In-work Poverty

Debate between Margaret Greenwood and Peter Gibson

Wednesday 16th March 2022 Westminster Hall

[Margaret Greenwood (Wirral West) (Lab)]

It is a pleasure to serve under your chairmanship this afternoon, Ms Rees. I congratulate my hon. Friend the Member for Easington (Grahame Morris) on securing this incredibly important debate.

Poverty is a scourge that devastates lives. In today’s debate we are focusing on in-work poverty, but the Government should address poverty however it arises. A report by the Institute for Public Policy Research in May 2021 highlighted that the UK’s poverty rate among working households was at a record high this century. The report also found that in 2019-20 the majority of those living in poverty were in households that had some form of paid work.

That is also reflected in the Government’s statistics, which show that of all the working-age adults in poverty, both in the UK and in the north-west, 65% are in working families. In some areas, the figure is even higher. For the east of England, that is 70%, and for the south-west, 72%. That is truly shocking, and completely dispels the Conservative myth that work is the best route out of poverty. I am so disappointed that we have already heard that myth chanted today.

[Peter Gibson]

If work is not the route out of poverty, what is?

--- Later in debate ---

[Margaret Greenwood]

I thank the hon. Gentleman for his question. We have just listened as my hon. Friend the Member for Leeds East (Richard Burgon) came out with all sorts of suggestions, as did my hon. Friend the Member for Easington—such as increasing the minimum wage, tackling insecure work, banning zero-hours contracts and so on. I will return in my speech to the issue that the hon. Gentleman raised.

As I said, those figures completely dispel the Conservative myth that work is the best route out of poverty. It is clear that low-income households are likely to be disproportionately affected by the cost of living crisis. The Trussell Trust has warned that, for people already struggling to afford the essentials, the cost of living crisis can mean parents going without meals in order to afford to feed their children. That, sadly, is nothing new, but the situation, instead of improving, is getting worse.

Food prices have been increasing since the middle of 2021 and are expected to increase in coming months. The domestic energy price cap will increase by 54% from 1 April for approximately 22 million customers. Energy prices are likely to continue to rise beyond that, as a result of Russia’s invasion of Ukraine. Some economists have suggested that the inflation rate in the UK could hit 10%.

[Peter Gibson]

Will the hon. Lady give way?

[Margaret Greenwood]

I have given way once and am short of time; I am sorry. The increase in national insurance contributions from next month, opposed by Labour, will increase the pressure on working people and businesses even further.

The full impact of the coronavirus pandemic on levels of poverty is not yet known, but early analysis suggests that poverty will increase over the next few years, and that low-income households are particularly vulnerable to the economic effects of the pandemic. The Government must end the scourge of in-work poverty, by tackling the structural causes of poverty and inequality, such as low pay and high living costs. At next week’s spring statement, the Government have a chance to make a real difference to the lives of working families. There are plenty of steps they could take.

The Government should never have cut universal credit by more than £1,000 a year, and they should reinstate the uplift. They should also scrap the two-child limit, which the Child Poverty Action Group has called for, and the benefit cap. They should increase child benefit by £10 a week, and call a halt to the rise in national insurance. They should also initiate a one-off windfall tax on oil and gas producers, to cut household energy bills by up to £600, as Labour has called for.

Those are all measures that this Conservative Government could take; it is simply a matter of political will. I ask the Minister to set out today what action the Government will take to eradicate poverty.