Oral Answers to Questions

Bridget Phillipson Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Helen Whately]

I am sure that the Government will be responding to the NAO report in due course, but I can assure the hon. Member that the Treasury works very hard with the Department of Health and Social Care to make sure that funding for the NHS, which we are increasing substantially, goes to good use and improves care for patients.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

Mr Speaker,

“energy price rises…increased evidence of supply bottlenecks …shortages in key occupations”.

Those are not my words but those of the Office for Budget Responsibility, which has issued a clear warning that the Government’s supply chain chaos will weigh on the recovery beyond its current forecast. Can the Minister help businesses and families prepare by explaining how much this chaos will cost the country this year?

[Helen Whately]

I thank the hon. Member for her question. I do not agree with the picture that she paints. As I said earlier, there are global factors affecting challenges to the supply chain. We are providing support where it is appropriate. Specifically on energy costs, customers are already supported by the energy price cap, and we are providing £500 million extra help to households that need it during this winter.

[Bridget Phillipson]

The run-up to the festive period is a busy and crucial time for many businesses. They simply cannot afford delays in getting goods to warehouses from our ports, yet that is exactly what the logistics industry is warning that the shortage of heavy goods vehicle drivers is causing. Can the Minister guarantee that no presents will be missing from under the tree this Christmas because of her Government’s complete failure to plan ahead?

[Helen Whately]

We are indeed taking steps to support the haulage sector, where there is a long-running situation with vacancies for HGV drivers. The action we have taken includes making available 5,000 temporary visas for the short term, increasing the number of tests available so that there is greater capacity for new drivers to take tests, changing cabotage restrictions, and funding improved facilities for drivers. In the longer term, we need to see both better pay and better conditions for lorry drivers.

Budget: Pre-announcement of Provisions

Bridget Phillipson Excerpts

Tuesday 26th October 2021 Commons Chamber

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

(Urgent Question): To ask the Chancellor of the Exchequer for a statement on the details of all the provisions in the upcoming Budget that have been made public in advance of the Chancellor’s statement.

[The Chief Secretary to the Treasury (Mr Simon Clarke)]

Mr Speaker, I have the deepest respect for you, this House and all its processes. It is a pleasure to be with you this afternoon. The ability of Parliament to scrutinise the Government, including the Budget, is clearly crucial, which is why we have five days of parliamentary debate ahead of us this week and next, and it is why my right hon. Friend the Chancellor will, in addition, be appearing before two Select Committees of this House next week.

Tomorrow my right hon. Friend will announce a Budget that delivers a stronger economy for the British people, invests in public services and levelling up, and delivers on growth and jobs with a pay rise for 7 million people— 5 million in the public sector and 2 million through an increase in the national living wage.

I will briefly summarise the headline announcements we have already made on the Budget, with the caveat that the bulk of the detail of the Budget will be delivered by the Chancellor himself at this Dispatch Box tomorrow. Importantly, that includes all market-sensitive information. Part of the Government’s objective in trailing specific aspects of the Budget in advance is to help communicate to the public what we are doing with their hard-earned money, because we believe there is merit in clear and accurate information.

I now turn briefly to just a few of the measures we have announced: an increase in the national living wage from £8.91 to £9.50 an hour, meaning an extra £1,000 a year for a full-time worker; £3 billion-worth of investment to build a high-wage, high-skill economy, with a doubling of investment in 16 to 19-year-olds and a quadrupling of the number of skills boot camps; and a multibillion-pound overhaul of local transport to help level up communities across England, with transport settlements for city regions increased to £5.7 billion and allocated directly to cities. As part of the spending review, there is a £5.9 billion deal for the NHS to tackle the backlog of non-emergency procedures and to modernise digital technology, with at least 100 community diagnostic centres to help clear most test backlogs by the end of this Parliament.

These are just a few of the measures that the Chancellor will outline to the House tomorrow as the Government continue their work to deliver a stronger economy for the British people.

[Bridget Phillipson]

Thank you for granting this urgent question, Mr Speaker.

We face an urgent cost of living crisis. Prices are up in our shops, at our petrol pumps and on our heating bills. Families and businesses are waiting and hoping for the Chancellor to take the action that they and our country desperately need. He has not even delivered his Budget yet and it is already falling apart. In recent days, we have read thousands of words about what he plans to do, but the silence is deafening on the soaring bills and rising prices facing families and businesses.

I have five questions for the Chief Secretary to the Treasury today, and I ask him to answer them clearly and simply, not through a press release but to this House. First, will he properly justify withholding from Parliament decisions that he and his colleagues have detailed in the press?

Secondly, the right hon. Gentleman just stood at the Dispatch Box and said that he believes in clear and accurate information. On that basis, will he confirm he understands that, for a full-time worker on the minimum wage in receipt of universal credit, a rise to £9.50 an hour will place far less than an extra £1,000 in their pocket?

Thirdly, will the right hon. Gentleman confirm that the public sector pay rises that Ministers told newspapers about yesterday will be real-terms pay rises, as the Under- Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully), was unable to do so on the telly this morning?

Fourthly, will the Chief Secretary to the Treasury follow Labour’s lead and confirm today, now he is with us, that he will be cutting VAT on domestic heating bills to 0% for six months? Finally, will he back Britain’s high-street firms and freeze business rates now and replace them with a better system fast?

The right hon. Gentleman can tell the newspapers; it is time for him to tell this House.

[Mr Clarke]

It is important that we consider all the measures that have been trailed in the round. It is clear that the wider announcements that have been made are entirely accurate. The national living wage is to rise by £1,000 a year, which will take the benefit for a full-time worker on the national living wage to £5,000 since 2016. That is a substantial increase. It beggars belief that the Labour party can stand there and say that a 6.6% increase in the national living wage is somehow not enough. It needs to be considered in conjunction with all the other announcements that have been made, including the £500 million household support fund, the energy price cap and all the action that we have taken to freeze fuel duty and to keep bills low. We are acutely conscious of the pressures that face households and we take action to modify them.

On public sector pay, which the hon. Lady asked about, I am delighted that we will be returning to the normal processes that adjust public sector pay in the light of all the pressures that exist. It will be for the relevant pay review bodies to discuss that, in conjunction with the Government, in the normal way. I am not going to pre- empt that work, but we will work closely with them to make sure that what is announced is right. The Chancellor will have further details on that in his speech.

On the cost of energy, the energy price cap is protecting households, with up to £100 a year off their bills. That is the right thing to do. We all recognise that that is a priority for all our constituents.

On business rates, we will get the upshot of the fundamental review of how we can get the future of business rates right. The Labour party has committed to abolishing business rates, without any clear idea of how it would fund that. Indeed, the disconnect between what the Labour party has committed to and what it has actually identified the funding for is somewhere in the region of £400 billion of commitments with £5 billion of savings to pay for them. That is not a responsible way to run the economy.

What you will be hearing from the Government Benches tomorrow, Mr Speaker, is a clear plan to make sure that we can not only balance the books but take our economy forward in a way that works for the benefit of all our communities. That is obviously the priority for my right hon. Friend the Chancellor and for me.

Working People’s Finances: Government Policy

Bridget Phillipson Excerpts

Tuesday 21st September 2021 Commons Chamber

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I beg to move,

That this House is concerned about the negative impact of Government policy on the finances of working people, with a growing squeeze on living standards caused by the £1,040 per year reduction to universal credit, the rise in National Insurance Contributions for low and middle income workers, increases in council tax, the freezing of the personal income tax allowance from April 2022, the increasing cost of household energy bills, the highest petrol prices since 2013 and the potential for the largest rail fare increase in a decade, the fastest rise in private rental prices since 2008, successive above inflation increases in childcare costs, and rising prices resulting from the supply chain disruption caused by worker and supply shortages; and calls on the Government to change the direction of its policies on these issues because they have created an avoidable and unacceptable burden on working people.

Before I begin in earnest, I welcome the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), to his new role and congratulate him on his appointment.

In our country today, working families face a sudden squeeze on living standards on a scale not seen for a generation: incomes are coming down; prices are going up, especially energy prices; taxes are going up; rents are going up; childcare costs are going up; fuel costs are going up; rail fares are going up. And with empty shelves in too many shops, restaurants closing because of meat shortages and now refrigerant shortages putting Christmas at risk, it is not just that people can afford less; there is also less to afford.

The people of Britain face an extraordinary squeeze on their living standards this winter—not simply by chance, but because of the choices made by Conservative Governments this year, last year and in the 10 years before. It is not some tragic, unforeseeable series of unhappy accidents that brought us here today. It is a string of choices that this Government have made, sometimes in the face of evidence, sometimes against advice, sometimes through a dogmatic refusal to try, and sometimes simply through a lazy and complacent failure to take the hard decisions that government involves. Time and again, through the pandemic and the long years before it, the Government have left issues to fester rather than taking action to address them, and then rushed at the last moment, only to find that it is too late and the damage is done.

I said at the beginning that incomes are going down, prices are going up, taxes are up, rents are up, childcare costs are up, fuel costs are up and rail fares are up. Let me take each one in turn.

Ten months ago, the Chancellor set out his policy of a public sector pay freeze. Like so much of his policy making, it was a triumph of short-term accountancy over rational economics. Public sector workers—council staff cleaning our parks in lockdown, police officers on the frontline, teaching assistants doing everything they can to give our children the best possible start in life—are not somehow separate from the rest of the economy. They buy food from the same shops as their neighbours working for private firms. Their children go to the same schools as private sector workers. They shop on the same high streets. They visit the same pubs and cafés. Taking money from their pockets while the recovery is so fragile—and it is so fragile—is taking money from our shops, our high streets, our economy. It is pulling demand out of our economy at the worst possible moment.

But the Government have not been content with clobbering those who did so much to keep our country running during the pandemic. In just a few weeks’ time, they are putting their hands in pockets once again: the pockets of the millions of families in our country—40% of them in working households, doing everything the Government have asked of them—for whom universal credit is what keeps them out of poverty. Again, let us be clear: many of the people being clobbered by this hit are the heroes whose bravery in the face of a then little understood disease kept this country running through lockdown after lockdown.

The Government are taking £20 each week from every family who receive universal credit. Government Members may choose to forget what that means. In the years ahead, their voters will remember the choices that they made. They will have heard from their own constituents, as I have heard, the growing worry and anger of the people they represent—the genuine sense of surprise that any Government could do this, mixed with a lasting fury that the Government really are doing this. Twenty pounds each week is not simply a number. It is school shoes, a gas bill, dinner on the table, and decent meals for the children.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

Thirty-seven per cent. of children in Lewisham are growing up in poverty. That is the stark reality of the cost of living crisis. Rather than addressing the issue, the Government are cutting those people’s universal credit and putting up their taxes. Does my hon. Friend agree that this is not the way to treat hard-working families and their children? Should not the Government keep the £20 uplift, cancel the cut and think again about the tax rises?

[Bridget Phillipson]

My hon. Friend is absolutely right. It is frankly indefensible. We knew that poverty was already beginning to rise before the pandemic even hit, and we know the impact that the cut to universal credit will have on family and household budgets, and on child poverty.

It is bad enough to be taking money out of people’s pockets as the recovery falters, but as price after price goes up for working people, this is unforgivable—because prices are up, and they are up sharply. Madam Deputy Speaker,

“August saw the largest rise in annual inflation month on month since the series was introduced almost a quarter of a century ago.”

Those are not my words, but the words of the Office for National Statistics. Alongside the most recent GDP figures, that is a powerful signal of how fragile our recovery remains.

Rising food prices have been driving upward pressure on the inflation rate, but this week, of course, it is energy prices that are the focus of our attention. That rise is taking money out of household budgets directly, but it will also be taking money out indirectly. Higher prices for energy mean higher prices for industry, and that means higher prices for goods. Already factories are being shuttered by higher prices and already that is driving further problems, such as knocking out the carbon dioxide supplies that keep meat fresh along our supply chains.

Ministers are always keen to blame other people, the weather or bad luck, and to claim that all of Europe has the same problems. That is not good enough and the public know it. To assert that other Governments have faults is not to excuse our own. What we are seeing and what we have seen over the last decade is a chronic failure to take responsibility, and it is hard-working families and struggling businesses who will pay the price.

[Jack Dromey (Birmingham, Erdington) (Lab)]

On Saturday, I met a care worker on Erdington high street who was close to tears. “I’ve got two kids, Jack”, she said, “I’m on universal credit. I can’t work any longer hours. Now I’m facing a £1,000 a year cut and a tax increase. Why? I worked so hard throughout the dreadful covid crisis to care for the desperate, sometimes the dying. Why are they doing this? I’ve worked so hard over so many years. I feel that they just do not begin to understand people like me and the pain that I will endure at the next stages.” Is it not the simple reality that the Government seem to be utterly oblivious to the consequences of their actions for the poorest in our country?

[Bridget Phillipson]

Like my hon. Friend, I have heard from care workers and many others in my constituency about the anger that they feel. The average care worker is set to lose more than £1,000 in tax rises and universal credit cuts. Of course, the Government’s much trumpeted so-called plan for social care will do absolutely nothing to help the very care workers my hon. Friend describes.

Let us remember the exact timing of the soaring energy prices: exactly as the cut in universal credit bites. It is about choices. The Government choose not to protect working people. We would choose differently.

[Stephen Flynn (Aberdeen South) (SNP)]

The hon. Member is making a number of incredibly important points in an articulate fashion. However, would she not agree that much of what she has covered up to this point is also a consequence of Brexit? Will she therefore condemn the fact that the Government took us out of the European Union during the middle of a pandemic?

--- Later in debate ---

[Bridget Phillipson]

I will shortly come to a section of my speech that deals with the extensive problems that we face as a result of the Government’s Brexit deal; I will say a little bit more at that point.

Resolution Foundation analysis published yesterday shows that four in 10 households on universal credit face a 13% rise in their energy bills in the same month that their universal credit is cut by £20 a week. Earlier this month, we heard a lot of Government Members selectively quoting the analysis of the Resolution Foundation. I hope that they have been paying a little more attention this week, and will be reading that report with the same degree of careful attention.

This crisis may be sudden, but the causes are long standing: dependence on imports; a lack of energy security; inadequate emphasis on storage; a decade of decisions deferred and dodged. This is a crisis made in Downing Street that was caused by a decade of complacency. Gas stockpiles are at their lowest level for 10 years. In 2019, the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves)—who then chaired the Business, Energy and Industrial Strategy Committee—wrote to the Government about the impact of closing the Rough storage facility, which provided about 75% of Britain’s natural gas storage capacity. She wrote about gas security and the need for supply resilience. “All is well” was the tenor of the response she received, even though the key report on which Ministers relied did not include any explicit analysis of consumer price impacts. And yet here we are today.

This month, connectivity to the continent for electricity imports is down. It is often high praise to be able to say that something is really on fire, but rather less so when it is the main electricity cable to France, which went up in flames earlier this month and will not be back online until March. As the pandemic showed so powerfully, when crises arise we discover that our country is not prepared, and that only one thing has to go wrong and everything is at risk. The resilience that should be there has long since been stripped out for illusory short-term savings.

Incomes are heading down and prices are up, but, more than that, taxes are already up and planned to go up further. Last November, the Chancellor all but forced councils to put up council tax further to pay for the rapidly rising cost of social care—a challenge the Conservatives did nothing to tackle in 11 years in power. In March, he set out his plans to freeze income tax thresholds, taking a higher chunk of working people’s incomes each year. This month he set out his new tax on working people and their employers, providing £19 in every extra £20 by taxing the earnings of working people and the success of small businesses. As we head towards another Budget, the Prime Minister and the Chancellor have repeatedly refused to rule out yet another unfair tax rise on working people. Time and again this Chancellor reaches to take money from the pockets of working people and their employers rather than looking across the system and ensuring that those with the broadest shoulders, who can afford to contribute more, do contribute more.

Incomes are heading down, prices are up, taxes are rising, and what is more, rents are up too. According to the property website Zoopla, private rental prices across the UK increased by 5% in the 12 months to the end of July, adding almost £500 a year to the average tenant’s bill—the biggest jump since its index began in 2008. That might be welcome news for those who have a portfolio of properties and make their living from renting to others, but for working people these numbers are an index not of success but of a decade of Government failure to get a grip on the housing issues of this country.

Incomes are going down, prices are going up, taxes are rising, rents are rising, and, what is more, the cost of childcare is going up too. Labour Members have long warned that a decade of Conservative neglect and the impact of the pandemic could force thousands of early years providers to shut their doors for ever, and it is now clear that those fears are being realised.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

A recent report by Pregnant Then Screwed showed that nine in 10 working families believe that the cost of childcare is severely impacting on their living standards. This is not surprising considering that childcare costs have been rising three times as quickly as wages in the past decade. Does my hon. Friend agree that the Government urgently need to put in targeted support for these working families, right now, rather than cruelly withdrawing the universal credit uplift?

[Bridget Phillipson]

I am grateful to my hon. Friend. I pay credit to her for all the work that she has been doing to highlight these issues and the impact on families and children, and the much bigger economic impact when we do not get our childcare system right in this country.

Three thousand childcare providers have closed since the beginning of 2021 alone, denying families access to the childcare that parents need and denying children access to the early education that sets them up for life. Why is that? One major reason, as the Early Years Alliance has highlighted, is that information released through freedom of information requests makes it clear that Ministers have been knowingly underfunding early years providers, driving up costs while driving down quality. Childcare should be a vital part of our national infrastructure that should help our whole economy to grow and to recover. Yet, as my hon. Friend points out, Britain has some of the highest childcare costs in the developed world. Childcare must be affordable and accessible to families. If more people can work, our collective output will be greater. It is right for children, it is right for families, and it is right for our economy.

Incomes are going down, prices are going up, taxes are rising, rents are up, the cost of childcare is up, and petrol and diesel are more expensive again too. I represent a seat where there are no passenger rail services. If people live far from their jobs, they drive to work or get the bus. Fuel prices feed fast enough into the squeeze on living standards, and last week petrol was over 135p a litre. It is more than £10 more expensive to fill up the average tank than it was when the spending review was agreed in November. That makes an enormous difference to families when every single penny counts.

Incomes are down, prices are up, taxes are rising, rents are up, the cost of childcare is up, fuel is up, and rail fares are set to rise too. My hon. Friend the Member for Oldham West and Royton (Jim McMahon) has set out the next steps we expect in the Government’s hammering of working people. With rail prices tied to July RPI inflation, and with inflation as high as it is, the cost of season tickets will rocket by almost 5% for long-suffering rail users next year—the biggest single increase in a decade. Again, it is not just the leap now but the decade of complacency before that tells the full story. The average commuter faces paying almost £3,300 a year for their season ticket—50% more than when the Conservatives came to power in 2010. Average fares have risen nearly three times faster than wages, and they are on course to rise again.

It is not just that families can afford less on food, energy, rent, childcare, travelling and commuting but that there is less to afford. Restaurants have closed. Shelves are empty. Shortages are real, and biting not just on families and their weekly shop but on our supply chains for industries too. What lies behind that? Not enough HGV drivers; long queues at our ports; more paperwork at the border; no agreement on food, animal and plant health standards when we left the EU; shortages of refrigerant, putting meat supply chains at risk: on issue after issue the Government were warned and warned again.

It is only three months since Ministers told the industry that concerns over HGV shortages were “crying wolf”. Last Christmas the roads around many ports were clogged for days. I meet businesses that have had to scale back ambitions for global expansion because it is not even worth their while sending goods to Northern Ireland any more. Again, these issues were not just foreseeable; they were avoidable. They were foreseen; they could have been avoided.

People are having less money to spend; having to spend more of what little they have paying more on tax, transport, fuel, rent and childcare; and having less in the shops than they can buy. There is a word for that: impoverishment. More and more people are being pushed into poverty. It is the policy of this Government to stand by and watch, and it will be the policy of the next Labour Government to turn it around.

[Dame Margaret Hodge (Barking) (Lab)]

I have listened very carefully to my hon. Friend’s really excellent exposition of a whole raft of issues that have challenged living standards, and what is interesting is that not one Government Member has got up to challenge any of the assertions that she has made. Does she agree that that demonstrates that they have nothing to say and that the slogans they use to try to describe their actions belie the truth of the increased division and poverty that they are creating?

[Bridget Phillipson]

I am grateful to my right hon. Friend, who did so much in government to tackle issues of poverty and of child poverty in early years, in particular.

Conservative Members will have heard the same from their constituents as I have heard from mine, which is that life is getting tougher and they just cannot understand why, in the face of rising cost pressures, the Government are putting up their taxes, cutting the support that is available and making life harder. My constituents simply cannot understand why the Government are prepared to stand by and allow that to happen.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

I thank the hon. Lady for giving way. You are making the case for why you do not agree with the Government’s position, but I have been listening very carefully to hear what your position is. You have criticised the removal of the uplift in universal, but no Labour politician on the news or interviewed by the press has committed to keep it if you were to be elected.

[Dr Johnson]

I did not mean to, of course, Madam Deputy Speaker. The point I am trying to make is that there is no plan from the Opposition. They are not giving any plan on what they would do instead; they simply criticise. They simply say we must spend more and tax less, but how does the hon. Lady propose to do such a thing?

[Bridget Phillipson]

I am grateful to the hon. Lady for her intervention. The single biggest difference that all of us could make right now would be to cancel the cut to universal credit. That would make the biggest difference to her constituents and to mine, who are facing the single biggest cut to social security since the inception of the welfare state. That is not a choice that a Labour Government would be taking in the aftermath of a pandemic.

[Dr Johnson]

The hon. Lady says that she would not wish to remove the temporary uplift, which we had always planned to be temporary throughout the pandemic. Does that mean that she is making the commitment that a Labour Government would reinstate that £20?

[Bridget Phillipson]

We would not be cutting it in the first place. We would replace universal credit with a better and fairer system that supports people into work. If the hon. Member wants to have a discussion about semantics, I suggest she has a chat with her constituents and sees how she gets on, arguing about the distinction between a temporary uplift and a cut. It is more than £1,000 a year from families’ budgets—that is what really matters.

[Miriam Cates (Penistone and Stocksbridge) (Con)]

The hon. Lady has made it clear that Labour wants to keep the temporary uplift. However, given that Labour does not support increasing national insurance, which is a very broad-based tax, how does it propose to pay for a permanent £6 billion a year increase in public spending? How would she pay for a blanket extension of £20 a week for every single universal credit claimant—it is not targeted to families or those with children in particular—in a way that is fair and does not involve raising taxes?

[Bridget Phillipson]

First, it is worth considering why the increase to universal credit was put in place. It was because, during the pandemic, the Government had to recognise that universal credit had been set at an inadequate level on which families might survive. On the hon. Lady’s wider point, I have a long list of places where we could find some money, if she is interested: the 1.9 million pieces of personal protective equipment, worth £2.8 billion, procured by the Government that were useless; the stamp duty holiday that was a £1 billion-giveaway to landlords and second homeowners—I could be mistaken, but I do not recall her objecting to that—and the hundreds of millions of pounds about to be wasted on the Prime Minister’s vanity yacht. That is before we get to the Test and Trace system that the National Audit Office said had not worked properly and had had a “minimal impact” on transmissions, literally wasting billions. This is about choices. There is always money for the Government’s projects, their friends and their people, yet when it comes to dealing with some of the poorest families in our community—those who have got us through the pandemic—I am afraid they are told that there is nothing for them.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

rose—

[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.

[Aaron Bell]

When the hon. Lady’s boss, the hon. Member for Leeds West (Rachel Reeves), was appointed as shadow Chancellor, she said that not only would all Labour’s policies be fully costed but she would explain how they would be paid for. They need to be paid for on an ongoing basis. It is no use going over incidents from the last 18 months and saying that that would fund the extension to UC forever, that tax credit uplifts would be made permanent and that legacy benefit claimants would also get them, as well as turning the advances we have had into grants, reducing the taper rate and scrapping the benefit cap and the two-child limit. Those are popular policies, but how much would all of that cost and how would Labour pay for it on an ongoing basis? The hon. Lady cannot deny the fiscal reality that we are in a difficult situation because of all the money that the Government have spent on protecting jobs.

[Bridget Phillipson]

The difficulty with the Government’s approach is that they like to pretend that theirs is the only way to do it, with the only option being to hike national insurance on workers and businesses when our recovery is far from clear. Labour would not be putting up national insurance at this point with the recovery far from secure. We have set out in lots of detail the different options available. Just yesterday, my hon. Friend the shadow Chancellor set out further changes that we would make to allow the tax system to become fairer and more progressive. We could say a lot more. It should be shared more evenly across the incomes and across the generations and not through the Government’s approach of hammering working people and their families.

Labour will make more in Britain by giving more public contracts to British companies big and small. We will build a prosperous and resilient economy where every corner of our country can offer decent jobs; where ours is the best country to grow up in and the best country to grow old in. We will use stretching social, environmental and labour clauses in Government contracts to raise standards and to spend and make more in Britain. We will focus on bringing the jobs of the future to Britain by investing in reshoring jobs just as we invest in foreign direct investment. By helping every business access the expertise and support that it needs, we will build a high-skill, high-wage economy, and we will take seriously the challenges that we face outside the EU, fixing the gaping holes in the deal that the Government negotiated.

Let us focus on what the Government can do right now. Earlier this month, the Government felt they just could not wait for next month’s Budget to announce their plan to clobber working people’s incomes through an increase in national insurance, after all that this country has been through. After a pandemic that again and again showed the British people pulling together at their generous, innovative, dedicated best, the Government’s reward was a tax rise on workers and struggling businesses rushed through in less than a week. There is nothing to stop Ministers taking the same decisive action, with the same urgency, to protect the living standards of millions of people. There is nothing to stop them tackling poverty as the scar that it is. I urge the Government to change direction not at their conference, not in October, not at the Budget and not next year but now, as the nights grow cold, the bills mount up and the money runs out. There is no time to spare. The time for action is now.

Health and Social Care Levy

Bridget Phillipson Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to follow my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton). I absolutely agree with him that the Government’s proposal is probably the least worst option.

When it comes to this debate, I feel saddest for the many constituents who have come up to me in recent years and said, “When it comes to the big issues—the issues of national interest—why is it that you lot can’t work together and come up with a solution?” Clearly, this issue is of huge national interest and has been debated in this House many times over recent decades. I have been involved in debates dozens of times in the six years I have been here. I blame colleagues from either side of the House—from both the Labour and Conservative parties. Whether it is the “death tax” or the “dementia tax”, people have come forward with proposals only to be rubbished by the other side for political purposes.

The reality is that this issue is one of many challenges that we are going to face over the next few decades. According to the Office for Budget Responsibility, if we do not change our tax system, our debt-to-GDP ratio will be 400% of GDP by 2060, because of pension, healthcare and social care costs. We must sort out this issue on a cross-party basis so that we have a long-term solution.

The reality is that we have had cross-party consensus. As I have said several times in the past couple of days, I have taken part in two Select Committee inquiries on the issue, the most recent a joint inquiry by the Health and Social Care Committee and the Housing, Communities and Local Government Committee. There were 24 Members on those two Select Committees, 12 of whom were from the Opposition Benches, and we strongly recommended a solution based on national insurance. We can of course argue about some of the detail of the national insurance proposal, which has been changed in some positive ways over recent days, but simply to dismiss it out of hand for political purposes is irresponsible. I understand that the shadow Minister for social care, the hon. Member for Leicester West (Liz Kendall), has also proposed a solution based on national insurance. It does not make sense simply to say for political purposes that the proposal is wrong—

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

indicated dissent.

[Kevin Hollinrake]

The shadow Minister on the Front Bench can shake her head, but that is the reality behind the proposal. The Chair of the Housing, Communities and Local Government Committee, the hon. Member for Sheffield South East (Mr Betts), said clearly that he still supported a solution based on national insurance.

I agree with my hon. Friend the Member for Stoke-on-Trent South that this solution is the least worst option, but we can develop better solutions down the line. I agree with my hon. Friend the Member for Bexhill and Battle (Huw Merriman) that the German solution is better. In Germany, they came together across party lines, based on the national interest, to solve this issue. It was very similar in respect of employer and employee. The key benefit of the German solution is that when a person comes to be defined as in need of care, instead of the local authority allocating care, they can choose to take a monthly cash payment, so they can pay a relative, a neighbour or whoever to care for them. A person can be cared for by the people who know them the best, who understand them the best and love them the most, which must be better than some of the stories that we hear about care providers who give a pretty poor service, with a 15-minute package now and then.

This must be a better solution, but I have one concern. I understand why the scheme has been brought forward like this, using national insurance. It is because it is quick and easy, and we need the money today, but the concern is about hypothecation, which many Members have mentioned. This was a social care levy, but already some of it is going to the health service. That is our understanding at the start. Hypothecated taxes simply do not work, and we see that time and again. It would be better to develop this into a proper social insurance system with not-for-profit providers, so that it does not go into the private sector, but instead the money could be paid in on a proper hypothecated basis to deal with the long-term problem of social care.

--- Later in debate ---

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

It is customary when closing a debate to say that we have had a good debate, and indeed we have, but what has been most striking is how inadequate a basis it has been for a change of this magnitude to the tax system of our country. I intend to come back to that point.

We have heard a number of extremely sharp and insightful contributions, including from my hon. Friends the Members for Wallasey (Dame Angela Eagle) and for Nottingham East (Nadia Whittome), who talked very powerfully about how what has been set out does nothing to improve the working conditions facing social care workers, many of whom will now themselves be facing a tax rise. I would just like to say that it is wonderful to see my hon. Friend the Member for Nottingham East back in her place in this House.

We have heard contributions from the Chair of the Public Accounts Committee, my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), and the Chair of the Housing, Communities and Local Government Committee, my hon. Friend the Member for Sheffield South East (Mr Betts), who asked very important questions of Ministers. We did not get answers to those questions, and I hope the Chief Secretary will address the really important points that were raised. I will touch on those a little later.

We also heard from my hon. Friends the Members for Birmingham, Selly Oak (Steve McCabe), for Eltham (Clive Efford), for Bedford (Mohammad Yasin), for Brighton, Kemptown (Lloyd Russell-Moyle), for Bristol South (Karin Smyth), for Lewisham East (Janet Daby) and for Hornsey and Wood Green (Catherine West). They covered a range of different points, but they were all clear that this does not represent a proper plan for the NHS or for social care. It is, instead, a broken promise. Two and a half million working households will be hit by the Tory double whammy of cuts to universal credit and an increase in national insurance.

Understandably, I have focused on contributions from Labour Members, and I am sad that, except for a few Conservative Members—notably the right hon. Member for Rossendale and Darwen (Jake Berry)—many of those who bravely stated their reservations over the weekend to the Sunday newspapers have been strangely silent this evening. I hoped we might have heard from whichever Tory MP said that putting up national insurance would be “morally and economically wrong”, and that:

“It kicks in at a low level…If you get all your income from investments and property you don’t pay a penny, but if you work your guts out for minimum wage you get clobbered.”

I could not agree more.

[Kevin Hollinrake]

That point about rental income has been made on a number of occasions. If someone holds their properties in a limited company and they take their profits through dividends, those dividends are taxed to include the social care levy. Will the hon. Lady put the record straight and accept that that is the case?

[Bridget Phillipson]

It is ludicrous that a landlord will be paying not a single penny more, but their tenants—many of them perhaps working in the NHS or social care—are about to be clobbered by a tax rise. Some 95% of what is to be raised from this measure will come from working people and businesses. What the hon. Gentleman says is simply not right. I understand that one former Cabinet Minister used perhaps more colourful language this afternoon, and I will not test your patience, Madam Deputy Speaker, by repeating exactly what they said. Safe to say, however, that he or she is not a fan of this Tory tax hike.

It is usual for major fiscal events in the House to be timetabled in advance. Indeed, this week the Chancellor put us all on notice of a comprehensive spending review and an autumn Budget at the end of next month. It is also usual for major fiscal events to be accompanied by independent and thorough scrutiny by the Office for Budget Responsibility. It is usual for those forecasts to be published alongside the Government’s plans, so that all Members of the House can understand, in detail, what they are voting for and how it will affect the public finances, the livelihoods of our constituents and the success of the economy.

The OBR’s typically thorough work back in March produced a report with more than 130 charts and tables, but the flimsy document produced by the Government yesterday had just three. I recall when some Government Members were sticklers for the rights of this House, and sticklers for procedure and proper time to debate and consider changes that will have a huge impact on our society and the shape of our economy. It seems that those days are long gone. The change we are being asked to vote through tonight is not being introduced in this extraordinary form because that is right for the country. The House knows that. It is because it is the right approach for the Prime Minister: announcement on Tuesday, vote on Wednesday, and perhaps a reshuffle later this week—Back-Bench rebellion averted. That is no way to run a country.

Let us be clear about what is happening. This House is being asked to approve, with almost no notice, an extra £11.4 billion of taxation on workers and businesses, and an extra £600 million of dividend taxes—95% of the new revenue is to come from taxing jobs and earnings. When this Government need income, they do not turn first to those with assets, stocks and shares and property, or to those with the broadest shoulders who can afford a little more. No, they turn to working people: to those who work hard to earn their income, and their employers. They break a solemn promise that every Government Member made to the people of this country. That is a choice, and it is not a choice that the Labour party would make.

Two other major questions emerge from the contributions today. Where is the Government’s actual plan? We need a real plan for social care, not a few numbered paragraphs and a handful of case studies. Labour’s priority would be to give older and disabled people the chance to live the life they choose, shifting the focus of support towards prevention and early help. Let us not forget in this place that around half of the social care budget supports working-age adults with disabilities. They are far too often overlooked in discussions about social care, and the Government’s announcement does nothing for them.

Alongside a strong and skilled social care workforce, Labour would deliver a new deal for care workers to create a well-motivated and properly rewarded workforce, with clear support for unpaid carers—the very people who got us through the last 18 months, whom we clapped and claimed to care about. There is absolutely no sign of that plan here today or in the documents published yesterday. The document that the Government published yesterday is strikingly poor on the practicalities of delivery, not just for social care but for our NHS too.

Our national health service was chronically overstretched long before the pandemic hit. We entered the pandemic with over 100,000 vacancies. By March this year, there were 5 million people on waiting lists for NHS treatment—waiting longer for cancer care, longer for vital surgery, longer for mental health support. What we have been given today is not a plan; it is the promise—another promise—of a plan to follow. The Minister could not even tell us what the impact would be on waiting times. He could not tell us what it meant for local authorities on the frontline. He could not give us details of how public sector bodies are expected to meet the cost. It is not a plan; it is just a tax rise.

Much of today’s debate has focused on whether it is the right sort of tax rise. Sometimes it is easy to focus on the fiscal aspects and forget the economic aspects. Our recovery is still fragile. Businesses are under enormous pressure. We all know it; many are yet to fully reopen, and many are not yet operating at full capacity. Yet the Chancellor has been putting up council tax, he is slashing universal credit, he is freezing income tax thresholds—he is sucking demand out of our economy at the worst possible time.

The shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), set out powerfully what these measures mean for working people, but this is a series of hammer blows for firms, too. Small businesses, struggling to get back on track after a terrible 18 months, have been clear, in the words of the Federation of Small Businesses, that this is “precisely the wrong moment” to be putting up the cost of taking on and retaining staff. The FSB estimates that these changes could mean an extra 50,000 people out of work.

This is the wrong process to agree the wrong tax at the wrong time. It will not deliver what is promised for our health and social care sectors. The Health Secretary cannot even tell us whether it will clear the NHS backlog in this Parliament. It will not give social care the resources it needs in the next three years. There is not a plan for reform of social care. This tax rise will not create more and better-paid jobs in the wider economy, it is not fair across the regions, it will not end people having to sell their homes to fund their care, and it will not help our economic recovery. The Prime Minister cannot even guarantee that it is the last unfair tax rise of this Parliament. Tonight, we are not voting for a plan to fix social care. There isn’t one. We are voting on the third Tory tax rise on working people, and we will oppose it.

Oral Answers to Questions

Bridget Phillipson Excerpts

Tuesday 7th September 2021 Commons Chamber

[Steve Barclay]

I understand that by the end of October there will be reassurance on that, and I am happy to take that up with my hon. Friend following this session.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

When the Chancellor increased universal credit eighteen months ago, he said that he wanted

“to look back…and remember how we thought first of others and acted with decency.”

Does the Minister consider that taking £20 a week from millions of families across our country is really an act of decency?

[Steve Barclay]

I think that £400 billion of support in response to the covid pandemic across our public services and individual businesses shows the scale of measures that the Chancellor has put in place. On the specific issue of universal credit, we were always clear that the uplift was going to be temporary. As it was, my right hon. Friend the Chancellor extended it for a further six months. But ultimately what divides the two sides of the House is that we believe the best approach is to have a plan for jobs, to get people into work, and to upskill them in those jobs. The Opposition simply do not have a plan at all.

[Bridget Phillipson]

Let us think about what £20 a week really means. Twenty pounds a week means being able to afford to buy a coat for your children this winter. It means not having to worry about turning on the heating when the weather turns cold. Can the Minister offer any advice to families who work hard and play by the rules about how they should manage with £100 less each and every month?

[Steve Barclay]

As the hon. Lady knows, alongside the universal credit uplift other measures of support were given. Those are not only my words; I quote the Resolution Foundation, which has said:

“Since the crisis hit, the support schemes introduced by the Government have prevented an unprecedented collapse in GDP from turning into a living standards disaster.”

That is the package of measures put forward by the Government. That is how we have protected people’s living standards. The key is to have a plan and to get that plan working; it is, and that is helping people back into work.

Oral Answers to Questions

Bridget Phillipson Excerpts

Tuesday 22nd June 2021 Commons Chamber

[Steve Barclay]

There was a striking omission from that question. There was no reference at all to the additional £2.2 billion of core school funding, over and above which there is the £1.4 billion announced by my right hon. Friend the Chancellor. Of course, the House would expect proposals to be evidence-led, deliverable and provide value for money, and we will work with Department for Education colleagues on that, but there was no mention in the hon. Gentleman’s question of the additional £2.2 billion of core school spending uplift this year.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

The Institute for Fiscal Studies has estimated that the significant long-term cost to our economy from the Chancellor’s failure to invest in our children and young people is as much as £350 billion in lost earnings. Has the Treasury done its own assessment and will the Minister have the decency to publish it?

[Steve Barclay]

As I said in my last answer, we will have a review to inform the question in terms of the impact on time. Most of the debates that we have had in this House have focused on teacher quality as the biggest driver of outcomes for children, so we need to see the evidence of it. For example, if we look at Finland, we see that Finland has a shorter school day but a higher PISA—programme for international student assessment—result. If we look at the USA, we see that it has a longer school day but a lower PISA result. So it is right that we look at the evidence, but teacher quality is usually seen as the bigger driver and that is why we have funded the tuition in the way that my right hon. Friend the Chancellor has.

[Bridget Phillipson]

With this Government, it seems that it is a case of “don’t know, don’t care”. The reality is that the Chancellor’s failure to invest in our children’s future is the very definition of a false economy. The Chancellor recently said that he could not say yes to everyone. He seemed to have no problem saying yes to the friends and donors of the Conservative party, but it is a no to the children who urgently need support to catch up after the biggest disruption to their education for a generation. Is the Minister really proud of that?

[Steve Barclay]

I am very proud that my right hon. Friend the Chancellor has committed an additional £7.1 billion over three years to increase the school uplift, with £2.2 billion this year alone. I am very proud that he announced £1.7 billion of additional recovery funding. I am proud that he announced a further £1.4 billion, but again, the hon. Lady appears to have written her question before hearing the answer. The answer was that we will of course look as part of our review at the effectiveness of the additional time. I have cited some of the international evidence that we will look at, but teacher quality is usually the bigger driver and that is why we have focused on teacher training but also on the tuition programme, so that we are training an additional 500,000 teachers and rolling out 6 million tuition courses to get that targeted learning support to children across the country.

Oral Answers to Questions

Bridget Phillipson Excerpts

Tuesday 27th April 2021 Commons Chamber

[Rishi Sunak]

I am glad that the Scottish Government are able to use the over £3.5 billion of Barnett consequentials that have been provided by the UK Government over the next year. Child poverty is of course an important issue and one that we remain committed to, which is why initiatives such as the troubled families programme are making an enormous difference to those families. Crucially, we also know that children growing up in a workless household are five times more likely to be in poverty, which is why this Government are committed to helping people find work and find well-paid work. That is something we have an excellent record of doing.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

David Cameron said that Greensill had

“the mandate for the UK Government”.

Greensill said that it was the

“sole provider of…supply chain finance”

across Government and that it had a model that brings several benefits to the UK public sector. Does the Chancellor still believe that he was right to bring in real-terms pay cuts for public sector workers, while allowing David Cameron and Lex Greensill to target their pay packets and giving them the run of Whitehall?

[Rishi Sunak]

With regard to public sector pay, I do believe it is right, at a time of extraordinary strain on our public finances—when those in the private sector have seen more than 1 million jobs lost, hours cut, wages cut and many millions furloughed, with the impact that that has on them—to take a fair and proportionate approach to public sector pay. That is why this Government have said that those on the lowest pay will see a pay rise this year, as will those in the NHS. Combined with all the other pay progression, this means that a majority of people in the public sector will see their pay increase this year, despite the difficult circumstances. Of course, the national living wage is also being increased ahead of inflation, making sure that those on the lowest incomes see an uplift in their take-home pay.

Oral Answers to Questions

Bridget Phillipson Excerpts

Tuesday 9th March 2021 Commons Chamber

[Rishi Sunak]

My hon. Friend is absolutely right about the importance of protecting jobs. The extension of the furlough scheme on generous terms beyond the end of the road map is designed to give his local businesses and others the reassurance that they need to reopen safely and confidently. I know he will be keen to protect as many of those jobs as possible in his local area and I am delighted that this Government can support him in doing so.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

A SAGE—Scientific Advisory Group for Emergencies —adviser is reported to have said:

“I thought the chancellor was in charge. He was the main person who was responsible for the second wave.”

Does the Chancellor accept that his refusal to follow the science by pitting public health against the economy led to worse outcomes for both?

[Rishi Sunak]

I urge the hon. Lady to be a little bit careful about what she reads in the newspaper. At all steps in this crisis, we have indeed taken the advice of our scientific advisers. Let us go back to September, which I think is what she is referring to. At that time—as she knows from the SAGE minutes herself, which are published, rather than unsourced quotes in newspapers—the evidence was finely balanced and there were many things for Ministers to consider. The consideration at that point was that the tiered system was working and deserved to be given a chance.

Draft Scottish Rates of Income Tax (Consequential Amendments) Order 2021

Bridget Phillipson Excerpts

Wednesday 10th February 2021 General Committees

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Mrs Miller. I thank the Minister for his explanation of the instrument. We do not intend to press the matter to a vote. The change seems very sensible and helpful, given the situation in which we find ourselves.

Making the tax system in every part of the UK straightforward for people to understand and comply with, both for taxpayers and those who enforce it, is a laudable aim. We believe strongly that as well as actively going after those who seek to avoid tax, the Government must have a clear focus on making it easier for those who play by the rules, who work hard and know that paying their tax in full is crucial, to work out easily what they should pay.

There does appear, however, to have been some avoidable confusion. Will the Minister comment on whether he feels there was adequate working between HMRC experts and Governments in both London and Edinburgh on the wording of the successor changes to the legislation? Will he say a little more about internal guidance and what steps have been taken or are being considered to prevent it from being necessary for us to agree these sorts of clarificatory changes more than is absolutely necessarily?

Draft Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2021

Bridget Phillipson Excerpts

Thursday 4th February 2021 General Committees

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

It is a pleasure to see you again in the Chair, Dr Huq.

Throughout the outbreak, we in the Opposition have relentlessly pushed the Government to help businesses through these extraordinarily difficult times. We have made it clear that Ministers must set out what will be available in good time, rather than leaving announcements to the last minute, as has far too often been the case. We therefore will not oppose the Government’s decision today to effectively freeze the multiplier calculating business rates between 2020 and 2021, as this provides support and certainty for businesses during the outbreak.

In fact, this measure being announced and agreed fully two months before it comes into force is, sadly, exceptional for this Government. It compares well with the Prime Minister’s announcement on 31 October last year about furlough being extended, which came just five hours before the time by which the existing scheme was due to end. Even two months, however, is nowhere near being a long-term plan looking six months ahead, for which we have repeatedly been pushing the Government.

I also want to be clear that, while this measure will be welcomed, we believe that the Government should urgently be looking at and setting out how they can use the business rates regime to help businesses struggling through the pandemic. We know that earlier in the crisis, the Government offered relief from rates for businesses in the retail, hospitality and leisure sectors in England during 2020-21, as the Minister has said. However, the Chancellor’s approach was, not for the first time, based on a one-size-fits-all method of doing things. In contrast, the Welsh Government took a more targeted approach to support those who needed it most, by declining to extend the 100% relief to properties with a rateable value of £500,000 or more.

Fortunately, some of the big supermarkets operating in England have recognised the weaknesses in the Government’s approach and have returned around £2 billion of unneeded business rates relief that they had received from the Treasury. We see this as a welcome opportunity to redeploy that £2 billion to help struggling businesses on the high street, through a hospitality and high streets fightback fund, and also to support those who have been excluded from support right throughout this crisis. Even though we proposed the urgent redeployment of resources towards the end of last year, the Government have still not acted on it or accepted our proposals. I therefore ask the Minister again: does the Treasury agree that the £2 billion returned by supermarkets should be used to support our struggling high streets and to provide additional help to those who, through no fault of their own, have been excluded from Government support right from the beginning of this crisis, almost a year ago?