Poverty in Liverpool

Debate between Dan Carden and Justin Tomlinson

Wednesday 24th October 2018 Westminster Hall

[Dan Carden (Liverpool, Walton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on her excellent speech; she set out everything that the city faces, from cuts to local authorities, the hostile environment on benefits and the personal experiences that we come across in our surgeries every week, as well as the evidence in report after report. The Government seem determined to turn a blind eye to those reports and doubt their veracity, and I find it shocking when the Minister shakes his head, when we see such experiences every day.

[The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)]

I was not shaking my head.

[Dan Carden]

You were during my hon. Friend’s speech. The experiences I am talking about are things we see every day in Liverpool.

I was elected for the first time last year, to represent a Liverpool constituency, and it is an incredible privilege. When I am asked what the biggest issue facing my constituency is, I say poverty—and it is, because that is the critical issue affecting people, in their long-term health, educational outcomes, job opportunities, living standards and mental health. Most of all, it affects their sense of self-worth. That is the most hurtful part of seeing the decline in our communities. As my hon. Friends have done, it is right to put on the record how proud Scousers are, and how strong our communities are. That is shown by the work that our community centres and food banks do day in, day out. Liverpool is an astonishing city that is doing well in many respects.

This debate set me thinking about what poverty is, and what we are talking about today. If we look back in history, we see different types of poverty. I have seen individuals fall into poverty—people can lose a job, be moved on, and then perhaps another job appears, and during that time, trade unions and charities may help out. Families also fall into poverty. My family was affected by unemployment. My dad was unemployed for seven years, and sometimes it felt as if we did not have much money when we were growing up. Nevertheless, we had a family unit, we had a community and we had support. We still had good schools and public services, the local authority did its bit, and there were youth facilities. Today we are talking about whole communities being pushed into poverty while the safety net is withdrawn from the bottom.

Poverty is man-made. It does not exist in a vacuum; it is the result of decisions made by the powerful. No one person is responsible for their own poverty. Austerity is and has been a political choice, not an economic necessity. Since 2010 this Government have handed out an eye-watering £110 billion in tax giveaways for the biggest corporations and the super-rich, paid for by devastating cuts to wages, living standards and essential public services for the rest. They have starved our schools of funding—something they deny—taken police off our streets, including 1,000 from Merseyside Police, and left our NHS and social care in crisis.

Not only have the cuts themselves been political, but so too has their distribution. New research from the University of Cambridge shows that post-industrial cities in the north of England have been hit by the deepest cuts to local government spending and that, on average, Labour councils have been hit four times harder than Tory councils. Few places have been hit harder than Liverpool, with the staggering 64% cut to local authority funding that we have heard about. Conservative Members tell us not to fear because the Prime Minister announced at the Tory party conference that austerity is over. Leaving aside the fact that we have heard such empty rhetoric three times before, I assure the Minister that the reality on the streets of Walton and across Liverpool tells a different story as austerity rolls on, piling misery on our communities.

We have already heard many of the statistics, so I will not repeat them all. Average wages in Liverpool are £11,000 below the national average, and 40% of children in my constituency are growing up in poverty. Liverpool is now classed as having the second-highest levels of destitution of any city in the UK. On top of that, this Government now heap universal credit—a policy so fundamentally flawed that it has become an exemplar of institutional incompetence. [Interruption.] I think I heard the Minister tut, but this is being played out on our streets, and we see the evidence in report after report. Perhaps he will respond to some of the points raised today, including the Trussell Trust’s report, which states that demand for food banks has soared by 52% in areas of universal credit roll-out, compared with 13% in other areas.

Housing associations, letting agents and private landlords have told me that tenants are falling into rent arrears in areas such as Bootle and elsewhere where the roll-out has gone ahead, and that evictions will increase. The calamitous roll-out in my constituency comes right before Christmas, and my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) was right to call for it to be delayed, at least until after the Christmas month, when we know it will cause increased hardship. The figures are stark, but they do not do justice to the human misery that I already deal with in my casework under the existing benefits system.

Under this Conservative Government, we are being hurtled backwards to bygone days, reminiscent of when it was a crime to be poor. The Government’s welfare reforms have seen hundreds of millions of pounds sucked out of Liverpool’s local economy. The benefit freeze—in reality it is not a “freeze” but a real-terms cut for millions of low-income families—has meant a loss of £45 million for households in Liverpool. We have heard about the cumulative effect of such cuts.

Given the pressures, some people have to give up employment to care for elderly relatives. A scaffolder came to my constituency office and explained that he has had to give up good, well-paid employment because the care is not there for his elderly mother. We have heard how the local authority already has to act as a sticking plaster, which shows that the current benefits system is failing. I want to congratulate the Mayor and the local authority on their work.

Next week the Chancellor will reveal the Government’s Budget, and we will no doubt have a debate about economic growth and the fudging of figures to mask deep systemic problems in our economy. Not only have we seen the worst decade for wages in centuries, but the UK is the only advanced economy in which wages have continued to fall, even when the economy is growing. That is because of a decades-long trend of the share of gains from growth going increasingly towards profit, not wages. More and more economists tell us the blindingly obvious: having money from economic growth flow to working people and the poor rather than to the rich would stimulate better rates of economic growth and lower unemployment. As income inequality increases, the potential for economic growth is constrained. Since the 1970s, while productivity and the economy kept growing, the average worker’s pay package did not. The Financial Times has stated that since 2007,

“the UK was the only big advanced economy in which wages contracted while the economy expanded. In most other countries, including France and Germany, both the economy and wages have grown…The UK sits on its own as a rich economy that experienced a strong economic performance while the real wages of its workers dropped.”

What does economic growth matter to my constituents if it does not even reach them?

We have heard reports that the Chancellor is considering bringing back regional pay in the Budget in order to deny pay rises to our constituents on a national pay scale. Can the Minister tell us anything about that, and can I urge him to feed back that it would be an absolute disaster for the regions of the country if the Chancellor were to go anywhere near the idea?

The Government’s cuts have not tackled the deficit; they have shifted it on to local authorities and public services, plunging them into crisis, while starving our economy of the patient, long-term investment it needs to thrive. The problems are so stark that the solutions must be radical. The people of Liverpool do not need piecemeal change; they need something much bigger. That is why the next Labour Government will not be satisfied with tinkering around the edges of a rigged economy; they will transform our economy so that it works in the interests of the ordinary people I represent.