Living Standards (North Wales)

Chris Ruane Excerpts

Wednesday 16th October 2013 Westminster Hall

[Chris Ruane (Vale of Clwyd) (Lab)]

I rise today to discuss the living standards in north Wales—the dropping living standards in north Wales.

The TUC reckons that Wales has the lowest levels of disposable income in the UK and has experienced the highest falls in living standards in the UK. There has been a drop in living standards for 38 of the 39 months that this Tory-Lib Dem coalition has been in power. In constituencies in north Wales, the impact has been severe. Between 2007 and 2012, in Flintshire the average pay packet for a 40-hour week dropped by nearly £3,000 and in my own county of Denbighshire it dropped by more than £2,000.

The outward sign of the drop in living standards is, of course, the food banks—the food banks that many Conservative Ministers and MPs refuse to go to when they are repeatedly asked to do so in the main Chamber. I have been to food banks in my constituency and I praise the work of people who volunteer at them; they do a sterling job. I have visited the Wellspring centre in my constituency and shared soup with the people it provided food for. The citizens advice bureau in Denbigh set up a food bank; in fact, it is an award-winning food bank and I congratulate the CAB in Denbigh on it.

The Conservatives say, “Oh, food banks increased by tenfold under Labour.” They did, from 3,000 to about 34,000. Under the Conservatives, however, they have increased from about 40,000 to nearly 400,000—another tenfold increase. The food banks under Labour were peripheral; as I say, there were 34,000 of them, at most. Under the Conservatives, food banks are central. Since 2011, the Government have given instructions to jobcentres to refer people who have no money to food banks. Food banks are part of official Government policy—dare I say official Government philosophy? It is charity versus the state; charity taking the place of the state. It is the big society, or, as I call it, the “beg society”, where soup kitchens are here in the 21st century, having last been seen in the 1930s. As I say, I have shared soup with the people using them.

Will there be a return to the workhouse, the alms house, the deserving poor and the undeserving poor? The language coming from certain sections and certain MPs on the right—I do not include the Minister here today in that group—is disgraceful. I will give a case in point. The Education Secretary said that the people who visit these food banks

“are not…able to manage their finances.”—[Official Report, 9 September 2013; Vol. 567, c. 681.]

Could the Education Secretary himself “manage” his finances on £56 a week, if he was a young person, or on £71 a week, if he was over 25? I think not—that money would hardly cover the price of a bottle of Moët. The Government have the wrong priorities—while they are forcing people to use food banks, they are giving a £44,000 handout to people earning £1 million a year.

Of particular interest to people in my constituency and the other constituencies in north Wales is the issue of public sector workers, who are another group vilified by the Conservatives. There are huge numbers of public sector workers in certain constituencies in north Wales. The number of people who reside in my constituency, the Vale of Clwyd, and work in the public sector is 10,200—35% of the work force. In Ynys Môn, the figure is 10,100; in Clwyd West, where the Secretary of State for Wales resides, the figure is 9,000. Those public sector workers are not only vilified by the Conservatives but have had their wages frozen until 2015-16. There is no help to rebalance the economies that have been reliant on public sector jobs; there is no specific help or guidance from the UK Government for those constituencies.

Who are the losers from the drop in living standards? It is the young long-term unemployed. There are more than a million of them in the country. In an 18-month period from early 2009 to 2010, in my home town of Rhyl in my constituency we put 450 young people back to work through the future jobs fund, under a Labour Government. That scheme was abolished almost as soon as the Conservative Government entered office.

Children are big sufferers from the drop in living standards. An excellent Daily Post article from 18 July calculates that 24,400 children in north Wales are living in poverty and that the state will pay an extra £265 million a year in additional school costs, benefits and NHS costs. We are even seeing the disease of rickets creep back into the UK, for the first time since the 1950s. I have tabled questions about this—[Interruption.] I see the Minister huffing and puffing.

The disabled have also suffered because of a drop in living standards. This group has been vilified, as well. Disability is the only one of the five or six hate crime categories, which include sexual orientation, religion and ethnic origin, that has increased in the past year. The elderly are the other group to have suffered because of the drop in living standards. They are on fixed incomes. When their fuel bills increase by 8% or 7%, they have no way of paying them, except by cutting back on food or other necessities.

In north Wales, 8,178 people will suffer because of the bedroom tax, but there are not 8,178 single-person units in the whole of north Wales to look after them.

[Mark Tami (Alyn and Deeside) (Lab)]

Last week I heard about a case of a man, in a couple, who was disabled and on whom the council spent a small fortune creating a wet room downstairs. This couple is to be moved to a one-bedroom place. The council will, no doubt, have to spend money converting that and ripping out the stuff from the previous place. It makes no sense.

[Chris Ruane]

It does not make social sense or economic sense. The state will be paying £60 a week rent for many people living in council houses. If such people are moved into houses of multiple occupation in my constituency, the state will be paying £85 a week. The conditions in HMOs are far worse than on council estates.

Some 420,000 households in Wales are living in fuel poverty, 84,000 of them in north Wales alone. Household fuel bills have increased by £300 since the Government have been in power. Those who suffer most are on pre-payment meters. I was brought up in a household with pre-payment meters; we put a pound in the “leccy” if the lights went out. Those people will be paying an extra £50 a year, because they are not on direct debit. Every which way, the poorest are hit the most.

Fuel bills went up by 7% last year. In this current season, the first energy company out of the blocks is going to increase its prices by 8%, at the same time as chief executive officers in energy companies are having golden handshakes of £15 million or £13.5 million.

Under Labour’s home energy efficiency scheme, the energy efficiency of 127,000 households in Wales was improved, cutting down people’s bills and their carbon footprint. The great green hope from the parties in Government was the green deal, What a failure that has been! At the top of the green deal figures for the whole of Wales is Alyn and Deeside, where 19 households have been checked; at number two is Delyn, with 16 households; third is Wrexham, with 13; and at number four is Clwyd West, with 13. In the Prime Minister’s constituency of Witney, six households were assessed for the green deal. This policy was going to rescue those living in fuel poverty, but it has done nothing for them.

[Hywel Williams (Arfon) (PC)]

Perhaps the hon. Gentleman will remember that the Arbed scheme—the insulation scheme that he mentioned—was part of a programme from the “One Wales” Government and was the responsibility of, and was launched by, Jocelyn Davies, the then Housing Minister. Does the hon. Gentleman share my disappointment that Labour’s energy price freeze does not extend to coal, liquid petroleum gas and oil? What can he do, in his party, to ensure that it does extend to those?

[Chris Ruane]

Fuel poverty is being looked at. It is on the political agenda because our Labour leader put it there during conference season. Labour is dictating the agenda on living standards. That aspect should be looked into.

I shall now talk about those in work. When Labour came into power, the proudest political moment in my 16 years in Parliament was the night, the day and the day after we introduced the minimum wage. The Conservatives kept us up for about 28 hours. They hated it and said that it would cost 3 million jobs and be devastating for the economy. It did not cost 3 million jobs; it created another 3 million jobs. Their prediction was 6 million jobs out. The minimum wage put a floor in for those who are paid poor wages.

The issue today is zero-hours contracts. I have tabled some 50 questions about those.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate my hon. Friend on securing this debate. When talking about living standards in areas such as north Wales, the cost of travel, particularly in rural areas, should be considered in addition to food inflation and energy prices. The Government are considering areas in Wales that may benefit from a discount, but does my hon. Friend agree that hard-working families are suffering because of the great distances that they have to travel, to work and to take their children to leisure facilities?

[Chris Ruane]

Absolutely. That is a particular problem in rural areas. I represent the Vale of Clwyd, a rural seat. This is just one of many ways in which ordinary working families are being hit by the parties in government.

Earlier today, I attended the zero-hours contracts debate in the main Chamber. Statistics are scarce. The Office for National Statistics claims that 240,000 people are on zero-hours contracts, but some trade unions reckon that 5 million people are on them. Either way, those are huge numbers and they are having a devastating effect. It is costly to the state, because if companies do not pay the going rate for the job, the state has to step in and subsidise that; it is also a cost to taxpayers.

The issue is also costly for individuals, because they cannot plan their future. They cannot get a mortgage on a zero-hours contract, cannot save up and get Christmas presents and cannot plan for holidays. The working week, including taking children to and from school, cannot be planned for properly. These contracts have an impact on people’s well-being and mental health.

The issue is costly for the companies implementing the contracts, because they will not get loyalty, good will and commitment from a work force on zero-hours contracts—they are pinging and ponging back and forth to work and can be sacked at a moment’s notice. It is also costly for companies paying a proper wage, because they are undercut by those who use zero-hours contracts. Overall, it is a costly business. The Labour party in opposition has shone the light on these dark practices and got the political ball moving.

To combat the drop in living standards, we need a living wage. I congratulate Councillor Joan Butterfield, leader of the Labour group in Denbighshire, who is pushing for that. The local churches in my constituency—Catholic and other churches—led by Father Charles Ramsay, my parish priest, are also pushing for a living wage.

Living standards are crucial. Labour had a good record on that in government and looked after the poorest of the poor, with, for example, Bookstart, child care credits, nurseries for everybody, Sure Start, the education maintenance allowance, child trust funds and the future jobs fund. We dropped VAT from 20% to 15%. All that helped people’s living standards.

Let us look at what has happened to child poverty under the Conservative-Liberal Government. The latest figures on child poverty, on which there is a two-year delay, show that the trough peaked under Labour and that child poverty will rise again under the Conservatives. The Prime Minister is for ever vilifying the Welsh Government and saying, “Look at Labour in practice, look at their bad practice here and their bad practice there.” Let me give MPs a taste of what the Labour Government are doing in practice in Wales.

In England, the education maintenance allowance was scrapped—the allowance was an opportunity to keep 16 to 18-year-olds in school so that they could get their A-levels, go on to college and get a good job. In Wales, it was not scrapped. In England, tuition fees went from £3,000 to £9,000; in Wales, they were capped at £3,500. In England, there were cuts to council tax benefits; in Wales, the Welsh Government allocated £22 million to stop those cuts.

Last week, £17 million was announced by Alun Davies, a Minister in Wales, to combat fuel poverty over a two-year period, which is equivalent to a UK Government allocating £1.5 billion to address fuel poverty. The Welsh Government are doing an excellent job of helping to buffer the Conservative-Liberal coalition’s negative effects on living standards.

The Conservative party has tried to get rid of its nasty reputation. The Home Secretary described the party as the “nasty party,” and the Conservative leader went to the Arctic to hug a husky and to Manchester to hug a hoodie. As has been said today, instead of hugging a husky he is now gassing the badgers. The mask has slipped: Flashman is back in charge.

In the 1980s, the Conservatives atomised, alienated and broke up society. They were out for 13 years, and now they are back to their old tricks—look at the language being used. The Education Secretary says that people are not able to manage their own finances. The Conservatives have the wrong priority in giving money to millionaires. They are allowing £15 million golden handshakes to chief executive officers of energy companies. They are reintroducing soup kitchens. We have beggars in the street for the first time ever in Prestatyn. The number of homeless people in Rhyl has doubled, and we will see people from the inner cities of England driven out to the UK’s coastal towns, including in Wales.

All that does not bode well for the future, and I am pleased that my Labour party and my Labour leader have put living standards at the heart of political debate.

--- Later in debate ---

[Stephen Crabb]

Forgive me, but I will not give way because I have not been left with much time.

This afternoon we have heard Opposition Members talking down north Wales and the Welsh economy and not recognising many of the great things that are happening in their own constituencies that we should be celebrating and promoting.

The hon. Member for Vale of Clwyd, for whom I have a huge amount of time and respect, finished his contribution with a rather crude political attack on my party and my Government. Of course, it was his party that said it was “intensely relaxed” about people becoming filthy rich. His party was intensely relaxed about abolishing the 10p tax band, which hurt the lowest-paid workers the most. His party was intensely relaxed about soaring petrol prices and soaring council tax. The Government are not relaxed about such things, which is why we are doing everything that we can as the economic recovery gathers pace to ensure that people on the lowest incomes are the ones who benefit and are given incentives to move into work and be at the front and centre of maximising opportunities from the economic recovery.

It is a pleasure and a privilege to be a Minister in the Wales Office, and I have the opportunity to go around all parts of the Principality. I see many of the exciting things that are currently happening in the Welsh private sector, and I have to tell Opposition Members that much of that is happening in north Wales; it is happening in their own constituencies. Unemployment is falling in most north Wales constituencies. Unemployment is not falling everywhere, and we are not complacent about that. We want unemployment to fall in every parliamentary constituency, but the hon. Gentleman cannot stand there and say what he said without recognising that unemployment in his constituency is lower today than when his party left office. I remind him that, under the previous Labour Government, in the five years between 2005 and 2010, unemployment increased in his constituency by more than 100%.

[Chris Ruane]

The top-line unemployment statistics look okay, but the number of people on jobseeker’s allowance for 12 months or more was 215 in 2010, and it was 516 in 2012. The underlying trend is that the number of people who are long-term unemployed, who are the most difficult people to get back to work, is going massively upwards and there is no room for complacency.

[Stephen Crabb]

I am the last person to be complacent. I recognise that a huge amount of work still needs to be done, but the latest figures today confirm that the overall employment picture in Wales is positive. Unemployment is falling across Wales. Overall employment levels are increasing, which we should welcome and want to see more of.

At the start of the hon. Gentleman’s speech, he talked about the decline in real wages between 2007 and 2012 in Denbighshire and Flintshire. We can go through the figures later if he wants more detail, but the vast majority of the decline in real wages happened in the last three years of the previous Labour Government, when, as a result of the economic trauma that they visited upon this country, there was an enormous destruction of wealth and real wages fell. We are now seeing a recovery in wages, including in Wales, but there is a long way still to go before we are back to previous levels.

On income tax, I recognise that many families are facing difficult financial circumstances. That is why we are putting cash back into those families’ pockets by taking the lowest-paid workers out of income tax altogether. We have now cut income tax for more than 1.1 million working people in Wales by increasing the tax-free personal allowance. We are lifting 130,000 of the lowest-paid workers in Wales out of income tax altogether by increasing that allowance to £10,000. Some 324,000 taxpayers in north Wales will benefit from that increase in the personal allowance.

Employers in north Wales are also benefiting from the fact that we are implementing in full all the recommendations of the independent Low Pay Commission. The hon. Gentleman talked about Conservative opposition to the minimum wage, but I for one never opposed the minimum wage, which has benefited the lowest-paid workers. This year, we are able not only to implement all the Low Pay Commission’s recommendations but to go further: the commission recommended freezing the apprentice rate, but we are not freezing it; we are increasing it, and we can do so because we have taken difficult decisions to restore discipline and order to our national finances and to put our house in order, which has given us the capacity and the resources to do things such as increase minimum wages.

One thing that we are committed to freezing, however, is fuel duty, and we have now seen fuel duty frozen for nearly three and a half years. This year, the average motorist will save £7 each time they fill up their fuel tank. I remind Opposition Members that, had Labour been elected in 2010 and implemented its detailed financial plans in full, as it had intended, the price of petrol would be 13p a litre higher than today. That is an example of the Government putting cash back into the pockets of hard-working people and hard-working families. Again, we can do that only because we were able and willing, and had the strength of purpose, to take difficult decisions at the start of this Parliament to put our national finances in order and to restore some sanity to national budgeting.