I advise the House that Mr Speaker has selected the amendment in the name of the Prime Minister.
Before we start the debate, let me tell Members that if they wish to participate in the debate, it is essential that they are here at the beginning. If they are not, they will not be called. It is also essential that hon. and right hon. Members stay to the end of the debate to hear the wind-ups. If there are those who have not put into speak but wish to do so, please can they bob so that they catch my eye?
I beg to move,
That this House is concerned about the negative impact of Government policy on the finances of working people, with a growing squeeze on living standards caused by the £1,040 per year reduction to universal credit, the rise in National Insurance Contributions for low and middle income workers, increases in council tax, the freezing of the personal income tax allowance from April 2022, the increasing cost of household energy bills, the highest petrol prices since 2013 and the potential for the largest rail fare increase in a decade, the fastest rise in private rental prices since 2008, successive above inflation increases in childcare costs, and rising prices resulting from the supply chain disruption caused by worker and supply shortages; and calls on the Government to change the direction of its policies on these issues because they have created an avoidable and unacceptable burden on working people.
Before I begin in earnest, I welcome the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), to his new role and congratulate him on his appointment.
In our country today, working families face a sudden squeeze on living standards on a scale not seen for a generation: incomes are coming down; prices are going up, especially energy prices; taxes are going up; rents are going up; childcare costs are going up; fuel costs are going up; rail fares are going up. And with empty shelves in too many shops, restaurants closing because of meat shortages and now refrigerant shortages putting Christmas at risk, it is not just that people can afford less; there is also less to afford.
The people of Britain face an extraordinary squeeze on their living standards this winter—not simply by chance, but because of the choices made by Conservative Governments this year, last year and in the 10 years before. It is not some tragic, unforeseeable series of unhappy accidents that brought us here today. It is a string of choices that this Government have made, sometimes in the face of evidence, sometimes against advice, sometimes through a dogmatic refusal to try, and sometimes simply through a lazy and complacent failure to take the hard decisions that government involves. Time and again, through the pandemic and the long years before it, the Government have left issues to fester rather than taking action to address them, and then rushed at the last moment, only to find that it is too late and the damage is done.
I said at the beginning that incomes are going down, prices are going up, taxes are up, rents are up, childcare costs are up, fuel costs are up and rail fares are up. Let me take each one in turn.
Ten months ago, the Chancellor set out his policy of a public sector pay freeze. Like so much of his policy making, it was a triumph of short-term accountancy over rational economics. Public sector workers—council staff cleaning our parks in lockdown, police officers on the frontline, teaching assistants doing everything they can to give our children the best possible start in life—are not somehow separate from the rest of the economy. They buy food from the same shops as their neighbours working for private firms. Their children go to the same schools as private sector workers. They shop on the same high streets. They visit the same pubs and cafés. Taking money from their pockets while the recovery is so fragile—and it is so fragile—is taking money from our shops, our high streets, our economy. It is pulling demand out of our economy at the worst possible moment.
But the Government have not been content with clobbering those who did so much to keep our country running during the pandemic. In just a few weeks’ time, they are putting their hands in pockets once again: the pockets of the millions of families in our country—40% of them in working households, doing everything the Government have asked of them—for whom universal credit is what keeps them out of poverty. Again, let us be clear: many of the people being clobbered by this hit are the heroes whose bravery in the face of a then little understood disease kept this country running through lockdown after lockdown.
The Government are taking £20 each week from every family who receive universal credit. Government Members may choose to forget what that means. In the years ahead, their voters will remember the choices that they made. They will have heard from their own constituents, as I have heard, the growing worry and anger of the people they represent—the genuine sense of surprise that any Government could do this, mixed with a lasting fury that the Government really are doing this. Twenty pounds each week is not simply a number. It is school shoes, a gas bill, dinner on the table, and decent meals for the children.
Thirty-seven per cent. of children in Lewisham are growing up in poverty. That is the stark reality of the cost of living crisis. Rather than addressing the issue, the Government are cutting those people’s universal credit and putting up their taxes. Does my hon. Friend agree that this is not the way to treat hard-working families and their children? Should not the Government keep the £20 uplift, cancel the cut and think again about the tax rises?
My hon. Friend is absolutely right. It is frankly indefensible. We knew that poverty was already beginning to rise before the pandemic even hit, and we know the impact that the cut to universal credit will have on family and household budgets, and on child poverty.
It is bad enough to be taking money out of people’s pockets as the recovery falters, but as price after price goes up for working people, this is unforgivable—because prices are up, and they are up sharply. Madam Deputy Speaker,
“August saw the largest rise in annual inflation month on month since the series was introduced almost a quarter of a century ago.”
Those are not my words, but the words of the Office for National Statistics. Alongside the most recent GDP figures, that is a powerful signal of how fragile our recovery remains.
Rising food prices have been driving upward pressure on the inflation rate, but this week, of course, it is energy prices that are the focus of our attention. That rise is taking money out of household budgets directly, but it will also be taking money out indirectly. Higher prices for energy mean higher prices for industry, and that means higher prices for goods. Already factories are being shuttered by higher prices and already that is driving further problems, such as knocking out the carbon dioxide supplies that keep meat fresh along our supply chains.
Ministers are always keen to blame other people, the weather or bad luck, and to claim that all of Europe has the same problems. That is not good enough and the public know it. To assert that other Governments have faults is not to excuse our own. What we are seeing and what we have seen over the last decade is a chronic failure to take responsibility, and it is hard-working families and struggling businesses who will pay the price.
On Saturday, I met a care worker on Erdington high street who was close to tears. “I’ve got two kids, Jack”, she said, “I’m on universal credit. I can’t work any longer hours. Now I’m facing a £1,000 a year cut and a tax increase. Why? I worked so hard throughout the dreadful covid crisis to care for the desperate, sometimes the dying. Why are they doing this? I’ve worked so hard over so many years. I feel that they just do not begin to understand people like me and the pain that I will endure at the next stages.” Is it not the simple reality that the Government seem to be utterly oblivious to the consequences of their actions for the poorest in our country?
Like my hon. Friend, I have heard from care workers and many others in my constituency about the anger that they feel. The average care worker is set to lose more than £1,000 in tax rises and universal credit cuts. Of course, the Government’s much trumpeted so-called plan for social care will do absolutely nothing to help the very care workers my hon. Friend describes.
Let us remember the exact timing of the soaring energy prices: exactly as the cut in universal credit bites. It is about choices. The Government choose not to protect working people. We would choose differently.
The hon. Member is making a number of incredibly important points in an articulate fashion. However, would she not agree that much of what she has covered up to this point is also a consequence of Brexit? Will she therefore condemn the fact that the Government took us out of the European Union during the middle of a pandemic?
I will shortly come to a section of my speech that deals with the extensive problems that we face as a result of the Government’s Brexit deal; I will say a little bit more at that point.
Resolution Foundation analysis published yesterday shows that four in 10 households on universal credit face a 13% rise in their energy bills in the same month that their universal credit is cut by £20 a week. Earlier this month, we heard a lot of Government Members selectively quoting the analysis of the Resolution Foundation. I hope that they have been paying a little more attention this week, and will be reading that report with the same degree of careful attention.
This crisis may be sudden, but the causes are long standing: dependence on imports; a lack of energy security; inadequate emphasis on storage; a decade of decisions deferred and dodged. This is a crisis made in Downing Street that was caused by a decade of complacency. Gas stockpiles are at their lowest level for 10 years. In 2019, the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves)—who then chaired the Business, Energy and Industrial Strategy Committee—wrote to the Government about the impact of closing the Rough storage facility, which provided about 75% of Britain’s natural gas storage capacity. She wrote about gas security and the need for supply resilience. “All is well” was the tenor of the response she received, even though the key report on which Ministers relied did not include any explicit analysis of consumer price impacts. And yet here we are today.
This month, connectivity to the continent for electricity imports is down. It is often high praise to be able to say that something is really on fire, but rather less so when it is the main electricity cable to France, which went up in flames earlier this month and will not be back online until March. As the pandemic showed so powerfully, when crises arise we discover that our country is not prepared, and that only one thing has to go wrong and everything is at risk. The resilience that should be there has long since been stripped out for illusory short-term savings.
Incomes are heading down and prices are up, but, more than that, taxes are already up and planned to go up further. Last November, the Chancellor all but forced councils to put up council tax further to pay for the rapidly rising cost of social care—a challenge the Conservatives did nothing to tackle in 11 years in power. In March, he set out his plans to freeze income tax thresholds, taking a higher chunk of working people’s incomes each year. This month he set out his new tax on working people and their employers, providing £19 in every extra £20 by taxing the earnings of working people and the success of small businesses. As we head towards another Budget, the Prime Minister and the Chancellor have repeatedly refused to rule out yet another unfair tax rise on working people. Time and again this Chancellor reaches to take money from the pockets of working people and their employers rather than looking across the system and ensuring that those with the broadest shoulders, who can afford to contribute more, do contribute more.
Incomes are heading down, prices are up, taxes are rising, and what is more, rents are up too. According to the property website Zoopla, private rental prices across the UK increased by 5% in the 12 months to the end of July, adding almost £500 a year to the average tenant’s bill—the biggest jump since its index began in 2008. That might be welcome news for those who have a portfolio of properties and make their living from renting to others, but for working people these numbers are an index not of success but of a decade of Government failure to get a grip on the housing issues of this country.
Incomes are going down, prices are going up, taxes are rising, rents are rising, and, what is more, the cost of childcare is going up too. Labour Members have long warned that a decade of Conservative neglect and the impact of the pandemic could force thousands of early years providers to shut their doors for ever, and it is now clear that those fears are being realised.
A recent report by Pregnant Then Screwed showed that nine in 10 working families believe that the cost of childcare is severely impacting on their living standards. This is not surprising considering that childcare costs have been rising three times as quickly as wages in the past decade. Does my hon. Friend agree that the Government urgently need to put in targeted support for these working families, right now, rather than cruelly withdrawing the universal credit uplift?
I am grateful to my hon. Friend. I pay credit to her for all the work that she has been doing to highlight these issues and the impact on families and children, and the much bigger economic impact when we do not get our childcare system right in this country.
Three thousand childcare providers have closed since the beginning of 2021 alone, denying families access to the childcare that parents need and denying children access to the early education that sets them up for life. Why is that? One major reason, as the Early Years Alliance has highlighted, is that information released through freedom of information requests makes it clear that Ministers have been knowingly underfunding early years providers, driving up costs while driving down quality. Childcare should be a vital part of our national infrastructure that should help our whole economy to grow and to recover. Yet, as my hon. Friend points out, Britain has some of the highest childcare costs in the developed world. Childcare must be affordable and accessible to families. If more people can work, our collective output will be greater. It is right for children, it is right for families, and it is right for our economy.
Incomes are going down, prices are going up, taxes are rising, rents are up, the cost of childcare is up, and petrol and diesel are more expensive again too. I represent a seat where there are no passenger rail services. If people live far from their jobs, they drive to work or get the bus. Fuel prices feed fast enough into the squeeze on living standards, and last week petrol was over 135p a litre. It is more than £10 more expensive to fill up the average tank than it was when the spending review was agreed in November. That makes an enormous difference to families when every single penny counts.
Incomes are down, prices are up, taxes are rising, rents are up, the cost of childcare is up, fuel is up, and rail fares are set to rise too. My hon. Friend the Member for Oldham West and Royton (Jim McMahon) has set out the next steps we expect in the Government’s hammering of working people. With rail prices tied to July RPI inflation, and with inflation as high as it is, the cost of season tickets will rocket by almost 5% for long-suffering rail users next year—the biggest single increase in a decade. Again, it is not just the leap now but the decade of complacency before that tells the full story. The average commuter faces paying almost £3,300 a year for their season ticket—50% more than when the Conservatives came to power in 2010. Average fares have risen nearly three times faster than wages, and they are on course to rise again.
It is not just that families can afford less on food, energy, rent, childcare, travelling and commuting but that there is less to afford. Restaurants have closed. Shelves are empty. Shortages are real, and biting not just on families and their weekly shop but on our supply chains for industries too. What lies behind that? Not enough HGV drivers; long queues at our ports; more paperwork at the border; no agreement on food, animal and plant health standards when we left the EU; shortages of refrigerant, putting meat supply chains at risk: on issue after issue the Government were warned and warned again.
It is only three months since Ministers told the industry that concerns over HGV shortages were “crying wolf”. Last Christmas the roads around many ports were clogged for days. I meet businesses that have had to scale back ambitions for global expansion because it is not even worth their while sending goods to Northern Ireland any more. Again, these issues were not just foreseeable; they were avoidable. They were foreseen; they could have been avoided.
People are having less money to spend; having to spend more of what little they have paying more on tax, transport, fuel, rent and childcare; and having less in the shops than they can buy. There is a word for that: impoverishment. More and more people are being pushed into poverty. It is the policy of this Government to stand by and watch, and it will be the policy of the next Labour Government to turn it around.
I have listened very carefully to my hon. Friend’s really excellent exposition of a whole raft of issues that have challenged living standards, and what is interesting is that not one Government Member has got up to challenge any of the assertions that she has made. Does she agree that that demonstrates that they have nothing to say and that the slogans they use to try to describe their actions belie the truth of the increased division and poverty that they are creating?
I am grateful to my right hon. Friend, who did so much in government to tackle issues of poverty and of child poverty in early years, in particular.
Conservative Members will have heard the same from their constituents as I have heard from mine, which is that life is getting tougher and they just cannot understand why, in the face of rising cost pressures, the Government are putting up their taxes, cutting the support that is available and making life harder. My constituents simply cannot understand why the Government are prepared to stand by and allow that to happen.
I thank the hon. Lady for giving way. You are making the case for why you do not agree with the Government’s position, but I have been listening very carefully to hear what your position is. You have criticised the removal of the uplift in universal, but no Labour politician on the news or interviewed by the press has committed to keep it if you were to be elected.
I did not mean to, of course, Madam Deputy Speaker. The point I am trying to make is that there is no plan from the Opposition. They are not giving any plan on what they would do instead; they simply criticise. They simply say we must spend more and tax less, but how does the hon. Lady propose to do such a thing?
I am grateful to the hon. Lady for her intervention. The single biggest difference that all of us could make right now would be to cancel the cut to universal credit. That would make the biggest difference to her constituents and to mine, who are facing the single biggest cut to social security since the inception of the welfare state. That is not a choice that a Labour Government would be taking in the aftermath of a pandemic.
We would not be cutting it in the first place. We would replace universal credit with a better and fairer system that supports people into work. If the hon. Member wants to have a discussion about semantics, I suggest she has a chat with her constituents and sees how she gets on, arguing about the distinction between a temporary uplift and a cut. It is more than £1,000 a year from families’ budgets—that is what really matters.
The hon. Lady has made it clear that Labour wants to keep the temporary uplift. However, given that Labour does not support increasing national insurance, which is a very broad-based tax, how does it propose to pay for a permanent £6 billion a year increase in public spending? How would she pay for a blanket extension of £20 a week for every single universal credit claimant—it is not targeted to families or those with children in particular—in a way that is fair and does not involve raising taxes?
First, it is worth considering why the increase to universal credit was put in place. It was because, during the pandemic, the Government had to recognise that universal credit had been set at an inadequate level on which families might survive. On the hon. Lady’s wider point, I have a long list of places where we could find some money, if she is interested: the 1.9 million pieces of personal protective equipment, worth £2.8 billion, procured by the Government that were useless; the stamp duty holiday that was a £1 billion-giveaway to landlords and second homeowners—I could be mistaken, but I do not recall her objecting to that—and the hundreds of millions of pounds about to be wasted on the Prime Minister’s vanity yacht. That is before we get to the Test and Trace system that the National Audit Office said had not worked properly and had had a “minimal impact” on transmissions, literally wasting billions. This is about choices. There is always money for the Government’s projects, their friends and their people, yet when it comes to dealing with some of the poorest families in our community—those who have got us through the pandemic—I am afraid they are told that there is nothing for them.
I will make a little more progress but will happily take another intervention in due course. Having gone from no interventions to a flurry of them, I should probably press on.
The scar of poverty is not just about not having material goods, a roof, warm clothes and warm food. It is about a lack of freedom, having nothing to spend on yourself, having choice exercised for you—either by others or by necessity—and finding your voice and your own choice squeezed out. That is what the Government’s changes do, but it does not need to be like that.
Labour has a clear plan for how we would secure a better future for our country and steer a path for our economy in the months ahead. We would not be pretending that a national insurance rise without a plan is the way to fix the NHS, we would not be cutting universal credit in just a few weeks’ time, hitting working families hard, and we would not have spent 18 long months handing out huge amounts of taxpayers’ money through outsourcing and crony contracts while hitting working people for tax again and again. We would not be telling hauliers that they were crying wolf. We would be taking action day and night with employers and trade unions to fix the supply chain disruption that is leading to higher prices and fewer goods. We would not have sat back for the last decade as rent, childcare and rail fares soared.
When I wander down Stockton high street or through Billingham town centre, I can see the signs of poverty everywhere in faces that are tired, faces that are anxious and faces that look older than their years. Eventually, poverty kills. The decision to leave thousands of my constituents in this situation is a political one. Does my hon. Friend agree that, as we are one of the richest nations in the world, it is time that the Tories’ choices changed for the better?
When the hon. Lady’s boss, the hon. Member for Leeds West (Rachel Reeves), was appointed as shadow Chancellor, she said that not only would all Labour’s policies be fully costed but she would explain how they would be paid for. They need to be paid for on an ongoing basis. It is no use going over incidents from the last 18 months and saying that that would fund the extension to UC forever, that tax credit uplifts would be made permanent and that legacy benefit claimants would also get them, as well as turning the advances we have had into grants, reducing the taper rate and scrapping the benefit cap and the two-child limit. Those are popular policies, but how much would all of that cost and how would Labour pay for it on an ongoing basis? The hon. Lady cannot deny the fiscal reality that we are in a difficult situation because of all the money that the Government have spent on protecting jobs.
The difficulty with the Government’s approach is that they like to pretend that theirs is the only way to do it, with the only option being to hike national insurance on workers and businesses when our recovery is far from clear. Labour would not be putting up national insurance at this point with the recovery far from secure. We have set out in lots of detail the different options available. Just yesterday, my hon. Friend the shadow Chancellor set out further changes that we would make to allow the tax system to become fairer and more progressive. We could say a lot more. It should be shared more evenly across the incomes and across the generations and not through the Government’s approach of hammering working people and their families.
Labour will make more in Britain by giving more public contracts to British companies big and small. We will build a prosperous and resilient economy where every corner of our country can offer decent jobs; where ours is the best country to grow up in and the best country to grow old in. We will use stretching social, environmental and labour clauses in Government contracts to raise standards and to spend and make more in Britain. We will focus on bringing the jobs of the future to Britain by investing in reshoring jobs just as we invest in foreign direct investment. By helping every business access the expertise and support that it needs, we will build a high-skill, high-wage economy, and we will take seriously the challenges that we face outside the EU, fixing the gaping holes in the deal that the Government negotiated.
Let us focus on what the Government can do right now. Earlier this month, the Government felt they just could not wait for next month’s Budget to announce their plan to clobber working people’s incomes through an increase in national insurance, after all that this country has been through. After a pandemic that again and again showed the British people pulling together at their generous, innovative, dedicated best, the Government’s reward was a tax rise on workers and struggling businesses rushed through in less than a week. There is nothing to stop Ministers taking the same decisive action, with the same urgency, to protect the living standards of millions of people. There is nothing to stop them tackling poverty as the scar that it is. I urge the Government to change direction not at their conference, not in October, not at the Budget and not next year but now, as the nights grow cold, the bills mount up and the money runs out. There is no time to spare. The time for action is now.
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the £400 billion package of support the Government has put in place to protect jobs, incomes and livelihoods throughout this covid-19 pandemic, including a temporary cut to VAT, generous cash grants for businesses, a business rates holiday, and the furlough scheme which protected 11 million people at its peak; notes the launching of the Plan For Jobs to help people back into work and gain the right skills to succeed in the jobs of tomorrow through schemes such as Kickstart for young people, Restart for the long-term unemployed, the Lifetime Skills Guarantee and additional funding for apprenticeships, traineeships and work coaches; further notes the measures taken by the Government to keep costs down for working people, such as introducing and increasing the National Living Wage in 2016 so that a full-time worker is £4,000 a year better off than before, doubling personal tax thresholds giving individuals an extra £1,200 per year, protecting local taxpayers from excessive council tax increases, introducing an energy price cap which protects 15 million households by around £100 a year, and freezing fuel duty for 11 consecutive years which has saved drivers £1,600 compared to 2010; and believes that this plan is working, as evidenced by unemployment forecast to be 2 million lower than previously expected, job vacancies at record highs, household incomes protected, consumer confidence back to pre-covid-19 pandemic levels, and GDP recovering rapidly, with the IMF forecasting the UK to have the highest growth in the G7 this year.”.
It is a pleasure to be back at the Dispatch Box and to have the opportunity to respond to the hon. Member for Houghton and Sunderland South (Bridget Phillipson). I thank her for her kind words on my appointment. It is great that the north-east has two representatives in the debate, and I am delighted that the north-east economy is in robust shape, contrary to what we just heard.
In the last 18 months, safeguarding working people’s finances has been the Government’s defining mission, and we have succeeded in that task. Just today, the OECD economic outlook says that it expects the UK to see the fastest growth in the G7 both this year and next. The IMF has described the UK’s policy response as “aggressive” and as one of the
“best examples of co-ordinated action globally”,
helping to mitigate the damage wreaked by the pandemic, and
“holding down unemployment and insolvencies.”
The Chief Secretary begins his speech by talking about growth, which everyone in the Chamber would like to see, but what impact is there on struggling businesses from the clobbering increase in national insurance? That will have an impact on not just individuals but employers and the workplace.
We are clear that the right thing to do as we emerge from the pandemic, in which we have spent £400 billion on providing a comprehensive response, is ensure that our NHS is ready to deal with the backlog of cases that has inevitably arisen as well as providing a long-term fix for social care in a broad-based solution, bringing together a progressive tax rise in which the wealthiest pay more and business plays a fair role. I am confident that that is the right thing to do at this time.
Let me remind the House once more of the sheer scale of what this Government have been doing and of our support for the economy. The £400 billion I referenced a moment ago is spending that has been devoted to safeguarding jobs and incomes the length and breadth of the UK. It is spending that has given millions of people financial certainty through a very difficult 18 months.
The furlough scheme has protected 11.6 million jobs—that is equivalent to a third of the entire workforce—and it has paid out £68.5 billion to employers. The self-employment income support scheme has provided £27 billion to almost 3 million people. Businesses have been kept afloat thanks to loan schemes worth £79 billion, in addition to cash grants, VAT cuts and business rates relief, while the most vulnerable have been supported by a temporary uplift to welfare payments. HM Treasury’s own distributional analysis shows that our interventions have supported the poorest working households most as a proportion of income. That list is far from exhaustive, but it shows how the Government have met an extraordinary crisis with an extraordinary package of measures.
In the Minister’s constituency of Middlesbrough South and East Cleveland, the child poverty rate is 24.7%, smashing the national average of 19.1%, and up nearly 10% over the past six years. Can the Minister tell us exactly how he intends to justify his own Government’s decisions to hit the pockets of the most vulnerable families and disadvantaged people he represents?
I am incredibly proud to be part of the extraordinary transformation of Teesside’s economy, which is taking incredible shape under the work of our Mayor, Ben Houchen. Of course, that was reflected in the fact that the Tees Valley voted by 73% to re-elect our Conservative Mayor just this May. Why was that? It happened because of jobs and growth, and hope and pride in place—all the things that this Government are committed to delivering, and all the things that a Conservative Government are doing after years in which Labour neglected areas such as Teesside and left us with no plan, no options and no future.
Peak unemployment is now forecast by the Office for Budget Responsibility as being substantially lower than initially expected. All the evidence now points to a rebounding labour market. Just last week, the Office for National Statistics reported that vacancies are at a record high, while the headline unemployment rate has fallen for seven consecutive months and now stands at 4.6%.
I am a bit concerned that the Minister has not actually read the motion on the Order Paper. This is about people who are in work. I absolutely agree that people have been kept in work as a result of the schemes that are being scrapped—that is the case—but the thing is that if people are not being paid the living wage and are not being paid enough money to actually live on, they are going to continue to be in poverty no matter whether or not they are in work.
I can assure the hon. Lady that I have read the motion closely, which is of course why I am celebrating the fact that the ONS estimates that underlying regular wage growth is between 3.6% and 5.1%. It is why I am so proud that we are the Government who introduced the national living wage, which has of course meant more money in the pockets of working people. So this is exactly about bearing down on the cost of living and about supporting families throughout a really difficult time. That is what we have managed to do and what we will continue to do.
The vast majority of people among my constituents who have written to me about the cut in universal credit are in work, some of them doing two or three jobs, yet many of them are going to be pushed into poverty by the cut the Minister is defending now.
The hon. Gentleman needs to bear it in mind that we are of course dealing here with a product, in universal credit, that has a number of different components. The change to which he is alluding affects the standard allowance, but the majority of households on universal credit of course receive many additional elements—for example, 58% receive additional support for housing costs and 38% receive the child element—and many households on UC will also have access to additional sources of income, such as child benefit. This comes before we come to all the things we have built into the system over recent years to make universal credit more generous. That includes, for example, the £1,000-a-year increase to the work allowance, which was announced in 2018 and is worth £630 to working parents and people with disabilities, and of course we have changed the taper rate so people get to keep more of the money they earn as their earnings increase. This is a very carefully calibrated system, and let us not forget that this is far better, frankly, than the legacy programme we inherited from the last Labour Government, which of course, as we know, did not incentivise work, did not properly support people and was a failure, so I am afraid I will not take lessons on universal credit from the hon. Gentleman.
I want to make progress because it is important that we reflect on the employment situation in the United Kingdom. Our joblessness rate is now lower than that of the United States, lower than that of Canada and lower than those of France, Italy and Spain. People have been coming off the furlough scheme very rapidly now, and the numbers are down to 5.1 million in January to 1.6 million at the end of July, while almost half of those people still on the scheme, lest we forget, are already working through flexible furlough. The number of people claiming self-employment grants has fallen significantly, too. But that is not all: broader economic growth has exceeded expectations as restrictions have been lifted.
My right hon. Friend refers to the furlough scheme, which has of course been a phenomenally successful scheme. It has been credited with preventing mass unemployment and saving the job market. Does he not agree that Opposition cries that we are clobbering working people absolutely do not stack up when we consider the furlough scheme?
I thank my hon. Friend for her point, and this is absolutely right. The furlough scheme has been absolutely essential to supporting the UK throughout this very difficult period. It has been an historic success, and we only need to consider how serious the employment situation would have been had we failed to intervene and failed to show the decisive leadership that this Government have shown.
As a fellow Tees Member of Parliament, the Minister will be aware that at the height, just a few weeks ago, there were 12,000 more unemployed people across the Tees Valley than there were in March last year. How does he reconcile that with talking up the Tees Valley employment situation?
I do so quite readily when I look at the extraordinary potential of our local economy. We have all the new jobs coming in at the Teesworks site, the former Redcar steelworks site. We have the hope and potential of green industry, which the hon. Member champions, as I do, with all the jobs in carbon capture, utilisation and storage as well as hydrogen. There is the new GE Renewable Energy factory, which will employ 2,500 people. Its construction starts incredibly soon, and it will be fully operational by 2023. Those are the reasons for hope and optimism. Of course, I will never apologise for talking up Teesside, just as we should never apologise for talking up the UK economy. We have done an extraordinary thing in this country: we have got through the pandemic—we have weathered the storm—and now we can move on to the recovery.
Three out of the 10 most deprived constituencies in England are in Birmingham and 42% of children in Birmingham are growing up in poverty, yet the Government are hitting Birmingham hard with the £1,000 a year cut to universal credit and the national insurance rise on top of the cost of living going up and soaring energy costs, with supermarket costs up, childcare costs up and rents up. Can I ask the right hon. Member this question: have the Government carried out any impact assessment of the consequences of their actions on Brummies, not least because the simple bleak reality is that tens of thousands face a tough Christmas and a bleak new year?
I thank the hon. Gentleman for his question, which basically re-summarised the speech we heard from the shadow Minister. I can confirm that HMT’s distributional analysis has shown that, as a proportion of income, our interventions have supported the poorest working households the most. Of course I recognise the challenges—I represent a constituency that has many challenges—but the number of children in absolute poverty, to which he alluded a moment ago, is lower than it was when Labour left office in 2009-10, both before and after housing costs are considered. These are incredibly important achievements, and we should never lose sight of them. In short, we took decisive action, and that action has worked.
It is clear that the world of September 2021 is very different from that of March 2020. The success of our vaccine roll-out means that most restrictions have now been lifted and we are seeing the benefits of our approach. These new circumstances therefore require a new response. We of course believe that the best anti-poverty strategy is a jobs strategy, and the best way to help vulnerable people is to provide them with the opportunities that they need for well-paid work.
My right hon. Friend is making a powerful speech. He is right about the importance of jobs, and not just well-paid jobs but high skilled jobs. Can he say something about how our plan for jobs is delivering people with skills? We have a limited amount of money to spend and it is better to invest that in people’s skills than endlessly into welfare.
I absolutely agree: it is very important that we invest in skills. The plan for jobs is not just about getting people into work or keeping them in work; it is about making sure they grow their skills during their working lives, which is why we have a focus on more skills for school leavers and generous apprenticeship hiring incentives. We are also tripling the number of traineeships for 16 to 24-year-olds, and we have the pioneering lifetime skills guarantee. These are all the sorts of things that will make a difference in Staffordshire as they will across the rest of the UK, and we should be incredibly proud of that.
On the previous intervention about there being a limited amount of money that can only go so far, did the £1.6 billion allocated for a nil rate stamp duty on houses worth up to £500,000 help the poorest, the richest, or a combination of the richest and the housebuilders’ profits?
The hon. Gentleman asks us to apologise for keeping the housing market moving in the teeth of the pandemic and I make absolutely no apology for that; it was absolutely the right thing to do to make sure we did not see a collapse of that market.
It is important to recognise that supplying, protecting and creating employment opportunities is the right way forward both economically and politically for our country. That is why we have made a deliberate choice to invest in our plan for jobs, which we launched over a year ago to create work opportunities and assist workers to develop the right skills for the future.
Our plan is helping young people—a group disproportionately affected by the pandemic—through the £2 billion kickstart scheme. At lunch, I was talking to the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Mid Sussex (Mims Davies), about the impact of these programmes on young people, creating and fully funding hundreds of thousands of jobs for those at risk of long-term unemployment. I am proud that so far over 63,000 young people have had the chance to begin a kickstart job, with the numbers growing by more than 2,000 every week. Our plan will support more than 1 million unemployed people, many of whom are aged over 50, helping them find work through our three-year-long £2.9 billion restart programme, and providing jobseekers with the personalised, intensive support that will make a real difference to their prospects.
On retraining opportunities, may I highlight the lifetime skills guarantee as well? If someone has a job and thinks they can do something better, we can give them £2,000 or £3,000 to help them retrain. That is huge for people in South Ribble who want to go and do something exciting.
My hon. Friend is right. For the first time, any adult without a level 3 qualification will be fully funded by the Government to access three courses worth £3,600 per person. There are 11 million adults across this country without level 3 qualifications; this policy is directly targeted to support them.
We have invested £2.3 billion to hire and retain work coaches, doubling the number to 27,000, a feat that we have achieved in just eight months, and we are spending over £200 million on providing unemployed people with tailored help with CV writing, interview skills and job search advice. [Interruption.] We have doubled free childcare for working families—we can carry this on all day. This is a comprehensive solution to a very challenging series of problems. The plan for jobs is not about quick fixes; it is about creating sustainable employment so that people can be confident about being able to support themselves over the longer term.
I understand the right hon. Gentleman’s point about job applications and employment but, as we have heard, this debate is about the cost of living. Can the right hon. Gentleman tell the House how much the average family has had to pay in increased petrol costs per year, as well as the average cost of filling up a car?
This Government have frozen fuel duty for 11 years, so we do not need to take any lessons on that.
It is vital that we keep bearing down on the skills crunch we have been talking about. Our employment strategy is supporting people through a variety of means to gain the knowledge, attributes and qualifications to find work in high-value sectors. Insofar as we achieve that, we will be achieving a much more sustainable, robust economy for the future. Our employment strategy is supporting the finances of people up and down the country, helping them back into work, and helping them earn more and succeed in the jobs of tomorrow.
Meanwhile, Labour offers absolutely no plan to tackle the challenges that the country faces. There is no plan to take the tough decisions on covid; the amounts of money to be raised that are talked about are a fraction of those required to support the demands they are making of the Exchequer. There is no plan to create the high-skilled, high-wage economy, no plan—they voted against it last week—to tackle the NHS backlogs. While we wait for the Opposition to reveal how they would do this, we are taking action.
In April we took definitive action, increasing the national living wage by 2.2% to £8.91 an hour, an increase worth more than £345 a year to a full-time worker on the NLW, and at the same time we extended the NLW to those aged 23 and over. Last year we took action to tackle rent costs by boosting the local housing allowance to the 30th percentile of market rates, and we are keeping cash levels at those higher rates going forward. That will cost more than £950 million this year and has meant that more than 1.5 million households benefited from an additional £600 last year compared with before the crisis. We have protected people from excessive council tax increases and given councils £670 million this year to provide families with help with their bills.
We have always been clear, and it has long been the practice, that a proportion of social care bills are met through council tax, and that is the right thing to do. We are saying that, additionally, we need a credible solution to properly fund social care in the long term, so that people can have the dignity in their old age that they deserve. This is a complex and challenging area of policy. While we have stood up and said that we will do the difficult thing and actually increase taxes so that there is enough money for the system not to fall over, Labour simply plays politics with the issue. Voting against what was a progressive, broad-based tax increase to properly fund adult social care was an irresponsible choice, and in their hearts Labour Members must know it.
The new health and social care levy is a £12 billion a year injection into the NHS and social care that will benefit people of all ages and backgrounds. The decision to raise taxes was tough—of course it was; we believe in a low-tax economy—but it was the responsible thing to do given the impact of covid on the country’s finances. Most importantly, that decision was fair: the levy is progressive because those earning more will pay more, and businesses will share the burden.
I congratulate the right hon. Gentleman on his appointment. The point is not whether extra money needs to be raised to fund the NHS or indeed social care; the point is how it is to be raised. National insurance and council tax are regressive, not progressive, taxes, but there are alternatives such as reform of national insurance, looking at assets as well as income, or looking at regional differences. There is a whole raft of options that the Minister and the Government could have considered; why did they not do so? Why have they chosen a regressive system for raising additional money?
We did look at this, and Treasury analysis showed that lower-income households will be large net beneficiaries from the package announced by the Prime Minister, with the poorest households gaining the most as a proportion of income. This Government are unafraid to make tough choices in order to safeguard the nation’s finances. The difficult decisions that we have made to increase corporation tax rates and temporarily reduce overseas development assistance—which I know will be considered the right decision by my constituents on Teesside—are clear illustrations of our approach on this front.
As a final point, I remind Members that while we have taken extensive action to safeguard workers’ finances during the pandemic, our record of achievement stretches much further back. Indeed, according to official statistics there were 1 million fewer workless households at the end of 2019 than in 2010, while income inequality was lower going into the pandemic than in that year as well. In fact, over the past 11 years successive Conservative Governments have striven to keep the cost of living in check for millions of households.
Let me give the House some examples. Fuel duty has been frozen for 11 years in a row, cumulatively saving the average driver £1,600. The energy price cap has protected 15 million households in the two years since its launch. We have nearly doubled the personal allowance over the last decade, making it the highest basic personal tax allowance of all countries in the G20 and one of the most generous internationally. In combination, our changes to the national living wage, personal allowance and national insurance currently leave a full-time national living wage employee £5,400 better off in cash terms compared with 2010. I am proud of that, and I think all Conservative Members should be. These measures are just part of a record of achievement that has made a real and lasting difference to people’s lives.
The Minister is talking about everything that he is proud of. Is he proud that the childcare system in this country is the third most expensive in the world, and that parents are making the choice between paying childcare costs or paying their rent or mortgage? Does he think that removing the universal credit uplift will help working parents? I notice that he has not said anything about childcare, so would he care to elaborate?
I would be delighted to. This Government have doubled childcare for working families to 30 hours a week. That is worth £5,000 a year. For working families claiming universal credit, up to 85% of eligible childcare costs are met. That is the right thing to do. We want to keep women in the workforce, and we want to make sure that it is easy for families to adjust to whatever arrangements best suit them to support their children as they grow up.
A plan for jobs, incomes supported, the economy rebounding—this Government have safeguarded the finances of millions of people and, in doing so, set our country on the path to a strong recovery. Working people right across this country are seeing the benefit. We are not just promising a brighter tomorrow; we are delivering positive, tangible change today. Let me stress that we have no plans to alter our course. We will remain relentless in our mission to provide workers in every part of this country with the better prospects, greater security and increased opportunities that they so rightly deserve.
This could not be a more timely debate. My constituents and people across the country are looking with great apprehension at the winter to come, fearful about how they will make ends meet. I welcome the Minister to his post, and I appreciate what he said about the economic support offered, but that is not unique to this Government or any other. Governments around the world have sought to support their citizens through this pandemic, and many have done so more compassionately and more competently than those sitting across from us on the Tory Benches.
Many have done that from a better starting point, too, without public services stripped bare from a decade of austerity and a welfare state that punishes people for their circumstances, and without the worst inequality in north-west Europe. And none of them has embarked upon a project so thoroughly deficient and self-defeating as Brexit, which has left businesses carrying higher costs, shelves empty, and skilled people—our neighbours and friends—leaving this island in their droves because this UK Tory Government have made them feel so unwelcome. Scotland voted for none of this.
To the here and now, Madam Deputy Speaker. We have food shortages and price rises, inflation increasing, cuts to universal credit and tax credits, the end of the pensions triple lock, a regressive national insurance hike, the end of furlough and the self-employment income support scheme—for people who were lucky enough to be eligible for that scheme rather than excluded from it—and now the prospect of spiralling energy bills as we head into the depths of winter.
The hon. Member has just mentioned energy prices. I do not know whether she saw that Torsten Bell of the Resolution Foundation said:
“The autumn is looking like a cost of living crunch.”
He added that four in 10 households
“will see their energy bills rise by 13% (£153 a year) at exactly the same time as their income falls by 5% (£1000 a year).”
He also mentioned inflation, which is expected to get to 4%. What does she think that will mean for the poorest people in our society?
The hon. Member is perfectly right to point that out and to refer to the words of Torsten Bell. He came to the Treasury Committee to give evidence about some of the things that we are facing in the months ahead. Many constituents will just not be able to cope with this. They will become more indebted, they will struggle to get by, and they will find it difficult to get back out of that debt, get on with their lives and be productive members of society. This is a significant crisis, which this Government are ignoring and making worse by their inaction.
This Tory Government have already created the perfect storm: a cost-of-living crisis atop an already weak and stagnant economy. Citizens Advice Scotland found that more than 1.4 million people in Scotland ran out of money before payday at least once in the last year. Sarah Arnold, senior economist at the New Economics Foundation, found that 2.5 million working families on low incomes will lose £1,290 a year because of the double whammy of the cut to universal credit and the increase in national insurance contributions. That is utterly unjustifiable.
It may not mean much to those on the Government Benches, but that is an enormous amount of money to many people across this country, which cannot be made up through a few hours’ work, as the Work and Pensions Secretary appears to believe. It is the difference between just getting by and not coping at all, between being able to put food on the table or relying on the food bank, between keeping the lights and the heating on or disconnecting from the power supply.
I am an honorary vice-president of Energy Action Scotland—I refer Members to my entry in the Register of Members’ Financial Interests—which has found that one in five households with a prepayment meter regularly self-disconnects because they simply cannot afford to top it up. Of those households, 88% contain a child or someone with health issues. Those on prepayment meters will struggle the very most in the months ahead—they always do—and this UK Government do absolutely nothing to support them. The stress of watching the meter eat what little money has been put in it is an experience that I am sure few on the Government Benches will understand, but I have had constituents shivering, living in one room under blankets and duvets, because no matter how much money they put in that meter, they cannot keep their home warm.
There is a significant impact on older people, carers and people with disabilities, whom this UK Tory Government have often completely ignored. That is a group whose energy bills are higher. My constituent Rob McDowall is among many already worrying about how to keep warm this winter. Like Citizens Advice Scotland, he is advising people to seek assistance and advice right now. While I fully support attempts to seek advice, this UK Tory Government should take their responsibilities seriously too.
Energy costs will increase more in Scotland due to our geography. This is a life and death issue. Living in a cold home causes illness, and Energy Action Scotland has found that there are around 2,000 excess deaths in Scotland each winter as a result. That is a scandal in energy-rich Scotland, but it is a reflection of how broken the energy system is—a system entirely reserved to Westminster. Around 25% of energy bills is the cost of UK Government levies and policy choices, as well as VAT. That disproportionately hits those on low and middle incomes. The Treasury must do something now to alleviate that burden. That is in its hands.
Is it not the case that even the schemes that are meant to help the poorest, such as the warm home discount, the eco scheme that helps with some energy-efficiency measures, are paid for by other energy users, so they are actually regressive? Those who can least afford their energy bills are paying to try to support other people, so it is a circular argument that goes nowhere. Is it not also outrageous that in the highlands of Scotland, people pay up to £400 more a year as a levy on their electricity while exporting energy to the rest of the UK?
My hon. Friend is absolutely right to point that out. That is an unfairness in the system that the Government have shown no compulsion to tackle at all. We must look at that unfairness, particularly for those in the most rural parts of Scotland who find it hardest to afford their energy bills.
I seek an assurance from the Government that those who have money sitting in their energy accounts just now will see that swiftly transferred over to any new company, as people tend to pay in more over the summer to meet their bills in the winter. In his statement yesterday, the Secretary of State for Business, Energy and Industrial Strategy could not guarantee that the warm home discount would be paid to customers transferring. I also want to know what assistance will be possible for those transferred customers who are living with existing arrears. It is an uncertain and very worrying time for them all.
As an aside, my hon. Friends the Members for Kilmarnock and Loudoun (Alan Brown) and for Aberdeen South (Stephen Flynn) have been pursuing the ridiculous transmission charging regime, which makes it more expensive for us to connect the clean, green energy produced on our doorstep in Scotland to the national grid. It feels as if Ministers could not be less interested in fixing that disproportionate scandal.
We all know households that already struggle to pay their energy bills. Households relying on electricity for their energy needs pay £600 more on average than households with both gas and electricity. In the areas that are off the gas grid completely, particularly those relying on liquefied petroleum gas, those costs can be even higher.
In addition to food banks, fuel banks are springing up around the country to meet this need, but given the soaring fuel prices we face, it will just not be enough. The price of food in the shops is also going up. Inflation stood at 3.2% in August, which I understand is the highest month-on-month increase since records began in 1997. Some have predicted that it might reach 4.5% by November. The Bank of England target is 2%. That means that goods in the shops will get ever more expensive. There is the prospect, too, of the national insurance hike being passed on to consumers. The Institute of Chartered Accountants in England and Wales has suggested that companies may try to cover the increase on employers’ costs by passing it on to consumers, so as well as being a tax on jobs, this is a tax at the till.
In addition to having an impact on people’s food bills and their ability to feed themselves, this cost increase is having an impact on charities that are already trying their best to support those in need. Audrey Flannagan at the Glasgow South East food bank in my constituency tells me that food donations to it are down 30%, at a time when she is planning for an influx of people due to the cuts to universal credit. I say “cuts” because, for many who claimed benefits for the first time during the pandemic, they have known nothing else. Audrey tells me that people she has spoken to have been horrified to receive a letter from the Department for Work and Pensions informing them that their money is getting cut, because for them it is not an uplift; it is quite simply what they have been managing on for months now.
The Minister talked about living wages, but his living wage is not a real living wage, as set by the Living Wage Foundation; it is a pretendy living wage. It is not enough for people to live on, and it is not available to everyone. As he knows well, age discrimination is baked into the living wage. Younger people, who face the same bills at the checkout and on their energy and rent, are getting short changed by this Government through their pretendy living wage.
The impact on families of this cut has been well repeated, but I would like to mention the impact on single people. Twenty pounds is around a third of a single person’s income on universal credit. Glasgow South East food bank has seen a significant drop in single people coming for emergency food assistance in this past year, from 601 people in January to March 2020, to just 151 people in the same period this year. Audrey Flannagan believes that the additional £86 per month—UC is paid monthly—was enough to make a difference to those people. It pays for the gas and electric, it puts food on the table, and without that £86 a month, many will return to her service in just a few weeks’ time.
Many people have been in touch with me, as they have with my colleagues, to protest the cut to universal credit, but I want to read this email from John, because he puts it so well. He says:
“I wanted to write you a short note to tell you that cutting back on the U.C. uplift is going to have a very hard consequence on me. I was laid off at the start of the pandemic when the company I was working for closed down. With the uplift I’m receiving about £300 to last me nearly 5 weeks! The government talks like this was a favour done us! Firstly, I and all those on Universal Credit are not responsible for a pandemic! Secondly, the pandemic is not over yet! There could be further strains and further lockdowns! What then for people like me! Also benefits did not go up before the uplift for years and years, while prices and the cost of living have. This therefore is actually a benefit cut! It will be the difference for me between just getting by and crushing poverty!”
That choice will be faced by people up and down this country. Every single person in this House has a responsibility to think of each and every one of them when we vote on this issue, because it is the difference between just getting by and crushing poverty, as my constituent John pointed out.
There are global issues, of course, driving the cost-of-living crisis, but the political choices being made by this UK Tory Government are making it worse. Yet again, they have chosen to balance the books on the backs of the poor—to repeat the mistakes of the previous crash by choosing austerity over stimulus. My constituents did not choose this. The people of Scotland did not choose this. Even many Tory voters did not choose this, as those on the Government Benches break promise after promise to their own supporters. The first duty of Government is to protect its people, and this UK Tory Government have failed repeatedly on all counts. There is no Union dividend, only a Union dead end. Scotland needs the full powers of a normal independent country, to look after all of our people and seek a fairer, just and more prosperous recovery for everyone.
Mr Speaker, first may I say what a privilege it is for me to have you back in the Chair? Thank you for calling me to make my maiden speech today, which I do as the first Conservative Member of Parliament for Hartlepool since the constituency’s creation almost 60 years ago. This is perhaps surprising, considering that the people of Hartlepool have traditionally shared so much in common with the modern Conservative party. Both recognise the importance of hard work, thrift and individual responsibility, and both share a profound love of family, community and country. For too long, the elected representatives of Hartlepool have dismissed the concerns of my constituents and taken their vote for granted, but I promise the people of Hartlepool that I will do all I can in my capacity as their new parliamentary representative to ensure that their voice is not only heard in this place but valued.
It is, after all, the people of Hartlepool that make my job the privilege that it is. I am immensely grateful that, in my new role, I have had the opportunity of getting to know some of the most hospitable and compassionate communities in the country. From Hart in the north to Seaton in the south, the unique kindness of my constituents never ceases to move me. They have made me feel so welcome in my new constituency, and for that I am truly grateful. Regardless of how my constituents voted in the by-election earlier this year, it is an honour to represent them all, and I would like to thank them here today for placing their trust in me.
Throughout history, the success of our United Kingdom has depended on the back-breaking work and unwavering determination of Hartlepudlians. Their engagement in the Hartlepool region’s maritime, rail and steel industries has repeatedly helped to secure Britain’s status as a true economic powerhouse. On 16 November 1914, the unshakable devotion of Hartlepudlians to their country was demonstrated in no uncertain terms when the first casualty of the first world war on British soil occurred on our Headland. It was here that we built ships that allowed global Britain to grow and trade around the world, and it is here now, at our nuclear power station, where we power 2 million homes across our region—and I am already fighting for a new reactor for Hartlepool beyond the current plans for decommissioning.
The history of Hartlepool is one of hard graft, bravery, sacrifice and love of country. I intend to fight tooth and nail in this place to give my constituents both the recognition and prosperity they deserve. Following Britain’s departure from the European Union, Hartlepool will once again be at the forefront of ensuring the success of this great country. The Government’s plans for a Teesside freeport, which will include the ports of Hartlepool and Able Seaton in my constituency, will give Hartlepudlians the necessary tools to drive not only regional growth but national growth. I would like to pay special thanks to all my Teesside MP colleagues and Ben Houchen, the Tees Valley Mayor, who has fought so tirelessly to ensure that the Teesside freeport becomes a success for the economy of Hartlepool. I look forward to continuing my work with them to deliver for my constituents.
I would also like to pay tribute to my predecessors Mike Hill, Iain Wright, Peter Mandelson and the late Edward Leadbitter for their service to the people of Hartlepool. Although Lord Mandelson and I agree on very few things, and I, as a proud northern lass, know the difference between mushy peas and guacamole, he was committed to injecting new life into Hartlepool, as demonstrated by the redevelopment of Victoria Harbour. I am proud to pick up the baton of regeneration for my constituency, and the grant of £25 million that Hartlepool recently secured as a result of the Government’s towns fund will help several redevelopment projects.
The towns fund showcases the Government’s commitment both to building back better after the pandemic and to levelling up the country. Further investment in Hartlepool will be crucial to ensuring that the priorities of Hartlepudlians are implemented, for example: regenerating our high streets and local communities; creating good quality and sustainable jobs; helping local businesses to deliver more apprenticeships; and putting more police officers on our streets. I also look forward to working with the Health Secretary and his Ministers to discuss how important healthcare services can be returned to Hartlepool.
As our country emerges from the pandemic, our communities, strengthened and emboldened by their fight against the virus, have much to be optimistic about. The Government’s ambitious plans to build back better, which will put Britain’s communities at the forefront of the national recovery, promise countless opportunities for constituencies like mine. It is time to demonstrate to places like Hartlepool, not with words but with concrete action, that their votes will never be taken for granted by a one nation Conservative Government. I, for one, will dedicate my career to repaying the trust of the people of Hartlepool, and this great but long forgotten jewel of the north will once again gloriously adorn our nation.
It is a pleasure to follow the maiden speech of the hon. Member for Hartlepool (Jill Mortimer). It is also wonderful to see her colleagues gathered around her to show her such support—support I know she will be sharing with the hard-working people of Hartlepool who may be suffering from the Government’s fiscal policies.
I am not sure if the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), who has now left his place, does the weekly shop, but it is something I try to do myself every weekend. Deliveries would be easier, but I find out far more in the aisle of Morrisons about what is happening in my constituency and about people’s problems than I ever do in casework surgery. At the moment, by far the biggest issue the people of Swansea East are facing is the steep rise in the cost of living, while at the same time the money coming in is being hit hard from every angle. I have lost count of the number of times I have heard, “Have you seen the price of this?” or “I can’t afford to buy that anymore”. Some will blame the pandemic and others will blame Brexit for the reasons behind the rising costs and reduced incomes, but either way, it boils down to the same thing: working-class communities are struggling more than ever before, and this Government need to hold up their hands and take responsibility for that.
I would like to take this opportunity to talk about what it is actually like for families who struggle every week to stay afloat. It was in the summer of 2016 that I became aware of the scale of the problem for families in Swansea East. Just a few days into the school holidays, the local food bank called, asking if my office could put out an appeal for donations as its shelves were almost empty—empty because parents were struggling to replace the free school meals that had kept their children fed during term time. From this, our first kids summer lunch club was born. Every year, my team makes sandwiches and delivers them to local free holiday clubs. Year on year, this has evolved and grown, and now every school holiday we try to do something to help families in the constituency who just cannot make money stretch far enough.
I thank my hon. Friend for the very hands-on approach she has taken to feeding her families, but does she share my pain and sadness that food banks and social supermarkets have become the norm, not the exception, in the last nine years alone?
I certainly do. I see that week in, week out when I visit my communities: there is not one that does not have a food bank facility, albeit an ad hoc version.
This year, we added to the lunch club, delivering a Morrisons bag full of breakfast provisions for a family for a week—so we were providing breakfast and lunch. At least once a month, we distribute what some might consider to be luxury items, such as soap, shampoo, sanitary towels and deodorant, courtesy of the wonderful Beauty Banks charity. We deliver them to a community organisation for families who, if they cannot afford to feed themselves, certainly cannot afford personal hygiene products.
By far our biggest project was last December’s “Everyone Deserves a Christmas” campaign. It is the fourth year we have done it, and last year was like no other. We were inundated with requests and recommendations about families who needed help. Thanks to support from the city’s Swans football club, the Ospreys rugby team, Swansea Council, local businesses, local community groups and people including the incredible Welsh football star Gareth Bale, who personally paid for 300 Christmas hampers, we ended up making and delivering 1,300 hampers. On Christmas eve, we cooked more than 100 dinners and delivered them to people who would not have had a Christmas otherwise.
The highlight for me was when one of the drivers returned from making his deliveries to thank me for letting him be involved in the scheme. He said that he was so touched by the excitement of a child who had opened up the hamper box and rejoiced that it was the best present he had ever had, because among the festive food were a tin of Quality Street and half a dozen Christmas crackers. That family had not had a tin of sweets before, because £4 on offer was too much to spend on something non-essential.
With summer now behind us, we are once again planning our Christmas hamper campaign, but with the scrapping of the £20 universal credit uplift, the steep increase in energy prices and the ongoing fallout from business closures, job losses and reduced incomes for those on furlough, 2021 is likely to have hit even more families than 2020. Thousands more people will be sitting at home right now worrying about how they will get through the next week or the next month, let alone buy Christmas presents and other extras. I worry for the families in my constituency, in my city, across Wales and across the UK. The past 18 months have been cruel to so many, but the Government clawing back more money from those who can least afford it is crueller still.
My team—and Gareth Bale, I hope, if he is listening—will help again. We will happily keep on fundraising, packing boxes and putting smiles on faces in Swansea East with a box of sweets in a Christmas hamper. It is an honour to do so, but anyone in this House who makes that necessary because they think that those families do not need the extra £20 universal credit payment, or that they can spend their already stretched incomes on huge hikes in energy bills, should think of those kids and be utterly ashamed of their actions. When the Minister refers to universal credit as a product, when in reality it is a lifeline, I fear that he sees claimants more as a commodity than as individuals.
May I say what a pleasure it was to hear the maiden speech of my hon. Friend the new Member for Hartlepool (Jill Mortimer)? It was absolutely tremendous. I was lifted off my feet by its sheer patriotism. It was so inspiring to hear her love for her place, her attachment to it and her commitment to Hartlepool. It makes me proud of the day I spent campaigning for her—well, maybe it was more like an afternoon, but it was enough. We are all Hartlepudlians after that speech, so I am very pleased that she has joined us.
The British economy is booming. We have the fastest growth in the G7, this year and next. Unemployment is falling across the country, wages are up and the strongest recovery is for the youngest people in our economy. I am very proud of what the Government are doing to invest in people—2,500 young people are joining the kickstart programme every week, 1 million people in long-term employment are being helped with £2,000 restart grants, there is £3,000 for every new apprentice, and the Government are doubling the number of work coaches—and to help them take the benefit of our high-wage economy. However, I recognise that there is a problem.
This is an appropriate debate for us to have at a time when inflation is creeping into the economy and the cost of living is a concern. It is creeping in partly because of the exuberance of the global economy as countries come out of lockdown and the huge pent-up demand for raw materials. Covid has obviously caused disruption to global supply chains and to logistics. We are a group of islands, and we are vulnerable to shocks in international trade; indeed, I think we are rather too vulnerable to such shocks. We are too reliant on imports, especially of energy, which, of course, is salient this week. Beyond that, however, are some profound structural issues in our economy that I think we need to address, on the supply side. There are distortions in the market.
Let us think about the four most essential aspects of life, the things that we all spend our money on first: housing, food, water and energy, such as heating. Each of those markets is distorted and they have different effects, in that some are overpriced and others underpriced. Housing is overpriced—more specifically, the land under houses is overpriced—and as a result the proportion of household spending that goes on housing has doubled over the last 50 years. Food costs are going up, and there is real concern about that, but it is happening after years of artificially low prices. As the proportion of household spending that goes on housing has doubled, the proportion spent on food has halved over the same period, so something is up. Of course it would be great if the quality of the food were just as good or if the real costs of its production were reflected in the price, but they are not. We have an obesity crisis, and we have polluted rivers and a polluted environment.
The same story could be told about our water systems. We have artificially cheap water in this country, because the real cost of water is being borne by the environment, by all of us in our taxes and by public services, resulting in bad health. As for energy, we are all now very familiar with the fact that prices are rising because of our dependence on foreign supply.
Those different distortions in our markets have different effects on prices, but what all the markets have in common is a lack of effective competition. We have a small number of very large companies—house builders, supermarkets, water companies, energy companies—all of which act to distort markets and have negative effects, and ultimately to pass on high prices. Even if in some cases the price at the till is low, for instance as a result of subsidies, the overall effect of these cartels is to increase prices for all of us.
I say yes to the Government’s demand-side reforms, and congratulate them on a high-wage economy with rises in wages and investment in skills. I look forward to the spending review, and hope that we will see more support for the worst-off families. Fundamentally, however, we need more plural markets and more local production in homes, food and energy, which will empower local communities, help local economies, and keep down the cost of living.
I apologise to you, Madam Deputy Speaker, for missing the opening minutes of the debate, and thank you for allowing me to speak this afternoon.
It was a pleasure to hear from the new hon. Member for Hartlepool (Jill Mortimer). I expect she will know that the colourful football manager Brian Clough started off at Hartlepool United, and I am sure that those on the Government Benches are hoping that she does not turn out to be as controversial, as outspoken or as rude as he proved to be over the course of his career.
As we enjoy the last of the summer, our thoughts will soon turn to winter and the challenges of fuel poverty. The rise in rail fares, council tax increases and rising household energy bills are of concern to hard-pressed families, but what is rarely mentioned is the extortionate price of water. Access to safe drinking water is one of the most basic human needs. Water should not be expensive, and it should not be causing environmental damage to our local areas. This appears to be a bare-minimum service, but I am sad to say that in Wales, the co-operative Dŵr Cymru Welsh Water is failing to meet even that standard. It is shameful that families are being let down on something as vital as their water bills. The Consumer Council for Water has found that the unemployed, call centre workers and carers are hardest hit by high water bills, simply because they do not know that help is available, and water companies have been found wanting when it comes to publicising such schemes.
Wales has some of the most impoverished communities in the UK. In 2020, median gross weekly earnings in Wales were the third lowest amongst the 12 UK countries and English regions. Water ought to be affordable for all, yet Welsh Water’s forecast average bill in 2021-22 is the third highest of all the companies in England and Wales. To put this in perspective, Severn Trent Water, which covers most of Gloucestershire, Bristol and Birmingham, has among the lowest bills in the country, so simply living across the border means enjoying lower prices. I am sure that Dŵr Cymru Welsh Water’s public affairs department will be on the phone to me and sending me emails and press releases telling me that it is different in that it has a higher geographical area and a coastline, but it seems amazing to me that the City of London, where some of the richest people live, benefits from the lowest prices from Thames Water. Why is that the case? How can Dŵr Cymru Welsh Water, a company that frequently touts its not-for-profit status, not be ashamed of the fact that it is forcing families with household incomes far below the average to pay some of the largest water bills in the country? This is a company that is failing its communities.
For some, the extortionate prices are just laughable, given that their water supply is not even reliable. One village in Denbighshire has been plagued by supply issues this year. Residents have experienced extremely poor water pressure and a complete halt in water supply on several occasions. Their water went off completely in July for the ninth time in the year. That is more than once a month. How can the company possibly justify charging some of the highest prices and then fail to even deliver the water? To add insult to injury, Welsh Water has confirmed that work to rectify the supply issues will not get under way until next May, a full six months away, and meanwhile we are facing a hard winter. That is not an isolated case. I know of many Members, from Newport to Monmouthshire, who have had problems with water supplies.
High bills and poor service are compounded by the environmental damage that Welsh Water has contributed to in our Welsh rivers. Wales is fortunate enough to have some exceptionally stunning waterways and countryside, but they are being threatened by the irresponsible actions of Welsh Water. At a time when we are trying to attract people to come to Wales for tourism and holidays, they are being faced with polluted rivers. It is not good enough. I was horrified to watch a “Panorama” programme earlier this year that found that Welsh Water had been illegally dumping raw sewage into rivers. This is extremely damaging for the ecosystems of the rivers, it is unsanitary and it is a dangerous breach of the company’s permits. It ruins the rivers for the many dog walkers, wild swimmers and paddleboarders who wish to enjoy the beauty of the Welsh countryside. It threatens the biodiversity of the rivers, puts wildlife at risk and results in large-scale ecological damage. Above all, it risks the health of the most vulnerable customers in the country, and still nothing is being done.
There is no defence for this. It is not a one-off mistake or a small-scale problem. Last year, sewage was dumped more than 100,000 times across 2,000 water treatment works and sewer overflows across the Welsh Water network. That is a shockingly high rate, and Welsh Water must be held accountable for the damage that this has caused. Welsh Water was found by the “Panorama” investigation to be one of the worst offenders across England and Wales. According to its data, three of its treatment works were in breach of their permits. The Aberbaiden plant had illegally discharged untreated sewage on 12 consecutive days in December into the River Usk. That sewage gets into the system, and our children will drink that water. Our elderly will drink that water. This is a scandal of epic proportions and it needs to be called out. The Usk is a protected river, and a special area of conservation. For Welsh Water to be dumping untreated sewage into an environmentally protected river is absolutely abhorrent and shows flagrant disrespect for the communities it operates in.
Dŵr Cymru Welsh Water says that it is run
“solely for the benefit of customers”,
yet it has some of the most expensive water in England and Wales, which it does not always deliver to the households it claims to serve anyway. Meanwhile it is consistently breaching its permits by dumping untreated sewage into the rivers. How can this possibly be the action of a company acting solely for the benefit of customers? Surely it would be more beneficial to them if Welsh Water ensured that its water bills were more affordable. I am a huge advocate for co-operatives, and I sit here proudly as a Labour and Co-operative Member of Parliament, but this one is failing. Welsh Water is failing in its environmental commitments and it is failing its customers, and it must be held to account.
The Public Accounts Committee held an inquiry on the water industry in 2015, and Ofwat has launched investigations. I implore those on the Treasury Bench to look into the actions of Welsh Water and make sure it starts delivering for its customers before we see an environmental scandal on a larger scale.
What a joy it was to hear my hon. Friend the Member for Hartlepool (Jill Mortimer) give a truly brilliant speech. It is somewhat apt that the hon. Member for Islwyn (Chris Evans) spoke about Brian Clough, who was passionate about his local community. Brian Clough gave hope and aspiration to the communities he represented and, having spent time with my hon. Friend the Member for Hartlepool in her constituency, I know that is exactly what she does. This is the first time Hartlepool has had such political leadership for a long, long time.
This is an important debate, and the first line of the Opposition motion says
“this House is concerned about the negative impact of Government policy on the finances of working people”.
The shadow Minister, the hon. Member for Houghton and Sunderland South (Bridget Phillipson), who is no longer in her place, framed that argument by saying it is based on choices made by the Government, my Government, this year and last year.
I want to test that thesis and, rather than stating things in bland generalities, I will make specific reference to my town of Bury and the impact of the choices that my Government have made over the past two years and how they have benefited working people.
Over the past two years, this Government have given nearly £80 million in busines support grants to businesses in my area, ensuring that people have jobs, that businesses are able to continue and that wages can be maintained at their previous level. That is down to the choices made by this Government. We have protected jobs, which seems to have been completely ignored by some Opposition Members.
What else have this Government done for the people of Bury over the past 18 months? In the financial years 2020-21 and 2021-22 so far, Bury Metropolitan Borough Council has received £1.8 million, on top of the other support that is open to people in my community, to support vulnerable families and specifically to help with fuel, energy and water bills. That is on top of the £1.8 million that the council received from the hardship relief fund, the majority of which has been given to families of working age, who have received £150 credit set against council tax bills. That is part of a total package of £118 million, separate from furlough and the Government-backed schemes such as the loan schemes, which has ensured that businesses have not only been able to maintain employment and pay wages but have been able to thrive and expand.
This Government and every Conservative Member should be extremely proud of that record and of the investment this Government have made in communities. My hon. Friend the Member for Hartlepool mentioned the £25 million going into her town, and it means regeneration. It is creating employment and changing lives. This Government are making these decisions in every part of the United Kingdom every week, and they are changing lives.
I also congratulate my constituency neighbour, the hon. Member for Hartlepool (Jill Mortimer), on her maiden speech. I am sorry that her Tees valley colleagues have now abandoned her, because I wanted to share some child poverty figures with them. Since 2015, the number of children in poverty has gone up by 1,800 in Stockton South, by 2,000 in Hartlepool and by 1,900 in each of Darlington, Redcar and Middlesbrough South and East Cleveland. Will the hon. Member for Bury North (James Daly) address the children in the Tees valley and persuade Tees valley MPs to vote against the universal credit cut?
From recollection, and my hon. Friend the Member for Hartlepool will tell me if I am wrong, Ben Houchen got 74% of the vote. Conservative MPs have been elected in Labour areas of the Tees valley because we give hope and we have a plan. This Government’s plan for jobs is working, whereas Labour has offered nothing to the Tees valley over the past decades. The Minister, my hon. Friend the Member for Hartlepool and other Members in that area are putting forward plans that are changing lives, for which they should each be extremely proud.
I come to the second part of the debate. In Bury, we have seen unprecedented support during an incredibly difficult period. How do I, as a Member of Parliament, feel about the Government policy? How do I look at what we should be doing to change people’s lives, give hope and inspiration, and make sure that people can make the best of themselves, having the best career, best-paid job and best future? I have heard no arguments —no plan, definitely—from any Opposition Member in respect of how that is going to happen; I have heard no hope, no vision, no anything for children in Bury or in the Tees Valley about how their lives are going to be transformed by a Labour party. I have heard bland generalities.
The shadow Minister said that the Labour party would create a high-skills, high-wage economy, but they are going to be too late, because this Government are doing it already. We are investing billions of pounds in skills uptraining, not only to give young people from the most disadvantaged backgrounds the best chance to have a highly paid, skilled job, but to regenerate our areas. In an area such as Bury, we have to have that skillset so that we can bring in high-tech manufacturing and make sure that those jobs are closer to our communities, so that people, including young people in Bury, do not have to go to Manchester or London to have a highly-paid job.
This Government have a plan that is delivering; the plan for jobs is delivering, and we can see the kickstart figures. We are creating, through youth hubs, kickstart and all the other programmes that have been outlined, a set of policies and programmes. Bury College is part of a bid for institute of technology status for Greater Manchester. What does that mean? It means colleges in Greater Manchester are working with the University of Salford to create the means by which high-skilled, high-worth employment is going to be on the doorstep for people, with the skills training that is being delivered. I had the privilege of going to Bury College with the Minister two weeks ago; the T-levels that have been introduced by this Government are inspiring aspiring people and changing lives, making people’s futures brighter—we cannot overlook that.
We have a transformative Government. Every decision made is regarding levelling up. Everything we decide to do is done to transform opportunity. Sadly, the Labour party is not interested in that and certainly does not have a plan to do it. So I congratulate this Government. There are challenges. We are dealing with a £400 billion pandemic, for which there is no panacea, but this Government have done what they have needed to do to protect people’s livelihoods and interests, and to support families throughout this period, with unprecedented financial support. We are now on to the next stage. The plan for jobs is working; it is hope, it is aspiration and it is changing futures and lives in communities such as Bury. I support the Government wholeheartedly on that vision for our country.
I would like to thank my right hon. and learned Friend the Leader of the Opposition for securing this important debate. I also wish to congratulate the hon. Member for Hartlepool (Jill Mortimer)—I would if she were in her place—on her maiden speech.
Many of my constituents in Sheffield, Brightside and Hillsborough are facing a winter of immense financial difficulty, particularly given the cruel £20 a week cut to universal credit that Ministers are pushing through, against the wishes of this House; I welcome this opportunity to bring to light their hardship. After a decade of Tory mismanagement, poverty and inequality run rampant in our country. Council budgets have been cut to within an inch of their lives, leaving local services in tatters. Schools struggle to give kids the education they need and deserve. Emergency services are stretched beyond any reasonable expectation. People have been left to fend for themselves. The same families who have borne the brunt of austerity are set to face a winter in which they choose between heating their homes and putting food on the table.
In Sheffield, Brightside and Hillsborough, 15,000 families are in receipt of universal credit or working tax credit—that is three in every five families. The planned cut will take £15 million from families that are already struggling to feed themselves. It will bring more hardship for those who are already struggling. It will come in October, just as the furlough scheme ends and the energy price cap is set to rise, which could see prices rise by up to £153 per year. Research by Sheffield citizens advice service has found that 28% of households in which someone received universal credit are behind on their energy bills. That is seven times the rate for those who do not receive that benefit.
Cutting universal credit now shows just how out of touch the Government are with the realities of working people’s lives. Some Government Members like to believe that poverty is a thing of the past—a product of Victorian Britain—but in today’s Tory Britain, the cut will affect 6.2 million families. On top of all that, the Government are now planning to raise taxes on millions of hard-working families. The rise in national insurance is the biggest tax rise on families for 50 years. Already, constituents have been contacting me because they do not know how they are going to be able to afford basic necessities after they are hit by the double whammy of a cut to their universal credit and a rise in their tax bill.
I wish to speak briefly about one of my constituents, whose name is Shaun. Shaun is a young man with serious mental health needs. His single person’s universal credit barely stretches to cover the costs of caring for his four-year-old son. What is Shaun supposed to do when he finds himself with £1,000 less each year? What choices will he be forced to make to get through each month? What will he and his son have to give up to get through each day? Shaun will not get answers to those questions, because Ministers will not look Shaun in the eye and listen to how the cut will plunge him into debt or how he worries about the impact it will have on his mental health.
Let us call these policies what they are: cruel. Labour knows it, the public know it, and dozens of charities and campaign groups know it. I would like to think that, deep down, even some Government Members know it. The cut to universal credit in particular is so cruel that the charity Human Rights Watch has said it would breach the UK’s international human rights obligations.
The Government’s policies are regressive and will hit working families the hardest. They lay bare the reality that the levelling-up agenda is no more than empty rhetoric and a new name slapped on a Government building. We cannot level up by taking money out of the pockets of those who need it the most. Not only that, but their policies are a sucker punch to businesses up and down the country which, after barely staying afloat during covid, will see their revenue streams run dry as consumer spending falls because of the fiscal squeeze. I urge the Government to listen sincerely to the concerns of Members from all parties. I hope they will see sense and reverse these decisions before yet more families are pushed into a never-ending spiral of poverty.
It is a pleasure to follow my constituency neighbour, the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss), and it was a delight to hear the maiden speech by my hon. Friend the Member for Hartlepool (Jill Mortimer) earlier. As a fellow MP in a post-industrial area, I absolutely recognise what my hon. Friend said about the importance of levelling up being about not only materially restoring to northern areas the opportunities that have been given to the south, but honouring those areas for their contribution to the wealth of this nation over hundreds of years.
Throughout my whole adult life, inflation rates and interest rates have been remarkably stable. That is not normal historically, and when I speak to constituents or more senior Members and hear about what life was like in the ’70s and for many decades before, I realise that the inflation that is a threat now is very different from the stability we have enjoyed in previous years. It is a concern.
My constituents are worried: they are worried about energy prices, and we have heard much about that over recent days; they are worried about commodity and construction prices; and they are worried about shortages. I have just heard from a major importer in my constituency who is concerned about the cost of shipping. The cost of a shipping container from China has risen from around $2,000 a container last November to getting on for $20,000 now. That will have a huge inflationary pressure, given how much we import.
It is also the case, though, that wages are rising and our job market is buoyant. Our plan for jobs is working. We have heard much about the furlough scheme, which has rescued our economy from the fate of mass unemployment. We have a record number of job vacancies—more than 1 million—and businesses in my constituency of Penistone and Stockbridge are hiring people of all ages for all different types of jobs.
We have heard Brexit being blamed for the situation that we find ourselves in, and there is no doubt that Brexit has caused changes in our economy. I draw the attention of hon. Members to an article by Matthew Lynn in this week’s Spectator entitled “Who’s afraid of rising wages?” It starts:
“During the Brexit referendum, Stuart Rose, the former boss of Marks & Spencer, and chair of the Remain campaign claimed that if Britain left the EU, wages ‘will go up’. This was, he added, in a rare moment of candour, ‘not necessarily a good thing’. But the idea that salaries might rise was exactly the reason that a great many people voted for Brexit.”
Why should we be afraid of rising wages? It is what the Opposition have been calling for. More competition for employees will lead to rising wages, and we are seeing that: Costa, for example, is paying over 5% more. On average, wages have risen 8% over the past three months, and, from April, this Government raised the national living wage to £8.91.
We must remember that we are still in economic shock. We are coming out of an extraordinary period of time, but things will settle. In fact, the International Monetary Fund has forecast that the UK will have the highest growth in the G7 this year, so while there are concerns around inflation and the cost of living, which must be addressed, there is also a good chance that we will have a fairer jobs market at the end of this.
Will the hon. Lady share with us the solution to the seasonal agricultural workers scheme, which is not adequate for farmers to be able to employ enough people to pick crops in the field and to avoid the situation that we are seeing in Scotland where many fields of crops are just being left to rot because of the lack of workers?
The hon. Lady makes an excellent point. While, overall, on a macro level, having more jobs available for British workers will push wages up, it is of course the case that certain sectors will need specific interventions to save them, and I would support any such measures.
While there are concerns like the one the hon. Lady has raised, and concerns in the wider economy, our plan for jobs is working and the future is optimistic. None the less, there are some long-term structural issues with the cost of living and threats to living standards that must be addressed, and this is the moment to do so. We must find a solution for the sake of future generations.
First, housing affordability is a key driver of problems with the cost of living. Solving the housing crisis will unlock many issues, such as generational inequality, and it will reduce the cost of living. I am delighted that the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), has been appointed to look at this specific problem, because it is very important. Many of the serious issues that Members have raised in this House today would be much aided by a reduction in the cost of housing.
Secondly, we also need to look at fairer finance for families. Again, much has been said about the changes to universal credit, but I want to consider what we could do in our taxation system to make life fairer and cheaper for families. Unlike many countries, the UK has an individualistic tax system. We tax individuals rather than households, which means that we do not take into account the number of dependants in a particular house, and that can make life very expensive for families. Some families on low and middle incomes can end up paying around 30% more tax than individuals living on their own. When we couple that with the way that benefits are clawed back as people earn more, some families can effectively face a marginal tax rate of 75%, making it very difficult for them to get out of poverty. We must recognise the importance of raising children not just for the nuclear family, but for our whole society. We need to look at how we can make it less expensive for families to exist and to raise their children.
The hon. Member is making an interesting point about support for families. Does she agree that the UK Government’s two-child benefit cap punishes those who have a larger family and puts them in a position where they cannot work their way out of poverty?
What is far more significant is the way in which we tax individuals—potentially spreading people’s income tax allowance and things like that—rather than looking at household income; that would give families far more choice about how they spend their income and organise their lives, and make family life much more affordable.
Thirdly, we have to address the long-term affordability of our public spending commitments. The welfare state that we have today was designed 80 years ago, when life was very different. Demographics were different then. There was no paid-for childcare or paid-for social care. Most women did not work. There was a huge amount of free care and community living going on that we just do not have, or that there is not nearly as much of, today. Of course, people then also spent a far higher percentage of their life working, whereas now people spend much longer in education and much, much longer in retirement, which means that proportionally, over the course of someone’s life, they are spending far less time paying tax and paying for insurance—paying for the benefits that we all want to enjoy.
The Office for Budget Responsibility forecasts that public sector net debt could rise to 300% of GDP by 2070. We just cannot continue in the way that we are now. We need a reset. We need to redesign our public spending and welfare state for modern life and modern demographics. I think we have already established that we cannot tax our way out of this. Of course, we should be trying to grow our way out of it, but we also need a fundamental redesign of the welfare state and public spending.
We also need much more emphasis on community solutions and prevention. It has been an honour to be part of the early years review of my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), whose start for life recommendations look at the importance of the first 1,001 days of a child’s life. If we get that period right, we can prevent so many problems that destroy people’s lives in the long term and which are incredibly expensive for public spending. We must spend more and invest in the early years and health prevention. About 40% of the NHS budget is spent on preventable and lifestyle diseases. We have to tackle those things if the state is going to be affordable in the long term. Of course we should innovate, use technology and look at what other countries are doing to address these issues.
We should be concerned about the cost of living. Families up and down the country are struggling, and there are families that are not able to take advantage of opportunities in jobs and higher wages. But this Government have taken action on jobs over the last 18 months, and that is bearing fruit. As our economy is reset, we now have an important opportunity to solve some of the structural issues that we face.
One thing that the Government could look at is the 2017 plan to extend pensions auto-enrolment to people who are 18-plus, rather than 22-plus, and to low-paid workers. Does my hon. Friend agree that the Government should take that forward at the earliest opportunity as part of a long-term solution?
I absolutely agree. In my speech on national insurance contributions a couple of weeks ago, I made the point that the auto-enrolment scheme was a fantastic invention and that we could extend it, as my hon. Friend says, but also that we could look at using it as a model to help contribute to social care, so that people pay into it now and reap the rewards later.
We have to address some of the structural issues that I have discussed. Now is an excellent time to do that, and I would welcome the opportunity to work with Ministers and colleagues across the House to look at innovative solutions to do that.
I thank the hon. Member for Penistone and Stocksbridge (Miriam Cates) for that very interesting analysis of what we ought to be doing now.
For households and families living on the edge, a cost of living crisis is a crisis that they simply cannot afford. To cite just one statistic, in my constituency of Coventry North East, the rate of child poverty already stands at 29%. Once the cuts to universal credit, the rise in national insurance contributions and an increase in a wide range of household bills are factored in, I am certain that the number will rise significantly. A cost of living crisis, therefore, will not just result in a short-term squeeze on family finances but will have a long-term corrosive impact on the life chances of thousands of children across the country.
Many of the people I represent in the community I grew up in work hard but in low-paid and often insecure jobs. The Government’s disregard for, or lack of understanding of, the challenges that these communities face was demonstrated recently by the Work and Pensions Secretary, who claimed that individuals facing the £20 cut to universal credit should work two more hours a week. Yet it was soon made clear that in fact it would take about nine more hours a week to make back the £20 cut. Is the Work and Pensions Secretary seriously saying to these people that they should essentially have a six-day working week: that they should sacrifice their weekends; their family time; their time for rest and relaxation? It is all well and good saying that we need better-paid and more secure work, but in communities like Coventry North East we need Government investment and support to make it a reality. So far, despite all we have heard about levelling up, we have not seen any tangible evidence of this in Coventry.
My hon. Friend knows that these people use the same supermarkets that she and I use, and they have so much less money. She knows, as I do, about supply and demand, and if there is less food and less product around, the prices go up. I do not go to supermarkets very often, but recently, when I do, I have noticed that product is being fronted on the shelves with very little behind it, so there might only be 20 or 30 cans of beans instead of 200 because there is a food shortage in some product areas. Does she agree that the Government really need to act on employment and getting drivers in place so that we do not face these kinds of shortages?
I thank my hon. Friend. Unlike him, I do go shopping a lot. I spend a whole lot of my time in supermarkets, for different reasons, and I entirely agree with him. I see that around my constituency an awful lot, not just doing food shopping, I hasten to add, but other shopping as well, which I thoroughly enjoy when I have the time for it.
It becomes clearer each day that the interests of my constituents will never be served by a Tory Government who simply do not understand, or do not want to understand, the difficulties faced by my constituents. Successive tax rises have demonstrated that even though my constituents were some of the worst affected by the pandemic, in terms of their health as well as their finances, the Government have made the political decision to ensure that they will bear the bulk of the costs of this crisis and will be offered scant support if they are struggling.
I urge the Government to pause and reflect on their recent decisions and offer a better deal for people like those who live in the communities that I represent to ensure that we can get through any cost of living crises together.
It is a pleasure to follow the hon. Member for Coventry North East (Colleen Fletcher).
It is also a pleasure to contribute to the debate in which my hon. Friend the Member for Hartlepool (Jill Mortimer) made her maiden speech. When I went up to campaign for her in Hartlepool, I was struck by the reception that we had on the doorsteps and the faith that the people of Hartlepool put in her. That faith has been entirely justified by the tone of her speech. She stands for putting pride back into Hartlepool, exactly the same as other Members in the post-industrial areas that the Government are levelling up and addressing, like me, in Newcastle-under-Lyme, and my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates). It will be good for working people that Newcastle-under-Lyme has a £23.6 million towns deal, just as Hartlepool has its towns deal funding. The Government have taken on that agenda. Let us be fair: it was originally the hon. Member for Wigan (Lisa Nandy) who said that we needed to do more for towns, but the Labour party decided that it did not want to listen to what people in towns have to say—people who voted for Brexit and wanted Brexit to happen—and it did not vote for her to be its leader. That is why it has been reduced to the state that it is in.
I turn to the effect of Government policy on the finances of working people. The key thing is that people should be working and the Government have been extraordinary in ensuring that people can continue working. There was a period when people had to stay at home, but now they have jobs and businesses to go back to because of the extraordinary measures taken by our extraordinary Chancellor in extraordinary times. We saved millions of jobs through furlough—more than 10,000 people in Newcastle-under-Lyme were on furlough. We saved tens of thousands of businesses through the grants and loans that we gave them, and those businesses are now recovering and hiring again. We have also protected people’s salaries through measures such as the energy cap. Yesterday, I was grateful to hear the Secretary of State for Business, Energy and Industrial Strategy say that, with the energy cap put in place by the Government, people will not have to pay much more this winter.
Above all, the Government have kept people in jobs. Unemployment peaked at 2 million fewer people than was initially feared at the start of the pandemic, which is a tribute to what we have done through the pandemic. As my hon. Friend the Member for Penistone and Stocksbridge said, jobs are now available—we have 1 million vacancies out there—and wages are rising because the era of unlimited immigration is over. We have the highest growth in the G7, and the OECD predicts that we will have the highest growth this year and next. We also have, as I said in my intervention on the Chief Secretary to the Treasury, a plan for jobs that is about not just getting people into jobs but getting them into better jobs and getting them better skills in jobs. We have policies such as kickstart and restart, and we are doubling the number of work coaches. I thank the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), for visiting the Newcastle-under-Lyme jobcentre with me in the summer, where he saw what our work coaches are doing to get people into jobs in north Staffordshire.
Of course, the Government also have policies for more skills, including apprenticeships and technical training. For the last two Fridays, I have been giving out awards at Newcastle College, first to those in higher education and last Friday to those in further education. The college’s apprenticeship scheme is outstanding—in fact, it was the first college to be graded “outstanding” across the board with Ofsted—and people who go there and get those technical skills will end up with much better jobs, and much better paid jobs, than they would have done without those innovations. My hon. Friend the Member for Bury North (James Daly) mentioned an Institute of Technology bid. Newcastle College also has one in. If it gets that, that will only enhance our offer to young people in north Staffordshire and Newcastle-under-Lyme.
Does my hon. Friend agree that it is about not just creating jobs but creating high-quality jobs? This Friday, United Caps is opening a new manufacturing facility in my constituency, providing high-quality jobs on the top of the old pit site. It is doing that because of the aspiration that the Government have given the company to invest in a former pit town on a former pithead to give us the new high-quality jobs that Government Members want and Opposition Members do not.
Like my hon. Friend, I have the honour of representing a former mining area, and it is so important that we give our areas the hope, the skills, the jobs and the future they need. So much public money is coming into places such as Newcastle-under-Lyme, but in the long term we will need the private sector to sustain our economy, which we can do by using the pump-priming of the towns fund and the future high streets fund—we have got money from that—to grow our local economy to support people. We can do that by paying people higher wages, and by giving them better skills they can earn those higher wages. He is absolutely right.
The Government have a plan for jobs, but where is the Opposition’s plan? We did not hear one from the shadow Minister, the hon. Member for Houghton and Sunderland South (Bridget Phillipson). Labour must address the fiscal reality; it cannot wish it away. We spent £400 billion in extraordinary support during the pandemic. We now have a £300 billion deficit—nearly 15% of GDP—but we were able to put that support on the table only because previous Conservative Governments accepted that we have to live within our means and get the deficit down when we can. We dealt with Labour’s deficit and we will now have to deal with the deficit that is the legacy of the pandemic.
As the Chief Secretary to the Treasury—I welcome him back to his rightful place at the Dispatch Box—said, the Opposition do not seem to want to accept any of that. They voted against extra money for the NHS, which I find astonishing. They say that we should put the tax elsewhere, but they voted against our increase to corporation tax. They also voted against freezing income tax thresholds, which was not a popular decision but a necessary one in the face of the fiscal realities. They also voted against the reduction in the international aid budget. Again, we breached the manifesto on that, but in the extraordinary economic circumstances we are in, I believe it is the right thing to do.
Labour Members want more spending and they want no tax rises in the face of an unprecedented, enormous deficit. I believe that that is economically incoherent, and it takes the British people for fools. They tried that once before in the face of an enormous deficit during the 2010 to 2015 Parliament, and I have to tell them that it did not work out well for them at the next election. I am reminded by today’s news that they also took the opportunity during that Parliament to change the way they elect their leader. They are trying to do that again now, and that really did not work out well for them, so they really should be very careful what they wish for.
In conclusion, the reason why Government economic policy is working and is in the interests of working people is that it is really all about jobs. Conservative Members all believe that jobs and work are the best way out of poverty. There are more jobs, more people helped into jobs, more training within jobs, including the apprenticeships I talked about earlier—[Interruption]—with up to £3,000, as my hon. Friend the Member for Broadland (Jerome Mayhew) says. There is our lifetime skills guarantee for those who are in the wrong job and want to change jobs, and we have also put an end to unlimited immigration, protecting our citizens from the race to the bottom in wages that, sadly, we have seen so often. The Labour party wants us to rejoin the EU, reopen those borders and force wages back down again.
From the plan for jobs to the increase in the national living wage, I firmly believe that this Government are putting those on lower incomes at the heart of our economic policies and at the heart of our economic planning, and it will be a brighter future for all of us.
It is a delight to follow my Procedure Committee colleague, the hon. Member for Newcastle-under-Lyme (Aaron Bell). It is helpful because we are ideologically opposed on every single matter, so I can pretty much stand up and say exactly the opposite of what he said, and it will be grand. Mr Deputy Speaker, I want to take to take you back to 1915. In 1915, my great-great-grandfather John Murray was killed when his steam herring drifter was cut in half by a British warship. My great-granny’s mother Barbra Helen Murray, who was known as Babeellen, was left to raise five girls by herself. When she was left in that situation of abject poverty, there was no Government funding to help her. She had no support from the Government to get through that very immediate crisis. Her sister stepped up and offered to take the youngest child off her hands—offered to give that child a home and pay for that child’s upbringing. Imagine having to make such a choice about whether to keep her child. Imagine being forced into that choice of whether to keep that child, whether in 1915, or in 2021 with the rape clause. Imagine having that choice. Thankfully, she chose to keep her child, and she brought up my great-grandmother.
The family were helped: they were helped by the church, their friends and their relatives. However, the reality was that people did not have a lot to spare and people did not have a lot they could give in such charitable situations, so the family really had very little money. This was despite the fact that my great-granny’s mother worked in every single job she could find. She knitted things, she sewed things and she mended things. She cleaned every building she could possibly get access to and that she could convince people to pay her for cleaning. She did not get any money at all from the Government until she turned 70, when she got 7 shillings and sixpence for her pension, which was an absolute fortune to her. She had spent 37 years working in every job she could have and in every moment she could find in insecure employment—like people are being forced to do in the current system; trying to work every single hour in multiple part-time jobs just so that they can try to put food on the table.
The hon. Member makes me reflect on a family matter of my own. When my grandad was killed in a pit accident, my dad had his apprenticeship, and my granny went out and scrubbed floors to ensure that he completed his apprenticeship. But today we find that grandparents are looking after grandchildren—perhaps because somebody is in prison or because they have a drug problem—yet they do not get help, and even those people are going to lose this £20 of universal credit. Would you credit that?
Stories like this belong 100 years ago; stories like this do not belong in the 21st century. We should not have constituents who are in absolute poverty coming into our constituency offices.
This motion is about the working poor. My great-granny’s mother did not have money to buy what she saw as necessities; she obviously did not have enough money to buy food and stuff but was helped out in that, but she also could not go to church because she could not buy clothes for church. She had her working clothes but could not buy Sunday best clothes to go to church; that was her biggest regret about not having money. Nowadays, people on UC may not be able to afford internet access, which they need to get their UC, or to afford other things we see as necessities. Not many people are wanting a Sunday outfit to go to church—some are, but not that many—but they desperately need access to the most basic of services so they can get their UC and make their claims, and so that they can speak to friends and family and not be hugely isolated.
A cut of £80 a month is a huge amount. For a lot of people, £80 a month is their council tax bill, or two mobile phone bills, or—goodness knows—one pair of shoes for the kid, maybe two pairs for those who are particularly lucky and their child is going to wear something a bit cheaper. It is a huge amount of money, not pennies; it means people will have to cut back on a big, major bill when this cut is implemented. My great-granny remembered her mother crying because winter was coming and she could not afford to buy shoes for the children. That was over 100 years ago; this should not be happening today—we should not be having single parents crying because they cannot afford to buy winter shoes for their children.
I am going to come on to that, because I am thinking there is a divide across this Chamber: the constituency cases we on the Opposition Benches are seeing do not appear to be reflected in the cases being seen by those on the Government Benches, or they would not be making this cut. If they were sitting around those tables with people crying because they are living in absolute poverty and destitution, they would not be choosing to cut this £20 a week.
Some 72% of families who need food bank help have at least one parent in work. In my constituency more than four in 10 families will be hit by the UC cut. Aberdeen has been hit by a triple-whammy: the oil price crash has meant many people have been made redundant; we have seen the reduction in the reliance on oil; and we have seen both covid and Brexit. All those things are having a significant impact on the people of Aberdeen, and particularly my constituency. We have seen massive house prices in our city, too, so people have not been able to save money, and they have not been able to get council houses because of the right to buy, which we have, thankfully, cancelled now in Scotland. They have not had the opportunity to get back on the housing ladder, and they are doing the kind of insecure work my great-granny’s mother was doing: they are cleaning hospitals and working as porters and carers. I defy anyone to tell me those people are not working hard; these are hard-working families, yet they are being slammed consistently by this Tory Government.
We are talking about absolute destitution. My hon. Friend on the Front Bench, the Member for Glasgow Central (Alison Thewliss), mentioned prepayment meters. I do not know how many Members have had a prepayment meter, but I lived in a flat with one when I had hardly any money. If a prepayment meter goes £20 into the red, it stops working—the electricity stops—and people do not just need a fiver to bring it back; they need to pay the full £20 to get back into the green. Many of my constituents are faced with those numbers ticking towards that negative £20 and wondering, “What on earth are we going to do about this? How are we going to pay for the electricity so our children have heat and do not freeze?” We had a guy come into my office one day. This chap was on universal credit, and he was one of those single people on universal credit who is literally destitute. That is a significant portion of single people on universal credit; they are living not just below the poverty line but below the line of destitution. This chap came into my office to say that he did not know what to do. He had not eaten in three days. His dog had not eaten in three days. He had sold every single item of furniture that he had in order to try to keep them both fed. He had sold his bed, so we managed to source a bed for this chap.
That should not be happening in 2021. We should not be having those conversations with people, yet Government Members talk about £6 billion and say, “Oh, we’ve given £80 million to this scheme” or whatever. It does not matter if they have given £80 million to that scheme; it does not make a difference. What makes a difference is ensuring that these folk have enough money to eat—enough money to feed themselves and to clothe themselves. The hon. Member for Bury North (James Daly) talked about hope and aspiration. How can someone have hope and aspiration if they spend every single moment of every single day—
Worrying—exactly. Worrying and thinking about what on earth they are going to do tomorrow, and what they are going to do the next day. Half of people who go to Trussell Trust food banks are in debt to the DWP because the universal credit system is so rubbish. People are in debt because they have had to take crisis loans due to the universal credit system.
That is before we talk about the £20-a-week cut. That is absolutely a cut for people who have been going through the hardest times. Government Members can talk about the £6 billion all they like, but the reality is that the damage that this cut will cause to people—the number of hospital admissions we will see and the number of people who will die as a result of the cut—will be far more and cost far more than £6 billion.
Let me start by saying that I make no apology for referring to a subject that I have talked about very often in this House and in questions—universal credit and child poverty, which are inextricably linked. I want to talk again about the serious and really disproportionate effect that ending the universal credit uplift will have on people in my constituency of Blaydon and across the north-east.
Many constituents have written to me expressing their concern about the cut—the loss of the £20. I have heard both from people who receive universal credit themselves and know what a huge difference that has made to them, and from those who are concerned about other people in their community who will be affected by the cut. There is a real and genuine concern about how people will suffer as a result of the loss of that £20.
One of the many constituents who got in touch with me, Stacey, will, after the cut, no longer be able to afford to take her child to their hospital appointments as the travel fare is too expensive, leaving her, she says, to choose between buying food and accessing healthcare. Stacey’s story highlights perfectly what we know from the data and what we hear from charities across the region. Forty-six per cent. of families with children in the north-east will be affected by the universal credit cut, and that in a region that already had the second highest level of child poverty in the country before the pandemic. The cut will leave families worse off.
Of the 20 constituencies with the highest increases in child poverty between 2014 and 2019, 17 are in the north-east. In my constituency of Blaydon, 27% of children live in poverty. That is data from before the pandemic.
The hon. Lady is bringing forward the very important issue of child poverty. Charities have indicated to me that child benefit is a godsend, but they also say that the benefit cap has remained the same since 2013 and that, in the same period, inflation has been 17.56%. That means that people who have been on the same wage for eight years will find that if they go to their boss and ask for a wage increase, they will lose their child benefit. Does the hon. Lady agree that it is time to address that too?
I thank the hon. Member for his intervention; of course, I absolutely agree with the important point he makes.
Some 7,320 households in my constituency of Blaydon, or 21%, will be affected by this cut, which represents a combined loss for low-income households in Blaydon of £146,400 a week. That is £146,400 being sucked out of the local economy each week, virtually overnight. Is that levelling up for my community? I thank the North East Child Poverty Commission for the important work it does to produce such figures, which graphically illustrate the problems we are facing.
We have talked a lot about jobs as well, because universal credit is as much an in-work benefit as it is an out-of-work benefit. Some 40% of those on universal credit are in work, many doing really important key worker jobs that did so much for our society during the last 18 months of the pandemic. This is not about people being lazy and wanting handouts. Low wages, poor-quality jobs, zero-hours contracts—they all mean that being in work is no longer enough to be out of poverty in this country.
I thank my hon. Friend for her intervention and share her concern about the number of people who will be affected by this cut. Being in work is not enough; we need better quality jobs, with proper conditions and adequate pay.
I want to mention the energy price cap rise and the inevitable cost rises that will follow. Many of these families will feel the impact of that. Many may be living in poorly insulated homes and may feel the need to increase the heating in their properties. We know that there are links between poor quality housing and poverty and, indeed, poor health, so the energy price cap rise will have a significant impact on those families—probably more significant than for some of us. Labour wants to keep the uplift until we can replace universal credit with a better, more compassionate social security system that properly supports those who need it.
I want to refer also to the increase in universal credit claims as a result of the pandemic. I have managed to get information from Gateshead Council showing a significant increase in council tenants across Gateshead claiming universal credit. Indeed, from April 2020 to the end of March 2021—almost exactly that whole year of the pandemic—there were 1,758 new universal credit claims. Some of those dropped off during the year—perhaps they were not eligible, or whatever—but there was still an increase of nearly 1,100 tenants claiming universal credit.
One other issue, which we have talked about often and must not forget, is the five-week wait, which leads to incredible arrears, certainly in Gateshead. By 31 March, 69% of Gateshead tenants were in arrears by an average of £666. Clearly, those arrears need to be resolved at some stage. They are a debt around the neck of those people.
I want to talk about the national insurance rise. Research from the New Statesman and the Resolution Foundation shows that people in the north-east will lose a higher proportion of their disposable income than those in the south of England due to incomes on average being lower in the north-east: people in the north-east will lose up to 25% more income than those in the south-west. When it comes to social care, people will still need to sell their home to fund their care, especially people with lower value homes. They will still face a substantial cost before the cap kicks in. Homeowners in the north-east could face care costs of up to three fifths of their assets, including the value of their home, while homeowners in London face costs of just 17% of their assets due to the difference in the value of housing. That is deeply unfair, on top of the additional contribution for many workers who, as I said, are in relatively low-paid jobs.
My hon. Friend is making a compelling and powerful speech about a wide range of issues affecting her region, and I commend her speech to the whole House. I was particularly moved by the point about housing and the difficulty for many tenants. Does she agree that there is a huge need for more council houses in this country?
I absolutely agree about the need for additional council housing.
The rise in national insurance will disproportionately affect younger people and those on low incomes. It is absolutely right that we need more money for the NHS and social care after years and years of cuts, but it cannot be right that it is the lowest-paid earners who pay for it. The Government’s plan will not end the crisis in social care or help to fix the backlog in the NHS.
The hon. Member for Aberdeen North (Kirsty Blackman) talked about the Conservatives not really understanding the plight of people living on universal credit. Does my hon. Friend agree with me that it might be a good idea for some of them to spend a month living on the income of a person on universal credit? Not just that, however. Let us load them with a debt of £10,000 and say that they have to pay off some of that debt out of their income as well, and maybe they might understand a little bit more.
I would not like to load anyone with debt, frankly, but I do wish that people would understand what it is like to live on universal credit, and not just for a week or a month, with no recourse to a cash pot in the bank on which they can draw if they run out of money. Many of us will not understand that, but it came home to me very clearly when I became a councillor and an MP just how much on the breadline some people are, with no access to credit cards or other finance. It is a really difficult life for people.
I was talking about social care. As I said, the Government’s plan will not end the crisis in social care or help to fix the backlog in the NHS. It will take money from those already struggling financially, without fixing the problems. What my constituents want to know, when we talk about social care, is what services they will be able to access. We have talked about money and the need to address that, and we have talked about caps. What we have not talked about is what the Government’s social care plan means for those of my constituents who actually receive social care, with people coming in to look after them. Will they receive a better service? Will the staff, many of whom will be caught by the universal credit cap, see decent pay and conditions, and recognition for the really important work they do? We are missing a huge piece of the jigsaw and the Government need to address that. Labour has said that there are many other ways to raise the money, including taxing the incomes of landlords, and of those who buy and sell large quantities of financial assets, stocks and shares. Labour has been clear that we want those with the broadest shoulders to carry the burden.
I want to talk a little bit about the excluded, because so many of my constituents during the pandemic, including the self-employed, have found themselves facing real problems. They were excluded from any schemes that the Government brought forward and in many cases they were excluded from universal credit because of money that they might have put away for tax, or small amounts of money. Lots of single people running dance schools or hairdressers or working from home have found it hard to get through. It is really important that we recognise the pandemic’s impact on them. I know from Zoom calls with my constituents—people who own beauty salons, people who were creative—how much they have been affected. They really have suffered.
Lastly, I pay tribute to Gateshead food bank, Gateshead Council and the many other local organisations that have picked up a lot of the slack. They are doing a great job, but for goodness’ sake, it should not be necessary in this day and age.
I congratulate the hon. Member for Hartlepool (Jill Mortimer) on her maiden speech. She is not in her place, but it was a very good maiden speech and I look forward to joining her in many more debates in this place. Having spent a little time at by-elections, I have never quite been sure that Peter Mandelson would confuse mushy peas with guacamole, but there we go.
Thank you very much indeed for calling me today, Mr Deputy Speaker, to support Labour’s motion on behalf of all the families in Newport East who have been hit really hard over the past 20 months and who now face the perfect storm of rising costs and cuts to Government support, with their incomes down and prices rising. Instead of making positive plans to tackle the problem and to help people, Conservative Members are making it worse, as we saw last week from their manifesto-busting vote to increase national insurance contributions—we saw their actions then.
The burden of lower incomes and rising prices is falling yet again on working people who can least afford it. As my hon. Friend the Member for Blaydon (Liz Twist) said, many of the working people who are being hit yet again were the key workers we so relied on in the pandemic. As my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) said, this is very much about political choices. That is a point that we repeatedly have to ask the Government to address—this is about political choices that they are making.
Last month, I met my local citizens advice bureau in Monmouthshire. I also thank Newport CAB, which is doing an excellent job in difficult times with funding cuts—my thanks go to all those out there offering advice services, because we will really need them in the months to come. In my meeting with Monmouthshire CAB, we discussed the looming autumn crisis, the end of furlough on 30 September and the cut to universal credit, which so many hon. Members have mentioned and the impact of which we could see coming down the tracks.
The uncertainty of the pandemic has already led to a series of income shocks for many constituents who are struggling just to meet everyday bills. Whether those bills are for heating, food, transport, childcare, back-to-school costs or rent, they are pushing people into debt. The Money Advice Trust’s report “The cost of Covid” makes shocking reading: it found that 5.5 million adults are behind on their basic bills and credit payments, 12% of adults have used credit and 37% are using high-cost credit just to cover essential outgoings such as groceries and energy bills.
My hon. Friend is making an excellent speech. Payday lenders —loan sharks, really—are charging exorbitant interest. The Government changed the regulations in 2017, but that has not helped at all. In the credit union market, which we particularly support, credit unions are absolutely at their limit because of covid, but the Government have not stepped in to support those low-cost lenders at all. It has been a boon to payday lenders, but for low-cost lenders such as credit unions, which are membership organisations, the Government have done absolutely nothing.
My hon. Friend has made an extremely valid point. I see that at first hand in my constituency, and I hope that Ministers will note what he said, take it away and actually do something about it.
People are using credit, including high-cost credit, to cover essential outgoings—spending on groceries, energy bills, and school books and stationery for children. Those on the lowest incomes are also bearing the brunt of the rising food prices that we have talked about today. I pay tribute to Raven House Trust food bank, Caldicot food bank, and all the other food banks that serve Newport East for the fantastic work that they do to support people. I also pay tribute to the community and the churches for supporting those food banks during what has been a very difficult time.
My hon. Friend is right. We owe a debt of gratitude to all those out there in the community—in churches and in other organisations—who have stepped up to help those who are suffering the most.
According to the BBC food price index, food prices have risen by 8.3% since January, with meat and fish up by 22% and fruit and vegetables by 14.7%. As has already been said today, the Government have done very little to address the supply chain issues which are leading to higher prices yet again. We are seeing HGV driver shortages and delays at borders and ports, and we need the Government to address those problems. As we have seen in many news reports, the costs of raw materials for many goods and services have risen as well, affecting the cost of furniture, women’s clothes, vets’ bills, second-hand cars and more. So much for the positive strategy from this Government for shaping our future post Brexit.
My hon. Friend is making some excellent points about the wide range of problems that families are facing—not only the deeply mistaken cut in universal credit and the end of the furlough scheme, but wide-ranging price rises linked to supply chain issues and the Government’s ineptitude in so many respects. All those problems are hitting ordinary people across the country very hard. Do we not face a perfect storm for many of our residents?
My hon. Friend is spot on. It is indeed a perfect storm, with all those factors coming together at the same time.
Petrol and diesel are also more expensive, costing more than they have since 2013, and the cost of buying a home has skyrocketed in Newport East. Home-Start Cymru has highlighted the huge rise in prices in Monmouthshire, and we have seen the same in Newport. That has put the opportunity to buy beyond many people, particularly our local young people trying to get on to the housing ladder. Housing insecurity has increased, with more mortgage arrears and more people pushed into renting. My hon. Friend the Member for Houghton and Sunderland South mentioned the research carried out by Zoopla, which has reported that rental prices have risen by 5% in the last 12 months, while wages have remained stagnant for many. Average rail fares are rising three times faster than wages, and are 50% higher than they were in 2010. Studies by the Office for National Statistics suggest that those who commute to work are set to experience the steepest increase in rail fares next January. As we heard from my hon. Friend the Member for Reading East (Matt Rodda), it is all coming together in a perfect storm.
There are further problems on the horizon. This week we have seen the crisis in energy costs and soaring prices. Fuel debt is already the third most common type of debt with which people seek help. The energy price cap for October—just as the cold weather sets in, furlough payments end and the universal credit uplift is scrapped—is set at £153, higher than the warm home discount payment, which has been set at the same rate since 2014. As Martin Lewis has said on his website, that payment should be increased in the Budget, and I hope that the Ministers are listening to that too.
The CAB estimates that 2 million households are already behind in paying their energy bills. As I have mentioned the CAB, it is important to note that while demand for debt advice has gone up and up, funding for debt advice services has decreased. If the Government do nothing else as we come into the autumn, they should at least look at properly funding our debt advice services.
The cutting of the universal credit uplift will be the biggest overnight cut to social security, with 8,630 households in Newport East alone seeing their money cut by £20 a week. I know at first hand from my constituents, as many hon. Members do, how the uplift has been a lifeline for those struggling to buy essentials.
I have heard from One Parent Families Scotland that single parents are often overlooked and stigmatised, and that an overwhelming number of one-parent families are headed by single mothers. On top of the day-to-day worries of increased energy and food costs, they also worry about providing a happy Christmas or a fun birthday for their children, and will push themselves into debt to do so. The £20 universal credit uplift is a lifeline for single parents. Does the Member agree that it is not enough to be barely getting by, and that it is also about quality of life?
The hon. Member makes a really valid point. Added to that is the fact that single parents who are under 25 get a lower rate of universal credit because they are perhaps deemed to be living at home, which is deeply unfair. They will also be deeply hit by these cuts and changes.
We know that 40% of those who will be hit by this cut are in work. That is an inconvenient truth for Ministers, who ignore the fact that universal credit is as much an in-work benefit as an out-of-work benefit. A cut of £1,040 a year alongside the increase in national insurance contributions says everything about where this Government’s priorities lie. Action for Children has said that
“you can’t level up the country by pushing down the living standards of some of the hardest working families in the country.”
The Joseph Rowntree Foundation estimates that 300,000 more children will be pushed into poverty. Families who are just about keeping their heads above water will be plunged into poverty.
In the face of this crisis, the Government choose not to help but to make things worse, wasting huge amounts of taxpayers’ money on outsourcing and crony contracts while hitting the same group of people over and over again. I hope that Conservative Members will do better tonight than they have in previous votes. I hope that they will stand up for constituents who need them, and show that they understand what life is like for many in this country.
I want to confine my remarks today to the impact on disabled people. Disabled people are being let down by this Government’s policies. Research by the Disability Benefits Consortium has found that at some point during the pandemic two thirds of disabled claimants had to go without food, heating or medication, and that almost half reported being unable to meet financial commitments such as rent and household bills. I have seen these people in my constituency office, and I am sure that the hon. Member for Aberdeen North (Kirsty Blackman), who made a powerful speech, has seen them too.
This is one of the direct impacts of the Government’s failure to extend the universal credit uplift to legacy benefits. The Government are now justifying their cut to universal credit on the basis that it was only meant to help with extra costs during the pandemic, but if that was the case, why did they refuse to extend it to disabled people on legacy benefits, who were disproportionately impacted by lockdown and who experienced much higher costs as a result? As I said yesterday in the debate on the Social Security (Up-rating of Benefits) Bill, the initial reason given for not extending the increase to legacy benefits involved technical issues, but how does that stand up, 18 months on? This was a political choice.
Many, but not enough, disabled people work, and for those who do, there is a disability pay gap of 20%, with disabled workers earning on average £2.10 less per hour. This is not surprising, given that disabled people tend to be concentrated in lower-paid and part-time roles. Yesterday, ethnicity pay gap reporting was debated in Westminster Hall, but we also need disability pay gap reporting—a policy already adopted by the Liberal Democrats. I would argue that what gets measured gets attention.
Although this debate is about the devastating impact of the Government’s policies on working people, we must not forget that their policies are leaving almost half of disabled people out of work, with an employment gap of 28%. For all that the Government may claim there are now more disabled people in employment than ever before, there are also simply more people classed as disabled than ever before due to the recent inclusion of those experiencing mental ill health. That is a welcome move, but it changes the statistics.
Hundreds of thousands of people are still kept out of the jobs market through lack of support, inappropriate testing and the fear of sanctions and loss of entitlements if work is attempted but not sustained. The health and disability Green Paper focuses on keeping people in work, not making work more accessible to all, and the Access to Work programme is lengthy, burdensome and simply does not work for small employers—it is a barrier, not a help.
Nearly half of all people in poverty are either disabled or live with someone who is disabled, and they will be disproportionately impacted by the growing squeeze on living standards, whether due to increased energy and fuel prices, cuts or tax rises. This crisis simply cannot continue.
This debate has made me feel like I am living in a parallel universe. Listening to Conservative Members—if they were still here—we would think everything in the garden is rosy, but Opposition Members know only too well that the cost of living crisis serves as a stark reminder that this Government are not serious about supporting ordinary working people. It confirms to us that they lack ambition when it comes to affording our people a life of dignity in which they can support themselves and their family and comfortably grow old with the assurance that they can support their children and grandchildren.
The economic settlement of the past four decades has smashed the unwritten guarantee that each successive generation will have it better than their parents. If this pandemic has taught us anything, it is that life is precious and that it is for living. Yes, those who can should contribute to society but, crucially, people should get something back and be able to enjoy their time with family and friends, rather than having to receive state support while in work. They should not have to rely on food banks or have to work three jobs just to make ends meet.
The system is not on the side of our people. Indeed, most callous of all, retirement itself is fast becoming a distant dream for so many in areas like mine in the north-west who fear that they will not be able to afford it. If only I had £1 for every time I heard someone say, “I will have to work until I drop.”
As the Scottish trade unionist Jimmy Reid put it:
“A rat race is for rats. We’re not rats. We’re human beings.”
In my constituency of Liverpool, Wavertree, I regularly come across people who do the right thing, work hard and pay their taxes. They are honest, decent, salt-of-the-earth people who operate in the real economy across all sectors—care workers, hospitality workers, call centre workers and those who run small and medium-sized businesses—and too many now tell me that they feel the system has failed them. After all, our people, working-class people, picked up the tab after the last economic crisis in the form of austerity, the biggest squeeze on wages and living standards since the Napoleonic wars and so much besides, and now they will do so again.
Conservative Members will no doubt trot out the same lines about their inadequate increases in the living wage and the personal tax allowance, which ironically they are now freezing—they even cite rising wages in certain sectors. Some might say that their intentions are good. Ultimately, success is measured by outcomes, and on every metric this Government are failing. If they were serious about supporting our people, their priorities would be wholly different.
My hon. Friend mentions the salt of the earth. For me, the real salt of the earth are kinship carers, the grandparents who take on their grandchildren because their parents can no longer look after them, yet they get a very raw deal. Does she agree it is time the Government recognised the value of kinship carers and the money that is saved because of the burden they take on? Does she also agree that kinship carers can do without this cut to universal credit?
I thank my hon. Friend for his intervention. The points he raised are completely pertinent and I agree with all of them.
As I was saying, if the Government were serious about supporting our people, their priorities would be wholly different. We would not see a hike in national insurance. We would not see the scrapping of the £20 UC uplift. We would see a proper funding settlement for local government, rather than backing our cash-strapped local councils into a corner over regressive tax increases. We would see action to tackle rising energy costs—that infamous Marxist idea, according to David Cameron. It is an idea once proposed by my former leader, my right hon. Friend the Member for Doncaster North (Edward Miliband).
Finally, something often missed in debates such as this: we would see recognition of the role of the trade unions in reducing inequalities in the workplace and across society. In the coming weeks, Members from across this Chamber, including on the Government Benches, will have the opportunity to support the private Member’s Bill on fire and rehire introduced by my hon. Friend the Member for Brent North (Barry Gardiner). I can say with certainty than an effective system of collective bargaining across sectors of the economy will not cost the Chancellor a penny—he may even save a few pounds.
Research from the New Economics Foundation shows that modelling produced for one of its reports indicates that by the end of the year, without a change in Government policy, 32% of the UK population, or 21.4 million people, will be living below a socially acceptable living standard, as measured by the minimum income standard. That is a third of people in this country, and it is absolutely shameful. Numbers like that tell us that the time for tinkering around the edges is over. Inequality is not some vague concept; it has real consequences for communities such as mine. What is economics if not the allocation of wealth, power and resources? Opposition Members believe in a fairer, more equal and democratic distribution of all three.
It is a pleasure to follow my hon. Friend the Member for Liverpool, Wavertree (Paula Barker), who made such a powerful and passionate case, so rightly pointing out the false economy that inequality represents.
Thousands of families in my constituency, like families across the UK, have taken a real buffeting over the past 18 months, and this month could bring the perfect storm for them as the furlough scheme ends, the universal credit uplift is scrapped and the cost of living spirals upwards. The pandemic has had a significant impact on household finances, which have been stretched to breaking point, and not everybody is able to weather the storm as easily as others.
Conservative Members like to claim that their Government have fixed the roof while the sun is shining, but the reality is that the Tory roof is made of straw and a cold wind is blowing. Worrying research from the Bevan Foundation has found that one in three Welsh households does not have enough money to buy anything beyond everyday items, while more than one in five households with a net income of less than £20,000 have seen their income drop since January. The planned cut to universal credit will only deepen these inequalities, as those on the lowest incomes will be pushed into poverty and destitution.
In Aberavon alone, more than 7,000 households receive universal credit. For those families, the £20-a-week uplift has been a lifeline, protecting those who have lost income and preventing them from slipping into poverty or having to visit the food bank to feed their families. It is important to note that of the 7,000 households in Aberavon that are on universal credit, 2,000 have registered since the start of the pandemic. The idea that the removal of the uplift is somehow not a cut is deeply disingenuous, because the 2,000 households that have registered since the start of the pandemic have certainly not known any other rate of universal credit. The Government’s claim is blatantly and deeply disingenuous.
The uplift has made a real difference to family budgets. My inbox has been filled with emails from residents telling me how it has helped them to meet the cost of essentials and allowed them to pay their bills, make the rent, put food on the table and switch the heating on. To some, £20 a week may seem like a small amount of money, but to the families I am talking about it makes a world of difference and would have been crucial to help them with rising energy bills and the escalating cost of the weekly shop. They are now deeply anxious about their precarious finances and worried about how they will make ends meet without the uplift.
The reality is that we are potentially moving into an age of anxiety. The anxiety that is now afflicting so many millions of families and households throughout the country saps the strength from the recovery and defeats growth. It is a brake on growth, which is why the Government’s policies are so deeply damaging. They are not only the wrong thing to do in a civilised society but the definition of a false economy because they are putting a brake on growth and holding back the recovery.
Some of those who contacted me are shopworkers and carers who worked through the pandemic and now face the cut to universal credit. That is no way to thank them for what they have done. Members on the Government Benches stood on their doorsteps applauding our key workers; now they reward them with this cut and a cost-of-living crisis. Their hypocrisy is breath-taking.
My hon. Friend talks about people applauding on their doorsteps; when I put a question to the Prime Minister when he was talking about his tax increase, he said that the Government do not pay care workers. Apparently, somebody else does, but does my hon. Friend agree that the Government pay grants to local authorities, and that money goes to carers? We hope that some of the extra tax money will go to local authorities to pay care workers, so is it not about time that the Government said, “We’re paying for the fiddler so we’re going to decide the dance”? They should decide the level of pay for care workers and it should be much higher than it is now.
My hon. Friend is absolutely right. As the Leader of the Opposition, my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), has confirmed, we are committed to a proper living wage in this country of a minimum of £10 an hour. Government Members constantly ask for Labour’s plan; there is one absolutely key element of it. It is about making work pay and rewarding the heroes of the pandemic: those who kept our economy running and our supply chains open. Rather than rewarding them with cuts and destroying supply chains, we should seek to build an economy that works for everyone.
The grim reality is that around 40% of the families who claim universal credit are in work, but that work is insecure and involves short hours or low pay. They are claiming universal credit not because they are workshy but because the Government are presiding over an economy in which jobs are not paying the bills and low-paid people are forced to top up their income. If the cut to universal credit goes ahead, it will be the biggest overnight cut to the basic rate of social security since the foundation of the modern welfare state. It will plunge families into poverty, forcing them to rely on food banks. But it is the very definition of a false economy: it would remove £7.3 million from the economy in my Aberavon constituency alone. This money is not saved by families; it is spent in the shops and the businesses in my constituency, helping to stimulate the local economy and helping to create jobs. Without it, spending power will decrease and the economic recovery will be stymied. Government Members have rightly stated that we need to grow our way out of the recession, and yet they are promoting policies that will put a brake on growth. It beggars belief.
This squeeze on living standards is not inevitable. Poverty is a political choice. The squeeze on living standards is a political choice. The Government have made the choice of hitting hard-working families with a double whammy of cutting the universal credit uplift and hiking up national insurance contributions. At a time when food, fuel and energy prices are going up, this will place an enormous burden on hard-working people. It is the Government’s choices that have shaped an economy that has become less resilient and less secure. The Government’s botched Brexit and failure to plan for crises such as the pandemic have combined to expose our declining sovereign capability—our lack of supply chain resilience, the empty shelves in the supermarkets, the shortage of HGV drivers, and delays at our border and ports. All of this is combining to drive up prices, and it is hitting working families in their pockets.
Two hauliers in my Aberavon constituency, Frenni and Owens, have told me about the detrimental impact that the shortage of HGV drivers is having on their businesses. Owens estimates that they are 150 drivers short and that that is reducing their capacity by about 1,000 full trucks a week. They desperately need the Government to take urgent action to address the shortage. What that demonstrates is that the economy is interconnected and that the impact on supply chains impacts on prices, impacts on the cost of living crisis, and impacts on working families. The Government should be doing all they can to support families through these tough times, not pulling the rug out from under them. They must start by cancelling this cruel and self-defeating universal credit cut. Then they must build an economy that works for all, by tackling insecurity at work, lifting people out of in-work poverty and increasing the minimum wage to at least £10 an hour. Then they must tackle the cost of living crisis by sorting out the chaotic shambles of their botched Brexit.
If the Government’s levelling-up agenda is to be anything more than empty rhetoric, they must change course. They must stop this race to the bottom and strive instead to build an economy that works for all. They must stop their complacent, blasé approach to Government and get their act together to address the huge disruption that has been caused by their botched Brexit deal.
The Tories are keen to talk up the importance of work, and I agree with them on the importance of work—good paid jobs must be the answer—but they also allow many firms to go to the wall. The latest in our area is the world-renowned Cleveland Bridge and Engineering Company, which built the Sydney Harbour Bridge and the Tyne Bridge. Hundreds of jobs in the main firm and in the supply chain have now gone, as neither the Tory mayor in the Tees Valley nor the Government were prepared to do anything to sustain those jobs, simply because the company had a cash-flow problem. Does my hon. Friend not agree that we need to protect the jobs that exist today and not just dream of jobs in the future?
My hon. Friend hits the nail on the head. Much of the debate today has been about the immediate impact of the universal credit cut and the immediate impact of the cost of living crisis, but we need to examine the fundamental structural weaknesses in the British economy that have seen a massive decline in manufacturing, and that has been turbocharged by 11 years of Tory neglect. We have ended up concentrating so much of our economy in London and the south-east around the financial services sector. The financialisation of the British economy has ended up driving inequality, with a very small percentage at the top being paid eye-watering bonuses while the rest of country is left behind. We have shifted from being a country that makes things to a country that consumes things—a country that is fuelled not by production, but by consumption, and which is floating on a sea of debt. All those structural weaknesses have been chipping away at the resilience of the British economy for 11 years now, and the pandemic and the botched Brexit are now combining to expose the profound lack of resilience in our economy. Therefore, although today’s debate is extremely valuable and important, it fundamentally needs to be seen in the context of 11 years of Tory failure, neglect and a failure to look at the foundations of our economy.
I have the largest steelworks in the United Kingdom in my constituency, and steel is a case in point. The hon. Member for Redcar (Jacob Young), who represents a steel constituency, is not in his place now. We have seen the act of industrial vandalism that saw the closure of the SSI works in Redcar on the watch of the Tory Government; the total and utter failure to address exorbitant energy costs, which are crippling the British steel industry; the failure to stand up to China and the dumping of Chinese steel on the markets, which has deeply undermined our competitiveness across the world; and the failure to have a patriotic procurement policy that would enable us to focus on buying British steel when those opportunities arose. If we are serious about the transition to a green economy, we will never get there without a resilient and vibrant British steel industry. Our steel industry is just one example of how the Government have allowed our manufacturing sector to decline over the last 11 years that they have been in power.
There is some good news this afternoon, because I understand that the Government have actually helped out and we have some form of agreement with CF Fertilisers—the company that makes fertiliser from natural gas and produces 60% of the country’s CO2, which is so desperately needed for everything from beer to anaesthetic systems in hospitals. Will my hon. Friend welcome that, but also reflect on the fact that the company had to go to the brink of failure before the Government chose to act on energy prices and the other factors that were affecting it?
My hon. Friend hits the nail on the head; we appear to be in a constant state of crisis management, based on the fact that there has not been long-term planning. The gas crisis was foreseen by many people years ago, and it was based on a concern about the Government’s failure to deliver gas security by enabling the additional storage of gas. We do not have gas stockpiled in the way that most other advanced industrialised countries across the world have. This is another example of the Government being asleep at the wheel and not having that long-term planning in place.
We have a Secretary of State for Business, Energy and Industrial Strategy who does not believe in industrial strategy. He has closed down the Industrial Strategy Council at the very time that we need a partnership between the state and business to drive our economy forward. These fundamental issues have to be addressed. We have to look at the cost of living crisis, and develop a partnership between the state and business. We must have the long-term planning in place that we so desperately need.
I am very grateful to my hon. Friend for giving way again. He will not know this, but I spent a long part of my career in the gas industry. I remember taking a group of women journalists offshore to the Rough field, off the Humberside and Yorkshire coast. Does he agree that it is extremely lamentable that the Government allowed that storage facility to close down and that that wonderful facility—the first of its type in the world—is no longer in use for gas storage?
There we have an absolutely spot-on illustration of precisely the problem that I was alluding to, which is that many of the issues that have been exposed by the pandemic are a failure of long-term planning. That is another example of a false economy. It is about the culture of looking at the immediate bottom line. Knowing the cost of everything and the value of nothing is the definition of the way in which this Government have been running the country for the past 11 years.
The value of resilience is about understanding the need for investment and about investing in order to save for the future. Prevention is always cheaper than cure. That is why, with the up-front investment that has been so sorely lacking over the past 11 years, those chickens are now coming home to roost. We therefore need to develop a new political culture, a new business culture and a new commitment in this country to security, resilience and partnership. On that basis, the issues that we are addressing today are the symptoms of the problem and not the cause.
Hard-working people are facing a triple whammy this winter: rising fuel bills, a national insurance rise, and a £1,000 cut to universal credit. Even before the pandemic, my constituency of Manchester, Gorton had some of the highest rates of fuel poverty in the country, with almost a quarter of families classed as fuel-poor. Across the UK, 3 million households struggle to pay their energy bills, and it is predicted that as many as half a million families could slip into fuel poverty as the temperature drops and bills skyrocket this winter.
In the face of the gas supply crisis, maintaining the energy price cap is welcome, but it will not be enough. As a minimum, the Government should make the £140 warm homes discount automatic and extend it to give more people peace of mind this winter. While the energy price cap may be fair, for many families it is no longer affordable, and in just a matter of weeks it will be at the highest-ever level. As a result, hard-working families already struggling to stretch pay cheques to the end of the month will be forced to make an impossible choice between heating or eating.
To make matters worse still, the CO2 shortages will mean that supermarket shelves could be empty in the coming days as food shortages hit the market. In Manchester, Gorton this will mean more vulnerable people being forced to access food banks. Food bank usage is at an all-time high. It is a disgrace that in the 21st century families and children have become so dependent on charity to survive. Manchester’s own Marcus Rashford has done so much over the past year to shine a light on the shameful rise of food bank usage, and it is time the Government listened. Being unable to buy food is not an issue with the high cost of living. It is much more fundamental than that: it is about the cost of surviving.
The escalation of fuel bills and the rising cost of living means that the Conservatives’ plan to cut universal credit is no longer just indefensible; it is now unconscionable. The Business Secretary himself has admitted that this
“could be a very difficult winter.”
So the question remains why his Cabinet colleagues will not intervene to alleviate the financial burden on working people and cancel the cut.
This morning, my constituent Alisha emailed me. She is a universal credit claimant and scared at what the cut will mean for her and her daughters. She wrote:
“it will mean I will go without food or warmth so my girls may suffer less…we go without luxuries and each month is a struggle. Our future is bleak. I just hope I can hold on for them.”
Alisha is one of hundreds of constituents who have written to me terrified about their future and worried about how they will get by this winter.
The Resolution Foundation reminds us that to govern is to choose, and I know that my constituents will never forget that the Tory Government have chosen to push millions of hard-working families into poverty. However, it is not too late. There is still time to cancel the cut.
I welcome the opportunity to say clearly to the Government that their current pursuit of benefit cuts and tax hikes, their economic mismanagement of the energy sector and the housing market—to name but two—and their casual indifference to the spectre of soaring inflation in the price of basic goods and food are combining to inflict poverty, hardship and misery on working people. The other week, the Prime Minister responded to my question on the negative impact of the £20 a week universal credit cut by saying that his Government have always been ready to put an arm around the people of this country. I would contend that the Government’s policies will more likely lead to a hand being clasped around the throats of working people, the unemployed, the disabled and—tragically—their children. This is not levelling up; it is grinding down. This is not building back better; it is a new round of austerity designed yet again to make the poor pay for another fine mess of the Government’s own creation. People’s standard of living is not, as the Government claim, rising inexorably because of recent wage increases. Overall, it is declining because of the toxic cocktail of measures administered by the Government, which they pretend are medicine to make us better.
The Joseph Rowntree Foundation has found that more than 12,500 working-age families in my Birkenhead constituency will be hit by the cut to universal credit, including more than 6,000 working-age families with children. That is almost one third of such families in Birkenhead, and they are set to lose just over £1,000 a year. How can that be fair? In the run-up to the day of shame on 6 October when the axe is scheduled to fall, more people have written to me asking me to oppose the cut than on any other single issue. My mailbag on the cut far outstrips the previous record holder: Dominic Cummings’ emergency eye test at Barnard Castle.
One letter stands out. It is from the seven-year-old son of a constituent who told me how worried he is that this family will not be able to afford to feed to him because he heard that they were about to lose £20. This is a particular concern for children because, as of 2020, 33% of children in Birkenhead—more than 6,000—were officially classed as living in poverty.
This vindictive cut would be bad enough any day of the week, but look at its timing—it is like something straight out of “Hammer House of Horror”. The cut coincides with the increase in national insurance, the surging cost of gas, the prospect of transport costs going through the roof, rents being driven up by the housing crisis and basic foodstuffs costing ever more as the supply chain becomes more and more disrupted.
Let me tell the House what that means to ordinary people. One of my constituents—I will call him Gary—lost his job due to contracting covid-19. He was not furloughed and he rents from a private landlord. He is on universal credit and, with the £20 uplift, after rent he had £46 a week to meet all his expenses. When the cut comes in, he will be left with £26 to meet those same expenses, each of which is going up. Gary, like so many others, faces ruin. I know full well that the Government will respond with their usual refrain that universal credit will help Gary to get a job, but they conveniently forget that their measure, which will put an estimated 800,000 into poverty—including 300.000 children—will have an impact on the about 40% of universal credit claimants who are already in work.
My right hon. Friend makes a good point. I made that point to the Prime Minister, who just did not give me an answer.
Those working people will be hit by both the cut and the increase in national insurance. They will number thousands of working hairdressers, shop assistants, street cleaners, hospital porters, farm workers and countless others who are paid peanuts and have no choice but to claim in-work benefits. I genuinely hope that Conservative Members will not cry TINA—there is no alternative—as a previous Government of their persuasion did. Rather I hope that they will withdraw their package of measures that will slash the standard of living for the majority, and adopt the progressive tax policies that my party stands for and that can ensure that those with the broadest shoulders and the most bloated bank accounts pay their fair share, so that my constituents are not forced into a life of poverty.
I express my gratitude to the Labour Treasury team for facilitating this opportunity to debate the devastating effect of Government policy on the finances of working people.
I know the British people have had a very difficult 18 months during the covid crisis, with the sorrowful loss of lives—inexcusably, the highest death toll in Europe —despite having our world-class NHS and our world-class public health systems, as well as an unforgiveable care home crisis, soaring unemployment, businesses closing, food bank usage skyrocketing and, most recently, the tragic debacle in Afghanistan, leaving many of us, especially my Slough constituents, and British Afghans in absolute despair. I do not think anyone in this Chamber could have foreseen the debilitating impact that a pandemic would have on our communities when we all had the honour of being elected as Members of Parliament.
I want to pay tribute to the extraordinary generosity and service of the Slough Council for Voluntary Service, the Slough Foodbank and other voluntary and faith groups within my constituency. But we as a nation should not have to rely so heavily on their good will. The Government should not be failing the most vulnerable, so as we emerge from what has been a very testing period for our economy, I despair at the direction this Government are taking us in. Instead of rebuilding, investing and stimulating our economy, it seems that they are more intent on ideological cuts to the very services and people that have kept this country going since March 2020.
There are the rises to national insurance, the universal credit cut, the upcoming freeze on the personal income tax allowance, inflation-busting rail fare increases and the highest petrol prices since 2013, as well as rampant waste, cronyism and corruption in the top levels of Government, the damage caused by the Government’s hard-line Brexit deal, and the supply chain and HGV drivers chaos leading to empty supermarket shelves. There is the Government forcing local authorities to raise council tax, and their unwillingness to outlaw the deplorable hire and rehire tactics of unscrupulous employers. There are some of the highest childcare costs in the world, a housing crisis worsened by a cladding crisis, and the absence of a sector-specific deal for our aviation sector, which at one point was world-leading, despite repeated pleas from the likes of myself and other hon. Members. There are the policing cuts leading to less safer communities, and the exorbitant increase in energy bills leaving many languishing in absolute despair.
This is all while we had a Tory Government asleep at the wheel and acting only when it is very late in the day. Make no mistake, although the Government may want to make it seem that way, these vital issues have not arisen solely because of the covid pandemic. These matters have been exacerbated by a decade of austerity and inadequate emergency support meeting a failing post-pandemic plan—a perfect storm that only leaves families worse off.
We in Slough have been impacted acutely by job losses and the inadequate Government support. With Heathrow and the largest singly owned trading estate, the Slough trading estate, on our doorstep, unemployment, furlough and food bank usage have all, sadly, increased. We must not allow a temporary crisis to unevenly and permanently change prospects across our country; we must assist those who have fallen on hard times through no fault of their own, not punish them further with ill thought-out Conservative Government policy.
The crisis in Heathrow has impacted not only my Slough constituents but regional airports and the economy of Wales, about which I know my right hon. Friend feels passionately. That is why we must help the aviation sector. Heathrow used to be the busiest airport in Europe but is now no longer even in the top 10; that is diabolical and is a direct consequence of inaction by this inept Government. Not only is it the right thing to do to help the aviation sector, but it is how we will effectively recover as a nation.
One of the most immediate dangers facing my constituents from the Government’s barrage of cuts and policies is the cut to universal credit of £20 a week. Over £17 million will be cut from my constituency, and this will affect families who have battled through a pandemic, who were clapped, who face a very difficult job market, and whose children have only just returned to the routine of school. I have been contacted by constituents who have been furloughed then had their UC capped, and are struggling to make ends meet. There are self-employed people using up all their income and being told to use food banks and claim UC. Continued cries from the Government Benches that that is a solution is insulting to all the families who work tirelessly just to put food on the table.
Does the hon. Gentleman agree that it is disrespectful of the Secretary of State to say that such people can just pick up another couple of hours of work? A working mother already on part-time hours because of childcare cannot just suddenly become an HGV driver overnight or pick up a couple of extra hours; that is not how it works.
The hon. Lady eloquently makes my point, and even that calculation of two hours has been demonstrated to be completely off the mark; the number of extra hours hard-working Brits will need to work is actually nine.
Another main issue on which constituents ask for my help is housing, and, sadly, that is unsurprising. Average rents have risen by £456 in a year, the highest rise since 2008, rising above average wages by over £2,000, leaving home ownership a distant or impossible dream for too many in the next generation.
The issues my hon. Friend raises will also result in more debt. Is he surprised to learn that debt in this country is 123% of household incomes and that there have been 27,662 individual insolvencies in the second quarter of this year? People are in trouble now, and if this additional help is withdrawn how on earth are they going to make ends meet?
My hon. Friend has demonstrated in this debate that he is an endless fountain of statistics; despite not being on the call list, he has made many interventions that make hard-hitting points to which the Government must listen.
It is important to highlight that home ownership is an impossible dream for so many in the next generation. That is because the quality and quantity of social and affordable housing is wholly inadequate, an issue the Government have failed to address despite being in power for well over a decade. A report showed that affordable housing increased by just 1% last year—90,000 homes short of the bare minimum needed to tackle this crisis. What about those who own homes that are now worthless due to Government inaction on unsafe cladding? That is an absolute shambles. It means a mother of two going without food to pay her rent and feed her children, and others moving from property to property due to rent arrears and evictions. One constituent even told me that their struggle with paying rent and bills made them feel like
“there is no way out”.
It is a vicious cycle—a downward spiral. Is this really the kind of society we want to live in post pandemic? I certainly do not.
We need to realise the potential in our great country and give businesses, families and young people the tools that they need to rebuild and prosper, not break them down before a recovery has even begun. We have a fantastic business hub and innovation centre in my constituency. Prior to the pandemic, we had among the highest business start-up rates in the entire country, we were in the top three for productivity, and we had a booming private sector providing thousands of jobs. But instead of giving the hard-working people of Slough support to ensure that they can once again thrive, these measures are pushing them further down.
In conclusion, I want to see ambition from this Government genuinely to rebuild stronger than before, with a greener, more efficient and innovative economy that will benefit us all, not just a select few.
It is a real pleasure to follow my hon. Friend the Member for Slough (Mr Dhesi), who is a good friend. He put his arguments so forcefully and cogently. So many of the contributions this afternoon, certainly from Opposition Members, have been impressive and consistent in their criticism of the Government’s attitude and policies for addressing a fundamental problem in our society.
That perhaps comes as no surprise. When someone has their lunch hand-delivered to them every day by a company based in the Cotswolds, they might not be totally in touch with what is going on out in the economy—the price of food, the price of sandwiches and so on—but as I understand it, that is exactly what happens for the Prime Minister; one of his donors delivers a sandwich to him every day. It is a very reputable and nice business, based in the Cotswolds; I actually visited it myself once.
That kind of out-of-touch-ness is at the heart of this Government. They are divorced from the harsh impacts of what is going on in our economy—of inflation and the real cost of living. We must think about what has happened in the past 15 or 18 months for our nurses, hairdressers, decorators, plumbers, brickies, care workers—all those who are now facing the severe impacts of really high inflation, with wage growth not keeping up.
Those of us who are in touch with the weekly shop, as was evidenced by my hon. Friend the Member for Swansea East (Carolyn Harris), know how much we are seeing in price increases—not just the standard price increases that are going on, but the price gouging that is happening on our high streets. I have seen that at first hand. We have a Tesco store on the Parade in Leamington, and there is sometimes a 60% price difference between what people pay in the Tesco superstore a mile and a half away and what the vulnerable, the elderly and so on pay in that store on the high street.
I am not sure how this computes. If someone’s real concerns are about buying Lulu Lytle wallpaper at £840 a roll, I do not think that necessarily puts them in touch with what is really going on at the local DIY store, or the cost of timber down the timber merchant to build themselves a shed. I think that is at the heart of the policy and the Government’s inaction in addressing inflation and the pressures on families up and down our country. Certainly, the hard-working people in Warwick and Leamington are being very hard hit by rising costs. We are all facing the rising prices of energy, food, travel and housing, all of which are contributing to rising inflation, not to mention, as has been said repeatedly from the Opposition Benches, the sledgehammer of the universal credit cut and the pressure on pensions. When we put all that into the mix, together with tax increases, we realise how hard it will be for people and families up and down the country.
Looking at inflation—sadly, I am one of those who takes a real interest in this sort of stuff—the biggest jump on record was in August. The Bank of England expects inflation to peak at 4%. I think it is slightly underestimating the impact of what could happen—personally, I think it might exceed that—but even 4% is double the Bank of England inflation target of 2%. The Government, the Prime Minister and the Chancellor seem to be acting surprised that inflation will be peaking at 4%, but surely they will have access to briefings from the Bank of England and the senior economists—the likes of Andy Haldane and others—who will be saying what is happening to the UK and global economy and where the price pressures are that will impact on ordinary households. They track the data and get input data from businesses in the regions—in the west midlands, all the businesses will be feeding that information into the Bank of England’s regional office.
My hon. Friend is making an excellent point about inflation. He and I may be of a similar age and remember how, perhaps in our younger years, inflation was such an important issue that we were mindful of almost daily. However, there is a generation that does not really understand, or perhaps has not experienced, what inflation means to the daily and weekly cost of living for ordinary families. By not being up-front or public about this, the Government are perhaps not educating people on how to manage the coming crisis.
I thank my hon. Friend; she is incredibly generous to suggest that I might be of a similar age, but I will take that compliment from her. Of course, I agree. Certainly, I think about my generation and what happened to inflation in, say, 1990 and 1991, as someone who was paying a mortgage at the time and seeing 60% of my income going on the mortgage because of the excessive interest. Those on tracker mortgages and so on will be really worried about what is happening, because their incomes are certainly not keeping up with that kind of increase. I speak as someone who suffered—okay, I am nowhere near, and never have been, the sharp edge of the sort of extreme poverty that we are here to talk about. However, we should realise the pressure that that puts people under emotionally and psychologically, and the impact on mental health. What inflation can do, in eroding pensions and impacting on household budgets, should be a real concern to everyone in this House.
On that point, we got our first mortgage in 2009. People who have had a mortgage for as long as I have had, which is about 12 years, have never really seen interest rate hikes. There are people in the group that the hon. Member is talking about who are not worried because they have never met this in the face, and they are going to get such a shock when interest rates rise, as he is describing.
I thank the hon. Member, or perhaps I can suggest friend. Indeed, we have been insulated these past 10 years from the ravages of inflation that some of us know—perhaps my hon. Friend the Member for Stockton North (Alex Cunningham) would say this—can erode business confidence and have an extreme impact on household budgets.
I well remember the Thatcher Government, when interest rates went up and up and up and up. Even those on good wages were struggling, so it was even more difficult for others. There is a storm ahead for many people. Does my hon. Friend agree that savings are very important? The average savings for a low-income household are £95, while a high-income person is likely to have £63,000 in savings. Who is going to come off worse?
My hon. Friend makes a very important point. We all have to understand that it is easy to talk about numbers and statistics in the abstract, but the reality for so many people, as he illustrates, is that they do not just have the uncertainty and insecurity of zero-hours contracts and the pressures of the cut to universal credit, but having so little money in the bank brings pressures on households. And here we have inflation about to rip into those households through the energy price increases I am going to come on to talk about.
I talked about the Chancellor and the Prime Minister. Those in corporate business and in senior positions in Government must know what is happening to inflation. They must know what forecasters are saying. When commodities are bought, all energy costs are forward priced—they know what is coming down the track—so the Chancellor could suggest only a 1% increase for nurses when he knew all along that there was likely to be a significant spike in inflation coming. Energy costs are a major issue, one that has perhaps been the driver to this particular debate, alongside the cut in universal credit. We have long known for months that there was going to be an increase in gas prices of 12% in October. That will have a significant impact on household bills. The average gas and electricity bill for customers will go up by £139 a year to just under £1,300. Now, we have to rely on the Government to get a grip to avoid further increases as a result of this unfolding crisis.
It is fundamentally a failure of long-term Government planning over the past decade that we, as a country, are so exposed and vulnerable to rising gas prices. We should have been building energy resilience, instead of being one of the countries most reliant on foreign gas. We should have been investing in domestically produced renewable energy. Instead, we squandered 10 years burning fossil fuels. When I was working on Warwick District Council as a councillor seven years ago, I proposed the Warwickshire energy plan to save people money, create energy resilience and address energy poverty. Sadly, there was not the gumption to follow through on that, and I am disappointed it never materialised.
A perfect example of the point my hon. Friend is making is Wylfa nuclear power station in north Wales, in Anglesey. Building could have started on that and it would have been part of a growing nuclear programme, but the Government failed to support it. A spin-off would have been high-tech jobs, but the Government are not interested—they just step back.
I thank my right hon. Friend for that point. I think the important thing is that the Cameron-Osborne Government in particular became obsessed with fracking and took their eye off the ball with other energy sources. In Warwickshire, we had Algy Cluff come and visit; he was a significant donor to the Conservative party, I think, and he was really interested in having blocks under Warwickshire that he would frack. That undermined long-term planning for projects like the one that my right hon. Friend mentions.
If the Government had followed through, we could have been building zero-carbon homes since 2016. Instead, the Cameron, Osborne and—dare I say it—Liberal Democrat Government scrapped the regulations for housing developer donors. A million homes could have been built since 2016, but something like 10% of households in my constituency are in fuel poverty already and I can only see that figure rising. Several thousand homes in my constituency could have benefited from forward-thinking house building and zero-carbon homes, because we have seen such an explosion in house building across south Warwick and south Leamington.
My hon. Friend might not know this, but I was in the gas industry for many years, as I mentioned earlier, and I was involved in a warm homes system. We went door to door, systematically insulating people’s homes and windows doing all manner of other things, but the current Government have done away with that. They have also done away with much of the responsibility on energy companies to do more in that space. Does he agree that energy companies could be expected to do much more to insulate our homes?
I absolutely agree—it is such a key point. There are so many schemes that could be introduced, and there is some excellent practice across Europe; I think it is currently beyond the wit of the Government, but as chair of the all-party parliamentary group for council housing I am certainly keen that we should push for it.
On energy costs, I go back to the point about heavy manufacturing. I am passionate about our manufacturing sector—not just the automotive sector, which I have talked about often, but chemicals, aerospace and steel. We have heard the comments that my hon. Friend the Member for Aberavon (Stephen Kinnock) made about the impact on steel, but the impact will be felt throughout our manufacturing: steel goes into the food and drink sector as much as into automotive and elsewhere.
The reality is that the price varies for energy. For gas in the UK, I think that I am right in saying that there is a 40% premium against the average in Europe, which is making us uncompetitive in comparison and will have an impact on future investment and, ultimately, on jobs.
Food prices are another big driver of inflation. The price of food and drink in shops and supermarkets has risen by more than 1% in August, the highest growth since 2008. Food commodity prices have increased by 17% since the start of the year. The Food and Drink Federation says that the cost per household of food and drink shopping will increase by more than £160 per year because of Government policies—that is the federation speaking, not me.
Various hon. Members have mentioned the supply chain disruption, which will lead to higher prices. We have heard about the shortages of heavy goods vehicle drivers, but there are also shortages of refrigerants and carbon dioxide, and of course there is the additional complexity of delays at borders and ports.
I turn to travel. I asked the Minister about the price of petrol, but in July petrol prices hit their highest level in almost eight years. It now costs £74.26 to fill a 55-litre family car with petrol, a 17% increase—17% seems to be a repeating figure—since the start of the year, by the Government’s own data. Diesel, by comparison, has risen by just 14%.
Rail fares are not faring any better. The Government are planning fare rises of 4.8% next year, way ahead of inflation. The average commuter faces paying £3,300 for an annual season ticket, 50% more than in 2010. An annual season ticket from Leamington to London, incidentally, now costs £8,700, a significant amount of money.
As for housing, rents have risen at their fastest rate since 2008, at a time when we are seeing declining home ownership, and the vulnerability that confronts so many people as more and more are living in the private rental sector. Rents in the west midlands are now £1,192 higher than they were in 2011, and incomes have certainly not kept pace with that.
My hon. Friend is making a powerful speech. I think those who are listening will appreciate that for some families the combination of rising prices, rising rents and rising costs of travel to work will lead to absolute desperation—and, of course, this does not just have an impact on individuals and families; it has a wider societal impact. If people are unable to pay their rent, if they are made homeless and if that affects their mental health, an enormous strain will be placed on our public services and on society more broadly. Measures such as the cut in universal credit are complete madness, because the longer-term costs for the Government will be even higher than the costs of maintaining the uplift.
My hon. Friend is spot on. Short-term thinking often costs much more in the long term, and impacts of that kind will have very long-term consequences on people. We all know about the impact on mental health and how that can then affect people’s home lives, social lives and family lives, but it can also affect their working lives, which can have an economic consequence too, as well as increasing costs in the national health service and elsewhere.
We need to build more social housing for rent. Just 21 social rent council homes have been built in the Warwick district since 2010.
Let me now turn to the unimaginable and, I think, inadmissible cut in universal credit. It just underlines how out of touch this Government are that they are cutting the £20 uplift. Reversing that decision would prevent families from experiencing an even sharper hit during this cost of living crisis. I think it shameful that the very workers who got us through the crisis are now in the firing line for a £1,000 cut in their income every year. I think about the carers, the shop workers and the delivery drivers—all the people who kept the wheels of the economy turning through such difficult times. Data from the Joseph Rowntree Foundation shows that in Warwick and Leamington, which I think many people would assume to be a prosperous area, 13% of working-age families—6,300—and 29% of working-age families with children will be affected by the cut. This really is a poverty policy.
We have heard a great many claims about levelling up, but the one area in which the Government seem to be succeeding is levelling up on taxes which are more regressive than ever. We may think back to the increase in VAT from 17.5% to 20%; now we are seeing a rise in national insurance and rises in council tax across our local authorities. The average band D council tax set by authorities in England in 2021-22 is just under £1,900, a 4.4% increase on the 2020-21 figure. These are real costs to people. As we have heard, the national insurance increase is the biggest tax rise for families—the most significant change—in 50 years. Graduates now face a marginal tax rate of nearly 50%: that, surely, is a tax on aspiration.
My hon. Friend talks about tax rates. He will be interested to know that a tweet has just come in from the Joseph Rowntree Foundation saying that
“191 Conservative seats will see more than a third of working-age families with children affected by the cut to #Universal Credit and Working Tax Credit. There’s still time for the Government to listen to the huge opposition to this cut and change course”.
I know that my hon. Friend will agree.
I can assure my hon. Friend that I absolutely agree with that. It was so telling that five or six former Conservative Work and Pensions Ministers said that they were absolutely against this cut. Of course, everyone on this side of the House is against it. It is also quite obvious to economists that the uplift should not be cut but left in place. The cost is £6 billion, I think, and in the context of some of the overspends that the Government have been guilty of during the pandemic, that is actually very little.
The cost of living tsunami that families will face in Warwick and Leamington and across the country this winter shows just how out of touch this Government are. Instead of making positive plans to tackle it, I am afraid that they are simply making it worse. We have the national insurance and council tax increases, and now we have the universal credit cut. The Government are failing to tackle the supply chain disruption that has been exacerbated by covid and Brexit, and we now have rising energy prices, rail fare increases and rising rents. The Government seem to be happy to waste huge amounts of taxpayers’ money on outsourcing and crony contracts, and I just feel that they are really out of touch. They seem to know little about the true cost of living.
We have a Prime Minister who spends—or rather, gets his donor friends to spend—tens of thousands of pounds on the refurbishment of his flat, and a Chancellor who is happy to spend a significant amount of money on a swimming pool, but they will seemingly not listen to all of us saying that there is a need to retain the £20 uplift. I was really surprised when the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), did not know how much it cost to fill up a car. I will tell him: it is 77 quid. He had no idea how much people spent on petrol a year. I can tell him that it is 17% more than it was at the beginning of the year.
There is no doubt that we are facing a cost of living crisis, with universal credit to be cut by £20 a week, negatively impacting 10,406 of my constituents and 400,000 people across Scotland; with a national insurance hike hitting those on the lowest incomes; with energy prices expected to soar by at least £139 for millions of households; with 16,500 jobs in Scotland still on furlough—that is 5% of all those who were furloughed; with exports from the UK falling by a staggering €16 billion, down 17.1% in the first seven months of this year; and with the ending of free movement disrupting supply chains and leading to empty supermarket shelves and higher prices. I could go on, but it really does feel like the end of days.
I would like to take this opportunity to pay tribute to the Ardrossan, Largs and other food banks in my constituency and to all the voluntary organisations that are supporting those in North Ayrshire and Arran who are in financial distress and who will fall into financial distress as a result of the universal credit cut. Apparently, though, it seems that none of the soaring prices and empty supermarket shelves are a consequence of Brexit. No, they are a consequence of covid, or the problem is global, or it is the bogeyman! It is the fault of anything or anyone except the rabid Brexiteers on the Tory Benches.
Of course there are global issues at play, but to suggest that the disruption to our economy is nothing to do with Brexit is complete nonsense. We have a shortage of HGV drivers, food packers and staff in food processing plants, and it is time that that was faced up to. I was told yesterday by the Secretary of State for Business that there was no point in talking about the consequences of Brexit, as that would be re-fighting the battles of five years ago. That might explain why we are being told that Brexit has nothing to do with our empty supermarket shelves, which incidentally no country in the EU is experiencing. Global factors apparently affect the UK uniquely.
We can all understand the scepticism with which the Business Secretary’s words were met yesterday when he said there will be no energy shortage this winter. The truth is that we cannot believe a word this Government say. This is the Government who told us there would be no food shortages, no price rises and no fall in exports. The sunlit uplands that they presented as their vision of Brexit have become the nightmare about which we warned.
The harsh and cruel reality is that food prices are up, energy prices are up, inflation is up, pensioner poverty is up, child poverty is up and taxes are up, regressive as they are, and the Tory response to this cost of living crisis is to cut universal credit. Today’s debate is about poverty, which prevents people from reaching their potential and prevents children from achieving their best in school. It robs people of their good mental health and of their physical health. It is corrosive, it grinds people down and, ultimately, it kills them. I remember when this Government used to pretend to care about the just about managing, but now they seem to care for the just about managing just as much as they care for those who live in deep poverty.
Today we hear that the National Audit Office has discovered that the Department for Work and Pensions underpaid 134,000 pensioners by a total of more than £1 billion in state pension, and of course women are disproportionately affected. With the energy price cap rise, it will be a cold winter for many of my constituents in North Ayrshire and Arran, but it has been wilfully and deliberately made colder by this Government’s £1,040 a year cut to universal credit. Shame on them. Their callous disregard for poverty shows with crystal clarity that the Conservative party is not fit to govern.
It would be laughable if it were not so serious. This bumbling Prime Minister pledged to restore trust in our institutions and in how our democracy operates. That is big talk from a Prime Minister who breaks pledges with ease, who is struggling to keep the lights on and who has insisted, despite the evidence to the contrary, that child poverty is falling. That view is brought to us by the same Prime Minister who said Brexit would lower energy prices.
I remember when, in 2012, the right hon. Member for Mid Bedfordshire (Ms Dorries) dismissed the then Prime Minister, David Cameron, and the then Chancellor, George Osborne, as “two arrogant posh boys” with
“no passion to want to understand the lives of others.”
I ask anyone sitting on the Conservative Benches if they would care to tell me what has changed. If it was true of the Prime Minister and the Chancellor then, by God how much truer is it now? I wonder what Conservative Members think of that.
The Prime Minister said today—this will put the fear of God into the House—that it will not be a tough winter. Let us hope he is right about something for once in his life, because we know that for too many in our constituencies it will indeed be a tough winter. This Government are not fit to govern and their so-called global Britain is not just an illusion but a laughing stock. It is a hallow phrase that means nothing to those who are struggling, and it is why so many of us in Scotland are sick to the back teeth of this cruel, nonsensical incompetence. We can and will take our future into our own hands and build a fairer, more equal, more compassionate society in an independent Scotland. We can then start to see what levelling up really looks like, instead of the shoddy window dressing we see before us.
I must be living in the same alternative universe as my hon. Friend the Member for Liverpool, Wavertree (Paula Barker) because I do not recognise any of the positive spin I have heard from Conservative Members this afternoon. They must be experiencing selective amnesia. Eleven years of draconian austerity measures have attacked some of our most deprived communities, particularly in Liverpool. They have robbed 63%—£450 million—from my great city, which has had a devastating impact on the most deprived.
In my constituency, we have some of the highest child poverty rates in the country, which rocket to 29.3%, compared with the national average of 19.1%. One quarter of the children in my constituency live in absolute poverty. This Government are making decisions to hit the income of those households that are completely unconscionable and must be stopped. Like most of my Labour colleagues, I receive lots of desperate emails. One of my constituents wrote to me to say that the thought of more cuts is making them physically and mentally unwell, and they fear that when these cuts go ahead, they will lose everything they have worked so hard for over the years. Another told me that they have just £100 to survive until their next pay day, which is still 26 days away. They described their heartbreaking daily cycle of hunger, worry and depression.
This Government’s proposals to cut UC, end furlough and hike national insurance, and now the rise in energy prices, is creating a Tory-manufactured cost-of-living crisis. This could not have come at a worse time, as the cost of living is rising. Income is down and workers are doing more work for less pay. We are experiencing fire and rehire, less wages, more work, and worse terms and conditions. How can this Government talk about levelling up while disproportionately taking money out of the pockets of low-paid people who are reliant on welfare payments? In my constituency, more than 6,200 people are in receipt of unemployment-related benefits, including UC, which in reality supports a huge number of working people. That represents about a 50% rise since the start of the pandemic. With the end of furlough, the cut to UC and the hike on taxes on working people, this Government are creating the perfect storm, driving working people further into poverty through a combination of welfare cuts, tax hikes and soaring living costs.
I wish to conclude by paying tribute to Liverpool City Council, the voluntary and community centres, and all of the law centres in my constituency for the amazing work they have done during this pandemic to support those in most need. I dread to think what would have happened without that amazing support.
It is a pleasure to take part in this timely debate, as we surely head towards a cold Tory winter of discontent, of high prices, shortages and rising unemployment. I am privileged to represent a constituency in the north-east of Scotland, which is generally regarded as a prosperous area. It has certainly suffered from the oil and gas downturn over the past few years. It is still to benefit from the transition to renewable energy technologies that we all fervently hope to see, and it has certainly borne the brunt of the austerity agenda we have experienced in recent years. My constituency is a mix of urban and rural, taking in a slice of the north of the city of Aberdeen and extending out into the rural countryside, with its mix of small towns and villages. Although the economic statistics might show that it has one of the highest levels of gross value added in Scotland, never mind the UK and never mind Europe, that hides the reality of the experience for far too many who live there. Someone who went to the go-to data set of the Scottish index of multiple deprivation and looked at Aberdeenshire might pick out a handful of streets that would show a concentrated amount of deprivation, but that misses out important parts of the picture. It misses the individual stories hidden within, because the reality is that there is a significant amount of rural deprivation and a range of intersecting factors that contribute to that.
As I know myself, living in a small community, there is the perennial issue of trying to find childcare. The Scottish Government are tackling that with their 1,140 hours of free childcare, which it is no exaggeration to say will be an absolute game-changer for many in Scotland with young families.
There are the additional costs of heating, particularly for those who live off the grid. People who get their energy for heating and cooking from heating oil do not get the opportunity to shop around on MoneySuperMarket.com for the best suppliers. There is a limited number of suppliers and they have to buy in bulk. Despite some of the many laudable community initiatives that have come through the community planning system to try to take the edge off that for people, it is still an additional expense of rurality.
There are transport costs. Not everybody lives near a public transport link, so there is the added cost of having to run a car to get to work, get about and access public services when public transport is not always an option.
People have been hard-pressed by austerity for a number of years. It is easy for those who have never lived in such an environment or who have never experienced scarcity or shortage in any significant way themselves to fully understand how expensive it can be to be short of money. People buy what they can afford, not what lasts best. They pay more for their energy, particularly if they are, as many colleagues have said, trapped on a prepayment meter, with everything that goes with that. Access to credit and financial services is much harder and is often more expensive when it is available.
Deprivation also hits those who at one point might have been seen as doing well—we could call them, as some have, the precariat. A significant number of people right across Scotland and the UK are probably no more than a missed pay cheque or a significant household expense away from serious financial difficulties. Let me cite the example of a citizens advice bureau that is not in my constituency—it is in the neighbouring constituency to the south, West Aberdeenshire and Kincardine—but covers areas of my constituency and I do not believe it is atypical. This citizens advice bureau is located in Westhill—in what would, on the surface, look like a prosperous set of communities there and roundabout—but it has one of the highest rates of people coming through its doors in search of debt advice.
Right across the north-east of Scotland, the use of food banks is common; not a community is unserved and, as we have heard, demand is, as in other areas, heading in only one direction, and sadly it is not down.
For me, tackling poverty means many things, but above all it means treating people as citizens, with dignity, and enabling them to participate fully in society on their own terms, shorn of the shame of being left without. What does it say of the UK Government that they have made a set of policy choices, particularly over the past fortnight, that seek to make it harder for families and individuals to provide that dignity for themselves and to participate as they might wish in wider society?
Does the hon. Gentleman agree that the people in my constituency of Swansea West and elsewhere who voted in good faith for Brexit—for more money, more control and more jobs—have seen a sort of Brexit dividend, which is basically rising food prices, because of food barriers and a falling currency, and national insurance going up and universal credit going down? Does he think that the poorest should get an injection of money to make up for that, rather than being hammered?
The hon. Gentleman makes a succinct and powerful point about how people voted in good faith for something that has turned out to be a fiction and a fantasy. I would always argue for more money to help those who are most in need—there is also an economic benefit to that in the boosting of consumption—but one of the first steps we could take is not to take money away. If the hon. Gentleman waits patiently, he may hear that I have more to say on that later in my speech, but he makes a powerful point.
In the Minister’s response to the opening speech of the hon. Member for Houghton and Sunderland South (Bridget Phillipson), he spoke of the need to make tough choices. It is that macho rhetoric—fine, easy words that fall a great deal harder on those on whom those choices impact than they do on the perennial Conservative and Unionist party’s self-conceit of being a party of low taxation, which it seldom ever lives up to in office in any meaningful way.
Those tough choices come with very long-standing consequences: they impact on people’s children; they impact on family life and well-being; they impact on a person’s health; they impact on their self-esteem; they impact on their opportunities; and they impact on life chances, and they do so across generations.
In the past fortnight alone, we have seen the triple lock gone, removing the link between earnings and pensions. We have seen the end of furlough. We have seen the £1,040 cut to universal credit. We have seen a breaking of the manifesto promise not to increase national insurance, in a move that will hit the youngest and the poorest the hardest and that will embed generational and geographical inequalities and bake them into our social and economic reality for generations to come. As has been said, this has all been exacerbated by Brexit, with the shortages of products that that will bring, allied to an accompanying increase in prices.
I could not agree more with my hon. Friend. I was deficient—I should have said what a magnificent speech she made earlier on, encapsulating as it did what it really means to be without and to be in search of that dignity. She is absolutely correct in what she says: this is absolutely the worst time to be taking away that support. It is almost like the Chancellor has gone out to the pub for a round of drinks. He has carried the drinks away from the bar—it was a very complicated order—and staggered across the floor with a big tray, and when he is about one yard from the table, he drops the whole lot, and leaves it smashed on the floor. It is the same with the economy, having carried it thus far. It is inept to say the least.