Welfare Reforms and Poverty

Debate between Steve Rotheram and Chris Williamson

Monday 13th January 2014 Commons Chamber

[Chris Williamson (Derby North) (Lab)]

I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing this incredibly important debate on the need for a commission of inquiry into the impact of this cruel, callous coalition’s policies on poverty in the United Kingdom. I wish to focus in large measure on the impact of housing and the welfare reforms that have been put in place, but I wish to start by addressing the intervention made by my hon. Friend the Member for Corby (Andy Sawford), who referred to the pernicious reforms that have been made to the council tax benefit system. We hear a lot from the Government about freezing council tax. That is fine and dandy for the people who have the resources not to need council tax benefit, but the very poorest people, even in those local authority areas that had a freeze on their council tax, are seeing an increase in the amount of council tax they are expected to pay. That is absolutely disgraceful, and I do not know how Ministers can sleep in their beds at night when they are inflicting such penalties on the poorest people in our country.

As I have said, housing is a key area in addressing poverty in our country. The hon. Member for Stafford (Jeremy Lefroy) said that the commission we are talking about should have a slightly wider remit, and that is important, as it should incorporate housing, too. What we saw when this Government came to power was a massive reduction in investment in affordable housing in our country. One of the first things they did was to cut it by 60%—that is what they did when they first came to power. Their housing policy is shambolic. They are not building anywhere near enough houses for the people in our country, and the houses they are building are too expensive—to buy or to rent. People are caught in a Catch-22 situation. Youth unemployment is growing, with about 1 million young people on the dole, and low pay is endemic. As my right hon. Friend the Member for Oldham West and Royton pointed out, some 6.7 million people living in poverty in our country are in employment —that is disgraceful.

Let me briefly touch on my personal story, and how things have changed from the 1970s in terms of what ordinary working-class people were able to do and the sorts of lifestyles they were able to afford, particularly the housing. I was a 19-year-old apprentice bricklayer when I was able to buy my first house, with the benefit of the option mortgage scheme brought in by the 1974 to 1979 Labour Government. I was earning £60 a week and I was able to buy a brand new three-bedroom house that backed on to a canal for £10,000. That was three times my salary then, but it would be impossible to do the same today because the average price paid by a first-time buyer is £185,000. I have checked on the internet what a bricklayer can earn these days. On average, they earn £10.28 an hour, or £21,382 a year, so the average price for a first-time buyer would be a multiple of 8.6 times their salary. In this day and age, an apprentice bricklayer earns around £170 a week, or £8,840 a year, so a multiple of 21 times their salary would be required. People can no longer put down roots in the way that they did, because they have been priced out of the market. I am talking not just about buying but renting as well.

It is vital that we build the houses that people need. Labour is committed to building 200,000 homes per annum, which is vital in not just delivering a social need but putting thousands and thousands of people back into work. We need a renaissance in council housing, because the private rented sector is ill-suited to social housing, which has led to the obscene housing benefit subsidy system that was set up by the right hon. Member for North West Hampshire (Sir George Young) when he was the Housing Minister. On 30 January 1991 he said:

“If people cannot afford to pay that market rent, housing benefit will take the strain.”—[Official Report, 30 January 1991; Vol.184, c. 940.]

Well, take the strain it most certainly has. Some £24 billion a year is being paid out in housing benefit. According to the House of Commons Library, £9.3 billion is going into the back pockets of private landlords. Compare that with the £1.1 billion this Government are putting into building affordable homes for people. The affordable homes programme summary said that will result in just over 67,000 homes per annum. Imagine if we put all that money into building homes for people. Think of all the jobs that could be created. If we just used the amount that is going to private landlords, we would be able to build 600,000 homes a year. We are building nowhere near that. We have a massive housing crisis in our country. There is a crazy housing subsidy system, which needs to be reformed. There are 1.7 million households on the housing waiting list across our country, 4,000 of which are in Derby. More and more people are reliant on the vagaries of the private rented sector. That cannot go on. What we need is a change in emphasis. We need a bricks and mortar subsidy to build the homes that people need. We need a council house, renaissance, to regulate the private rented sector and to ensure that land is released to build homes that people can afford.

[Steve Rotheram]

Does my hon. Friend also agree that Labour’s pledge, if we were to be the next Government, would mean an additional apprentice for every £1 million of public sector contracts?

[Chris Williamson]

That is a really important commitment. Let me refer if I may to some other statistics. I have talked about a massive investment in council housing. It is important to recognise that for every £1 of public sector investment in infrastructure, the Exchequer gets back 56p. As the net expenditure is somewhat less, it is well worth making that investment to generate the apprenticeships to which my hon. Friend referred and the jobs across the piece that are required, and to build the homes that people need. We need this commission. Its terms of reference should be somewhat wider than has been set out in the motion. If we can invest in the housing that we need, it will help to create stable communities, generate jobs and promote economic growth. Yes, we need a commission, but we also need a Labour Government in 2015 with the radical commitment that we saw in 1945 to deliver what Beveridge achieved. We need to deliver on the recommendations of the commission, which has been called for by my right hon. Friend the Member for Oldham West and Royton.