Cost of Living

Iain McKenzie Excerpts

Wednesday 27th November 2013 Commons Chamber

[Mr Iain McKenzie (Inverclyde) (Lab)]

It has become evident from today’s debate that the Government are incapable of making any real changes to improve the cost of living for our hard-pressed families up and down the country. Nothing seems to be changing for those people who, as they have told me, see the Government putting the wrong people first. The only growth people have seen on the high street has been in prices and in pawnbrokers, payday loans, cash-for-gold companies and betting shops.

As has been said, prices are still going up faster than wages. That has been compounded by the fact that many of my constituents have experienced wage freezes over the past couple of years and/or have been moved to reduced hours or part-time working.

[Jim Shannon]

The hon. Gentleman mentioned payday loans, which are a scourge if ever there was one. Some 33% of people borrowing payday loans do so just to pay their basic household bills—just to live and get through the day—while 44% are borrowing to pay for their gas and electricity. Is that an indication of our society?

[Mr McKenzie]

Absolutely. The hon. Gentleman is spot on about that indicator of what is happening in society. I will develop that theme further.

Last April’s increase in the personal allowance does not make up for what families have already lost through tax and benefit changes. The cost of living is rising four times faster than earnings, on the back of a fall in real wages since this Chancellor took office. People are getting worse off, and the cost of living crisis is hitting hard-working families up and down this country. Families in Britain have taken a pay cut of £1,200 a year.

What do families face week in, week out as they struggle to overcome the cost of living crisis? I will give some examples to highlight the severity of the squeeze on living standards. On the basic weekly shop for food and clothing at the supermarket, families are seeing less go into the shopping trolley and more go into the till. Some families no longer do such a one-stop shop, but flit from supermarket to supermarket to cash in on the bargains and stretch their pound even further. There are growing crowds around the mark-down shelves, buying food that must be consumed that day. That is surely an indication that people are living from hand to mouth. Citizens Advice has also produced evidence on food shopping:

“On average UK households purchased 4.2 per cent less food in 2011 than in 2007 while spending 12 per cent more.”

Families are facing record energy bills, while energy companies are enjoying huge profits. Only Labour is committed to freezing prices, not freezing families. At my surgery last week, many constituents came to me with their power bills, concerned about how they would pay them. That is at the start of winter. Goodness only knows how they will pay their bills at the end of winter. Again, I will quote Citizens Advice:

“Over the last three years the average domestic dual fuel energy bill has increased by 37 per cent.”

That is a massive hit on family budgets.

Fuel prices are about 5p or 6p higher in Inverclyde than just 20 miles away. The pricing in my neck of the woods is unbelievable. There are different prices even within the boundaries of the town. The prices for one company vary from one end of the town to the other. The higher prices are predominantly in the areas where people can least manage the rising price of fuel.

A big indicator of the cost of living crisis is the increase in the number of people who are turning up at the doors of food banks. It is a national disgrace that there is food poverty in one of the world’s largest economies. In Britain today, some 13 million people live below the poverty line. The number of Scottish families that attend food banks has risen by 100%. In my constituency of Inverclyde, the number of people using food banks has increased dramatically and shows no sign of falling. The fact that 50% of those who go to food banks are in work is shocking.

What can I say about the impact of the welfare changes on my community? They have taken some £2 million out of the local economy. That money was spent on essentials such as food and clothing. That is having an impact not only on the families affected, but on high streets and shops because it threatens the survival of small businesses.

Where will the squeeze on living standards lead? It leads either in the direction of debt or towards desperate acts, of which I see more and more. In Inverclyde, one recent act—a metal theft, which we see up and down the country—sums up the desperation of families to get money to subsidise their income. Some copper cabling, worth a mere £30, was stolen from a substation in my constituency, plunging dozens of homes into darkness, leaving many people without heating and causing one home to burn to the ground—all that for £30! It was a senseless act, but for what reason? Struggling—that is why I believe that crime took place and put in danger not only the lives of those who perpetrated it, but those of the people living on that estate. Only the kind-heartedness and community spirit of the people of Inverclyde will ensure that the family who have lost their home and possessions will have a Christmas and a roof over their heads.

I know that many other Members wish to contribute to the debate, so I will conclude by saying that times are hard, living standards are definitely falling, and the Government’s economics are failing.