Cost of Living and Brexit

Debate between Beth Winter and Martin Docherty-Hughes

Wednesday 14th June 2023 Commons Chamber

[Beth Winter]

I thank the hon. Lady for that explanation.

As others have pointed out, the frontline remains in the everyday lives of our constituents: in the energy bills that come through their doors, at the supermarket check-outs, and in the payslips detailing wages that are much too low. In Cynon Valley, far too many people are struggling. About a year ago, I conducted a cost of living survey to which hundreds of people responded: we were overwhelmed by the response. It showed that 72% of respondents expected to cut down on their heating in the following 12 months, and almost half expected to cut down on essentials. Like other Members present, I hear harrowing stories of families having to use food banks—there has been an exponential growth in their use in my constituency—and kettle packs.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

I was interested to hear the hon. Member’s ideas about a socialist Government in Wales. I look forward to that. According to research by the London School of Economics, the impact of Brexit on food prices has cost households across the UK £6.95 billion, because 28% of food consumed in the UK comes from the EU. Does she recognise that being wedded to Brexit is an absolute policy disaster, not only for the Government but for her party as well?

[Beth Winter]

I do not disagree that Brexit is an issue. I have made that comment already. Food price inflation is a major issue.

I thank all the community groups and the trade unions back in south Wales who do such fantastic work to try to mitigate the worst elements of the cost of living crisis. We recently raised a significant amount for the food banks in my constituency in conjunction with the trades council. Despite all the constraints being placed on us by this UK Tory government, local people are stepping up. They should not have to do that, but it demonstrates the importance of community spirit.

There is a problem with pay, and there is a problem of profiteering. Only yesterday, we saw data from the Office for National Statistics showing that real pay is down by £35 a week compared with 15 years ago. Paul Johnson of the Institute for Fiscal Studies described these data as “staggering statistics” and spoke of

“a completely unprecedented period with no earnings growth.”

That is thanks to this Tory Government’s policy of holding down public sector pay and using that to drive down private sector pay. This is a strategy they have pursued regardless of Brexit.

As a result of Brexit, however, there is certainly a loss of funding. The levelling-up fund and the shared prosperity fund fail to match the resources of the EU regional development fund. We famously heard that there would be

“not a penny less, not a power lost”,

but as a result of the shortfall in EU structural funds and the loss of rural funding, the overall shortfall to the Welsh budget is more than £1.1 billion. That is shameful. The UK Government rode roughshod over devolution when it cut out Welsh government to deal with local authorities. My constituency remains one of those that have seen nothing from the levelling-up fund. In the context of that disregard for devolution, it is welcome that we have new thinking, from Gordon Brown's commission on the future of the UK to Mark Drakeford and the Welsh Government’s Comisiwn y Cyfansoddiad or Constitution Commission. Indeed, in the last couple of weeks the two came together with the Mayor of Greater Manchester, Andy Burnham, in the new Alliance for Radical Democratic Change to advocate the changes that we need to strengthen what the First Minister of Wales refers to as our “solidarity union”. I look forward to becoming involved with that work.

In Wales, as Mark Drakeford explained at the Welsh Labour party conference, that has meant progressive policies such as trialling basic income, expanding universal free school meal provision, and delivering the living wage for care workers. I could say more about those progressive policies, but I know that we are short of time. In contrast, the UK Tory Government have only made people’s lives worse, forcing hardship and suffering on millions of people. We are the fifth richest nation in the world—I am tired of saying that—and we have the wealth, but it is in the hands of the few and not the many. There are alternatives, such as a wealth tax, fundamental reforms of the social security system, and inflation-proofed pay rises. I also want to see a commitment to reforming funding for devolved Governments that recognises Wales’s dependence on public services. We urgently need a revision of the Barnett formula to deliver a needs-based allocation of funds. We need the provision of prudential borrowing powers for the Welsh Government.

The solution to this crisis is being advocated by grassroots community groups and the labour and trade union movements, which speak of the need for higher pay, more universal service provision and for increased wealth taxation, and that is what the TUC General Secretary told the parliamentary Labour party this week. The most pressingly needed solution to alleviate the cost of living crisis is the election of a Labour Government so that we can achieve a greener, fairer, socialist future for everyone.