Cost of Living Increases

Chris Stephens Excerpts

Wednesday 16th March 2022 Commons Chamber

[Stephen Flynn (Aberdeen South) (SNP)]

I beg to move,

That this House warns that households will soon be suffering the worst income squeeze since the 1970s; notes The Institute for Fiscal Studies analysis that households are on course to be £800 worse off; calls on the Government to scrap VAT on energy bills, implement a windfall tax on companies which are benefitting from significantly increased profits as a result of impacts associated with the covid-19 pandemic or the current international situation, and to scrap the energy bill rebate scheme and introduce immediate emergency cash payments for households.

A phrase said to me many years ago has stuck with me, and I believe it is true for this debate on the cost of living crisis: “Poverty is a punishment for a crime you didn’t commit.” For so many people now—in Aberdeen, Scotland and across the United Kingdom—there is a real feeling of helplessness, hopelessness and powerlessness at the situation before them. Their food, fuel and energy prices are soaring, as is the price of their children’s clothes; no matter which way they turn they cannot escape the grim reality of the situation before them.

This issue cuts across all sectors of society. Just yesterday at the Dispatch Box the Chancellor was extolling the virtues of the employment figures going up. That is of course good—everyone irrespective of political party would welcome it—but he did not address the fact that for those in work, energy prices will be some 14 times what their pay rise might be; he did not even acknowledge that that was a fact. Furthermore, he did not address, let alone reflect on or apologise for, the fact that, just a matter of months ago, he took some £20 of universal credit out of the pockets of those who are not in work and are reliant on the state for social security to get by day to day.

[Chris Stephens (Glasgow South West) (SNP)]

On deductions by the state, it is not just the £20 uplift but the fact that hundreds of thousands of people across these islands have £60 taken off them every month in Department for Work and Pensions deductions, some of them advances and some of them so-called tax credit overpayments.

[Stephen Flynn]

Absolutely; my hon. Friend is a doughty champion on these causes and makes his point extremely well, and it would be remiss of the Government not to listen to him. He is right to touch on that, as we all are right to touch on the cost of living crisis, because it is a crisis: it is a crisis for households up and down the country.

What we need from the Government in a time of crisis is a response. We need them to take action to improve people’s lives—to protect them, and to insulate them from what is coming down the road—but, sadly, they have been completely lacking in that regard. I am sure that in their hearts of hearts many Conservative Back Benchers—although just a few are present today—recognise that the Government can and must go further, because all we have seen at this stage, despite the exponential increase in the price cap, which could well reach about £3,000 a year by the autumn, is £150 towards a council tax rebate.

--- Later in debate ---

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to follow my hon. Friend the Member for Airdrie and Shotts (Ms Qaisar), who is a good friend and comrade. When she talked about loan sharks, it reminded me of the misleading adverts that we see on social media from debt companies, which I do regard as loan sharks, as they force people into trust deeds and other such things. I know the Minister used to be in the Treasury, so he will be familiar with some of these arguments. Certainly this is a matter that I will be taking up with the Government in future, because it must be tackled. If we are in a cost of living crisis and people see these misleading adverts on Facebook and other social media outlets, their lives could be made even worse.

I am told that repetition is not a vice. I was in a Westminster Hall debate this afternoon on in-work poverty, which was led by the hon. Member for Easington (Grahame Morris). It is worth reminding people that in-work poverty is at its highest ever level, disproportionately affecting lone parents, disabled people and carers. As the Joseph Rowntree Foundation has told us, 68% of working age adults in poverty are in a household where at least one adult is in work. Those are the highest figures ever recorded since 1996, when figures were first gathered on these issues.

I ask the Government to look specifically at in-work poverty. Far too many people in low-paid jobs do not have any opportunities to progress to better work and to better wages. Moreover, far too many of our fellow citizens are working in insecure jobs with unpredictable hours and unpredictable incomes.

I have a real concern about minimum wage rates, which some of my colleagues have also mentioned. A recent article on The Ferret website—the story was also covered by The Herald newspaper—outlined that an alarming number of the 10,000 jobs advertised on the Department for Work and Pensions website offered less than the national minimum wage. Burger King was advertising a post with a wage of £6 an hour; PizzaExpress, a wage of £6.56 an hour; and Farmfoods, a wage of £6.66 an hour. These companies made profits in the past couple of years—good profits, at that. I will be asking for an inquiry on why the DWP website is advertising jobs that pay less than the national minimum wage. It really is a scandal. Perhaps the DWP will refer itself to the national minimum wage compliance unit; it should, given that it is advertising jobs with these rates of pay. I hope that the Minister will respond to that point.

A number of Members on both sides of the Chamber have raised concerns about universal credit. Unfortunately, the hon. Member for Blackpool South (Scott Benton) is no longer in his place, but while he was speaking about universal credit, I looked at a parliamentary answer that I received from the Department for Work and Pensions, and it shows that 55% of Blackpool South constituents on universal credit have an average of £63 a month deducted from their benefit. In Stourbridge, 39% of people receiving tax credits get an average of £61 deducted as a result of tax credit overpayment.

Deductions from benefits really have to stop. Universal credit is supposed to be a subsistence-level benefit; it is supposed to be the amount of money that people require to eat, heat their home, and live a good life. If we deduct from universal credit, it leads to the spiral of debt that many hon. Members have spoken about.

The Government need to do a couple of things. This scandal of advances has to stop; there really should be an up-front grant. The all-party Select Committee on Work and Pensions unanimously agreed that there should be a starter payment two weeks after a claim. That is perfectly reasonable. It would stop the cycle of advances and debts.

Also, why are the Government pursuing tax credit debts that are over six years old? If the hon. Member for Edinburgh South (Ian Murray) wanted to sue me in the Scottish courts for a debt that was over six years old, the sheriff would immediately knock the case out, because it would be absurd; likewise if I were to sue the hon. Gentleman. So why are the Government pursuing tax credit overpayments that are decades old? It seems complete nonsense. I hope that the Government will sort that out.

The Minister is from the Department for Business, Energy and Industrial Strategy; one thing that he and his Department can do to sort out in-work poverty is introduce an employment Bill that ends insecure work, for example by seeking to eliminate zero-hours contracts, and that stops nonsensical practices. For example, employers are texting four individuals and telling them, “The first person who arrives gets the shift.” Employees then have to pay for transport to get to work, but they might not get the shift because someone else arrived two minutes before them. I hope that there will be an employment Bill, because we have been promised one since 2017. Five years on, it is still not here. Where is this mystical employment Bill? If the Government do not introduce it, perhaps they should support many of us who have brought forward employment legislation to address the plight of workers.

[Peter Grant (Glenrothes) (SNP)]

I was a bit reluctant to interrupt my hon. Friend, because he is making a fantastic speech, but may I give him an example that shows where the Government’s priorities lie? One group of employees who are traditionally low paid and in very insecure work are catering and cleaning staff. Does he recall that in the last Budget, the Chancellor claimed to have no choice but to impose a tax hike on people who are paid low wages to clean floors and dishes in casinos, but was at the same time able to announce a tax pay-back for the lucky people who own casinos? Is that not an example of where this Government’s true loyalties lie?

[Chris Stephens]

That is exactly where the Government’s priorities lie. Let us not forget that in-work poverty disproportionately affects carers as well, and that has to change.

I am conscious of time, but I hope the Government will respond positively to the points I have made. This is their crisis—the things I am pointing out are not to do with Ukraine or anything else. These things have been going on for 12 years, and the Government can immediately solve them.

[Mr Deputy Speaker (Mr Nigel Evans)]

There are 15 minutes left and three of you want to speak. Doing the maths, it is five minutes each and then you can all have equal time.

--- Later in debate ---

[Greg Hands]

I will respond first to the debate. If I have time, I will take interventions.

My hon. Friend the Member for Blackpool South (Scott Benton) said that there were more universal credit recipients in his constituency than in any other in the UK—a startling fact for his constituency—and said how much his constituents are benefiting from the changes in the UC taper rate as well as the increases in the national living wage, which he supported. On green levies, we announced in the heat and building strategy an affordability call for evidence on where to put those levies. We will take decisions on that later this year. His support for nuclear was well made, particularly coming from his part of the world near Springfields.

The hon. Members for Airdrie and Shotts (Ms Qaisar) and for West Dunbartonshire (Martin Docherty-Hughes) gave a selective account of Scottish Government actions. But Scotland is benefiting hugely from the broad shoulders of the United Kingdom and the UK taxpayer in particular. What would really hammer his constituents is separation and the immediate huge budget deficit, which would be easily the largest in the western world. Either taxes would have to rise or Scottish public services would be cut.

My hon. Friend the Member for Stourbridge (Suzanne Webb) praised the £9.1 billion package to help those with increased energy bills and spoke about how to reduce our dependence as well as the importance of the transition to renewables. That is the answer. She also praised the Government for the 500% increase in the proportion of our electricity that comes from renewables since 2010.

The hon. Member for Glasgow South West (Chris Stephens) made some important points about in-work poverty, but the best route out of poverty is work itself. I heard no mention from him of yesterday’s amazing figures, with the number of unemployed falling below pre-pandemic levels for the first time and another strong increase in employees on the payroll in February.

[Chris Stephens]

Will the Minister give way?

[Greg Hands]

I will answer the hon. Member’s point about minimum wage job adverts. The Department for Work and Pensions does have checks and, if it discovers any positions below the minimum wage, it will take them down.

[Chris Stephens]

I thank the Minister for that helpful answer. Is it in order for us to report the Department for Work and Pensions to the national minimum wage compliance unit?

[Greg Hands]

We take enforcement of the national minimum wage incredibly seriously across Government—all Departments do. However, I point out that the increase in the national living wage from £8.91 to £9.50, which is coming in just a few weeks, will help out someone working full-time by £1,000 a year. That will make a huge difference to their pay packets.

The hon. Member for Edinburgh North and Leith (Deidre Brock) rightly condemned the Russian invasion of Ukraine—I praise her for that—and made some important points on food security that I am sure will be drawn to the attention of the Department for Environment, Food and Rural Affairs. The hon. Member for Midlothian (Owen Thompson) called for a package of measures to tackle the crisis. Well, I had to go back to the SNP motion, because we will remember a package of measures being announced by our Chancellor of the Exchequer on 3 February at this Dispatch Box precisely to take action on energy bills. The hon. Gentleman is calling for a package of measures. Unfortunately, his motion calls

“to scrap the energy bill rebate scheme”.

His own motion calls for that very package of measures to be scrapped.

Moving on to the Front-Bench contributions, I have been in this House 17 years but I do not think I have ever heard a Member of Parliament for Aberdeen—for Aberdeen itself—without a single word of support for the North sea oil and gas sector. The hon. Member for Aberdeen South (Stephen Flynn) was ducking the issue, rightly raised by the hon. Member for Edinburgh South (Ian Murray), about what exactly is meant by the windfall tax. There are 100,000 Scottish jobs at stake, many in his constituency—in fact, his constituency may have more of those jobs than any other constituency in Britain—yet there was not a single word of support for those hard-working people in the North sea oil and gas sector.

The First Minister of Scotland said—these are her own words—

“production from the North Sea in the short term is not a practicably deliverable solution.”

That is totally defeatist. We will do further licensing rounds and we will do one this year. We are now seeing the benefits of previous licensing rounds. Only today IOG announced the Elgood field coming online, the second new field this week. This is great news for the UK as a whole and for the overall North sea sector so crucial for Scotland’s success, as well as the success of the whole of the United Kingdom.

They are not the Scottish national party. They are against the interests of Scotland. They are the Scottish dependency party, dependent on imported hydrocarbons from abroad, including from Russia. I read carefully the hon. Gentleman’s motion—one should always read the motion, as we all well know—which calls to

“scrap the energy bill rebate scheme”.

That would mean no reduction of £200 in energy bills in October, no council tax reduction in two weeks’ time, and, presumably, a repayment of the £290 million Barnett consequentials. What public services would the hon. Member for Aberdeen South cut in Scotland to fund that £290 million repayment?

Finally, I turn to Labour’s windfall tax. I must say that I had a slightly different interpretation of the position of SNP Front-Benchers. I think the hon. Member for Aberdeen South was supporting the windfall tax. I agree that it was not really clear, but I took it as supporting given that the motion talks about the windfall tax and this is a debate on energy. But I have to say to Labour that 82% of oil and gas produced in the UK is produced in Scotland, which means that Labour’s windfall tax would very largely hit the Scottish economy. A windfall tax could accelerate rising prices.

Labour has given up on Aberdeen and north-east Scotland. I remember when Labour had both seats for Aberdeen. Now, they are nowhere near—nowhere near. The Scottish Conservatives have overtaken them and anyone opposing the SNP in Aberdeen should vote for Ryan Houghton and his team in May. With moves like the windfall tax, is it any wonder that Labour support in Aberdeen is in decline and going nowhere? Maybe the hon. Member for Edinburgh South should go back to the shadow Cabinet and stick up for Scotland, and not throw in Labour’s lot with the Scottish National party—or the Scottish dependency party—when it comes to oil and gas.

As the Exchequer Secretary and I have set out, the Government have listened to, recognised and acted on the concerns of families who are struggling with the cost of living. We do not take their concerns lightly. The energy bills support scheme will provide £5.6 billion of support to households later this year, ahead of the winter period, while the additional support for English homes in council tax bands A to D will further help households with the cost of living—totalling, with Barnett consequentials, a package worth £9.1 billion. The Government will continue to engage with industry, consumer groups and other stakeholders as we progress these measures.

It is this Government who have the clear plan. The Opposition parties have squabbled among themselves today, arguing over the definitions of windfall tax, but it is we who are delivering energy security and energy transition, and securing this nation’s prosperity.

Question put and agreed to.

Resolved,

That this House warns that households will soon be suffering the worst income squeeze since the 1970s; notes The Institute for Fiscal Studies analysis that households are on course to be £800 worse off; calls on the Government to scrap VAT on energy bills, implement a windfall tax on companies which are benefitting from significantly increased profits as a result of impacts associated with the covid-19 pandemic or the current international situation, and to scrap the energy bill rebate scheme and introduce immediate emergency cash payments for households.

House of Commons Members’ Fund

Ordered,

That Stuart Andrew be removed as a Trustee of the House of Commons Members’ Fund and Christopher Pincher be appointed as a Trustee in pursuance of section 2 of the House of Commons Members’ Fund Act 2016.—(Gareth Johnson.)