Cost of Living: Energy and Housing

Debate between Andy McDonald and Nia Griffith

Thursday 5th June 2014 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

It gives me great pleasure to speak in the debate, and I seek to clarify some of Labour’s policies if we were to get into government next year. Some have actually been borrowed by the coalition Government, who have thought, “Yes, there is something in that. The public are interested in that.” However, they have produced a pale imitation of these things in their Queen’s Speech. Let me give some examples. Labour wants to tackle how people on low and middle incomes cope with rising costs. This year, for the first time, we have seen a reasonable rise in the national minimum wage, but that comes after three years of starving it and of costs going up by a far higher amount. We certainly welcome the measures to be tougher on employers who try to dodge paying the minimum wage, who try to make people work more hours than they were intending to or who try to make deductions from people’s pay. We would like more of such measures, but we have not seen many prosecutions. Time and again during questions Labour Members have asked what is happening about prosecuting people who are dodging the national minimum wage regulations. So, yes, let us get that legislation, but let us also get enforcement of it.

[Andy McDonald]

Does my hon. Friend agree that some of the delays we are experiencing in securing prosecutions are totally unacceptable? A case in my constituency has been rumbling on now for nearly a year and Her Majesty’s Revenue and Customs tells us that it will be a further two months before it is even looked at.

[Nia Griffith]

That is precisely the point: there is not much point having the legislation if it is not properly enforced and if people get the idea that they can get away with things.

There is no suggestion from those on the Government Benches of anything as strong as our idea that, to be effective, the national minimum wage needs to be linked to median earnings. We would like it to be gradually raised to 60% of median earnings. We are also keen to see people incentivised to pay the living wage. One of our proposals is to give employers a tax break if they bring all their employees’ pay up to the living wage. That proposal is affordable because of the savings we would make on tax credits and housing benefit. We should make it possible for people in full-time work to pay their way without an enormous number of top-ups from the state.

Again, the issue of zero-hours contracts is one that the coalition has picked up. We urgently need to deal with it and we need legislation on it. I am pleased that the Government are introducing a provision on exclusivity, which will deal with people who have to be available to work for only one employer. They do not know whether that employer will give them even an hour or two of work, but they cannot take up any other offer of work. However, a lot more could be done and we would like people to be offered proper contracts if they are working regularly over six months. Let us look at what the Union of Shop, Distributive and Allied Workers has done in some of the big supermarkets. The need for flexibility has been recognised, but things such as annualised contracts and averaging out hours are looked at so that people at least know that they will have a reasonable income over a number of weeks, rather than not knowing the situation from one minute to the next. Such contracts work both for the employee and the employer, as they give a sense of flexibility and of security. The real problem with zero-hours contracts is that not only are they unpredictable in terms of what someone gets from week to week, but they do not allow people any employment rights. I am sure that is one reason why some employers try to avoid issuing proper contracts. We would like people who are working regularly to be put on proper contracts.

Let me now turn my attention to the energy companies. Our suggestion of a price freeze has been well documented and we are seeing some ruffled feathers in the energy companies, but why can this coalition Government not help people by introducing that idea of a freeze much sooner? As we have clearly said, it is not just about having the freeze; it is about then breaking up the market so that it works properly for people, and there is proper competition and a proper opportunity to beat down prices. People are very angry about the profits. Yet again, we see high salaries and very high profits, but people’s energy bills are going up. As my hon. Friend the Member for Stretford and Urmston (Kate Green) mentioned, the only reason people managed to cope this winter was because it was so mild. If we have the sort of winters that we saw in the previous two years, people would find their bills astronomically higher, even given the coalition Government’s promise to take £50 off—although that amount has proved slightly elusive, in that it does not actually apply to everybody; the figure is up to £50. The more annoying thing is that we are paying for it through other means; in other words, other schemes that would have been financed by the Government have been scrapped, particularly the one to help with hard-to-heat homes. That is a double tragedy, because fuel bills will remain high and it is difficult to lower them in homes that are difficult to adapt. Ending that scheme, which means that more than 400,000 properties will not benefit from it, is a disaster both environmentally and, for the families concerned, economically.

With regard to the energy companies, we would like to have seen stiffer action much sooner. We have also said clearly that we would like much stronger powers for the regulator. We would also like to see powers extended to people suffering from off-grid issues, which are particularly acute in semi-rural areas, such as parts of Wales, as my hon. Friend the Member for Ynys Môn (Albert Owen) mentioned. People there are reliant on the vagaries of oil deliveries or liquefied petroleum gas. They also have difficulty bargaining over price. Although some good work is being done, for example by oil clubs in my area, it is still very difficult to get the best possible deal. We would also like to have seen pensioners given the opportunity to receive their winter fuel allowance earlier in order to pay in advance and benefit from lower summer prices, rather than finding out halfway through the winter that they have bought only half of what they need and then having difficulties, both with price and delivery.

On fracking, there seems to be a bit of stampede, as if it is the be-all and end-all and the answer to all our energy needs. I am worried that there has been an overestimation of how easy fracking might be and how great the profits might be. I think that fracking will prove considerably more difficult in our country than it has been in the United States. When the Welsh Affairs Committee visited Lancashire to see what is happening there, I was struck by just how little we get from one well. It is like squeezing a tiny drop of something out of a stone. The hundreds of thousands of wells that would have to be sunk seem absolutely disproportionate to the amounts we would get.

The real question is this: why are we making such a huge effort to try to get something that we know is difficult to get—otherwise, we would have got it years ago—when really we should be trying to wean ourselves off fossil fuels altogether? We should be moving towards much greater investment in renewables. I am greatly disappointed that the Queen’s Speech included no mention of climate change or meeting our renewables targets. The renewables industry seems to have been left in limbo, whether it is wind energy being attacked or the Solar Trade Association, which is very worried about the current consultation. Will subsidies be reduced in the same way that feed-in tariffs have been? What is the situation with solar panels on rooftops? There is a lack of certainty, understanding and commitment to getting it right to ensure that we have the best possible uptake in the right places for solar energy.

Marine renewables also seem to have been pushed to one side and sadly neglected. Again, much more could be done to look at how subsidies work and to consider the opportunities to promote technologies that are more expensive and more difficult to develop, such as marine technologies, but that have such huge potential for our island.

As for the latest confusion about who can go on to whose land to undertake exploration for fracking sites, we need urgent clarification, because there seem to be conflicting stories. The Prime Minister has said, “No, nobody will be able to do that”, but that follows a letter to MPs from the Minister concerned stating that that is precisely what they are proposing. The situation is not clear and people have major concerns as a result.

Lastly, I want to deal with the major issue of housing. We all know how difficult it is, particularly for young people, to purchase a house or to afford rents. It is a struggle even in the less expensive parts of the country, where the ratios between what people earn and what houses cost are not good, but in London the disparity is enormous. London has very significant problems, and we need to look at them in a much wider context. Over the past few years, and particularly the past couple of months, we have seen the housing market in London grow away from the housing market in the rest of the UK, and at an even faster pace than it did before. That is leading to immense disparities in the cost of property, but it is also making London almost impossible to live in. If we add to that the fact that, because a huge amount of foreign direct investment—some 40%—tends to centre on London, we see that London seems to be growing in a way that is completely unsustainable. That is leading to huge problems with transport and housing, and people having to live further away and commute for even longer.

The question we must ask ourselves in the long run is this: do we need some far-reaching policies to redress the balance across the United Kingdom with regard to growth? I do not want to stop any regeneration programmes in London, which I think are vital for less well-off and more run-down areas, and I do not want to stop the people who are furthest from the work opportunities being given as much help as possible to access them, but we need to ask whether too many jobs are being created in London and not enough are being created elsewhere. When people think of the UK as a place to invest, they almost invariably think of London. Whereas if they think of Italy, they might think of Milan as much as Rome; if they think of Spain, they might think of Barcelona as much as Madrid; and if they think of Germany, they might think of Munich as much as Berlin. We have a huge concentration on London, and it is becoming absolutely unsustainable.

We need a strategy not only because it would help other areas of the United Kingdom, such as Wales, the north-west and the north-east, but because it would also help London and the south-east. We did that with public sector jobs a few years ago, when the Driver and Vehicle Licensing Agency was moved to Swansea and the passport office was moved to Newport, but we need to go further. I am sure that there are still some public sector jobs that could be moved out of London. But then we would have to consider whether we might create an imbalance between the public and private sectors, as we have seen in Northern Ireland.

We should also think about what motivates the private sector companies to base themselves in London so much of the time. We need proper studies of that and a real understanding of how we can ensure that in future London can be lived in. This is about not just helping other parts of the country but making London a place in which ordinary people can live and, at the moment, that is becoming more and more difficult. We must look at the pattern around the whole country, because we cannot make changes in a piecemeal way. Currently, we are seeing the development of a city region approach, especially in Manchester.

Like London, some places are experiencing a slight overheating compared with their surrounding areas. We need to find ways of linking in those towns that feel they have been left behind, because, as we saw in the recent elections, they are the areas that are the most disaffected and the most likely to turn away from the main political parties. We need to look at the way in which they are linked in to their regional capitals, or to the wealth-generating parts of their areas.

Our plan for the UK should be about creating the right transport links that take people from the places in which they live to the places in which there is work, and putting the work in the places in which people live. We need to think globally. We should think not just about what we will do this year and next, but about what we will do in the next 30 to 40 years. If we do not do that, we will be playing catch-up all the time.

My right hon. Friend the Member for Barking (Margaret Hodge) talked about needing 800,000 houses in the capital. That is a huge quantity. The Government are putting forward proposals for one new town, when in fact we need several new towns. We need to think about not only using every opportunity to improve the situation for people now and to build more affordable homes, but what we are going to do in the long term. How do we want the UK to look? We need to create a balance between where the work is, where the wealth is and where the transport is so that we get a much better balance across the country.

We should help those areas that have seen a decline in the more traditional industries and are struggling to attract some of the new industries as well as those areas that are over-heating, especially those in which young people and people on low incomes are struggling to live. Everyone would benefit from a much more strategic overview, and we should not be afraid of combining that with localism. That does not mean that we are against devolving funds to regions—we have announced that we would do that—or against promoting a municipal force, as was outlined by my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) when talking about Joseph Chamberlain. It is not about decrying that; that is extremely important. It is about linking a local strategy into an overall vision for the UK. In that way, we can begin to tackle as one the issues of housing, work and transport, and making that a strategy that we want to follow for the future. I will not suggest exactly what that strategy should be, because that needs to come from all the regions and the countries of the UK working together. They should look at how the strategy works as a whole, and not just at how it works for their region, country or part of the UK.