Working People’s Finances: Government Policy

Jack Dromey Excerpts

Tuesday 21st September 2021 Commons Chamber

[Bridget Phillipson]

My hon. Friend is absolutely right. It is frankly indefensible. We knew that poverty was already beginning to rise before the pandemic even hit, and we know the impact that the cut to universal credit will have on family and household budgets, and on child poverty.

It is bad enough to be taking money out of people’s pockets as the recovery falters, but as price after price goes up for working people, this is unforgivable—because prices are up, and they are up sharply. Madam Deputy Speaker,

“August saw the largest rise in annual inflation month on month since the series was introduced almost a quarter of a century ago.”

Those are not my words, but the words of the Office for National Statistics. Alongside the most recent GDP figures, that is a powerful signal of how fragile our recovery remains.

Rising food prices have been driving upward pressure on the inflation rate, but this week, of course, it is energy prices that are the focus of our attention. That rise is taking money out of household budgets directly, but it will also be taking money out indirectly. Higher prices for energy mean higher prices for industry, and that means higher prices for goods. Already factories are being shuttered by higher prices and already that is driving further problems, such as knocking out the carbon dioxide supplies that keep meat fresh along our supply chains.

Ministers are always keen to blame other people, the weather or bad luck, and to claim that all of Europe has the same problems. That is not good enough and the public know it. To assert that other Governments have faults is not to excuse our own. What we are seeing and what we have seen over the last decade is a chronic failure to take responsibility, and it is hard-working families and struggling businesses who will pay the price.

[Jack Dromey (Birmingham, Erdington) (Lab)]

On Saturday, I met a care worker on Erdington high street who was close to tears. “I’ve got two kids, Jack”, she said, “I’m on universal credit. I can’t work any longer hours. Now I’m facing a £1,000 a year cut and a tax increase. Why? I worked so hard throughout the dreadful covid crisis to care for the desperate, sometimes the dying. Why are they doing this? I’ve worked so hard over so many years. I feel that they just do not begin to understand people like me and the pain that I will endure at the next stages.” Is it not the simple reality that the Government seem to be utterly oblivious to the consequences of their actions for the poorest in our country?

[Bridget Phillipson]

Like my hon. Friend, I have heard from care workers and many others in my constituency about the anger that they feel. The average care worker is set to lose more than £1,000 in tax rises and universal credit cuts. Of course, the Government’s much trumpeted so-called plan for social care will do absolutely nothing to help the very care workers my hon. Friend describes.

Let us remember the exact timing of the soaring energy prices: exactly as the cut in universal credit bites. It is about choices. The Government choose not to protect working people. We would choose differently.

--- Later in debate ---

[Jack Dromey]

rose—

[Mr Clarke]

I give way to the hon. Member for Stockton North (Alex Cunningham).

[Mr Clarke]

I do so quite readily when I look at the extraordinary potential of our local economy. We have all the new jobs coming in at the Teesworks site, the former Redcar steelworks site. We have the hope and potential of green industry, which the hon. Member champions, as I do, with all the jobs in carbon capture, utilisation and storage as well as hydrogen. There is the new GE Renewable Energy factory, which will employ 2,500 people. Its construction starts incredibly soon, and it will be fully operational by 2023. Those are the reasons for hope and optimism. Of course, I will never apologise for talking up Teesside, just as we should never apologise for talking up the UK economy. We have done an extraordinary thing in this country: we have got through the pandemic—we have weathered the storm—and now we can move on to the recovery.

[Jack Dromey]

Three out of the 10 most deprived constituencies in England are in Birmingham and 42% of children in Birmingham are growing up in poverty, yet the Government are hitting Birmingham hard with the £1,000 a year cut to universal credit and the national insurance rise on top of the cost of living going up and soaring energy costs, with supermarket costs up, childcare costs up and rents up. Can I ask the right hon. Member this question: have the Government carried out any impact assessment of the consequences of their actions on Brummies, not least because the simple bleak reality is that tens of thousands face a tough Christmas and a bleak new year?

[Mr Clarke]

I thank the hon. Gentleman for his question, which basically re-summarised the speech we heard from the shadow Minister. I can confirm that HMT’s distributional analysis has shown that, as a proportion of income, our interventions have supported the poorest working households the most. Of course I recognise the challenges—I represent a constituency that has many challenges—but the number of children in absolute poverty, to which he alluded a moment ago, is lower than it was when Labour left office in 2009-10, both before and after housing costs are considered. These are incredibly important achievements, and we should never lose sight of them. In short, we took decisive action, and that action has worked.

It is clear that the world of September 2021 is very different from that of March 2020. The success of our vaccine roll-out means that most restrictions have now been lifted and we are seeing the benefits of our approach. These new circumstances therefore require a new response. We of course believe that the best anti-poverty strategy is a jobs strategy, and the best way to help vulnerable people is to provide them with the opportunities that they need for well-paid work.