Charter for Budget Responsibility and Welfare Cap

Jim Shannon Excerpts

Monday 10th January 2022 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I say respectfully to the Minister that I want to speak on the welfare cap and endorse the comments that others have made, using cases from my own constituency of Strangford. I see the issues very clearly. To be fair to the Minister, I absolutely understand the rationale behind capping the amount that the state spends on welfare. We cannot hold on to what we do not have in our hand, and we cannot give what is not ours to give. We do have to be responsible, but we also need to ensure that the funding that we are allocating to NHS reform and to the latest stages of the covid battle is adequate, while keeping an eye on the amount borrowed, which is beyond belief in my opinion. The hon. Member for North East Bedfordshire (Richard Fuller) said that it is hard to understand just how much money has had to be borrowed.

However, at the same time, it must be said that people are struggling and that they need more help, and that is what I am going to say on behalf of my constituents of Strangford. For many people, the withdrawal of the covid lifeline of the £20 uplift to universal credit has left them in a precarious situation. I can see that. I know that. Let me provide the evidential base for what I am saying; others have done so and I want to do the same. I know because the number of referrals to the food bank in my constituency has doubled. I spoke to the guys there just last week. I asked whether I was right in saying that the number of people applying to the food bank this year was greater than ever before. The answer was yes. I can see that statistically from my office. I can also see the levels of hardship and poverty to which the hon. Member for Glasgow East (David Linden) referred. People are struggling. They are the working poor. They are the people on low wages who are finding it incredibly difficult to make ends meet. I see families whose income has stayed the same and yet, in Northern Ireland, they are facing increased costs due to the Northern Ireland protocol. Let me give Members an idea of the prices that are being asked and where they are going—where they were before and where they are now.

One local business in my town is renowned for bargains. It carries a range of £1 products. The business owner informed me that his range of 600 £1 products now cost between £1.15 to £1.29 each. That is for bleach, dishcloths, toilet rolls—the things that people need every day. These are not luxury items; they are the essentials. The owner informs me that he has not made 1p more on these products. His income is up because prices are up, but his profits are down because people cannot afford to be buying his goods. The impact is felt even in a pound shop where the products are sold for only £1 or thereabouts.

There has been a 15% rise on groceries alone. Add into this a 30% gas rise and a 20% electric rise, and the problem is clear. This is why it is right and proper for this Government to review the welfare spending cap and then lift it due to the dire circumstances that working families and those who are ill and vulnerable find themselves. The right hon. Member for Hayes and Harlington (John McDonnell) referred to those who are disabled. Things are hard enough for those who are able-bodied, but it is even worse for the disabled.

I wish to pose a question to the Minister—I do it respectfully and he knows that. This is a genuine question and not a political point. Will the rise be sufficient to make a meaningful difference to families on the poverty line? Is the increase proposed today enough to do the job and to do it right? The cap set at the spring Budget 2020 was restated following some methodological changes. In 2024-25, it was set at £126.8 billion, with a margin of 3%. The new aim is that the cap in 2024-25 will be £138.3 billion, with a margin of 2%. Will that be enough for those who need it?

I know that all families in Northern Ireland are bearing the brunt of the intransigence of Brussels in its refusal to do the right thing and allow us to trade with the rest of the UK. This is not the debate on the Northern Ireland protocol, but its effects are felt in my constituency. There can be no discussion about people on the brink of the poverty line without acknowledging the effect of the protocol on the finances of every person who buys anything in Northern Ireland. This is about every mother unable to purchase gifts on Amazon and paying astronomical amounts for Christmas presents for their children as they were outside delivery areas, and every business owner paying more for products to cover the cost of the procedures. All those people show that Northern Ireland is much poorer financially for the protocol, as well as culturally.

I support the uplift of the welfare cap. I am no smarter than everybody else, but I understand the issue because my constituents tell me. I understand the reservations of those who do not want to borrow more, but we must get our local businesses back to earning and paying tax, which covid has removed. Wages for the working poor mean disposable income that is spent in the local economy, and people having enough to heat their homes and clean them. There is work to be done on the economy of this nation to encourage business and enterprise to tap into the global market. In the meantime, we must have enough money to spend on our vulnerable and needy. I have never seen anything quite like this year, and if this measure is needed as a first step, we must take that step today.