Cost of Living: Energy and Housing

Jeremy Lefroy Excerpts

Thursday 5th June 2014 Commons Chamber

[Sir John Randall]

To a great extent, they are doing that. The problem is that when their suppliers in another country tell them that everything is okay and not to worry, they accept that. It is sometimes very difficult to get right down to the problem and that is why many of us think that one director or the chief executive should have a legal responsibility, not to penalise that person but to help the company. In other words, so long as they are doing their very best they will not be hauled in front of everybody and publicly shamed if something is found to have gone wrong. The idea is to help businesses.

[Jeremy Lefroy (Stafford) (Con)]

Will my right hon. Friend also acknowledge the excellent work that has been done through the Department for International Development’s support in places such as Bangladesh, where the garment industry has been encouraged to improve its terms of work and the conditions for its staff? UK companies that take supplies from Bangladesh are being encouraged to work with DFID on that.

[Sir John Randall]

I pay tribute to my hon. Friend for his work in this field. He is a very strong advocate and he is absolutely right. We have to work on this and must also increase public awareness. There is always a problem—I remember discussing it as a furnisher in the context of sustainable timber—in that some people, sad to say, do not care as long as a product is cheap enough. That is true of a lot of items. We must make it unacceptable to have available products produced by slave labour so that people will be unable to say, “Well, it’s cheap.” There should be no choice. We in this country should be free of the problem and we should set an example.

There are always things that I would have liked to have seen in the Queen’s Speech and things that I am delighted to see. If we can get a modern slavery Bill of which we can be genuinely proud onto the statute books in the 10 or 11 months left to us at the end of this Parliament, we will all be able to say that we were here when that happened.

--- Later in debate ---

[Jeremy Lefroy (Stafford) (Con)]

It is a pleasure to follow the considered speech of the hon. Member for Llanelli (Nia Griffith) and the insightful comments of my hon. Friend the Member for Esher and Walton (Mr Raab). I congratulate the proposer and seconder of the Loyal Address, my hon. Friends the Members for Portsmouth North (Penny Mordaunt) and for Mid Dorset and North Poole (Annette Brooke), on their excellent speeches yesterday.

The Queen’s Speech states that the aim of the Government is to strengthen the economy and to provide stability and security. Today we are debating, among other things, the cost of living, which is a matter of huge concern to all our constituents. That is why tackling the deficit is so important. In 2010, the deficit was at an unsustainable 11.8% of GDP. That should be compared with a maximum of 3% which, even in the eurozone, is seen as essential for long-term stability. The necessary measures that this Government have taken will, according to The Economist, reduce the deficit this year to 4.8% of GDP, which is still considerably higher than that 3% but a huge improvement none the less.

Unusually, I pay tribute to the Treasury for the efforts it has made in recovering tax from tax avoidance schemes. The amount of money coming in now has greatly increased on previous years, and that is a tribute to the work that the Chancellor and his team have done in bearing down on some of the ridiculous tax avoidance schemes that they inherited.

What would the consequences have been of not making such a reduction in the deficit? The Government would have had great difficulty in raising money on the markets and in financing borrowing. For the taxpayer, there would have been higher taxes to pay the increased borrowing charges. Let us not forget that we pay about as much interest at the moment as we spend on our entire school system, and soon it will be more. For home owners and businesses, it would have meant increased borrowing charges through higher interest rates. Tackling the deficit is therefore key and the first step in keeping the cost of living down. Any party serious about being in government has to state how it will do that and continue to bear down on the cost of living, because 4.8% is still far too high.

As earlier speakers have said, the Government have done much more to tackle the cost of living. First and most importantly, they have increased the number of jobs—or helped to increase them, because the Government themselves do not create many jobs; in fact, there are fewer people working in the public sector now than at the beginning of the Parliament. Nevertheless, the Government have created the conditions in which 1.7 million new jobs have been created, which goes to the core of addressing the cost of living crisis. They have increased the personal allowance to £10,000—it is to go up again next year—which helps to increase take-home pay and is important in tackling the crisis. They have also frozen fuel duty and supported councils to freeze council tax.

At this point, I add a note of warning about the Opposition policy of freezing energy prices. One consequence of such a freeze, as we have discovered with fuel duty and council tax, is that when we have done it once, people expect us to continue and continue with it. What happens after 20 months of frozen energy prices? What happens to that policy? Will people expect it to continue? Will they say, “You have done it for 20 months, and we need it to continue”? Council tax and fuel duty, however, are to some extent in the hands of Government—they are taxes—but energy prices are not wholly in our hands.

[Julie Hilling]

Perhaps I can answer the question for the hon. Gentleman. We will have reformed the energy market by that point, so we will have stopped the excess profit earned—or taken—by the energy companies. That is the plan; it is not only about the 20-month freeze, but about reforming the energy market.

[Jeremy Lefroy]

I understand that, and I think the energy markets need reform, but to expect that that will keep energy prices frozen, or at least at a stable level, when we are subject to world energy prices is to some extent pie in the sky. But we will see.

[Julie Hilling]

I thank the hon. Gentleman for giving way again. Does he agree that when world prices go down, energy suppliers should reduce our bills, rather than putting them up? Fair enough, when the prices go up, we expect our bills to go up—but should we not expect them to go down as well?

[Jeremy Lefroy]

We would. In some cases, our bills have gone down, and in other cases energy companies are freezing them. Furthermore, through the ability to switch, which many people take advantage of, they can also cut their energy costs. All I am saying is that once we introduce a freeze, it is less easy than we might think to take the freeze away, because people will expect prices to remain the same, and we have been finding that with council tax and the fuel duty. It is essential that the Government look at every sustainable way to keep downward pressure on the cost of living for households.

I want to concentrate my remaining remarks on three areas, housing, health, and international affairs, which sadly have not been included as a subject for the Queen’s speech debate, although they were mentioned in the Gracious Speech itself. The Queen’s Speech talks about increasing the supply of housing, and we all agree that that is vital: we need to build more houses. The question is not simply one of numbers; it is also about the type of houses, where they are built and infrastructure.

With changing demographics, we need more housing suitable for older citizens, including extra care housing, of which I am glad to say that more is being built in my constituency. It also includes building small, energy-efficient, single-storey homes, which many of my constituents say that they would wish to move into, if possible, but there are simply not enough of those homes. I saw an excellent example of such a development, which must have been built 20 to 30 years ago, when for some reason I happened to be passing through Newark recently. Unfortunately, we do not see that sort of development now. Why? Because developers tell us that such homes are not profitable, because they take up too much land. That shows a lack of ambition and imagination. Such developments would encounter much less opposition, because they can be seen as fulfilling a real need and keeping communities together by enabling older people to stay in the communities in which they have lived for so long.

Where houses are built is, of course, a matter of great controversy, but it is exacerbated by the irresponsible submission by developers of planning applications that are quite clearly outside democratically agreed local development plans. That is certainly the case in my area. I urge the Secretary of State for Communities and Local Government, whom I am glad to see in his place, strongly to resist such speculative developments, which fly in the face of properly agreed local plans.

Infrastructure is also a great concern. I worry that sometimes we look only at the narrow implications of development and perhaps suggest that problems can be addressed by, for instance, a controlled junction onto a new housing estate, rather than considering the wider knock-on effects of traffic across the whole area. In particular, once traffic lights are introduced, they are rarely removed or even modified to take account of subsequent development. We need to consider that. We tend to focus much too narrowly on the requirements of a specific development rather than those of the community as a whole.

I want briefly to speak about health. I have spoken on many occasions about the Mid Staffordshire NHS Foundation Trust and will continue to do so, both in order to speak up for my constituents and because I believe that what has been happening there is of national importance and has national implications. Medium-sized district general hospitals provide services that are prized by local communities. They often provide out-patient services and elective surgery, but they also provide general accident and emergency provision—not the most complex, but everyday provision—and consultant-led maternity services and paediatrics. For that to be provided and, of course, for safety reasons, there is a need for them to come together with the larger hospitals through networking, buddying or mergers, but such provision should be possible. That is why I fully support NHS England’s review of the possibility of continuing consultant-led maternity services at Stafford. I have also urged consideration of the possibility that urgent care could be available at night to supplement the 8 am to 10 pm A and E service that should be provided, although I believe that eventually a return to a 24/7 A and E will be necessary, especially given the housing developments taking place.

We are told that specialisation means that centralisation is inevitable. I disagree and I was very glad, after a conversation last week with Simon Stevens, the new head of NHS England, to find that he views district general hospitals and community hospitals as important in providing not just community services but acute services. I hope that he will succeed. Those of us who live and work in large towns and rural areas need a decent, truly national health service and not one that is increasingly sucked into the major cities.

Of course, there is the unpalatable issue of cost, and I shall not be afraid to address it in this place, as I have before. We will have to spend more on health, probably at least 2% of GDP. I have already suggested both in this place and in writing how we can do that, possibly by converting national insurance into a progressive national health insurance paid according to income and preserving an NHS free at the point of need. In my opinion, we must remove health from an increasingly sterile debate about taxation.

Finally, I want to touch on foreign affairs. I am proud to be a supporter of a coalition Government who have, with cross-party support, achieved spending of 0.7% on overseas development assistance. I am also proud to be a supporter of a Government who have introduced the Modern Slavery Bill, again with cross-party agreement.

Those things are vital, but I see four global challenges that we must confront. The first is to eradicate absolute poverty. The World Bank has set a target to get rid of it by 2030, and we as a country and a people need to do everything we can to support that. The second is to reduce income inequality. We have already spoken today about income inequality is in this country, and the World Bank has that we must concentrate on the 40% with the lowest incomes globally to reduce income inequality. I share that aspiration, as income inequality eventually leads to political instability and many other things.

Thirdly, there is climate change, which we cannot run away from and which any responsible Government must take fully into account in their policies. Fourthly, there is the whole matter of combating—not allowing—extremism. This relates to income and equality, but it is not just about income and equality as some of the most extreme people come from some of the most privileged backgrounds. We have to combat extremism everywhere and promote freedom of speech, thought and religion and the freedom to have no religion. That is the responsibility of this Government and this country. There is no magic solution to any of this, just constant, hard negotiation, peace making and engagement. We cannot do it on our own. We need to work with others to exercise our influence through the Commonwealth, the United Nations, the World Bank, the IMF and particularly the European Union.