. Gentleman should listen, actually.
By refusing to backdate the tax to January 2022, end the investment allowance tax loophole and raise the rate in line with other countries, the Chancellor has left billions on the table, leaving working people to pick up the rising council tax bill. Labour would use the additional funds raised by a proper windfall tax to cut energy bills for domestic food manufacturers and processors, and we would cut business rates for small shops, paid for by properly taxing online giants, to bring down the eyewatering cost of everyday items. We would also reverse the Conservative decision to hand the 1% wealthiest pension savers a £1 billion handout and instead introduce specific measures to keep doctors in work. And we would close the non-dom tax loophole, so people who live and work here pay their tax here. We would use that money to fund one of the biggest expansions of the NHS workforce in history. Those are straightforward measures. The Government could introduce them today to show people they are on their side, but we know they will not because they have given up on Britain.
At the heart of today’s Opposition day debate is a simple question that everyone up and down the country will be asking themselves: “After 13 years of Conservative rule, am I better off?” The simple answer is no. People now have a clear choice: between a tired Conservative Government out of ideas, and a Labour party committed to forging a new partnership with British business to create good jobs and boost wages; between a Conservative Party that puts developers before first-time buyers, and a Labour party committed to the principle of home ownership and giving young families a start in life; and between the Conservatives, the party of high taxation and Government handouts to the wealthiest 1%, and Labour, the party committed to putting working people and businesses first, freezing council tax and cutting business rates to ease the cost of living. Only the Labour party has a serious plan for growth to improve living standards and wages for working people. [Interruption.] Those on the Conservative Benches can laugh all they want, but only the Labour party has a vision of a better life for the British people.
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s action to halve inflation, grow the economy and reduce debt; supports the Government’s extensive efforts to support families up and down the country with the cost of living through significant support to help with rising prices, worth an average of £3,300 per household including direct cash payments of at least £900 to the eight million most vulnerable households; notes the use of a windfall tax on energy firm’s profits to pay around half of the typical family’s energy bill through the Energy Price Guarantee, also notes the fact that the Government has frozen fuel duty for 13 consecutive years to support motorists; welcomes the expansion of free childcare to all eligible parents of children aged nine months to four years old; and notes that Labour will fail to grip inflation or boost economic growth, with their plans for the economy simply leading to unfunded spending, higher debt and uncontrolled migration.”
Even in times of economic challenge, this is a Government who prioritise helping families face down the cost of living. I think Members across all sides of the House recognise that having come through the covid crisis, families and businesses across the country have felt additional global headwinds. After two decades of low inflation, the world has been confronted with fast-growing prices. We are not alone. While we tackle this, our friends in Ukraine are at war and we are supporting them diplomatically, militarily and economically. We have faced down those challenges while supporting our economy and, because of the action we took, we avoided a recession. Our sensible, credible economic plan is working. The International Monetary Fund said we are on the right track, unemployment remains very low by historic standards, and measures in the spring Budget deliver the largest permanent increase in potential GDP that the Office for Budget Responsibility has ever scored in a medium-term forecast, as a result of Government policy.
I realise that this will bring back painful memories for the right hon. Gentleman, but he may recall that the previous Prime Minister crashed the economy. The UK has been uniquely impacted. The issues with Ukraine and covid are impacting the rest of the world, but they are impacting the UK in a slightly different way because of the previous Prime Minister’s actions. I know that the right hon. Gentleman wishes to erase all memory of that, but he must acknowledge that her actions have had a consequence, and the British taxpayer is still paying the price.
My hon. Friend is right. I approach the job of government with a sense of humility about the challenge we face.
I recognise that we have made significant progress in recent months—that has been generally acknowledged. I will now set out where else we will make progress. Although it is welcome that wholesale energy prices have been falling, many families remain under significant pressure. The Government understand that. Food prices are contributing to headline inflation. Rising food prices, however, are not a unique issue to the UK, as my hon. Friend the Member for Wantage (David Johnston) pointed out. It is a problem that advanced economies are facing. For example, as he correctly pointed out, in Germany, food price inflation is above 22%. We are fully alive to the fact that some people remain in real distress. I want to assure Members and their constituents that we will always stand ready to help where we can.
Is it not about compassion in government? That is why pensioners on a fixed income and people on benefits will receive a 10% increase. Also, the fourth iteration of the household support fund is there directly to help the most vulnerable to get through those tough times.
My hon. Friend is absolutely right. In a moment I will set out exactly what interventions we have made and how we are continuing to intervene to support the most vulnerable in our communities across the United Kingdom.
The best thing we can do to help people’s money go further is to deliver on our plan to halve inflation and grow the economy. In doing so, we will meet the Prime Minister’s five pledges to the British people. Three of those are economic—two of which I have mentioned—and reflect people’s priorities. Inflation makes us all poorer. It has to be tackled head-on, which is why, working closely with the Bank of England, we are bearing down on it. We are also growing the economy.
Will the Minister confirm the IMF figures that in 2020 to 2022—that important three-year period after we left the EU—the UK was the fastest growing economy of the G7? The Opposition’s forecast that the UK might be a poorer performer this year is just a forecast, and most forecasts are usually wrong.
As always, my right hon. Friend is on the money. The point is that forecasts predict many different things. I have been in the Treasury for nearly five years; forecasts for every fiscal event rarely prove to be true at the next fiscal event.
We must continue to focus on taking the right decisions, decision by decision, and prove those forecasters wrong. That means long-term, sustainable and healthy growth that pays for our NHS and schools, finds jobs for young people and provides a safety net for older people, all while making our country one of the most prosperous in the world. It also means reducing debt, which we are on track to do. In fact, because of the decisions we have taken and the improved outlook for the public finances, underlying debt in five years’ time is now forecast to be nearly three percentage points lower than back in the autumn. That means more money for our public services and a lower burden on future generations—deeply held Conservative values, which we put into practice today. It is these steps that will make our country and our people better off. We are also taking action to shelter the most vulnerable while we achieve these longer-term ambitions for the economy.
In the Budget, we announced that the energy price guarantee would remain at £2,500 per year until July 2023. That was funded in part by the energy profits levy that this Government introduced last year, recognising that profit levels in the sector had increased significantly due to very high oil and gas prices caused by global circumstances, including of course Russia’s invasion of Ukraine. The levy is expected to raise just under £26 billion between 2022-23 and 2027-28, on top of around £25 billion in tax receipts from the sector in the same period through the permanent tax regime. The energy price guarantee measure will save the average family a further £160 on top of the energy support measures already announced, bringing total Government support for energy bills to £1,500 for the typical household since October 2022.
It is worth recapping those measures. This Government have helped all domestic electricity customers with £400 off their energy bills through the energy bills support scheme. The energy bills support scheme alternative funding provides £400 to around 900,000 households that are not supplied by domestic electricity contracts and are unable to receive support automatically through the energy bills support scheme.
Our support has not stopped there. Alongside holding down energy bills, freezing fuel duty and increasing universal credit, we are giving up to £900 in cost of living payments to households on means-tested benefits. Starting from today, over 8 million families across the UK will receive the first £301 cost of living payment from the Government. That is the first of up to three payments for those on means-tested benefits, totalling £900 through 2023-24. Those entitled do not need to apply for the payment or do anything to receive it. The payments will be accompanied by a payment of £150 for people on eligible disability benefits this summer and a payment of £300 on top of winter fuel payments for pensioners at the end of 2023.
These are carefully designed interventions, targeted at the most vulnerable across communities in the United Kingdom. The latest payment follows on from the £650 cost of living payment delivered to households on means-tested benefits by the Government in 2022, with an additional £150 for individuals on disability benefits and £300 for pensioner households.
The Government of course need to recognise that some people will fall into difficulties. They have enabled local authorities to provide additional support with the cost of household essentials through a 12-month extension to the household support fund in England worth £1 billion, including Barnett funding. We are also ensuring that more than 10 million working-age families will see an increase in their benefit payments from April 2023, based on the September inflation figure of 10.1%.
While we shelter the most vulnerable, the public also rightly expect us to look further to the future, making sure we are taking steps to grow sustainably and securely in the long term. This Government are unashamedly pro-growth, because expanding the productive capacity of the economy is the only way to solve the productivity puzzle, which has dogged us for decades, and improve living standards for all.
One reason we are held back is because a great number of people have left the labour market altogether. As a Conservative, I believe there is virtue in work and getting people into work is the best way to avoid the ills and perils of poverty. There has been an increase of more than 1.5 million working households since 2010, which shows that we are on the side of working families. That includes our new game-changing childcare offer that will entitle working parents in England to 30 hours of free childcare per week, once their child is nine months old, and close the gap between parental leave ending and the current childcare offer.
In addition to making provision on free childcare, the Budget set out to remove barriers for the long-term sick and disabled, for jobseekers and for older people with our pension tax reforms. Part of the plan is welfare reform to support those who have been disengaged from the labour market. My right hon. Friend the Secretary of State for Work and Pensions has introduced a White Paper setting out reforms that will support more people who are long-term sick or disabled to try work without any fear of losing their benefits. Other policies that we announced at the Budget will then ensure that those individuals are better supported to stay and succeed in work. Overall, the Office for Budget Responsibility expects the spring Budget package to result in 110,000 more individuals in the labour market by the end of the forecast period.
The UK saw the fastest growth in the G7 over 2021 and 2022. Cumulative growth over the 2022 to 2024 period is predicted to be higher than that of Germany or Japan, and at a similar rate to that of France or the US. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. We have protected pensioners, those on low incomes and those with disabilities. We are continuing to lay the groundwork for a vibrant, innovative and growing economy that benefits communities and families up and down the country.
Having sat and listened to the shadow Minister—I was not smiling, but reflecting on what I heard—I think it is very unfortunate that the Labour party continues to play politics and snipe from the sidelines without a clear and coherent plan.
I notice that the Opposition motion refers to freezing council tax; the shadow Minister also mentioned freezing council tax under Labour. However, Labour-run Gedling Borough Council is increasing council tax by 2.98% this year, in spite of the fully costed Conservative amendment that would have enabled a council tax freeze. Does my right hon. Friend agree that whereas Labour’s rhetoric is about freezing taxes, the reality is tax, tax and tax again?
Absolutely, and I think the good people of Gedling will come to the right conclusions next week.
What is really clear is that this Conservative Government will get on with the business of resetting the conditions for growth after this enormously difficult period. We are setting the conditions for protecting the vulnerable and delivering for the British people. As a united Government, we remain focused on what really matters for the British people. I urge the House to reject the Labour motion.
I was intrigued by the Chief Secretary’s answer to the right hon. Member for Wokingham (John Redwood) about forecasts: I think he said something along the lines of “For every fiscal event there’s a forecast, and on many occasions it turns out to be wrong.” That may be correct. Is it not passing strange, then, that the Government’s own fiscal charter, which they announced only six months ago, is based on precisely such a forward-looking view, with forecasts on a five-year rolling basis? I think the Government and the Chief Secretary might want to sort their lines out on that one.
I agree with what the Chief Secretary said towards the end of his speech about boosting productivity, which is a perennial problem. He is absolutely right about that, of course, but he will recall from the OBR forecast and the Red Book that productivity growth does not exceed 1.5% in any year of the forecast period. Whatever plan the Government thought they had, they will need to do a little better.
The Chief Secretary quite rightly mentioned the requirement to get more people into the workforce; I think he mentioned having an extra 110,000 people by the end of the forecast period. That is welcome, but it would be a fraction of 1% of the workforce of 33 million. Again, I think it is a case of “Five out of 10—must do better.”
There is much to agree with in the Opposition motion: the condemnation of the Tory Government and their mismanagement of the economy; the regret that the UK is the only G7 country whose economy has not returned to pre-pandemic levels; and the ambition, which I am sure is shared across the House, to secure sustained growth and good jobs. However, I will focus not on macroeconomics, but on the impact on real people of inflation and the cost of living crisis that many of them face, not least because energy price hikes, inflation, and mortgage and rent increases are continuing to erode people’s standard of living. We certainly know from the November OBR forecast that inflation was set to peak at a 40-year high, and that wages and living standards were set to be squeezed by 7%, wiping out all the growth of the past eight years. By March, the OBR was telling us that real disposable income would fall by nearly 6%. We now know that telecoms prices will rise as well: BT confirmed that its costs would rise by 15% on 31 March, O2 is increasing prices for SIM-only customers by 17%, and TalkTalk will increase its prices for landline and broadband customers by 14%.
Grocery prices also continue to climb. In February the increase reached a new record high of 17.1%, and more recently the prices of some goods have risen by 19.1%, which represents the best part of £1,000 per year per household for the average weekly shop. The prices of essential food items have also risen in recent months. The price of two pints of semi-skimmed milk is up from 92p to £1.37, a 49% increase; a litre of olive oil now costs £7.28, which is a 65% increase over the past year, and the price of vegetables has risen by 31% over the same period. However, inflation does not hit all households equally. It has a particularly dire impact on lower-income households, which spend a much higher proportion of their incomes on necessities such as food and energy. For some people, it is even worse than that: those with allergies or special dietary requirements are hit even harder. According to analysis carried out by the Allergy Team, people with specific dietary requirements are now paying up to 73% more for food than those who do not need to buy “free from” products at their local stores.
The Joseph Rowntree Foundation has warned that low-income families simply do not have the resources to go on bearing the cost of soaring inflation. It noted that
“nine in ten families on Universal Credit said they couldn’t afford the essentials in October last year. Since then, inflation has been in double digits”.
Even the Office for National Statistics told us in April that about half the adult population—49%—were worried about the cost of energy or the cost of food. I think that some of the comments we have heard from Tory Members today spoke volumes. It is almost as if they thought that Tory voters would not be affected by these prices, when half the adult population are worried about the cost of energy or food. I think that they should take notice.
We also know that families are beginning to feel the pain of increased mortgage costs, which, while they may have fallen back a little from the high point last October, are still much higher than they were a year ago; and of course, the central bank has increased the base rate for the 11th consecutive time. Let me put that in context. Nationwide has reported that its standard mortgage rate will rise to nearly 8%—7.74%—on 1 May.
It is rather obvious that, when it comes to the cost of living, the Government should have three urgent tasks. The first is continuing to help families with high energy costs, not by simply freezing the cap—although it is not really a cap at all—but by reducing it from £2,500 to £2,000, as well as maintaining the energy bills support scheme. The second is to bear down on inflation; forcing down energy prices would help with that, as it did last year. Thirdly, as this was mentioned earlier, when it comes to the elements that are under the Government’s control—the next round of public sector pay awards, benefits, the minimum wage and pension settlements—they should ensure that no one falls further behind, and should introduce fairness into the system to pay for it. As the motion says, it could be paid for by a meaningful windfall tax, the ending of non-dom status, the taxing of share buy-backs, and the scrapping of costly vanity nuclear projects.
That is not to say that there is no support from the UK Government—the Chief Secretary referred to some of it, which he rightly described as targeted—but it would be helpful for them to look at the efforts made in Scotland and the range of additional measures that have been put in place there. The Scottish child payment has been further expanded to all eligible six to 15-year-olds. It has increased to £25 a week, and 387,000 children are now forecast to be eligible this year. The various family payments, including the Scottish child payment, could be worth around £10,000 by the time an eligible child turns six, compared with around £1,800 for comparable families in England and Wales. There are more free school lunches during term time for all pupils in primaries 1 to 5, which is the most generous free school meals offer in the UK, saving families on average £400 a year per child.
We have doubled the fuel insecurity fund to support people at risk of self-disconnection or self-rationing of energy. The new winter heating payment that replaces the Department for Work and Pensions system will provide a stable, reliable annual payment, helping 400,000 people. We are maintaining investment in the Scottish welfare fund at £41 million this year, and continuing to invest in discretionary housing payments, with £84 million this year. We are also continuing to provide funding to deliver the council tax reduction scheme. So it is obvious that this Government can, and now should, do more.
Of course, the inflationary pressures that have driven the cost of living crisis are not there by chance. They are not all a consequence of external shocks, and they are not all a result of covid or of Ukraine. The inflationary elephant in the room is Brexit. The London School of Economics has said that
“by the end of 2021, Brexit had already cost UK households a total of £5.8 billion in higher food bills”.
Last year, as prices were rising steeply, the former Bank of England policymaker Adam Posen insisted that 80% of the reason why the UK has the highest inflation of any G7 country was the impact of Brexit on immigration and the labour market. Even the Harvard Economics Review has stated that Brexit
“can be seen as the guilty culprit in Britain’s inflationary crisis.”
I agree with this criticism of the Government. I agree that we should seek higher sustainable growth, but until the inflationary impact of Brexit is even recognised, it will be impossible to fully address the cost of living crisis that so many of our constituents are facing.
I want to speak very briefly to commend the Government for their efforts, not just over the last couple of years, and not just since the appalling aggression of Putin in Ukraine and the post-pandemic crisis, but all the way back to 2010, when a Conservative coalition Government inherited the biggest mess out. When I was doing a bit of research for this afternoon’s debate, I looked back through the years since 1973. Just look at unemployment. Every single Labour Government have left office with unemployment higher than when they came in. When I looked back, I could see that unemployment continued to fall very briefly following the excellent legacy left by a Conservative Government, but then, inexorably, it crept up again. And under Labour, there was no money left when the Conservatives took office in 2010. That is the start of the story. When we look at what really matters to people and at how young people want a role model and want to learn, get out there and get a good job for themselves, we see that unemployment matters so much. In the United Kingdom now, we have the lowest unemployment figures since the early 1970s—in fact, since 1975.
When we look at growth, yes, at the moment we are challenged, as are all economies around the world, but actually, looking at the facts, the UK was growing faster than any economy in the G7 over the last three years, as my right hon. Friend the Member for Wokingham (John Redwood) said. Last year, only the UK had growth of 4%; Germany’s was 1.8%. It is easy for the Opposition to talk about the cost of living crisis and what the Conservative Government have done wrong, but they are not looking at the big picture. They should look at our trade policy. The UK has left the EU, and what are we able to do? We can turn to what is predicted to be the fastest-growing area of the world: Asia. We can expand our global trade and be an advocate for global free trade. There is an opportunity for all nations to rise on the back of more global trade. For so many years, the Opposition tried to scupper the will of the people, as expressed in the Brexit referendum, by preventing us from leaving the EU. Instead, we are now free to form our own trade policy and to trade with the rest of the world, which is fantastic.
The hon. Member for Hampstead and Kilburn (Tulip Siddiq), for whom I have a lot of time, talked about pensions and the difficulties for people in the UK. I wanted to intervene to ask her about the Leader of the Opposition. Bearing in mind that he had legislation to protect his own pension—with no lifetime allowance, can protect his family as much as he likes—will he resile from that? Will he scrap that little statutory instrument, so that he can be in the same boat as the rest of us? Or is it one rule for him and a different rule for the rest of the country? [Interruption.]
This cost of living crisis is “unlike anything we’ve seen”. Those are the words of Citizens Advice, which is truly on the frontline when it comes to the real bread-and-butter problems people face.
We know that the rising cost of essentials impacts those on the lowest incomes the most. I used to talk about bumps in the road—unexpected life events that derail people, such as job loss or bereavement—but increasing numbers of people are simply running out of road. There is more debt and more unmanageable debt, and more demand for advice services. StepChange and Citizens Advice both say that the size and scale of the debt crisis is unlike anything they have seen before.
The debt crisis means more borrowing, too. StepChange has found that people who use credit cards and overdrafts to pay for essentials, as more and more people do, are 10 times more likely to be in problem debt than those who do not. Some 1.4 million people are relying on high-cost credit to cover rent and other household bills.
There is also a relatively new phenomenon: the negative budget. This is when, even after debt advice sessions and budget counselling, a client’s income is not enough to meet their essential outgoings. Half of Citizens Advice clients and a third of StepChange clients are in that predicament. That is particularly worrying because it requires a rethink of how to support the most financially vulnerable. Yes, there are practical measures, but we need to better fund our advice agencies, which are seeing an enormous increase in demand. We have to be careful that this includes provision for face-to-face advice in addition to virtual advice, because people sometimes need to see a trusted adviser before going to another channel.
We need to overhaul the type of debt solutions that advice agencies can offer. I welcome the breathing space that gives debtors respite from their creditors while they get their finances on track. I also welcome the expanded access to debt relief orders and the fresh start that bankruptcy can bring, but the up-front application fees are pricing people out of these options with nowhere to go. Applying for a debt relief order costs £90 and declaring bankruptcy costs £680, and those are up-front fees. They are simply not affordable for people who need such options, particularly those with negative budgets, and we need to consider how to fund them.
We should also be wary of individual voluntary arrangements. Too many people are forced into IVAs without the impartial advice they need to ensure they are the best option for them. In fact, it is probably time to undertake a full, holistic review of debt solutions. We need a simple, straightforward system that ensures people in debt are always able to access the system that best suits their needs, through independent, impartial advice that is suited to the individual. Such a review must look at enforcement, as the use of bailiffs is far too widespread. I was pleased to sponsor the launch of the Enforcement Conduct Board, but it needs to be put on a statutory footing. It is vital that creditors have to use a bailiff that is accredited by the ECB, and that includes central and local government, who are some of the worst offenders.
There is no easy solution to the cost of living crisis, but for those who have reached the end of the road and can see no way out of their debt, we need to move from temporary fixes and piecemeal solutions to a long-term, sustainable plan.
Thank you for calling me to speak so early in this debate, Mr Deputy Speaker.
The fact is that unprecedented international conditions have led to instability in our economy. Given the global world in which we live, any international crisis can and will have an impact at a national level sooner or later. I am proud that the UK has long been at the forefront of work to forge an international system characterised by stability and co-operation. This Government have always taken very seriously their responsibilities as a member of the G7, the G20 and the Commonwealth of Nations. This Government proudly took on the leadership of COP26 and rallied the world’s Heads of State and Government to take action on climate change.
Despite all those commendable efforts, there are some things that this or any other Government cannot predict or control. The Government cannot predict when a potentially deadly virus will cause a pandemic; they cannot control when a dangerous autocrat marches his troops into a neighbouring country; and they most definitely cannot control the weather. However, when listening to the Labour Front Bencher’s speech, one got the sense that had Labour been in power there would, magically, have been no pandemic, war or adverse weather. The public are listening and they are not stupid. They have experienced those things with us and they will not be taken in by what the Opposition say.
From the covid pandemic to Putin’s senseless war in Ukraine, and bad weather conditions in north Africa and Spain, this Government have been tested time and again. Our constituents across the country are feeling the squeeze caused by those events, but this Government have been there to help them deal with the burden of high energy bills, soaring inflation and uneven food availability. Actions always speak louder than words, and the actions of this Government are clear: we have provided £94 billion in cost of living support, helping the most vulnerable in our society; the energy price guarantee has been extended for three months; and three cost of living payments totalling £900 are going directly into the bank accounts of those on means-tested benefits, starting today.
But what about the words? The words of Labour’s motion are nothing but a smokescreen for its past and present lack of grip on the economy. The party that casually left a note saying that there was “no money left” now criticises the Conservative Government who have grown our economy at a faster rate than those of France, Japan and Italy since 2010, and at the same rate as Germany since the Brexit referendum. The party under which youth unemployment rose by nearly 45% criticises the party under which the total unemployment rate has fallen to a near 50-year low. When it comes to the economy, it is only the Conservative party that the British people can trust. The Labour party has never left government with unemployment lower than when it took office or with the economy on a better footing.
Even in opposition, Labour advocates for the same disastrous recipe of unfunded spending commitments and yet more borrowing. So far, the bill that Labour would saddle taxpayers with stands at £90 million in spending commitments that are plucked out of thin air—that is roughly £3,000 per household. All that comes with a good serving of borrowing, to the tune of £28 billion each year until 2030.
Going back to the motion before the House, I advise the Labour party to get on with understanding the people’s priorities and how the economy actually works. Labour should stop using the non-dom tax status as a cheap political attack under the guise of economic policy and stop going on about a windfall tax, which this Government introduced last May and increased as part of the autumn statement last November.
Listening to the Minister, I get the distinct impression that Labour’s Front Benchers and Labour colleagues more generally are simply making things up; it is as though the cost of living crisis does not exist. But I know that the cost of living crisis is getting worse as the days go by and that it is becoming increasingly difficult for people to afford even the most basic consumables. I am sure that the Minister can afford to pay attention to this, even if he cannot afford much else under his Government’s mess. I did expect a bit more originality from him in explaining away the crisis. It is now getting pretty tedious listening to the same old claptrap about global headwinds, international disruption, the impact of the war in Ukraine, supply line challenges due to this or that, or the covid landscape.
There was no mention of the Government’s part in the debacle. The Government—not a Cameron Government, not a May Government, not a Johnson Government, not a Truss Government, not even a Sunak Government, but a Tory Government—have been in office for 13 years. I know that it feels much longer than 13 years, but does the Minister grasp that at all? He seems to think that the previous four Administrations have nothing to do with the current Administration. Well, I have a bit of unwelcome news for him: they do.
The Minister may be surprised to learn that we have had seven Chancellors of the Exchequer since 2010, which is, on average, about one every two years. If we put the six-year chancellorship of George Osborne aside, we have had, on average, a new Tory Chancellor every 12 months. The Minister may be even more surprised to find out that they have all been Tory Chancellors—yes, all seven of them. In fact, I will let him into a little secret: the current Prime Minister used to be one of them.
Does the Minister not think that such lack of continuity, on top of the general incompetence, may have had a bearing on the current parlous state of the economy? Does he not think that such an environment of chaos has had a bearing on the cost of living crisis? Does he seriously expect us to believe that the Government’s actions have made things better? Does he seriously expect us to swallow the narrative that all this financial, fiscal and economic entropy was foisted on an otherwise competent coterie of Tory Chancellors who happened to be in the wrong place at the wrong time over a period of 13 years?
Between them, that list of failed Chancellors broke their own fiscal rules at least 11 times, if I recall rightly. Has that not had anything to do with the current cost of living crisis? Have cutting housing benefit, bringing in the bedroom tax, freezing child benefit and making changes to tax credit not had a bearing on the cost of living crisis? What about the 10-year virtual freeze in public sector pay? How about the cuts to schools or the justice system? It goes on and on, but the Government will take no responsibility whatsoever for it.
What about the issue of debt? The Minister should be unsurprised to learn that Tory Governments have been responsible for the bulk of all Government debt—a debt currently standing at £2.5 trillion. They claim to be the party of sound finance, but they are not. They have managed to pay back 0.5% of all the money they have borrowed. They say they are the party of economic confidence. That is a joke.
Nobody should be terribly surprised that we face difficult economic times if a Government lock an economy down for nearly two years; if they pay 7 million, 8 million or 9 million people to sit at home; if they provide grants to keep companies in business; and if they intervene on an unprecedented level. Indeed, the intervention to get us through the worst pandemic since 1918 was almost on the scale of a world war. The Government are to be commended for doing what they did to save lives.
Following that, we have had a major economic crisis and war in Ukraine. That has caused an almost unprecedented spike in energy prices. The last time they rose as much was in 1974. Both those factors have had a big effect on Governments, businesses and individuals. The Government have done an awful lot to try to safeguard people’s living standards. They have provided a cap on energy prices, they have provided a £400 grant, they have put the pension up by 10.1%, they have put benefits up and they are providing special payments. Billions have been spent on supporting people, and that is quite right in an extraordinary time.
Of course we can always have a political argument about whether we should do more or do less, but the most important point is to have an economic policy that gets us through the immediate crisis and into better times when the sun will shine. The good news is that in the course of this year, inflation is expected to fall substantially. We already see a fall in input price inflation figures, and a fall will come through in food prices and energy prices in the course of the year.
There is a debate about whether we will have 2% or 3% inflation, but given that it looks from the negotiations as though pay will go up a little bit, it is clear that inflation will fall below the level of pay increases sometime this summer. We will then have a situation where living standards start to recover. I do not pretend that people will immediately turn round and say, “This is great!”, because it takes several months for people to feel that that has happened, but we are heading towards a situation where the big reductions in living standards that have taken place over the last 12 months, and which have understandably made my party unpopular and made the public mood very scratchy, will start to reverse.
Through sound financial policies, the Government have done their best to keep a stable economy and set us on a path for growth. Looking at the public sector finance figures today, I hope that, when it is prudently responsible to do so, we will increase incentives by reducing tax. That in itself will help some of those who are struggling.
I think the Government are on the right track. I have no doubt that this is a difficult time for many of our constituents, but I do not think anybody can complain that we have not done what we can. I look forward, over the next three, six and 12 months, to a better economic situation. Ultimately, the argument that we are having on the Floor of the House is this: if people feel miserable and badly off, they will vote us out of office, and if they feel that things are going better, they may well vote us back in. I am optimistic.
I wish we did not need this debate, but unfortunately, as all Opposition Members know, the cost of living crisis is biting harder than ever. As we have heard, under the Conservatives, food prices have risen at the highest rate for more than 45 years. I want to speak today about the implications of that for disabled people and those with long-term health conditions.
Depending on the nature of their disability, some people have difficulty preparing certain foods and rely on pre-prepared or convenience foods, which frequently works out more expensive than buying raw ingredients. The price of ready meals rose by almost 22% in 2022. If, for example, someone has difficulty standing or sitting for long enough to prepare a meal from scratch, they may feel that they have no choice but to pay those prices.
Rising food costs are also a huge source of concern for those on specialist medical diets. In a report published last month, Coeliac UK revealed that a gluten-free weekly shop can be up to 20% more expensive than a standard shop. For example, the cheapest loaves of gluten-free bread cost more than seven times the standard equivalent.
Even before the pandemic and the current cost of living crisis, disabled people faced extra costs of £583 per month on average—the so-called disability price tag. Scope is set to reveal an updated figure tomorrow, which I understand is substantially higher. I can confirm that the new statistics show that the extra cost of disability is equivalent to 63% of household income after housing costs. If, for example, a non-disabled household spends £100 per week on their food shop, an equivalent disabled household will need an additional £63. Again, even before the cost of living crisis, people with coeliac disease and those with other specialist diets faced higher prices when accessing essential foods.
When the price of everything has risen so substantially and there are fewer opportunities to shop around, it follows that those who are already at the sharp end will be hit hardest. I am sure that the Minister will agree that that is a shocking disparity. I hope to hear in his concluding remarks that he will pay close attention to Scope’s announcement tomorrow on the disability price tag, and lay out a clear plan to alleviate the financial pressure on the people hit hardest, first by covid and now by the cost of living crisis.
I take this issue very seriously. Clearly, families across the country are feeling the pinch at the moment. We in this House are all keen to address the issue in a constructive and sympathetic manner.
I am delighted that 9,100 families in Clwyd South will receive £301 from the Government as the latest cost of living payments begin to be sent out today. That cost of living payment is being made to more than 8 million families on means-tested benefits across the UK. It is the first of three cost of living payments that will, together, total £900. Some families will receive £1,350 of support. Those payments will be accompanied by a £150 payment for people on disability benefits, and a £300 payment for pensioners at the end of 2023, on top of winter fuel payments.
That is part of a much larger programme by the Government to support vulnerable people in these difficult times. Indeed, the cost of living package to help the most vulnerable has been worth £94 billion. A key part of this is addressing inflation. As the Chief Secretary to the Treasury said, we expect inflation to halve by the end of this year, so the issues that we have at the moment and to which the hon. Member for Hampstead and Kilburn (Tulip Siddiq) referred will mitigate themselves, and we will see inflation come down later in the year.
I am proud to represent a Government who, in these difficult times, have gone out of their way to support people, as my hon. Friend the Member for Poole (Sir Robert Syms) said in his excellent speech. I will not go back over the pandemic and the invasion of Ukraine, but as he said, those issues put exceptional pressure on the UK economy, and Labour Members need to take that on board and at least acknowledge it in their remarks, which, so far, they seem not to have done.
We have to be realistic about what we can do to help people in a time of crisis. I am pleased that we are extending the energy price guarantee, at £2,500, for three months from April to July, which will help families to save an average of £160 on their energy bills. The extension means that, thanks to Government support, families will have saved £1,500 on their energy bills since October 2022. I strongly support a number of other measures: the uprating of benefits and the state pension in line with inflation protects the most vulnerable households; freezing fuel duty for a 13th consecutive year saves the average driver about £200; extending our household support fund to more than £2 billion ensures that local authorities can support the most vulnerable in their communities; raising the national living wage by 9.7% increases wages by an average of £1,600 for 2 million low-paid workers. Those measures will support the most vulnerable in our society.
I intervened earlier on the Labour Government’s record on unemployment between 1997 and 2010. During that period, the number of unemployed people increased from 2.1 million to 2.5 million, and there was a 45% increase in youth unemployment. As we have seen in a number of comments—
The central issue that we are debating is very simple; there is a very simple question to address: after 13 years of Conservative rule in Westminster, do our constituents feel better off than before? [Interruption.] Exactly. I know from talking to residents and people across my constituency of Pontypridd and Taff Ely, and from being on the doorstep across the UK in the past few weeks, that the answer is a clear and resounding no. Across the country, every single family has felt the impact of what the Trussell Trust and many others have described as a cost of living emergency. When we look across all the indicators, it is no wonder, with inflation reaching a four-year high, an average family’s weekly food shop up over £700 this year, and the essentials of housing, fuel and power up almost £1,500 on average. All the while, real wages have stagnated and Britain has slipped behind other developed nations—all of this on the Conservative Government’s watch.
The Government have completely failed to get a grip on the crisis, while the human cost continues to be utterly devastating. Nowhere is that more apparent to me than in my own patch in the south Wales valleys, where, according to data from the Office for National Statistics, residents in my local authority of Rhondda Cynon Taff report life-quality indicators lower than the UK average, including on life expectancy, happiness, the local employment rate and disposable household income. All of that is thanks to more than a decade of inaction by this incompetent Tory Government.
Let us be clear: as the cost of living crisis continues to rage, regional inequality is deepening by the day. So much for levelling up—we are not even levelling equal. Our incredible local authority, together with the Welsh Labour Government, as I have said, are moving heaven and earth to do what they can to help people in these exceptional circumstances, including with RCT’s regular food support grants to our local food banks. Those grants, together with the amazing food bank volunteers, are a lifeline to thousands of my constituents, who need support now more than ever. Sadly, the RCT area saw a 14% rise in food bank usage in the last year. Despite local efforts, the UK Tory Government continue to sit on their hands by not granting devolved nations the proper support they need and people in Wales are being let down.
I am immensely proud that our local food bank collected an incredible 16,000 kilos of food donations from generous shoppers at local supermarkets in the last year, but it is an indictment of the UK Government’s failures that my constituents have had to step in where the Government have failed. While the UK Tory Government desperately attempt to shift media coverage from the realities—they gloss over the fact that they crashed the economy last September—we all know the truth. The cost of living crisis is far from over. Later this week, I will host a dedicated cost of living event for my constituents in a local community centre in Rhydyfelin because these issues are ongoing. They are all too real and felt all too keenly. Again, it is a heavy indictment of the UK Government that my team and I have received so many messages from terrified constituents unable to feed themselves or pay their bills. That is why it is absolutely right that colleagues have focused on the impact of the cost of living crisis on individual consumers, households and families.
Another heartbreaking consequence of this crisis is that, with people spending less, inevitably businesses are suffering, too. In my constituency, we are fortunate to have some incredible independent businesses and our high street is thriving. I am shocked, however, by the responses from businesses on this issue. They cannot cope with the rising cost of energy bills or business rates. They are struggling to support themselves and, when our businesses struggle, our local economy struggles, too.
I could go on, but sadly we are limited for time. We must move beyond a sticking plaster for our economy and embrace real, ambitious change to ease the cost of living crisis and unlock economic growth. After 13 years of failed Tory rule, it is clear that only a Labour Government in Westminster are capable of that change.
Yet again, in the face of the serious challenges that we and many other nations face, Labour chooses to play politics. The pressure on households is real, but does the Labour party really believe that economic issues are defined by national borders? For example, UK food inflation in March was 19.1%. The EU average at the time was slightly higher, at 19.2%. Several EU countries face much higher inflation, including food price inflation of up to 44.8%. The International Monetary Fund shows that the UK inflation rate is the same as Sweden’s, and only slightly higher than Germany’s.
Do the Opposition really believe that this is solely a national issue? They seem to forget that we have had a pandemic, war in Europe and a resulting energy crisis. Our Conservative Government did not cause any of those, but they did respond, not by playing politics or by pointing fingers, but by delivering for people and protecting households. When people needed help, we provided covid support to households and businesses, the largest increase in benefits and the state pension for 32 years, direct support with energy bills for every household, and direct cash payments of at least £900 to the most vulnerable households. We lowered the universal credit taper rate, increased the minimum wage and froze fuel duty, and we are now investing in more affordable childcare so that parents can return to work knowing that their children are getting a great start in life, too. But unlike Labour, we do not simply spend with no plan for tomorrow: we work to rebalance our economy after each shock. That is why we have a plan to halve inflation, grow the economy and reduce debt. We are supporting research and development and promoting the UK as the future for life science and STEM industries. We are leading on green energy and carbon capture, and delivering new jobs and investment through freeports and investment zones.
Not only are we helping nationally, but well-run local authorities such as Runnymede Borough Council are delivering excellent services and administering direct financial support while maintaining low council tax. I am pleased by the timing of this debate, as it highlights what is at stake in the upcoming elections. If people want good governance and support locally, tackling the challenge of inflation, they need to vote Conservative on 4 May. The Conservatives have a clear economic plan; Labour only has a soundbite.
I wonder whether Government Members need to work on their lines a bit because they seem to be saying, “There was nothing we could do—there has been a war in Ukraine and covid.” That leads us to ask, what is the point of them really if there is nothing they can do when there is a pandemic and when our country is in need?
The defining question for people to hold in their minds as they vote in the election is this: “Do I really want another five years of this?” In everything, in every way, the 13 failed years of Conservative Government and Lib Dem coalition rule—the Lib Dems do seem to forget that they were part of it for five years—have failed our country and prevented us from reaching our potential. If growth had continued at the same rate as it did under a Labour Government, we would have an extra £40 billion for our public services.
But what makes me really angry about this Government is the way in which they have made too many people feel like this is as good as it gets, that we do not deserve to have good public services, or that good public services are beyond our reach. In the next elections, they are relying on people giving up hope—hope that our country can be so much better than it is today.
When Labour left office, public satisfaction in the NHS was the highest it had ever been. We were so proud of our achievements in the NHS that, in the 2012 Olympics, we put it on show for the whole world to see. That was how much we celebrated it, but not only have this Government broken our NHS—they are revelling in breaking the people who are working for it. They are telling working people in this country that their ambition to not just survive, but actually live a life, is beyond their reach, however small they may think it is. They tell them instead, “No, strive instead for 30p meals. That is as good as you are going to get under this Government—30p for your meal and that is it.”
If people want more than that, that is when all the cheerleaders will have a go. If they want to work with their trade unions to fight for a better salary so they can afford a bit more to eat, that is unreasonable; it is so unreasonable that this Government introduced legislation to stop workers being able to come together to fight for the salaries that they actually need. When we look at our international comparators, we see that the French are 10% richer and the Germans are 19% richer, and that is a result of this Government. They are continuing to fail us. Our country is seeing what happens when low-paid workers are told by this Government, “Go and get another job.” Well, they are going to go and get another job in adult social care, and look at what has happened there.
The last Labour Government achieved so much: the longest period of sustained low inflation since the 1960s, low mortgage rates, the national minimum wage, 14,000 more police in England and Wales, a cut in crime of 32%, child benefit up by 26%, 36,000 more teachers and 274,000 more support staff. That is what the last Labour Government achieved. This Conservative Government can judge the Labour party on our record, and on 4 May, the public will judge the Conservatives on theirs. [Hon. Members: “More!”] I will save it for next time.
The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) is right to feel empathy and sympathy and to feel angry for the people challenged by the cost of living, as everyone in this House does, whatever side they are on. Families are struggling right across the country and that is because of inflation, which steals money from everyone’s pockets. The best cure for all the issues we have all been discussing on either side of the House is to deal with inflation, yet in its 12-line motion on the cost of living, Labour has not made any mention at all of the Government’s intervention to reduce the level of household inflation. It is as though the Opposition are not aware of the £94 billion package that the Government have instituted over the last period. That is an average of £3,300 of Government support per household, which is having a direct impact on reducing the headline level of inflation. It includes halving people’s energy bills over this winter at an average of £1,500 of support per household. That has been extended to the summer, when prices are forecast to come down.
There is an enormous irony that we are having this Opposition day debate on the cost of living, on a motion with no mention of Government support, on the very day when £301 has landed in the bank accounts of the 8 million most-vulnerable families in the country through the household support fund. However, the motion does have some positive suggestions to make. It suggests we should freeze council tax. The best way for people to ensure that their council tax is frozen is to vote Conservative on 4 May. People should come and look at my council in Norfolk, Broadland District Council, which has frozen council tax not for one year, but for the past two years. If Labour councils were serious about helping people with the cost of living, they would run their councils just as efficiently as we do, and they would keep their council tax down and freeze it.
The other thing that the Opposition have done today is to have the first Opposition day debate on water infrastructure, yet in that debate, the effect of what they were arguing for with their so-called plan would have had the effect of increasing water bills by a full £1,000 a household. Is that joined-up opposition? I do not think so. What we have is the Conservatives giving £3,300 of support per household and freezing council taxes more often than not in Conservative-run districts such as my own, against Labour which, through its policy requirements, is saying we should increase bills by £1,000 and have higher council taxes in areas they represent. The best solution to the cost of living crisis is to halve inflation, grow the economy and reduce debt while supporting the most vulnerable in our society. Those are the priorities of my constituents and constituents right around the country, and they are the priorities of this Government.
I would like to raise the terrifying consequences of the declining living standards experienced by my constituents in West Derby and by people across the city of Liverpool. One third of the people in my city are now in some kind of food poverty. Two thirds of my constituents are having to cut back on hot water, heating or electricity. The crisis was not inevitable; it has been fuelled by political choices—the political choice of Tory Governments to privatise our utilities and infrastructure; the political choice to allow profiteering in supermarkets and the oil and gas companies; the political choice of this Government to inflict 13 years of brutal austerity on my constituents; and the political choices to cut our vital public services to the bone, to decimate the social safety net and state pension, to strip away workers’ rights and to create a crisis of insecure contracts and low pay. The Government’s political choices have destroyed the services that can be the difference between life and death for many of my constituents in these times of crisis.
The rise of 19.2% in the price of food in the past year is the highest since 1977, and it is alongside the sharpest fall in real wages since 1977. The Resolution Foundation calculated that had wages continued to grow as they were before the financial crash of 2008, the average worker would make £11,000 more a year than they do now, taking rising prices into account—imagine where we would be. Recently, the Food Foundation reported that child food poverty has doubled in a year: 3.7 million children—one in five—have eaten less, skipped meals or gone without meals for an entire day. We are in danger of losing a generation of children through no fault of their own. Those who will shape the future of our nation will not reach their full potential because of the preventable scourge of hunger.
It is a disgraceful injustice that many of my constituents and so many children across this country are in this situation, yet at the same time inflation has been fuelled by “greedflation”, with supermarkets, food manufacturers and shipping companies protecting shareholder dividends by giving extra lifts to prices. Unite the union has highlighted:
“Despite the rise in wholesale prices, Tesco, Sainsbury’s and Asda still managed to increase their profits by an astonishing 97% in 2021.”
At a recent sitting of the Environment, Food and Rural Affairs Committee, we heard evidence from the UN special rapporteur on the right to food, who told us:
“Corporations have a significant amount of power in markets”,
“Governments have tools in place to stabilise prices.”
In West Derby, there are nurses, educators, firefighters, postal workers, rail staff and civil servants all using food banks. This is one of the most grave and frightening crises we have seen in our lifetimes. The situation simply cannot go on, so I ask the Minister to intervene now to support my constituents and services in West Derby, and curb the selfish profiteering by some companies in the food supply chain and energy industry.
I also call on the Minister to make food a legal right for all, to enshrine the right to food in legislation, and to end the scandal of hunger and food banks once and for all, beginning by providing universal free school meals for every primary and secondary pupil in state education. Let us heed this evidence, and invest in our communities and our children. We do not need sticking plasters and tinkering around the edges. We need the kitchen sink throwing at this dire situation for millions to transform the future of our nation. We should demand nothing less and settle for nothing less.
The cost of living is the No. 1 issue that comes up on doorsteps. That is why it is so important the Government are working on their plan to reduce inflation by at least half, and it looks as though it is going to come down by a lot more than that. Today is a good day to have this debate, because it is the day that 8 million people—actually, more than 8 million people—will get the first instalment of the £900 cost of living payment, including nearly 9,000 people in my constituency.
There is a lot in this motion, from economic growth to wages, taxes and energy. I will try to skip through as many of those as I can, beginning with economic growth. In every year since 2010 until we hit the pandemic, the economy grew. It grew by 19.2% during that period, with the third highest growth in the G7. We saw during that period, until the pandemic, fantastic employment figures as well. When Labour left office in 2010, unemployment was 8%, and it is now less than 4%. We saw the equivalent of 1,000 people being added to the workforce every single day in that period up to 2019. On youth unemployment, which is of particular interest to me, Labour left office with it at over 20% and it is now also at a historical low.
On wages, the national living wage since 2016 has seen an average of £5,000 go into people’s annual wages. The Labour party does not want to talk about pensions in this motion, which is okay, but I will just note that this Government’s triple lock policy has added £2,300 to the value of the state pension, and we must not forget the important role that plays for pensioners with the cost of living.
On taxes, I welcome Labour to the cause of being concerned about taxes being too high. It is not their record in government, but better late than never. We have doubled the personal allowance to more than £12,500 on which people pay no tax whatsoever. This motion says that Labour wants to freeze council tax. I doubt its local authorities would be supportive of that. However, leaving that to one side, there is this awkward fact that in the 13 years of this Government so far council tax has gone up by 36%, but in the 13 years of the Labour Government it went up by 110%. It is easy to be in favour of council tax and everything else being lower when a party is not in power, but it is slightly harder when it has to make such decisions.
Turning to energy prices, through the combination of the rebate and the energy price guarantee, families have been saved £1,500 on their energy bills since October. This is a huge investment by a Government to help keep down the cost of living, paid for by a windfall tax that the Labour party says it wants to extend. It is already going until 2028, so we have taken the action that Labour is just talking about all the time, pretending that we have not done so already.
The Prime Minister wants the country to take maths more seriously, and I think he is right. Maths is important for people in the labour market. I have never asked him, but I have a feeling that maths is always in his mind, because when he sits on the Front Bench, he looks across at a sea of Labour MPs who do not take maths seriously at all. Every week we are told that if we end non-dom status, put VAT on private school fees and use the windfall tax, we can pay for whatever our hearts desire—childcare, council tax, freezing energy bills, free breakfast clubs, whatever we like. That is totally unserious. There is no greater example of the anti-maths mindset than the Labour party, and as usual its sums do not add up.
In terms of maths, no matter how far a number of my constituents try to make the pennies stretch, they are just not stretching enough. Families’ incomes continue to go down and costs continue to go up. That is the reality of the Tory Government. The cost of living crisis has been going on for some time, and it is important that we do not talk about it as something normal and something we should accept. Every day I see that with my constituents, who are so desperate with nowhere to go. We see it in our casework and our advice surgeries. Household incomes are being squeezed. To put that in context, food prices are going up 50% faster than elsewhere in the G7, putting Britain’s food inflation rate at a staggering 19.2%. That is not some abstract maths figure from economists; that is felt in people’s weekly shop. When people go to the supermarket, they find that the price of sugar is up by 42%, milk is up by a third, and pasta by a quarter. Those are basic food items that families need to survive. That is the maths they are struggling with when they struggle to pay for this cost of living crisis.
I want to highlight the impact of this crisis on young people, which far too often we forget. We talk about young people being the future, but a number of them are struggling to live day to day. They are struggling with zero-hours contracts. We see the claims about youth unemployment going down, but these young people are in insecure jobs—Deliveroo jobs. That is not aspiration. That is not what I want for young people in Vauxhall. I want them to have long-term careers, not insecure jobs, yet that is the reality behind the figures that Conservative Members keep citing.
I am proud to represent Vauxhall. On my visits to schools and youth centres I seebold and passionate-thinking young people, but a number of them feel that politics is not for them, does not speak to them, and that the economy is skewed against them. The sad reality is that they are right. Instead of the Government getting behind votes at 16, votes are being supressed next month with the introduction of voter ID. Why are the Government so scared of allowing young people to vote? Why?
Figures from Barnardo’s show that one in four young people now live in poverty, and sadly many more face going hungry. Yesterday, children from Stockwell Primary School visited Parliament, and they spoke to me about their worries and concerns. I recently co-chaired an event of the all-party group for London, with the hon. Member for Bromley and Chislehurst (Sir Robert Neill). We hosted an event with a youth charity, London Youth, to hear directly from young people about what the cost of living crisis is doing to them. We heard how many of them are having to take on weekend jobs alongside their schoolwork, just to support their families who are struggling. We heard stories of young people stepping up to care for their younger siblings, because their parents are having to work more hours because childcare is extortionate. We heard about those young people’s abject lack of hope of being able to move and have secure roots because—guess what?—they cannot afford to buy.
I have spoken about the need for us to end section 20 notices, and the impact that the cost of living crisis is having on insecure housing. If we want our young people to have hope, be successful, and contribute to the economy, we need to support them by not abandoning them, and by not making them suffer through the cost of living crisis. We need to give those young people hope, and that will happen only with a Labour Government.
In her opening remarks, the shadow Minister asked what planet Conservative Members are living on. I will tell her. We live in the real world, whereas it seems that Labour Members have been living under a rock. We have just emerged from the worst pandemic since 1918, a new disease that killed millions of people globally and as a result saw much of the international economy grind to a halt. That tragedy was compounded by the brutally evil ambitions of President Putin when he launched his illegal and inhumane invasion of Ukraine. Not only has his regime murdered countless innocent civilians; his actions have had a massive impact on energy prices, further adding to the cost pressures experienced globally. And that is just it: this is a global problem—not national, global.
The rise in the cost of living over the past year has impacted on all our constituents. Nobody denies that, least of all the Government. It is surely the very reason why the first of the Prime Minister’s priorities is to halve inflation, which will, in and of itself, bring massive benefit to everybody who is struggling with rising prices and the cost of living. As the late and much-missed Baroness Thatcher said, “inflation devalues us all”. As on so many issues, she was absolutely right.
The good news is that the Bank of England is clear that inflation will fall dramatically this year. Indeed, one of the biggest deflationary tools in the Government’s extraordinary package to help my constituents with the cost of living was the energy price guarantee, which lowered bills for the vast majority of my constituents and the constituents of every single Member in this House. That has helped to curb the inflationary spike caused by what we are seeing day in, day out in Ukraine.
It is not just support with domestic energy on which the Government have helped my constituents. Fuel duty has been frozen for the 13th consecutive year, saving drivers some £200. Let us contrast that with what Labour is doing for people who drive. We need look no further than the Mayor of London. He is costing my constituents money with the ill thought through imposition of his new ultra low emission zone tax. People from Aylesbury who need to drive to parts of outer London for their work or for specialist hospital appointments will now have to pay £12.50 a day for the privilege—no help from the Labour Mayor with the cost of living.
What have we done as a Government? We have come up with a package of support worth £94 billion—an average of £3,300 per household. As we have heard, Conservative Members recognise that we are supporting low-income households with £900 in cost of living payments, the first of which is finding its way into constituents’ bank accounts from today. In Aylesbury, more than 10,000 stand to benefit from that assistance.
Growth and prosperity go hand in hand with improved productivity. That is what my constituents told me on Saturday that they want to see. I am so pleased that the Chancellor has rightly started work in that direction. In time, I would like to see the Government reverse measures on IR35 and reconsider the VAT threshold, because I believe that will help with those ambitions, but it has to come as our economy strengthens following the unprecedented shocks it received in recent times.
Labour offers the prospect of unfunded spending and higher debt. That is not a recipe to help people with the cost of living; it is a recipe for another letter from Labour telling us there is no money left. It is the Conservative party that will provide the short-term help and the long-term policies to enable the British people to enjoy greater prosperity now and far into the future. It is the Conservative Government who are building the stronger economy to help with the cost of living.
There is a cost of living crisis in energy, food and other aspects. It is all part of a wider age of austerity being imposed on us by the few and inflicted on the many. It is, of course, affected by international matters, acknowledged by Members on both sides of the Chamber, which no Government could ignore. Fundamentally, however, political choices have been made, not just recently but over decades, that are causing the issues and the problem. It is not simply about the plight of the poorest, which I will come on to. The middle class is now being squeezed. I was in a rather prosperous town in my constituency speaking to a minister in a church where most parishioners would think of themselves as being at least on the ladder of prosperity. He was talking about the extent of poverty that people are feeling because mortgages are going up, and the fact that with the lack of increase in their wages, they cannot deal with the additional factors that are squeezing their income.
As well as the poor being impoverished, the middle class is now being impoverished. At the same time, let us remember that Brexit and covid, which the Government say have caused difficulties and plead as an excuse, have created millionaires and billionaires. People on the Government Benches and in the House of Lords have benefited significantly from political choices that have impacted on not just the poorest but the middle class.
My constituency is by no means the poorest part of Scotland. It is an energy-rich and food-rich area with arable land, yet there is food and energy poverty, which is shameful. The situation of food poverty was brought to my attention by the local food bank, which sent an email on 17 April saying:
“It’s been a busy start to the year”.
Let us remember that we are not even one third into it. It continues:
“we’ve already sent out 1500 emergency food supplies to 3647 people supporting 1210 households in East Lothian. Last month…saw the highest demand ever for foodbank services with 565 emergency food supplies…1 in 3 people supported were children.”
Two thirds of those referred were people whose income was from benefits or work, but who simply could not make ends meet. That is the situation that we are in. It cannot be blamed simply upon Putin, or weather and other catastrophes. It is down to political choices that have been made, as the hon. Member for Liverpool, West Derby (Ian Byrne), said, not simply in recent years with Brexit and covid but by Governments over decades. We have an energy-rich county—East Lothian has Torness power station and offshore wind at Cockenzie and Torness—yet we have fuel poverty to match the food poverty that exists. It is not simply that kids are going hungry—they are going cold. It is absurd, when the volume of energy we need is there in the fuels that exist in our community. It is all down to political choices.
I agree with a lot of the sentiment expressed from the Opposition Benches. This problem has been ongoing for decades. Change will not come in the local elections or in this Chamber. Change can come only when Scotland becomes an independent nation and ends the poverty forced upon our people for generations.
I am grateful for the opportunity to speak today, first to recognise the challenging times that we live in. Although Mansfield is increasingly affluent—average incomes have risen—there remain pockets of significant disadvantage and high levels of economic inactivity. In those pockets, poor health, poor housing and being out of the workforce contribute significantly to the challenges. It is not, as Labour would have us believe, a simple case of chucking a bit more money at people to fix it. These are complicated issues.
I am grateful for the wide range of Government support, including direct support for residents in the biggest welfare package in history, as far as I can tell. It includes increases in pensions, the halving of energy bills and the household support fund, which have helped a lot of people. We need to recognise that that is not sustainable. The Prime Minister is therefore right to look at reducing inflation and growing the economy. My community fundamentally needs better-paid jobs rather than subsidies. We need to make inroads into economic inactivity. I have spoken to the Department for Work and Pensions before about devolving powers to our local area to create packages that will support people into work that fits our local needs and priorities. I will see the Secretary of State about that shortly. At the very least, our new combined authority in the region should have the powers that Greater Manchester and the west midlands already have to deliver those packages. I have written to the Secretary of State for Levelling Up, Housing and Communities about that recently.
The Government are supporting growth in our region. Devolution is also an opportunity to boost life chances through jobs and infrastructure. In Mansfield we still have lower-paid employment than elsewhere. Transport links to other areas for jobs and investment, and attracting new jobs in growth sectors such as clean energy and advanced manufacturing, are key. I have spoken in this place a lot about the £20 billion STEP—spherical tokamak for energy production—fusion investment as an example of huge Government investment. Our combined authority will give us the ability to wrap a local skills and education package and transport links around that, so that kids in Mansfield can have amazing opportunities that have not existed in our area for decades. North Nottinghamshire can power the country again. In turn, we can change lives. That is a powerful intervention from the Government to support people.
There are all sorts of great projects across Mansfield, Nottinghamshire and our region, including the freeport, our development company, spherical tokamak for energy production fusion, investment zones and our combined authority and transport projects. We all want bigger, quicker and better support for these projects, but they will sit under our combined authority to help us drive private sector growth and bring funding back into the Treasury, as well as create opportunities, which are important. Rather than talking about doing things, the biggest role for Government in growth is to undo some things in order to help small businesses to get on with business and reduce the regulatory burden.
It is important to clarify Opposition comments about council tax. Residents are reading national leaflets in relation to local elections and getting the impression that if they vote for Labour next week, their council tax will be frozen, which is nonsense. It is highly misleading and almost as if the Labour party is trying to dupe people into believing that. People expect local campaigners and candidates who are worthy of their trust, but in this case Labour is leading people up the garden path. It is important to get that on the record. In truth, the Labour party does not know what the policy will cost or what its impact on public services will be, because it does not understand the issues. That is what residents need to know in a week’s time when they come to vote.
We all want to tackle rising costs, grow our economy and boost opportunities. Through the covid pandemic, the Russian invasion of Ukraine and other global events, the Government have continued to support people heavily through some of the biggest welfare interventions in this country’s history. Obviously, that is not sustainable forever but the Prime Minister is right to focus on economic recovery and growth.
Rather than seeking to paint an increasingly bleak picture of Britain, as the Opposition consistently do, and acting as though everybody in our country lives in abject poverty and misery, which does not go down well with most of this country’s voters, this Government are acting to help people who are struggling with the challenges of the cost of living and to boost growth and opportunity. While Labour Members pop up all over the place, pointing fingers and without any ideas of their own, the Prime Minister and this Government are actively supporting my constituents in an unprecedented way.
My constituents in Bolton South East, the 38th most deprived constituency in our country, need a Government and a council that will take the necessary steps to support them through the cost of living crisis.
The record of the Government of the last 13 years is clear. They are forcing through a 5% rise in council tax this spring; real wages have been squeezed since 2010; families are poorer than our European neighbours; the chaotic mini-Budget in September 2022 added £500 a month to first time buyers’ costs; food prices in the United Kingdom are up 50% faster than elsewhere in the G7; and we have had 24 tax rises since 2019, meaning the burden on working families is now the highest in 70 years.
Then there is the record of the Conservative council in Bolton, which has been in control since 2019. It failed to even apply to the levelling-up fund and we missed out on the opportunity of £40 million in investment; the urban redevelopment of Crompton Place has been cancelled and housing development on Moor Lane has been downgraded; and Marks & Spencer, a huge employer in Bolton, has announced that it will be leaving our town as it is not feasible for it to continue because of the stalled regeneration.
Meanwhile, the Labour party has a real plan for Bolton South East and for the country at large. We will freeze council tax this year and cut energy bills, paid for through a proper windfall tax on the gas and oil giants that have made billions of pounds in profits. A Labour Government will support small businesses, paid for by an online sales tax, allowing them to lower prices for customers on the high street. Our Treasury team will reverse the Conservative decision to hand the richest 1% of pension savers a £1 billion pound handout. Those are our immediate plans.
This afternoon, we have heard many Members on the Government Benches talk about the financial credibility of a Labour Government and of the Labour party, so I want to take a little journey through time. In 2006, nine years after Labour came into power, the GDP-to-debt ratio was 40.5%. Germany’s was 66.7% and France’s was 64.6%, so we were still doing better than those two countries. In 2008, as everyone knows, there was an economic crash that started with the Lehman Brothers collapse in the USA, and there was a global recession. The then Labour Chancellor borrowed money to save our economy, and everybody knows, if they put their hand on their heart, that he did: he stopped about half a million people losing their jobs and avoided the banking crisis.
Between 1997 and 2010, we also made a record investment in health, in education and in police numbers. Some £19 billion was spent on renovating council homes that had been left in an appalling situation because of years of Conservative government. Let us have no lectures from Government Members about who is financially prudent, bearing in mind that last year their Prime Minister collapsed the entire economy.
I want to move away from the sort of tribal politics and tribal speeches that we have heard from Opposition Members. I want to talk about some inspirational people, but before I get away from partisan points, I think it is worth pointing out that 21,900 households will be £900 better off today as a result of what this Government have done.
I want to talk about the best thing about my city of Peterborough: the people of Peterborough. Last year, in the House of Commons, I brought together people from my city who I call my Peterborough heroes: people who volunteer their time to make their city a better place. I want to talk about some of those people.
I thank people from the Bretton project—people like Miriam Whittam, Rob Fisher and Erin McGuigan, who volunteer their own time to make Bretton a better place and who deserve our recognition. I thank organisations like Gladca, which has existed for 50 years in the heart of my city, supporting people and signposting them to the right services; I thank Yasmin Ilahi and Mr Mohammad Choudhary for all the work that they have done.
I thank Zillur Hussain, who gave thousands of meals to vulnerable people during the covid pandemic and who I took to Downing Street yesterday to say thank you very much. I thank people like Mr Rony Choudhury—[Interruption.] This is important. Opposition Members might not like it, but I am recognising people in my constituency: people like Rony Choudhury, the owner of the Bombay Brasserie, who did exactly the same thing. Perhaps Opposition Members do not think that those people’s contribution is worth while. I thank people like Ed Walker, who runs the charity Hope into Action, which helps prison leavers into stable accommodation. [Interruption.] I do not know why Opposition Members are chuntering from a sedentary position. These people are heroes.
I thank people like Julie Gooding and Sharon Keogh from the Care Zone, which ensures that households have decent furniture. I thank people like Cocoa Fowler, who runs the charity Food for Nought, which provides food banks with food such as soup that would otherwise have been thrown out from supermarkets and which is supporting people. I thank people like Christine Nice, who runs the WestRaven community café and helps her community. I thank people like Erin Lee and Maureen and Jeff Walters from the Thorney food bank; Steven Pettican from the Garden House; and Moez Nathu from the charity PARCA, the Peterborough Asylum and Refugee Community Association. I thank Snow and I thank Petr Torák from the charity COMPAS. I thank Bernadetta Omondi, Faustina Yang and Louise Ravenscroft, who have all helped people in my city.
Opposition Members are dismissing these people as if they do not matter. I suggest that they go into their communities, find heroes and recognise them. They should use their position as Members of Parliament to say thank you to the people who work in their community. The idea that a Labour Government would solve any of these problems, quite frankly, is just insulting.
It does not matter how loud Government Members shout and scream, “Crisis, what crisis?”. It does not matter how many times they repeat themselves. This crisis is devastating our communities. It is killing people in our communities. Believe me: the records are there to prove it.
I am not sure whether people have seen the latest television advertisement from Age UK. A lady is sitting in her house. It is so cold that you can see her breath. She is on the phone saying, “I am really worried because I cannot afford to put the heating on. What am I going to do?”. What have we become in this country? What have we become, when that sort of thing is being broadcast on television?
There is poverty in every one of our constituencies. Families sitting around the table of a night-time—people who are working their socks off, working all sorts of hours—are not talking about GDP, RPI, CPI, the G7 or predictions about the financial situation. They are saying, “How can we afford to put the heating on? How can we afford to eat properly? How can I afford to put shoes on the bairns? How can I afford to give them the right sort of clothing for school?”. That is what people are talking about. Government Members can shout, “Crisis, what crisis?”, as loud as they want, but it is alive and kicking in our communities. The police have informed me that theft in my constituency is on the increase, but people are not stealing the normal types of goods; they are stealing to survive. A local GP demanded to see me to tell me that I needed to see how bad some of the conditions are that people have been pushed into because of the Government’s policies. It is frightening, it really is.
Food banks are a Tory invention, of course, but I must say a big thank you to the food banks in my area—Wansbeck Valley, Bedlington, Real Deal and the Biggin Box. Everyone working in them deserves great credit. However, the food banks are drying up; the people who used to donate now want to use food banks themselves. This simply cannot go on.
Child poverty is a huge issue for me. In my constituency, it has gone up by 9.5% in five years, to 35.2%. The fact that there are empty bellies and poorly shod children in this country is an absolute disgrace. We are one of the richest countries in the world; let us use it wisely.
If wages had continued to increase at just their pre-2008 rate, workers would have been £233 a week better off last year than they are now, and that figure is expected to increase to £304 per week by 2027. There is a yawning chasm between what working people could have benefited from and what they are experiencing now. Imagine what the world would have been like if that wage rise had continued.
It is a staggering fact that average incomes will lag behind those in Poland by the end of the decade if we carry on as we are. Ours is not a poor country—we have one of the biggest economies in the world—but when so many of our citizens have to scrape from day to day just to make ends meet, we have to ask some fundamental questions about why it has gone so wrong. It seems pretty clear to me that the experiment with trickle-down economics has been conclusively proved to be a failure, that the Government can no longer be a bystander in our economic renewal, and that the economic shocks of the past 12 months could have been much more effectively mitigated.
Let us look at what is happening around the world. With his Inflation Reduction Act, President Biden is taking steps to prepare the United States for an extremely challenging future. We have nothing approaching that scale or that ambition, at least not from the Government Benches, but those of us on the Labour Benches do have ambition. We are ready to face the challenges of global competition and climate change; we are seeking to reduce our dependence on fragile international supply chains with our plans to buy, make and sell more in Britain; we will have a real go at funding the step change in home insulation that is needed for this year’s and every subsequent year’s energy bills; and we will end the chronic disease of low-paid, insecure employment.
It is pretty clear that we need to do more to improve people’s earnings in this country, and one way of doing that is to empower workers to negotiate their terms and conditions through sectoral collective bargaining. Wherever we look in the world, when trade unions are empowered to negotiate on behalf of their members, people’s earnings tend to be higher.
When I look at what my children and their generation are facing, I see their wages continuing to fall behind everyday costs, with endemic job insecurity and companies gaming the system so that they do have any rights, let alone the ability to get on and progress in their chosen fields. More and more of their wages go on meeting the basics of living, which puts into the realms of fantasy the idea that they might be able to save up for a home of their own one day, or even—heaven forbid—save for their retirement. That is not the future that I want for my children, or for anyone’s children. We have to do something to halt the country’s slide into mediocrity, where ambition is stymied before people even start because the way in which the economy is structured means that the bulk of the nation’s wealth never leaves the top rung.
We cannot go on like this, with people working harder but seeing their cash go less and less far so that it becomes a stretch even to pay for essentials, while their tax burden increases and public services continue to deteriorate. If we were still in Europe, we would be the sick man of it. We cannot keep asking people to pay more for less. Something has to change, and it should be the Government.
Families, businesses and the country are struggling. For too long, Government support has been too little and too late. During the pandemic, we would have fared much better if the health service had not had its money cut every year since the Conservatives came into Government. The energy crisis has also had a huge impact on our economy. Britain is the only major G7 economy that is still smaller than it was before the pandemic. The country is going backwards under this Government. Many families are having to fork out an extra £500 in mortgage payments following the disastrous Conservative Budget last year that crashed the country’s economy. This is real money; it is the real lives of our constituents, and people are facing real hardship. This is not an abstract statistic, yet instead of doing something to help families, the Government are cutting funding to councils. Even last year, they introduced stricter eligibility for free school meals.
I have the honour of representing a constituency that spans two councils: St Helens and Knowsley. They are wonderful places with a strong sense of community spirit, but there is no denying that the Conservative Government’s decisions have taken their toll over the past 13 years and caused real hardship. As they are the second and 22nd least well-off council areas in the country, the offer of support that is too little, too late is being felt by my constituents, particularly the vulnerable people, children and people with disabilities.
In 2010, central Government funding to St Helens was £127 million. This year, it is £11 million. In Knowsley, the second poorest council area in the country, the council’s funding has been cut by £485 per person since 2010, despite the average across the country being £188. It is the second poorest area in the country. These cuts have consequences. Local authorities have duties that they have a legal requirement to fulfil, but even with a council tax rise, services have had to be rationed in many areas. We are raising council taxes during the biggest cost of living crisis in a generation, and working people already face the highest tax burden in 70 years.
The Government should have learned their lesson by now after acting too little and too late over the pandemic and the energy crisis. Families and businesses could be crushed if the Government do not get there quickly enough with the support that is needed, but I doubt they will do it. This is real money that could be in the pockets of our constituents while the cost of the average weekly shop is skyrocketing. The Government need to cut business rates to help revitalise businesses. There is no denying that short-term support is required, but there is also a need for long-term council funding. The fair funding review has been delayed for too long. Who is benefiting? The better-off areas are benefiting at the expense of my constituents—
It is exactly 12 months since I conducted a cost of living survey in my constituency. The results were absolutely shocking, with 90% of constituents feeling worse off than in the previous 12 months, 80% struggling to pay their bills and over 80% reporting that their mental health had been impacted by the cost of living crisis. Since then, this Tory Government have done absolutely nothing to ease those pressures, and people’s situations are much worse. The cost of living crisis is a political choice.
In the brief time that I have to speak, I will focus on pay and prices. The cost of living is being driven by inflation exceeding incomes—prices are outstripping pay. Millions of people, particularly in the public sector, are having pay awards imposed on them that are below the rate of inflation, and people are being forced—yes, forced—to go on strike. The Government simply do not care. With inflation outstripping pay, month after month, there is an urgent priority for this Government to inflation-proof pay for the public sector and all workers as a short-term measure in the cost of living crisis. I will continue to stand in solidarity with trade unions seeking that outcome.
Turning to food prices, the Office for National Statistics reported last week that food prices were driving inflation. Food prices have increased 19.2% over the past year, but key staples have increased by much more. The impact of this is clear, as others have said today. Food banks in my constituency, like those everywhere else in the country, are seeing more and more people arriving for food, including at the food bank where I volunteered for more than 12 months, which has had an astronomical increase in the number of people turning up on the doorstep. This is shameful—shameful—for the Government, and it is why I have felt compelled in the last month to work with our local trades council to raise nearly £2,500 for the food bank, but we should not have to do that in the world’s fifth richest nation. It is an absolute disgrace.
Yet the supermarkets are doing very well. We hear that Tesco has paid more than £1 billion in dividend payments to shareholders when most people in this country are struggling. It is not right that supermarkets continue to make hundreds of millions of pounds in profits at the expense of ordinary households.
I finish with a quote from a constituent, “Why are the rich continuing to get richer in this country while the rest of us suffer? I do not see any point in living. Sadly, as usual, the Tories are deaf and just do not care.” I implore the Government to wake up and listen to the majority of people in this country and take urgent action to address this cost of living crisis.
After 13 years of Conservative Government, do the people of Britain feel better off? As my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq) put it, the answer is a resounding no. Across the country, families and individuals are seeing their bills rise while their pay packet falls, and they are faced with a Government who are only making the problem worse. We must remember that the shocking decisions made over the past year, be it the mini-Budget that crashed our economy or the pension reforms that cut taxes for the 1%, only further entrenched 13 years of failure and mismanagement.
That economic record and the Government’s failure have left the UK exposed to skyrocketing price increases. Working people are facing soaring bills, rising food prices and higher taxes. Meanwhile the Government have inflicted a Tory mortgage premium on first-time buyers that has increased costs by £500 a month for some households, forced a 5% rise in council tax this spring by reducing funding to councils, and introduced a permanent tax cut for the wealthiest 1% of pension savers by changing pension allowances. As my hon. Friends have powerfully illustrated, these decisions continue to have a devastating impact on people across the country.
My hon. Friends the Members for Bootle (Peter Dowd), for Cynon Valley (Beth Winter), for Kingston upon Hull West and Hessle (Emma Hardy), for Ellesmere Port and Neston (Justin Madders), for Liverpool, West Derby (Ian Byrne), for Vauxhall (Florence Eshalomi), for St Helens South and Whiston (Ms Rimmer), for Bolton South East (Yasmin Qureshi) and for Wansbeck (Ian Lavery) all talked about how people are worse off after 13 years of Tory Government. Even the hon. Member for Wantage (David Johnston) said that the cost of living crisis is the No. 1 issue on the doorstep. My hon. Friend the Member for Lewisham, Deptford (Vicky Foxcroft) talked about how the cost of living crisis is affecting disabled people in such a cruel way.
My hon. Friend the Member for Pontypridd (Alex Davies-Jones) talked about how the Welsh Government are moving heaven and earth to help constituents. This is what a difference a Labour Government make.
People who walk down a local high street today are likely to see pubs, independent shops or even bank branches shutting their doors as soaring inflation and energy bills make their businesses near impossible to run. They might go into a local supermarket and be shocked at the price tickets accompanying everyday items. The price of eggs is up by a third, the price of milk is up by a third and the price of sugar is up by 42%. And at the end of the street they might see a food bank where local people generously volunteer their time to help members of their community in need.
That is the reality of 13 years of Conservative Government. Hard-working families and individuals are struggling to make ends meet, are having to cut back to only essential spending, and are deciding whether they can afford to take their children on holiday this summer or go out for a meal with friends on their birthday. Businesses, suffering under the weight of price rises, are looking at their balance sheets and having to take incredibly difficult decisions. High streets are on the decline. The fabric of the community is breaking down. I know that hon. Members on both sides of the House will recognise that picture. The UK has lost 6,000 pubs, 4,000 local shops and more than 9,000 bank branches since 2010. The Government have presided over and led that managed decline, and now the UK is right at the bottom of the pack, with dismal growth forecasts and no plan to steady the ship. Instead, despite fast-rising prices, wages are stagnating while the tax burden reaches its highest point in 70 years, with 24 tax rises since 2019—I repeat: 24 tax rises since 2019.
For first-time buyers, the Tory mortgage premium has added up to £500 a month to their bills, as the Conservative mini-Budget wrecked the economy and saw interest rates rise and markets losing confidence. That first step up the ladder as people start a family and settle into the community has been put out of reach. What should be a time of excitement and joy has been reduced to one of anxiety and disappointment, and this is before we consider the impact of the many other tax rises coming down the path. Council tax bills have risen above £2,000 for the first time, with the Government forcing councils to put up rates by reducing their funding, seeing families hit with an average rise of 5.1%. Bills are landing on the doormat while parents hide their fear from their children upstairs.
That is the reality of 13 years of a Conservative Government and the time for change is now. But instead of focusing on the interests of working people, the Chancellor’s main offer has been a tax cut for some of the wealthiest pension savers. While he refuses to take action, it is clear that the British people deserve much better. What is needed is a change of direction. What is needed is a Labour Government—a Labour Government who will create good jobs across every part of the country. We will make Britain a world leader in the industries of the future and ensure that people have the skills to benefit from these opportunities. A Labour Government would today freeze council tax and cut business rates to ease the cost of living crisis, supporting businesses and consumers to thrive. That is the choice facing the country and that is why it is time for a Labour Government.
This is a Government who will always support those who need it the most, a Government on the side of working families and a Government who are implementing generational, landmark policies to get the economy growing and ensure that everyone shares in its success. Just look at the impact of decisions made from the autumn statement 2022 onwards. It shows beyond doubt that Government support for households in 2023-24 provides low-income households with the largest benefit in cash terms and as a percentage of income. In fact, on average, households in the bottom half of income distribution will see twice the benefit of households in the top half, in cash terms. Because of the rises in tax thresholds introduced by successive Conservative Governments, for the first time ever, people in our country can earn £1,000 a month without paying a penny of tax or national insurance.
I thank my right hon. and hon. Friends for their contributions: my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom); and my hon. Friends the Members for Guildford (Angela Richardson); for Poole (Sir Robert Syms); for Clwyd South (Simon Baynes); for Runnymede and Weybridge (Dr Spencer); for Broadland (Jerome Mayhew); for Wantage (David Johnston), for Aylesbury (Rob Butler); for Mansfield (Ben Bradley) and for Peterborough (Paul Bristow). They all made salient comments about the support this Government are giving at this time when the cost of living has been rising.
As my right hon. Friend the Chief Secretary to the Treasury reminded us, the best way we can help people get through a period of rising prices is by bearing down on inflation. At the same time, we are cutting debt and growing the economy, which is the best way to lift living standards. But we also know at this time that some people need additional, targeted support. In the face of cost of living headwinds, we demonstrated our values by protecting struggling families with a £2,500 energy price guarantee, one-off payments and the uprating of benefits. Aside from the measures on energy, we made changes that mean the average driver has saved about £200 in total since the 5p fuel duty cut was introduced.
The Minister speaks about the support the Government have given in terms of the cost of living payment. Why is it then that, when someone has already been punished with a sanction, the Government punish them twice by not giving them the cost of living payment?
I understand that the hon. Member and his party are not happy campers these days, but we are giving more money per head to households in Scotland than we are in the rest of the United Kingdom, which is why he should get behind the many benefits of being part of this Union. On this very day, more than 8 million families across the United Kingdom will receive in their accounts a £301 cost of living payment from the Government, and that is just the first of three payments that will be made, giving a total of £900 to low-income and vulnerable families.
One measure that touches almost everyone in this country is childcare. In the Budget, we on the Conservative Benches confirmed the biggest expansion of free childcare in living memory. Our new offer will close the gap between parental leave ending and the current childcare offer. It will reduce costs for parents who can get back to work and make sure that a career break does not become a career end. It will improve the lives of millions of people. It is the right thing to do, but we can only afford to do that because of the fiscal discipline that we have exercised.
I am delighted that, as people go to the polls next week, the Opposition have given them a reminder of where they stand, for which I am grateful. Conservative councils charge £80 a year less than Labour on a band E property. Under the last Labour Government, council tax doubled. Under Labour Wales, it has more than trebled. Not for the first time, Labour says one thing and does another. Its motion today calls for a council tax freeze, and yet, far from freezing, I looked at the increases in every one of the constituencies of those on the Opposition Front Bench: Leeds up 5%; Wolverhampton up 5%; Camden up 5%; Ealing up 5%; Greenwich up 5%. A full house of Labour councils charging the maximum that they are allowed in council tax.
Enough, Madam Deputy Speaker: enough of the Opposition giving us rhetoric not record; enough of the economic illiteracy from Opposition Front-Bench spokesmen; and enough of these ChatGPT-does-socialism-type speeches that we have heard this afternoon. We should never forget Labour’s record on the economy: working people and your children pay the price. Labour has ditched its rule not to borrow to fund day-to-day spending, so we know its plan to stick billions on the nation’s credit card. [Interruption.] Labour Members can intervene if I am incorrect. No Labour Government have ever left office with unemployment lower than when they came to power. Under the last Labour Government, unemployment rose from 2.1 million in 1997 to 2.5 million by the time they left office in 2010—more people denied the security and the chance in life of a good job.
Finally, let us never forget, when Labour left office in 2010, how the then Chief Secretary wrote—[Hon. Members: “Ah!”] What did he write? He wrote:
“Dear Chief Secretary, I’m afraid there’s no money left.”
We are a Government focused on delivering the British people’s priorities. We are making sure that we are helping those in financial strain. We are focused on the future and we are delivering not just for growth that comes when a country emerges from a downturn, but for long-term sustainable healthy growth.
Since the Conservative Government came into power in 2010, we have grown more than major economies such as France, Italy or Japan and around the same as Europe’s largest economy, Germany. We have halved unemployment. We have cut inequality and reduced the number of workless households left to us by 1 million. Output is now higher than pre-pandemic levels. There is still much to do, but we are on track to deliver—
Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.
The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).
That this House welcomes the Government’s action to halve inflation, grow the economy and reduce debt; supports the Government’s extensive efforts to support families up and down the country with the cost of living through significant support to help with rising prices, worth an average of £3,300 per household including direct cash payments of at least £900 to the eight million most vulnerable households; notes the use of a windfall tax on energy firm’s profits to pay around half of the typical family’s energy bill through the Energy Price Guarantee, also notes the fact that the Government has frozen fuel duty for 13 consecutive years to support motorists; welcomes the expansion of free childcare to all eligible parents of children aged nine months to four years old; and notes that Labour will fail to grip inflation or boost economic growth, with their plans for the economy simply leading to unfunded spending, higher debt and uncontrolled migration.