Cost of Living: Fiscal Approach

Gerald Jones Excerpts

Wednesday 25th May 2022 Westminster Hall

[Dan Jarvis]

The hon. Gentleman is fortunate to represent a beautiful part of our country. There are some particular pressures on the rural economy, and he is absolutely right to highlight them.

An NHS worker in Barnsley with two decades of service recently contacted me to say that 63% of the meagre pay rise she received went back into the Treasury coffers because she was on universal credit. She said:

“Having worked throughout the pandemic, pushing my children from pillar to post as after school clubs and usual childcare arrangements were cancelled, so that I could work on the front line—often with COVID positive patients—please can you tell me how the government can morally justify this?”

Perhaps the Minister can try to justify it. If not, will she outline what progress the Treasury has made in making the funds available for a long overdue and much deserved pay rise for those who quite literally risked their lives for us?

Soundings from No. 10 suggest that several Ministers, including the Prime Minister, are pushing for further public service pay restraint, but wage inequality is going through the roof. Research by the High Pay Centre reveals that the ratio of chief executive officer pay to that of medium earners is 63:1—almost doubling in a year—so it is telling whose pay Ministers are willing to restrain. By giving porters in our NHS enough money to put enough food on the table, the Government would protect public finances by avoiding a staffing crisis. Awarding a fair pay rise is morally and, critically, economically the right thing to do. Problems are being caused not just by what our key workers are seeing in their payslips each month, but by what is being taken out by stealth—the cost of working.

I have two suggestions for the Minister, both of which would lessen the burden on key workers and have an immediate impact. The first is about mileage rates. According to a survey by Unison, three out of four health workers who use their cars for work say that the current mileage rates do not cover prices at the pump. Care workers, environmental health inspectors, social workers and community healthcare staff are all out of pocket for doing vital work. Some 9% report that high petrol prices and out-of-date mileage payments mean that they have had to cut down on patient visits. More than half the workers at one South Yorkshire hospital say that mileage payments not covering costs is having a severe financial impact on them.

Her Majesty’s Revenue and Customs is responsible for setting approved mileage rates, but they have not been updated since the 2011-12 tax year. National Joint Council rates for local government workers have not changed since 2010, and NHS rates have not been updated since 2014. Ending the mileage rates freeze would put an average of £150 back in the pockets of workers over the course of a year.

The Minister will no doubt point to the Chancellor’s 5p fuel duty cut, which—let’s be honest—is modest, but some retailers stand accused of failing to pass on half that amount. Petrol and diesel prices are at record highs, so more needs to be done. Will the Minister provide an assurance today that the Treasury will conduct an immediate review of mileage rates—a review that would encourage and include provisions for the NJC and the NHS to do the same?

My second suggestion is on car parking fees. Not everyone can use public transport to get to work. Between a quarter and a third of the healthcare workers Unison spoke to in South Yorkshire use a car because of the lack of public transport. That is what makes reintroducing hospital car parking charges so wrong. Three out of five staff at one South Yorkshire hospital said that the reintroduction of car parking charges will have a high or extremely high impact on them financially.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

Does my hon. Friend agree that it would be wise for the Government to look to the Welsh Labour Government, who have scrapped all car parking charges at NHS hospitals in Wales? It is a small measure, taken with a number of others, but supports the hard-working staff he is talking about.

[Dan Jarvis]

My hon. Friend raises an important point. Yes, I would point to the story that is being told in Wales, and to the benefit and value of Labour in power, leading by example.

I am aware that night shift workers remain exempt from car parking charges. However, it will still cost NHS staff £90 million a year to park. The Government cannot allow the price of parking their car to become the straw that broke the camel’s back for our health workers. Will the Minister provide an assurance that she will meet with ministerial colleagues in the Department of Health and Social Care as soon as possible to find a way to scrap all car parking charges for NHS staff? It is plain for everyone to see that the Government’s plan is not working. When plan A fails, the Government’s reaction should not be to keep repeating the plan, it should be to formulate plan B. Let us see what tomorrow brings.

Finally, the incredible Barnsley Foodbank Partnership supplied 8,000 food parcels in the 12 months to March—that is up 60% on pre-covid levels. Now demand is up and donations are down, as more people struggle with the cost of living crisis. I honestly do not know how some people have got through the last few months, and I dread to think about the sacrifices they will have to make to get through the next few. It does not have to be this way. If the Government grasp the seriousness of what people are facing, and act now, we can avoid a social catastrophe. I hope the Minister will consider the suggestions that I have made, and that others will no doubt make today, in the spirit that they are offered. Our public sector workers—indeed, our entire country—deserve better than this.

--- Later in debate ---

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Twigg. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing what is an extremely timely debate, given that this is the biggest issue facing our country and our constituents.

The cost of living crisis is causing great hardship in Merthyr Tydfil and Rhymney, and right across the country. We desperately need measures to tackle it and, at the very least, an emergency Budget that introduces a windfall tax to bring people’s bills down now. Yesterday’s news that the energy cap could increase to £2,800 in the autumn is truly frightening.

The Government do not seem to have a plan. During the Queen’s Speech debate, the Prime Minister hinted that help would be announced “in the coming days”, only for the Treasury to announce in the following hours that that was not the case. That is an example of the lack of a joined-up approach across Government.

Recently, I met my local citizens advice bureau, which highlighted growing hardship across the constituency. I was alarmed to hear that overall client numbers have doubled in recent months. Queries about energy have increased by 250%, which is evidence of the fuel poverty crisis, and are now mainly about support to pay fuel bills. Debt numbers have increased by 200%, and council tax debt is now the biggest issue. That is worrying, as those are household debts. Probably most worrying, however, is the massive increase—more than 500%—in requests for food bank vouchers and other charitable support. My local food banks operate in challenging times and, on a number of occasions recently, have come close to running out of food, given the huge demand.

The fact that nothing in the Queen’s Speech tackled this growing crisis demonstrates that the Government are not listening or, if they are, that they are failing to act, which shows a shameful lack of compassion. A windfall tax would be a start. As we have heard, it is grossly offensive that energy giants are announcing their highest ever profits—recently, Shell announced profits of more than £7 billion in the first quarter of the year—and yet the Government have so far refused to implement a windfall tax. At the same time, people are struggling to choose between heating and eating. The Government must rethink their approach. We need a proper plan, and we need it now.

We also know that many public service workers are out of pocket from just doing their jobs. Many use their cars to do their job, such as care workers and social workers, who visit vulnerable adults and children. They are now repaid less than what they spend on petrol, thanks to the out-of-date HMRC mileage rates. I support the call of my hon. Friend the Member for Barnsley Central to review those rates.

It is clear that public sector pay is also key to levelling up, as public sector workers make up one in seven employees in every region of the UK. In the north-east, Wales, Scotland and Northern Ireland, increasing public sector pay would provide a boost to the economic regeneration of the country, given that we are seeing the steepest drop in living standards since the 1950s. The Government have levers at their disposal, and they must use all of them to help ease the huge pressure on thousands of families across the country. Talk on this issue simply is not enough; we need action, and we need it now. I look forward to the Minister’s response and hope that she can demonstrate that the Government will act, and act quickly.

[Derek Twigg (in the Chair)]

I am afraid I will have to reduce the limit again, to three minutes. I call Jim Shannon.