Cost of Living: Support for Young People
(1 year, 6 months ago)
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Fabian Hamilton (Leeds North East) (Lab)
I beg to move,
That this House has considered cost of living support for young people.
It is a pleasure to serve under your chairship this afternoon, Ms Ali.
This debate could not come at a more important time, as everyone’s bills are skyrocketing, the cost of food and other basic items seems to be increasing exponentially, and our country’s Government are in utter turmoil. Young people across Britain, who have had to live through the pandemic, are now faced with a cost of living catastrophe. In north-east Leeds, young people are facing the huge impacts of the crisis, with 6,712 16 to 24-year-olds on universal credit. Of those, 32% are in work. It is shameful that the Government have still not committed to increasing universal credit in line with inflation.
Janet Daby (Lewisham East) (Lab)
I thank my hon. Friend for securing the debate. He is talking about the point that I want to mention: the Government really should be increasing universal credit in line with inflation. Many young people and children in my constituency are having to go without breakfast and, in some cases, without lunch as well. No Child Left Behind recently said that 26% of households experience food insecurity. Does my hon. Friend agree that that is absolutely wrong?
Fabian Hamilton
I thank my hon. Friend for her intervention, because I am just about to describe what a difference it makes to increase universal credit in line with inflation, rather than in line with wages. Her point is very well made indeed. If universal credit rose in line with wages, young people in my constituency and throughout the country—
Rushanara Ali (in the Chair)
Order. We have to suspend for Divisions in the House. There will be 15 minutes for the first Division, and then 10 minutes for each subsequent Division. Today’s final debate will have injury time added for those Divisions.
Fabian Hamilton
As I said earlier, it is a pleasure to serve under your chairship this afternoon, Ms Ali, in spite of the interruptions. I shall continue where I left off an hour and a quarter ago.
The fact that the Government still have not committed to increasing universal credit in line with inflation is shameful. If universal credit rose in line with wages, young people would receive just £7.42 extra per month. If, however, it rose in line with inflation, they would receive an additional £21.49 per month. Given the huge difficulties young people are facing at the moment, does the Minister think that failing to commit to an inflation-linked increase is morally acceptable?
The stark reality of this crisis could not be clearer for Jack, who attends YMCA sessions in Leeds. Jack is not his real name, of course. Jack is 10 years old and lives with his parents and two siblings. He has been quoted at YMCA sessions as saying that
“we’ve got no food at home.”
The fact that a child as young as 10 has been put in this position is unforgivable. It is a humiliation for our country not only at home but abroad. With wages squeezed more than ever, Jack’s family also receives support at school, through the uniform exchange, because they cannot afford to buy new school uniforms. The pressures of the current crisis are now causing issues between family members at home.
I commend the activists in Leeds for pioneering school uniform exchanges across the city, but it is outrageous that their brilliant work is even necessary in modern Britain. I ask the Minister what he would like to say to Jack and his family after yesterday’s day of shame for the Government, when the Prime Minister and her new Chancellor effectively gave the green light for energy bills to go up to a predicted average of £5,000 a year for most households from April.
The failure to provide cost of living support to young people often affects their parents as well. A report released by UNICEF today states that 59% of parents with children under five say that they are struggling with their mental health, and 66% have been negatively affected by the rising cost of living. That amounts to a total of more than 2 million families in the United Kingdom. The status quo is simply unacceptable, and this crisis will only deepen as we approach winter and enter the new year. Among parents feeling the pinch from the rising cost of living, the report also found that just under half have already cut back on their electricity and gas usage, with one in 10 unable to adequately heat their home as winter approaches. As we know, that will be hugely detrimental to the development and education of young people.
As I said earlier, the cost of living emergency, coupled with covid, will amount to a disaster for many families up and down the country, especially young people. Public Health England data shows that across the first three quarters of 2021-22, nearly one in three children aged between two and two and a half were assessed as having missed out on reaching their expected level of development. That contrasts with around one in six in the first three quarters of 2019. A recent YouGov poll pointed to the fact that over a quarter of people aged between 18 and 24 feel unable to cope with the cost of living crisis owing to the stress that it is causing, so I ask the Minister what plans are in place to ensure that the mental health problems in parents and elder siblings do not have a knock-on impact on younger people and children.
I turn now to university students, who have also missed out on learning because of the pandemic and are currently facing huge financial problems, but who risk being a forgotten group of people suffering from the impact of the crisis.
Paul Blomfield (Sheffield Central) (Lab)
My hon. Friend is making a powerful speech, and I am glad that he is including students. There will be mixed experiences in terms of students’ ability to fall back on family support, but is he aware that recent research conducted for Universities UK indicated that over half of students were considering whether they would be able to continue with their studies as a result of the pressures they are under? Does he recognise that university students cannot draw down the support that is generally available through the council tax system, because they do not pay council tax? Is he aware that other countries, such as Germany, are treating students in the same way as other low-income groups—for example, pensioners—by giving them additional grants? Does he recognise that the Government need to make some sort of national intervention on this issue, and not rely on a patchwork of different measures that are being introduced by some universities and some councils?
Fabian Hamilton
I thank my hon. Friend, who is a very old friend of mine and has a great reputation for standing up for students and universities—certainly in this place and before he came into the House. I was not aware of many of those facts. I did not realise that half of students were considering giving up their courses, and I can only imagine the detrimental effect that it will have not just on their futures, but on the future of our whole country.
From my time on the Foreign Affairs Committee, I recall visiting South Korea and asking people how they could account for their massive success since the second world war. That was 15 or so years ago, and since then South Korea has become even more successful and has risen higher up the scale of G20 countries to become one of the most powerful industrial nations in the world. The Korean Education Minister at the time said to me, “It is one very simple fact. We took a decision after the Korean war that the only future for our country, as a rural agrarian economy, would be to invest in our young people, and educate them to such a level that that education would follow through in terms of our industry, our scientific research, our know how and our intellectual property.” We can see that that has happened.
A country that relinquishes the potential of its young people to develop, not just themselves but the economic future of that country, is one that is in trouble. I do not want to see that happen to this great nation—it would be absolutely tragic. I think we can learn from our economic, social and geopolitical partners, in countries such as Germany, as to how we can handle a crisis like this. They have the right idea. Not everything that happens in Europe is bad, believe it or not; there are some really good policies there. I think we should learn from those, and I hope that the Minister will begin to address that question.
Those university students who have missed out on learning because of the pandemic and are currently facing financial problems risk becoming a forgotten group of people suffering from the impact of the cost of living crisis. As my hon. Friend the Member for Sheffield Central (Paul Blomfield) has said, it has serious implications for the long-term job market in the UK. Recent polls suggest that 55% of those who felt concerned about managing their living costs were worried that it might prevent them from continuing their studies. That rises sharply—up to three quarters—for those students who are severely disadvantaged or from poorer backgrounds. We simply cannot afford for more than half of our young people to drop out of university before graduation. I would be grateful if the Minister told us what support the Government are providing to universities, centrally, to tackle the issue before it is too late.
It is increasingly clear that urgent action is needed to prevent more young people from sliding into poverty. In a recent Barnardo’s report, one young person was quoted as saying that
“mentally, it’s taken a massive toll. I was thinking of seeing a counsellor, but I don’t want to because of the fear of how much it would cost. I haven’t been able to get the correct help”.
I am the president of Leeds UNICEF, and through that group I have heard first-hand about the horrific experiences of my young constituents, as well as of the many people across the city of Leeds who are struggling.
I conclude by strongly urging the Minster to look closely at extending free school meals, at improving mental health provisions for schools, and at backing the Labour party’s call for a breakfast club in every primary school in England and Wales. Those measures would at least give parents and young people some of the support they so desperately need.
Wera Hobhouse (Bath) (LD)
It is a pleasure to serve under your chairship, Ms Ali. I congratulate the hon. Member for Leeds North East (Fabian Hamilton) on securing this important debate. It gives us an opportunity to shine a light on young people, who are often overlooked. In my short remarks, I will focus on students.
The last decade will have a long and significant impact on the younger generation. Many entered their youth in the throes of the financial crisis, went through the pandemic in their formative years and are now experiencing the full force of the cost of living crisis. The latest economic shock is presenting a new set of challenges for young people, particularly students.
I recently met a group of students from Bath Spa University. They are hugely worried about the financial pressures that rampant inflation is placing on them, and their concerns are not unfounded. UK students have seen a 7.5% cut in their maintenance loans. That has had severe consequences: research by the National Union of Students shows that a third of UK students are being forced to live on £50 a month after paying rent and bills. Some are having to choose between feeding themselves and carrying on with their education; many are holding down multiple jobs to make ends meet. Mercy In Action, a local charity in Bath, has seen a fivefold increase in the number of young people and students who need to use its food pantry. Inevitably, students from the poorest backgrounds are disproportionately affected.
The cost of living crisis goes far beyond a purely financial hit. The Bath Spa students I spoke to described how the crisis was causing them considerable stress and anxiety. The Student Value Report showed that nearly two thirds of UK students felt their mental health had been negatively affected, while two fifths of students thought that their physical health had been affected. That is no way to go through a demanding course of study, or to sit and prepare for exams. The Government claim to view economic growth as a priority, but growth is not sustainable unless we support our young people. The students of today will shape our future, and should have ample opportunity to do so. The Prime Minister talks about equality of opportunity, yet she is not giving students the opportunity they need to achieve their potential.
Of course, failing to support students has a knock-on effect on local economies. Student spending supports over £80 billion of economic output: that is crucial for places such as Bath, where over a third of our population is made up of students. If students are struggling, the local communities in which they live will lose out too. To prevent the devastating effects of student poverty, the Government need to tie student support to inflation, as we have already heard, and deliver urgent maintenance grants and bursaries to those who need them.
Paul Blomfield
I know that the hon. Member regularly takes up student issues and is a strong advocate for her student constituents. Does she recognise that students, particularly those from poorer backgrounds, went into this crisis already at a disadvantage, not least because the salary threshold for eligibility for maximum loans in England has been frozen at £25,000 since 2008? Does she agree that a simple measure the Government could implement, and should not necessarily rule out, would be to adjust the threshold so that those from poorer backgrounds are more able to access those loans in England?
Wera Hobhouse
I thank the hon. Member for that remark—I have to admit that I was not totally aware of the detail, but I fully support what he has said about what needs to be done. It is clear that young people, including those who are now in their 30s, have already lost out because of the financial crisis. We need to support that younger generation, but we also need to support the young people who are coming through now, those who have been at a disadvantage as a result of covid. The least we can do is listen, and the Government need to listen to the recommendations that have been made today and act on them urgently.
As I said, the Government need to tie student support to inflation and deliver urgent maintenance grants and bursaries to those who need them. The cost of doing so would be low compared with other recent Government spending commitments. It would support the vital economic growth on which this Government tell us they are uniquely focused. While I applaud universities that have provided hardship funds, those institutions do not have enough means adequately to protect students in need: that is the responsibility of central Government. The Prime Minister has talked regularly about equality of opportunity and about growth. If this Government are serious about growth, they need to invest in people, especially young people.
Amy Callaghan (East Dunbartonshire) (SNP)
The cost of living crisis is hitting all our constituents hard, but today we are focusing on children and young people, the support available and what is still needed. The bottom line is that, despite ongoing interventions from the Scottish Government, too many children are still living in poverty as a result of decisions made in this place. According to the Joseph Rowntree Foundation, one in five people in the UK live in poverty. That is 4.3 million children.
I praise the incredible work of East Dunbartonshire’s food bank and all its volunteers for the support they provide, but they should not have to do so. Welfare provided by the UK Government should be uprated in line with inflation. Not to do so is a disgrace, but the Government have made their stance on support for students and workers crystal clear.
Angela Crawley (Lanark and Hamilton East) (SNP)
Are young people not being consistently left behind—whether by the benefits system, the fact that they are not paid equal wages, or the fact that the living wage is not a real wage? It is fair to say that not every young person has the support of mum and dad and can live at home, so should we not ensure that universal credit is equalised? The price of a pint of milk is the same, whether someone is over 25 or under 25.
Amy Callaghan
I welcome that intervention from my very good friend; it is correct that students and young people should be paid the same amount, because goods cost the same regardless of age.
The UK Government’s disastrous mini-budget has caused economic uncertainty and market upheaval, meaning that working families with children to support are now terrified of losing their homes. With one hand tied behind their back, the Scottish Government are doing all they can to help Scotland’s children and young people—through free university tuition, free bus travel for under 22s, free school meals for children in primary 1 to 5, free prescriptions, the young patients family fund, the young carer grant and the rent freeze. With the powers that they have, the Scottish Government are building a wealthier, happier, fairer Scotland. Successive Tory Governments in this place are getting in the way, and that is why Scotland needs independence.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to see you in the Chair, Ms Ali. I am grateful to the hon. Member for Leeds North East (Fabian Hamilton) for introducing this important debate. When we talk about the cost of living crisis, the impact on young people and children often gets missed. They are an incredibly important group, and they will grow up with their life chances stunted and their health impacted if we do not consider their needs.
In preparation for this debate, I reached out to some youth groups in my constituency to ask how their young people are coping. The Urban Youth Project in Pollokshields got back to me with a response from one of its young people:
“As a student who lives on his own and has a part time job to keep food on the table, how much longer can I afford to juggle both these responsibilities? Sooner or later I’ll need to choose, do I continue with University or get a full time job? At my age (20) I should be able to study in university as I worked hard to get in.”
It is worrying that people are now choosing whether to continue their studies or give up and just work, because they are finding it hard to do both. Another young person said:
“It’s all very well budgeting for rising costs if you earn in the first place. How much higher will these costs rise? My parents are stressed, my brothers and sisters are feeling the change in spending, it’s not nice. My parents both work hard and they are talking about second jobs. Does anyone in parliament need to consider that option? Didn’t think so.”
There are choices made in this place that impact people. Many of the people making those decisions and choosing those policy routes never have to live with them. A piece of Barnardo’s research out today said that 49% of its frontline workers have supported children, young people and families who have had to choose between feeding themselves or paying their bills in the past year. That is nearly half of people facing that choice, and it is only going to get worse.
I will talk about some of the ways in which this is affecting people, and some of the choices that families in my constituency are having to make. In particular, I note a report from Migrant Voice about visa fees. For many families, each application costs £2,500 every two and a half years. If a family is having to bear that cost every two and half years, there are choices that they are not able to make for their children. One witness that Migrant Voice spoke to as part of its work said:
“I can’t feed my kids due to the visa fees and borrowing money.”
At the very least, the Government could suspend those fees for children and give folk a break, because it is really quite difficult. That is a choice that the Government have. They choose to add those costs for families as part of the immigration system. It means that those young people do not get the same choices as their peers at school. Furthermore, there could be two identical families with parents working identical jobs and children of exactly the same age, but the Government deliberately put one family at a disadvantage by giving them no recourse to public funds status. Those families are not entitled to the same benefits and they have to work twice or three times as hard to put food on the table as their neighbours. They deserve support. It is a system that is basically unfair, and I see many cases like that through my constituency office.
This situation is not news because the then UN special rapporteur on extreme poverty and human rights, Philip Alston, noted in 2019 that UK Government policy changes since 2010 were unravelling two decades of progress on child poverty. The UK now has the worst poverty and inequality levels in north-west Europe. In the UK, 11.7% of people are living below the poverty line. That is significantly higher than in countries such as Iceland at 4.9%, Denmark at 6.15% or Belgium at 8.2%. These are deliberate choices leading to deliberate impacts on people.
We did not hear much from the Government yesterday about what exactly they intend to do about this situation. We have the largest real-term cut to benefits in a single year. We have families struggling to get by on the national minimum wage, and young people are significantly disadvantaged by the way in which it is staged. An under-18 or an apprentice is entitled to only £4.81 an hour. In comparison, a 23-year-old starting the same job on the same day is entitled to £9.50 an hour. It is age discrimination baked into Government policy, and I would be interested to hear why the Minister thinks discriminating against young people in this way is justified. Universal credit also deliberately discriminates against young people, and the Government should explain why that is the case.
I could talk for a long time about the Government’s policies and the way in which they impact young people, but I want to highlight a few things that are happening in Scotland, where we have a choice and we are making a difference to the lives of young people. We have the young person’s guarantee, aiming to connect every 16 to 24-year-old in Scotland to an opportunity, which could be a job, apprenticeship, further or higher education, training programme, formal volunteering or enterprise opportunity, and that opens up opportunities to young people. As my hon. Friend the Member for East Dunbartonshire (Amy Callaghan) mentioned, we have a greater free school meal entitlement in Scotland. We provide free period products for everybody, not just young people, but certainly that will help young people setting out in the world.
We have launched free bus travel for under-22s, which approximately 930,000 young people in Scotland are entitled to. The scheme could be worth up to £3,000 for a child by the time they turn 18, opening up horizons for young people and making it easier for them to get to work or their studies and to live their lives. This is just the start. Scotland has a vision for how we want to see young people go ahead in the world. We want to be the best country for young people to grow up in. What is holding us back is Westminster. What will give us those opportunities is independence.
James Murray (Ealing North) (Lab/Co-op)
It is a pleasure to speak in this debate with you as Chair, Ms Ali. I congratulate my hon. Friend the Member for Leeds North East (Fabian Hamilton) on securing this important debate and comprehensively setting out the need to support young people through the cost of living crisis. Growing up at any time brings its challenges, but young people today are living through a time of particularly great turbulence and uncertainty. We know that today’s young people will feel the impact and cost of 12 years of Conservative rule and the economic chaos of recent weeks longer than any of us. After 12 years of presiding over low economic growth and of undermining our public services, in the past few weeks the Conservatives have crashed the economy. Their unfunded tax cuts for the wealthiest and their reckless approach to public finances have caused enormous damage that will be felt well into the future. The new Chancellor’s U-turn in the past few days had become unavoidable, but the damage had already been done. That damage will be felt by working people across this country for many months and years. Let me be clear: this is a Tory crisis, made in Downing Street and being paid for by working people, many of whom are just starting out in adult life.
The former Chancellor’s disastrous mini-Budget shattered the plans of many young first-time home buyers, as the reaction to the Conservatives’ recklessness saw more than 40% of available mortgages withdrawn from the market and saw lenders begin to price in interest rates over 6% for two-year fixed rate deals. For many young people who have been able to get over the hurdle of saving for a deposit, they have fallen at a new hurdle put in their way by the Government. This follows 12 years during which home ownership rates have fallen. There are now 800,000 fewer households under 45 who own their own home, and nearly a million more people rent privately than when the Conservatives came to power in 2010. We have seen the prospect of home ownership slipping out of reach of more and more young people. In contrast, at the recent Labour party conference, we set out our plans to introduce a mortgage guarantee scheme, raise stamp duty on foreign buyers and give first-time buyers first dibs on newly built homes. Labour is the party with a plan to increase the rate of home ownership and support councils in making social housing the second tenure in our country.
Of course, many young people across the country are renting privately, often out of necessity rather than choice. They are left vulnerable to unaffordable rent rises and no-fault evictions. We are concerned by the confusion about the reports that the Government have U-turned on their commitment to scrap section 21 no-fault evictions—although they have subsequently U-turned on that apparent U-turn. As things are changing so rapidly, I would be grateful if the Minister could confirm that—assuming the current Prime Minister is still in office, which I realise is a dangerous assumption—the Government can give a cast-iron guarantee that they will introduce a rental reform Bill in this Parliament.
We know that another reality of the Conservative cost of living crisis is food poverty. A recent survey of 2,000 young people carried out by the Prince’s Trust found that a quarter said they had skipped meals to cut back on spending, and 14% had used a food bank at least once in the past 12 months. Furthermore, a third said they could not afford to turn the heating on, while a similar proportion have struggled to afford the cost of travelling to work. Just yesterday, representatives from the Trussell Trust, Independent Food Aid Network and Feeding Britain delivered a letter to the Prime Minister signed by more than 3,000 food bank volunteers, in which they called for urgent help as they face “breaking point”. The letter warned that food banks are “struggling to cope” as demand outstrips donations. The volunteers said they were “overstretched and exhausted”, and urged the Government to take action to
“end the need for charitable food aid by ensuring everyone has enough income, from work and social security, to buy the essentials.”
According to the Children’s Society, a third of children were living in poverty prior to the cost of living crisis and, as my hon. Friend the Member for Leeds North East mentioned, that is why Labour’s commitment to breakfast clubs in every primary school in England is so important. More widely, the continued failure of the Conservative Government to commit to uprating benefits in line with inflation will leave families with children significantly worse off. Does the Minister personally agree that benefits should now rise with inflation?
Finally, we know that the cost of living crisis has had an impact on mental health, particularly the mental health of young people. I know from speaking with young people in my constituency how aware they are of the need to look after their mental health, and since I was elected I have often been struck by how clear so many young people are about what support they need. That is why I am glad that we have been able to set out our plan to use funding from closing tax loopholes for private equity fund managers, and removing the VAT exemptions from private schools, to strengthen mental health services for young people. This funding would improve mental health services, particularly those for young people—from guaranteeing mental health treatment within a month to all who need it to ensuring there is a full-time mental health professional in every secondary school and a part-time professional in every primary school.
Young people today face great uncertainty and insecurity after 12 years of the Conservatives, and never more so than after the damage caused by the economic chaos of recent weeks. Changing the Chancellor and making U-turns will not undo the damage that has been done by this Prime Minister and Conservative Government. The damage they have caused has come from Downing Street, but it will be paid for by working people, and young people will face the impact and the costs for longer than any of us. Only a Labour Government will support young people with the jobs, homes, public services and stability they need to succeed.
The Economic Secretary to the Treasury (Richard Fuller)
What a great pleasure it is, Ms Ali, to serve under your chairmanship. I thank the hon. Member for Leeds North East (Fabian Hamilton) for securing the debate, and I thank the hon. Members who have contributed, including the hon. Members for Bath (Wera Hobhouse) and for East Dunbartonshire (Amy Callaghan). I thank my friend, the hon. Member for Sheffield Central (Paul Blomfield), for a number of very useful interventions, and the SNP spokesperson, the hon. Member for Glasgow Central (Alison Thewliss), and my colleague on the Front Bench opposite, the hon. Member for Ealing North (James Murray), for their contributions.
It was good that the hon. Member for Leeds North East started by referring to the YMCA publication entitled “Inside the cost of living crisis: The experiences of young people living at YMCA”, which was published earlier today, along with some other reports. I would like to draw colleagues’ attention to the statement with which that report starts, with which I am sure we can all agree:
“Everyone should have a fair chance to discover who they are and what they can become.”
The YMCA does great things across the country to enable people to achieve that objective.
There are real challenges facing our economy after two decades of low inflation. The world is now confronted with a high bout of fast-growing prices and the United Kingdom is not immune. While that takes place, we should all remember that our friends in Ukraine are at war, and the United Kingdom will continue to support them in a number of ways. We recognise that Putin is using energy as a weapon of war, pushing up prices and piling pain on citizens across the free world and particularly in Europe.
We should also recognise that young people can be in a particularly precarious position, because they are still in education or just starting out in their careers. They may not have had time to build a financial safety net. Many are at a critical stage of identifying and then seeking to accelerate their potential. I want to be clear: this Government are responding to help the most vulnerable to get through these tough economic times.
I want to answer some of the questions that have been raised. Very directly, on the uprating of welfare benefits in line with inflation, I will be honest: there are difficult decisions to be made. I want to reassure people that helping the most vulnerable will continue to be central to our decisions, just as it was when we announced support of £1,200 for millions of the most vulnerable households. The Government are required to review the rates of benefits annually to determine whether they have kept pace with price inflation. The Work and Pensions Secretary is yet to conduct her annual review of benefits and more will be said in the medium-term fiscal plan.
I think I heard the hon. Member for Glasgow Central ask why the universal credit standard allowance is lower for people under 25. That is to reflect that those claimants are more likely to live in someone else’s household and to have lower living costs. However, it is acknowledged that some claimants under 25 do live independently, which is why universal credit includes separate elements to provide support to claimants for those additional costs.
I want briefly to talk about the trend of poverty since 2009-10. Between 2009-10 and 2021, 2 million fewer people were in absolute poverty after housing costs—a figure that includes 500,000 children. In 2021, 536,000 fewer children were in workless households than in 2010. The youth unemployment rate fell by 1.3 percentage points in the quarter to August 2022 and is at a record low of 9%, which is around a quarter below its pre-pandemic level.
That progress requires us to talk about economic stability, which is vital for everyone and particularly for young people who may be looking for their first jobs or next steps. Instability affects the prices of things in shops, the cost of mortgages and the value of pensions, meaning that bringing stability to the economy will ease the cost of living for everyone. As the Chancellor has said, the United Kingdom will always pay its way and we remain committed to fiscal discipline. There will be more difficult decisions to take on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term. We will publish a medium-term fiscal plan to set out our responsible fiscal approach more fully at the end of the month.
The only real way to create better jobs, deliver higher wages and spread opportunity is growth. Growth is what frees us to invest in the services that ordinary people need and to give people the financial security to live their lives as they want. Stability is a prerequisite for growth.
Wera Hobhouse
I do not think anybody could disagree that we all want growth, but the question is, how do we make that growth happen? My point was that we need to invest in people, particularly young people, to make that growth happen.
Richard Fuller
Yes of course, but the hon. Lady did not answer her question. The question is, how do we tap that potential? It is important to design policies that tap that potential. I was struck by a point made by the hon. Member for Glasgow Central about migrant families coming to this country and how they start their life. It is a fact around the world that first-generation migrant families, more often than not, contribute a greater proportion to the growth of the country that they go to than the population that they join. That seems to be a fact. I have not forgotten previous discussions with her before I took this role. The hon. Member for Bath said that we have to focus on people’s potential, but we have to find that strategy to achieve growth.
I remind hon. Members that while tackling these economic challenges, the fundamentals of the UK economy remain resilient. Unemployment is at its lowest in nearly 50 years. Our growth rate since 2010 has been higher than that of Germany, France, Italy and Japan, and it is forecast to be higher than that of any G7 country this year. The Labour spokesperson, the hon. Member for Ealing North, is shaking his hands, but these are the facts.
Our need for competence and stability is not at odds with the help that we are providing to those struggling with the cost of living. That is why the Government are focused first and foremost on helping everyone with the cost of living, most notably the cost of energy. The energy price guarantee and the energy bill relief scheme are supporting millions of households and businesses with rising energy costs. The Chancellor has already made clear that they will continue to do so—
Richard Fuller
I must finish up, if I may. They will continue to do so from now until April next year. The Government have also announced £37 billion of targeted support for the cost of living this financial year.
Many young people will have benefited as their wages got a boost from the national minimum wage increase. As a result of our changes to the national minimum wage, from April 2022 people aged 21 or 22 saw a 9.8% uplift, to £9.18 an hour, while 18 to 20 year-olds received a 4.1% rise, to £6.83 an hour, and 16 to 17 year-olds had an equivalent 4.1% increase, to £4.81 an hour.
Alison Thewliss
Can the Minister explain why people of a younger age are not worth the same as someone older?
Richard Fuller
Yes I can. The fundamental point is that we are investing in young people. Many businesses wish to invest and add additional costs for training and support to tap into those skills, so that people can earn higher wages later on. It is because companies have the incentive to invest in young people that young people can then earn more. The hon. Lady shakes her head, but she should recognise that the national minimum wage is not a cap on what people can be paid but a floor. If companies invest in young people to get those skills, they can earn more.
Our youth offer provides guaranteed foundation support to young people searching for work on universal credit. That includes 13 weeks of intensive support to help new claimants into suitable opportunities and provision. Youth hubs are co-delivered by the Department for Work and Pensions and local partners, and youth employability coaches are available for those with complex needs.
We will always encourage labour market participation and make it pay to work. Through universal credit, the Government have designed a modern benefits system that ensures that it always pays to work and that withdraws support gradually as claimants move into work, replacing the old legacy system, which applied effective tax rates of more than 90% to low earners.
Questions were raised by the hon. Member for Bath about free school meals and breakfast clubs. The Government spent more than £1 billion on delivering free school meals to pupils in schools. Around 1.9 million disadvantaged pupils are eligible for free school meals, as well as an additional 1.25 million infants who receive a free meal under the universal infant school meal policy. The Government are also providing an additional £500 million toward the cost of extension, which has come via a six-month extension to the household support fund.
The hon. Member for Leeds North East talked about breakfast clubs. The Government are providing over £2 million a year to continue the holiday activities and food programme, which provides free holiday club places to children from low-income families. The Government are providing £24 million over two years for the national breakfast club programme, benefitting up to 2,500 schools.
The hon. Member for Sheffield Central and others asked questions about support for university students. He may know that the Government have increased maintenance loans every year, meaning that disadvantaged students now have access to the highest ever amounts in cash terms. He may know that the Government have made £260 million available through the Office for Students, which universities can use to boost their own hardship funds. He may know that many students also benefit from the wider package of cost of living support, and he will know that maximum tuition fees will be frozen until 2025. He mentioned one particular idea on thresholds, which I would be grateful if he could write to me about.
Paul Blomfield
I will write to the Minister on that point. It is all very well saying that the maximum loan has been increased, but people cannot access it because the threshold has not changed. I think there is some serious work to be done by the Government on that. It could make a very real difference to some of the most hard-pressed students.
Richard Fuller
I would be grateful for his insight on that issue. I want to close on the issue of mental health and young people, which is an issue close to my heart. We are all aware that the response to covid had a dramatic effect on the mental health and wellbeing of young people more than others. The Government appreciate the importance of responding to the significant demands on children and young people’s mental health. The Government are delivering record levels of investment in mental health services. These investments are part of the NHS’s long term plan and include an extra £2.3 billion per year for mental health services by 2023-24. This will give an additional 345,000 children and young people access to NHS-funded services or school-based support by 2024.
It has been an interesting and pithy debate. It is clear that we owe it to the next generation to deliver higher wages, new jobs and improved public services. We owe it to young people to deliver stability and a strong economy on which they can build their future securely. We must make sure they have the safety net they need now. The Government will help them with the cost of living today and continue to invest in them for the future; that is what young people will benefit from, and that is what the Government are focused on delivering.
Fabian Hamilton
I thank all who have contributed this afternoon, from the hon. Member for Bath (Wera Hobhouse), who made some very important points, to the hon. Member for East Dunbartonshire (Amy Callaghan), to the SNP spokesperson, the hon. Member for Glasgow Central (Alison Thewliss). I also thank my colleague the shadow Minister, my hon. Friend the Member for Ealing North (James Murray), as well as my hon. Friend the Member for Sheffield Central (Paul Blomfield), who is a good friend.
The debate should have been far longer in many ways, because there is so much more to say. Let me conclude by saying this: if we ignore investment in children and young people, we will pay a price, but if we invest in young people and their welfare, education and mental wellbeing, we will all benefit. Our society will be stronger. Our country will be better, and it will deliver the growth we are all after.
Question put and agreed to.
Resolved,
That this House has considered cost of living support for young people.