Cost of Living: Support for Young People

Paul Blomfield Excerpts

Tuesday 18th October 2022 Westminster Hall

[Fabian Hamilton]

As I said earlier, it is a pleasure to serve under your chairship this afternoon, Ms Ali, in spite of the interruptions. I shall continue where I left off an hour and a quarter ago.

The fact that the Government still have not committed to increasing universal credit in line with inflation is shameful. If universal credit rose in line with wages, young people would receive just £7.42 extra per month. If, however, it rose in line with inflation, they would receive an additional £21.49 per month. Given the huge difficulties young people are facing at the moment, does the Minister think that failing to commit to an inflation-linked increase is morally acceptable?

The stark reality of this crisis could not be clearer for Jack, who attends YMCA sessions in Leeds. Jack is not his real name, of course. Jack is 10 years old and lives with his parents and two siblings. He has been quoted at YMCA sessions as saying that

“we’ve got no food at home.”

The fact that a child as young as 10 has been put in this position is unforgivable. It is a humiliation for our country not only at home but abroad. With wages squeezed more than ever, Jack’s family also receives support at school, through the uniform exchange, because they cannot afford to buy new school uniforms. The pressures of the current crisis are now causing issues between family members at home.

I commend the activists in Leeds for pioneering school uniform exchanges across the city, but it is outrageous that their brilliant work is even necessary in modern Britain. I ask the Minister what he would like to say to Jack and his family after yesterday’s day of shame for the Government, when the Prime Minister and her new Chancellor effectively gave the green light for energy bills to go up to a predicted average of £5,000 a year for most households from April.

The failure to provide cost of living support to young people often affects their parents as well. A report released by UNICEF today states that 59% of parents with children under five say that they are struggling with their mental health, and 66% have been negatively affected by the rising cost of living. That amounts to a total of more than 2 million families in the United Kingdom. The status quo is simply unacceptable, and this crisis will only deepen as we approach winter and enter the new year. Among parents feeling the pinch from the rising cost of living, the report also found that just under half have already cut back on their electricity and gas usage, with one in 10 unable to adequately heat their home as winter approaches. As we know, that will be hugely detrimental to the development and education of young people.

As I said earlier, the cost of living emergency, coupled with covid, will amount to a disaster for many families up and down the country, especially young people. Public Health England data shows that across the first three quarters of 2021-22, nearly one in three children aged between two and two and a half were assessed as having missed out on reaching their expected level of development. That contrasts with around one in six in the first three quarters of 2019. A recent YouGov poll pointed to the fact that over a quarter of people aged between 18 and 24 feel unable to cope with the cost of living crisis owing to the stress that it is causing, so I ask the Minister what plans are in place to ensure that the mental health problems in parents and elder siblings do not have a knock-on impact on younger people and children.

I turn now to university students, who have also missed out on learning because of the pandemic and are currently facing huge financial problems, but who risk being a forgotten group of people suffering from the impact of the crisis.

[Paul Blomfield (Sheffield Central) (Lab)]

My hon. Friend is making a powerful speech, and I am glad that he is including students. There will be mixed experiences in terms of students’ ability to fall back on family support, but is he aware that recent research conducted for Universities UK indicated that over half of students were considering whether they would be able to continue with their studies as a result of the pressures they are under? Does he recognise that university students cannot draw down the support that is generally available through the council tax system, because they do not pay council tax? Is he aware that other countries, such as Germany, are treating students in the same way as other low-income groups—for example, pensioners—by giving them additional grants? Does he recognise that the Government need to make some sort of national intervention on this issue, and not rely on a patchwork of different measures that are being introduced by some universities and some councils?

[Fabian Hamilton]

I thank my hon. Friend, who is a very old friend of mine and has a great reputation for standing up for students and universities—certainly in this place and before he came into the House. I was not aware of many of those facts. I did not realise that half of students were considering giving up their courses, and I can only imagine the detrimental effect that it will have not just on their futures, but on the future of our whole country.

From my time on the Foreign Affairs Committee, I recall visiting South Korea and asking people how they could account for their massive success since the second world war. That was 15 or so years ago, and since then South Korea has become even more successful and has risen higher up the scale of G20 countries to become one of the most powerful industrial nations in the world. The Korean Education Minister at the time said to me, “It is one very simple fact. We took a decision after the Korean war that the only future for our country, as a rural agrarian economy, would be to invest in our young people, and educate them to such a level that that education would follow through in terms of our industry, our scientific research, our know how and our intellectual property.” We can see that that has happened.

A country that relinquishes the potential of its young people to develop, not just themselves but the economic future of that country, is one that is in trouble. I do not want to see that happen to this great nation—it would be absolutely tragic. I think we can learn from our economic, social and geopolitical partners, in countries such as Germany, as to how we can handle a crisis like this. They have the right idea. Not everything that happens in Europe is bad, believe it or not; there are some really good policies there. I think we should learn from those, and I hope that the Minister will begin to address that question.

Those university students who have missed out on learning because of the pandemic and are currently facing financial problems risk becoming a forgotten group of people suffering from the impact of the cost of living crisis. As my hon. Friend the Member for Sheffield Central (Paul Blomfield) has said, it has serious implications for the long-term job market in the UK. Recent polls suggest that 55% of those who felt concerned about managing their living costs were worried that it might prevent them from continuing their studies. That rises sharply—up to three quarters—for those students who are severely disadvantaged or from poorer backgrounds. We simply cannot afford for more than half of our young people to drop out of university before graduation. I would be grateful if the Minister told us what support the Government are providing to universities, centrally, to tackle the issue before it is too late.

It is increasingly clear that urgent action is needed to prevent more young people from sliding into poverty. In a recent Barnardo’s report, one young person was quoted as saying that

“mentally, it’s taken a massive toll. I was thinking of seeing a counsellor, but I don’t want to because of the fear of how much it would cost. I haven’t been able to get the correct help”.

I am the president of Leeds UNICEF, and through that group I have heard first-hand about the horrific experiences of my young constituents, as well as of the many people across the city of Leeds who are struggling.

I conclude by strongly urging the Minster to look closely at extending free school meals, at improving mental health provisions for schools, and at backing the Labour party’s call for a breakfast club in every primary school in England and Wales. Those measures would at least give parents and young people some of the support they so desperately need.

[Wera Hobhouse (Bath) (LD)]

It is a pleasure to serve under your chairship, Ms Ali. I congratulate the hon. Member for Leeds North East (Fabian Hamilton) on securing this important debate. It gives us an opportunity to shine a light on young people, who are often overlooked. In my short remarks, I will focus on students.

The last decade will have a long and significant impact on the younger generation. Many entered their youth in the throes of the financial crisis, went through the pandemic in their formative years and are now experiencing the full force of the cost of living crisis. The latest economic shock is presenting a new set of challenges for young people, particularly students.

I recently met a group of students from Bath Spa University. They are hugely worried about the financial pressures that rampant inflation is placing on them, and their concerns are not unfounded. UK students have seen a 7.5% cut in their maintenance loans. That has had severe consequences: research by the National Union of Students shows that a third of UK students are being forced to live on £50 a month after paying rent and bills. Some are having to choose between feeding themselves and carrying on with their education; many are holding down multiple jobs to make ends meet. Mercy In Action, a local charity in Bath, has seen a fivefold increase in the number of young people and students who need to use its food pantry. Inevitably, students from the poorest backgrounds are disproportionately affected.

The cost of living crisis goes far beyond a purely financial hit. The Bath Spa students I spoke to described how the crisis was causing them considerable stress and anxiety. The Student Value Report showed that nearly two thirds of UK students felt their mental health had been negatively affected, while two fifths of students thought that their physical health had been affected. That is no way to go through a demanding course of study, or to sit and prepare for exams. The Government claim to view economic growth as a priority, but growth is not sustainable unless we support our young people. The students of today will shape our future, and should have ample opportunity to do so. The Prime Minister talks about equality of opportunity, yet she is not giving students the opportunity they need to achieve their potential.

Of course, failing to support students has a knock-on effect on local economies. Student spending supports over £80 billion of economic output: that is crucial for places such as Bath, where over a third of our population is made up of students. If students are struggling, the local communities in which they live will lose out too. To prevent the devastating effects of student poverty, the Government need to tie student support to inflation, as we have already heard, and deliver urgent maintenance grants and bursaries to those who need them.

[Paul Blomfield]

I know that the hon. Member regularly takes up student issues and is a strong advocate for her student constituents. Does she recognise that students, particularly those from poorer backgrounds, went into this crisis already at a disadvantage, not least because the salary threshold for eligibility for maximum loans in England has been frozen at £25,000 since 2008? Does she agree that a simple measure the Government could implement, and should not necessarily rule out, would be to adjust the threshold so that those from poorer backgrounds are more able to access those loans in England?

[Wera Hobhouse]

I thank the hon. Member for that remark—I have to admit that I was not totally aware of the detail, but I fully support what he has said about what needs to be done. It is clear that young people, including those who are now in their 30s, have already lost out because of the financial crisis. We need to support that younger generation, but we also need to support the young people who are coming through now, those who have been at a disadvantage as a result of covid. The least we can do is listen, and the Government need to listen to the recommendations that have been made today and act on them urgently.

As I said, the Government need to tie student support to inflation and deliver urgent maintenance grants and bursaries to those who need them. The cost of doing so would be low compared with other recent Government spending commitments. It would support the vital economic growth on which this Government tell us they are uniquely focused. While I applaud universities that have provided hardship funds, those institutions do not have enough means adequately to protect students in need: that is the responsibility of central Government. The Prime Minister has talked regularly about equality of opportunity and about growth. If this Government are serious about growth, they need to invest in people, especially young people.

--- Later in debate ---

[Richard Fuller]

Yes I can. The fundamental point is that we are investing in young people. Many businesses wish to invest and add additional costs for training and support to tap into those skills, so that people can earn higher wages later on. It is because companies have the incentive to invest in young people that young people can then earn more. The hon. Lady shakes her head, but she should recognise that the national minimum wage is not a cap on what people can be paid but a floor. If companies invest in young people to get those skills, they can earn more.

Our youth offer provides guaranteed foundation support to young people searching for work on universal credit. That includes 13 weeks of intensive support to help new claimants into suitable opportunities and provision. Youth hubs are co-delivered by the Department for Work and Pensions and local partners, and youth employability coaches are available for those with complex needs.

We will always encourage labour market participation and make it pay to work. Through universal credit, the Government have designed a modern benefits system that ensures that it always pays to work and that withdraws support gradually as claimants move into work, replacing the old legacy system, which applied effective tax rates of more than 90% to low earners.

Questions were raised by the hon. Member for Bath about free school meals and breakfast clubs. The Government spent more than £1 billion on delivering free school meals to pupils in schools. Around 1.9 million disadvantaged pupils are eligible for free school meals, as well as an additional 1.25 million infants who receive a free meal under the universal infant school meal policy. The Government are also providing an additional £500 million toward the cost of extension, which has come via a six-month extension to the household support fund.

The hon. Member for Leeds North East talked about breakfast clubs. The Government are providing over £2 million a year to continue the holiday activities and food programme, which provides free holiday club places to children from low-income families. The Government are providing £24 million over two years for the national breakfast club programme, benefitting up to 2,500 schools.

The hon. Member for Sheffield Central and others asked questions about support for university students. He may know that the Government have increased maintenance loans every year, meaning that disadvantaged students now have access to the highest ever amounts in cash terms. He may know that the Government have made £260 million available through the Office for Students, which universities can use to boost their own hardship funds. He may know that many students also benefit from the wider package of cost of living support, and he will know that maximum tuition fees will be frozen until 2025. He mentioned one particular idea on thresholds, which I would be grateful if he could write to me about.

[Paul Blomfield]

I will write to the Minister on that point. It is all very well saying that the maximum loan has been increased, but people cannot access it because the threshold has not changed. I think there is some serious work to be done by the Government on that. It could make a very real difference to some of the most hard-pressed students.

[Richard Fuller]

I would be grateful for his insight on that issue. I want to close on the issue of mental health and young people, which is an issue close to my heart. We are all aware that the response to covid had a dramatic effect on the mental health and wellbeing of young people more than others. The Government appreciate the importance of responding to the significant demands on children and young people’s mental health. The Government are delivering record levels of investment in mental health services. These investments are part of the NHS’s long term plan and include an extra £2.3 billion per year for mental health services by 2023-24. This will give an additional 345,000 children and young people access to NHS-funded services or school-based support by 2024.

It has been an interesting and pithy debate. It is clear that we owe it to the next generation to deliver higher wages, new jobs and improved public services. We owe it to young people to deliver stability and a strong economy on which they can build their future securely. We must make sure they have the safety net they need now. The Government will help them with the cost of living today and continue to invest in them for the future; that is what young people will benefit from, and that is what the Government are focused on delivering.