Autumn Statement Resolutions

Kerry McCarthy Excerpts

Monday 21st November 2022 Commons Chamber

[Kerry McCarthy (Bristol East) (Lab)]

I start by echoing something said a moment ago by my hon. Friend the Member for Bristol South (Karin Smyth) about the pressure on council finances, starting with the fact that the local housing allowance has been frozen yet again. She cited the example of a constituent who needed a three-bedroom home, but because the local housing allowance has been fixed at £950 the constituent is paying £400 out of her own pocket. The Bristol Cable, working with the Bureau of Investigative Journalism, found that in July this year only one two-bedroom property was available in Bristol that fell within the local housing allowance rate. We are finding that people simply cannot afford to pay the extra and it has caused a housing crisis in the city. I raised that survey with Ministers at the last but one Department for Levelling Up, Housing and Communities questions, and was told that they kept local housing allowance constantly under review, so it was very disappointing that we saw no movement on it in last week’s announcement.

As we heard from quite a number of Members at today’s DLUHC questions, local councils, through no fault of their own but because of the Government’s catastrophic, self-indulgent financial mismanagement, are now being forced to cut services to their bare bones. Once statutory services have been paid for, there is very little money left for anything else, which means that councils such as Bristol that have fought year on year to protect precious amenities might now have to let them go. At departmental questions earlier, the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for North East Derbyshire (Lee Rowley), talked about the need to make efficiency savings; there are endless meetings in Bristol City Council about how we can make efficiency savings. It is a constant process, but there comes a point at which there is nothing left to cut.

Nine out of 10 councils face funding shortfalls next year, and Bristol will face a funding gap of £87.6 million over the next five years. I really did think that the Under-Secretary of State seemed to be in a state of denial about this issue when answering questions today. I hope that he comes to Bristol, talks to local councillors and people in their communities and sees just how tough things are.

The Government tell local authorities to try to recoup some money by raising council taxes and the social care precept, effectively passing the buck, but that will mean that our constituents, who are already struggling to make ends meet, with rising rents and mortgages, inflation sending food prices soaring and, of course, energy bills—all these cost of living pressures coming at them from all quarters—will be hit in the pocket once again. It is predicted that council tax for an average property will go up by around another £100. Councils cannot take this level of financial pressure any more and my constituents cannot shoulder the burden any more.

It was notable that although the autumn statement included the windfall tax, there was no move to scrap the investment allowance. Basically, that means that the Government are taking away with one hand and giving back with the other. It means that a company such as Shell, which has made record profits, has not had to pay any tax at all on those profits.

Underfunding local services is completely counterproductive. What does it mean for the growth agenda if council planning departments are swamped and cannot process applications for new development? What does it mean for community wellbeing if councils cannot maintain parks, fund their public health programmes or keep libraries and children’s centres open? What does it mean for social care if we keep kicking it into the long grass? Again, my hon. Friend the Member for Bristol South spoke about that. Cuts have consequences, and we are starting to see that in very stark relief. Things will only get worse.

I want to talk about the labour situation. The Chancellor told us on Thursday of plans to get more people into the workforce, but I am not convinced that they go anywhere near far enough. As the shadow Secretary of State for Work and Pensions said, the Government are commissioning a review, not a plan. We are seeing labour shortages in so many areas. The NHS is ramping up overseas recruitment. Restaurants and shops are being forced to close early or sometimes for whole days because they do not have the staff to stay open. Food is being left to rot in the fields. The birth centre in Cossham Hospital in my constituency has had to close—hopefully temporarily —because of a shortage of midwives. In Bristol, the post-Brexit shortage of HGV drivers is now having a serious impact on bus services. First Bus is having to cut routes, leaving people stranded, because it is simply unable to recruit drivers. It has upped the starting salary and is trying to get people through their driving tests, but to no avail, because there simply are not enough people out there willing to take up driving jobs.

The Government’s solution was to look at the economically inactive and at people on universal credit, who the Chancellor said could spend more time talking with their work coach about increasing their hours and earnings. As has been said, however, what blocks them is often access to affordable childcare. We had the March of the Mummies and the Pregnant Then Screwed campaign in Bristol a couple of weeks ago, which highlighted the crisis in early years and the fact that decent, accessible and affordable childcare is becoming ever scarcer. The shadow Work and Pensions Secretary’s five-point plan gave the Government some real pointers, and I hope we get a response to some of those points when the Minister sums up. My hon. Friend the Member for Stockton North (Alex Cunningham) also made a valid point about carer’s allowance.

The OBR estimates that real household disposable income per person will fall by more than 7% over the next two years. That is the biggest drop on record and will not lead to the growth that this country needs if it is to emerge from this crisis. Yet the Chancellor told the House that only the Conservatives could get us out of this—Conservative—mess. He is basically saying, “There have been 12 years of economic incompetence, but I promise that this time will be better.” Austerity is a choice, not a necessity.

The answer to the cost of living crisis is not squeezing wages, eroding public services and taxing working people as living costs soar. It is about investing in public services, investing in infrastructure and investing in British workers. At conference, Labour unveiled its green prosperity plan, with thousands of new jobs across the country in green energy and retrofitting. We also announced a modern industrial strategy that will see workers and businesses flourish and a long-term plan for growth that will allow us to cut bills and tackle inequality and poverty. That is what was missing in yesterday’s statement, and that is what Britain needs—not a return to austerity.