Cost of Living: Energy and Housing

Mary Macleod Excerpts

Thursday 5th June 2014 Commons Chamber

[Stephen Metcalfe]

The hon. Gentleman makes a valuable point. There are still challenges to be tackled. I am not saying that the recovery is perfect. There is a long way to go and we need to do a lot more, but the fact that we are on the right road has to be welcomed.

There are challenges—there is no doubt about that—and one of them is the overall cost of living, but we are serious about tackling that by taking the decisions to resolve these issues, decisions that have been blocked at every turn by Labour. I accept that there is a cost of living challenge—we have to; it is a reality—but we were always going to have this problem until our long-term economic plan was in place and seen to be working. Whichever way you cut it, as a nation we were spending more than we were earning and borrowing the difference, and that is what had to come to a stop. We cannot keep spending more than we earn. Anyone who has ever got into trouble with their credit card or overdraft knows that at some point they have to stop spending and face reality. That is what we did when we got into government—we faced reality and we stopped spending so much. Anyone who has ever used a credit card or an overdraft to fund their lifestyle knows that when they rein in expenditure and start paying back their bills they do not have as much money to spend. That is the situation we found ourselves in as a nation. Despite the toxic economic inheritance we received, we have managed the reductions in spending in a cautious and measured way. It has not been without pain, but if we had not taken the decisions we have, things could have been so much worse than they have been and are.

How do we tackle the continuing cost of living challenge? I believe there are three ways to do that. First, we can put off the inevitable, keep borrowing and spending, and hope something will turn up. Secondly, we can take an interventionist approach and try to con people that we can freeze energy prices, cap rents, and renationalise the railways. Thirdly, we can do what this Government have done: take the hard decisions, pull our head out of the sand, and tackle the problem head on. The best way to deal with the challenge is to create growth and jobs and to rebalance the economy so that wages rise at least in line with costs, and, in the meantime, to mitigate the impact of the readjustment as best we can. For example, we have raised the threshold at which people begin to pay tax so that low-paid workers who are least able to weather the economic storm can keep more of their money. That measure alone has saved 26 million people £705 each per year.

We have demonstrated to the markets that we are serious about paying down the debts and closing the deficit. This has potentially saved mortgage holders over £1,000 for every percentage point by which mortgages could have risen. We have frozen council tax so that after five years people are paying the same as they were in 2010, saving them hundreds of pounds. We should compare that with the doubling of council tax that took place under the previous Government. We have frozen the fuel duty escalator, making fuel now 20p per litre cheaper than it would have been under the previous Government’s plans. We have created jobs so that people have the security of an income. We have created 1.5 million new jobs and now have more people in work than ever before in our history. I could go on .

However, all of the above does not mean I am oblivious to the challenges people continue to face each and every day. That is why I warmly welcome all the Bills announced in the Gracious Speech, including the Childcare Payments Bill, which will help people to meet the cost of child care; the infrastructure Bill, which will enable us to source cheaper local energy; and the pensions Bill, which will show that we trust people to do the right thing with the money they have saved.

Above all, I welcome the small business, enterprise and employment Bill. As many in this House will know, in my previous life I worked in my own family printing business. I can therefore confirm that running your own small business is tough—always has been and probably always will be. If we can do anything to make it easier, then we must, and this Bill goes a long way towards achieving that. People might ask what small businesses have to do directly with the cost of living. I sometimes think we forget how important our small and medium-sized business sector is. It is the powerhouse of the British economy and—dare I say it?—the backbone of our society. Not until the SME sector is truly thriving will we be able fully to tackle the cost of living challenge. There are 4.9 million small businesses in the UK. If even only half of them employed one extra person, we could wipe out unemployment in a stroke.

That is why this Bill is so important, and I am not the only one who thinks so—the Federation of Small Business and the British Chambers of Commerce have also welcomed it. John Allan, the FSB’s national chairman, said:

“The Small Business Bill, announced today in the Queen’s Speech, reflects the growing recognition of the role small businesses have to play in driving forward the economy and the need to do all we can to support them in that effort.”

John Longworth, director general of the BCC, said:

“Simplifying life for small or growing businesses should be an objective shared across all political parties.”

That is what I believe we are delivering. A number of significant measures in the Bill will go a long way towards helping small businesses and thus helping them to support their staff in tackling the rising cost of living. Unlike Governments or public bodies, SMEs can pay their staff only what the company earns, and until they can earn more they cannot pay more.

The first measure that will have a significant impact on the success of our businesses is the renewed focus on late payment. As I said in my debate on this topic 18 months ago, small businesses should not be acting as the bank for large business. A recent survey of FSB members found that 51% of large company invoices were paid late. That is outrageous. It is blocking tens of billions of pounds that could be pumped back into the economy for the benefit of the majority and not the minority. Make no mistake: this is not asking companies to settle their invoices before the due date; it is just asking them to settle them at the agreed terms, whether 30, 60 or 90 days—that is a private arrangement. Paying on time could significantly increase the profits of small businesses. Businesses often function on overdrafts because of the money they are owed. If they did not have to fund an overdraft, they would undoubtedly have more money for wages and investment. Late payment of invoices costs money, affects cash flow, increases overdrafts, causes anxiety, and demotivates businesses so that they do not invest. Anything we can do to improve the situation by toughening up the prompt payment code is very welcome, but if it does not work, please expect me to come back here and call for yet further action. We cannot take our foot off the accelerator on this one.

[Mary Macleod (Brentford and Isleworth) (Con)]

Is my hon. Friend disappointed, as I am, that the Queen’s Speech did not say anything about a full review of business rates? I am sure that he has been very conscious of this issue and businesses in my constituency talk about it all the time. We fundamentally need a full review of business rates in order to come up with a fairer tax.

[Stephen Metcalfe]

I agree that we need to look at that. The steps we have taken to ease rates for small businesses have been welcomed by businesses in my constituency, but we need to do more and a full review, perhaps with some safeguards for those businesses that may not be able to weather an increase in rates, is certainly something we should consider.

The second area of the small business Bill that I particularly welcome relates to the fact that, despite what banks tells us, small and medium-sized businesses still find it very hard to access competitively priced finance. Every time I visit my local shopping area or business park, someone tells me of the problems they have getting finance in order to grow and invest. I welcome the steps the Government have already taken to ease access to finance, such as the introduction of the business bank, but it is now time to go further, which is why I welcome the steps to force banks to refer businesses to other providers.

We are told that, for many first-time small business borrowers, the rejection rate from banks is about 50%, often simply because the bank’s risk assessment process is so rigid or the sector profile is so inflexible that a small or growing business is rejected out of hand, regardless of how viable or sustainable it is. Therefore, it is only right that they can be referred to other banks and alternative providers with different business models. If the provision fails to improve access to finance, I will again call for more direct action to support our vital SME network.

The third measure I particularly welcome is the commitment to level the playing field. As John Longworth has said:

“The vast majority of law-abiding businesses will also favour a clampdown on rogue employers who do not pay the National Minimum Wage”.

Of course those businesses will agree with that. The vast majority of SME owners and operators are decent, caring people who often act as the second welfare system, helping employees cover unexpected costs through loans or advance wages, avoiding other sources of lending. They also often help their staff with financial planning and managing their finances. That is because the vast majority of SMEs recognise that their greatest asset is their staff. For those who do not recognise that and who want to take advantage, it is right that we crack down and make everyone play by the same rules.

I believe that those measures, combined with many others in that and other Bills announced yesterday, will go a long way to help to tackle the cost of living challenge. It is a challenge that we have to rise to, and I believe that we are doing that. It is not easy—no one ever said it would be—but I am sure that, despite the challenges faced and the pain we have endured, there is only one Government who can rise to the challenges we still face, only one Government with a long-term economic plan to secure our future, and only one Government with a parliamentary programme that builds on our achievements. That is this Government and they should be supported.

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[Mary Macleod (Brentford and Isleworth) (Con)]

It is always a pleasure to follow the hon. Member for Birmingham, Edgbaston (Ms Stuart), who painted an honest and balanced picture of the city of Birmingham. She gave startling figures on the disengagement from the EU in terms of the voter percentage turnout. I agreed with her on devolution in England outside London and on cities being the engines of economic growth. As a London MP, I completely agree on that. We only need to look at the Mayor of London, Boris Johnson, to see how successful a mayor can be and what he and his team can deliver.

I pay tribute to my hon. Friend the Member for Portsmouth North (Penny Mordaunt) on her outstanding proposal of the Loyal Address yesterday. It seems incredible that she is only the second woman to propose the Loyal Address in the 57 years of Her Majesty’s reign. Of course, it was ably seconded by my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke).

[Ms Gisela Stuart]

I was reading the speech this morning. I thought it was stunning, including the reference to Eric Prickles, which I really loved. However, I do not think that the hon. Member for Portsmouth North (Penny Mordaunt) was the second woman; she may be the second Conservative. Just for the record, I distinctly remember Oona King moving the Loyal Address from our side.

[Mary Macleod]

I thank the hon. Lady for that correction. My hon. Friend the Member for Portsmouth North was the second Conservative woman to propose the Loyal Address, and I was very pleased she did. She did herself, her party and her constituency proud.

We heard earlier from my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) who talked about the Gracious Speech in terms of less is more: there was less legislation in it than expected. I completely agree with him and with others that less government and less legislation is a good thing and that we have quality and not quantity in the year ahead.

I was personally disappointed that my ten-minute rule Bill on the succession to hereditary titles and estates was not included. I am sure, Madam Deputy Speaker, that you are as amazed as I am that in the vast majority of cases women in this country still cannot inherit hereditary titles or estates. Of the 92 hereditary peers in the House of Lords, only two are women. At some stage—hopefully sooner rather than later—that really needs to change.

We have already heard about the importance of this year as the centenary of the start of the first world war. Another important event this year was mentioned by the hon. Member for Angus (Mr Weir) who spoke about the Scottish referendum. I hope that many Members will get involved in it. I believe it is important to give Scotland more fiscal powers and I hope that we can debate that issue before the referendum takes place in September. I believe that the Scottish people are sensible and pragmatic and that Scotland is an enterprising nation, and I hope and feel sure that the Scottish people will do the right thing and affirm that we are better together.

The legislation outlined in the Queen’s Speech underlines the Government’s commitment to delivering our long-term economic plan. As my hon. Friend the Member for Fareham (Mr Hoban) said, it is all about being pro-work, pro-business and pro-aspiration. The last year before the general election is an appropriate time to look back at the last four years. Unlike the right hon. Member for Barking (Margaret Hodge), I think that this Government can say a lot about what they have achieved—whether it be cutting income tax for 25 million people, taking 3 million of the lowest paid people out of tax altogether, cutting the deficit by a third, helping businesses create 1.5 million new private sector jobs, creating 400,000 more new small businesses, making our corporation tax the lowest in the G20, getting net immigration down by a third—I could go on. We need to recognise the many things that this Government have achieved in difficult circumstances over the last four years.

As I look locally at Brentford and Isleworth in west London, I can see what those things mean for my constituents. We are in the top 10 constituencies for business growth across the country. Since 2010, unemployment has gone down by 25% and youth unemployment down by 38%, while crime has gone down 15% across the borough—the second biggest decrease in London. There is much, then, to be recognised in what has been done in my constituency of 95,000 voters and 120,000 residents—one of the biggest in the country—including the Mayor’s outer-London fund in giving Brentford and Hounslow £4.8 million. Businesses are expanding; the new BSkyB campus hopes to increase from 8,000 to 12,000 people; a new free school has been set up; and the Health Secretary has prevented the closure of A and E at Charing Cross hospital and has secured £50 million to build a new hospital.

Much has been done, but there is, of course, more to do, which is what we have in front of us today. I believe that this Queen’s Speech was all about helping families and backing small businesses. As the small business ambassador for London, I would like first to look at what this means for small businesses. Secondly, I want to say a few words about support for child care in helping families. Thirdly, like other Members I shall speak about housing. I shall also mention supporting schools and finally touch on the Modern Slavery Bill.

On small businesses, my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) ably mentioned the challenges that he and small businesses have to face generally. He reminded us of how important small businesses are to the economy, making up 99% of all UK businesses. If all the sole traders were to take on just one person, we would eliminate unemployment across the country, as he said. That provides an important sense of perspective. A lot has been done to support small businesses, whether it be through encouraging start-ups, through StartUp Britain or the “Business is GREAT” campaign, through start-up loans, the new enterprise allowance or by encouraging growth through reducing corporation tax and extending small business rate relief, increasing investment allowance and doubling the lending for export finance.

Increased access to finance in general is important, with the setting up of the Business bank and the introduction of the enterprise finance guarantee. Improving skills is relevant, too, with 1.7 million new apprentices since 2010, making a huge difference to young people’s lives. We have seen 17 new university technical colleges, with a further 33 in development. I would really like one in west London, so I hope to work on that over the next year. We have cut red tape, improved business advice and achieved much for women in enterprise—there are now more women in work than ever before, and more female entrepreneurs than ever before. A lot has been done to help support them.

The Prime Minister was good enough to visit me in Brentford to meet some of my female entrepreneurs, who certainly spoke very clearly to him about where they needed further support. Whether it be “lovegiveink”, Anila’s Sauces, Plumber UK or SprinkledMagic, these small businesses have been set up by enterprising women who will, I am sure, go from strength to strength. We just need more of them. The Small Business, Enterprise and Employment Bill will, I think, help even further: it is all about building a stronger economy and supporting businesses. It should help to deal with some of the issues that many businesses talk to me about—access to finance, late payments, access to Government contracts, red tape and so forth. Those things are all important to small businesses. This Bill will really help them by reducing the burden of regulation, helping them to get paid faster by large companies, and supporting them through public procurement—I want to see many more small businesses getting the opportunity to get a slice of the bigger contracts that are often difficult for them to secure. The Bill will provide support for the low paid and help pub landlords to get a fair deal. This Bill, the first of its kind, will achieve much for small business.

Secondly, supporting child care is crucial to help people at an important time of life. This Government have already done a lot to support it, although there is certainly more to do. I was at a meeting this morning with Carolyn McCall, the chief executive of easyJet, and there was a whole range of talented business women in the room. She spoke of her frustration at how many great women in the middle ranks of business drop out of their careers, partly owing to the high cost of child care. We really need to try to do more to help with that. We have already funded 15 hours of free child care a week for all three and four-year-olds and introduced shared parental leave, which will make a difference. This Bill will offer tax-free child care to almost 2 million families, meeting 85% of the child care costs of families on universal credit. That will affect people’s lives fundamentally and make a real difference to families in my constituency and elsewhere around the country.

Thirdly, housing is very important, as some hon. Members have mentioned, and it is a particularly big issue in London. I was very pleased to take my right hon. Friend the Secretary of State for Communities and Local Government to Brentford to see some of the developments taking place there, particularly how Brentford has been completely transformed from Commerce road to the south side of the High street right up to Kew bridge, with many new housing developments taking place. From 2011 to 2021, the population of London is expected to rise by a million, so we will hit the 9 million mark before New York and approach 10 million by 2030. The hon. Member for Islington North (Jeremy Corbyn) mentioned population growth in his contribution.

Those figures mean that we need at least another 450,000 jobs for Londoners in the next 10 years, and another 400,000 homes. It is therefore important for us to support people and help them to meet their housing needs. I am pressing my local authority in Hounslow to provide a much better mix of housing, and to ensure that affordable housing is available so that people can live where they need to live. I hope that the Secretary of State will consider a measure aimed specifically at London, possibly in connection with the Help to Buy scheme. Perhaps the Government could guarantee a higher percentage, or perhaps something could be done to help people who aspire to buy their own homes but who find it difficult to raise a deposit of 10% or 20% when house prices in London are so high.

My borough is the fourth fastest-growing in London, and I know that we need skills to support population growth. I have taken the Secretary of State to see a potential new school site in the ISIS housing development in Commerce road, and I hope that it can be pushed through with the help of Hounslow council and the Department for Education, because there is an intense local need for new primary schools and, subsequently, secondary schools. Much more needs to be done to help cities with problems relating to population growth, housing and education.

My right hon. Friends the Members for Meriden (Mrs Spelman) and for Uxbridge and South Ruislip (Sir John Randall) spoke very articulately about the Modern Slavery Bill, as did the hon. Member for Islington North. The hon. Gentleman said that every story was a human story and every tragedy a human tragedy, and how right he was. Female genital mutilation has already been mentioned today, but the Government are also trying to do more this summer to raise awareness of forced marriage. Pupils at some of my local schools go off on holiday to places such as Pakistan during the summer, and forced marriages take place during that time.

We all need to speak out about such issues. I think that the Modern Slavery Bill will form part of our legacy, and I hope that Members on both sides of the House will work together to deliver what I believe will be one of the first Acts in the world to deal with practices which, although we can hardly believe it, still take place across the world: human trafficking, slavery, forced labour and domestic servitude. If all Members stand up against those practices and speak with one voice, they can have an immensely powerful influence. The Bill will protect victims by introducing an anti-slavery commissioner and tougher measures to ensure that slave drivers face justice. I am sure that we in the House can say with one voice that the actions of such people will not be tolerated, and that we will definitely do something about it.

I am entirely in favour of the measures that were announced in the Queen’s Speech. The best way to ensure that there is a good standard of living for all is to continue to support the working economy and encourage everyone to make the most of the opportunities that are available to them. I commend the work that the Government have already done to help businesses and hard-working families, and I welcome the developments that are still to come in the year ahead.

[Several hon. Members]

rose—