Living Standards

Ian Lavery Excerpts

Monday 5th March 2012 Commons Chamber

[Ian Lavery (Wansbeck) (Lab)]

I was amazed to hear the Minister claiming to be putting fairness at the heart of policy, when this Government are viciously attacking the most vulnerable and the lowest paid in the country.

As has continually been said, the forthcoming Budget must include measures for jobs and growth. Without jobs and growth, everything else in the economy fails and the cuts will continue indefinitely. The country is suffering greatly as a result of the coalition Government’s policies. I call on them to reconsider their intended changes to tax credits and child benefit, which will cost ordinary hard-working families up to £4,000 a year.

These proposals will impact heavily in my constituency. For the benefit of the Government Front-Bench team, I should point out that Wansbeck is in the north-east—not near Aberdeen, but in the north-east of England. We are being hit very hard already. Before the general election, the Prime Minister said he would hit the north-east the hardest, and, by goodness, that is one promise he has kept. Some 240 households in Wansbeck will be hit by the measures that are to be introduced, and 465 children in Wansbeck will suffer as a consequence. The situation is dire.

[Yasmin Qureshi]

I sympathise with my hon. Friend’s constituents. In my constituency, 880 households, which include 2,095 children, will be affected. Does my hon. Friend agree that these measures are disgraceful?

[Ian Lavery]

I entirely agree.

The dire situation in my constituency is compounded by the following fact. The Office for National Statistics stated last week that 55.4 people are applying for each vacancy advertised at the jobcentre—and there are only 48 unfilled jobs in Wansbeck—although two weeks ago the House of Commons Library said this figure was a little lower, with some 36.5 applicants per vacancy. The notion that there are plenty of job opportunities, and opportunities to take on extra hours at work and part-time employment, is a myth propagated by the Government.

I am very concerned. Today, I have written to the Prime Minister, the Business Secretary and the Employment Minister, the right hon. Member for Epsom and Ewell (Chris Grayling), calling for urgent discussions on the future of my area. The attacks on the disabled and the less well-off seem to have abated since the new welfare reforms passed through Parliament, but now the Government are beginning in earnest their attack on hard-working families with children.

The tax and benefit changes will hit women, children and single parents hardest. We must ask why that is the case. Why are the bankers not being attacked? Why do they get a tax cut? Why is there now talk about the rich people getting their 50p tax rate reduced, while at the same time the Government are continuing to attack those who are unable to support themselves? That is obscene, to say the least.

The average family with a child will lose up to £580 per annum. As many as 200,000 couples with children will face losing up to £4,000 in their income. Some 212,000 households and 470,000 children will be affected if people cannot secure extra hours in their workplace. We have got to ask ourselves: where will people get these hours from in their workplace? There is not enough employment in any case—if the Minister wishes to intervene, that would be great. He can tell people in Wansbeck, where there are 50-odd people after each job, how they will get extra hours in part-time employment. The fact of the matter is that they have absolutely no chance, so they are going to lose their money. In a recent Union of Shop, Distributive and Allied Workers survey, 78% of people said that there was absolutely no chance that they would get an extra hour in their workplace, and so they will be losing their tax credits.

[Yasmin Qureshi]

My hon. Friend rightly says that there are no jobs out there, with more than 2 million unemployed. So people will become unemployed and the state will then have to spend hundreds of pounds on keeping these families on benefits, as opposed to allowing them to work and contribute to the economy.

[Ian Lavery]

Again, I thank my hon. Friend for her intervention, as I could not have put it better myself.

We are talking about the same hard-working families who were used two or three weeks ago by the Government as shining examples of why people on benefits should lose them. We are talking about the people who are getting out of bed and going to work, even if it is for 14, 15 or perhaps 16 hours a week—these are the shining examples and look what has happened to them. A lot of people believed in what the Government had to say but, unfortunately, that has now gone out the window. These are not necessarily the squeezed middle, but the working poor, and they are very hard-working people. I must point out that £4,000 is a mortgage to lots of people involved in this issue, and people—hard-working families—will lose their homes as a result of these policies being introduced by the Government. Their figures suggest that some people will actually be better off not going to work. Only a few weeks ago, we heard a million and one times, “It doesn’t pay to be on benefits and nor should it.” So they attack the “scroungers” first and look what is happening now. The situation is an absolute disgrace, because under these new proposals someone can be better off on benefits than in work, possibly by as much as £728 per annum, as some have it. How is it that people can be better off on benefits?

The proposal on child benefit is the most bizarre and ridiculous, and it has to change, as I am sure everyone in this Chamber understands—it is that stupid and it involves a huge anomaly. How can it be fair that someone in a family earning £84,000 can keep their benefits, whereas someone in a family earning £43,000 can lose theirs? It is absolutely outrageous. I am sure that that will change—if it does not, God help us all. I hope that this glaring anomaly will be cleared up.

The Government cannot continue their unfair attack on those less well-off in society—it is mainly an attack on women, children and hard-working people. The hard-working people cannot continue to pay the highest price for this too fast, too far Government approach. Hard-working people cannot continue to pay the lion’s share in a failing economy, purely on the basis of ideology. Given an increase in fuel prices, the introduction of unfair welfare reforms, high unemployment—the highest in 17 years—huge energy prices, pay freezes and pension cuts, the burden must be shared. It must not be shared just by women, children and those hardest up who are willing to go to work—the hard-working people, as we have heard a million times. It is time that the coalition Government changed direction. Instead of flying into the abyss, they should look after the hard-working people in this country, and revisit their proposals on child benefit and tax credits.

--- Later in debate ---

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

We have heard a lot of twaddle from Government Members today. I was shocked that the Minister seemed to agree with the hon. Member for South West Norfolk (Elizabeth Truss) about the need for unregulated child care, as though high-quality, regulated child care is a cost too high for working parents to pay. As a working parent who uses child care, and as someone who represents many young people in my constituency who face having to seek child care, I must say that having lower-quality child care is not the answer. Cost is an issue but lowering the quality is not the answer. I hope the Minister will pick up on that point in responding.

I represent half of a borough that has the unenviable record of being one of the country’s poorest. About 45% of children in my constituency live in out-of-work households or in in-work households that have an income below 60% of the national average. That compares with 22% in the UK as a whole according to 2009 figures.

One in five of my constituents is under 16, so the two changes that the Government are introducing have a very big impact on a very large number of people in my constituency—the youngest, the children who need the support, and their parents as well. Anything that hits children affects Hackney particularly hard. When we are talking about the impact on young people, their life chances and their opportunities, we should not forget the impact that that has on the wider population. It is my constituents who will be paying the pensions of the older population of the rest of the country in time to come. It is my constituents who will be creating the jobs that will pay for this country in time to come. We need to make sure that we give them a little more respect than the Government currently do.

The Government have form in this respect. About a third of my constituency is aged under 24. This group has already been hit massively by the loss of the education maintenance allowance, which had a high take-up in my constituency. For example, one young woman said to me, “By Thursday, when the electricity key was running out, I would pay that,” so she could do her homework and the house would be warm. It paid for basics like that in my constituency. I will not revisit the pain of tuition fees, on which the Liberal Democrats have shown their true colours.

I turn to working tax credits. In my constituency 12,000 families receive tax credits overall. Of those, 4,500 families, which include 8,600 children, are in work and receive both child tax credits and working tax credits. Of the total 12,000 families, 1,100 families receive working tax credit only. Those figures are from December last year, and they hide real people, such as the woman who came to see me on Friday and wept as she said to me, “I’m working 16 hours a week. I want to work more but I cannot find the hours.” She will lose more than £300 a month as a result of the Government’s changes. She has one month to find eight hours of extra work. Where is she going to find that at her level of income?

A related issue, which I am digging into, is school support staff. I have had a number of reports from primary schools in my constituency where low grade staff working 10 or 11 hours a week have been told by the jobcentre that they need to increase their hours to 16, because that gets them off some statistic that the Department is gathering about part-time work. When they went back to the school to ask for extra hours, one head teacher had the wit to go to Jobcentre Plus and say, “Give me this in writing. Tell me who is directing this.” No information was forthcoming.

Those people were being encouraged to give up a good job of 10 or 11 hours a week to find some job somewhere that might be 16 hours a week, but as many of the jobs in low level retail are on zero hours contracts, it is difficult to be guaranteed the 16 hours, let alone the 24 hours. They may get 16 hours now in a good week but not in a bad week, but going up to 24 hours will be increasingly challenging. I talk about my constituency, but as we have heard, up to 200,000 working parents will lose almost £4,000 a year in working tax credit as a result of the changes, which are about three weeks away.

I move on to child benefit. We know that in London child care costs are very high and many of my constituents on good incomes find it unaffordable to work. Their child care would cost more than quite generous full-time earnings, so many have made the understandable decision to opt for one of the couple to stay at home and look after the child. The Minister’s answer was, “Unregulate the child care and make it cheaper”, but that is a retrograde step.

The Government talk about being family-friendly and wanting to support the family unit of two parents with children. The reward for those families for doing what the Government profess to want is a cut in child benefit. What does that mean? If one of the couple is earning £43,000 but the other is not earning and they have three children, they lose £188 a month in child benefit.

[Ian Lavery]

I shall be brief. The hon. Member for Bristol West (Stephen Williams) commented that that is an extreme example. Does my hon. Friend agree that it is not extreme; it is absolutely accurate?

[Meg Hillier]

I completely agree with my hon. Friend. It is rich for the Liberal Democrats to speak sanctimoniously today, when we know what they were saying on the campaign trail just over two years ago.

A family with two incomes totalling £84,000 a year and three children loses nothing in child benefit. The policy is bonkers. It was not even written on the back of an envelope. It must have been written late at night in the bar, because it does not make sense in any way, and the Minister was unable to answer my question about how much it would cost administratively for individuals to collect the paperwork to find people who are on those incomes, in order to take their child benefit away.

We will have the Budget in a fortnight’s time, but my constituents are already being hit. Working tax credit is being taken away from the lowest-paid. There are the cuts to child benefits. We hear from The Daily Telegraph that there might be some changes, but we have heard nothing today from the Minister at the Dispatch Box. VAT has been increased to 20%, affecting the cost of day-to-day purchases for all my constituents. We read of the threat of mortgage interest rates going up. Rents for new social housing will now have to be 80% of private rents, which in my constituency will make it unaffordable for most people—and we can add to that the housing benefit cap, which would affect two thirds of my constituents renting in the private sector, the fact that private rents are increasing exponentially all the time, that energy bills and food prices are going up, that unemployment is increasing, and the loss of the education maintenance allowance.

Many of my constituents may be poor, but there is no poverty of aspiration in my constituency. These policies, layered on month after month and year after year under this wretched Government, are a real kick in the teeth for my constituents, many of whom have come from other countries to do well and to put time and effort into education and training in order to improve their lot. As they are struggling up the ladder of ambition and trying to improve their lot and support their families, the Government are pulling the rug out from under their feet and taking away the lower rungs of the ladder. It is shameful.