Living Standards

Lilian Greenwood Excerpts

Wednesday 30th November 2011 Commons Chamber

[Teresa Pearce (Erith and Thamesmead) (Lab)]

I spent this morning talking about living standards with mothers in my constituency, who are losing a day’s pay today to stand with other public sector workers fighting for a decent pension. They told me that they had not taken strike action lightly or easily, and had never been on strike before. Many of them are low paid; they are all women. They told me that under the Government’s proposals for public sector pensions, when they retired they would receive only just enough to keep them above the threshold for means-tested benefits.

The Government like to encourage the myth that pensions in the public sector are gold-plated; they are anything but. The average pension in local government is £3,800 a year, and for women it is even lower—£2,800 a year. More than half of all women pensioners who have worked in the national health service receive a pension of less than £3,500 a year. Nobody in society benefits when pensioners are in poverty, and if people are reliant on state benefits in retirement, that costs the taxpayer more in the long run.

Although in my lifetime we have seen progress in terms of a fairer deal for women, it is undeniable that the women now reaching pension age are still at a disadvantage because of the decades for which women’s pay was lower. The Government talk the talk about a fairer deal for women, but I do not believe that they walk the walk. Many of us who campaigned alongside thousands of women born in 1954 will remember that the coalition had to be dragged kicking and screaming to make concessions to those women.

Under this Government the pay gap between rich and poor has been widening, and last week the Office for National Statistics figures showed that for the worst-paid jobs, the jobs traditionally held by women—the hairdressers, the dinner ladies and the waiters—pay has fallen sharply in real terms.

[Lilian Greenwood (Nottingham South) (Lab)]

Will not those very women that my hon. Friend is talking about—the dinner ladies and the classroom assistants—be further hit by two years of a pay freeze, followed by years to come in which they will get wage increases of just 1%, if their jobs stay in the public sector and are not privatised?

[Teresa Pearce]

I totally agree with my hon. Friend. There is wage stagnation at the bottom of the income ladder. People are seeing their pay frozen at the same time as they face higher food, fuel and energy costs. There is a quiet crisis going on behind the front doors of the homes in my constituency, where families are struggling week in, week out to make ends meet. Their financial affairs can be thrown into total crisis by even the smallest unexpected bill.

Today, therefore, I want to talk about how the Government have decided what side they are on. They have driven on with that course, no matter what. It has to be said that we in this House are the privileged few, and surely the moral duty of those with privilege is to defend those who have little or no power. But that is not what I have witnessed since I came here in May 2010. What I have seen is a systematic, focused political attack by the Government on the poor, the weak and the voiceless.

In the May 2010 emergency Budget child benefit was frozen, housing benefit was capped, the health in pregnancy grant was abolished, and Sure Start grant was restricted to the first child. The Library said that 72% of those cuts fell on women. In October 2010 the same thing happened: more cuts—cuts to local government, cuts to Departments whose work affects women, and nearly half a million jobs cut from the public sector. When it comes to cuts, it seems to me that it is “women and children first”.

That leads me on to yesterday’s announcement. In June 2010 the Chancellor announced plans to increase child tax credits above inflation as a measure to prevent rises in child poverty. The spending review in October reaffirmed that pledge. Yesterday the autumn statement said that that decision would be reversed. The Daily Telegraph said today that the Treasury admitted that the cuts in tax credit would “theoretically” push 100,000 children into poverty. Let me tell the House that the child poverty in my constituency is not theoretical. It is heartbreakingly, grindingly real. So why do the coalition Government think that it is fair, or morally right, to hit hardest those who have the least?

It is not just me who thinks this way. The Children’s Society has said that it is “deeply concerned” that the Chancellor

“has decided to compound the hardship felt by low-income families.”

It added:

“Children in low-income families need to be protected from rising living costs. Instead, the Chancellor has condemned thousands of low-income families to a winter of discontent, with many more to come.”

The Working Families charity has said that

“today’s measure will lead to higher levels of in-work poverty, or to more parents being priced out of work.”

--- Later in debate ---

[Anna Soubry (Broxtowe) (Con)]

I would like to open my remarks by trying to find some consensus in this place. What do we, as parents, all want and hope for our children? I think that each and every one of us agrees that we hope to pass on to our children stuff that is better than we have had as we have lived our lives. For example, we want our children to have a better education than we had, a higher quality and standard of living, and perhaps a happier and more fulfilled life. Essentially, we want them to have more and better things than we have enjoyed. We do not want our children to have to bear the burden of debt from a previous generation—a debt and a deficit in which they played no part. I certainly do not want that for my children, who are 20 and 21. It is not right, and it is not fair that they and the rest of their generation, and arguably the generation that will come from them, should bear the burden of the debt and deficit that my generation—the generation in this House—has ratcheted up, particularly as a consequence of the policies adopted by the last Government.

It is breathtaking to sit in this debate listening to the Opposition. It is as though the last 13 years of their Government did not exist. It is as though they were not here, and as though some of them have landed from planet Zog. They talk about things that bear no resemblance to the reality of the policies that they pursued, and the consequences that we are now living with.

It would be ridiculous to try to argue that it is all the fault of the last Government. We know—others have spoken more eloquently and with greater knowledge than me—about the external factors and forces, but at the heart of this nation’s problem is our deficit. One does not have to be a woman or to run a family budget to know that the matter is simple. One works out how much money is coming in, and how much is going out, and tries to ensure that one spends only as much as is coming in. Someone who gets it wrong and spends more than is coming in runs up debt.

[Lilian Greenwood]

Will the hon. Lady give way?

[Anna Soubry]

I am more than happy to give way in a moment to the hon. Lady whose constituency is next to mine in Nottingham.

What people do not do—they recognise this if they are responsible—is to borrow more. If they have reached the maximum on their credit card or their overdraft, they must pull in their horns, live within their means, and cut their expenditure to match their income. Opposition Members struggle with that concept, because they never practised it when in government. That is why we have an appalling level of debt and, worst of all, an appalling level of deficit.

--- Later in debate ---

[Anna Soubry]

There we have it: the finest example that we could have expected of an Opposition Member who simply does not get it. Deficit deniers—after 18 months of argument, they still do not understand. It is the structural deficit that is our problem. We are not earning as much as we are paying out. We have this debt, and that is what is causing the economic crisis.

[Lilian Greenwood]

I do not know what planet the hon. Lady was on yesterday, but here we heard that as a result of the Chancellor’s failed economic plans, more people are out of work and as a result he is having to borrow an extra £158 billion, which is making the deficit worse.

[Anna Soubry]

Again we have another brilliant example of somebody who just does not get it. They do not understand the problems. Some of the problems are external, as I have explained, but at the heart are the failings of 13 years of Labour Government. Some of us are old enough to remember what happened at the end of the Labour Administration before that. My generation, the ones who did our homework by candlelight, had to pick up the pieces. Who was it who had to sort out the mess that Labour created? A Tory Government—and here we are again, all these years later.

I would like to make another point. We all come from different backgrounds, but we all come here for the same reason: to make change. We all want to make things better for everybody in our society, and I find it deeply offensive when the Labour party claims a monopoly on compassion. No one person, party or side has any such monopoly. Nobody on the Government Benches came to this place to make the life of the poor even worse. In fact, many of us came here because we want to eradicate poverty. How rich it is to hear the comments from the Opposition, who failed to hit all their targets for child poverty—after 13 years of their Labour Government, the difference between rich and poor actually grew. That is their legacy and the indictment of the last Government’s failures.

I believe in fairness as much as I believe in compassion. I would much prefer there not to be any need for regulation, but there must be fairness when it comes to restraint and responsibility among executives over their pay. Other hon. Members have touched on the issue. It is just not on to see the levels of pay and bonuses that we have seen in the financial sector. I urge all those people to exercise restraint and responsibility in difficult times, which affect every other one of us.

I reject the Opposition motion and support the autumn statement so eloquently explained to us yesterday. I do not wish to tread on the toes of the hon. Member for Nottingham South (Lilian Greenwood), but I am sure that, like me, she will welcome one of the proposals in that statement—the widening and improvement of the A453. It does not lie in my constituency, although if the Boundary Commission gets its way, a large part of it will, but that work will have a profound benefit for the people of Greater Nottingham and the whole county.

I commend the Conservative-led county council for their efforts in bringing everybody together to persuade the powers that be that the improvement and widening of the A453 would bring great economic benefit to Greater Nottingham, including my constituency of Broxtowe. Many things are happening, such as the extension of the tram, that give people hope for the future—the prospect of more jobs and apprenticeships. I am happy to reject the motion and support the Chancellor in all he does to make a better future for all of us, especially our children.

[Lilian Greenwood (Nottingham South) (Lab)]

I agree with the hon. Member for Broxtowe (Anna Soubry); I do welcome the work on the A453. However, if her Government had not cancelled it 18 months ago, work would already have been under way.

Families in Nottingham are finding life hard this autumn. They tell me that they are worried about turning up the heating because gas bills have shot up. It costs more and more to do the weekly shop, they pay more for the bus and it costs a fortune to fill up the car. Thousands have found themselves out of work, but even if they have a job, their wages are likely to be frozen or rising by less than inflation. There certainly is not much left over for Christmas presents or occasional treats, let alone holidays or major purchases.

[Andrea Leadsom (South Northamptonshire) (Con)]

What has happened to their mortgage rates?

[Lilian Greenwood]

Obviously those who are home owners are paying low interest rates, but many who rent their home are having to pay a lot more.

People in my city are angry that the irresponsible behaviour of a small number of people in banks brought our economy to the verge of collapse. They do not feel that those who caused the damage are doing enough to pay for the costs. They are also angry that the Government are making the situation much more difficult by putting up VAT, freezing child benefit, cutting the support families get for child care, taking away their children’s education maintenance allowance, or closing down services they rely on. A year ago, the Chancellor claimed that his £40 billion of extra cuts were necessary to get borrowing down, but now we know that borrowing will be £158 billion higher than he planned—a lot of pain for no gain. It was his decision to cut too far and too fast that choked off growth and led to rising unemployment: more people are claiming benefits and fewer people are paying taxes; people have less money to spend, so businesses struggle and more people lose their jobs. It is a vicious circle that this Government helped to create.

Thousands of people in my constituency face an even bigger hit. Public sector workers are being told that they have to find an extra 3.2% from their pay packets to help the Government pay down the deficit. Teaching assistants, nurses and youth workers are all being asked to pay more. The Government say they need to pour more money into their pensions, but the money is not going to boost their pension scheme; it is going straight to the Treasury. That is why people who have never taken part in a strike in their lives are doing so today. They feel they have no choice. This is the last resort when their employers simply will not listen or negotiate properly.

Let me tell the House about one hard-working family in my constituency that this Government are squeezing. Mark Thomas works for the city council as a neighbourhood enforcement officer. His job is to inspect houses in multiple occupation, of which there are thousands in Nottingham, particularly around our universities. Mark does vital work protecting public health and ensuring that young people are not exploited by unscrupulous landlords. In July this year, Mark and his partner Alison bought their first home together, and Mark’s 14-year-old son lives with them every other week. Like most people, they worked out how much they could afford, taking account of all the other bills they would have to pay each month and how much they had coming in through their wages. In addition to the usual utility bills, Mark pays child support to his son’s mother. Alison went to university to improve her career prospects and has student loan payments deducted from her salary. As Mark says,

“We are not a wealthy family. I would class us as average, getting by”.

Mark earns £2,500 less than the national average wage and currently pays £120 a month towards his pension. If the proposals to increase pension contributions go ahead, Mark will be paying half as much again—an extra £60 a month. Perhaps a member of the Cabinet would not notice £60 a month, but ordinary people who are not completely out of touch know that that is a lot extra, especially when their pay has been frozen for two years already. Mark and Alison face a double whammy because Alison also works for the city council, as an environmental health officer. She earns a bit more than Mark and pays £155 a month toward her pension, so her 50% increase will be £77 a month. One Nottingham family, an average family, getting by, is being asked to find an extra £137.50 each month, not to benefit their pension fund, but to help the Treasury pay down the deficit—a deficit caused by bankers; a deficit that this Government are making worse.

Mark and Alison are worried sick about finding that extra money. Mark says,

“£137.50 would pay our council tax, or buy gas and electric credit for the month, or pay for a large amount of grocery shopping. We already have to save over a number of months to buy necessities such as glasses and dental treatment.”

Mark is anxious that he will not be able to give his son the life he wanted to. He is worried that his son might choose to spend more time at his mum’s house because she is able to provide for him better financially. I am pretty sure that Ministers do not lie awake at night worrying about their family like that, and Mark and Alison should not have to either.

Of course pensions have to be sustainable and affordable, but changes have to be fair. They have to be fair to taxpayers—of course, public servants are taxpayers themselves—but also fair to the people who care for us when we are sick, educate our children and keep our streets clean and safe. The Government need to stop attacking the people our communities rely on day in, day out. They need to listen to why people are so angry and they need to try to resolve the dispute by engaging in real negotiations.