Covid-19: Government Support for Business

Karen Buck Excerpts

Thursday 16th December 2021 Commons Chamber

[Ms Karen Buck (Westminster North) (Lab)]

I am acutely aware, having a constituency on the edge of the west end, of the impact that the pandemic has had not only on hospitality and tourism, but on the culture, arts and live performance sector. Last night, it was reported that 12 west end shows were unable to go ahead because of illness among the cast, many of whom are self-employed. Will the Minister confirm that he or fellow Ministers will be meeting representatives of the theatre and live performance sector to discuss the impact of this latest wave of the crisis on their finances?

[John Glen]

We will continue to engage with the sector. I just draw the hon. Lady’s attention to the £2 billion culture recovery fund; the emergency resources support fund, which gives up to £3 million of support to charities and £1 million to commercial entities in that sector; and the £800 million to the live events reinsurance scheme. However, we will continue to engage across different sectors of the economy.

Economic Update

Karen Buck Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

My right hon. Friend has written about the importance of employment support, and I look forward to getting his thoughts on those measures.

[Ms Karen Buck (Westminster North) (Lab)]

Half of my constituents rent privately—that is the highest proportion in the country. A quarter of all Londoners rent privately, and 13 million people across the country rent privately, with a third having no savings whatsoever. Will the Chancellor assure me that when we have the statement from the Housing Minister, there will, in addition to any legislative change to protect renters, be money on the table to help people on low incomes and in insecure employment to pay their rent, so that this crisis does not mean that they also get into debt and risk losing their homes?

[Rishi Sunak]

We very much recognise that rent is a significant portion of most household bills, which is why the Housing Secretary will shortly be outlining measures in this regard.

Gambling-Related Harm

Karen Buck Excerpts

Tuesday 19th March 2019 Westminster Hall

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Mims Davies)]

I, too, congratulate the hon. Member for Inverclyde (Ronnie Cowan) on securing this important debate, and I thank all Members for their thoughtful and passionate contributions.

As I outlined to the House last week, reducing gambling-related harm is a priority for the Government. The Secretary of State and I are very clear on that. Millions of people enjoy gambling safely. It is a harmless social activity for many, whether in the form of a day at the races—I was at Cheltenham festival last week—or popping down to the pier on a holiday and enjoying time with family, as I do sometimes with my daughters. As we have heard today, for a small number of people who experience harm the consequences can be devastating, and Members have raised the problem of addiction. In response to my right hon. Friend the Member for East Devon (Sir Hugo Swire), the latest data that I have states that the estimated problem gambling prevalence rate among adults in Great Britain is 0.7%, which is approximately 340,000 people.

In my response, I will try valiantly to answer as many points as I can, but I will concentrate on two things: first, the protections that are already in place to prevent harm, and what we want to do more on and, secondly, how we are working with the Department of Health and Social Care. The hon. Member for Tooting (Dr Allin-Khan) will be pleased to know that we have many ongoing policy workstreams across both Departments to ensure that we get the help to those who need it and learn from experiences.

Many Members mentioned the Gambling Act 2005, because it predates the current internet age. It is supported by the Gambling Commission, which is a regulator with broad powers to ensure that all forms of gambling are free from crime, are fair and open, and protect children, our young people and the vulnerable. However, we recognise the challenge regarding gambling online. Wherever an operator is based, it must have a licence from the commission and must obey the conditions of that licence. The commission regularly checks that its requirements are still right, changing and updating them as needed.

In answer to the questions asked by my right hon. Friend the Member for East Devon and the hon. Member for Swansea East (Carolyn Harris) about age verification and identity, the commission is consulting on strengthening the customer interaction and looking at credit cards and gambling. The Secretary of State and I also recently met banks and challenger banks on that.

The Government will intervene where there is evidence of harm. We did that on the B2 machine stakes in betting shops, and I am pleased that those changes will come into effect in two weeks. Let me be clear to any operator who thinks that that is the end of Government action that if there is evidence that a product is causing harm, we will act. Operators are simply mistaken if they think that we will not intervene.

The hon. Member for Glasgow East (David Linden) challenged me about Government action. As the gambling and lotteries Minister, I will not give in to any bullying tactics from big business when it comes to intervening where there is harm. I want to be very clear about the further work necessary to ensure that operators act in a socially responsible way: if we see signs that they are not intervening where there are problems, we will act. Where operators fail to protect customers from harm, the Gambling Commission has the teeth to act and has done so. I am sure that the commission will look at the all-party group’s work with interest, as we do; I commend all those who are doing that work. Where operators may be giving incentives to gamble to those who suffer the highest losses, we are absolutely on the case. It is time for everyone to come to the table and be responsible.

[Ms Karen Buck in the Chair]

Accountability for business, social responsibility and customer protection are key, as we heard from my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith). The industry has a key role in preventing harm. The Gambling Commission’s rules are clear that operators must identify where people’s gambling is putting them at risk. Responsible business is the only kind of business that I want to see in the sector—I have been clear about that ever since I took this job. The power to prevent harm is in also in the hands of businesses, as we have heard today. The Secretary of State and I are absolutely stepping up to the challenge of working with financial institutions, across Government and across sectors.

The hon. Member for Inverclyde mentioned loot boxes and gaming. We are aware of concerns that loot boxes could encourage gambling-like behaviour. Alongside the Minister for Digital and the Creative Industries, I continue to look at the evidence, and we will listen to the all-party group and work with the tech and gambling industries. GamStop, which was rolled out last year, can really help people with online problems. For the first time, we have seen some outcomes: it currently extends to 90% of the market, and I call on the rest of the providers to step up and ensure 100% coverage. I was pleased last week to meet Gamban, which I will soon visit at its Southampton base. It provides extra protection and has a background in understanding this challenge and using tech and all the devices that it can engage with to help people. Work is being done where people know the challenges and can respond.

The hon. Member for Inverclyde also raised concerns about gambling advertising. I reassure hon. Members that we have looked carefully at the review’s evidence on advertising and will continue to do so. There are strict rules on adverts that target children and vulnerable people; guidance has been strengthened further as a consequence of the review, and the commission has toughened its sanctions for operators that breach the rules. The whistle-to-whistle ban has already been mentioned, and we have worked with GambleAware to launch the Bet Regret advertising campaign. I thank the hon. Gentleman for his support for Bet Regret.

The industry is also responding to public concern about TV adverts more broadly. From this summer, there will be a ban on betting adverts during sports events before 9 o’clock. That is a step forward, but as Minister for sport, I say directly to sports bodies that they must look very carefully at their responsibilities to their fans and followers, because they, too, can play a part in reducing the risks and in raising awareness of them. There are sports that have an overreliance on types of sponsorship that some could see as irresponsible. They know who they are—they need to take stock, think about their fans, including young children, and support the vulnerable.

Let me turn to concerns about suicide. Any suicide is a tragedy for so many families. As has been said today, we need robust understanding. GambleAware has commissioned new research, which will be published soon and will help us to work with health professionals in the sector. We want to continue to work with the Department for Education on stigma and on concerns about gambling problems. I agree that we need a better awareness of people’s risks and problems from a younger age, so that we can direct help where it is needed. GambleAware and GamCare have some fantastic initiatives, including programmes for schools, to reach out to our young people. I intend to work with ministerial colleagues to see what advice we can give to parents, who absolutely need to know what is out there.

It is important that we continue to listen to those with lived experience, and I thank the Ritchies and Gambling With Lives for their important and ongoing work. We are also working closely with the Department of Health and Social Care, and I am pleased that in our long-term plan for the NHS we committed to expanding specialist support for people with gambling addictions. As has been said, GambleAware is evaluating its current services and looking to increase access.

Health surveys show links between poor mental health, substance abuse and problem gambling—2.2% of people with probable mental health issues are problem gamblers—so we need to ensure that we understand the public health harms. Working with Public Health England to carry out a review of the evidence is our next step; the Responsible Gambling Strategy Board has also published a paper that sets out a potential framework for measuring harm. We want stronger evidence so that we can appropriately target our resources and, ultimately, our intervention.

Further research is needed on the factors behind suicide. I recently met the Minister for suicide prevention, the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Thurrock (Jackie Doyle-Price), to understand more about gambling as a factor in suicide, which is a key priority for her as well. I want to see a stronger evidence base. We heard today about some of the academics who are working in this important area, but I encourage more academics to do so and help us to understand the challenges of harm. Preliminary research on gambling-related suicide will be published soon, and we will work across Government so that we do not see any more tragedies in this area.

Let me focus on support. I assure those who are currently experiencing harm that help is there. There is an NHS clinic in London and there will soon be one in Leeds. GambleAware funds a national gambling helpline and a network of counselling services led by GamCare. It is open from 8 in the morning to midnight, seven days a week, and—for those tuning in—the number is 0808 8020 133. I met GamCare last week and heard all about what it has been doing for the past 20 years to frame frontline service provision. It shows that if people reach out for help, they can move forward and get out of the cycle.

GamCare’s helpline is an essential starting point. It is doing all it can to raise its visibility among GPs, and it is working with GambleAware to ensure that appropriate resources are available for health workers, frontline staff and debt advisers—in fact, people often come to banks as their first line of help. That important work is funded by industry, and I encourage it to maintain and increase the support that it gives. We want the voluntary system to work, and the Gambling Commission is committed to reviewing and helping to strengthen it.

On the levy question, I remind all those who are watching or listening that nothing but responsible business is acceptable. The Government will act and make changes where evidence so directs, leaving open for consideration all funding options for future treatment.

I am glad that recognition of gambling-related harm has increased, as we have seen today. It is a serious issue and a lot of work is being done by a range of bodies, and it is important that we acknowledge their good will and commitment as well as recognising where we need to go further. Strong protections are in place and they are being further strengthened, but we continue to gather knowledge and evidence of harm. I look forward to working with the House, updating hon. Members and working with business on this area to ensure that only responsible practices and actions remain.

[Ms Karen Buck (in the Chair)]

Ronnie Cowan, you have less than a minute, but that is enough for a brief comment.

Spring Statement

Karen Buck Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

I very much enjoyed my visit to the University of Gloucestershire and was interested to see the innovative work going on there. The improvement in the public finances, to which my hon. Friend referred, is being driven by increased business tax receipts, partly as a result of the Government’s relentless clampdown on opportunities for tax avoidance and evasion and partly as a result of the very significant increase in employment. Some 3.5 million more people in work is very good news not just for 3.5 million households, but for the Exchequer, the public finances and, ultimately, our public services.

[Ms Karen Buck (Westminster North) (Lab)]

Is it not true that poverty in this country increasingly wears a working face, that we now have the highest ever proportion of families in poverty who are in work, that a family of four with two people working full time on the national minimum wage will be £600 a year worse off by 2020, thanks to the Chancellor’s benefit freeze, and that, because he will not tackle the benefit freeze, including on in-work benefits, families in that condition will see absolutely nothing as a consequence of today’s statement?

[Mr Hammond]

I have already made the point about the unsustainable rise in welfare payments under the previous Labour Government. A 65% real-terms increase in the welfare budget was not sustainable. [Interruption.] The hon. Member for West Ham (Lyn Brown) can chunter from the Opposition Front Bench as much as she likes, but it will not make it sustainable. I will tell the hon. Lady what will help her constituents: the £6,500 tax cuts per family for people earning low wages and buying fuel, which Opposition Front Benchers voted against, and the £2,500 increase in the national living wage since 2016 for people working full time on low wages.

Tax Credits

Karen Buck Excerpts

Thursday 29th October 2015 Commons Chamber

[Caroline Flint (Don Valley) (Lab)]

It is a pleasure to follow the hon. Member for Aberconwy (Guto Bebb). He makes a very important point about how little people keep for every £1 extra they earn. I seem to recall that the Prime Minister once took Gordon Brown to task on that very issue. It is on film and it can be seen on YouTube. In making work pay, it is very important for people to feel that for every extra hour they work they are making a difference to their progression in their working lives.

The starting point for this debate is the Chancellor’s ill-formed proposals to reform working tax credits. The truth is that the distribution aspect to the tax credit cuts is severely regressive. The Institute for Fiscal Studies has shown that the national living wage, touted by the Government as a solution for that, at best undoes 27% of the damage.

Today, I would like to start with how the story really began. In 1997, when Labour came to power, the only help for families was child benefit, married person’s tax allowance and a child personal allowance as part of income support and income-based jobseeker’s allowance. A small number of people with disabilities also received a disability working allowance. The then Government found high rates of poverty among families with children. Tax credits were thought to be a new mechanism to support those families into work, which was the best route out of poverty. The evidence is strong that the more far-reaching tax credits and the introduction of help with childcare costs transformed prospects for millions of families. One outcome was that the lone parent employment rate rose. In 2014, it was at the highest rate on record: 65.7%. That is amazing. Of course, the vast majority of lone parents are women. Another outcome was that tax credits reduced child poverty. The Department for Work and Pensions confirmed that in the first decade of tax credits, up to 2010, child poverty fell dramatically as 1.1 million children were lifted out of poverty.

Tax credits give a benefit to employees. They are not simply a state handout to bad employers. When most employers set wages, they are blind to the private tax credit details of their employees. What is more, they cannot pay one worker one wage and the next person on the production line a different rate just because they claim tax credits. In most cases, the employer does not know. As the Resolution Foundation reported this week in evidence to the Work and Pensions Committee, if the Government remove tax credits the employer will not immediately step in to fill the void, regardless of the rises in the national minimum or living wage. The Government must know that, and it is wrong to suggest that the only beneficiaries of tax credits are bad employers.

We must challenge and address the Chancellor’s claim that the cost of tax credits has risen from £1 billion to £30 billion today. This summer, the Chancellor stated:

“The original tax credit system…cost £1.1 billion in its first year. This year, that cost has reached £30 billion.”—[Official Report, 8 July 2015; Vol. 598, c. 334.]

That claim is simply bogus. Articles by Declan Gaffney and Tim Blackwell in the New Statesman and by many others show that the £1.1 billion figure relates to the first reforms, which began only in October 1999, halfway through the tax year and covering only three months of tax credit payments for a typical claimant. Indeed, in its first full year, 2000 to 2001, the cost was more like £10.5 billion, not £1.1 billion.

That brings me to the question of why the tax credits bill increased. First, tax credits wrapped up within them a number of previously separate benefits. They were more generous—I acknowledge that. The tax credits we refer to today, however, include the childcare costs introduced in 2003, which no previous Government had ever met. Yes, tax credits were about challenging poverty pay. However, as my hon. Friend the Member for Darlington (Jenny Chapman) mentioned, they also aimed to address the issue facing many families, particularly lone parent women: even if they were on a reasonable wage—whatever “reasonable” is—they still could not afford to work, because of the amount of their wages that would have been spent on exorbitant childcare costs.

[Ms Karen Buck (Westminster North) (Lab)]

My right hon. Friend is making a very powerful case. Does she agree that the important element of tax credits was that they were a means of getting lone parents in particular into work? Gingerbread, among others, has calculated that a 5% rise in employment among lone parents saves the Treasury £436 million. Getting lone parents in particular into the workplace therefore benefits the wider economy.

[Caroline Flint]

I absolutely agree with my hon. Friend. Missing from the debate is a consideration of the impact of the changes on other sectors of the economy, and the wellbeing and economic opportunities they provide to people by being in work. As I said, the employment rate for lone parents went up to 65.7% in 2014, which is brilliant. The worry is whether it will go back down, rather than improving further.

The total tax credits that families receive relate to their income. The 2008-09 recession had a dramatic effect on wages. As wages fell, many families either qualified for tax credits or saw their tax credits rise. It is notable that during the John Major recession unemployment rose to a peak of 10.7% by 1993, whereas in the recession of 2008-09, many employers reduced hours or did not increase pay to keep staff in work. I understand why they did that. In the House, we had debates in which we said that we appreciated that employers were trying to deal with a difficult situation and were trying to hold on to people in work. As a result, however, more people either claimed tax credits or received a higher amount.

As I said, unemployment during the John Major recession rose to a peak of 10.7%. In the 2008-09 recession, as a result of a number of factors, including employers keeping people in work, unemployment rose to only 8.5%. Recent figures show that the number of employees earning less than the living wage has risen by 45% since 2009. Combining the two, it is clear that people remained in work but needed more support through tax credits. That is not a conspiracy; this is the reality of an economy adjusting to finding itself in difficult situations, and families finding themselves in difficult situations and the state being there as a safety net to help them. Without tax credits, the rise in unemployment in that most serious recession, which we all experienced, could have been much worse. I think that that goes a long way to explain the cost of tax credits today.

This week, given the vote in another place, the Chancellor says he is in listening mode. We must address how we support people into work and to stay in work, so that they can make progress on improving their living standards and the life chances of their children. I agree with everything my right hon. Friend the Member for Birkenhead (Frank Field) and other colleagues from across the Chamber have said. I will not repeat that, but let me add a final few points.

To move forward, a number of things have to happen. First, the Government must be straight about the figures relating to tax credits. Only then can we have a sensible conversation. Secondly, the Chancellor needs to provide a proper assessment of the impact of any new proposals on incentives or disincentives to work for those who receive tax credits. I asked the Chancellor on Tuesday why, if he stood up for working people, a proper assessment had not been not published with his last proposal. He did not answer. I am afraid that I feel that that was because he is afraid to face the facts. Thirdly, the Chancellor needs to ask what impact the new proposals will have on child poverty. Fourthly, we need to look more widely across Departments at what support actually helps people to get into work, stay in work and make progress in work. I founded the first all-party group on childcare 18 years ago, when I came into this place. The childcare offer has improved, but it is still not good enough for many working families. Those are the questions I need answers to for the 5,300 Don Valley families who are really worried about the future of their tax credits and their ability to hold their head up high and say, “I am in work. Help me to support my children.”

--- Later in debate ---

[Vicky Foxcroft (Lewisham, Deptford) (Lab)]

The past few weeks have been a rollercoaster. We have heard passionate speeches from both sides of the House urging the Government to find another way forward. Time and again, the moral argument has been made, but time and again political games have been played and votes have been lost. This is not about scoring points in this place, but about real people and about how we look after and care for those who are most in need. It is about fairness, morals and building the kind of society we want to see.

During Prime Minister’s questions yesterday, the Prime Minister was asked six times to confirm that no one would be worse off under these changes, but declined to do so. Earlier this week, I asked the Chancellor directly what he would put in place to make sure that 9,000 families in Lewisham, Deptford, of which 5,500 are working families, were not out of pocket by £1,300. At a time when rents are rising and people are having to turn to food banks because they are struggling to pay their bills and feed their families, people will turn to credit. People will fall into arrears with their rent, and people will be made homeless. What does the Chancellor have to say about that? That he is listening; well, that is a start. That he will change his plans? No such luck as yet. He says that he will introduce a national living wage—what a cheek! The Living Wage Foundation does a fantastic job of campaigning for a real living wage, but this is no living wage. It is quite simply spin and the Chancellor is grossly mistaken if he thinks that people will be fooled. He has stolen the brand of a fantastic organisation and, in an instant, contaminated it and muddied the waters.

When tax credits were introduced by a Labour Government, they were introduced because there was a real need for them. The Government’s failure to build a better economy means that that need is still there.

[Ms Buck]

Does my hon. Friend agree that although we have heard a lot from the Conservatives about the rise in tax credits over the past decade, the Institute for Fiscal Studies has stated very clearly that child poverty would have stayed the same or risen rather than falling substantially without those increases in tax credits? There is evidence to suggest that the reforms prevented a large rise in inequality. That is what tax credits achieved and that is why the expenditure was worth while.

[Vicky Foxcroft]

I thank my hon. Friend for her intervention and completely agree with everything that she says.

Personally, I think that it is wrong that Governments subsidise large employers, who can and should pay their staff more. That is the solution we should all be working on together, not tit-for-tat political point scoring. One of the best ways for staff to organise and put pressure on their employers is through their trade unions. If the Government had any sense of a moral code they would be working with the trade unions to raise wages and, in the long term, eliminate tax credits altogether. That must be the goal, but the Government are doing anything but that. They are attempting to hamper the great work that trade unions do by introducing their negative Trade Union Bill.

Welfare Reform and Work Bill

Karen Buck Excerpts

Tuesday 27th October 2015 Commons Chamber

[Owen Smith]

That is a brilliant point, and extremely well made. There are myriad examples of waste and incompetence in the handling of our DWP budget under this Government, not least the enormous increase in housing benefit.

[Ms Karen Buck (Westminster North) (Lab)]

Does the Conservative party not fail to understand what tax credits are all about? The tax credit policy was successful in that it moved people into work, and, in particular, underpinned the major progress that was made when single parents were allowed to move into work. When we talk about saving money, should we not see that in the context of the tax credit policy’s success in moving people from worklessness into sustainable employment?

[Owen Smith]

My hon. Friend speaks with enormous experience and expertise, and she is completely right. As I said earlier, tax credits are a policy success. In 1997, 43% of single parents in Britain went out to work; today, the figure is 65%. There has been a 50% increase in the number of single parents who are in work, and that is a measure of the success of tax credits.

--- Later in debate ---

[Ms Buck]

The right hon. Gentleman makes a good point about the importance of allowing people to keep more of their money when they work longer hours. How does he square that commitment with the fact that the changes coming in next April will increase the tapers on higher earnings so that people will be subject to 80p in the pound withdrawal rates when they do work extra hours?

[John Redwood]

The problem with welfare reform, as all who have wrestled with it well know, is that we either have a large number of people facing a moderate rate of withdrawal or we have a more limited number of people facing a high rate of withdrawal. All the time that we have means-tested benefits—our system is still riddled with them—means that we will have to make that difficult choice about whether there is a fast move off benefit when people’s income goes up or a slower move. That will mean we either have fewer or more people affected by the taper. Labour never solved the problem of the taper. The Labour Government had lots of difficult tapers and high marginal rates of tax and benefit withdrawal.

That brings me to the second fundamental pillar of the Government’s strategy, which I support, after the promotion of work and better-paid work: taxing people less, particularly those on lower incomes. Both the coalition and this Government have worked away at that, by trying to get more people out of paying income tax. As my right hon. Friend the Chancellor thinks about his pre-Budget judgment and his autumn statement judgment later this year—he is rightly in listening mode—I trust he will think about the tax element in his policy mix, because the more he can do to take people out of tax or to lower the tax rate upon them, the more he will succeed in promoting prosperity and the more he will offset the impact of benefit changes.

Tax Credits

Karen Buck Excerpts

Tuesday 15th September 2015 Commons Chamber

[Ms Karen Buck (Westminster North) (Lab)]

Before the election, the Prime Minister promised to maintain the value of tax credits. He has broken that promise. He also said on 22 April that the Government were

“using all the tools at our disposal”,

including the “tax and benefit system”, to “make work pay”. Today, we are debating the betrayal of that pre-election commitment.

As we have heard, 3 million working households will lose up to £1,000 each and a single-parent earner on £19,000—a modest income—will lose £2,000. Many extrapolations that are set out in the House of Commons briefing paper and elsewhere show the scale of the losses.

Today, we have heard from Government Members the argument that tax credits are a subsidy for bad employers. In some instances, that is true, but there is scant evidence for the assertion across the board. What is absolutely clear is that the tax credit system is an incentive, particularly for lone parents, to go into the workplace and stay in work. The positive employment incentive of the tax credit system has been almost entirely ignored by the Conservative party.

That masks a success story over the past 10 to 15 years, which has seen a dramatic increase in the number of parents, particularly lone parents, going into the workplace. We should celebrate that fact and support those working parents who have gone into work. A recent piece of research by the New Policy Institute, “Trends in parental employment in London”, demonstrates that success story in employment. Associated with that, there has been a

“large shift away from out of work claims towards in-work claims”.

A rise in the national minimum wage is welcome—indeed, employers should share with the state the responsibility for ensuring that working people enjoy a decent basic income—but it will not offset the huge hit on tax credits. As the analysis by the Institute for Fiscal Studies has shown, the new national living wage offers

“little compensation because the boost to gross wages is smaller than the announced fiscal tightening and almost one-third of the increase in gross wages goes to the Treasury in higher tax receipts and lower benefits and tax-credit entitlements.”

The IFS calculates that across the entire population that receives in-work benefits and tax credits, just 20% of the losses that will accrue from the benefit cuts will be returned to those people through the rise in the minimum wage.

[Mike Wood (Dudley South) (Con)]

Will the hon. Lady give way?

[Ms Buck]

I will not give way because many people want to speak.

My particular concern is that London has the highest level of child poverty of any region in the country and, with 356,000 families receiving tax credits, almost 750,000 children will be losers as a result of this policy. A study by the Trust for London on the higher costs that are faced by working people and parents in London, which has just come out, shows that even before the tax credit cuts, such families are £54 a week worse off than equivalent families outside London. These cuts will hit the working poor right across the country, but they will hit them harder in London than anywhere else.

As we look towards the election that we will fight next May, I absolutely guarantee that my colleagues will draw attention to those losses for families, and those families will not forgive this Government for betraying their commitment to protect the working poor.

Amendment of the Law

Karen Buck Excerpts

Thursday 20th March 2014 Commons Chamber

[Ms Karen Buck (Westminster North) (Lab)]

This is a budget that does little or, in many cases, nothing for the millions in the lowest income groups in this country. Unsurprisingly, the chief executive of the Joseph Rowntree Foundation has said:

“This is a Budget for the people who already have, not the people who need to benefit most from the return to growth.”

It is a lost opportunity to help the 13 million people on low incomes, who are unlikely to see any benefit from these measures. That assessment fits in with the analysis of the Institute for Fiscal Studies, which shows that more than 300,000 children will be pushed back into absolute poverty over the course of this Government and that, on present trends, 900,000 children will be returned to relative poverty by 2020. That will undo everything that the last Labour Government did to tackle poverty. The Budget sets a cap on overall social security spending while doing little or nothing to tackle the drivers of rising social security spending, especially among working people who are being squeezed by rising housing costs.

I want to talk about two policy areas that lie behind these failures. As we have heard, households have suffered the longest period of falling living standards and squeezed wages since the 1850s. We have had 50 consecutive months of a wage squeeze below inflation. I came into politics because I was driven by concerns about unemployment, and the growth in job numbers is undoubtedly good news, but it would be completely wrong to see the growth that has been achieved in recent months as an unalloyed success story. Among other things, one third of a million families are now working fewer hours than they want, with more people being forced into part-time employment. The latest job figures show 211,000 people entering self-employment, which represents a large proportion of the recent jobs growth. Self-employment is undoubtedly a good thing for many people, but one problem is that it is strongly associated with low pay. Low pay is part of the crisis that is underpinning the fall in living standards.

[Alex Cunningham]

My hon. Friend has quoted one organisation; let me quote another. Gillian Guy of Citizens Advice has said:

“The chancellor talked about making, doing and saving. This budget needs to work for those who are making do and can’t save”.

Are those the people that my hon. Friend is talking about?

[Ms Buck]

I am talking about the 13 million people on very low incomes, many of whom have incomes that are so low that they will not benefit from the change in the income tax threshold, welcome though that is. It will do nothing for the people whose earnings are already below it.

There are 5 million workers on low pay in the UK—one in five of the work force. That is one of the highest proportions in the developed world. The academic consensus shows clearly that the minimum wage, although fiercely and wrongly opposed by the Conservatives, boosted earnings without causing unemployment. It has all but abolished extreme low pay, but in recent years there has been an increasing spike in the number of workers on the minimum wage. The proportion of workers on the minimum wage has grown by nearly 60% in the past five years. Rather than being part of a continuous process of uprating the pay of those on low incomes, it is now becoming the going rate in many sectors. That is one of the causes of falling living standards for millions of people and of increased social security spending.

This is a particular challenge for London. Londoners did not benefit as much from the introduction of the national minimum wage as did people in many other parts of the country, because of the slightly higher wages. The trend towards more workers earning at or just above the level of the minimum wage has exacerbated the crisis in living standards in London.

As well as low pay, another challenge—and another driver of social security spending—is housing costs. It was interesting to see that yesterday’s report from the Office for Budget Responsibility stated:

“The largest driver of the rise in spending on housing benefit has been caseload growth in the private rented sector…The rising proportion of the renting population claiming housing benefit may be related to the weakness of average wage growth…almost all the recent rise in the private-rented sector housing benefit caseload has been accounted for by people in employment.”

The relationship between low pay—and a failure to uprate pay over a number of years—and rising housing costs is driving more and more people, particularly working people, into dependency on housing benefit.

None of us wants to see expenditure on keeping people unemployed or lining the pockets of private landlords by subsidising higher rents. We all want to see a fall in social security spending on these things, but while pay is low, while average living standards are not rising and while rents are rising, we are going to see more costs and expenditure in that area. But there is a solution. The Chancellor promised a rise in the national minimum wage to £7, but we saw a 17p increase. Many employers across the country could pay more than the national minimum wage and they should be encouraged to do so.

We will not see a cut in social security spending unless and until we reverse the calamitous fall in the building of social housing, which is the only safe and secure means of ensuring that low-income people have low housing costs. Combine those two things and we will see a major shift away from the social security spending, which we would like to see fall, into a rise in living standards for millions of people. This Budget has not been able to provide that.

National Minimum Wage

Karen Buck Excerpts

Wednesday 15th January 2014 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House celebrates the 15th anniversary of the introduction of the National Minimum Wage, which falls this year, and the contribution it has made to making work pay, boosting living standards and tackling in-work poverty; notes that, before the National Minimum Wage was established, poverty pay was widespread and that the Conservative Party and many Liberal Democrat hon. Members opposed its introduction; further notes that families are on average £1,600 worse off a year and that the National Minimum Wage is now worth less in real terms than in May 2010; further notes that the Government has not backed up its promise to name and shame firms not paying the minimum wage; calls on the Government to strengthen enforcement of the National Minimum Wage, including by increasing fines for non-payment of the National Minimum Wage and giving local authorities enforcement powers; and further calls on the Government to encourage employers to pay a living wage and take action to restore the value of the National Minimum Wage so that the UK can earn its way out of the cost of living crisis and to help control the cost of social security.

For me, the proudest achievement of the previous Labour Government was the introduction of the national minimum wage. It was important because, as we know, the best way out of poverty is work and because taxpayers should not have to pick up the bill of subsidising bad employers. Making work pay is also vital to getting the social security budget under control and we will not allow the Government to let the national minimum wage wither on the vine.

Fifteen years ago, on 1 April 1999, the national minimum wage took effect. We should and do celebrate the difference it has made to millions of people. We have also called this debate today, at a time of difficulty for so many low-paid workers and with low pay a growing problem across our country, to call on the Government to take action to strengthen the minimum wage, crack down on rogue employers and restore the value that the minimum wage has lost over the past three years. We call on them to do more to build a stronger economy that enables people to earn their way out of the cost of living crisis.

[Ms Karen Buck (Westminster North) (Lab)]

Social care workers do one of the most important jobs in our society. Does my hon. Friend share my concern that in my borough, Westminster, and, I am sure, in others, social care workers are not even guaranteed the minimum wage as the travelling time between appointments is not counted for the purpose of payment?

[Rachel Reeves]

An investigation by the Low Pay Unit looked at pay rates before the national minimum wage was introduced and back then one worker in a residential care home was paid just £1.66 an hour. I agree that today, too, people working in that sector are too often exploited and that their employers get round the legislation.

The Low Pay Unit considered pay before 1997 in a range of industries. I mentioned residential care but it also came up with other examples, such as a factory worker who was earning just £1.22 an hour in 1997 and a person working in a chip shop in Birmingham who was earning just 80p an hour. That is sheer exploitation. It is poverty pay and it was taxpayers who picked up the bill.

Let us also remember what Government Members said back then. The right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), now Secretary of State for Work and Pensions, said in 1997 that a minimum wage would

“negatively affect, not hundreds of thousands but millions of people.”—[Official Report, 4 July 1997; Vol. 297, c. 526.]

The right hon. Member for Richmond (Yorks) (Mr Hague), now Foreign Secretary, said back then that a minimum wage would have to be

“so low as to be utterly irrelevant”

otherwise

“it would price people out of work.”—[Official Report, 17 March 1997; Vol. 292, c. 617.]

The right hon. Member for Sevenoaks (Michael Fallon), now the Minister of State responsible for business and enterprise, said that a minimum wage

“will add costs to British business”.—[Official Report, 11 July 1997; Vol. 297, c. 1240.]

And the right hon. Member for Witney (Mr Cameron), now Prime Minister and then a parliamentary candidate in Stafford, darkly predicted in 1997 that a minimum wage would lead to a rise in unemployment.

Living Standards

Karen Buck Excerpts

Wednesday 4th September 2013 Commons Chamber

[Rachel Reeves]

As the hon. Gentleman knows, there was a global financial crisis that hit every country in the world, and all countries are now dealing with the aftermath. As the Office for Budget Responsibility and the Institute for Fiscal Studies have said, budget deficit reduction has now stalled, not because the Government have not cut public services or put up taxes for ordinary people but because unemployment remains too high and economic growth too weak to get the deficit down.

This Prime Minister is ripping up the record books when it comes to overseeing falling wages for ordinary workers. Average wages have been falling behind prices for 37 of the 38 months of David Cameron’s prime ministership. Which month is the odd one out? It is April of this year, when the bankers reaped the rewards of deferring their bonus until George Osborne’s cut to the top rate of tax was implemented. That tax cut resulted in 13,000 people with an income of more than £1 million receiving a tax cut worth on average £107,000. That is four times average earnings in this country.

The rest, ordinary people, will be on average £6,660 worse off by the end of the Parliament. That is enough to have paid for the family weekly shop for more than a year and a half. Although he has said repeatedly, “We’re all in this together” and “Those with the broadest shoulders should bear the greatest burden”, how can families trust this out-of-touch Prime Minister, who has prioritised millionaires over millions of working people?

[Ms Karen Buck (Westminster North) (Lab)]

I thank my hon. Friend for giving way, and I am sure that Members on both sides of the House would like to welcome her back from her maternity leave. Does she share my concern that 4.8 million people are now earning below the living wage? Does she agree that that is a concern not just for them, because of their low living standards, but for the state and the Government? Social security benefits are having to rise to compensate for that low pay, so the number of in-work claimants of housing benefit alone has gone up to 1 million, with a 50% rise since 2010.

[Rachel Reeves]

As my hon. Friend will know, the number of people earning less than a living wage has gone up from 3.4 million in 2009 to 4.8 million today, which means that 20% of the work force in this country is now earning less than a living wage. My hon. Friend is absolutely right to point out that that means more pressure on the Treasury, more money spent on tax credits and more money spent on housing benefit. As I said in answer to the earlier intervention, the budget deficit reduction plan has stalled because those payments are going up as the economy is not growing in the way that it was supposed to.

--- Later in debate ---

[Greg Clark]

The hon. Gentleman should pay attention to the more thoughtful members of his party. If he looks at the work of respected think-tanks such as the Resolution Foundation, which does some excellent work, he will see that the problem of low wages is affecting many western countries and has been for some time. In fact, the right hon. Member for Southampton, Itchen (Mr Denham) pointed out in the summer of 2010 that the problem under the previous Government was that hard-working families who played by the rules and paid their taxes did not get a great deal back, that their pay had not increased much and that they thought there was fundamental unfairness in the system. This is a problem that afflicts many western countries. It started under the previous Government. I will come on to explain how the best way to pursue the matter is to raise sustainably high living standards.

[Ms Buck]

Does it cause the Minister any concern at all that since his Government took office in 2010 there has been a 50% rise in the number of working people who require help with their housing costs and that this Government will spend £14 billion more on supporting private tenants with their housing costs than the previous Labour Government?

[Greg Clark]

The hon. Lady and my party share the ambition of ensuring that people can earn a living that allows them to pay their and their families’ costs, but the question is how we get there. If Members oppose the reforms necessary to create that possibility they will not make any progress, given the financial situation we inherited.