Cost of Living
Debate between Huw Irranca-Davies and Damian Collins
Damian Collins (Folkestone and Hythe) (Con)
Several hon. Members have touched on the initiatives that the Government have put in place to try to address the cost of living. I am pleased that my local authority, Shepway district council, has frozen council tax for three years in a row—as Kent county council did this year too. Measures to stop increases in fuel duty have had a direct impact on the lives on millions of people in this country, and I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his campaign on that issue. The Government have also taken the first steps any Government have taken to bring in measures to guarantee that consumers receive the lowest energy prices. I welcome all those measures.
One issue that has not been addressed in this debate is the Labour party’s commitment to increase borrowing—it says in the short term—as part of its programme for government. It is very reluctant to be drawn on this, but it should be drawn on it, especially in a debate on the cost of living, because of the consequences it would have. The country direly needs to live within its means and reduce its debts and deficit. If it deviates from that track because of the Labour party’s desire to spend more money—money that it does not have—we have to wonder how the money will be raised. Will it be raised in taxation—by asking people to pay higher taxes—or by higher borrowing, which will be passed on to consumers in higher mortgage rates? We have been down this track before and we have seen the consequences, which is why the Opposition are so reluctant to be drawn on the consequences of their policies and what they will mean for people’s lives.
Huw Irranca-Davies
This morning I was at a breakfast meeting with a contingent from the Civil Engineering Contractors Association, which has published a report that advocates increasing expenditure on infrastructure, not necessarily through the public sector but through imaginative use of private sector investment, including being underwritten by the Government at a time when interest rates are at a record low. Does the hon. Gentleman approve of that?
Damian Collins
I am grateful to the hon. Gentleman for his point, because it provides a neat segue into what I want to talk about next. Of course, the Government welcome investment in major infrastructure projects that improve the competitiveness and underlying strength of the economy, and there are numerous schemes where that is taking place. If I look at investment in jobs in my own area through the work of the regional growth funds, I see that £35 million is being spent in east Kent to create new jobs. Businesses such as Wooding in Hythe in my constituency have already received £1 million and they are hiring people on the basis of that investment. Of course we welcome that type of investment, but we are hearing from the Labour party a desire for a short-term, temporary cut in tax to act as a stimulus to the economy, with no real sense of where that money will come from or how it will be costed and paid for. My concern in this debate on the cost of living is that the people who will end up paying for those policies will be the consumers. People will pay through higher taxes, and higher interest rates on their mortgages if they are homeowners.
I will come back to the point made by the hon. Member for Ogmore (Huw Irranca-Davies) on imaginative partnership with the private sector to increase investment, which also touches on the speech made by the hon. Member for Edinburgh East (Sheila Gilmore) on the housing sector. One of the biggest elements of the cost of living is housing. Rent, servicing a mortgage or finding the money in the household budget to try to save and buy one’s first home are all significant costs. I am attracted to schemes where local authorities seek to work with institutional investors to fund the building of new homes that will be run by arm’s length management associations and councils, effectively producing a private partnership with a local authority to build new council houses and to borrow money from an institution over a 40-year to 50-year period. That is a sensible thing to do, and is what any organisation would do. If it is ultimately responsible for paying the rent through housing benefit, why would it not seek to control the end product too? That will give us more opportunities not only to provide people with lower cost homes to rent, but, in time, for even more people to benefit from the right to buy scheme, and for the money to be reinvested into providing new, high-quality homes. That would a good thing: it would reduce some of the costs of renting and be a good thing for the housing market as a whole.
Such a policy would also help to do something to address the scandal of the poor quality of many homes in the private rented sector which are offered to tenants claiming housing benefit but are not fit for habitation. Local authorities should use powers, which they already have, to take action against those landlords. I welcome, in part, the measure in the Queen’s Speech that will create an obligation for private landlords to ask whether people seeking accommodation are qualified to receive it. That will ensure that they are in the country legally and not in breach of the law. That is a good thing, because we will probably find that it is the rogue landlords who are happy to take the money and not ask any questions, and who are making money not out of people who are here illegally, but from some of the poorest people in our society. We should clamp down on that, because it is public money, paid out through housing benefit, that they are profiting from, and we should take firm action against it.