Food Banks (Wales)

Albert Owen Excerpts

Tuesday 12th February 2013 Westminster Hall

[Kevin Brennan]

The hon. Gentleman is absolutely right, and I am aware of that fact, but he will find that families spend their money on things that do attract VAT, which has a direct impact on their disposable income and, therefore, on their ability to buy food.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate my hon. Friend on securing this important debate. Visitors to food banks in my constituency tell me that, because they are paying VAT on other things, particularly on peripheral items such as fuel, they have less money to spend on food. That is the reason why they come into food banks for the first time. Those people are in work and often work long hours.

[Kevin Brennan]

Yes, indeed. That is a continuing process. The consumer prices index figures were released today. CPI is 2.7%, which is 1.2 percentage points above rises in income for people in work. There is an impact on everyone, including people in work. As we know, as VAT is a regressive tax, it has the greatest impact on those on the lowest incomes. Also, because their marginal propensity to consume is much higher than that of people on higher incomes, VAT is a particularly hard tax on them.

Some 90% of the food in food banks is donated, mainly by the public via supermarkets, Churches, community centres, schools and other organisations. I pay tribute to the efforts of food banks, many of which are run by the Trussell Trust, including the one in Ely in my constituency, which I have visited. They are intended as a crisis intervention for families in need. As I said in response to an intervention, the problem is not what food banks do but the scale on which they must now do it.

Food goes to distribution centres, where food bank volunteers gather, weigh, account for and issue the food. Food is issued only to recipients with vouchers, and vouchers are issued by front-line service officers trained in the assessment of need. Issuing organisations include, among others, citizens advice bureaux, Jobcentre Plus, GP surgeries, social services, housing officers and now, as I said earlier, Members of Parliament and, I suspect, Welsh Assembly Members, too.

A voucher gives just over three days’ worth of food, and vouchers are typically issued in batches of three. As we heard, the trust operates 23 food banks across Wales, nine of which opened in the last year, and four more are expected to open in Wales by Easter this year. There are now more than 270 food banks across the UK. In 2011, some 7,173 adults and 4,038 children in Wales used a food bank, and in 2012, the numbers rose to 18,721 adults and 10,328 children. The trust forecasts that the number of people relying on food banks in Wales will rise to 40,000 next year.

The trust collates information about the people using food banks. The consistent main reason cited for using a food bank, accounting for between 40% and 45% of usage, is benefit changes and delays in benefit payments. About one quarter of usage is accounted for by low-income families, and about one tenth by debt. As we have heard, food bank usage has exploded over the past two to three years. It is sad but typical that the Prime Minister recently tried to suggest that food banks expanded by a greater amount under the last Government than under this one; that abuse of statistics was skewered by Channel 4’s feature, “FactCheck”, which I recommend to hon. Members.

The trust forecasts that this year, 250,000 people across the UK will use a food bank. Hundreds of thousands of Welsh families face a cost of living crisis worsened by the Government’s policies, including welfare changes that are likely to make the crisis even worse. The Welfare Up-rating Bill alone will hit 400,000 low and middle-income households in Wales, including 170,000 families in Wales who currently receive working tax credits. It is estimated that 140,000 people in Wales will be worse off under the Government’s change to universal credit and 40,000 will be hit by the bedroom tax; I know that hon. Members are already getting a lot of traffic in their surgeries about that issue.

The Office for Budget Responsibility has shown that between 2010 and 2013, inflation will have risen by 16%, whereas average earnings will have risen by just half that, or 8%. The TUC estimates that four-year wage stagnation will cost the average worker £6,000. Wales has some of the highest energy bills in the UK, and more families are having to choose between heating and eating. As I said, the VAT hike alone added £450 a year to average household bills. Low economic growth has created fewer opportunities, and unemployment is forecast to rise in the next two years. Public sector job losses are forecast to reach 1 million by 2017. Meanwhile, in April, the Government will give more than 8,000 millionaires an average tax cut of £107,000, and the top 4,000 earners in Wales will benefit from a cut in the additional rate of income tax.

I have a few questions that I hope the Minister will answer in his response. What does he think best explains the explosion in food bank use in Wales? Is it the cost of living crisis facing Welsh families, or the notion that more people have suddenly decided that they want a bit of extra food, to quote No. 10? On the “Politics Show” this weekend, the Welsh Office Minister in the House of Lords, Baroness Randerson, said that the Government are reducing the deficit in the fairest possible way. What exactly is fair about the bedroom tax, which will hit 40,000 people in Wales while taxes are cut for millionaires? What impact does the Minister think the Welfare Up-rating Bill will have on the number of people in Wales relying on food banks? Has he made any estimate of that?

Does the Minister agree that the growing number of food banks in Wales is a symptom of the cost of living crisis facing Welsh families? Does he accept that the Government’s failure to get the economy moving is likely to have led more people to rely on food banks? What does he think the expansion of food bank usage in Wales and across the UK tells us about the success or otherwise of the Government’s policies? Does he think that the number of people in Wales who rely on food banks is likely to rise or fall over the next two years? I hope that he has made some estimate in preparation for this debate.

We never thought to see the return of the charity handout as a mass means of feeding the poor in Wales. Is the Minister proud of his Government’s big society, or ashamed of its small-minded demonisation of the poor?

--- Later in debate ---

[David T. C. Davies (Monmouth) (Con)]

First, I should like to deal with comments made to me directly by the hon. Member for Cardiff West (Kevin Brennan). I received an invitation to visit a food bank in Chepstow, but it was during the parliamentary week and I made it clear that I was unable to take a day off from here. I am more than happy to visit it at any time, however, and I hope that that will be arranged.

Of course there is poverty. There is poverty in Monmouthshire and in the whole of Wales. I spent many years in the Welsh Assembly making the point that there is a great deal of poverty in Monmouthshire, although that usually fell on deaf ears among Labour Members of the Welsh Assembly, who assured me, practically, that the place was full of millionaires, although it never has been and it certainly is not at the moment. There is a great deal of poverty in rural areas. I hope that matter will be addressed.

One of the most important things that can be done to address this matter is dealing with the completely unfair local government funding formula, brought about by the Welsh Assembly in about 2000, which has caused a catastrophic loss in income for local authorities, particularly those in rural areas. As the hon. Gentleman will no doubt be aware, the local government funding formula for Wales, introduced by a Labour Welsh Assembly Government in about 2000, does not take proper account of the costs of dealing with rurality or the extra costs involved when trying to deliver goods and services in rural areas, and it does not take proper account of the age of the population. Sadly, those who live longer are much more likely to incur costs on the local authority than those of us who are younger and in better health. If those two issues were addressed in the local government funding formula, it would go a long way towards stamping out poverty in parts of Wales, particularly in the rural areas. I hope that the hon. Gentleman joins me in campaigning against that disgraceful, unfair local government funding formula, which did so much to remove cash from rural areas of Wales.

[Albert Owen]

I am sure the hon. Gentleman will mention food banks in a moment. He has dealt with the local authorities, but will he not accept that those are under strain now because of the cuts that the Westminster Government have made to revenue and capital grants to local authorities?

[David T. C. Davies]

I will certainly come to it. I am jumping in rather quickly by not mentioning the 1930s and the Ramsay MacDonald Government, during which time my family were miners, but I wanted to start from 2000. The hon. Member for Ynys Môn (Albert Owen) knows that local authorities in Wales are funded by the Welsh Assembly, and its funding has remained in line with inflation.

[Albert Owen]

It has been cut.

[David T. C. Davies]

Well, one problem is that the Welsh Assembly has found it easy to raise money—taxation through the back door—by reducing the amount of money, proportionately, that it gives to local authorities throughout Wales and expecting them to raise the difference in council tax. The hon. Gentleman will know how the gearing effect works: a small cut in the amount given to the local authority by the Welsh Assembly will result in a much larger increase, proportionately, in council tax to make up the difference.

The hon. Member for Cardiff West mentioned the 50% tax cut for millionaires, a great line that he repeated a number of times. Of course, this came about because Governments of left and right since the 1980s, across the whole world, have accepted—