Working People’s Finances: Government Policy

Alex Cunningham Excerpts

Tuesday 21st September 2021 Commons Chamber

[Bridget Phillipson]

I will make a little more progress but will happily take another intervention in due course. Having gone from no interventions to a flurry of them, I should probably press on.

The scar of poverty is not just about not having material goods, a roof, warm clothes and warm food. It is about a lack of freedom, having nothing to spend on yourself, having choice exercised for you—either by others or by necessity—and finding your voice and your own choice squeezed out. That is what the Government’s changes do, but it does not need to be like that.

Labour has a clear plan for how we would secure a better future for our country and steer a path for our economy in the months ahead. We would not be pretending that a national insurance rise without a plan is the way to fix the NHS, we would not be cutting universal credit in just a few weeks’ time, hitting working families hard, and we would not have spent 18 long months handing out huge amounts of taxpayers’ money through outsourcing and crony contracts while hitting working people for tax again and again. We would not be telling hauliers that they were crying wolf. We would be taking action day and night with employers and trade unions to fix the supply chain disruption that is leading to higher prices and fewer goods. We would not have sat back for the last decade as rent, childcare and rail fares soared.

[Alex Cunningham (Stockton North) (Lab)]

When I wander down Stockton high street or through Billingham town centre, I can see the signs of poverty everywhere in faces that are tired, faces that are anxious and faces that look older than their years. Eventually, poverty kills. The decision to leave thousands of my constituents in this situation is a political one. Does my hon. Friend agree that, as we are one of the richest nations in the world, it is time that the Tories’ choices changed for the better?

[Bridget Phillipson]

Yes, absolutely. These are political choices—who we seek to prioritise, what we do from Government and what matters most to us all.

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[Mr Clarke]

I thank my hon. Friend for her point, and this is absolutely right. The furlough scheme has been absolutely essential to supporting the UK throughout this very difficult period. It has been an historic success, and we only need to consider how serious the employment situation would have been had we failed to intervene and failed to show the decisive leadership that this Government have shown.

[Alex Cunningham]

rose—

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[Mr Clarke]

I give way to the hon. Member for Stockton North (Alex Cunningham).

[Alex Cunningham]

As a fellow Tees Member of Parliament, the Minister will be aware that at the height, just a few weeks ago, there were 12,000 more unemployed people across the Tees Valley than there were in March last year. How does he reconcile that with talking up the Tees Valley employment situation?

[Mr Clarke]

I do so quite readily when I look at the extraordinary potential of our local economy. We have all the new jobs coming in at the Teesworks site, the former Redcar steelworks site. We have the hope and potential of green industry, which the hon. Member champions, as I do, with all the jobs in carbon capture, utilisation and storage as well as hydrogen. There is the new GE Renewable Energy factory, which will employ 2,500 people. Its construction starts incredibly soon, and it will be fully operational by 2023. Those are the reasons for hope and optimism. Of course, I will never apologise for talking up Teesside, just as we should never apologise for talking up the UK economy. We have done an extraordinary thing in this country: we have got through the pandemic—we have weathered the storm—and now we can move on to the recovery.

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[Alison Thewliss (Glasgow Central) (SNP)]

This could not be a more timely debate. My constituents and people across the country are looking with great apprehension at the winter to come, fearful about how they will make ends meet. I welcome the Minister to his post, and I appreciate what he said about the economic support offered, but that is not unique to this Government or any other. Governments around the world have sought to support their citizens through this pandemic, and many have done so more compassionately and more competently than those sitting across from us on the Tory Benches.

Many have done that from a better starting point, too, without public services stripped bare from a decade of austerity and a welfare state that punishes people for their circumstances, and without the worst inequality in north-west Europe. And none of them has embarked upon a project so thoroughly deficient and self-defeating as Brexit, which has left businesses carrying higher costs, shelves empty, and skilled people—our neighbours and friends—leaving this island in their droves because this UK Tory Government have made them feel so unwelcome. Scotland voted for none of this.

To the here and now, Madam Deputy Speaker. We have food shortages and price rises, inflation increasing, cuts to universal credit and tax credits, the end of the pensions triple lock, a regressive national insurance hike, the end of furlough and the self-employment income support scheme—for people who were lucky enough to be eligible for that scheme rather than excluded from it—and now the prospect of spiralling energy bills as we head into the depths of winter.

[Alex Cunningham]

The hon. Member has just mentioned energy prices. I do not know whether she saw that Torsten Bell of the Resolution Foundation said:

“The autumn is looking like a cost of living crunch.”

He added that four in 10 households

“will see their energy bills rise by 13% (£153 a year) at exactly the same time as their income falls by 5% (£1000 a year).”

He also mentioned inflation, which is expected to get to 4%. What does she think that will mean for the poorest people in our society?

[Alison Thewliss]

The hon. Member is perfectly right to point that out and to refer to the words of Torsten Bell. He came to the Treasury Committee to give evidence about some of the things that we are facing in the months ahead. Many constituents will just not be able to cope with this. They will become more indebted, they will struggle to get by, and they will find it difficult to get back out of that debt, get on with their lives and be productive members of society. This is a significant crisis, which this Government are ignoring and making worse by their inaction.

This Tory Government have already created the perfect storm: a cost-of-living crisis atop an already weak and stagnant economy. Citizens Advice Scotland found that more than 1.4 million people in Scotland ran out of money before payday at least once in the last year. Sarah Arnold, senior economist at the New Economics Foundation, found that 2.5 million working families on low incomes will lose £1,290 a year because of the double whammy of the cut to universal credit and the increase in national insurance contributions. That is utterly unjustifiable.

It may not mean much to those on the Government Benches, but that is an enormous amount of money to many people across this country, which cannot be made up through a few hours’ work, as the Work and Pensions Secretary appears to believe. It is the difference between just getting by and not coping at all, between being able to put food on the table or relying on the food bank, between keeping the lights and the heating on or disconnecting from the power supply.

I am an honorary vice-president of Energy Action Scotland—I refer Members to my entry in the Register of Members’ Financial Interests—which has found that one in five households with a prepayment meter regularly self-disconnects because they simply cannot afford to top it up. Of those households, 88% contain a child or someone with health issues. Those on prepayment meters will struggle the very most in the months ahead—they always do—and this UK Government do absolutely nothing to support them. The stress of watching the meter eat what little money has been put in it is an experience that I am sure few on the Government Benches will understand, but I have had constituents shivering, living in one room under blankets and duvets, because no matter how much money they put in that meter, they cannot keep their home warm.

There is a significant impact on older people, carers and people with disabilities, whom this UK Tory Government have often completely ignored. That is a group whose energy bills are higher. My constituent Rob McDowall is among many already worrying about how to keep warm this winter. Like Citizens Advice Scotland, he is advising people to seek assistance and advice right now. While I fully support attempts to seek advice, this UK Tory Government should take their responsibilities seriously too.

Energy costs will increase more in Scotland due to our geography. This is a life and death issue. Living in a cold home causes illness, and Energy Action Scotland has found that there are around 2,000 excess deaths in Scotland each winter as a result. That is a scandal in energy-rich Scotland, but it is a reflection of how broken the energy system is—a system entirely reserved to Westminster. Around 25% of energy bills is the cost of UK Government levies and policy choices, as well as VAT. That disproportionately hits those on low and middle incomes. The Treasury must do something now to alleviate that burden. That is in its hands.

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[Alex Cunningham]

I also congratulate my constituency neighbour, the hon. Member for Hartlepool (Jill Mortimer), on her maiden speech. I am sorry that her Tees valley colleagues have now abandoned her, because I wanted to share some child poverty figures with them. Since 2015, the number of children in poverty has gone up by 1,800 in Stockton South, by 2,000 in Hartlepool and by 1,900 in each of Darlington, Redcar and Middlesbrough South and East Cleveland. Will the hon. Member for Bury North (James Daly) address the children in the Tees valley and persuade Tees valley MPs to vote against the universal credit cut?

[James Daly]

From recollection, and my hon. Friend the Member for Hartlepool will tell me if I am wrong, Ben Houchen got 74% of the vote. Conservative MPs have been elected in Labour areas of the Tees valley because we give hope and we have a plan. This Government’s plan for jobs is working, whereas Labour has offered nothing to the Tees valley over the past decades. The Minister, my hon. Friend the Member for Hartlepool and other Members in that area are putting forward plans that are changing lives, for which they should each be extremely proud.

I come to the second part of the debate. In Bury, we have seen unprecedented support during an incredibly difficult period. How do I, as a Member of Parliament, feel about the Government policy? How do I look at what we should be doing to change people’s lives, give hope and inspiration, and make sure that people can make the best of themselves, having the best career, best-paid job and best future? I have heard no arguments —no plan, definitely—from any Opposition Member in respect of how that is going to happen; I have heard no hope, no vision, no anything for children in Bury or in the Tees Valley about how their lives are going to be transformed by a Labour party. I have heard bland generalities.

The shadow Minister said that the Labour party would create a high-skills, high-wage economy, but they are going to be too late, because this Government are doing it already. We are investing billions of pounds in skills uptraining, not only to give young people from the most disadvantaged backgrounds the best chance to have a highly paid, skilled job, but to regenerate our areas. In an area such as Bury, we have to have that skillset so that we can bring in high-tech manufacturing and make sure that those jobs are closer to our communities, so that people, including young people in Bury, do not have to go to Manchester or London to have a highly-paid job.

This Government have a plan that is delivering; the plan for jobs is delivering, and we can see the kickstart figures. We are creating, through youth hubs, kickstart and all the other programmes that have been outlined, a set of policies and programmes. Bury College is part of a bid for institute of technology status for Greater Manchester. What does that mean? It means colleges in Greater Manchester are working with the University of Salford to create the means by which high-skilled, high-worth employment is going to be on the doorstep for people, with the skills training that is being delivered. I had the privilege of going to Bury College with the Minister two weeks ago; the T-levels that have been introduced by this Government are inspiring aspiring people and changing lives, making people’s futures brighter—we cannot overlook that.

We have a transformative Government. Every decision made is regarding levelling up. Everything we decide to do is done to transform opportunity. Sadly, the Labour party is not interested in that and certainly does not have a plan to do it. So I congratulate this Government. There are challenges. We are dealing with a £400 billion pandemic, for which there is no panacea, but this Government have done what they have needed to do to protect people’s livelihoods and interests, and to support families throughout this period, with unprecedented financial support. We are now on to the next stage. The plan for jobs is working; it is hope, it is aspiration and it is changing futures and lives in communities such as Bury. I support the Government wholeheartedly on that vision for our country.

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[Colleen Fletcher (Coventry North East) (Lab)]

I thank the hon. Member for Penistone and Stocksbridge (Miriam Cates) for that very interesting analysis of what we ought to be doing now.

For households and families living on the edge, a cost of living crisis is a crisis that they simply cannot afford. To cite just one statistic, in my constituency of Coventry North East, the rate of child poverty already stands at 29%. Once the cuts to universal credit, the rise in national insurance contributions and an increase in a wide range of household bills are factored in, I am certain that the number will rise significantly. A cost of living crisis, therefore, will not just result in a short-term squeeze on family finances but will have a long-term corrosive impact on the life chances of thousands of children across the country.

Many of the people I represent in the community I grew up in work hard but in low-paid and often insecure jobs. The Government’s disregard for, or lack of understanding of, the challenges that these communities face was demonstrated recently by the Work and Pensions Secretary, who claimed that individuals facing the £20 cut to universal credit should work two more hours a week. Yet it was soon made clear that in fact it would take about nine more hours a week to make back the £20 cut. Is the Work and Pensions Secretary seriously saying to these people that they should essentially have a six-day working week: that they should sacrifice their weekends; their family time; their time for rest and relaxation? It is all well and good saying that we need better-paid and more secure work, but in communities like Coventry North East we need Government investment and support to make it a reality. So far, despite all we have heard about levelling up, we have not seen any tangible evidence of this in Coventry.

[Alex Cunningham]

My hon. Friend knows that these people use the same supermarkets that she and I use, and they have so much less money. She knows, as I do, about supply and demand, and if there is less food and less product around, the prices go up. I do not go to supermarkets very often, but recently, when I do, I have noticed that product is being fronted on the shelves with very little behind it, so there might only be 20 or 30 cans of beans instead of 200 because there is a food shortage in some product areas. Does she agree that the Government really need to act on employment and getting drivers in place so that we do not face these kinds of shortages?

[Colleen Fletcher]

I thank my hon. Friend. Unlike him, I do go shopping a lot. I spend a whole lot of my time in supermarkets, for different reasons, and I entirely agree with him. I see that around my constituency an awful lot, not just doing food shopping, I hasten to add, but other shopping as well, which I thoroughly enjoy when I have the time for it.

It becomes clearer each day that the interests of my constituents will never be served by a Tory Government who simply do not understand, or do not want to understand, the difficulties faced by my constituents. Successive tax rises have demonstrated that even though my constituents were some of the worst affected by the pandemic, in terms of their health as well as their finances, the Government have made the political decision to ensure that they will bear the bulk of the costs of this crisis and will be offered scant support if they are struggling.

I urge the Government to pause and reflect on their recent decisions and offer a better deal for people like those who live in the communities that I represent to ensure that we can get through any cost of living crises together.

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[Alex Cunningham]

The hon. Member makes me reflect on a family matter of my own. When my grandad was killed in a pit accident, my dad had his apprenticeship, and my granny went out and scrubbed floors to ensure that he completed his apprenticeship. But today we find that grandparents are looking after grandchildren—perhaps because somebody is in prison or because they have a drug problem—yet they do not get help, and even those people are going to lose this £20 of universal credit. Would you credit that?

[Kirsty Blackman]

Stories like this belong 100 years ago; stories like this do not belong in the 21st century. We should not have constituents who are in absolute poverty coming into our constituency offices.

This motion is about the working poor. My great-granny’s mother did not have money to buy what she saw as necessities; she obviously did not have enough money to buy food and stuff but was helped out in that, but she also could not go to church because she could not buy clothes for church. She had her working clothes but could not buy Sunday best clothes to go to church; that was her biggest regret about not having money. Nowadays, people on UC may not be able to afford internet access, which they need to get their UC, or to afford other things we see as necessities. Not many people are wanting a Sunday outfit to go to church—some are, but not that many—but they desperately need access to the most basic of services so they can get their UC and make their claims, and so that they can speak to friends and family and not be hugely isolated.

A cut of £80 a month is a huge amount. For a lot of people, £80 a month is their council tax bill, or two mobile phone bills, or—goodness knows—one pair of shoes for the kid, maybe two pairs for those who are particularly lucky and their child is going to wear something a bit cheaper. It is a huge amount of money, not pennies; it means people will have to cut back on a big, major bill when this cut is implemented. My great-granny remembered her mother crying because winter was coming and she could not afford to buy shoes for the children. That was over 100 years ago; this should not be happening today—we should not be having single parents crying because they cannot afford to buy winter shoes for their children.

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[Liz Twist]

I absolutely agree about the need for additional council housing.

The rise in national insurance will disproportionately affect younger people and those on low incomes. It is absolutely right that we need more money for the NHS and social care after years and years of cuts, but it cannot be right that it is the lowest-paid earners who pay for it. The Government’s plan will not end the crisis in social care or help to fix the backlog in the NHS.

[Alex Cunningham]

The hon. Member for Aberdeen North (Kirsty Blackman) talked about the Conservatives not really understanding the plight of people living on universal credit. Does my hon. Friend agree with me that it might be a good idea for some of them to spend a month living on the income of a person on universal credit? Not just that, however. Let us load them with a debt of £10,000 and say that they have to pay off some of that debt out of their income as well, and maybe they might understand a little bit more.

[Liz Twist]

I would not like to load anyone with debt, frankly, but I do wish that people would understand what it is like to live on universal credit, and not just for a week or a month, with no recourse to a cash pot in the bank on which they can draw if they run out of money. Many of us will not understand that, but it came home to me very clearly when I became a councillor and an MP just how much on the breadline some people are, with no access to credit cards or other finance. It is a really difficult life for people.

I was talking about social care. As I said, the Government’s plan will not end the crisis in social care or help to fix the backlog in the NHS. It will take money from those already struggling financially, without fixing the problems. What my constituents want to know, when we talk about social care, is what services they will be able to access. We have talked about money and the need to address that, and we have talked about caps. What we have not talked about is what the Government’s social care plan means for those of my constituents who actually receive social care, with people coming in to look after them. Will they receive a better service? Will the staff, many of whom will be caught by the universal credit cap, see decent pay and conditions, and recognition for the really important work they do? We are missing a huge piece of the jigsaw and the Government need to address that. Labour has said that there are many other ways to raise the money, including taxing the incomes of landlords, and of those who buy and sell large quantities of financial assets, stocks and shares. Labour has been clear that we want those with the broadest shoulders to carry the burden.

I want to talk a little bit about the excluded, because so many of my constituents during the pandemic, including the self-employed, have found themselves facing real problems. They were excluded from any schemes that the Government brought forward and in many cases they were excluded from universal credit because of money that they might have put away for tax, or small amounts of money. Lots of single people running dance schools or hairdressers or working from home have found it hard to get through. It is really important that we recognise the pandemic’s impact on them. I know from Zoom calls with my constituents—people who own beauty salons, people who were creative—how much they have been affected. They really have suffered.

Lastly, I pay tribute to Gateshead food bank, Gateshead Council and the many other local organisations that have picked up a lot of the slack. They are doing a great job, but for goodness’ sake, it should not be necessary in this day and age.

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[Paula Barker (Liverpool, Wavertree) (Lab)]

This debate has made me feel like I am living in a parallel universe. Listening to Conservative Members—if they were still here—we would think everything in the garden is rosy, but Opposition Members know only too well that the cost of living crisis serves as a stark reminder that this Government are not serious about supporting ordinary working people. It confirms to us that they lack ambition when it comes to affording our people a life of dignity in which they can support themselves and their family and comfortably grow old with the assurance that they can support their children and grandchildren.

The economic settlement of the past four decades has smashed the unwritten guarantee that each successive generation will have it better than their parents. If this pandemic has taught us anything, it is that life is precious and that it is for living. Yes, those who can should contribute to society but, crucially, people should get something back and be able to enjoy their time with family and friends, rather than having to receive state support while in work. They should not have to rely on food banks or have to work three jobs just to make ends meet.

The system is not on the side of our people. Indeed, most callous of all, retirement itself is fast becoming a distant dream for so many in areas like mine in the north-west who fear that they will not be able to afford it. If only I had £1 for every time I heard someone say, “I will have to work until I drop.”

As the Scottish trade unionist Jimmy Reid put it:

“A rat race is for rats. We’re not rats. We’re human beings.”

In my constituency of Liverpool, Wavertree, I regularly come across people who do the right thing, work hard and pay their taxes. They are honest, decent, salt-of-the-earth people who operate in the real economy across all sectors—care workers, hospitality workers, call centre workers and those who run small and medium-sized businesses—and too many now tell me that they feel the system has failed them. After all, our people, working-class people, picked up the tab after the last economic crisis in the form of austerity, the biggest squeeze on wages and living standards since the Napoleonic wars and so much besides, and now they will do so again.

Conservative Members will no doubt trot out the same lines about their inadequate increases in the living wage and the personal tax allowance, which ironically they are now freezing—they even cite rising wages in certain sectors. Some might say that their intentions are good. Ultimately, success is measured by outcomes, and on every metric this Government are failing. If they were serious about supporting our people, their priorities would be wholly different.

[Alex Cunningham]

My hon. Friend mentions the salt of the earth. For me, the real salt of the earth are kinship carers, the grandparents who take on their grandchildren because their parents can no longer look after them, yet they get a very raw deal. Does she agree it is time the Government recognised the value of kinship carers and the money that is saved because of the burden they take on? Does she also agree that kinship carers can do without this cut to universal credit?

[Paula Barker]

I thank my hon. Friend for his intervention. The points he raised are completely pertinent and I agree with all of them.

As I was saying, if the Government were serious about supporting our people, their priorities would be wholly different. We would not see a hike in national insurance. We would not see the scrapping of the £20 UC uplift. We would see a proper funding settlement for local government, rather than backing our cash-strapped local councils into a corner over regressive tax increases. We would see action to tackle rising energy costs—that infamous Marxist idea, according to David Cameron. It is an idea once proposed by my former leader, my right hon. Friend the Member for Doncaster North (Edward Miliband).

Finally, something often missed in debates such as this: we would see recognition of the role of the trade unions in reducing inequalities in the workplace and across society. In the coming weeks, Members from across this Chamber, including on the Government Benches, will have the opportunity to support the private Member’s Bill on fire and rehire introduced by my hon. Friend the Member for Brent North (Barry Gardiner). I can say with certainty than an effective system of collective bargaining across sectors of the economy will not cost the Chancellor a penny—he may even save a few pounds.

Research from the New Economics Foundation shows that modelling produced for one of its reports indicates that by the end of the year, without a change in Government policy, 32% of the UK population, or 21.4 million people, will be living below a socially acceptable living standard, as measured by the minimum income standard. That is a third of people in this country, and it is absolutely shameful. Numbers like that tell us that the time for tinkering around the edges is over. Inequality is not some vague concept; it has real consequences for communities such as mine. What is economics if not the allocation of wealth, power and resources? Opposition Members believe in a fairer, more equal and democratic distribution of all three.

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Liverpool, Wavertree (Paula Barker), who made such a powerful and passionate case, so rightly pointing out the false economy that inequality represents.

Thousands of families in my constituency, like families across the UK, have taken a real buffeting over the past 18 months, and this month could bring the perfect storm for them as the furlough scheme ends, the universal credit uplift is scrapped and the cost of living spirals upwards. The pandemic has had a significant impact on household finances, which have been stretched to breaking point, and not everybody is able to weather the storm as easily as others.

Conservative Members like to claim that their Government have fixed the roof while the sun is shining, but the reality is that the Tory roof is made of straw and a cold wind is blowing. Worrying research from the Bevan Foundation has found that one in three Welsh households does not have enough money to buy anything beyond everyday items, while more than one in five households with a net income of less than £20,000 have seen their income drop since January. The planned cut to universal credit will only deepen these inequalities, as those on the lowest incomes will be pushed into poverty and destitution.

In Aberavon alone, more than 7,000 households receive universal credit. For those families, the £20-a-week uplift has been a lifeline, protecting those who have lost income and preventing them from slipping into poverty or having to visit the food bank to feed their families. It is important to note that of the 7,000 households in Aberavon that are on universal credit, 2,000 have registered since the start of the pandemic. The idea that the removal of the uplift is somehow not a cut is deeply disingenuous, because the 2,000 households that have registered since the start of the pandemic have certainly not known any other rate of universal credit. The Government’s claim is blatantly and deeply disingenuous.

The uplift has made a real difference to family budgets. My inbox has been filled with emails from residents telling me how it has helped them to meet the cost of essentials and allowed them to pay their bills, make the rent, put food on the table and switch the heating on. To some, £20 a week may seem like a small amount of money, but to the families I am talking about it makes a world of difference and would have been crucial to help them with rising energy bills and the escalating cost of the weekly shop. They are now deeply anxious about their precarious finances and worried about how they will make ends meet without the uplift.

The reality is that we are potentially moving into an age of anxiety. The anxiety that is now afflicting so many millions of families and households throughout the country saps the strength from the recovery and defeats growth. It is a brake on growth, which is why the Government’s policies are so deeply damaging. They are not only the wrong thing to do in a civilised society but the definition of a false economy because they are putting a brake on growth and holding back the recovery.

Some of those who contacted me are shopworkers and carers who worked through the pandemic and now face the cut to universal credit. That is no way to thank them for what they have done. Members on the Government Benches stood on their doorsteps applauding our key workers; now they reward them with this cut and a cost-of-living crisis. Their hypocrisy is breath-taking.

[Alex Cunningham]

My hon. Friend talks about people applauding on their doorsteps; when I put a question to the Prime Minister when he was talking about his tax increase, he said that the Government do not pay care workers. Apparently, somebody else does, but does my hon. Friend agree that the Government pay grants to local authorities, and that money goes to carers? We hope that some of the extra tax money will go to local authorities to pay care workers, so is it not about time that the Government said, “We’re paying for the fiddler so we’re going to decide the dance”? They should decide the level of pay for care workers and it should be much higher than it is now.

[Stephen Kinnock]

My hon. Friend is absolutely right. As the Leader of the Opposition, my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), has confirmed, we are committed to a proper living wage in this country of a minimum of £10 an hour. Government Members constantly ask for Labour’s plan; there is one absolutely key element of it. It is about making work pay and rewarding the heroes of the pandemic: those who kept our economy running and our supply chains open. Rather than rewarding them with cuts and destroying supply chains, we should seek to build an economy that works for everyone.

The grim reality is that around 40% of the families who claim universal credit are in work, but that work is insecure and involves short hours or low pay. They are claiming universal credit not because they are workshy but because the Government are presiding over an economy in which jobs are not paying the bills and low-paid people are forced to top up their income. If the cut to universal credit goes ahead, it will be the biggest overnight cut to the basic rate of social security since the foundation of the modern welfare state. It will plunge families into poverty, forcing them to rely on food banks. But it is the very definition of a false economy: it would remove £7.3 million from the economy in my Aberavon constituency alone. This money is not saved by families; it is spent in the shops and the businesses in my constituency, helping to stimulate the local economy and helping to create jobs. Without it, spending power will decrease and the economic recovery will be stymied. Government Members have rightly stated that we need to grow our way out of the recession, and yet they are promoting policies that will put a brake on growth. It beggars belief.

This squeeze on living standards is not inevitable. Poverty is a political choice. The squeeze on living standards is a political choice. The Government have made the choice of hitting hard-working families with a double whammy of cutting the universal credit uplift and hiking up national insurance contributions. At a time when food, fuel and energy prices are going up, this will place an enormous burden on hard-working people. It is the Government’s choices that have shaped an economy that has become less resilient and less secure. The Government’s botched Brexit and failure to plan for crises such as the pandemic have combined to expose our declining sovereign capability—our lack of supply chain resilience, the empty shelves in the supermarkets, the shortage of HGV drivers, and delays at our border and ports. All of this is combining to drive up prices, and it is hitting working families in their pockets.

Two hauliers in my Aberavon constituency, Frenni and Owens, have told me about the detrimental impact that the shortage of HGV drivers is having on their businesses. Owens estimates that they are 150 drivers short and that that is reducing their capacity by about 1,000 full trucks a week. They desperately need the Government to take urgent action to address the shortage. What that demonstrates is that the economy is interconnected and that the impact on supply chains impacts on prices, impacts on the cost of living crisis, and impacts on working families. The Government should be doing all they can to support families through these tough times, not pulling the rug out from under them. They must start by cancelling this cruel and self-defeating universal credit cut. Then they must build an economy that works for all, by tackling insecurity at work, lifting people out of in-work poverty and increasing the minimum wage to at least £10 an hour. Then they must tackle the cost of living crisis by sorting out the chaotic shambles of their botched Brexit.

If the Government’s levelling-up agenda is to be anything more than empty rhetoric, they must change course. They must stop this race to the bottom and strive instead to build an economy that works for all. They must stop their complacent, blasé approach to Government and get their act together to address the huge disruption that has been caused by their botched Brexit deal.

[Alex Cunningham]

The Tories are keen to talk up the importance of work, and I agree with them on the importance of work—good paid jobs must be the answer—but they also allow many firms to go to the wall. The latest in our area is the world-renowned Cleveland Bridge and Engineering Company, which built the Sydney Harbour Bridge and the Tyne Bridge. Hundreds of jobs in the main firm and in the supply chain have now gone, as neither the Tory mayor in the Tees Valley nor the Government were prepared to do anything to sustain those jobs, simply because the company had a cash-flow problem. Does my hon. Friend not agree that we need to protect the jobs that exist today and not just dream of jobs in the future?

[Stephen Kinnock]

My hon. Friend hits the nail on the head. Much of the debate today has been about the immediate impact of the universal credit cut and the immediate impact of the cost of living crisis, but we need to examine the fundamental structural weaknesses in the British economy that have seen a massive decline in manufacturing, and that has been turbocharged by 11 years of Tory neglect. We have ended up concentrating so much of our economy in London and the south-east around the financial services sector. The financialisation of the British economy has ended up driving inequality, with a very small percentage at the top being paid eye-watering bonuses while the rest of country is left behind. We have shifted from being a country that makes things to a country that consumes things—a country that is fuelled not by production, but by consumption, and which is floating on a sea of debt. All those structural weaknesses have been chipping away at the resilience of the British economy for 11 years now, and the pandemic and the botched Brexit are now combining to expose the profound lack of resilience in our economy. Therefore, although today’s debate is extremely valuable and important, it fundamentally needs to be seen in the context of 11 years of Tory failure, neglect and a failure to look at the foundations of our economy.

I have the largest steelworks in the United Kingdom in my constituency, and steel is a case in point. The hon. Member for Redcar (Jacob Young), who represents a steel constituency, is not in his place now. We have seen the act of industrial vandalism that saw the closure of the SSI works in Redcar on the watch of the Tory Government; the total and utter failure to address exorbitant energy costs, which are crippling the British steel industry; the failure to stand up to China and the dumping of Chinese steel on the markets, which has deeply undermined our competitiveness across the world; and the failure to have a patriotic procurement policy that would enable us to focus on buying British steel when those opportunities arose. If we are serious about the transition to a green economy, we will never get there without a resilient and vibrant British steel industry. Our steel industry is just one example of how the Government have allowed our manufacturing sector to decline over the last 11 years that they have been in power.

[Alex Cunningham]

There is some good news this afternoon, because I understand that the Government have actually helped out and we have some form of agreement with CF Fertilisers—the company that makes fertiliser from natural gas and produces 60% of the country’s CO₂, which is so desperately needed for everything from beer to anaesthetic systems in hospitals. Will my hon. Friend welcome that, but also reflect on the fact that the company had to go to the brink of failure before the Government chose to act on energy prices and the other factors that were affecting it?

[Stephen Kinnock]

My hon. Friend hits the nail on the head; we appear to be in a constant state of crisis management, based on the fact that there has not been long-term planning. The gas crisis was foreseen by many people years ago, and it was based on a concern about the Government’s failure to deliver gas security by enabling the additional storage of gas. We do not have gas stockpiled in the way that most other advanced industrialised countries across the world have. This is another example of the Government being asleep at the wheel and not having that long-term planning in place.

We have a Secretary of State for Business, Energy and Industrial Strategy who does not believe in industrial strategy. He has closed down the Industrial Strategy Council at the very time that we need a partnership between the state and business to drive our economy forward. These fundamental issues have to be addressed. We have to look at the cost of living crisis, and develop a partnership between the state and business. We must have the long-term planning in place that we so desperately need.

[Alex Cunningham]

Will my hon. Friend give way?

[Stephen Kinnock]

I would very much like to give way to my hon. Friend again, but Mr Deputy Speaker is looking at me in a way that tells me that perhaps it is time to finish my speech.

--- Later in debate ---

[Alex Cunningham]

I am very grateful to my hon. Friend for giving way again. He will not know this, but I spent a long part of my career in the gas industry. I remember taking a group of women journalists offshore to the Rough field, off the Humberside and Yorkshire coast. Does he agree that it is extremely lamentable that the Government allowed that storage facility to close down and that that wonderful facility—the first of its type in the world—is no longer in use for gas storage?

[Stephen Kinnock]

There we have an absolutely spot-on illustration of precisely the problem that I was alluding to, which is that many of the issues that have been exposed by the pandemic are a failure of long-term planning. That is another example of a false economy. It is about the culture of looking at the immediate bottom line. Knowing the cost of everything and the value of nothing is the definition of the way in which this Government have been running the country for the past 11 years.

The value of resilience is about understanding the need for investment and about investing in order to save for the future. Prevention is always cheaper than cure. That is why, with the up-front investment that has been so sorely lacking over the past 11 years, those chickens are now coming home to roost. We therefore need to develop a new political culture, a new business culture and a new commitment in this country to security, resilience and partnership. On that basis, the issues that we are addressing today are the symptoms of the problem and not the cause.

--- Later in debate ---

[Mr Dhesi]

The hon. Lady eloquently makes my point, and even that calculation of two hours has been demonstrated to be completely off the mark; the number of extra hours hard-working Brits will need to work is actually nine.

Another main issue on which constituents ask for my help is housing, and, sadly, that is unsurprising. Average rents have risen by £456 in a year, the highest rise since 2008, rising above average wages by over £2,000, leaving home ownership a distant or impossible dream for too many in the next generation.

[Alex Cunningham]

The issues my hon. Friend raises will also result in more debt. Is he surprised to learn that debt in this country is 123% of household incomes and that there have been 27,662 individual insolvencies in the second quarter of this year? People are in trouble now, and if this additional help is withdrawn how on earth are they going to make ends meet?

[Mr Dhesi]

My hon. Friend has demonstrated in this debate that he is an endless fountain of statistics; despite not being on the call list, he has made many interventions that make hard-hitting points to which the Government must listen.

It is important to highlight that home ownership is an impossible dream for so many in the next generation. That is because the quality and quantity of social and affordable housing is wholly inadequate, an issue the Government have failed to address despite being in power for well over a decade. A report showed that affordable housing increased by just 1% last year—90,000 homes short of the bare minimum needed to tackle this crisis. What about those who own homes that are now worthless due to Government inaction on unsafe cladding? That is an absolute shambles. It means a mother of two going without food to pay her rent and feed her children, and others moving from property to property due to rent arrears and evictions. One constituent even told me that their struggle with paying rent and bills made them feel like

“there is no way out”.

It is a vicious cycle—a downward spiral. Is this really the kind of society we want to live in post pandemic? I certainly do not.

We need to realise the potential in our great country and give businesses, families and young people the tools that they need to rebuild and prosper, not break them down before a recovery has even begun. We have a fantastic business hub and innovation centre in my constituency. Prior to the pandemic, we had among the highest business start-up rates in the entire country, we were in the top three for productivity, and we had a booming private sector providing thousands of jobs. But instead of giving the hard-working people of Slough support to ensure that they can once again thrive, these measures are pushing them further down.

In conclusion, I want to see ambition from this Government genuinely to rebuild stronger than before, with a greener, more efficient and innovative economy that will benefit us all, not just a select few.

--- Later in debate ---

[Matt Western]

I thank the hon. Member, or perhaps I can suggest friend. Indeed, we have been insulated these past 10 years from the ravages of inflation that some of us know—perhaps my hon. Friend the Member for Stockton North (Alex Cunningham) would say this—can erode business confidence and have an extreme impact on household budgets.

[Alex Cunningham]

I well remember the Thatcher Government, when interest rates went up and up and up and up. Even those on good wages were struggling, so it was even more difficult for others. There is a storm ahead for many people. Does my hon. Friend agree that savings are very important? The average savings for a low-income household are £95, while a high-income person is likely to have £63,000 in savings. Who is going to come off worse?

[Matt Western]

My hon. Friend makes a very important point. We all have to understand that it is easy to talk about numbers and statistics in the abstract, but the reality for so many people, as he illustrates, is that they do not just have the uncertainty and insecurity of zero-hours contracts and the pressures of the cut to universal credit, but having so little money in the bank brings pressures on households. And here we have inflation about to rip into those households through the energy price increases I am going to come on to talk about.

I talked about the Chancellor and the Prime Minister. Those in corporate business and in senior positions in Government must know what is happening to inflation. They must know what forecasters are saying. When commodities are bought, all energy costs are forward priced—they know what is coming down the track—so the Chancellor could suggest only a 1% increase for nurses when he knew all along that there was likely to be a significant spike in inflation coming. Energy costs are a major issue, one that has perhaps been the driver to this particular debate, alongside the cut in universal credit. We have long known for months that there was going to be an increase in gas prices of 12% in October. That will have a significant impact on household bills. The average gas and electricity bill for customers will go up by £139 a year to just under £1,300. Now, we have to rely on the Government to get a grip to avoid further increases as a result of this unfolding crisis.

It is fundamentally a failure of long-term Government planning over the past decade that we, as a country, are so exposed and vulnerable to rising gas prices. We should have been building energy resilience, instead of being one of the countries most reliant on foreign gas. We should have been investing in domestically produced renewable energy. Instead, we squandered 10 years burning fossil fuels. When I was working on Warwick District Council as a councillor seven years ago, I proposed the Warwickshire energy plan to save people money, create energy resilience and address energy poverty. Sadly, there was not the gumption to follow through on that, and I am disappointed it never materialised.

[Matt Western]

I thank my right hon. Friend for that point. I think the important thing is that the Cameron-Osborne Government in particular became obsessed with fracking and took their eye off the ball with other energy sources. In Warwickshire, we had Algy Cluff come and visit; he was a significant donor to the Conservative party, I think, and he was really interested in having blocks under Warwickshire that he would frack. That undermined long-term planning for projects like the one that my right hon. Friend mentions.

If the Government had followed through, we could have been building zero-carbon homes since 2016. Instead, the Cameron, Osborne and—dare I say it—Liberal Democrat Government scrapped the regulations for housing developer donors. A million homes could have been built since 2016, but something like 10% of households in my constituency are in fuel poverty already and I can only see that figure rising. Several thousand homes in my constituency could have benefited from forward-thinking house building and zero-carbon homes, because we have seen such an explosion in house building across south Warwick and south Leamington.

[Alex Cunningham]

My hon. Friend might not know this, but I was in the gas industry for many years, as I mentioned earlier, and I was involved in a warm homes system. We went door to door, systematically insulating people’s homes and windows doing all manner of other things, but the current Government have done away with that. They have also done away with much of the responsibility on energy companies to do more in that space. Does he agree that energy companies could be expected to do much more to insulate our homes?

[Matt Western]

I absolutely agree—it is such a key point. There are so many schemes that could be introduced, and there is some excellent practice across Europe; I think it is currently beyond the wit of the Government, but as chair of the all-party parliamentary group for council housing I am certainly keen that we should push for it.

On energy costs, I go back to the point about heavy manufacturing. I am passionate about our manufacturing sector—not just the automotive sector, which I have talked about often, but chemicals, aerospace and steel. We have heard the comments that my hon. Friend the Member for Aberavon (Stephen Kinnock) made about the impact on steel, but the impact will be felt throughout our manufacturing: steel goes into the food and drink sector as much as into automotive and elsewhere.

The reality is that the price varies for energy. For gas in the UK, I think that I am right in saying that there is a 40% premium against the average in Europe, which is making us uncompetitive in comparison and will have an impact on future investment and, ultimately, on jobs.

Food prices are another big driver of inflation. The price of food and drink in shops and supermarkets has risen by more than 1% in August, the highest growth since 2008. Food commodity prices have increased by 17% since the start of the year. The Food and Drink Federation says that the cost per household of food and drink shopping will increase by more than £160 per year because of Government policies—that is the federation speaking, not me.

Various hon. Members have mentioned the supply chain disruption, which will lead to higher prices. We have heard about the shortages of heavy goods vehicle drivers, but there are also shortages of refrigerants and carbon dioxide, and of course there is the additional complexity of delays at borders and ports.

I turn to travel. I asked the Minister about the price of petrol, but in July petrol prices hit their highest level in almost eight years. It now costs £74.26 to fill a 55-litre family car with petrol, a 17% increase—17% seems to be a repeating figure—since the start of the year, by the Government’s own data. Diesel, by comparison, has risen by just 14%.

Rail fares are not faring any better. The Government are planning fare rises of 4.8% next year, way ahead of inflation. The average commuter faces paying £3,300 for an annual season ticket, 50% more than in 2010. An annual season ticket from Leamington to London, incidentally, now costs £8,700, a significant amount of money.

As for housing, rents have risen at their fastest rate since 2008, at a time when we are seeing declining home ownership, and the vulnerability that confronts so many people as more and more are living in the private rental sector. Rents in the west midlands are now £1,192 higher than they were in 2011, and incomes have certainly not kept pace with that.

[Matt Western]

My hon. Friend is spot on. Short-term thinking often costs much more in the long term, and impacts of that kind will have very long-term consequences on people. We all know about the impact on mental health and how that can then affect people’s home lives, social lives and family lives, but it can also affect their working lives, which can have an economic consequence too, as well as increasing costs in the national health service and elsewhere.

We need to build more social housing for rent. Just 21 social rent council homes have been built in the Warwick district since 2010.

Let me now turn to the unimaginable and, I think, inadmissible cut in universal credit. It just underlines how out of touch this Government are that they are cutting the £20 uplift. Reversing that decision would prevent families from experiencing an even sharper hit during this cost of living crisis. I think it shameful that the very workers who got us through the crisis are now in the firing line for a £1,000 cut in their income every year. I think about the carers, the shop workers and the delivery drivers—all the people who kept the wheels of the economy turning through such difficult times. Data from the Joseph Rowntree Foundation shows that in Warwick and Leamington, which I think many people would assume to be a prosperous area, 13% of working-age families—6,300—and 29% of working-age families with children will be affected by the cut. This really is a poverty policy.

We have heard a great many claims about levelling up, but the one area in which the Government seem to be succeeding is levelling up on taxes which are more regressive than ever. We may think back to the increase in VAT from 17.5% to 20%; now we are seeing a rise in national insurance and rises in council tax across our local authorities. The average band D council tax set by authorities in England in 2021-22 is just under £1,900, a 4.4% increase on the 2020-21 figure. These are real costs to people. As we have heard, the national insurance increase is the biggest tax rise for families—the most significant change—in 50 years. Graduates now face a marginal tax rate of nearly 50%: that, surely, is a tax on aspiration.

[Alex Cunningham]

My hon. Friend talks about tax rates. He will be interested to know that a tweet has just come in from the Joseph Rowntree Foundation saying that

“191 Conservative seats will see more than a third of working-age families with children affected by the cut to #Universal Credit and Working Tax Credit. There’s still time for the Government to listen to the huge opposition to this cut and change course”.

I know that my hon. Friend will agree.

[Matt Western]

I can assure my hon. Friend that I absolutely agree with that. It was so telling that five or six former Conservative Work and Pensions Ministers said that they were absolutely against this cut. Of course, everyone on this side of the House is against it. It is also quite obvious to economists that the uplift should not be cut but left in place. The cost is £6 billion, I think, and in the context of some of the overspends that the Government have been guilty of during the pandemic, that is actually very little.

The cost of living tsunami that families will face in Warwick and Leamington and across the country this winter shows just how out of touch this Government are. Instead of making positive plans to tackle it, I am afraid that they are simply making it worse. We have the national insurance and council tax increases, and now we have the universal credit cut. The Government are failing to tackle the supply chain disruption that has been exacerbated by covid and Brexit, and we now have rising energy prices, rail fare increases and rising rents. The Government seem to be happy to waste huge amounts of taxpayers’ money on outsourcing and crony contracts, and I just feel that they are really out of touch. They seem to know little about the true cost of living.

We have a Prime Minister who spends—or rather, gets his donor friends to spend—tens of thousands of pounds on the refurbishment of his flat, and a Chancellor who is happy to spend a significant amount of money on a swimming pool, but they will seemingly not listen to all of us saying that there is a need to retain the £20 uplift. I was really surprised when the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), did not know how much it cost to fill up a car. I will tell him: it is 77 quid. He had no idea how much people spent on petrol a year. I can tell him that it is 17% more than it was at the beginning of the year.