Working People’s Finances: Government Policy

Mark Tami Excerpts

Tuesday 21st September 2021 Commons Chamber

[Mick Whitley (Birkenhead) (Lab)]

I welcome the opportunity to say clearly to the Government that their current pursuit of benefit cuts and tax hikes, their economic mismanagement of the energy sector and the housing market—to name but two—and their casual indifference to the spectre of soaring inflation in the price of basic goods and food are combining to inflict poverty, hardship and misery on working people. The other week, the Prime Minister responded to my question on the negative impact of the £20 a week universal credit cut by saying that his Government have always been ready to put an arm around the people of this country. I would contend that the Government’s policies will more likely lead to a hand being clasped around the throats of working people, the unemployed, the disabled and—tragically—their children. This is not levelling up; it is grinding down. This is not building back better; it is a new round of austerity designed yet again to make the poor pay for another fine mess of the Government’s own creation. People’s standard of living is not, as the Government claim, rising inexorably because of recent wage increases. Overall, it is declining because of the toxic cocktail of measures administered by the Government, which they pretend are medicine to make us better.

The Joseph Rowntree Foundation has found that more than 12,500 working-age families in my Birkenhead constituency will be hit by the cut to universal credit, including more than 6,000 working-age families with children. That is almost one third of such families in Birkenhead, and they are set to lose just over £1,000 a year. How can that be fair? In the run-up to the day of shame on 6 October when the axe is scheduled to fall, more people have written to me asking me to oppose the cut than on any other single issue. My mailbag on the cut far outstrips the previous record holder: Dominic Cummings’ emergency eye test at Barnard Castle.

One letter stands out. It is from the seven-year-old son of a constituent who told me how worried he is that this family will not be able to afford to feed to him because he heard that they were about to lose £20. This is a particular concern for children because, as of 2020, 33% of children in Birkenhead—more than 6,000—were officially classed as living in poverty.

This vindictive cut would be bad enough any day of the week, but look at its timing—it is like something straight out of “Hammer House of Horror”. The cut coincides with the increase in national insurance, the surging cost of gas, the prospect of transport costs going through the roof, rents being driven up by the housing crisis and basic foodstuffs costing ever more as the supply chain becomes more and more disrupted.

Let me tell the House what that means to ordinary people. One of my constituents—I will call him Gary—lost his job due to contracting covid-19. He was not furloughed and he rents from a private landlord. He is on universal credit and, with the £20 uplift, after rent he had £46 a week to meet all his expenses. When the cut comes in, he will be left with £26 to meet those same expenses, each of which is going up. Gary, like so many others, faces ruin. I know full well that the Government will respond with their usual refrain that universal credit will help Gary to get a job, but they conveniently forget that their measure, which will put an estimated 800,000 into poverty—including 300.000 children—will have an impact on the about 40% of universal credit claimants who are already in work.

[Mark Tami (Alyn and Deeside) (Lab)]

I intervene to make the point that my hon. Friend has made that there are many working families—those in work—who are on universal credit, which the Prime Minister does not seem to understand.

[Mick Whitley]

My right hon. Friend makes a good point. I made that point to the Prime Minister, who just did not give me an answer.

Those working people will be hit by both the cut and the increase in national insurance. They will number thousands of working hairdressers, shop assistants, street cleaners, hospital porters, farm workers and countless others who are paid peanuts and have no choice but to claim in-work benefits. I genuinely hope that Conservative Members will not cry TINA—there is no alternative—as a previous Government of their persuasion did. Rather I hope that they will withdraw their package of measures that will slash the standard of living for the majority, and adopt the progressive tax policies that my party stands for and that can ensure that those with the broadest shoulders and the most bloated bank accounts pay their fair share, so that my constituents are not forced into a life of poverty.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

I express my gratitude to the Labour Treasury team for facilitating this opportunity to debate the devastating effect of Government policy on the finances of working people.

I know the British people have had a very difficult 18 months during the covid crisis, with the sorrowful loss of lives—inexcusably, the highest death toll in Europe —despite having our world-class NHS and our world-class public health systems, as well as an unforgiveable care home crisis, soaring unemployment, businesses closing, food bank usage skyrocketing and, most recently, the tragic debacle in Afghanistan, leaving many of us, especially my Slough constituents, and British Afghans in absolute despair. I do not think anyone in this Chamber could have foreseen the debilitating impact that a pandemic would have on our communities when we all had the honour of being elected as Members of Parliament.

I want to pay tribute to the extraordinary generosity and service of the Slough Council for Voluntary Service, the Slough Foodbank and other voluntary and faith groups within my constituency. But we as a nation should not have to rely so heavily on their good will. The Government should not be failing the most vulnerable, so as we emerge from what has been a very testing period for our economy, I despair at the direction this Government are taking us in. Instead of rebuilding, investing and stimulating our economy, it seems that they are more intent on ideological cuts to the very services and people that have kept this country going since March 2020.

There are the rises to national insurance, the universal credit cut, the upcoming freeze on the personal income tax allowance, inflation-busting rail fare increases and the highest petrol prices since 2013, as well as rampant waste, cronyism and corruption in the top levels of Government, the damage caused by the Government’s hard-line Brexit deal, and the supply chain and HGV drivers chaos leading to empty supermarket shelves. There is the Government forcing local authorities to raise council tax, and their unwillingness to outlaw the deplorable hire and rehire tactics of unscrupulous employers. There are some of the highest childcare costs in the world, a housing crisis worsened by a cladding crisis, and the absence of a sector-specific deal for our aviation sector, which at one point was world-leading, despite repeated pleas from the likes of myself and other hon. Members. There are the policing cuts leading to less safer communities, and the exorbitant increase in energy bills leaving many languishing in absolute despair.

This is all while we had a Tory Government asleep at the wheel and acting only when it is very late in the day. Make no mistake, although the Government may want to make it seem that way, these vital issues have not arisen solely because of the covid pandemic. These matters have been exacerbated by a decade of austerity and inadequate emergency support meeting a failing post-pandemic plan—a perfect storm that only leaves families worse off.

We in Slough have been impacted acutely by job losses and the inadequate Government support. With Heathrow and the largest singly owned trading estate, the Slough trading estate, on our doorstep, unemployment, furlough and food bank usage have all, sadly, increased. We must not allow a temporary crisis to unevenly and permanently change prospects across our country; we must assist those who have fallen on hard times through no fault of their own, not punish them further with ill thought-out Conservative Government policy.

[Mark Tami]

Does my hon. Friend agree that the aviation sector is not going to recover any time soon? It will need support, and not only for months; it will probably take years before it gets back to previous levels, and this Government are failing to recognise that.

--- Later in debate ---

[Matt Western]

My hon. Friend makes a very important point. We all have to understand that it is easy to talk about numbers and statistics in the abstract, but the reality for so many people, as he illustrates, is that they do not just have the uncertainty and insecurity of zero-hours contracts and the pressures of the cut to universal credit, but having so little money in the bank brings pressures on households. And here we have inflation about to rip into those households through the energy price increases I am going to come on to talk about.

I talked about the Chancellor and the Prime Minister. Those in corporate business and in senior positions in Government must know what is happening to inflation. They must know what forecasters are saying. When commodities are bought, all energy costs are forward priced—they know what is coming down the track—so the Chancellor could suggest only a 1% increase for nurses when he knew all along that there was likely to be a significant spike in inflation coming. Energy costs are a major issue, one that has perhaps been the driver to this particular debate, alongside the cut in universal credit. We have long known for months that there was going to be an increase in gas prices of 12% in October. That will have a significant impact on household bills. The average gas and electricity bill for customers will go up by £139 a year to just under £1,300. Now, we have to rely on the Government to get a grip to avoid further increases as a result of this unfolding crisis.

It is fundamentally a failure of long-term Government planning over the past decade that we, as a country, are so exposed and vulnerable to rising gas prices. We should have been building energy resilience, instead of being one of the countries most reliant on foreign gas. We should have been investing in domestically produced renewable energy. Instead, we squandered 10 years burning fossil fuels. When I was working on Warwick District Council as a councillor seven years ago, I proposed the Warwickshire energy plan to save people money, create energy resilience and address energy poverty. Sadly, there was not the gumption to follow through on that, and I am disappointed it never materialised.

[Mark Tami]

A perfect example of the point my hon. Friend is making is Wylfa nuclear power station in north Wales, in Anglesey. Building could have started on that and it would have been part of a growing nuclear programme, but the Government failed to support it. A spin-off would have been high-tech jobs, but the Government are not interested—they just step back.

[Matt Western]

I thank my right hon. Friend for that point. I think the important thing is that the Cameron-Osborne Government in particular became obsessed with fracking and took their eye off the ball with other energy sources. In Warwickshire, we had Algy Cluff come and visit; he was a significant donor to the Conservative party, I think, and he was really interested in having blocks under Warwickshire that he would frack. That undermined long-term planning for projects like the one that my right hon. Friend mentions.

If the Government had followed through, we could have been building zero-carbon homes since 2016. Instead, the Cameron, Osborne and—dare I say it—Liberal Democrat Government scrapped the regulations for housing developer donors. A million homes could have been built since 2016, but something like 10% of households in my constituency are in fuel poverty already and I can only see that figure rising. Several thousand homes in my constituency could have benefited from forward-thinking house building and zero-carbon homes, because we have seen such an explosion in house building across south Warwick and south Leamington.