Cost of Living: Fiscal Approach

Jamie Stone Excerpts

Wednesday 25th May 2022 Westminster Hall

[Dan Jarvis (Barnsley Central) (Lab)]

I beg to move,

That this House has considered the fiscal approach to tackling rises in the cost of living.

It is a pleasure to serve under your chairship, Mr Twigg. I am grateful to see so many Members present, although they appear—almost without exception—to be on the Opposition Benches. It is good to see the Minister and the shadow Minister in their places. I want to put on the record my thanks to Unison, which is working tirelessly to help its members through these toughest of times, and to Anna Birley, for her efforts with the research I will be quoting shortly.

It is not my intention to speak at great length. I am aware that colleagues wish to contribute and I want to ensure they get the opportunity to speak up for their constituents. However, before I begin, I would like to say a few words about the tone of the Government’s response to this crisis—not just for the next 90 minutes, but beyond. This is the most serious issue facing our country. Some of my constituents in Barnsley Central are facing an emergency, and the Government are providing nowhere near enough relief.

I want to share the words of a working single mum who contacted my office as an example of the indignity, pain and sacrifice happening up and down the country right now:

“I have not eaten for 2 days due to saving as much as possible for my son to get by until payday. I honestly can understand why so many people feel there is no other way than to end their life. It is humiliating to beg for food.”

She does not want Ministers telling her to work more hours when British workers already put in the longest shifts in Europe. She does not want Ministers telling her to buy non-branded food on the weekly shop when people are so desperate that baby milk is now being security-tagged in supermarkets. Most of all, she does not want Ministers telling her that the Government cannot ease her pain when that is simply not the case.

We are all aware that the effects of this crisis are almost boundless, but I will focus my remarks on the impact on public sector workers. Barnsley was left devastated by the pandemic. The suffering endured will live long in our memory, but so too should the resolve of those who pulled us through—not least our NHS staff, our carers and our educators. They are too often taken for granted, but their true value was there for all to see during our darkest hour. How quick we are to forget.

Unison research found that two in five health workers have had to ask family or friends for financial support in the past year. Roughly the same number are taking on extra work just to make ends meet. Nearly every member of school support staff that Unison surveyed—96%—was worried that they did not have enough cash to cope with the rising cost of living, meaning that a quarter have had to take on a second or, in some cases, third job.

The treatment of those on whom we relied so heavily and so recently is unacceptable and untenable. It is unacceptable because they deserve better. They paid their dues 100 times over, and the Government need to do right by them. It is untenable because it is exacerbating a staffing crisis. Public sector pay is lagging behind the private sector, and the long-term effect could be severely detrimental to services.

Take our NHS as an example. Already, 500 nurses and midwives quit every single week. We are at risk of losing thousands of low-paid staff because of that gulf in pay with the private sector. While Morrisons guarantees workers £10 an hour, there is an ad for a porter on the NHS website for £9.65 an hour. While UPS pays drivers more than £16 an hour, the NHS pays just £10 an hour. Public service workers have already endured more than a decade of pay restraint, and it cannot continue. Public sector workers need a pay rise that reflects not only the cost of living crisis, but their true value to wider society.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

The hon. Gentleman is making an excellent speech. The public sector workers in my vast, remote constituency underpin life—I am thinking of health workers, people who keep the roads clear and everyone else. Given the sheer distance involved, however, everything we buy up in my part of the world, from a bar of soap to a washing machine, is that much more expensive due to the cost of getting the stuff there. However, these people are on similar rates of pay to those mentioned by the hon. Gentleman. Does he agree that, in addressing this hugely important issue, the remote location of parts of the UK, such as the west country or Wales, should be taken into account?

[Dan Jarvis]

The hon. Gentleman is fortunate to represent a beautiful part of our country. There are some particular pressures on the rural economy, and he is absolutely right to highlight them.

An NHS worker in Barnsley with two decades of service recently contacted me to say that 63% of the meagre pay rise she received went back into the Treasury coffers because she was on universal credit. She said:

“Having worked throughout the pandemic, pushing my children from pillar to post as after school clubs and usual childcare arrangements were cancelled, so that I could work on the front line—often with COVID positive patients—please can you tell me how the government can morally justify this?”

Perhaps the Minister can try to justify it. If not, will she outline what progress the Treasury has made in making the funds available for a long overdue and much deserved pay rise for those who quite literally risked their lives for us?

Soundings from No. 10 suggest that several Ministers, including the Prime Minister, are pushing for further public service pay restraint, but wage inequality is going through the roof. Research by the High Pay Centre reveals that the ratio of chief executive officer pay to that of medium earners is 63:1—almost doubling in a year—so it is telling whose pay Ministers are willing to restrain. By giving porters in our NHS enough money to put enough food on the table, the Government would protect public finances by avoiding a staffing crisis. Awarding a fair pay rise is morally and, critically, economically the right thing to do. Problems are being caused not just by what our key workers are seeing in their payslips each month, but by what is being taken out by stealth—the cost of working.

I have two suggestions for the Minister, both of which would lessen the burden on key workers and have an immediate impact. The first is about mileage rates. According to a survey by Unison, three out of four health workers who use their cars for work say that the current mileage rates do not cover prices at the pump. Care workers, environmental health inspectors, social workers and community healthcare staff are all out of pocket for doing vital work. Some 9% report that high petrol prices and out-of-date mileage payments mean that they have had to cut down on patient visits. More than half the workers at one South Yorkshire hospital say that mileage payments not covering costs is having a severe financial impact on them.

Her Majesty’s Revenue and Customs is responsible for setting approved mileage rates, but they have not been updated since the 2011-12 tax year. National Joint Council rates for local government workers have not changed since 2010, and NHS rates have not been updated since 2014. Ending the mileage rates freeze would put an average of £150 back in the pockets of workers over the course of a year.

The Minister will no doubt point to the Chancellor’s 5p fuel duty cut, which—let’s be honest—is modest, but some retailers stand accused of failing to pass on half that amount. Petrol and diesel prices are at record highs, so more needs to be done. Will the Minister provide an assurance today that the Treasury will conduct an immediate review of mileage rates—a review that would encourage and include provisions for the NJC and the NHS to do the same?

My second suggestion is on car parking fees. Not everyone can use public transport to get to work. Between a quarter and a third of the healthcare workers Unison spoke to in South Yorkshire use a car because of the lack of public transport. That is what makes reintroducing hospital car parking charges so wrong. Three out of five staff at one South Yorkshire hospital said that the reintroduction of car parking charges will have a high or extremely high impact on them financially.

--- Later in debate ---

[David Linden (Glasgow East) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Twigg. As I am sure other Members will do, I pay tribute to the hon. Member for Barnsley Central (Dan Jarvis) for securing this debate and setting the scene so eloquently. I also pay tribute to Unison for its work on the issue. Most of us will have seen the briefing note that came out; I commend everything in it. As the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) made reference to hospital car parking charges, he will be aware that it was the SNP Government in Scotland who lead the way on that—not helped by private finance initiative contracts organised by the previous Scottish Labour Executive. I will not seek to be party political any further in the course of this debate.

Something that I have found difficult over the last few months, particularly since the beginning of the Ukraine crisis, has been people talking about the cost of living crisis as if somehow it is a new thing; it is not a new thing. It has been exacerbated by 12 years of Conservative austerity. In many respects, we are right to call it a crisis, but it is something we have been dealing with for quite some time. I would argue that it is not just a cost of living crisis. Ultimately, at its most fundamental level, it is a low pay crisis.

The UK Government like to talk about the living wage, and I am sure we will hear the Minister do so, but we know that to refer to it as a living wage is to inadvertently mislead the House. It is not a real living wage. It does not reflect the true cost of living for many of our constituents, and it is nowhere near the benchmark set by the Living Wage Foundation.

The UK Government must look at whether that real living wage is fit for purpose. As most of us know from our constituency postbags and surgeries, it is definitely not. The Government should also look at the pay discrimination baked into wage rates in the UK. The reality is that 16-year-old apprentices are still being paid roughly only £4 an hour. A young person on £4 an hour certainly does not get cheaper products at the supermarket as a result of their age. They should not be getting a lower rate of pay.

There are other things we can do. We should absolutely look at a windfall tax. That has become incredibly topical in this place, with people talking about putting a windfall tax on the likes of Shell and BP. I would like them to pay a windfall tax. There is no doubt that they are doing immensely well out of the current crisis. Why not also consider an additional windfall tax on supermarkets and Amazon? We know that the future of work is changing and that our high streets are struggling very much. That is a natural consequence of consumers using big, out-of-town supermarkets and getting goods delivered from Amazon. Given that they are doing very well out of this, perhaps we should consider putting a windfall tax on them as well.

The UK Government should also increase benefits in line with inflation. I was really disappointed when they legislated for a real-terms cut to benefits earlier this year. The people whose benefits are being cut are among the poorest and most vulnerable in society. This is no time to leave them behind. They do not have the disposable income to make a slightly more difficult choice at the supermarket. Let us increase benefits in line with inflation.

If the Scottish Government, who have a fixed budget, can uprate benefits by 6%—I accept that that is still below inflation—the UK Government, with all of their borrowing powers, should be able to do so, too. In reality, the biggest difference between the UK and the Scottish Government is that the UK just puts it on borrowing.

We should also reinstate the pensions triple lock. Pensioner poverty is on the rise and we do not talk anywhere near enough about it in this House. The fact that we have one of the lowest state pensions in western Europe should be a stain of embarrassment for this Government. They like to go around talking about being a global Britain, while pensioners are literally having to choose between eating and heating. I ask the Minister to reflect on that.

We should also reinstate the £20-a-week uplift to universal credit in the social security system. The Government were right to concede at the beginning of the pandemic that social security was inadequate in its current form. It was inadequate in March 2020, and, by the way, it is still inadequate now. Taking that £20 a week away from families means that they are losing £1,000 a year when they can least afford it.

[Jamie Stone]

Carers for the elderly, the infirm and the sick are crucial in remote parts of Scotland such as my constituency. I have carers pulling out, giving up and calling it a day right now. I am sure the hon. Gentleman agrees with the hon. Member for Barnsley Central (Dan Jarvis) that we must look again, as a matter of extreme urgency, at—how shall we put it?—payments for carers and the regime for taxation on mileage for them and other health workers who have to travel. It is a crisis right now.

[Derek Twigg (in the Chair)]

Order. I remind Members who take interventions to bear in mind that I am trying to keep speeches to around five minutes.