Peter Gibson
Main Page: Peter Gibson (Conservative - Darlington)Department Debates - View all Peter Gibson's debates with the Department for Work and Pensions
(2 years, 9 months ago)
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Peter Gibson (Darlington) (Con)
It is a pleasure to serve under your chairmanship, Ms Rees. I congratulate my County Durham colleague, the hon. Member for Easington (Grahame Morris), on securing the debate. He called for a 58% increase in the minimum wage, which would have a massive inflationary impact. He cannot complain about inflation and the cost of living crisis that we face while advocating policies that would create further problems. If levelling up is to succeed, we must tackle poverty. I want to make it clear that I believe that one person or family in poverty is one too many.
As we all know, employment is the best route out of poverty. Evidence shows that full-time work substantially reduces the chances of living in poverty, and I am proud that the Government have taken an approach to tackling poverty that has employment at its heart. We have seen the Government accept the four recommendations of the Low Pay Commission, which will see the living wage increase to £9.50 an hour—an increase of 6.6%. We have seen the Government extend the national living wage to 23 and 24-year-olds, who will also benefit from the increase to £9.50. Improvements have been made for those on universal credit and in work, with an increase in the work allowance and a reduction in the taper rate, making work pay. Across the country, we have seen massive improvements in our pension savings for working people, with auto-enrolment securing a pension income for millions. I am hopeful that this can be extended to younger people and those working part time, to help ensure that they save for their futures too.
I appreciate that some people do not have the skills to get the job that they want, including those who left school at an early stage and those who have caring responsibilities. That is why the Government’s lifetime skills guarantee is designed to transform the adult education system, helping people of all ages to develop the skills that they need to get better jobs and supporting businesses to find or develop talents to fill the skills gap. Last week, I visited the marvellous Darlington College and saw with my own eyes the incredible learning and training opportunities on offer, from plumbing, plastering and public service to catering, car repairs and childcare. As T-levels will be introduced later this year, the college also offers courses in robotics. These are incredible opportunities to learn and improve skills for the economy of the future.
We know that our economy has record vacancies. From ambulance, bus and taxi drivers to doctors and nurses, we know that there are opportunities out there. The simple law of economics means that wages are increasing in order to attract people into these roles. We help our constituents in the long run by ensuring that they have the chances to improve their skills and employability. I hope that one day we reach a point where wages from employment provide enough, so that in-work benefits are not necessary. In the meantime, however, I believe that increasing wages, reducing the amount taken from those on benefits who work, and giving people the chance to learn in order to improve their lot is the best way to tackle the issues raised in today’s debate. I look forward to the Minister’s response and to hearing an update on the cross-departmental mechanism on in-work progression.
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.
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%.
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.
Alison McGovern (Wirral South) (Lab)
It is a pleasure, as ever, to serve under your chairship, Ms Rees.
I thank my hon. Friend the Member for Easington (Grahame Morris) for, and congratulate him on, securing this debate in Westminster Hall. The passionate contributions from all, particularly Opposition Members, have made it clear that this is a crucial discussion. At the heart of the debate is a simple truth: we all want to get on in life. Many of us know the feeling of receiving our first pay packet—that sense of finally releasing our parents from the stress of having to afford us and from that worry about money. There is a feeling of ease—not of great wealth, but of having enough—and that is what we want every person in our country to feel. With hard work, that should be available to all. The truth, however, as we heard in so many countless examples, is that that feeling is not available to everyone.
The hon. Member for Darlington (Peter Gibson) described the simple law of economics that a high number of vacancies increases wages. If that were the case, real wages ought to be shooting up, but they are not. The fact is that economics does not have simple laws—if it did, a lot of economists would be out of work.
Things do not work like that; they are much more problematic. This is the challenge: there is a rocketing number of vacancies, but people are not able to get on in life. That is the problem. The Government themselves know that that is the case. They know we have a problem. They commissioned the in-work progression review by Ruby McGregor-Smith.
Peter Gibson
As a former employer of a substantial number of people in a very competitive industry, I frequently had to recruit people when demand was greater than the supply available. It was often the case that employers such as myself had to increase wages to make those jobs attractive and to bring people in from other employers. I was speaking from my own experience. Having spoken to employers in my own constituency who have vacancies, I know that they too are increasing their wages to attract people.
Alison McGovern
Perhaps the hon. Member could ask those other employers why real wages are not increasing, because that is what the data tells us is happening. Unfortunately, it turns out that the rules of supply and demand are not so simple when an economy has as many problems as those experienced in Britain.
The Government themselves—the hon. Member’s own Government—know that this is a problem. They know that people are stuck in low pay, because they got Ruby McGregor-Smith to investigate and ask why people are simply not able to get on in life, earn a better pay packet and look after their family. She found that there were myriad issues with the cost of childcare and transport, and that people are unable to get the right skills to move on and move up. In certain professions, including care, a culture of low pay means that people are not able to move on and get a well-paid job to look after themselves and their family.
Last February, the Secretary of State told me that she was the reason that the response to Ruby McGregor-Smith’s report was being held up. My first question for the Minister is: when will the Government respond to that report? When will practical steps be taken to help working people get better pay? As the review found, there are myriad reasons why it is not a simple matter of supply and demand. It also showed that single parents have only so many hours in a day, and that if someone lives in a town whose bus service is so chronically bad that it limits their job choices, it is not their fault that they cannot get a better paid job. We need the Government to reply to that report.
My second question to the Minister is time-sensitive. Working people are facing a national insurance rise. If ever there were a time for such a tax rise, it is not now. People are dealing with truly horrific increases in energy bills and other costs. The Government really must rethink this. I want to quote an organisation that has spoken on this issue and on the underlying reason why this tax increase on workers is being brough about. It said:
“There is a large, unjustified and problematic bias against employment and labour incomes”.
That quote comes not from Marxism Today, but from the Institute for Fiscal Studies. The Government must rethink their whole approach to working people and how we make sure that people have decent pay.
To conclude, I want to come back to the point made by the hon. Member for Darlington about the iron law. As I have said to him on several occasions, it is not a matter of simple supply and demand. We only need to look around the economy today in Britain to realise that we can have rocketing vacancies while real pay does not go up. That is what is happening now. I ask myself what could possibly have gone wrong. The economics textbooks say it should work. What could have possibly gotten in the way of working people and a decent income?
Since 2010, the Tories have done the following: presided over a massive increase in zero and short-hours contracts; overseen a pandemic of low pay in key professions such as social care, which has driven chronic staff shortages; put charges on employment tribunals, so that working people find it much harder to get their rights confirmed; put roadblocks and bans in the way of trade unions, so that organising is harder; got rid of Unionlearn, which helped many working people get on; and overseen a labour market with a skills crisis and in which 20% of people have to work below their skill level, making it impossible for them to get on.
Rishi Sunak has put taxes up more times in two years than Gordon Brown did in 10 years, and he is landing working people with a devastating tax rise at the worst possible time. We have seen child poverty rise and food bank use explode, and 1 million experienced destitution in 2019. That is the problem. It has been a decade of doom for people trying to get on in life—a Labour Government is required.