Living Standards

Iain McKenzie Excerpts

Wednesday 4th September 2013 Commons Chamber

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is an honour to contribute to this very important debate. We should take time to pause and reflect on what is really happening to the living standards of people up and down this country.

Since 2010 wages have fallen in real terms in just about every region of the UK. In Scotland wages are down some 6.4%, which is having an impact on living standards. Families are more than £800 worse off this year because of cuts to tax credits and benefits. Time has shown that the Government are increasingly incapable of making any positive changes to improve living standards for hard-pressed families.

Prices continue to rise faster than wages—that is, if people are fortunate enough to be employed and in receipt of a wage. We also continue to witness banks giving out bonuses while families across the UK are struggling. Is it therefore surprising that most people feel that nothing is changing for them? The Government are locked into a failing economic plan whereby, bizarrely, they ask millions of families and pensioners to pay more while millionaires are given a tax cut. My constituents find that to be an unacceptable economic approach in the face of their plummeting living standards.

Families, pensioners and businesses in my constituency continue to struggle. People tell me of their shock during their weekly trip to the supermarket on finding that they are putting less food in their basket but more money in the till. I witness more and more families having to go to greater lengths to keep within their budget, desperately shopping around to track down bargains for the most basic food items.

Those who cannot make it from week to week have been forced to turn to food banks. Frighteningly, the number of people going to food banks continues to rise. Inverclyde now has two large food banks and starter packs for families trying to set up a home. Starter packs offer help to families and individuals with the most basic home furnishings, such as kitchen utensils. It is no use having food if there is nothing to cook it with or eat it off. Is it not a sign of living standards getting worse when not only is food an issue but people have to be given utensils to eat it?

Families are losing their tax credits. Families in Scotland are losing on average more than £500 a year, which they could have spent in the local economy on essentials such as food and clothing. That is hurting my local economy and many shops are closing down; in the last week alone, three have closed down in Greenock. My chamber of commerce has been pleading for an increased local spend to try to help save those local shops. The truth is that people are not spending as much as they used to, locally or elsewhere.

Scotland will lose £43 million a year from cuts to tax credits, which is an enormous amount to take out of the Scottish economy. The evidence is that people up and down this country are facing an unprecedented reduction in their living standards. The Government’s programme does little to help those most in need. It has been pain all the way, hurting people, families, pensioners and even the disabled. They are all finding it difficult to make ends meet.

Since the last election, average energy bills, as we have heard, have increased by about £300 per year, meaning that people are under severe pressure even to afford to heat their own home. If the Government do not take action, what is the alternative? Debt? I have spoken to two credit unions in my constituency and they warn that families face extreme difficulty in managing their finances, and they have seen an increase in the number of people coming to them just to budget from week to week. Unfortunately, many people do not turn to the credit unions but seek alternative loans, which only push them deeper into debt and trouble.

The Government need to help families immediately by taking measures that address the crisis of the falling standard of living and that stop the rip-off prices of fuel and power. This country needs a Government who are in touch with families during these hard times. The Government clearly need to make different choices and set different priorities. Families up and down the country are feeling the pain. Only today I have heard that unemployment in my constituency has increased and that the rate of non-working families is 25%. Clearly, we need employment and we need jobs.

If the Government do not change their priorities and stop handing tax cuts to millionaires, living standards will continue to fall for working people, young people, families, pensioners and even the disabled. In fact, living standards will fall for everyone apart from the Government’s favoured millionaires.