Working People’s Finances: Government Policy

Debate between Bridget Phillipson and Jack Dromey

Tuesday 21st September 2021 Commons Chamber

[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.