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Grahame Morris (Easington) (Lab)
I beg to move,
That this House has considered in-work poverty.
It is an honour to serve under your chairmanship, Ms Rees. Before I start, I want to pass on our best wishes, from all sides of the House, to the Under-Secretary of State for Work and Pensions, the hon. Member for Mid Sussex (Mims Davies), who I am sorry to hear has covid. I am sure that her colleague, the Under-Secretary of State for Work and Pensions, the hon. Member for Macclesfield (David Rutley), will do an admirable job in her place.
Work should always be a pathway and route out of poverty. The fact that the phrase “in-work poverty” even exists is a damning indictment of successive Conservative Government policies over the past 12 years. The Government are clearly making life harder for working people, as I will illustrate with a number of examples. I am conscious that a large number of Members want to participate in this important debate, so I will truncate my remarks, but I want to illustrate my argument with some examples from a number of sectors.
Clearly, one of the issues is the increase in taxes and national insurance, which is in direct contravention of a commitment that the Conservatives made in their last general election manifesto. We are also having to deal with the problem of the huge increases in energy prices that the Government, via Ofgem, have allowed to take place. Members may recall that I had a question for the Prime Minister last Wednesday in order to contrast the position of the French Government, who have capped energy price rises at 4%, with that of our Government, who have capped energy price rises at an incredible 54%. That has had a huge impact on people who are in work.
Fuel poverty, food poverty, energy poverty, housing poverty and child poverty are all measures of economic failure, and they are all on the increase. According to the Joseph Rowntree Foundation, one in eight workers are struggling to make ends meet. If work guaranteed a decent standard of living, the UK would be going through a golden age of prosperity. Instead, the Conservative party has delivered successive year-on-year policies of austerity over a decade. The social security safety net has given way, after a decade of wear and tear.
Without the most basic protection, a decade of pay cuts and wage stagnation has left working families ill prepared. Many have no savings at all, and people certainly have far less resilience to cope with the current cost of living crisis. In the workplace, we have seen employment rights deliberately weakened, a dramatic increase in the number of zero-hours contracts, and an expansion of the gig economy, with a growing proportion of working people in insecure employment.
I also want to mention the appalling employment practices. Poor employment practices, such as fire and rehire, are rife, even with very profitable and long-established companies, some of which are household names. Despite recent and repeated assurances from Ministers at the Dispatch Box—often condemning the practice—they have done nothing to outlaw the practice of fire and rehire by rogue employers. The Government have disregarded the interests of working people and dismissed the private Member’s Bill brought forward by my hon. Friend the Member for Brent North (Barry Gardiner).
The key workers we all clapped for and honoured during lockdown are bearing the brunt of our low-wage, poverty-pay economy. Figures produced by the TUC reveal that 43% of north-east key workers—over 173,000 people —earn below £10 an hour. Personally, I do not think that £15 an hour is an unreasonable ask in this day and age.
Chris Stephens (Glasgow South West) (SNP)
I thank my honourable comrade for giving way. Is he as surprised as I am at a recent article, published by The Herald newspaper and The Ferret website, showing that 20% of jobs advertised on the Department for Work and Pensions website paid under the national minimum wage rate of £9.50? The Department really needs to launch an inquiry into why that is the case.
Grahame Morris
Absolutely. It should concern us all when the DWP is advertising jobs that fall below the minimum standard and even the limited protections afforded to working people.
We know that even a modest increase in the minimum wage to £10 an hour would transform the lives of key workers, including one in three care workers—so many of us applaud care workers for their contribution, particularly during the pandemic—and 173,000 childcare workers. It would raise the incomes of over half a million people.
Workers across the country are struggling to feed their families and heat their homes. I will give some examples, including one I received from the National Union of Rail, Maritime and Transport Workers. Like many of us, I have met the cleaners employed by the Churchill Group who are fighting for a real living wage of £15 an hour. I will also highlight the fact that the GMB trade union is campaigning against real-terms pay cuts for nearly 150,000 ASDA staff, and the ongoing University and College Union strike in the university sector. The pattern is the same: terms, conditions, wages and pension rights are being eroded; workers who try to negotiate are blocked, ignored and blamed; while well-paid directors shrug their shoulders with uninterest, often while picking up huge bonuses.
The workers who kept our supermarket shelves stacked during the pandemic are now struggling to feed their own families. I was shown a survey by the Bakers, Food and Allied Workers’ Union, which was very illuminating; it was conducted by the union of its members, who are in the food sector. It found that between February and March 2021, 40% of those surveyed had eaten less than they should have eaten because they did not have sufficient cash; 35% had eaten less than they should have to ensure that other members of their household got a meal; and 21% relied on goods and contributions from family and friends to make ends meet. These are people who are in work—shift workers who supplied the country with bread during the pandemic.
I will also highlight the excellent Right to Food Campaign, which was mentioned in this very Chamber yesterday. The campaign was set up and promoted by my hon. Friend the Member for Liverpool, West Derby (Ian Byrne), and it has been endorsed by my own union, Unite. It seeks to make the Government responsible for addressing the raging income inequalities and the broken benefit system that have pushed so many people into a spiral of poverty.
I saw a quote on social media just before this debate and thought how relevant it is to what we are discussing, because we are talking about the cost of living crisis. The country has more than enough resources and more than enough money to keep everyone warm, housed, free from hunger and properly clothed; in fact, the country has enough wealth to do that a hundred times over. So it is not really a cost of living crisis; what we have is an inequality crisis.
I think the Government should scrap some of the provisions that currently apply to those in receipt of universal credit. Let us not forget that a substantial number of those in receipt of universal credit are in work—they are the working poor. The five-week wait before they can receive a penny is a major contributing factor to the huge increase in the number of people having to turn to food banks.
We need to start putting people before profits. Sadly—it is lamentable, really—poverty has become the norm in Britain; it has become normalised. Yards away from where we are having this debate, homeless people are freezing on the streets and sleeping rough for want of a home. Children go hungry. We see Members of Parliament, particularly Members of the Conservative party, posing for photographs at food banks, and I think the irony must be lost on them that those food banks exist only because of the policies that this Government have promoted.
To return to energy prices, the French Government have capped cost rises at 4%, Germany has cut tariffs and Spain has introduced a windfall tax on the energy companies. But here in Britain, standing charges are doubling and the energy price cap will see energy bills rise by 54%—that is £700 more on average—for our families. Peterlee is the biggest town in my constituency, and EDF, one of the big six energy companies, has many customers there. It is interesting to contrast what is happening in Peterlee with what is happening in Paris. Will the Minister explain why French state-owned EDF can cap cost increases at 4% in Paris while my constituents in Peterlee face a 54% increase in their bills?
Tax rises are exacerbating the cost of living crisis as many in our nation struggle with rising prices. I happened to meet a farmer last weekend, and we chatted about a number of issues. He grows oilseed rape and wheat, and he said that the price of wheat is doubling, and that the price of fertiliser is doubling as well, which will cost him an extra £10,000 a year. He reliably informed me that the cost of wheat, which was £150 a tonne, is now £300 a tonne. That will filter through into dramatic increases in food costs for staples such as bread. The prices of many basic staples, including margarine, tomatoes and apples have increased by as much as 45% in the past year.
Figures from the Trussell Trust and the Independent Food Aid Network show that more than 3 million food bank parcels were distributed in 2020-21. I tried to get the figures for the food banks operating in my constituency —at the community centre in Dawdon and at the East Durham Trust in Peterlee—but they are not part of the Trussell Trust, so the excellent work that they do is not included in those statistics, meaning that the figure is even bigger.
Average petrol and diesel prices are £1.61 and £1.73 per litre respectively, but regional public transport is expensive and unreliable after a decade of neglect, meaning that families have no alternative to protect against increasing fuel costs. The energy cap is up at 54%, and further increases are in the pipeline. The Conservative party once promised to be the “greenest government ever”, but the Public Accounts Committee recently described the green homes grant as a “slam dunk fail”.
House prices are rising beyond the reach of first-time buyers; sky-high rental costs leave little at the end of the month for deposits and savings; and we as a country have abandoned council housing, which is quite disgraceful—that social housing delivered low-cost homes for the post-war generation.
Nelson Mandela said:
“poverty…is man-made and can be overcome and eradicated by the actions of human beings… Overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life… While poverty persists, there is no true freedom.”
Once again, we see that poverty is a political choice. It is a Conservative political choice, and one that this Government should be ashamed of.
Several hon. Members rose—
Christina Rees (in the Chair)
Order. The debate is well subscribed, so I am putting in place a formal time limit of four minutes. I call Peter Gibson.
Peter Gibson (Darlington) (Con)
It is a pleasure to serve under your chairmanship, Ms Rees. I congratulate my County Durham colleague, the hon. Member for Easington (Grahame Morris), on securing the debate. He called for a 58% increase in the minimum wage, which would have a massive inflationary impact. He cannot complain about inflation and the cost of living crisis that we face while advocating policies that would create further problems. If levelling up is to succeed, we must tackle poverty. I want to make it clear that I believe that one person or family in poverty is one too many.
As we all know, employment is the best route out of poverty. Evidence shows that full-time work substantially reduces the chances of living in poverty, and I am proud that the Government have taken an approach to tackling poverty that has employment at its heart. We have seen the Government accept the four recommendations of the Low Pay Commission, which will see the living wage increase to £9.50 an hour—an increase of 6.6%. We have seen the Government extend the national living wage to 23 and 24-year-olds, who will also benefit from the increase to £9.50. Improvements have been made for those on universal credit and in work, with an increase in the work allowance and a reduction in the taper rate, making work pay. Across the country, we have seen massive improvements in our pension savings for working people, with auto-enrolment securing a pension income for millions. I am hopeful that this can be extended to younger people and those working part time, to help ensure that they save for their futures too.
I appreciate that some people do not have the skills to get the job that they want, including those who left school at an early stage and those who have caring responsibilities. That is why the Government’s lifetime skills guarantee is designed to transform the adult education system, helping people of all ages to develop the skills that they need to get better jobs and supporting businesses to find or develop talents to fill the skills gap. Last week, I visited the marvellous Darlington College and saw with my own eyes the incredible learning and training opportunities on offer, from plumbing, plastering and public service to catering, car repairs and childcare. As T-levels will be introduced later this year, the college also offers courses in robotics. These are incredible opportunities to learn and improve skills for the economy of the future.
We know that our economy has record vacancies. From ambulance, bus and taxi drivers to doctors and nurses, we know that there are opportunities out there. The simple law of economics means that wages are increasing in order to attract people into these roles. We help our constituents in the long run by ensuring that they have the chances to improve their skills and employability. I hope that one day we reach a point where wages from employment provide enough, so that in-work benefits are not necessary. In the meantime, however, I believe that increasing wages, reducing the amount taken from those on benefits who work, and giving people the chance to learn in order to improve their lot is the best way to tackle the issues raised in today’s debate. I look forward to the Minister’s response and to hearing an update on the cross-departmental mechanism on in-work progression.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The cost of living crisis is biting deep into the lives of my constituents in North Ayrshire and Arran. In-work poverty ought to be a contradiction in terms, but it is at an all-time high. Two thirds of working-age adults in poverty live in households where an adult is working, and 75% of children in poverty live in a home where at least one person is working, which shows that work offers no guaranteed route out of poverty. In-work benefits, such as universal credit, are simply not enough to lift people out of poverty, and cutting the universal credit uplift and the working tax credit of £20 a week was not just folly on the part of the Government; it was also cruel in the extreme, because it was done in the full knowledge of the hardship it would cause.
Despite the doubling of the Scottish child payment, the universal credit uplift cut has caused untold hardship in our communities. What can the Government do? They need to raise the statutory minimum wage in line with the real living wage, and they need to remove the age discrimination that it inherently contains. They need to understand that increasing the national minimum wage to £9.50 per hour next month is simply not enough to compensate the people who are suffering because of soaring costs in every direction, and it does not compensate them for the £20 cut in universal credit that they have already suffered.
The Government could ditch the national insurance tax rise, which is set to kick in next month and will disproportionately hit those in the lowest-paid jobs. They could increase statutory sick pay—we have one of the lowest sick pay rates in the OECD. Even so, one in five workers are simply not eligible for it, which, again, disproportionately impacts on women. They could support my Bereavement (Leave and Pay) Bill, because we know that beyond the emotional impact of bereavement, there are significant financial costs as well, without the bereaved having to worry about lost earnings. They could reverse the £20 per week universal credit cut immediately and abolish the electricity standing charge, which amounts to about a quarter of consumer energy bills for the less well off.
We all understand that global fuel prices are increasing, but motorists pay 58p per litre on fuel duty and then additionally pay 12p in VAT on that charge, so around 70p per litre of petrol goes straight to the Treasury in tax. As fuel hits £1.80 per litre, the UK Government must cut the tax take on fuel, as it does not just hit motorists who rely on their cars to get to work, but adds to business costs and impacts the whole economy, and increases the costs of goods and services. Cutting the tax on fuel could help prevent inflation reaching double figures. It makes complete sense to do that at this time.
The scandal of in-work poverty cannot be simply tolerated. The current cost of living crisis demands direct and urgent Government intervention right now, to support those in work who are no longer even just about managing—the group that the Government say they care about. The Government must respond to the needs and demands of those they purport to serve. I hope the Minister will not simply regurgitate what has already been done, because what has already been done is simply not enough in the face of a cost of living crisis that grows by the day. I hope he will be able to give us some hope that in the spring statement there will be a prospect of some respite for people across the UK, and for my constituents in North Ayrshire and Arran.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is a pleasure to serve under your chairmanship, Ms Rees. I congratulate the hon. Member for Easington (Grahame Morris) on securing this debate. Although we might disagree on the ways of tackling poverty, I think we all agree on the need to do so.
I want to start by defining what I mean by in-work poverty. It is important that when we talk about poverty we use the correct definitions. The Work and Pensions Committee’s report on children in poverty goes into different definitions and how they are used and misused. I will use the standard definition of relative poverty. Many have focused on financial poverty, but I do not think that is the best definition. I prefer multi-modal models because I think poverty is about more than just money. It is also about educational and societal resources, but this debate has very much veered into the financial side.
On the financial side we look at inputs and outputs. Inputs are about wages, benefits and benefits top-ups, and outputs are about living costs. I want to focus on the outputs and what I call the two big beasts, which I have been campaigning on for some time—affordable housing and childcare. For affordable housing we need to sort out affordable rents. It horrifies me that in my constituency the No. 1 cause of someone being at risk of homelessness remains affordable rents, which we need to get sorted and fixed.
Childcare is also a particular challenge in terms of a big beast. It costs a lot. It is difficult for people to administer, particularly the requirement to pay up-front costs and then claim retrospectively when one is on benefits, as opposed to directly invoicing the Department for Work and Pensions. The 85% cap for people on benefits is not enough to cover childcare costs for many people. For those in receipt of 15 to 30 hours’ free childcare, certainly if they live in my constituency, lots of childcare providers require top-ups, so the idea that it is 15 to 30 hours of free childcare is illusory. Many people need financial top-ups over and above that provision. The provision is very generous, but it could be more generous still.
Childcare is also a barrier to in-work progression. Lots of people who work part time face childcare costs. When they want to increase their hours, there is a diminishing return in terms of the taper. I welcome the reduction of a taper in terms of UC payback, but that on top of increasing childcare means that when someone moves from 36 to 40 hours a week, they see relatively little return for the extra hours of work. That acts as a substantial disincentive; we need to look carefully at how we can support people who want to work—and make sure that work always pays.
Besides cost, availability of childcare is a huge problem; it remains a disincentive to work for people who are not on the breadline. I speak to lots of people on the doorstep who tell me about the challenges of childcare provision and costs when returning to work—people previously in quite high-flying careers. There are some areas where we can fix that. We can look at ratios of childminders to children. We can look at increasing school hours; I would support a move to a more continental model around that. Reducing the cap on benefits and providing more childcare support for people who are on benefits is another area we can look at.
Richard Burgon (Leeds East) (Lab)
It is a great pleasure to serve under your chairship, Ms Rees. I congratulate my hon. Friend the Member for Easington (Grahame Morris) on securing this important debate. This debate takes place in the context of a sustained attack on the living standards of ordinary people in this country. Energy bills are rocketing. There are tax rises and real-terms pay cuts for millions of people, as well as cuts to universal credit, benefits and pensions. That does not happen in a vacuum; it comes after a decade of austerity, cuts to public services and the tightest squeeze on wages in 200 years. Experts warn that this could be the biggest drop in living standards in many decades.
What does that mean in reality? The daily reality of this crisis for families in my constituency of Leeds East and throughout the country is grim. How, in the fifth-biggest economy on Earth, can we have families who cannot turn the heating on? How, in the fifth-biggest economy on Earth, can we have a situation where parents are missing meals to make sure that their children can eat? How, in the fifth-biggest economy on Earth, do we have more food banks than branches of McDonald’s? I recently met staff at the Chapeltown Citizens Advice in Leeds; their data shows that already, more than one in seven people in my constituency cannot pay their energy bills without cutting back on essential spending.
At the same time, the richest are getting richer. While millions suffer, the millionaires are doing very well. British billionaires have increased their wealth by £290 million per day. The Government have been slashing the taxes of bankers and the gas and oil giants that make £900 profit every single second. Let us be clear: the right to be warm is more important than the right to make super-profits. It is a rigged economic system, which is failing ordinary people. It is a crisis made in Downing Street—let us not be scared to say that.
The Government are trying to shift the blame; they are trying to say that the cost of living crisis is due to the horrific war on Ukraine. It is not. The Government’s plan is to make working people pay the costs of the pandemic, just like they made ordinary people pay for the bankers’ crisis. Poverty is a political choice, and the Tories are choosing to push people into poverty through the cost of living crisis.
What do we do about it? We need an emergency plan to tackle the situation. I will make five suggestions. First, the Government must scrap the national insurance hike that is coming in next month and replace it with a wealth tax on the richest 1%. Secondly, we need a windfall tax on energy profits, to be immediately used to lower energy bills, and a huge home insulation programme to save people hundreds of pounds a year. Thirdly, we need a national minimum wage of £15 per hour. Fourthly, we need the restoration of the universal credit uplift, and its expansion to those who are denied it. We need to uplift benefits by the 8% that the Resolution Foundation and others are calling for to meet inflation pressures. Finally, we need to tackle child hunger, with free school meals for all schoolchildren—learning from what Labour is doing in power in Wales.
We cannot allow the Government to yet again force working people to pay for a crisis. They have made a political choice; our political choice is to fight back with a set of proposals that will make a real difference.
Margaret Greenwood (Wirral West) (Lab)
It is a pleasure to serve under your chairmanship this afternoon, Ms Rees. I congratulate my hon. Friend the Member for Easington (Grahame Morris) on securing this incredibly important debate.
Poverty is a scourge that devastates lives. In today’s debate we are focusing on in-work poverty, but the Government should address poverty however it arises. A report by the Institute for Public Policy Research in May 2021 highlighted that the UK’s poverty rate among working households was at a record high this century. The report also found that in 2019-20 the majority of those living in poverty were in households that had some form of paid work.
That is also reflected in the Government’s statistics, which show that of all the working-age adults in poverty, both in the UK and in the north-west, 65% are in working families. In some areas, the figure is even higher. For the east of England, that is 70%, and for the south-west, 72%. That is truly shocking, and completely dispels the Conservative myth that work is the best route out of poverty. I am so disappointed that we have already heard that myth chanted today.
Margaret Greenwood
I thank the hon. Gentleman for his question. We have just listened as my hon. Friend the Member for Leeds East (Richard Burgon) came out with all sorts of suggestions, as did my hon. Friend the Member for Easington—such as increasing the minimum wage, tackling insecure work, banning zero-hours contracts and so on. I will return in my speech to the issue that the hon. Gentleman raised.
As I said, those figures completely dispel the Conservative myth that work is the best route out of poverty. It is clear that low-income households are likely to be disproportionately affected by the cost of living crisis. The Trussell Trust has warned that, for people already struggling to afford the essentials, the cost of living crisis can mean parents going without meals in order to afford to feed their children. That, sadly, is nothing new, but the situation, instead of improving, is getting worse.
Food prices have been increasing since the middle of 2021 and are expected to increase in coming months. The domestic energy price cap will increase by 54% from 1 April for approximately 22 million customers. Energy prices are likely to continue to rise beyond that, as a result of Russia’s invasion of Ukraine. Some economists have suggested that the inflation rate in the UK could hit 10%.
Margaret Greenwood
I have given way once and am short of time; I am sorry. The increase in national insurance contributions from next month, opposed by Labour, will increase the pressure on working people and businesses even further.
The full impact of the coronavirus pandemic on levels of poverty is not yet known, but early analysis suggests that poverty will increase over the next few years, and that low-income households are particularly vulnerable to the economic effects of the pandemic. The Government must end the scourge of in-work poverty, by tackling the structural causes of poverty and inequality, such as low pay and high living costs. At next week’s spring statement, the Government have a chance to make a real difference to the lives of working families. There are plenty of steps they could take.
The Government should never have cut universal credit by more than £1,000 a year, and they should reinstate the uplift. They should also scrap the two-child limit, which the Child Poverty Action Group has called for, and the benefit cap. They should increase child benefit by £10 a week, and call a halt to the rise in national insurance. They should also initiate a one-off windfall tax on oil and gas producers, to cut household energy bills by up to £600, as Labour has called for.
Those are all measures that this Conservative Government could take; it is simply a matter of political will. I ask the Minister to set out today what action the Government will take to eradicate poverty.
Kenny MacAskill (East Lothian) (Alba)
It is a pleasure to serve under your chairmanship. Ms Rees. I pay tribute to the hon. Member for Easington (Grahame Morris) for securing the debate and for his comments.
In-work poverty undermines the social contract that evolved in this country after world war two with the establishment of the welfare state. The whole purpose of Beveridge was that people would work and pay national insurance, which would provide for their sickness and retirement. Those who fell through the gap would be dealt with by supplementary benefit. Work was the route out of poverty. That is no longer the situation.
We now have in-work poverty, as others have said—something that is unprecedented in recent times. That is not an accident; it is an economic model that has come from the United States. It was brought in—established perhaps—by Clinton. For those who have not read it, I recommend the book by Barbara Ehrenreich, “Nickel and Dimed”. She refers to the United States that came into being after the reforms brought in by Bill Clinton in 1996 with the Welfare Reform Act. That created a low-wage economy. It might have created many jobs, and Clinton dined out on that for a long time, until people began to drill down into what was actually happening. It was a low-wage economy. Ehrenreich talks about people having to do one, two or three jobs simply to survive—not to pay medical bills or school fees, but simply to live—because the cost of living made it impossible. We perceived that to be a problem for people in the United States, which did not have a welfare state, and that it would not apply here. We still have a welfare state, but it is beginning to fall apart—not just fraying at the seams, but being eroded, corroded and, indeed, torn down from within.
The whole concept of work being a route out of poverty no longer applies. That simply is not the case, as we can see all about us. It is not simply about the statistics that have been mentioned; we are conscious of other aspects. The problem hits every corner of this country and applies to every sector. The movie “Sorry We Missed You” highlights how the issue affects social care and distribution, but there is hardly a sector that is not affected.
The problem is not restricted simply to those who work on zero-hour contracts because, as in the United States, we now have people who cannot live on the hours they get in one job; they have to do two or three jobs simply to survive, and we have to make sure that that changes. It is simply unacceptable, and a breach of the social contract that was supposed to be the benefit of world war two.
We still see risks, so what can we do about them? First and foremost, we have to recognise that this was an issue even before coronavirus and the cost of living crisis. It was, as others have correctly testified, predicated on high rents. People were unable to earn enough to meet their rent, and they had to choose between paying their rent and eating. That is now compounded by a cost of living increase, especially for fuel, and inflation is hammering food costs. Now, the situation is not just about people managing to pay the rent, but deciding whether they can heat their homes before even indulging in feeding themselves and their children. Society has to change, but how can we do it?
Fundamentally, we must ensure first of all that we have a living wage. Our current minimum wage is not enough; it needs to be a national living wage. We need to empower trade unions, because workers are being driven right over. We must regulate, so that people can afford their rent. Finally, as we face escalating fuel costs, we need a social tariff and an end to the abomination of standing charges, which are impoverishing people. There is a better way. This is not the society that was anticipated by the generations before us.
Rebecca Long Bailey (Salford and Eccles) (Lab)
It is a pleasure to serve under your chairmanship, Ms Rees. I thank my hon. Friend the Member for Easington (Grahame Morris) for securing this important debate and for his passionate speech.
More than half of those who live in poverty are in working households. Indeed, the Institute for Public Policy Research found last year that since 2010 the situation has deteriorated steadily, leaving working families at the highest risk of falling into poverty since the welfare system was at its most generous in 2004. That was before the current cost of living crisis that we face.
Now, the Government’s proposed national insurance contributions increase will affect more than 2.5 million working households on low incomes, inflation is expected to hit at least 7.25% in April—pushing food and everyday costs through the roof—and energy prices are expected to rise by a whopping 50%. If we add the Government’s proposed benefits uplift of 3.1%, which, in the light of the anticipated rates of inflation that I have just mentioned, actually amounts to a dramatic benefits cut, we have the makings of a poverty crisis the scale of which we have not seen in our lifetimes.
Things do not need to be like this. In fact, it makes no economic sense at all, because in economies where incomes are supressed, it is not just living standards that suffer; growth is suppressed, too. I am sure that we have all heard the saying, “A rising tide should lift all boats”—as the economy expands, everybody should reap the rewards—but we cannot successfully expand the economy without two things—industrial strategy and demand. If consumers have no money to spend, there is no demand—unless we export everything we produce in the UK.
I urge the Minister to take a number of urgent actions. First, the Government must set about setting out a far more detailed and comprehensive industrial and skills strategy. Secondly, the Government must take the reins on liveable wage levels. They must reform corporate governance and industrial policies to promote healthy wage growth. They must strengthen the workforce voice and roll out sectoral collective bargaining to give working people more power in the workplace, and they should examine the concept of a universal basic income for all. Thirdly, they must introduce the long-promised renters’ reform Bill, to give renters the security and protection that they deserve.
Finally, on providing support to households during the cost of living crisis, I urge the Minster to scrap the proposed NICs increase and to help struggling households on energy bills by cutting the rate of VAT for household energy bills, and levying a long overdue windfall tax on oil and gas companies to generate income. This plan should include expanding the warm home discount, significantly increasing universal credit to offset soaring inflation, and increasing public sector pay and the living wage to push further wage growth. I know that this suggestion goes against every ideological principle that the Minister probably has, but he must finally address the fact that privatisation of our energy system has failed, and acknowledge that public ownership is not just a pragmatic way to solve the energy crisis, but essential to securing our energy security.
There is much that I disagree with when I study the economic principles of Adam Smith, but I will leave the Chamber with one final quotation, which I hope the Minister will agree with:
“A man must always live by his work, and his wages must at least be sufficient to maintain him.”
I hope that the Minister bears that in mind when he sums up, and that he will address the points that I have raised.
David Linden (Glasgow East) (SNP)
It is a pleasure, as ever, to serve under your chairmanship, Ms Rees. I congratulate the hon. Member for Easington (Grahame Morris) on securing the debate.
In the course of the last few weeks, we have been speaking about issues such as the cost of living crisis and in-work poverty almost as if they are new concepts. However, it would be remiss of any of us in this House to allow that to pass without saying that the cost of living crisis and in-work poverty are not new; they are the result of 12 years of Conservative government and austerity.
Many of my constituents, particularly those in Wellhouse, raise three main points with me regularly, and I will come them in a minute. First, I want to discuss the issue of the national insurance hike, which a number of other hon. Members have mentioned. I must be one of the many people in this House who find it a bit bizarre to be told that we need to hike national insurance on the youngest and lowest earners in society, when only in 2016 a bus was going around the UK that said that if people voted for Brexit, there would be £350 million a week extra for the national health service. I find it a little bit odd that, having committed the act of economic madness that is Brexit, we now find ourselves being told that national insurance has to be hiked to pay for changes in the health system.
The national insurance hike will disproportionately hit the youngest and the lowest income earners in our society. To put that in context, particularly for my constituents back home in Scotland, that means that 20% of the pay increase for a band 5 nurse will go on the national insurance hike. We can all stand there and talk about clapping for carers and that kind of thing, but the very people who we are seeking to reward and recognise for their work during the pandemic will be clobbered by this national insurance hike.
I will raise three other issues today. First, I want to see proper statutory sick pay. If the pandemic has highlighted anything, it is that making people choose between adhering to public health guidance and having enough money to heat their homes and put food in the fridge is a nonsense. The Government will say that now is not the time to look at statutory sick pay, but I would turn that on its head: the pandemic has magnified why statutory sick pay needs to be reformed. Statutory sick pay in these islands is the equivalent of about 17% of average weekly earnings, according to the Office for National Statistics. The Government must revisit the issue.
Secondly, let me turn to the idea of removing age discrimination. The hon. Member for Darlington (Peter Gibson) talked about the living wage. Let us be clear that the living wage is a con trick. The Government talk about the living wage, but it is not a real living wage that is set in line with the recommendations of the Living Wage Foundation, and age discrimination is baked in.
We celebrated Scottish Apprenticeship Week just last week. I do not know whether Conservative MPs are aware that an apprentice in the UK can be paid as little as £4.30 an hour. Indeed, the UK Government website states:
“An apprentice aged 21 in the first year of their apprenticeship is entitled to a minimum hourly rate of £4.30.”
I served alongside many apprentices when I was an apprentice at Glasgow City Council. Apprentices do not get a discount on their fuel when they go to the pumps, they do not get a discount on their energy bills, and they do not get a discount when they go to Asda or Aldi for their food. If the UK Government want to talk about equality and making sure that work pays, let us start by ensuring that everybody gets a fair day’s pay for a fair day’s work.
Finally, I want to talk briefly about the importance of childcare. The hon. Member for Runnymede and Weybridge (Dr Spencer) made a thoughtful speech. He is right to say that we can by all means provide childcare, but the universal credit childcare offer is not enough. The Government must do so much more to help people with in-work poverty, which is a stain on this society.
Jim Shannon (Strangford) (DUP)
As always, it is a pleasure to serve under your chairmanship, Ms Rees. I thank the hon. Member for Easington (Grahame Morris) for setting the scene so well. He has a passion for the subject, as we can tell from the way he introduced the debate.
Like others, I have been contacted by countless constituents who are not only concerned about the increase in the cost of living, but struggling to make ends meet on a daily basis. It is as simple as that, unfortunately. It is important to highlight these issues and discuss what steps we can take to help working families who are in need.
It has been estimated that 14.5 million people—some 22% of the population—were in poverty in 2020. If they were in poverty in 2020, they will unfortunately be even more so today. In addition, some 11% of families where one adult is in work are in poverty. Although the cost of living and some other issues remain devolved, they have an impact on the whole United Kingdom of Great Britain and Northern Ireland. Consumer rates were 5.4% higher in December 2021 than they had been a year before, making the inflation rate the highest recorded since 1992.
We all know the issues that I want to focus on. I want to focus on working-class people, who are impacted the most. I am not saying that the middle class are not impacted, because they are, but the hurt and anxiety are larger for the working class. Fuel prices are up 50%, and food prices are up some 25%. Almost 60% of people in the UK are termed working class, and in Northern Ireland 220,000 working-age adults are in poverty. We have seen the prices of petrol and diesel soaring with little or no hope of a reduction, although they have stalled today. The price of heating oil has gone up, like the price of diesel or petrol for the car.
I want to make a genuine request to the Minister. The Republic of Ireland—I do not think it is the greatest country in the world, by the way, as people know—has responded to its people by reducing VAT on household energy and fuel, as a short-term measure to help constituents. Why can we not do the same? I put that very gently but very firmly to the Minister, because I think we should do something about this.
I want to highlight the problems with the child benefit cap. I am conscious that many working families feel unable to take a pay rise from their employment, because they could lose their child benefit and be worse off. That is not the Minister’s responsibility, but we need to address the issue for those who juggle their wage with the child benefit cap.
The people of the United Kingdom deserve more when it comes to housing rental prices and food prices. In the Department for Communities back home, Deirdre Hargey has brought forward some support in the Northern Ireland Assembly for those on benefits at this tough time. Whenever I see that being done, I look to the Government here to do the same. My staff have taken numerous calls from those in unemployment who cannot afford the cost of living, and unfortunately there does not seem to be any answer. More must be done to support them.
What is sure is that the issue with living costs will not de-escalate any time soon. Prices are set to rise even further in April, and we cannot and must not sit idly by and watch that unfold without knowing that we have taken all steps possible and done everything practicable to combat it. I know that this is not directly in the Minister’s portfolio, but it is important, and he is the man here today responding to the debate. We need to have some measures in place and take some steps in the right direction, so that we can go back to our constituents knowing that we have done our darndest for them in Westminster Hall today. I urge the Minister to ensure that all the comments are taken on board and that the devolved nations are communicated with, so that we in Northern Ireland, and in the Northern Ireland Assembly, can benefit from whatever steps are taken to try to address the issue.
Yasmin Qureshi (Bolton South East) (Lab)
It is a pleasure to serve under your chairship, Ms Rees. I thank my hon. Friend the Member for Easington (Grahame Morris) for securing this debate, which is absolutely vital but should not be necessary in 21st-century Britain.
My constituency of Bolton South East is the 38th most deprived constituency in the United Kingdom. We have a jobs crisis, a wage crisis and a poverty crisis. Every single day, constituents write to me, outlining the most tragic circumstances. The stories include the inability to get a job, an unexpected benefits freeze and, more recently, a collective panic about how to pay for food, heating and bills. These are not the make-believe people that Cameron and Osborne dreamed up in 2010—the “shirkers” or “scroungers”—but the strivers that the coalition supposedly championed. They work long hours in tough jobs to provide for their families, put food on the table and give their children the best chance in life.
The 800 taxi drivers in the borough of Bolton are an example. Many of them live in my patch, and work long, hard hours, but because of rulings about the gig economy and their self-employed status, they often fail to make even the minimum wage on some shifts. We need to factor in the continuing restraints on licensing by local authorities, insurance costs, and other rules set by local authorities that make life even harder for them.
So many hard-working people are living in poverty. The Joseph Rowntree Foundation found that 56% of people in poverty are working; that represents a rise of 17% from 1998. Additionally, almost 40% of people on universal credit are working. That tells us that our economic model and wage system are fundamentally broken. We are told frequently by the Government that work is the best route out of poverty, as if that is an irrefutable fact, but clearly it is not the case.
Real wages were revised down again on Tuesday and are collectively lower than at the height of the financial crisis in 2008, yet the pay of chief executives of big companies has ballooned. The rich have actually got richer over the years. House prices are up by 150% in some areas of Bolton. Of course, there is also the rise in national insurance for the lowest paid, just to make things even worse for them. We need the Chancellor of the Exchequer to top up universal credit and take it back to the rate that it was at during the pandemic. The removal of the £20 uplift is not only morally bankrupt, but economically illiterate. It affected 14,000 of my constituents, and £20 per week is a lot of money for them.
Another reform that the Government could support is in relation to public transport. Only 30% of households in my constituency have a car and therefore rely on public transport, at significant cost. Thankfully, the Mayor of Greater Manchester has brought the buses into the public sector. As a result, no one will have to pay more than £2 per journey, which will make life so much easier for people. The Government could also quite easily implement a windfall tax on the £31 billion-worth of profits from oil and gas companies—above the ordinary profit that these companies make. That could be used to help to alleviate people’s problems, yet what does the Treasury say? “We’ll give you a £200 loan that you must pay back to us.” That is an insult to our constituents.
Many of my colleagues have today suggested practical steps that the Government could take. Bearing in mind that we are the fourth richest country in the world, we should not have constituents in poverty. I hope that the Minister listens to the suggestions put forward today and acts on them.
Andy McDonald (Middlesbrough) (Lab)
It is a delight to see you in the Chair, Ms Rees. I thank my hon. Friend the Member for Easington (Grahame Morris) for securing the debate.
If anything proves how broken the current economic model is, it is the extent of in-work poverty—it does just that. I have listened carefully to the remarks from Government Members. You would not think, Ms Rees, that they have been in power for 12 years. The hon. Member for Darlington (Peter Gibson) talks about work being the best route out of poverty. Are cleaners not entitled to a decent wage? Are security staff who keep our hospital staff and patients safe not entitled to a dignified life? Are care workers not entitled to the decency of a wage that they can live on? Are the shopworkers who we applauded not entitled to be able to make ends meet? Or have people got to leave those jobs and get “better” ones? What an indictment it is on this Government that they say such a thing.
It is a fact that one in six working families is now in poverty—a record high. It puts paid to all the Tories’ boasts of job creation when the jobs that they are creating still confine people to destitution. The latest employment figures, published by the ONS yesterday, show that real wages dropped by 1.5% over the past year. That is the worst fall in real pay for eight years.
This is clearly a situation that the Government are actively pursuing. The motion they passed last month—effectively cutting pensions and social security payments by 3% to 4% in real terms—along with their slashing of the universal credit uplift, the rise of the energy price cap and the increase in national insurance contributions all point to the simple conclusion that this Government are knowingly pushing more and more families into circumstances where they have to choose between staying warm and putting food on the table.
Just as with the coalition Government’s austerity programme after the financial crash, we hear from this Tory Government that it is those in most need who will have to bear the biggest brunt of the fallout of the covid crisis, and now the illegal and atrocious Russian invasion of Ukraine. The Government’s argument is that the cost of living crisis is a sacrifice that must be made to oppose Putin’s actions—it is nonsense and must be called out. Poverty is a political choice, and the Government are choosing for that sacrifice to be made by working people instead of the wealthy. In fact, despite the ongoing crises, billionaires have never had it so good.
Grahame Morris
Would my hon. Friend comment on the level of profits being generated by the energy distribution companies for gas and electricity, and what alternatives there are in windfall taxes on those companies?
Andy McDonald
My hon. Friend makes a pertinent point. Those transmission companies are enjoying a scandalous rise in profits; if ever a case was made for public ownership of the transmission of energy, that is it. The time is absolutely now.
There are also a number of longstanding factors that have caused the spiralling levels of in-work poverty. Above all is the fact that the so-called national living wage of £8.91 an hour is significantly below a wage that people can actually survive on. I have said it time and again: we need to raise the minimum wage to a level that allows people to live fully flourishing lives, not just get by. The planned rise to £9.50 an hour next month simply will not cut it. In the midst of a cost of living crisis, with inflation soaring, the national minimum wage is nothing but a poverty wage. The time is right for a £15 an hour minimum wage—in fact, it is way overdue.
Different categories of workers are going to work with different types of employment rights. We need to consolidate those categories into a single status of worker so that people have the same full employment rights from day one. I am pleased to have introduced to this House the Status of Workers Bill, which was guided through the other place by my noble Friend Lord Hendy. I implore the Minister to allow the Bill the necessary time to pass through this House, so that it can make the fundamental change to workers’ rights that could do so much to turn the tide of in-work poverty.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to see a friend of the worker in the Chair, Ms Rees. I thank my good friend and comrade the hon. Member for Easington (Grahame Morris) for making an excellent speech to kick off the debate. The contributions—with the possible exception of one—have been very impressive indeed.
I want to make a number of points. First, in-work poverty and inadequate living standards remain the norm for far too many people on these islands. We urge the UK Government to look at the minimum wage rates in the country. They need to not only amend the definition of a worker, but go further by strengthening protection for workers.
The UK is experiencing the highest levels of in-work poverty this century, which disproportionately impacts groups facing high living costs, such as lone parents—the majority of whom are women—disabled people and people with caring responsibilities. The Joseph Rowntree Foundation report that was mentioned earlier shows that around two thirds—the actual figure is 68%—of working-age adults in poverty in the UK live in a household where at least one adult is in work. The figure has never been higher since records began in 1996, so we now have the highest ever levels of in-work poverty. For too many people, low-paid jobs offer no opportunities to progress to better work and better wages, and far too many people are in insecure work with unpredictable hours and incomes, which is something that I want to touch on. That is, of course, in stark contrast to the situation in Scotland.
Grahame Morris
The hon. Member is making some excellent points, but I wonder what impact the Government’s decision to close jobcentres will have on constituencies such as mine and perhaps 60 others. What impact will that have on alleviating in-work poverty and on encouraging people who are out of work into paid employment?
Chris Stephens
It will increase in-work poverty. As the hon. Gentleman will know, the Government tried to close half the jobcentres in the city of Glasgow. People there are having to spend more money and go further in order to get to a jobcentre to see whether they can get better work.
As we have a Minister from the Department for Work and Pensions in front of us, I want to point out that a number of people claiming universal credit are in work. We have a situation—the Minister responded to a written question on this issue—whereby half of DWP claimants have their universal credit claims deducted. I would argue that that is a poverty tax. In some cases, £60 a month is taken away from someone’s universal credit claim. Universal credit is supposed to be a subsistence benefit that is paid at a rate that people can live on. If we take £60 a month away from them, people have to choose whether to heat or eat. That really needs to end. Advances need to be replaced by an up-front grant or a starter payment, as we argued on the Work and Pensions Committee. The recovery of tax credits needs to be at a lower level, and I would say that debts of more than six years should be written off entirely. There are a number of lawyers in the Chamber and they know that if I try to sue them for a debt that is over six years old, a sheriff in a Scottish court would write that off and absolve the debt.
I also want the Minister to respond to a point that I made earlier during my intervention on the hon. Member for Easington. In the jobs advertisements on the DWP website, 31% of full-time jobs and 50% of parti-time jobs pay less than the real living wage of £9.90 an hour. Some 20% are advertised as paying less than the national living wage of £9.50. I will give three examples: Burger King pays £6 an hour, Pizza Express £6.56 an hour, and Farmfoods £6.66 an hour. None of the adverts clarifies wage rates for different ages, and all the companies have made substantial profits in the last year or two, so increasing the wage rates and asking them to pay more certainly would not harm those businesses all that much. I am talking about multinational companies, and I would like to know what the DWP is going to do about the adverts. Will it refer itself to the national minimum wage compliance unit, which has a number of vacancies? Perhaps we can advertise those jobs on the DWP website.
I want to touch on what my hon. Friend the Member for Glasgow East (David Linden) said about discrimination in the national minimum wage rates, because he is absolutely right. There is a nonsensical argument that somehow young people are not active participants in the labour market. If Burger King has a 17-year-old next to a 37-year-old and they are both flipping hamburgers, they are equal participants in the labour market and should be paid the same rate for doing the same work. That is what I call equal pay. The equal pay legislation always encourages people to get the same rate for the same job, the same work.
What would happen if we increased wages? People would spend money. A false argument is also made about public sector pay—that somehow it takes money out of the economy. But that is not how it works. When people get a wage increase, they do not put it in a shoebox and hide it under bed; they go out and spend it in the economy. It means that they can afford things that they could not afford before, so they spend more on food and other items.
To touch on the contribution of the hon. Member for Middlesbrough (Andy McDonald)—I support his Bill and I know that he supports my Workers (Definition and Rights) Bill—there needs to be a definition of “worker”, so that we can strengthen workers’ rights. For four years the Government have been sitting on the Taylor report, which sought to address the issues, but at the last Queen’s Speech we were told that it was no longer a priority for them. That is scandalous. We need to take a real look at protection for workers and at eliminating zero-hours and other unfair contracts.
Employers are currently able to text four people to say, “The first one here gets the shift.” That has to end. People phone taxis and run out of the house to get there first, spending money as they do so, only to end up as the runner-up and get nothing. That is completely and utterly scandalous. I have included that in my Bill, because we need to address it. We also need to look at flexible working and at strengthening parental, neonatal and miscarriage leave for workers.
SNP MPs have consistently sought to strengthen workers’ rights and have promoted Bills to do so. I commend the Bakers, Food and Allied Workers Union for its Right to Food campaign. I will welcome that in Glasgow, because it has identified Glasgow South West as one of the constituencies in which it wants to do work. There is much that the Government need to do to address in-work poverty, before it gets even worse.
Alison McGovern (Wirral South) (Lab)
It is a pleasure, as ever, to serve under your chairship, Ms Rees.
I thank my hon. Friend the Member for Easington (Grahame Morris) for, and congratulate him on, securing this debate in Westminster Hall. The passionate contributions from all, particularly Opposition Members, have made it clear that this is a crucial discussion. At the heart of the debate is a simple truth: we all want to get on in life. Many of us know the feeling of receiving our first pay packet—that sense of finally releasing our parents from the stress of having to afford us and from that worry about money. There is a feeling of ease—not of great wealth, but of having enough—and that is what we want every person in our country to feel. With hard work, that should be available to all. The truth, however, as we heard in so many countless examples, is that that feeling is not available to everyone.
The hon. Member for Darlington (Peter Gibson) described the simple law of economics that a high number of vacancies increases wages. If that were the case, real wages ought to be shooting up, but they are not. The fact is that economics does not have simple laws—if it did, a lot of economists would be out of work.
Things do not work like that; they are much more problematic. This is the challenge: there is a rocketing number of vacancies, but people are not able to get on in life. That is the problem. The Government themselves know that that is the case. They know we have a problem. They commissioned the in-work progression review by Ruby McGregor-Smith.
Peter Gibson
As a former employer of a substantial number of people in a very competitive industry, I frequently had to recruit people when demand was greater than the supply available. It was often the case that employers such as myself had to increase wages to make those jobs attractive and to bring people in from other employers. I was speaking from my own experience. Having spoken to employers in my own constituency who have vacancies, I know that they too are increasing their wages to attract people.
Alison McGovern
Perhaps the hon. Member could ask those other employers why real wages are not increasing, because that is what the data tells us is happening. Unfortunately, it turns out that the rules of supply and demand are not so simple when an economy has as many problems as those experienced in Britain.
The Government themselves—the hon. Member’s own Government—know that this is a problem. They know that people are stuck in low pay, because they got Ruby McGregor-Smith to investigate and ask why people are simply not able to get on in life, earn a better pay packet and look after their family. She found that there were myriad issues with the cost of childcare and transport, and that people are unable to get the right skills to move on and move up. In certain professions, including care, a culture of low pay means that people are not able to move on and get a well-paid job to look after themselves and their family.
Last February, the Secretary of State told me that she was the reason that the response to Ruby McGregor-Smith’s report was being held up. My first question for the Minister is: when will the Government respond to that report? When will practical steps be taken to help working people get better pay? As the review found, there are myriad reasons why it is not a simple matter of supply and demand. It also showed that single parents have only so many hours in a day, and that if someone lives in a town whose bus service is so chronically bad that it limits their job choices, it is not their fault that they cannot get a better paid job. We need the Government to reply to that report.
My second question to the Minister is time-sensitive. Working people are facing a national insurance rise. If ever there were a time for such a tax rise, it is not now. People are dealing with truly horrific increases in energy bills and other costs. The Government really must rethink this. I want to quote an organisation that has spoken on this issue and on the underlying reason why this tax increase on workers is being brough about. It said:
“There is a large, unjustified and problematic bias against employment and labour incomes”.
That quote comes not from Marxism Today, but from the Institute for Fiscal Studies. The Government must rethink their whole approach to working people and how we make sure that people have decent pay.
To conclude, I want to come back to the point made by the hon. Member for Darlington about the iron law. As I have said to him on several occasions, it is not a matter of simple supply and demand. We only need to look around the economy today in Britain to realise that we can have rocketing vacancies while real pay does not go up. That is what is happening now. I ask myself what could possibly have gone wrong. The economics textbooks say it should work. What could have possibly gotten in the way of working people and a decent income?
Since 2010, the Tories have done the following: presided over a massive increase in zero and short-hours contracts; overseen a pandemic of low pay in key professions such as social care, which has driven chronic staff shortages; put charges on employment tribunals, so that working people find it much harder to get their rights confirmed; put roadblocks and bans in the way of trade unions, so that organising is harder; got rid of Unionlearn, which helped many working people get on; and overseen a labour market with a skills crisis and in which 20% of people have to work below their skill level, making it impossible for them to get on.
Rishi Sunak has put taxes up more times in two years than Gordon Brown did in 10 years, and he is landing working people with a devastating tax rise at the worst possible time. We have seen child poverty rise and food bank use explode, and 1 million experienced destitution in 2019. That is the problem. It has been a decade of doom for people trying to get on in life—a Labour Government is required.
The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)
It is an honour to serve with you in the Chair, Ms Rees. I congratulate the hon. Member for Easington (Grahame Morris) on securing the debate. I recall having had a similar debate with a similar cast list recently, so some of the arguments are familiar but some have been amplified. I take all of them seriously and will endeavour to answer some of the questions. No doubt others will be addressed separately, but I look forward to responding to them. Like the hon. Member, who is very kind, I wish the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Mid Sussex (Mims Davies) a speedy recovery and return to good health. She would have been keen to be here had she had been able to.
Prior to this debate, I had just come out of a meeting with Communities that Work, a group of housing associations that help people into work and to progress in employment. I am grateful for the work it is doing. One of the participants was Helen Johnson, a livin futures manager at Livin Housing in the north-east, who is doing great work in Country Durham. Despite party political differences and different views on policy, we can all applaud the work those people are doing to help literally thousands of people—in this case, tenants—to achieve their potential in employment opportunities. I congratulate them on that work. All hon. Members present want to see everybody have the opportunity to progress in work, improve their earnings and realise their potential.
Andy McDonald
We hear with unerring regularity the mantra that the only way for someone to progress and live a good and flourishing life is to progress out of their current job. It will then be occupied by somebody else, who will be paid a low wage. Where is the dignity or decency in that philosophy, which does not have regard for the people doing the key jobs we applauded all the way through the pandemic?
David Rutley
I understand the hon. Member’s point, and that is why we have taken steps in that direction. I was going to come on to that in my speech, but I will come to it now. The national living wage, which we have already talked about, is projected to increase to £10, and other steps are being taken. [Interruption.] If the hon. Member for Easington would have the courtesy to let me respond. He raised that question earlier in the debate. Another important point is that policies, such as the increase in work allowances and the reduction in the taper rate for people on universal credit, are helping people in work to progress, do better and flourish.
We have already seen the creation of exiting job opportunities in the north-east, including through the industrial zone at the UK’s largest freeport, Teesworks, which is expected to create 20,000 jobs. Many of them are in green energy, establishing literally a green industry revolution in a region that many hon. Members participating in the debate represent. We should not forget that 6,000 jobs will be created as a result of Nissan’s plans for the UK’s first large-scale battery factory, as part of a £1 billion electric vehicle hub in Sunderland. That is alongside Stockton being on the frontline in the battle against covid, with the Novavax vaccine being made in Billingham later this year.
Opportunities abound in the north-east. Of course, we need to go further. I am disappointed that we are not hearing about these opportunities. So often we recognise that there are challenges, but there are also opportunities, and this Government are working hard to create them.
David Rutley
I would not dream of not giving way to the hon. Member, because she is always so polite with her questions.
Patricia Gibson
I want to press the Minister on something that has been in my inbox—in all of our inboxes, I am sure—in the last few weeks. One of the big outlays for people who are in work and suffering is the cost of petrol or diesel to get to work. We pay 58p per litre in fuel duty and 20% VAT on that—it is a tax on a tax. The Minister will know that the cost of petrol drives up the cost of goods and services across the whole economy, and that drives up and feeds inflation. Does he agree that if we cut the tax on petrol, we can stop inflation driving up into double digits?
David Rutley
I understand the point that the hon. Lady makes; she makes it well and she makes it long. Perhaps we could do an Adjournment debate on the subject later. I recognise her point—I was trying to bring in a bit of humour there. With the fuel duty freeze that has been put in place we have been able to keep that cap over time. I recognise that we are in challenging circumstances; that is why the Chancellor has put in place a three-point plan. We have £20 billion set out in this financial year that is designed to help vulnerable people facing challenges and to deal with rising energy costs, £9 billion of which goes to the Chancellor’s three-point plan. We are doing substantial work to try and address those challenges, and we will continue to review the situation. As hon. Members will appreciate, throughout the pandemic we looked at what the challenges were and we responded. We responded well in the Department I work in—universal credit was particularly resilient.
I want to address the questions raised during the debate. The hon. Member for Glasgow South West (Chris Stephens)—a good man who understands a lot of those matters—asked about jobs being advertised on the DWP website. They go through a process and are checked to make sure that they are at the minimum wage or above—there are obviously some exceptions. If he has further information on that, I will gladly follow up because I know he takes the issue very seriously.
Chris Stephens
I will send the Minister the articles from The Ferret website and The Herald, which found 10,000 such jobs in Scotland alone. Does that not suggest that there is a problem?
David Rutley
I will take a look at the hon. Gentleman’s point. I am not familiar with all those issues, but he knows that I will follow that up.
Other points were raised about the health and social care levy, the purpose of which is to deal with backlogs in the NHS and the future costs of social care. Those with the broadest shoulders will rightly pick up the bulk of the cost, with the highest earning 14% paying around half of the revenues.
The hon. Member for Glasgow East (David Linden), who is no longer in the Chamber, spoke about statutory sick pay. That is just one part of our welfare safety net and the wider Government offer of support for people in times of need. As we move on from the pandemic, the Government are continuing to take a broader look at the role of SSP—we are keeping the system under review.
The hon. Member for Strangford (Jim Shannon) always contributes well in these debates; I hope I have addressed some of his points about energy costs. We will continue to take a look at those issues.
The hon. Member for Middlesbrough (Andy McDonald) was concerned about uprating, but we have followed the time-worn process of looking at inflation in the year to September. All benefit ratings since April 1987 have been done on that basis; the Opposition could have changed that approach when they were in Government. However, in recognition of the challenges we face, we have a £20 billion package of support this year to help people.
The hon. Member for Glasgow South West also talked about deductions. I remind colleagues that we have put a spotlight on dedications, and we have reduced the maximum amount from 40% to 25%.
Chris Stephens
Will the Minister look at the issue of pursuing debts that are over six years old? It seems a nonsense that we still pursue people who have had a debt for longer than that period, and then taking a deduction.
David Rutley
I understand the hon. Gentleman’s point, but as a member of the Work and Pensions Committee he will also realise that we are experiencing record levels of fraud, and we are absolutely determined to bear down on that. We need to get the balance right, because it is taxpayers’ money that we are talking about.
Alison McGovern
Just to remind the Minister, when will the Government respond to the in-work progression report?
David Rutley
Of course, we recognise that we need to do more on in-work progression. The hon. Member is right to highlight that and we will respond shortly, and the response will be important. We are already taking action in this area, and I did not focus on that today because it was focused on in a previous debate. The hon. Member for North Ayrshire and Arran (Patricia Gibson) wanted to know what we were doing differently on progression, and I confirmed then and confirm now that we are working to put in place progression champions across the country who will make connections between employers, local authorities and skills providers and help more people to progress in work, which all of us across this Chamber want to achieve.
I believe passionately that we need to help people to see the opportunities before them and realise their potential. The plan for jobs helps people into work and also provides lots of mechanisms to enable people to progress in work. The progression work coaches will be a vital tool to help with that agenda. We know there is more to be done, and we are working hard to deliver on it.
Grahame Morris
I thank everyone who has participated in the debate. I particularly thank the Minister for his courteous responses to the points put by Labour Members, and I thank the hon. Members for Darlington (Peter Gibson) and for Runnymede and Weybridge (Dr Spencer), who made some excellent points. I thank my hon. Friends the Members for Leeds East (Richard Burgon), for Wirral West (Margaret Greenwood), for Salford and Eccles (Rebecca Long Bailey), for Bolton South East (Yasmin Qureshi), for Middlesbrough (Andy McDonald) and for Wirral South (Alison McGovern). I also thank the hon. Members for North Ayrshire and Arran (Patricia Gibson), for East Lothian (Kenny MacAskill), for Glasgow East (David Linden), for Strangford (Jim Shannon) and for Glasgow South West (Chris Stephens).
Some really good points have been put forward as a critique of existing policies in relation to a raft of things that I hope the Minister has taken note of. We look forward to such issues being addressed in the spring statement.
I conclude by saying that there are young people across this country subsisting on poverty pay with little hope or prospect of home ownership or a decent pension. They are crippled by student debt and long for a standard of living above the breadline. We look to the Government to come up with policies to address that. If the Minister and his colleagues cannot, there are people willing and waiting to take up that challenge.
Question put and agreed to.
Resolved,
That this House has considered in-work poverty.