Budget Resolutions

Alex Cunningham Excerpts

Tuesday 30th October 2018 Commons Chamber

[Yvonne Fovargue (Makerfield) (Lab)]

I welcome the rise in mental health funding, but people with mental health problems also need support from other Departments, not just Health, particularly when they have problem debts. A person is four to six times more likely to have a debt crisis if they have mental health issues, and half of all those seeking debt help have a mental health issue. The two are interrelated. Debt can trigger clinical depression, anxiety attacks and more, while mental illness can build debts. Universal credit is not helping. I am thinking not only about the complex and stress-inducing work capability assessment but about the wait for the first payment. Also, if people are able to get an advance payment, they struggle to pay it back. None of that will do anything to relieve their mental health issues.

If the Government really are intent on prioritising the nation’s mental health, they need to guarantee that no one will be left without sufficient income as a result of moving to universal credit. Under the rules, any advance payment could be deducted at a rate of up to 40% of the standard payment. It was also possible to have other debts, such as council tax arrears or money owed to utility companies, taken at the same rate. The Chancellor has announced a reduction of this rate to 30%, but that could still mean a combined deduction of up to 70%, which is much higher than for pre-existing legacy benefits, so actually the change will be of little help. For some people, having deductions taken from their benefits to pay their creditors can be a positive method of repaying debt and managing their bill payments, but a rate of 70% is ridiculous. What steps is the Department for Work and Pensions taking to determine whether a deduction is appropriate or even affordable for the individual? I recognise that this method can be positive, but for many people it is inappropriate and unaffordable.

Universal credit can push people further into debt. The Government’s data confirm that people on universal credit are falling into rent arrears, with more than two in five saying that that is due to problems with universal credit. More than half the recipients of universal credit that Citizens Advice helps have had to borrow money while waiting for their first payment. We know that 97% of tenants in Wigan who live in social housing go into arrears because of universal credit, and that 60% of those tenants have arrears of more than £600. It is therefore perhaps ironic that the Chancellor has finally announced a breathing space in the form of a statutory mechanism to give those in problem debt a period of respite while they get their financial lives in order.

[Alex Cunningham (Stockton North) (Lab)]

I met representatives of Macmillan Cancer Support this morning, and they were talking about the challenges facing cancer patients in the self-same circumstances that my hon. Friend has just described. Does she think that action needs to be taken for them, as well as for people with mental health issues?

[Yvonne Fovargue]

I absolutely agree with my hon. Friend. I also think that the rules on terminal illness should be changed.

Going back to the question of the breathing space, the devil will be in the detail. For a breathing space scheme to work well, it has to have minimum standards. It has to provide enough time for the person in debt to get advice on the best way to resolve their problem debts, to recover from temporary financial difficulties and enter a statutory debt solution, and to pay their debts at a manageable rate. There must also be funding so people can access free, independent and impartial services speedily, because when people decide they are at the end of their tether, they want to see someone quickly.

The Government suggest a breathing space of 60 days, but debt advisers need the flexibility to recommend an extension. I worry that if the arrangement is too rigid, creditors may well delay until someone gets out of the breathing space period so they can start chasing them again. Call me cynical, but that is what 23 years at Citizens Advice does.

There is clear consensus that a breathing space solution must cover all debts, including debts to the Government—household bills such as council tax and moneys owed to central Government. It must also offer protection against further interest and charges, and against enforcement action. Creditors must stop collection activities such as calls, letters and visits—that means no more bailiffs. Returning briefly to universal credit, there must be no deductions from benefits or other income to recover outstanding debts during the breathing space period, future deductions must be affordable, and—please—there must be no public register of people who enter a breathing space. Evidence from Scotland shows that that deters people from doing so. If there is going to be such a register, let us make it private between creditors and people in debt.

I welcome the announcement that the Government will look at no-interest loans, although the long timescale will allow many people to fall into debt. It is unfortunate that, despite the work of the Law Commission, Government time was not given to debate ending the exploitation of a Victorian law that was used as a vehicle for logbook loans.

I turn to education—in particular sixth-form funding, which is at crisis level.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

The financial health of industry in my area is absolutely critical. The attempts yesterday by the Chancellor to bury the bad news for industry, in particular energy-intensive industries, did not help at all. He did not mention it, but he did not bury the news very deep either: it is there for all to see on page 47 of the Red Book. If the changes in carbon taxes materialise in response to Brexit, it will cost individual firms millions of pounds. The carbon emissions tax is significantly higher than the average emissions trading scheme price over the past 12 months, which was just £12.30. This would increase the cost of carbon for UK installations across the country, currently covered by ETS, by 30%.

The Chancellor acknowledges the increasing high total carbon price, but proposes to freeze it at £18 a tonne of carbon dioxide for 2021. He might think that that is an ambitious move, but these plans come with little notice and a particularly high cost for industry. Firms like CF Fertilisers in Stockton are significantly exposed to the additional extra costs. The EU energy trading scheme is a market-based instrument for which companies had developed a strategy over time to ensure they were able to comply. Now, on top of the perfect storm of high electricity and gas prices, this carbon tax, coupled with the doubling of the gas climate change levy, is a very real issue for energy-intensive industries.

The Government did publish a document on this last night. It betrays a fundamental change in policy since the Brexit vote, with no consultation with industry along the way. In the worst Brexit scenario of all, EIIs are being given an expensive fait accompli with no notice, no discussion and no impact assessment. This makes industry very nervous. Rolled together, all this serves to make the UK an unattractive place for EIIs to do business in the future.

The Chancellor could have helped an industry facing such a dilemma by giving some indication of Government support for carbon capture, use and storage, but he did not. As I have said on numerous occasions, Teesside is ripe for investment in carbon capture, use and storage. The industry needs some indication that the Government are capable of making the right call on this matter. Perhaps once the task group on CCS reports we will hear something more positive from the Chancellor in the new year.

This is my ninth speech in a Budget debate, and in every single one I have talked about health inequalities in my area and the need for a 21st century hospital in Stockton to help tackle them. Stockton was promised a new hospital, but in 2010 the coalition Government scrapped it while making sure that similar plans went ahead where there just happened to be Government MPs of both the blue and yellow. Let me outline why we need to solve the social care crisis and build a new hospital in Stockton.

Nationally, on average, a boy born in one of the most affluent areas of England will outlive one born in the poorest parts by 8.4 years. In Stockton, where life expectancy for a man in the town centre ward is 64, that gap is around double at 15 years. Incidentally, that life expectancy age is the same as in Ethiopia. Our children in these inner-city areas are living in poverty. They are more likely to be undernourished, more susceptible to all manner of illnesses and more likely to end up in care. Older adults are more likely to be ill, given a lifetime of hard work in the heavy industries. One in five babies in Stockton is exposed to cigarette toxins in the womb because their mother smokes while pregnant. That was in 2015-16. That year, there was a significantly higher rate of hospital admissions attributed to smoking than the national average. According to the British Lung Foundation, people in the north-east have the highest chronic obstructive pulmonary disease mortality ratio in the country. The English average for children achieving a good level of development at five years old is at 60%. In Stockton, this is just 50%.

[Dr Paul Williams]

Does my hon. Friend agree that the cuts to public health funding have had a significant impact on Stockton Council’s ability to deal with some of those health inequalities, and is he as disappointed as I am not to have heard about increases in public health funding in the Budget?

[Alex Cunningham]

Most certainly. My hon. Friend and I represent between us some of the most difficult areas in Stockton, with high levels of smoking and drinking that make the national average pale into total insignificance. We desperately need that additional funding, so I most certainly agree with him.

Our local North Tees hospital does an exemplary job in the most difficult circumstances, yet it could do so much better in a modern building with services that are required cheek by jowl and where people can be treated in wards rather than converted corridors. That is why we need a new hospital in Stockton and why I will mention that in every Budget speech I ever make until I get it.

Still on health, the police and crime commissioner for Cleveland has been doing excellent work on the introduction of heroin-assisted treatment in neighbouring Middlesbrough—a project that the experts believe will help to save lives and money and reduce crime across Teesside—but he needs Government support to make it the best that it can be. I hope that there will be a full Government commitment to that initiative.

On policing, I am really worried, like my colleague next door in Stockton South, about policing in our area. Like most others, the Cleveland police force area has been short-changed by this Government over many years and the police know that they can no longer deliver the full service that is needed. As my hon. Friend said, over the last eight years, the Government grant for policing and crime in Cleveland has been cut by around 24%. He also outlined in detail why we need that extra money, yet Cleveland is harder hit by cuts than most other forces because of how it is categorised. The county is largely rural, but the vast majority of the population is in inner-city areas, with the same challenges of the cities, yet we do not get the same level of funding. Let me be clear: there will be severe repercussions for public safety and criminal justice in Cleveland if the people do not get more funding.

On education, the Chancellor announced some one-off funding for schools to pay for little extras, but it is teachers and action on pay that they need. Stockton’s branch of the National Education Union visited my surgery on Friday. It wants to see the Government fund the full pay award rather than leave schools to do it. It also wants all teachers treated fairly, which the pay award fails to do. I hope that they will hear something better from the Government in future.

I simply plead again with the Chancellor to do the right thing by Stockton: help us to tackle the health inequalities that we have; help us to deliver the public health programmes that help to educate people about the choices that they have in life; and please find a way to build us a new hospital.