Scotland (Poverty)

Debate between William Bain and Sandra Osborne

Wednesday 30th November 2011 Westminster Hall

[Mr William Bain (Glasgow North East) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Mr Robertson, and to reply from the Opposition Front Bench to this important debate.

I pay tribute to my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) for securing this debate and for speaking with such passion and commitment about the effects that material inequality, lack of money, lack of resources and lack of opportunity have on the quality of life of her constituents and many thousands of people across Scotland. She referred in her speech to a historical figure—Nye Bevan, of course. Today, it might be fitting to recall the words of another historical figure, former US President Franklin Roosevelt, who once said:

“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have little.”

That is what the Government are failing to do in its policies today.

I also pay tribute to the contribution from my hon. Friend the Member for Glasgow North (Ann McKechin), who spoke movingly about the impact that housing benefit changes and lack of money are having in driving up levels of food poverty in Glasgow, and also to my hon. Friend the Member for Aberdeen South (Dame Anne Begg) and my right hon. Friends the Members for Coatbridge, Chryston and Bellshill (Mr Clarke) and for Stirling (Mrs McGuire), who spoke with great passion and eloquence about the effects of deindustrialisation in Scotland and the damaging effects of the Government’s reforms of disability, housing and sickness benefits. My right hon. Friend the Member for Stirling impressed the House this afternoon with her historical sweep and with the notion that she very ably tied between equality and liberty—the fact that they go together and that one simply does not exist without the other.

I recently had the privilege of attending a briefing arranged by the Resolution Foundation, which is hosting the Commission on Living Standards. The presentation gave some staggering statistics from the foundation’s ongoing work. There is an increasing dislocation between growth and living standards. In the past three decades, for every £1 of growth generated in our economy, just 12p is going into wages in the lower half of the income scale, which is a fall of a quarter. Those trends have been exacerbated by the squeeze on jobs and the squeeze through increased taxes and lower tax credits that have been in the Chancellor’s Budgets so far and, sadly, in the autumn statement yesterday.

From that event, there also emerged three themes that are necessary to drive an increase in living standards and reductions in poverty in coming years: full employment, the importance of income transfers—including the tax credits system—and rising wages. The foundation has estimated that the squeeze on living standards that is being imposed by this Government—the steepest since the 1920s—means that to make good the gap, the level of the minimum wage would have to rise to £6.29 per hour by 2015. That is the extent of the squeeze that is impacting on people in this country today. The words of the US economist Lane Kenworthy are very important, reflecting that income transfers—the tax credits system—have been critical in this country and across the western world to seeing an improvement of the living standards of those in the lower half of the income distribution scale.

I also want to endorse some of the findings of UNICEF Scotland’s recent report, which points out the damaging effects of failing to tackle asset-based inequality. The Government have scrapped the child trust fund and introduced an inadequate replacement in the form of junior ISAs, and we will see damaging effects for young people in their failing to build up that nest egg of savings that would help them go to college or university, to start a job and to pay for the necessary expenses for a good start in life.

The key to tackling poverty and to seeing a fairer distribution of wealth in our society is to increase levels of good jobs in our economy and to aim for full employment. Yesterday, the Office for Budget Responsibility downgraded its forecasts for levels of employment throughout this Parliament. It revealed that 710,000 public sector workers will be thrown on to the dole queues in this Parliament. Overall, unemployment will surge by a further 500,000, destroying the lives of people who are claiming benefits when they could be providing services and paying taxes instead.

Scotland will suffer hugely through the absurd economic theories that underpin such devastating choices. As a result of the Chancellor’s failure to change course on public spending and to introduce a proper plan for jobs and growth, Scotland is likely to suffer from rising unemployment, lower growth and the biggest attack on the living standards of ordinary people since the 1940s. The Chancellor said yesterday that he would like to tackle the causes of poverty, but he has slashed support for hard-pressed Scots families who are burdened by big rises in child care costs.

This week, the Social Market Foundation stated, in its report entitled “The Parent Trap”, that average families face an increase in child care costs of more than £600, a rise of up to 62%, which is more than the cost of a family Christmas for average families in Scotland. Yesterday, the Government failed to cut VAT to boost consumer confidence and failed to increase demand amid slumping growth.

[Sandra Osborne]

My hon. Friend is answering some of the questions of the hon. Member for Argyll and Bute (Mr Reid), who seemed to think that the Labour party had no alternative proposals to put forward. I am pleased to hear my hon. Friend telling the House about what we would do if we had the opportunity.

[Mr Bain]

My hon. Friend is entirely right. Yesterday, the OBR’s figures revealed that if we had followed the public spending plans of my right hon. Friend the Member for Edinburgh South West (Mr Darling), borrowing would be £37 billion less. There is an alternative—based around growth and job creation—that would not have visited the damaging effects of increased poverty and inequality which this Government are waging on the people of Scotland.