Amendment of the Law

Alex Cunningham Excerpts

Thursday 19th March 2015 Commons Chamber

[Vince Cable]

It depends entirely on how we look at the combination of tax and tax credit. The simple point is that the top quintile—the top 20%—has paid four times as much in deficit reduction as the group to which the right hon. Gentleman referred.

[Alex Cunningham (Stockton North) (Lab)]

Of course, the poorest in our society are the people who are on benefits. The Chief Secretary to the Treasury has ruled out support for the £12 billion of cuts to the welfare budget, which would make income inequality even greater for the poorest people in our society. If the Secretary of State does not support those cuts, what cuts does he support to fill the gap?

[Vince Cable]

Let me deal with one of the points of righteous indignation that is made about welfare cuts—the point about the so-called bedroom tax. The problem with it is that the idea of relating housing benefit to the size of accommodation did not start under this Government; it was a long-standing policy in relation to people in private rented accommodation. Where we have disagreed with our Conservative colleagues—we have made this explicit—is in saying that the so-called bedroom tax should not apply retrospectively. If people are given an offer of accommodation in the council house sector and they turn it down, they should pay it, but if they do not receive a satisfactory offer, they should not. That is a point of difference. The sheer righteous indignation bears absolutely no relation to the history of this problem.

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[Alex Cunningham (Stockton North) (Lab)]

I worry about the poorest people in society, including the working poor, in places such as Stockton-on-Tees, because this outgoing Government have failed, even at the last opportunity, to do anything to help them. The Government have done nothing to boost their incomes or provide them with the jobs they would love to have. The Budget will bring no benefit to tens of thousands of people across Teesside, and more across the country, who hold low-paid jobs, with wages of no more than £5,000 or £6,000 a year. While the Chancellor maintains huge tax cuts for millionaires and increases tax-free allowances for people paying higher-rate tax, very few low-paid workers gain anything from changes to the tax system. These people can only dream about saving some money.

This is another Budget for the better off to be better off still and the poor to be poorer. The Chancellor even failed to deliver the promised minimum wage of £7 an hour—Labour will do much better. In his very first Budget speech, the Chancellor pledged that under his economic management the coalition Government would build

“an economy where prosperity is shared among all sections of society and all parts of the country.”—[Official Report, 22 June 2010; Vol. 512, c. 167.]

Many of the people I represent have not benefited from even the low inflation rate. Instead they have been stung by above-inflation increases in the cost of things such as energy and other utility bills. The Chancellor might be in it with his rich pals from the hedge funds who bankroll the Tory party, but I do not see much evidence on Teesside of everyone sharing in that prosperity.

Perhaps more worryingly, we have seen the repeated pattern of the poorest being hit the hardest, and nowhere are the effects of this more starkly illustrated than in the jobs market. For too long, unemployment has been higher in the north-east than anywhere else in the UK and that has been the case in every quarter since April to June 2011. Hon. Members will not be surprised to learn, then, that the claimant count in the north-east is also the highest in the country, and in my constituency the numbers are higher still. The 4.1% we have claiming support related to unemployment is more than three times higher than the rate in the south-east, and almost seven times higher than the rate in the Chancellor’s seat in Tatton.

Are Government figures an honest reflection of the numbers of people who ceased claiming this allowance? They are not. According to research by the House of Commons Library, of those who have ceased claiming jobseeker’s allowance in my constituency, only just over one third did so because they had found work. Conversely, more than half were recorded as doing it “for other reasons”. Not a single person has done so as a result of upping their hours to more than 16 a week. So, where have they gone? We know that they do not have jobs. Although a few may have gone abroad, into education, or even died, that has not happened to the hundreds of people who have disappeared from the Government’s statistics.

It is also a sad fact that too many people feel insecure and powerless at work. Record numbers of people are working fewer hours than they would like, and there is an increasing reliance on zero-hours contracts. The result is that more people worry about having enough money to pay their way. More than 5 million people are in low-paid jobs, while a quarter of a million people earn below the national minimum wage.

[Meg Hillier]

My hon. Friend sums up the challenges well. People may be in jobs, but what is the quality of those jobs and what prospects do they have? Does he agree that that is an issue not just in his constituency but in many other constituencies, including mine?

[Alex Cunningham]

Certainly, it is an issue across the entire country. I hear from people who are told at 6 o’clock in the morning that they are required for work, or, worse still, that they are not required for work. That is nonsense. What surety of income does that give them as they go into the week ahead?

The value of the national minimum wage has dropped by 5% since 2010, which is why the amount spent on in-work benefits and tax credits has risen 18%. Why cannot this outgoing Government recognise that people want to earn their money and look after their families rather than exist in a dead end, low-paid role that leaves them dependent on the state? What of those who, through no fault of their own, are dependent on the state? I fear what the Chancellor is planning to do to them next. Why is the Chancellor so coy about spelling out where the £12 billion cut in welfare spending will fall? Is it because he knows that decent people will baulk at his plans to devalue further the incomes of our most vulnerable?

Has the Minister seen the report that came overnight from Herriot-Watt university for Centrepoint, which shows that more young people will be homeless as a result of Government policies, and that many in work could lose their jobs if their housing benefit is removed and they are forced to return to live with their parents? We should not forget that this Government’s policies have seen these young people shoulder a disproportionate share of austerity and its worst effects.

[Karl Turner (Kingston upon Hull East) (Lab)]

Before my hon. Friend moves on, will he estimate the number of people in his constituency who are living with their parents because they are unable to buy their own home? How many of them could afford to save £200 to get the advantage of the individual savings account?

[Alex Cunningham]

I may not have the exact statistics, but I do know that large numbers of young people are in such a position. When I go to local colleges, I hear the anxieties of young people. They say that they want to live independent lives, go to university, and develop their plan for their own home, but they cannot do any of that.

The education maintenance allowance has been removed, support from the access to learning fund and student opportunity fund has been cut, housing benefit for under-25s has been reduced, higher education tuition fees have been trebled, and careers services have been slashed. On top of that, youth services have been hit by funding cuts of £60 million since 2012. I saw nothing in the Budget to address those issues, just a prediction of many more cuts to come.

In the north-east, 11 of the 12 councils suffered higher than average reductions in spending power for 2014-15 along with a 5% funding reduction. That is 10 times higher than cuts in the south-east, and almost four times higher in percentage terms. Our front-line emergency services are suffering more than most, too. It is no secret that A and E departments up and down the country are having a torrid time as a result of this Government’s wanton neglect of the NHS. We have £3 billion wasted on a reorganisation that has increased bureaucracy and allowed confusion to reign; fewer nurses than in 2010; and a GP work force in crisis. But much less well publicised has been the net loss of 293 officers from Cleveland police force since 2010, with more to go as the police and crime commissioner faces another 5.1% budget cut. Cleveland police are £35 million worse off than they were in 2010-11.

That picture is repeated in the fire service, with many brigades struggling to budget for the coming year while having to maintain confidence in the speed and efficiency of their emergency response services. Despite being a centre for the petrochemicals industry and posing one of the biggest fire risks in Europe, Cleveland is facing one of the biggest hits to its spending, with additional cuts this year of 10.4%.

Would the Chancellor still have the temerity to suggest that the quality of public services has gone up, not down, if he could see that services such as Cleveland are having to replace trained, full-time firefighters with retained firefighters just to make ends meet? Would he also do so if he knew that his cuts had spurred the service to close the marine fire station at the centre of our industrial complex?

Energy intensive industries form a large part of the economy on Teesside and across the north-east. The Chancellor mentioned the steel and chemical industries, but he has done little to help them. Although it was announced that the feed-in tariff element of renewable compensation for energy intensive industries will be brought forward to the point of state aid approval, renewables obligation compensation will not be introduced until 2016. That means yet another year of struggling in highly competitive global markets against international competition, which has more favourable conditions, thereby risking jobs and growth in Teesside, as companies are undercut and the jobs moved elsewhere.

With energy prices being business critical, it is possible for these industries to operate only in countries with competitive prices. If we continue in that manner, the UK will fall off the list, and it is areas such as Teesside and the north-east that will again be hit the hardest. That represents yet another missed opportunity to stimulate growth and create jobs.

With working people worse off than they were in 2010, millionaires receiving tax cuts while VAT has been bumped up to 20%, public services being decimated and front-line emergency services slashed, and at the same time that employment is insecure and those on low pay are struggling just to make ends meet, it is little wonder that people in the north-east, and indeed across the country, feel no connection at all with the two parties in government.

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[Andrea Leadsom]

The right hon. Gentleman will realise that I have just quoted Paul Johnson of the IFS. I stand by what the IFS has said, which is that, from 2010 to 2015, the average household is £900 better off.

My right hon. Friend the Member for Boston and Skegness (Mark Simmonds) welcomed the fall in unemployment, the many who have been taken out of tax, and the fuel duty freeze, which has been great for his constituents. My hon. Friend the Member for Dudley South (Chris Kelly) spoke about the fact that Dudley is full of hard-working people, and said how our support for businesses has helped them. He will certainly be missed in this place.

The hon. Member for Luton North (Kelvin Hopkins) criticised many of the coalition’s cuts but did not say how he would sort out the huge financial mess left by the Labour party in 2010. My hon. Friend the Member for North Warwickshire (Dan Byles) gave impressive figures for improvements in his constituency, not just to the local economy but also to local public services. As he pointed out, a strong economy means that we can pay for excellent public services. I wish him every success in his career when he leaves this place.

The hon. Member for Clwyd South (Susan Elan Jones) welcomed the increase in personal allowances and the rise in gift aid for charity cash collections. I join her in congratulating Giggles and Games in her constituency on its prize for a thriving business. My hon. Friend the Member for South Norfolk (Mr Bacon) raised the important issue of housing. He welcomed the Budget creating 20 housing zones, and made important suggestions about the need to improve housing supply, including through self-build. The hon. Member for Hackney South and Shoreditch (Meg Hillier) talked about problems of poverty in her constituency, but acknowledged that the route out of poverty is work. She should welcome the fact that the total claimant count in her constituency is down by 39% since 2010. She also raised the issue of real-time data for credit reference agencies. The FCA is continuing to focus on achieving real-time data sharing, and significant progress is being made.

My hon. Friend the Member for Brentford and Isleworth (Mary Macleod) pointed out the economic benefits to her constituency of regeneration and making work pay, as well as the business rate reliefs for her high street and support for the creative industries. She highlights the urgent need for faster broadband and more new housing, and I agree with her about that. The hon. Member for Stockton North (Alex Cunningham) challenged the quality of the jobs available, so I am sure he will be pleased to know that since Q1 2010, more than 70% of the increase in employment has come from full-time workers, two thirds of whom have been in high-skilled occupations, and that the claimant count in his constituency is down by 25% since May 2010.

[Alex Cunningham]

I welcome any jobs that are created in my constituency, but the statistics I referred to showed that hundreds of people have disappeared from the jobseeker’s allowance lists. Nobody knows where they have gone and whether they have died, left the country or something else. Is there any explanation for where those hundreds of people missing from the JSA lists have gone?

[Andrea Leadsom]

That is an extremely interesting question and the hon. Gentleman may well want to follow it up as the representative for his constituency. It is not something that I can answer at the Dispatch Box.

My hon. Friend the Member for Ealing Central and Acton (Angie Bray) welcomed the review of business rates and pointed out their importance, particularly for businesses in her constituency that are competing with online companies. She also pointed out the need for urgent action on superfast broadband for business, and welcomed the measures in the Budget.

The hon. Member for Birmingham, Selly Oak (Steve McCabe) welcomed the penny off a pint and the freeze in fuel duty, but said that the Chancellor ignored the NHS. In truth, the Government have chosen to protect the NHS through this tough period and have now committed to much greater support for mentally ill people. I would dearly love to hear the Opposition just once welcome this vital investment, which will do so much to help people struggling with poor mental health, rather than just ignoring it. My hon. Friend the Member for Northampton South (Mr Binley) told us about the choices that his grandmother gave us all—either earn more or spend less when in difficulty—and I am delighted to hear she would have been pleased with the Budget. I congratulate him on his long-standing support for small and medium-sized businesses and put on the record how much I have enjoyed being his constituency neighbour in the lovely country of Northamptonshire.

The hon. Member for Angus (Mr Weir) talked about the problem of the last bank in town, which I am very sympathetic to, but he might be reassured to know that I have held round tables, including with the Secretary of State for Business, Innovation and Skills, talking to banks about the need for smart ATMs that take in, as well as give out, cash and discussing improvements to post offices, including longer hours and upgrading security at counters for business banking, and we hope there will be a protocol for bank closures in the future. I am happy to talk to him separately about the matter. My hon. Friend the Member for North Dorset (Mr Walter), in his encore speech as a retiring Member, warmly supported the Budget and gave a considered assessment of the measures in it. It was an excellent swansong, and I wish him a successful and peaceful retirement.