Women and the Cost of Living

Stephen Metcalfe Excerpts

Tuesday 19th November 2013 Commons Chamber

[Nicky Morgan]

I am sorry that the hon. Lady, whom I regard as a good neighbourly MP in so many ways, is scaremongering. People have to pay the fee only if they actually go to a tribunal, and there are many stages before that in an employment claim.

Let me talk about women and the workplace. As I said, we want to see not only more women in the workplace, but more women rising to the top of their workplaces. I am delighted that the Minister for Women and Equalities is on the Benches today, as she has been doing so much work to promote women in the workplace. I was also delighted to see Fiona Woolf, the second ever female Lord Mayor of London, coming into post earlier this month. I am sure that she will be an excellent role model for women in the City of London. But we need to do what we can to help more women to reach these senior positions and play an even more prominent role in our recovery. As many hon. Members will know, last month we published a Government action plan specifically designed to help women start out, get on and stay on in our workplaces by taking steps on things such as training, skills and flexible working.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

There is no doubt that we have been through a very difficult time, and that will have affected both sexes—men and women alike. Is not growth the best way out of a lot of these problems? Is it not irresponsible of a Government not to tackle the problems they are presented with, leaving them to be tackled by our children and our grandchildren?

[Nicky Morgan]

My hon. Friend is, of course, right about that. The best way to address living standards is by dealing with the economic crisis, so that families can find work in a growing economy. He is absolutely right to say that it is not fair to burden future generations with debt, which is why this Government have taken the tough actions they have.

I shall now discuss child care. For any mothers and fathers to succeed in the workplace, we need to have the right policy in place to support them. The Labour party is right to draw attention to the importance of parental leave and child care, but let me remind the Opposition that we were the Government who recognised the current system of leave and pay for parents as being not only old-fashioned and inflexible, but as playing a role in reinforcing the idea that women are the primary carers of children. Our new system will give real choice to families, and, from 2015, will allow working parents to share leave once the mother feels ready to end her maternity leave.

I remind the Opposition that we were the party that made sweeping changes on flexible leave and that they were the party that presided over child-care costs rising to the second highest level in the developed world. We are working hard to address that and to make child care more affordable for parents across the United Kingdom. A recent survey showed that 2012-13 was the second successive year in which the price of full day care and nurseries stayed flat in real terms

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[Andrea Leadsom (South Northamptonshire) (Con)]

It is regrettable that Labour likes to portray women as always victims. It is important that this Government see women for what they are—people with all sorts of different ambitions, different needs, different aspirations and so on. It is impossible to define what women want, other than to say that they want to be able to choose and not to be punished for their own choices. Choosing to stay at home and raise children; to work part time and use informal child care; to use nurseries or childminders; to have a stunning career running a FTSE 100 company, or as a pop star or a brain surgeon; to retire early or volunteer for a charity; to care for elderly relatives or disabled children; to be a teacher or, yes, even a politician—what women want is utterly varied, and I am proud of the way that this Government have made efforts to create choice and opportunity for women.

We all know that times have never been tougher economically. Austerity has limited our ability just to keep spending, but it has not stopped the Government’s desire to reform, and to support women in their own choices. There is no escape from the appalling mess that Britain was in in 2010, but the Government have been committed to raising the tax-free allowance for the lowest paid to £10,000 per annum by 2014. In spite of being almost half the work force, women are by far the lowest earners, so keeping more of their income is vital for them. Freezing fuel duty and council tax has helped all families through these tough times. But above all, dealing with the deficit has been and should be the key goal.

[Stephen Metcalfe]

My hon. Friend talks about the deficit. Does she think it is responsible for a Government not to tackle that and to pass it on to our children and grandchildren so that they have to deal with the problem?

[Andrea Leadsom]

My hon. Friend is quite right, and I was coming on to say that our deficit is not some airy-fairy statistic; it is the debt that is growing from it that is the biggest threat to our children and grandchildren. If we do not sort it out in our lifetime, it will wreck their future. That matters not just to loving mums, but to loving dads and loving grandparents. The Opposition must stop making light of it. It is real; it is there; it has to be dealt with.

Unemployment rose by 29% for women under Labour. Now there are more women in employment than ever before. The unemployment rate for women has fallen to 7%. At all levels we are helping women to build and develop successful businesses. The Women’s Business Council, set up in 2012, is taking many different actions, including providing business grants and mentors to female entrepreneurs. We are promoting business to girls in school and providing student enterprise loans. In the boardroom, under this Government female representation has risen from 12.2% to 17.3% in three years. We have a long way to go, but it is real progress in what women want.

Women and men are working parents. We have just had a debate on child care, and our policies to support the cost of child care through tax breaks, as well as a raft of measures to encourage new childminders to professionalise the nursery work force and to give parents the confidence that they are getting quality child care as well as helping with the cost of it, are vital.

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[Lilian Greenwood (Nottingham South) (Lab)]

A few weeks ago I was listening to “The Morning Show” on Radio Nottingham. They were discussing whether people felt better off now that the economy is growing again. A mum rang in. She was working but finding it a real struggle to make ends meet. She admitted that sometimes, in order to get by, she had to ask her son if she could borrow some money from his piggy bank. That is just one story—an anecdote—but I think that it says a lot about life under this Government. Government Members talk about intergenerational fairness. What is fair about a mum having to borrow money from her child to manage until her next payday?

Of course, it is not just one mother who is struggling to get by; millions of women are, and not just in Nottingham, but up and down the country. It is not just women who are struggling, because families up and down the country are facing a cost of living crisis, but it is women who are being hit hardest of all, through cuts in public services, cut in public sector jobs, cuts in the real value of their wages and cuts in the social security benefits they rely on. It is women who are unable to access or afford care for their children or disabled or frail relatives, who are being denied adequate support when they experience domestic abuse, who are losing good jobs in the public services and who are unable to cope with longer waits for the social security benefits they have earned.

[Stephen Metcalfe]

The hon. Lady talks about responsibility. Does she think that it was responsible for the previous Government to borrow £1 of every £4 they spent? Is that not one reason for the problems we now face?

[Lilian Greenwood]

I am not going to take any lectures from Government Members who have doubled the amount of debt in this country.

Of the £14 billion the Government are taking from people’s pockets to pay down the deficit through changes in tax, benefits, pay and pensions since the general election, £11 billion is from women, even though they still earn less and own less than men. More than 40 years after Labour’s Equal Pay Act 1970 outlawed paying women less than men for the same work, women still face a lifetime of earning less. For every £1 a man takes home, a women takes home just 85p.

Under this Government, the situation is likely to get worse. The cuts mean that women are losing employment in the public sector, but they are not getting comparable jobs in the private sector. The Women’s Budget Group analysis shows the following: although unemployment across the whole UK has fallen by 0.6% for men, it has increased by 0.8% for women; the number of women who are unemployed has increased by nearly 15% to over 1 million, the highest level for a generation; and long-term unemployment has increased eight times faster for women than for men. For older women aged over 50, the situation is even worse: unemployment is up by 42,000—more than a third—since the general election, while for older men it has fallen. As my hon. Friend the Member for Ashfield (Gloria De Piero) said, unemployment rates are particularly high among black and ethnic minority women.

Some jobs have been created in the private sector, but overall 63% of them went to men and only 37% to women. For women who are still working in the public sector, while wages have been frozen, at least progress was being made year on year to close the gender pay gap, with the difference between the hourly pay rates for men and women narrowing from 18.2% to 14.2% in recent years. There has been no comparable reduction in the private sector, where women earn, on average, 25.1% less per hour than men. As the Fawcett Society warns:

“Unless the government takes urgent action, women will lose their precarious footing in the workforce. We face a labour market characterised by persistent and rising levels of women’s unemployment, shrinking pay levels for women and a widening of the gender pay gap.”

Even the recent return to growth will not necessarily help if the Government do not act. Professor Diane Elson of the Women’s Budget Group says:

“Our big concern is that…women are going to be so far behind they will not be able to catch up.”

Is there any reason to hope the Government are listening and will act? Not if recent announcements are anything to go by. The Tories’ Free Enterprise Group wants to extend VAT—a deeply regressive tax that hits the poorest hardest—to essentials such as food, children’s clothes and bus fares. The Lib Dems tell us that the answer is to increase the income tax threshold. The Deputy Prime Minister claims that that will help those on low incomes, but any gain will be far outweighed by the Government’s tax rises and unfair changes to tax credits—and of course the very poorest will not benefit at all.

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[Sheila Gilmore]

The hon. Lady has told the House that the path onwards involves more raising of tax thresholds, regardless of who will or will not benefit from that. A further rise in tax thresholds, however, will do absolutely nothing for many who already earn below that level, particularly women who are part-time workers. How will that further generosity—which, as I have said, benefits more those whose earnings are in the upper brackets—be paid for? On the basis of the past three and a half years, presumably it will be paid for by yet more cuts to benefits and services that help a lot of women.

[Stephen Metcalfe]

Will the hon. Lady give way?

[Sheila Gilmore]

I will not give way again.

In future—assuming, of course, that universal credit ever materialises, which is far from certain at the moment—low-paid people will benefit even less as the tax threshold increases. Universal credit will be calculated on net, rather than gross earnings. Therefore, if a taxpayer who claims universal credit receives a tax cut of £100, they will automatically lose £65 of benefits. The lowest paid taxpayers are going to suffer more, and a solution would be to commit to increase the amount someone can earn before universal credit payments are reduced every time tax thresholds go up. Those who advocate the solution for low-paid workers have told us time and again that the reason for raising tax thresholds is not to benefit everyone but to benefit low-paid workers. However, it will not benefit those workers to anything like that extent—indeed, for many of them probably not at all.

We are constantly being told that we have to make tough choices—the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe), who wanted to intervene, has constantly risen to speak about the need to deal with the deficit. Choices are being made in the way the Government are proceeding, including the choice to give those generous tax cuts and wanting to continue to do so, but that does not sound like a terribly tough choice for some people to make.

There are other uses for the money if it is available. We could give a tax break to businesses that agree to pay the living wage, which would benefit women in particular. We could increase help with child care costs now. Child care tax credits were cut from 80% to 70% by the coalition. I know the Government say that they will restore that for recipients of universal credit when—if—it comes in, and the new child care tax relief starts in 2015. Why not now, however, especially with universal credit receding somewhere over the horizon? Further to that, the Social Mobility and Child Poverty Commission suggests that the Government should reallocate the 2013 Budget funding for child care tax relief from higher rate tax payers to those on universal credit. That would be over and above existing plans—this is a recent report from the commission—to help those who want to work and need help with child care.

Gingerbread, which will obviously advocate on behalf of families with one parent, 90% of whom are women, has made proposals for improving universal credit that would make work pay and encourage the progression through employment that is desired by us all. The old 16-hour rule that Government parties tend to dismiss was to ensure that going back to work really improved people’s situation, rather than the mini-jobs that, frankly, leave people poor.

Gingerbread has suggested that we increase the amount a claimant can earn before universal credit starts to be withdrawn, and reduce the rate at which benefits are reduced—the taper rate. Those proposals cost money, but if money is available—clearly it is for those who advocate another increase in the basic tax threshold—I urge the Government to consider measures such as those advocated by Gingerbread genuinely to help the lowest earners improve their position.

One point I completely refute is the suggestion that if we say that life under this Government is hard for many women, we are calling women victims. Far from being victims, women are struggling to bring up their children despite the difficulties that they face. It is completely wrong to suggest that we are therefore painting them as victims—far from it.

[Harriett Baldwin (West Worcestershire) (Con)]

It is a pleasure to follow the hon. Member for Edinburgh East (Sheila Gilmore), a former colleague on the Work and Pensions Committee, who is one of the most diligent attendees in the Chamber. However, I shall disagree vehemently with her and demolish a number of the arguments that are inherent in today’s motion. I urge all hon. Members to vote against it at 7 o’clock.

I shall start with some of the macroeconomic arguments and make the case that the way to destroy a country’s wealth, and to plunge people into many years of poverty, is to do what the previous Government did to the economy—create the largest recession for 60 years and the most significant banking crisis ever. I shall also outline the course of policy to follow for economic prosperity.

The secret of economic prosperity is not hard to find, but it is hard to achieve. The first ingredient is obviously a strong central bank maintaining sound monetary policy and a prudent Chancellor who maintains sound public finances. That is the framework that provides the environment in which businesses can invest, grow, export and create jobs. It is not politicians who create that wealth and those jobs, but we can damage the cost of living and the growth of businesses with bad monetary policies, high taxes, irresponsible borrowing, excessive regulation and the high interest rates that we saw under the previous Government.

The decision to make the Bank of England independent in 1997 was just about the only decision made by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) with which I agreed. The mandate to keep inflation at 2% has meant some predictability and stability from the inflationary ravages that we all remember from the Labour Governments of the 1970s. It is essential that the Governor of the Bank of England, Mark Carney, is able to unwind the current additional monetary stimulus that has been needed since the crash of 2008 without allowing any major deviation from that 2% target. Sound money will mean that the pound stays strong. Given the UK’s dependence on imported goods and fuel, a strong pound keeps our cost of living down.

The Government also need to play a part. The Chancellor has taken the tough and necessary steps to bring the public finances back into structural balance.

[Stephen Metcalfe]

My hon. Friend talks about the Chancellor making tough decisions. Do you think it would be right to abandon the programme that we have adopted and to increase the amount of borrowing? Do you think that would be the right way for the country to move forward?

[Harriett Baldwin]

rose—

[Mr Speaker]

Order. I do not think anything about these matters, although I am sure that the hon. Lady does.

[Stephen Metcalfe]

I apologise, Mr Speaker.

[Harriett Baldwin]

Some Opposition Members think that the Chancellor has tightened too fast, but others might argue that he could have tightened faster. I say that he has been a Goldilocks Chancellor, and this has been a tightening at the pace at which job creation has been allowed to flourish. I also want to put on record that there has been no recession in this country since 2009. At all points in this fiscal responsibility, the Chancellor has looked for measures that have helped hard-working families keep their cost of living under control. He has helped councils freeze their council tax, he has raised the tax-free threshold for working people and he has avoided the 13p fuel duty increase that Labour had planned—

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[Sarah Champion (Rotherham) (Lab)]

In Rotherham, unemployment among women is far too high. According to figures from the Office for National Statistics, 13.4% of economically active women in Rotherham are unemployed. That is significantly higher than the regional figure of 8.1% and the national figure of 7.3%. While there has been some fluctuation in this figure, it has averaged almost 15% across the lifespan of the current Government.

Unfortunately, these figures are symptomatic of a national trend. Female unemployment is at its highest for a generation. Over 1 million women in the UK are out of work, an increase of 82,000 under this Government. When we look at long-term female unemployment, the situation is much worse as it is rising eight times faster than for men. The number of women out of work for more than 12 months increased by 79,000 between May 2010 and August 2013, while the number of men out of work for more than 12 months increased by 10,000. The number of older women—those aged 50-plus—who are unemployed has increased by 42,000, which is up by more than a third, over the same period, while male unemployment in this age group has fallen by 15,000. Black minority ethnic women also have a disproportionately high level of unemployment than men.

Where women are finding employment, their pay continues to lag behind that for male colleagues. Changes to in-work benefit left many women in Rotherham struggling to earn a living, in sharp contrast to the Government’s oft-repeated aim of making work pay. Furthermore, the increase in the cost of living has left many women facing an extremely insecure existence, and an even bleaker future.

A constituent I met recently shared her experiences, which are no doubt repeated across the country. A single parent, she desperately wants to return to work, but the huge costs of child care and cuts to in-work benefits mean that it is simply untenable.

[Stephen Metcalfe]

Will the hon. Lady give way?

[Sarah Champion]

I am sorry, but I do not have the time.

My constituent is thus forced to choose between short-term, part-time and low-paid work or to stay at home. To make her situation worse, local amenities on which she relies are facing closure as a result of Government cuts to local authority budgets and to national programmes such as Sure Start.

I want to mention two other issues related to the increasing unemployment of women. The first is the lack of role models for young women. It is very noticeable that this Government have only four women in a Cabinet of 22. Only 23% of this Parliament’s Members are women, the vast majority of them being Labour MPs. When we look at chief executives and board membership, we see that this situation is, unfortunately, common. That is compounded by a lack of consistent careers advice in schools, and in some schools no careers advice at all, so how are young women meant to make informed career choices?

The other key consideration in respect of why more women are unemployed has to do with their caring responsibilities and lack of Government support for them. For younger women that is likely to be child care, while for older women it is more likely to be care of their parents or their partners. The support for both those groups of women to enable them both to care and to work is being systematically chipped away. Not only is this bad for the women; it is also bad for the country economically. The ultimate irony is that of the £14.4 billion raised in 2014-15 through the additional net direct tax and benefit, pay and pension changes announced since the general election, £11.4 billion—or around 79%—is coming from women and £2.9 billion is coming from men.

House of Commons Library analysis shows that women will be hit four times harder by the new direct tax credit and benefit changes announced in December’s autumn statement, with women shouldering £867 million of the £1.1 billion raised. This situation is immoral and unfair, and it needs to change.