Free Childcare

Debate between Geraint Davies and Catherine McKinnell

Monday 9th March 2020 Westminster Hall

[Geraint Davies (in the Chair)]

Before I call Catherine McKinnell, I simply say that Jessica Taylor, the House of Commons photographer, is in the room and will be taking photographs. I hope people do not mind; everyone is looking very good today.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I beg to move,

That this House has considered e-petition 255237 relating to the provision of free childcare.

It is a real pleasure to serve under your chairmanship, Mr Davies, and to lead the first Petitions Committee debate of this new Parliament. Campaigning on issues that are important to us is a vital democratic right, and for hundreds of years petitions have had the power to connect people with Parliament, to raise awareness of important issues and to help bring about real change for people and communities around the country. More than 23 million people have started or signed petitions on the parliamentary site since it launched in 2015, and it has been inspiring to see so many people getting involved and actively engaged with Parliament and democracy. I am proud to have been elected Chair of the Petitions Committee, and I look forward to taking it forward into the new decade, starting with today’s debate, which has attracted interest from every part of our country.

The e-petition, which is titled, “Provide 15 hours free childcare to working parents for children over 9 months”, was signed by more than 146,000 people, including more than 600 in my own city of Newcastle upon Tyne. It reads:

“After 9 months of maternity leave, most working mums do not receive any maternity pay and need to go back to work. I think all working parents should be entitled to 15 hours free childcare from the time a child is 9 months. It makes more sense to provide this funding from 9 months instead of 2 years.

Many working families struggle week to week due to the cost of childcare. You are required to go back to work after a year of maternity pay however many go back after 9 months due to funds. Once you go back the majority of your wage goes to childcare and in some cases you are better off not working. This should not be the case.”

The creator of the e-petition, Harley Cuthbert, was going to be in the Gallery today to watch the debate and may well join us. I thank Harley for starting the petition. She told me that she decided to start the petition because of her own situation.

For anyone to be left feeling that they cannot afford to start a family due to the cost of childcare is truly heartbreaking. We all want to live in a society where families are able to balance work and family life and are not forced to delay having a family or become dependent on welfare benefits to meet the costs of raising a family. Harley described her situation as being in a middle group of people who earn too much to receive state support, but not enough to be able to afford the cost of childcare. The system should encourage parents to work and contribute to the economy, while also raising a family. The provision of affordable childcare is a key part of that.

Childcare is an issue that interests the British public, and no fewer than 67 petitions in the last Parliament were related to it. They included calls for extra support for parents of multiples, for free childcare to begin earlier, such as at six months or a year, for extra support for parents with disabilities, for special schemes for the families of UK armed forces personnel and for business rates relief for nursery providers.

Ahead of the debate, our Committee reached out to the public online, through Facebook and Mumsnet, to continue the conversation about how childcare issues are impacting on families. The issue affects people in every part of our country and across the income scale, from two-parent families with two good, full-time salaries, to part-time, single-parent families on minimum wage. All said that they struggle to pay for childcare so that they could return to work. I want to share just a few of the contributions to highlight how the issue is affecting working families.

One of the strongest messages from people was that they have to pay to go to work. Jo said:

“With two preschool aged kids I was earning at a loss having to pay for childcare…working and not making money is really bad for a mum’s mental health, the guilt for choosing to maintain a career and not being with your kids is one thing but to do it for no current financial gain is a real mind crusher.”

Katie, who is due to return to work in June, said:

“When me and my partner were looking at me going back full time and putting my child in nursery full time it didn’t make financial sense for me to go back to work. It’s unfair for parents to have to choose between going back to work to break even or in some cases actually paying to work (as nursery fees are above the cost of their wage) or staying at home and having no job and no income.”

A large number of respondents said that they were better off financially not working or working fewer hours than paying for full-time childcare.

Some families are paying the same amount for childcare as they do for their rent or mortgage. Claire said:

“3 days a week nursery is costing us £1000 forcing me to have to go back full time and rely on family for the other 2 days!”

Victoria said:

“The nurseries in my local area have essentially created a fixed price for childcare. Full time nursery 5 days a week is £1500 a month. That is more than my mortgage!”

We know the cost of childcare is a huge expense for families, and the childcare survey, published by Coram last month, reported that the average cost of 25 hours of childcare a week for a child under two in England is £131.61 a week, or £6,800 a year. That is a significant amount of money for families to budget for. Moreover, we know that the cost of childcare is rising above the rate of inflation. Twenty-five hours of childcare for children under two now costs 5% more than it did a year ago, and 4% more for a child aged two. Those ever-rising costs put huge pressure on family budgets and erode the incentives for parents to go out to work when they see most of their wages disappearing to cover the cost of childcare. The financial pressures have a knock-on effect on other aspects of family life.

We have heard from parents whose careers have been permanently disadvantaged. Others must rely on family members to help, particularly elderly grandparents. Some people, such as Harley, have delayed having children or having additional children because of childcare costs. Shannon said:

“I had my baby in May and I’ve had to give up working and rely solely on my fiancé’s wage. My weekly wage before was £250 and my childcare bill would be £200 so I’m out of pocket by the time I’ve filled my car to drive to work and drop my little girl off.”

Rachel said:

“Women like me who then have to stay at home to look after children risk falling behind male colleagues at work, increasing the gender pay gap. Men who don’t have caring responsibilities are able to work those extra years and so earn more overall.”

Sandra, a grandmother, said:

“My daughter returned to work recently. Her older daughter was cared for by me until just over a year ago when she was given a nursery place. I now care for her baby almost 9 months old. I’m nearing 66 with no pension. My daughter can’t afford to pay me as she is on minimum wage. I love my grandson but 4 years ago it was easier with his sister and I now struggle with caring for him. I’m exhausted by the time she gets home, a nursery place would be brilliant.”

Another point, particularly given that we have just had International Women’s Day, is the impact on gender equality and career progression for women. A report by the TUC in 2016 found that fathers who work full time get paid a fifth more than men with similar jobs who do not have children. A wage bonus of 21% contrasts with the experience of working mothers, who the report found typically suffer a 15% pay penalty. The TUC has called for more decently paid jobs to be available on a reduced-hours or flexible-work basis to reduce the penalty paid by mothers and to enable more fathers to fit working around their fathering and parenting responsibilities.

Better childcare opportunities could also enable women who have children to continue working more hours a week, reducing the impact on their career. If we are to tackle increasing rates of child poverty and a lack of social mobility, it is critical that we address the issue. In 2017-18, 4.1 million children were living in poverty—30% of all children—which is a shocking statistic. It is expected to reach 5.2 million by 2022. The two biggest costs putting pressure on family budgets are childcare and housing. When childcare costs are accounted for, an extra 130,000 children are pushed into poverty.

We also know that the attainment gap between disadvantaged and more advantaged children is already evident by the time a child reaches school at age five, with the gap between them equivalent to 4.3 months of learning. The gap more than doubles to 9.5 months at the end of primary school, and then more than doubles again to 19.3 months at the end of secondary school. Increasing the availability of good quality affordable childcare enables more parents to get into or return to work or access education or training, while also improving the educational outcomes for their children.

--- Later in debate ---

[Catherine McKinnell]

I absolutely agree with my hon. Friend. I will come on to make that very point in more detail.

The issue is not only a problem for individual families; it is critical to our whole economy and productivity levels. Early years education has proven to be a positive benefit to our children, too. The Department for Education’s study of early education and development—SEED—longitudinal study, published in 2018, found that increased hours per week spent in formal early education, such as day nursery, between the ages of two and four resulted in non-verbal development and better socio-emotional outcomes. The Education Committee’s inquiry into tackling disadvantage in early years found that early years education for children below the age of four has a positive impact on the life chances of disadvantaged children. However, it also found that disadvantaged children currently spend significantly less time in pre-school than children from more affluent backgrounds.

Britain has long had a publicly funded education system because successive Governments have recognised that such a fundamental service should be provided by the state and be available to all. Just as we accept the principle that family income should never be a factor in whether children receive a good school education, the same must be said of early education, which is equally as crucial. We often look to Scandinavia for ideas on effective family policy; countries there have long recognised the value of early education and have invested in it extensively.

Finland provides free universal daycare from eight months until the start of formal education at age seven. In Sweden, parents have a universal entitlement to a guaranteed childcare space, and the fees for using it are capped. The system is so accessible that 85% of children under five years attend pre-school. Parents are entitled to 16 months’ parental leave, with the first year paid at 80% of their salary. They also receive a monthly child allowance that can be used to significantly reduce the cost of pre-school. In Denmark, the cost of childcare to parents is capped at 30% of the actual cost for nurseries. Norwegian parents are entitled to a flat-rate child benefit allowance. The result is that Scandinavian countries consistently rank among the best internationally on all the indicators of children’s wellbeing. Rates of child poverty are also among the lowest in the world.

The provision of free part-time childcare places for all three and four-year-olds in England was introduced in the early 2000s. Tony Blair’s Labour Government recognised that the modern welfare state needed to adapt and do more to support parents to raise young families and balance home life with work. The introduction of free childcare, alongside tax credits, was part of a package to give parents—particularly mothers—more choice over returning to work and having more children. I am pleased that the principle of investing in early years support has received cross-party backing. There have been some positive developments from Governments in recent years. Working parents of three to four-year-olds now receive 30 hours of free childcare, and those of disadvantaged two-year-olds can receive 15 hours on a means-tested basis.

However, although the headline picture is of a Government that continued Labour’s investment in early years, beneath the surface services have been squeezed and vital early intervention support has been cut. Across the board, spending on Sure Start and early years services in England has decreased by 39% since 2014-15, and almost £1 billion was slashed from Sure Start spending between 2010 and 2018. Free childcare, as my hon. Friend the Member for Cambridge (Daniel Zeichner) has pointed out, has been underfunded; additional funding has not been allocated to cover the cost of minimum wage rises for nursery staff. Take-up of the two-year-old offer among children who receive free school meals varies significantly across the country, with analysis showing that in major metropolitan areas they are among the key disadvantaged groups. Access to places and differences in the types of placement on offer varies a lot, too, and can limit take-up in some areas. That is why, in 2018, the Treasury Committee conducted an inquiry, which I was pleased to be part of, into childcare policy and its influence on our economy.

I was really pleased to see the Committee—for the first time chaired by a woman—investigate the economic impact of childcare as a key aspect of our national infrastructure, in recognition of the fact that our economy is driven not only by trains, roads and IT, but by parents’ ability to go to work knowing that their children are happy and well cared for in high-quality settings. We therefore looked at the overall package of Government initiatives in this area and their effectiveness. Our cross-party review found that the Treasury had made little effort to calculate the economic impact of the Government’s childcare interventions. However, the evidence available suggested that the biggest impact of the Government’s childcare schemes may be to make childcare more affordable to those who receive support, rather than bringing parents back into the workplace.

The Committee also found that parents may need to retrain in order to return to work, but the free childcare scheme did not support that. We recommended the removal of age restrictions on childcare support for parents undertaking training or education, which would have the greatest impact on productivity. We also identified design flaws in the current schemes. The requirement in the childcare element of universal credit for parents to pay childcare costs up front before seeking reimbursement is really unhelpful to the lowest-paid parents. Moreover, the fact that the entitlement to 30 hours of free childcare only begins the term after a child turns three means that if a parent is offered a job in January, their entitlement will not begin until the summer term; that can make a critical difference to some parents’ livelihoods and decision making. If the current system of support is the starting point, the flaws need to be addressed for free childcare schemes to support people into work effectively.

Another area that has proven to be a challenge is the way in which providers are funded to deliver the schemes, and any uplift in free childcare must be accompanied by the additional funding required to make it viable. Coram’s childcare survey found that around a third of local authorities thought that the 30-hour extended entitlement had caused prices to rise for those aged three to four outside the funded entitlements. Half thought that there had been a negative impact on the financial sustainability of childcare providers. Purnima Tanuku OBE, chief executive of the National Day Nurseries Association, has said:

“High quality early education positively impacts on a child’s development and therefore their lifelong education and opportunities—it cannot be done on the cheap...By short-changing childcare providers, the Government is selling families short on their promises. Parents are seeing fees for additional hours and for under threes go up as a result.”

The Treasury Committee report estimated that the average cost per hour of providing childcare is £4.68, but the average rate that the Government passed on to providers for 2017-18 was £4.34. Some providers are left with insufficient funding to cover their costs and therefore have to cut back on the service provided, including by restricting times, reducing child-to-staff ratios and charging for services such as food and activities. In this situation, providers in higher-income areas can mitigate those funding shortfalls much more easily than can providers in deprived areas, who have much more to gain from these schemes. That undermines the potential for early education to reach disadvantaged children, who are in the greatest danger of falling behind.

The Education Committee’s inquiry into tackling disadvantage in the early years made similar observations. It found that rather than closing the gap, the Government’s 30-hour childcare policy was entrenching inequality by leading to financial pressures on nurseries, providing more advantaged children with more quality childcare and putting stress on the available places for disadvantaged two-year-olds. The Government must pay providers a rate that reflects the full costs; otherwise, the full benefits for those who are eligible will not be realised, particularly in our most disadvantaged communities, and the overall cost of childcare will be pushed up further.

Of course, investing in childcare costs money. Any policy proposals, however effective they would be, are shaped by the available financial resources. The cost of funded childcare places for three and four-year-olds stood at £3.3 billion in 2018-19, which is equivalent to £3,650 per eligible child. Overall, the Government now spend about £6 billion on all funded childcare, despite the limitations and restrictions in the current model. If free childcare were to be expanded to all children from nine months old, as the petition requests, there would clearly be significant cost implications. Labour’s manifesto proposals to reform childcare provision and make high-quality early years education available to all, regardless of income, would amount to a £4.5 billion investment. We know the value of investing in early education to tackle entrenched disadvantage and gender inequality, and there would be longer-term cost savings and a productivity boost from targeting this investment at the early years. Although this would involve a significant cost, politics is the language of priorities, and measures that tackle poverty, support families and boost the economy should be at the top of the list.

There is clear cross-party support for improving childcare, as evidenced by commitments in the manifestos of the three main parties at the last election. Labour pledged the extension of paid maternity leave to 12 months; the introduction of 30 hours of free pre-school childcare for all two, three and four-year-olds; and the extension of provision for one-year-olds. The Conservatives pledged a £1 billion fund to help to create more high-quality affordable childcare, including before and after school and during school holidays; and the Liberal Democrat manifesto included a commitment to offer 35 hours of free high-quality childcare to every child aged two to four, and to children aged between nine and 24 months whose parents are in work.

It remains to be seen whether the current Government have the political will to deliver the support that is needed. Childcare is an issue that affects families right across our country, and there is a widespread belief that the Government could be doing much more to support people to work while also raising a family. I thank everyone who signed the petition that led to today’s debate, and I thank all members of the public who have been in touch to share their views. I hope that by the conclusion of the debate, we will have represented their views and experiences effectively, and that the Government will reflect on this discussion and have a serious think about what support they can provide, particularly given this week’s Budget, which is very timely.

I will finish by asking two questions that I hope the Minister will pledge to consider. First, will she commit to a review of the economic and social impact of various levels of free childcare, so that its effectiveness can be independently verified? Secondly, will she commit to exploring the expansion of free childcare as requested by the petitioners, including the benefits of such a scheme and how it might practically be delivered with sufficient childcare places and funding to make it viable? Today, the Government have the opportunity to give a clear expression of their commitment to supporting families, supporting social mobility and supporting women and families in the workplace by pledging to investigate this issue. On behalf of the petitioners, I urge the Minister to do so.

[Geraint Davies (in the Chair)]

I now have the pleasure of inviting David Simmonds to make his contribution.

Universal Credit

Debate between Geraint Davies and Catherine McKinnell

Wednesday 19th April 2017 Westminster Hall

[Catherine McKinnell]

I take on board the hon. Gentleman’s serious concerns and, indeed, implore the Government to get this process right before they roll it out across the country.

There are also some fundamental flaws in the system. The fact that payments are made monthly and in arrears effectively embeds debt into the system—as landlords awaiting receipt of the housing benefit element of universal credit know all too well—and requires repeated applications for advance payments from DWP and/or budgeting skills, which many people sadly do not have. Indeed, the Joseph Rowntree Foundation recently commented:

“People risk debt, destitution and eviction while they wait…to receive their first UC payment”—

a description that surely belongs in the world of Charles Dickens, rather than in the modern, fit-for-purpose and efficient social welfare system that we should have in 21st-century Britain.

So what was the DWP’s initial response to the increasing number of complaints about universal credit claims? In a letter dated 20 January 2017 and addressed to

“Colleagues working in the welfare advice sector”,

MPs in full service universal credit areas were informed that they could not receive any information about a constituent’s case unless the constituent in question had provided online explicit consent directly to the DWP. The letter stated that such consent

“must be given freely, unambiguously and in an informed way. The claimant must be clear on the information that they want to be disclosed and who the information can be disclosed to…Consent does not last indefinitely, but covers a particular query or piece of business.”

Even when I had been sent an email by a constituent that provided me with all the details of their case and that specifically asked me to intervene on their behalf—usually because they had reached the end of their tether —that was not deemed sufficient proof for the DWP to provide me with information about the case. I am, of course, pleased that that ridiculous situation has now been reviewed, after complaints by many hon. Members and an intervention by the Leader of the House, but I must emphasise that it caused weeks of additional challenge for my constituents and for my caseworkers in Newcastle, who were deluged with universal credit cases but could not receive any sensible information about them.

The Minister need not take my word for the problems that people face in Newcastle. He can come and visit the Newcastle citizens advice bureau, for which the DWP’s explicit consent edict remains in place. He can hear about the 85 universal credit clients from Newcastle upon Tyne North alone that the bureau has supported in the last year, who have faced severely delayed payments and, in the bureau’s words,

“unnecessary hardship through no fault of their own”.

They face that hardship because of difficulties in finding or accessing a computer, failure of jobcentre staff to provide information about advance payments, incorrect information held on claimants’ records, incorrect advice being provided by jobcentre staff, and incorrect payments being made.

Alternatively, the Minister can come and meet staff from Your Homes Newcastle, the arm’s length management organisation responsible for managing Newcastle’s council housing stock, to discuss the significant level of support that they are having to provide to tenants through the universal credit process. Indeed, Your Homes Newcastle has highlighted that it and Newcastle City Council have so far provided support to 506 people,

“specifically to help those who may be unable to manage monthly payments or don’t understand UC and need explanations at the very start of their claims. The time taken to support customers in personal budgeting varies between 2 and 15 hours of support, although there are some exceptional cases where this can take considerably longer. The average time per case is currently 3.5 hours and this is carried out by staff co-located at Jobcentres. The cost of placing three staff in Newcastle Jobcentres to provide this service is £93,651 annually.”

That support is above and beyond the 25 minutes to two hours that it can take Your Homes Newcastle staff to assist tenants through the initial universal credit claim process. Some of the more complex cases can take significantly longer. Indeed, Your Homes Newcastle staff have highlighted the case of one tenant whose universal credit application has taken them approximately 100 hours to progress. Throughout that time, the woman has seen a significant decline in her health and wellbeing, as well as real financial hardship because of the severe delays and mistakes on the DWP’s part. If this represents a simplification and streamlining of the benefits system, I dread to think what a more complicated system would look like.

Of particular concern to Your Homes Newcastle is the significant impact on rent arrears of the roll-out of universal credit and the associated delays. I know that the Minister has repeatedly claimed—no doubt he will do so again this afternoon—that a large number of cases that enter universal credit have existing rent arrears. However, Your Homes Newcastle has made it clear to me that its current income collection rate is 93.9% of the rent due from tenants who are on universal credit, compared with 99.8% of the rent owed by other tenants. As a result, there was a reduced income collection of £220,000 for customers on universal credit at the end of the financial year. Your Homes Newcastle went on to state that tenants on universal credit owe a total of £784,000 in rent arrears, of which some £381,000—just under 50%—are solely as a result of universal credit. As Newcastle City Council has informed the Select Committee on Work and Pensions, of the 1,380 Your Homes Newcastle tenants claiming universal credit on 10 March, some 1,186—more than 85%—were in rent arrears. The average level of those rent arrears was £686, more than double the average of £300 for YHN tenants in rent arrears. Clearly the situation is completely unsustainable.

Housing-related concerns about universal credit are shared by the homelessness charity Crisis, which clearly states that, as it currently operates, universal credit

“is causing rent arrears, threats of eviction and homelessness for our clients”.

Meanwhile, the Residential Landlords Association has raised concerns that

“as it currently operates, Universal Credit is causing rent arrears problems for a considerable number of tenants. Changes are needed to provide tenants and landlords with greater confidence that rent can be paid on time and in full.”

All three organisations—Your Homes Newcastle, Crisis and the RLA—are pressing the Government to make alternative payment arrangements much easier to set up.

It is clear to me and to many other hon. Members that the roll-out of universal credit is having a significant detrimental impact on far too many of our constituents. These issues are not unique to Newcastle; they are being replicated across the country, as other parliamentary debates—including one recently secured by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—have made all too clear. Indeed, some of the concerns that I have highlighted this afternoon recently caused the Work and Pensions Committee to reopen its inquiry into the impact of universal credit. The Chair of the Committee, my right hon. Friend the Member for Birkenhead (Frank Field), commented:

“Despite a growing body of evidence about the very real hardship the rollout of Universal Credit is creating for some, often the most vulnerable, claimants—and the struggles it is creating for local authorities trying to fulfil their responsibilities—it is flabbergasting that the Government continues to keep its head in the sand.”

I agree.

On behalf of my constituents, of people in other areas in which universal credit has been fully rolled out, and of people in the rest of the country who will still have to endure this process, I strongly urge the Minister to take his head out of the sand and start addressing the very real issues that the roll-out of universal credit—the Government’s flagship policy—is causing. We must ask ourselves: how many times, from how many people and organisations across how many parts of the country must the Minister hear that universal credit is not working before he finally accepts that it is time to act?

[Geraint Davies (in the Chair)]

I will call the Front Benchers at 3.42 pm, half an hour before the end of the debate at 4.12 pm. I ask hon. Members to speak for between five and six minutes, so that everyone gets an equal share.

Cost of Living

Debate between Geraint Davies and Catherine McKinnell

Tuesday 14th May 2013 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Elmet and Rothwell (Alec Shelbrooke), although I do not think that the spot price of oil should be the determining factor in whether we intervene in a country where 70,000 people have been slaughtered and 1 million more have been made into refugees. That should not have been a consideration in Libya either.

The centrepiece of the Queen’s Speech, with respect to the cost of living, should have been a strategy for growth. That was sadly missing from the rag-bag of old ideas that we have seen before. Contrary to what was said by the hon. Member for North East Somerset (Jacob Rees-Mogg), who is no longer in his seat, under this Government, the debt to GDP ratio will have gone up from 55% in 2010 to 85% in 2015, debt is rising by £245 billion and we have lost our triple A rating. The idea that all is rosy in the garden is farcical.

What we need is growth. To his credit, the Prime Minister is in Washington trying to negotiate an EU free trade deal with the United States. At the very same moment, the Eurosceptics—or should I say Euroseptics—are busy undermining that prospective agreement with a great trading partner. That is very sad.

[Catherine McKinnell]

My hon. Friend is making a powerful point about our international position. Does he share my concern over the figures from the Office for National Statistics that came out today, which show that the UK has plummeted to 12th in the league table of household incomes? That shows that not only are people suffering, but we are falling behind our international neighbours and competitors.

[Geraint Davies]

That is a key point.

We are always hearing that everything is all right in the UK and the problems are someone else’s fault. The EU does have problems, but there are emerging opportunities in China, India, Brazil and elsewhere. The Queen’s Speech should have provided a strategic platform for international trade to help us access the newly emergent and massive middle classes who want to take our consumer goods and who form the basis of inward capital investment. But no, we are busy being the one nation, fish and chip shop, Eurosceptic Britain—the nation of shopkeepers that Napoleon described us as. It is frankly pathetic. The Conservatives are not fit to be in government.

Between 1997 and 2008, we saw growth of 40%. Not enough Labour Members stand up and defend that. If our debt to GDP ratio is going from 55% to 85%, how can we sort it out? One way is to cut debt and to stamp on the poor for the recklessness of the bankers, which is what the Tories are doing. The other is to increase GDP so that the ratio goes down. Under Labour, GDP went up by 40% up to 2008. In 2008, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) and President Obama put together the fiscal stimulus. The EU’s fiscal stimulus was 2% of GDP. In the United States, it was 5% of GDP. Indeed, the United States put in $2 trillion of quantitative easing, whereas the EU put in nothing. Britain did put in something, but we still have the economics of austerity here and in Europe. In the United States, where the economy was stimulated, growth is projected to be 3% in the next year. In the EU, it is projected to be 1%. Why was nothing done about that in the Queen’s Speech?

We have seen the emergence of massive youth unemployment. In Greece, the rate is more than 60% and in Italy it is 38%. In Greece, people are moving towards the Nazis and extreme communists. In Italy, 25% of people voted for a comedian. I notice that that is the same percentage of people who are voting for UKIP here. The British National party’s support has gone up fourfold from 1% to 4%. The response of the Tories is to run for the hills and emulate UKIP.

Why has support for UKIP gone up? The first reason is that the Prime Minister has given it credibility by saying that he will hold a referendum. People who used to say to me when I knocked on their doors, “You must be joking. We’ve got millions of jobs involved in trade with Europe. It’s the platform into China, India and the United States”, are now thinking, “Hold on. Cameron’s offering us this option, so it must be a credible choice.” That gives oxygen to UKIP.

Infrastructure

Debate between Geraint Davies and Catherine McKinnell

Tuesday 12th February 2013 Commons Chamber

[Catherine McKinnell]

Indeed. My hon. Friend makes that point very well. Infrastructure investment fell off the cliff when this Government came to power and we are seeing the economic consequences of that today. Many Members have referred to the Chancellor’s 2010 spending review. It took place in the fourth quarter of 2010 and the UK’s economy has grown by just 0.4% since then. During that time, the USA economy has grown by 4.2%, Germany’s by 3.6% and France’s by 1.5%. Our economy, however, has been stagnating for the past two years, and borrowing is now rising, not falling, as a result.

[Geraint Davies]

Will my hon. Friend give way?

[Catherine McKinnell]

I do not have much time left, but I will give way.

[Geraint Davies]

Does my hon. Friend agree that the United States strategy for the top 2% to pay more towards reflating the economy and getting 1% extra growth is a good idea and that we should not be hitting the poor to pay for debts?

[Catherine McKinnell]

This Government’s choices on spending and tax have resulted in millionaires being given a tax cut while the poorest bear the brunt. We are seeing the results of that, not just in the suffering that we see at our constituency surgeries, but in the lack of economic growth. That is why it is so disappointing—indeed, unforgiveable—that the coalition Government have been asleep at the wheel on the issue of infrastructure investment.