Loan Charge

Gerald Jones Excerpts

Thursday 18th January 2024 Commons Chamber

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

I am grateful for the opportunity to speak in today’s debate, and I congratulate the right hon. Member for East Antrim (Sammy Wilson) on having secured it. I thank the Backbench Business Committee for granting the debate. I declare my membership of the loan charge and taxpayer fairness all-party parliamentary group.

As we have heard, this is a long-standing issue that continues to have an impact on the health and wellbeing of thousands of people right across the country, including residents of Merthyr Tydfil and Rhymney. Among them is my constituent, Geraint Owen, whom I have met on a number of occasions over a long period of time. He and other victims of this scandal have experienced considerable frustration in attempting to deal with HMRC.

The way HMRC has dealt with this issue has caused unbelievable hardship, distress and anxiety for large numbers of the people we serve. This sorry saga bears striking similarities to the Post Office/Horizon scandal, which we have heard so much about in recent weeks. Ordinary people up and down the country are being asked for unrealistic payments, which is causing huge financial hardship, bankruptcy and worse, such as the risk of losing their home and an increased risk of suicide. There are real concerns that this is another scandal where the Government have ignored the alarm bells and cries for help, so I urge them to revisit it and ensure a fairer and more effective approach.

This debate is a huge opportunity to highlight the injustice of the loan charge scandal. At a recent meeting of the all-party group, we heard more harrowing stories about how people’s lives had been ripped apart by the loan charge. The Government’s approach has meant that ordinary people who were victims of mis-selling are facing huge bills, which is causing them untold distress and personal harm. Tragically, the number of suicides linked to this scandal has reached double figures. Clearly, Labour supports attempts to tackle tax avoidance schemes, but that is not what we are talking about in this case. The fact that there have been so many shocking accounts of harm and distress suffered by people liable to the loan charge, including those we heard at meetings of the all-party group, demonstrates how the Government’s approach has gone badly wrong.

Labour has consistently called for a fair and effective approach from HMRC instead of the current approach, which is extremely tough on those caught up in these schemes. We are clear that the 2019 Morse review cannot be the final word on this matter. We tabled an amendment to the Finance Act 2020 that would have forced the Government to review the impact of the scheme and the fairness of HMRC’s implementation of the policy, and a proposed new clause to the Finance Act 2022 that would have required the Chancellor to commission an independent review to consider HMRC’s approach to the loan charge scheme and make recommendations on how it should be altered; it would also have required the Government to explain to the House of Commons what efforts they had made to guarantee the review’s independence.

We need a fair and effective approach from HMRC instead of the current approach, which is extremely tough on those caught up in these schemes, but weaker on their architects. As the all-party group previously suggested, the tax burden should not fall solely on the individual users of the schemes, but should be shared by the employers and agencies and also, ideally and appropriately, the operators and promoters of the schemes. On that basis, the Government should change course and announce a fairer approach.

We must remember the human impact of the loan charge: as we know and as I touched on earlier, HMRC has confirmed that there have been 10 suicides of people facing the loan charge; it has also confirmed that there have been 13 suicide attempts. That in itself should be enough reason to stop this cruel retrospective policy. I urge the Government to accept that there is something deeply wrong with their current approach to the loan charge scheme.

Reports to the Treasury Select Committee last October stated that around 40,000 people still face the loan charge, meaning that four and a half years on, there are still many unresolved cases. The current approach has not worked: HMRC is still trying to resolve tens of thousands of cases, and 10 families have lost loved ones to suicide. This whole sorry saga is cruel and unacceptable. Action is needed now. The Government must think again. When ordinary people who are the victims of mis-selling face financial ruin and personal harm because of the way the loan charge has been pursued, action must be taken urgently. I hope that in summing up today’s debate, the Minister will address the points I have made.

Mortgage and Rental Costs

Gerald Jones Excerpts

Tuesday 27th June 2023 Commons Chamber

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

The Tory mortgage bombshell can trace its roots back to the disastrous mini-Budget and the so-called growth plan last September. Coupled with 13 long years of Tory failures, it left our country in a mess and thousands of families in an extremely vulnerable and precarious position. Last September, a mortgage adviser in Merthyr Tydfil contacted me and told me the effect of the mini-Budget and how devastated he and many of his customers were to see hundreds of pounds added to mortgage payments every month. The shadow Chancellor was right that we can never allow the Tories to forget that.

After 13 disastrous years and an even more disastrous few months, the UK has the highest inflation in the G7 and a mortgage crisis that is worse than in other countries—typically, mortgages are £100 higher than in other European countries. In Merthyr Tydfil and Rhymney, approximately 6,400 households are affected by the Tory mortgage bombshell, paying on average an additional £1,300 per annum, on top of the cost of living crisis, all caused by the economic failures of the Conservative party.

Recently, I raised in the Chamber the plight of our local food banks, which are struggling to cope under so much pressure from demand and reduced donations, as people across our communities are feeling the pinch and are less able to donate. The Tory mortgage bombshell will only make matters much worse. Indeed, the added stress placed on families with their homes under threat is just unforgiveable.

Citizens Advice is an agency that works hard to support the most vulnerable. I work closely with our local citizens advice bureaux on promoting events to maximise income. They have been telling me for some time how their workload has increased massively, particularly on debt advice. We learned from Citizens Advice this week that its clients with mortgages have seen their finances fall off a cliff, as the shadow Chancellor said. Every month, the amount they need to spend on things such as housing, bills and food is over £100 more than their income. The situation is not sustainable and causes anxiety, stress and deep worry for so many of my constituents and many thousands more across the country.

The previous Prime Minister has apologised for her mistakes, which led to a spike in interest rates following the disastrous mini-Budget last Autumn. However, the Minister should do the same. This whole rotten Government should hang their head in collective shame for the misery they are causing so many.

The Tory mortgage charter falls short in a number of key areas. Not all the mortgage market is covered by the charter. There remains a huge worry that more than l million households could miss out on support. The Government must outline the measures they intend to take to ensure that help will be available to everyone struggling to pay their mortgage. Perhaps the Minister can address that in his wind-up, and confirm that support will be available to all, not just to those who happen to have a mortgage with one of the banks on the Chancellor’s invite list for his cosy chats.

All too often, this Tory Government have been too slow to act. Renters are not even mentioned in the latest charter. In his statement on Friday, why did the Chancellor make no mention of the impact of this crisis on people who are renting? It is time for the Minister to outline whether he agrees that one way to provide support for renters is to back Labour’s proposal to halt no-fault evictions.

The Conservative party likes to think of itself as the party of home ownership, but with housing affordability lower than ever in recent years, that claim lies in tatters. There is very little or no assurance given to those looking to take their first step on to the housing ladder that they will not be held back by issues in the mortgage market caused by the Tory mortgage bombshell. The Government simply cannot brush things away and put the cost of living crisis down to global factors. The latest data on mortgage rates specifically shows that they have increased faster here in the UK than in the USA since the mini-Budget and, as we have heard, the gap in mortgage interest rates with our nearest neighbours means someone with a £200,000 mortgage will pay over £1,000 a year more in the UK. The reality is that the Government have no explanation for that, apart from that they have been grossly incompetent.

It is time for the Government to step aside, put an end to the misery faced by millions of families, call a general election, let Labour get on with governing and get this great country back on its feet.

Oral Answers to Questions

Gerald Jones Excerpts

Tuesday 20th June 2023 Commons Chamber

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

3. What recent assessment he has made of the potential impact of the growth plan of 23 September 2022 on mortgage rates.

[Janet Daby (Lewisham East) (Lab)]

9. What recent assessment he has made of the potential impact of the growth plan of 23 September 2022 on mortgage rates.

[The Economic Secretary to the Treasury (Andrew Griffith)]

We recognise that this is a concerning time for homeowners and mortgage holders, but we cannot ignore the fact, much as some may wish to, that interest rates have risen across western economies as a result of the covid pandemic and the impact of the war in Ukraine. The Bank of England sets the base rate, which can have an effect on mortgage pricing, and the Bank has been independent since the decision of the then Labour Government in 1997. We remain committed to responsible management to bring inflation under control, which is the only sustainable way to lower interest rates and lower mortgage rates.

[Gerald Jones]

The former Prime Minister has apologised for the mistakes in her so-called growth plan and the damage it caused. Families across the UK will soon start paying thousands more in mortgage interest payments. Given the Prime Minister’s comments yesterday, it appears that there is little or no further support coming. Will the Minister join the former Prime Minister and apologise to the nation for the impact of the Conservative party’s misguided economic experiment?

[Andrew Griffith]

Much as the Opposition would prefer this not to be the case, it is a fact that this is impacting across western economies. Although market-to-market comparisons are not always easy, in the United States of America the average 30-year mortgage has now increased to above 6%. As I have said, this Government will do what we can sustainably to lower interest rates, and thereby ease the burden on mortgage holders.

Oral Answers to Questions

Gerald Jones Excerpts

Tuesday 20th December 2022 Commons Chamber

[Jeremy Hunt]

I am very grateful that the hon. Lady asked that question. She is absolutely right; a number of businesses, charities and organisations such as care homes are extremely vulnerable because of the big increase in energy prices. All I would say is that she should look at what the Government have done this winter. With around £18 billion of support, we have demonstrated that we are aware of those concerns. Early in the new year, we will bring forward an appropriate package on what will happen from next April.

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

13. What fiscal steps he is taking to support people with their energy costs.

--- Later in debate ---

[The Chancellor of the Exchequer (Jeremy Hunt)]

We have reaffirmed our commitment to help hard-pressed families this winter with support for energy bills. We have introduced a range of measures to help those families, including capping energy bills at £3,000 this year and £2,500 next year.

[Gerald Jones]

The End Fuel Poverty Coalition has called for an immediate ban on the installation of prepayment meters made under court warrants, because of fears that energy suppliers are using them to disconnect the poorest and most indebted customers by the back door, and it claims that transferring households to prepayment meters often prompts people in debt to self-disconnect. Citizens Advice said that an extra 450,000 people could be switched to prepayment meters by the end of the year because of debt, and a record number of people could not afford to top-up their prepayment meters—the eighth time that record has been broken in the past nine months. This is a crisis made in Downing Street, and it is having a grave impact on a growing number of the most vulnerable households in my constituency and across the country. What will the Chancellor do to support people in that grave situation?

[Jeremy Hunt]

I thank the hon. Gentleman for raising that issue. There are 4.1 million people across the country on prepayment meters, and the Ofgem energy price cap covers all prepayment meter customers and ensures that they pay a fair price for their energy. Licence conditions require energy suppliers to provide extra support for those customers because, as the hon. Gentleman said, we recognise how vulnerable they are. We will continue to monitor the situation over the months ahead, because we are aware of the extreme vulnerabilities of that group.

Economic Situation

Gerald Jones Excerpts

Wednesday 12th October 2022 Commons Chamber

[Chris Philp]

Well, if the nationalist Administration in Scotland were willing to support more natural gas and oil extraction or indeed nuclear power generation, that would help the energy situation. Renewable energy use in the United Kingdom has increased from, I think, 7% to 42% over the past 12 years, which is very welcome. The energy price guarantee has protected families and businesses across the United Kingdom from bills that could have been £6,000 or £7,000 higher, which is a huge amount. The hon. Gentleman has not mentioned the £37 billion intervention, which particularly helps people on lower incomes, giving them an extra £1,200 a year to support them with bills. The fact that we are in such an economically successful Union means that we can offer things like the energy price guarantee and the £37 billion energy intervention.

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

It does not get more serious than this Tory-led crisis made in Downing Street. Only yesterday, a mortgage adviser in my constituency contacted me about offers that he is redoing for customers with increases of £300 to £500 a month. People are desperate for stability, but rates are changing by the day.

Commentators have said that sidelining the OBR in the recent mini-Budget and not having its assessment created more uncertainty. Does the Chief Secretary agree that sidelining the OBR was not helpful and was a mistake? Can we have a guarantee that it will not be sidelined on 31 October or in any future fiscal event?

[Chris Philp]

When the new Government came into office there was a need to act urgently on the energy price guarantee, and to alleviate the extra national insurance burden, which the hon. Gentleman’s constituents and mine are paying right now, but—thanks to yesterday’s vote—will not be paying from 6 November. That is why it was done quickly: to address the situation in front of us.

The OBR will be fully scoring the medium-term fiscal plan on 31 October. There is a statutory requirement under the Budget Responsibility and National Audit Act 2011 for the OBR to produce forecasts twice in every financial year. That commitment will continue.

Cost of Living Crisis: Wales

Gerald Jones Excerpts

Tuesday 19th July 2022 Westminster Hall

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

It is a pleasure to serve under your chairship, Ms Nokes. I add my congratulations to my hon. Friend the Member for Newport West (Ruth Jones) on securing today’s debate and the passionate way in which she started the case.

It is clear that the Government have a case to answer for their cost of living crisis, which is so damaging for people in Wales and across the UK. The Government’s response to the deepening crisis has been hugely disappointing. At the moment, they are too wrapped up in internal wrangling to care about dealing with the issues that matter to people. It is clear that the Government are out of touch, out of ideas and out of excuses. After 12 years of Conservative Government, we have a high-tax, low-growth economy, with the country suffering the biggest drop in living standards since records began, and the highest tax burden since world war two.

The Government initially refused to implement Labour’s policy of a windfall tax, until the pressure was too much and they finally caved in and had to take action. The Labour party’s plan to deal with the cost of living crisis would cancel the rise in national insurance contributions, which has come in during hugely challenging times. Labour would also cut VAT on home energy bills, and the red tape that has been created by the Prime Minister’s chaotic Brexit. Our policies would make it easier to buy, make and sell more in Britain.

We have had a passionate debate this afternoon. It is disappointing, though not surprising, that we have yet to hear a Tory voice. There are no Tory MPs here to defend their record. We heard from my hon. Friend the Member for Newport West, who talked about the worry and fear faced by many of her constituents. She put the blame for people not being able to provide for their families squarely on the crisis in Downing Street. She highlighted that prescription charges in Wales ease the burden somewhat, compared with the £9.35 cost in England, and that council tax band D properties on average pay £167 less than in England. There is also the £244 million council tax reduction scheme that helps 270,000 households in Wales. All those are policies of the Welsh Labour Government.

My hon. Friend the Member for Llanelli (Dame Nia Griffith) talked about the massive growth in inequality, the need for a redistributive tax policy, and the fact that the UK has the firepower and capacity to take action, but not the will. She gave examples of the work of the previous Labour Government, and some ideas that could be taken forward, such as cutting VAT on fuel. She, along with other Members, talked about the need to tackle issues around universal credit, particularly the five-week wait that causes so much hardship for our constituents.

The hon. Member for Ceredigion (Ben Lake) talked about the impact of the cost of living crisis in Wales, along with the energy price cap. He spoke of his concern, which I we share, about the possible outcome in the autumn, with further increases in the price cap. He talked about the challenges facing rural communities with off-grid energy costs, and the need to tackle the rise in fuel costs. Like other hon. Members, he talked of the need to address universal credit and restore the £20 uplift.

My hon. Friend the Member for Pontypridd (Alex Davies-Jones) talked about how this Government never take their responsibility to Wales seriously, and about the economic firepower of the UK Government—if only they had the will. She talked of her pride, which many of us share, in the Welsh Government, who work so hard and shoulder-to-shoulder with our constituents, to support them through these troubling times. She highlighted the fact that the windfall tax was too little, too late.

My hon. Friend the Member for Cynon Valley (Beth Winter) talked of how we are in a cost of living emergency, and that the freeze on pay over the longer term has caused so many issues. She again highlighted that the Welsh Government are doing as much as they can, doubling the investment over and above the devolution settlement. She raised her concerns about poverty becoming normalised in the fifth richest country in the world, gave examples of parents not being able to buy stationery for children to go to school, and spoke about the need for proper pay for our public servants.

My hon. Friend the Member for Swansea West (Geraint Davies) talked about the impact of the massive cuts on poverty and the family lives of many of our constituents, and pressed the Government to act now. He also spoke about local housing allowance and the recent report by the Bevan Foundation that said that many people are unable to find properties within the local housing allowance rate. Finally, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) talked about digital poverty and the need for a cap on the price of heating oil in Wales—and, of course, in Scotland.

In about two weeks’ time, I will host a cost of living crisis event in my constituency, and I know many others are doing the same. We are bringing providers and support agencies together to offer our constituents support and advice during this awful time.

In recent weeks, I have talked to constituents who have raised concerns. I talked to a young family a few weeks ago. Both parents work full time, and by the middle of the month they rely on the support of the food pantry to get them through the rest of the month—to feed themselves and their young child.

[Carolyn Harris]

I am sure my hon. Friend is aware of the food and hamper scheme that I have run in my constituency for the past six years. We provide food and hampers at Christmas and Easter, and during the summer. This year, more people who were previous contributors are becoming dependants. Does he agree that we are at a dangerous point, and that demand will eventually outstrip supply and we will not be able to help people?

[Gerald Jones]

I congratulate my hon. Friend on the excellent work she has done over many years on this issue. I absolutely agree that we are in danger of demand outstripping supply. I have talked to food banks and food support organisations in my constituency in recent weeks, and they all tell me of that concern. Week on week, they are extremely worried that their supplies of food will not be able to meet the ever-increasing demand.

Last week, I spoke to another couple, who go for a swim three times a week, which obviously helps with their health and wellbeing—it is supported by Welsh Government funding—but they use that opportunity to have a shower in the baths to save on water and heating at their home. The danger is that such examples are becoming normalised in 21st century Britain. That is worrying, scary and shameful.

I want to contrast the Tories’ record with that of the Welsh Government. As we have heard, the Welsh Labour Government have invested more than twice what they received in consequential funding to support households with the cost of living crisis. My hon. Friend the Member for Cynon Valley talked about the delivery of the £51 million household support fund, which is targeted at people who need the most support. The Welsh Government have doubled the winter fuel support payment to £200, which has helped 150,000 people across Wales.

My hon. Friend the Member for Newport West said that, from September, all primary schools in Wales will begin to receive free school meals; an additional 180,000 primary school children will benefit from the scheme. The Welsh Government’s warm homes programme has invested almost £400 million in more than 67,000 homes since 2011 to improve home energy efficiency across Wales, saving families money on energy bills. More recently, 57,000 unpaid carers across Wales became eligible to receive a £500 support payment.

The budget available for the Welsh Government to support the people of Wales is hampered by the reality that, over the spending review period, it is likely to be worth at least £600 million less than it was when it was first announced last autumn because of rocketing inflation. The Welsh Government’s spending power is likely to deteriorate further because of that. That is why they have called on the UK Government to update their settlement to reflect the significant impact that inflation is having on important budgets in Wales.

We have seen the smoke and mirrors, and sheer uncertainty, around the shared prosperity fund. There has been a lack of investment, despite the explicit manifesto promise in 2019 that Wales would not be a penny worse off; investment would make a huge impact on the cost of living crisis in Wales. As we heard from my hon. Friend the Member for Swansea West, designating HS2 as an England and Wales project, which it clearly is not, also denies Wales an extra £4.6 billion in consequential funding. The Welsh Affairs Committee and even the leader of the Welsh Conservatives agree with that assessment, but instead the Government are intent on short-changing Wales again. Once again, that money could significantly help to tackle the cost of living crisis in Wales.

What we have seen from the Tories at every turn is that they seem to make decisions to take money from people who can least afford it, such as voting to cut the £20 universal credit uplift, which Welsh Conservative MPs all voted for. They also voted to increase tax during the cost of living crisis, but voted against a windfall tax until they were forced by Labour to perform a screeching U-turn.

Our farming communities are suffering, too. Wales faces a UK Government who have broken their promises to the people of Wales. It has become clear that when providing a replacement for EU farm funding, the Government deducted EU receipts that were due to Wales for work that was due as part of the 2014 to 2020 rural development programme. That means that rural communities in Wales are £243 million worse off. Again, that is devastating for farming communities and the livelihoods of our farmers.

It is clear that this Government have no answers. Although the removal of the current Prime Minister is a step forward, none of the candidates for his job has any meaningful ideas to tackle the cost of living crisis and really make a difference to the lives of people in Wales. Rather than playing musical chairs and having the fourth Conservative Prime Minister in six years, what we really need is a UK Labour Government who will build a stronger, more secure economy, working hand in hand with the Welsh Labour Government for the benefit of everyone in Wales, and getting the cost of living crisis under control.

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.

Oral Answers to Questions

Gerald Jones Excerpts

Tuesday 15th March 2022 Commons Chamber

[Kim Johnson (Liverpool, Riverside) (Lab)]

1. What recent assessment he has made of the impact of inflation on living standards.

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

6. What fiscal steps he plans to take to help reduce the impact on households of the rise in the cost of living.

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

16. What fiscal steps he plans to take to help reduce the impact on households of the rise in the cost of living.

--- Later in debate ---

[Rishi Sunak]

The hon. Lady talks about children in poverty, and I am pleased that there are now 300,000 fewer children in poverty than in 2010 thanks to the actions of Conservative-led Governments. We all know that the best way to ensure the children do not grow up in poverty is to ensure that they grow up in a house where people work, and that is why I was delighted this morning to learn that there are record numbers of people on payroll.

[Gerald Jones]

Citizens Advice has told me that one in six people in my constituency of Merthyr Tydfil and Rhymney are unable to pay their energy bills right now, and that is before they spike next month and before the Chancellor’s national insurance hike. Some 86% of people said that they did not think that the October energy loan scheme would make a difference in helping to pay their bills. The conflict in Ukraine will inevitably lead to a further surge in energy prices, so if he will not accept Labour’s suggestion of a windfall tax on oil and gas producers, what exactly will the Chancellor do now to relieve the pressures on people in my constituency and across the country?

[Rishi Sunak]

We are putting in place support to help households meet the rising cost of energy bills, and £9 billion of support will help to ensure that four out of five households in England will receive £150 starting this April, with a further £200 of support towards the autumn. Of course, councils have been given extra money for discretionary funding to help households in need as well.

National Insurance Contributions Increase

Gerald Jones Excerpts

Tuesday 8th March 2022 Commons Chamber

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

I rise to support the motion from my right hon. and hon. Friends. We all remember too well that during the 2019 general election campaign, just over two years ago, the Prime Minister said to voters:

“Read my lips, we will not be raising taxes on income or VAT or national insurance.”

The Chancellor of the Exchequer was also keen to point out that his plan was to cut taxes for the lowest paid through cutting national insurance. It is clear that the Government have blatantly broken their promises to the country on national insurance, as they have on international development and the pension triple lock.

As my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Chancellor, mentioned, things have changed in the six months since the national insurance contributions increase was announced back in September. It is clear to many Opposition Members that the Government need to rethink the planned rise in national insurance contributions. In these extraordinarily difficult times, if the rise goes ahead, it will see people’s incomes squeezed even more. People are finding it more and more difficult just to survive and that is before we see the increase in national insurance contributions and the huge increase in energy bills that will have a heavy impact from April.

In my constituency and across the country, we are all hearing stories of huge sacrifice. Families are facing a real cost of living crisis, with energy bills set to rise again in April—

[Anthony Browne]

Will the hon. Member give way?

[Gerald Jones]

No, I will not. Given that oil and gas producers in the North sea have posted huge profits during the pandemic, why do the Government not halt their unfair tax rise, back a windfall tax to help to fund a cut in VAT on home energy bills and ease the burden on working people?

Government Members have also called on the Government not to go ahead with the rise. They have urged Ministers to make tackling the cost of living their No. 1 priority and noted that this year will be exceptionally hard for families, so why are the Government still not listening?

The Government claim that this situation is down to the pandemic, but in March last year—a year into the pandemic—the Chancellor promised that national insurance would not go up, saying:

“We’re not going to raise the rates of income tax, national insurance, or VAT.”

He added:

“Nobody’s take home pay will be less than it is now”—

another broken promise.

Analysis from the New Economics Foundation shows that 2.5 million working households will be hit by the Tory double whammy of cuts to universal credit and the increase in national insurance, losing out on as much as £1,170 next year. That is all at a time when we know that the price of food, the price of petrol and the cost of rent are going up and families are genuinely fearful about making ends meet.

There are other ways to raise that money, but the Chancellor wants the country to believe that this is the only way to do it. Half of Britons say that they could not afford an additional £50 a month on their cost of living. The Government should halt the national insurance rise so that people see their cost of living concerns ease. Surely the Minister recognises that stopping the rise would provide immediate support and help families at this really difficult time.

We know that citizens advice bureaux have seen a huge increase in debt advice services and that is before we reach April, when there will be the national insurance rise and the increase in energy costs. Labour has long called for the national insurance rise to be halted so that it does not make the cost of living crisis worse.

[Anthony Browne]

Will the hon. Member give way?

[Gerald Jones]

No, I will not. The Federation of Small Businesses warned that

“this increase will stifle recruitment, investment and efforts to upskill and improve productivity in the years ahead.”

The trade unions have joined the FSB in that regard. The FSB stated:

“The Government’s regressive jobs tax hike will put jobs at risk, stifle start-ups and prevent new jobs from being created…It could mean 50,000 more people out of work after it takes effect in April. That means 50,000 livelihoods harmed—50,000 people who would otherwise be at work in our economy.”

The TUC also says that it is wrong to hit young and low-paid workers while “leaving the wealthy untouched”.

Surely the Government must recognise that we are in a totally different situation from when the rise was announced six months ago. The economic outlook for thousands of families across the country is much bleaker, so I urge the Government to change course, support today’s Opposition motion and help to ease the pressure on families in Merthyr Tydfil and Rhymney and right across the country.

Household Energy Bills: VAT

Gerald Jones Excerpts

Tuesday 11th January 2022 Commons Chamber

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

I rise to speak briefly in support of the motion.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I beg the hon. Gentleman’s pardon, but I have to reduce the time limit to three minutes.

[Gerald Jones]

Thank you, Madam Deputy Speaker.

Families in Merthyr Tydfil and Rhymney and across the country face a bleak start to the new year. Rising energy costs are especially concerning at the coldest time of year. The cost-of-living crisis is growing. Shopping baskets were £15 more expensive this Christmas than last Christmas because of inflation, and the price of petrol was 24% higher. Families face real pressures on their household incomes this winter, yet so far the Government have not stepped up to the challenge and offered anywhere near adequate support.

Next month, a new price cap is likely to be announced to take effect from April 2022, and there is some alarming speculation that bills could rise by as much as 46%. Undoubtedly, some will point to the rise in energy bills being partly due to the short-term increase in the global gas price, but let us be clear: the reality is that a decade of Conservative government has left us exposed to the market. Do the Government recognise that their failure on regulation and gas storage, the delay in new nuclear and renewables, and the failure to insulate homes properly have led to working people paying the price for the Government’s incompetence?

Labour’s plan, which the motion outlines, will go some way to support families up and down the country who face a cost-of-living crisis here and now. We know that oil and gas producers in the North sea have posted huge profits during the pandemic. A windfall tax to help cut VAT on home energy bills and ease the burden on working families is appropriate at this most difficult time for families across the country.

Cutting VAT on energy would save most households around £200 on their bills at a time when the poorest need support. We also know that the Prime Minister, the Levelling Up Secretary and the Home Secretary backed cutting VAT on fuel in the past. Therefore, the Government could support the motion. Why are they so far refusing to do so? As I said, Labour’s plan would save most households £200 while targeting support at low earners, and pensioners would save £600. The plan tries to ensure that people do not have to choose between eating and heating.

The Welsh Labour Government have already announced a £38 million winter fuel support scheme that directly supports families to cover their energy costs and keep their homes warm this winter. That demonstrates the Welsh Government’s willingness to offer support to those most in need. The Welsh Government never shied away from trying to support families through the crisis. We now need the UK Government, with all their financial clout, to step up to the plate and deliver for those who need it most at this most difficult time. I urge all Members, particularly those on the Conservative Benches, to do the decent thing and support the Opposition motion.