Cost of Living: Energy and Housing

Debate between Huw Irranca-Davies and Dominic Raab

Thursday 5th June 2014 Commons Chamber

[Mr Dominic Raab (Esher and Walton) (Con)]

It is a pleasure to speak in this debate and to follow the hon. Member for Stretford and Urmston (Kate Green). She touched on some of the issues I intend to speak to, although she may have come to slightly different conclusions from those I shall reach.

The No. 1 thing for this Government from their inception through to this Queen’s Speech has been the economy. There is no divide between economic growth and fairness and all the things that follow through from that, including the cost of living, which is the subject of this debate. It has been mentioned that we have cut the deficit, and we hope it will have been cut by half by the end of this Parliament, as has been forecast. That is not just some bean-counting exercise; it relates directly to mortgage payments, and it is therefore a cost of living issue as well as an economic issue.

A lot is said about Government debt, but far less is said about banking and household debt. Both of those are down from their high point under the last Government, and that is important. None of us wants to have to talk to our constituents about taxpayers bailing out banks again, and with interest rates likely to rise—and rightly so—in the relatively near future, it is very important that household debt comes down as well, so that those on tight, fine margins in respect of their mortgages do not feel the pinch too much.

We have recently become the fastest growing economy in the advanced world, and as a result unemployment has come down to 6.8%, as opposed to the 8% rate left by the last Government. The private sector has fuelled a huge amount of job creation. The media and also many in this Chamber talk about job creation and unemployment as if it were an economic priority, but the most economically and socially disfranchised in this country are the unemployed, and jobs creation is about dealing with them. This Government’s record in that regard is stellar: in just four years we have seen businesses create double the number of jobs that were created in the last decade under Labour. That is absolutely critical.

Inflation has been one of the issues eating away at the cost of living for many of our constituents, but again this Government’s record is very clear. The statistics do not lie: consumer prices index inflation now stands at 1.8% as against the 3.4% we inherited from the previous Government. The British Retail Consortium figures out just this week show that because of supermarket competition there has been a decline in non-food prices of 2.8% over the year. That is critically important, and annual food inflation stands at 0.7%, the lowest rate since 2006.

[Huw Irranca-Davies]

I just want to dig under some of the things the hon. Gentleman has been saying about debt. How, for example, would he make sense of the fact that, according to a recent report, the Bridgend county borough area, which covers two constituencies and contains a big manufacturing belt and areas of prosperity, has seen a tenfold increase in the number of people taking out payday loans at the end of the week to ease themselves over into the following week? In spite of all the good news that the hon. Gentleman is giving us, something worrying is happening.

[Mr Raab]

I am trying to look at the big picture, and the fact is that household debt has fallen from its 2009 peak of about 109% of GDP to around 10 percentage points lower. I am not suggesting that there are no issues relating to other subsets of household debt, such as credit and payday loans, but if the hon. Gentleman looks at the big picture and examines the raw data, he will see that the present situation represents a significant improvement on the one that his Government left behind. He is right to look at other micro-issues, and we must continue to do that, but let us not lose sight of the big picture.

When it comes to the big picture, we have to talk about housing. We could talk about stamp duty, as I am tempted to do, and about planning regulations and the relevant taxation, but the key issue is the supply of new homes. We need to do more on that front. I am sure that the Secretary of State for Communities and Local Government does not feel that he is on the back foot in this regard; I am simply urging everyone to look at the raw data. Hon. Members will be delighted to hear that, according to DCLG figures, the average annual number of affordable homes built under this coalition was 48,000, compared with 31,000 during the 13 years of the previous Government. That represents a 50% increase, and we should recognise the progress that we have made as well as talking about what else needs to be done.

We are talking about fairness in this debate on the cost of living, and we should also talk about inequality. The Leader of the Opposition is a wonkish sort—I mean that in the best possible way—and I am sure that he will be delighted to learn that the Gini coefficient shows that inequality is lower under this Government than it was under Labour. People talk about tax cuts for millionaires, but he will also be delighted to know that people earning between £10,000 and £15,000 are paying 54% less tax under this Government than they were in the last tax year under the previous Government, and that millionaires are paying 14% more. The idea that this Government are the enemy of the low-paid and the friend of the millionaire is therefore news to us.