Cost of Living

Robert Halfon Excerpts

Wednesday 27th November 2013 Commons Chamber

[Chris Leslie]

The report published by the Money Advice Service, which the Government trumpeted as an organisation that was set up some while ago, is very startling. Certainly, the number of people in my hon. Friend’s constituency who are suffering from indebtedness is exceptionally high. In my constituency, over 40% of people are struggling to make ends meet when faced with these crippling burdens and debts.

[Robert Halfon (Harlow) (Con)]

Whenever the Government introduce fundamental measures to help with the cost of living, such as freezing council tax, freezing fuel duty and cutting it in 2011, and cutting taxes for lower earners, why do you vote against them?

[Chris Leslie]

I do not know whether you voted against those measures, Mr Deputy Speaker, but we appreciate any efforts to help alleviate the cost of living. Does the hon. Gentleman believe that when people fill up their tank at the petrol station, they think, “How grateful we are to the Conservatives for the cost of petrol today”? When it comes to the cost of living—[Interruption.]

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[Robert Halfon]

On a point of order, Mr Deputy Speaker. The hon. Gentleman has said that his Government tried to help motorists, but he inadvertently forgot to mention that they raised fuel duty 12 times.

[Mr Deputy Speaker]

I assure the hon. Gentleman that that is not a point of order. He has made that point on many occasions and I did not need reminding.

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[Robert Halfon (Harlow) (Con)]

Thank you for calling me, Madam Deputy Speaker. This is the first time I have spoken in front of you, and it is an honour to do so.

I am delighted that the Labour party has initiated this debate. I say to Labour Members “Bring it on!” I am glad that they have at last woken up to the cost of living crisis. While many of us were going on about it for a number of years, they were talking about predistributions or other “chattering classes” subjects that no one understood. While we were cutting and freezing fuel duty, cutting taxes and raising thresholds for lower earners, and increasing taxes for the rich by, for instance, increasing capital gains tax, they were voting against all those measures. They created a handout society, whereas we want to create a “hand back” society, and to give people back their own money through lower taxes. They created a society of dependency: a society of high tax, high debt and high borrowing.

[David Rutley]

My hon. Friend is making a very passionate speech. I know that he feels strongly about these matters, and has campaigned strongly on them in the past. Does he agree that, although our hon. Friend the Financial Secretary made an outstanding speech, what was omitted from it was a reference to the importance of the employment allowances that will allow a first-time employer to take on a new employee, thus helping even more people into the workplace?

[Robert Halfon]

My hon. Friend is absolutely right. That is another example of why we are the party of small business. Labour showed during its years in office that it was, as Peter Mandelson said, the party of the filthy rich and of big business, sucking up to bankers in the City—Fred the Shred, Flowers and all those kinds of people.

The main elements of the cost of living are jobs, pay and energy. Let us look at the Labour Government’s record. They scrapped the 10p rate of tax under Gordon Brown in 2008. They talk about wages, but median wages stopped rising in 2003, in times of plenty, and hourly pay rose at only a quarter of the rate of economic growth. They increased fuel duty 12 times while in office, and the cost of bus travel increased by 59%. Council tax increased by 67%, and energy bills doubled. That is the record of the Labour party, which says that it wants to help with the cost of living. Sadly, it has nothing to show for it at all.

Energy and fuel prices are among the key indicators of the cost of living. As we have heard from the Minister, this Government have cut fuel duty and said that they will freeze it for the lifetime of this Parliament—an historic move. Of course, I would like the Government to do more and to cut fuel duty further, and I hope that when economic conditions allow, that will be the No. 1 tax cut. We need to continue to help hard-pressed motorists.

On energy, let us remember that there were about 17 energy companies under Labour; now, there are only six. Labour decreased competition, but we are doing things to increase it. I believe that the Government should do more on VAT, particularly through renegotiating our VAT rates with the European Union. They should also consider imposing windfall taxes—de facto fines—on some of the energy companies and passing the money back to the consumer. They should also cut Labour’s green taxes, which make up 17% of the average energy bill.

[Mr Ellwood]

My hon. Friend is making a powerful speech. I understand that Labour intends to make energy its focus in the forthcoming EU elections. I intervened on the hon. Member for Nottingham East (Chris Leslie), but he declined to answer my question. Does my hon. Friend agree that we should look not only at the six energy companies but at how we make energy in this country? We now need to import it, and we are over-reliant on expensive energy imports because the previous Government failed to replace the nuclear fleet in time. They did nothing during their 13 years, and that energy offering went down from 25% to 15%. That is why we now have to pay more for expensive oil and gas from abroad.

[Robert Halfon]

As always, my hon. Friend hits the nail on the head. It is funny how we hear in the media that energy prices fell under the right hon. Member for Doncaster North (Edward Miliband), because they actually doubled during Labour’s time in office.

There were 2.5 million people, including 1 million young people, unemployed when Labour left office. That did not happen over 18 months solely as a result of the recession; it was happening even in times of plenty. Under this Government, youth unemployment in my constituency has gone down by 7.6%, long-term unemployment by 4.3% and overall unemployment by 4.4% over the past 12 months. This Government are helping with the cost of living and helping people to get back into work. I met a chap who was helping me with my car at Halfords, and he told me that he was going to vote Conservative for the first time in his life. When I asked him why, he said it was because the Conservatives helped people who work. That is what this party is all about. We are the party of hard-working people. We are the party that helps people with the cost of living.

Pay and taxes are another indicator of the cost of living. There are 3,749 people in my constituency who have been taken out of tax altogether. They are on low earnings. A total of 36,861 lower earners have had a tax cut. I want the Government to do more, however. I want them to raise the threshold at which people pay national insurance, because that would make a huge difference. Let us take people on low earnings out of all tax altogether, not just out of income tax. Nevertheless, the Government have made huge progress, which has been opposed massively and has been voted against by the Labour party. We have to remind our constituents that Labour voted against people on lower earnings getting lower taxes. As I said, median wages stopped rising in 2003, so the previous Government’s record on wages is nothing to shout about. We need to improve the minimum wage; we should have a regional minimum wage top-up, on top of the national minimum wage. We need to reform national insurance as I have described, but at least this Government have started doing the things that are helping to address the cost of living most; we have taken action on energy, jobs and national insurance.

A thing that gets my goat is that the Labour party claims to have the monopoly on compassion. As my constituents found out, the reality is that Labour had a monopoly on failure—on the cost of living, on taxes and on the economy. Through our history, the Conservative party has always been on the side of hard-working people; we have always helped lower earners. Despite the very difficult economic conditions that the Labour party left us, this Government have done everything possible. The Conservatives do not have a monopoly on compassion, but we are the party of aspiration. We give people ladders of opportunity; we give them skills and apprenticeships, the number of which has increased by more than 80% in my constituency. We are giving people jobs, and we are creating a new nation of property owners through the right to buy and the Help to Buy scheme. We recognise that the best way to help the poor and lower earners is not through the dependency culture and welfare society so beloved of Labour Members, but by cutting taxes, cutting fuel duty, freezing council tax, restoring the link between pensions and earnings, and helping hard-working people.

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[The Economic Secretary to the Treasury (Nicky Morgan)]

I thank the 19 hon. Members, on both sides of the House, who have taken part in this afternoon’s debate.

It is said that the first step to recovery is admitting you have a problem, and the Opposition had a chance to admit they had a problem this afternoon. This debate has revealed the lack of an economic plan from Labour and the cost of a potential Labour Government. It is clear from what he said that the shadow Chief Secretary to the Treasury does not know the difference between a debt and a deficit. The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) talked about household debt. She might like to know that household debt, as a proportion of income, was 100% in 1997, grew to 150% by 2007 and was 170% by the first quarter of 2008, but has now fallen by 30 percentage points to 141%, as of the first quarter of 2013.

Another falsehood spread this afternoon was that the Government had borrowed more in three years than the last Government borrowed in 13 years. Labour increased public sector net debt by £488 billion during their term in office, but the debt this Parliament has increased by £360 billion. The shadow Chief Secretary to the Treasury talked about record breaking. If he wants to talk about record breaking, how about talking about the record-breaking deficit that his Government left us? What about the broken promise of no more boom and bust. Remember that one? We do not hear that any more. The only honest statement we have heard from a Labour MP was from the former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who left a note saying, “There’s no money left”. He could not have been more right.

So what is missing from the motion today? There is no mention of the jobs created by this Government, of the 2.7 million people taken out of income tax, of the council tax freeze, of fuel duty cuts, of the deficit falling by a third, of inflation falling or of employment being at an all-time high.

[Robert Halfon]

Does my hon. Friend not think it strange that the Opposition, who say they care about the cost of living crisis, voted against cutting taxes for lower earners and raising the threshold? Far from paying for those tax cuts for lower earners through other cuts, as the hon. Member for Edinburgh East (Sheila Gilmore) said, have we not raised taxes on the rich by increasing the capital allowance from 18% to 28%?

[Nicky Morgan]

My hon. Friend is indeed right. I wanted to come to his speech, because he started by talking rightly about fuel duty and the wonderful campaign he has launched to ensure that households are not spending as much as planned under the last Labour Government. I heard his plea for a further cut. I take note, but I make no promises.

We then heard from my hon. Friend the Member for Braintree (Mr Newmark), who gave a characteristically positive speech. I note that unemployment in his constituency, including youth unemployment, is down by 20%, which is definitely something to be recognised. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) rightly talked about the recovering economy and about how debt had become endemic under the last Government. He is, of course, absolutely right.

My hon. Friend the Member for Tamworth (Christopher Pincher) coined a new phrase that I hope will spread across the Twittersphere and beyond about geeks bearing gifts. I wonder whether he would agree with Charles Clarke, the former Home Secretary, who said of Labour’s energy policy: “My criticism of that particular proposal is I think it is a one-off effort that does not deal with the overall comprehensive issue we have to address. I think there is even a case that some of the recent price rises we have seen might have been a response to the suggestion of a freeze”. That is absolutely correct.

We heard a wonderful speech from my hon. Friend the Member for Hexham (Guy Opperman), who talked about apprenticeships, noting the move from 430 to 690 apprentices in his constituency over the last year. He is absolutely right that for 13 years the last Labour Government failed to tackle the lack of skills necessary for our economy.