Cost of Living Support: Carshalton and Wallington
(3 months, 3 weeks ago)
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Elliot Colburn (Carshalton and Wallington) (Con)
I thank the Speaker’s Office and you, Mr Deputy Speaker, for granting me this Adjournment debate to talk about the cost of living pressures in my constituency and what fiscal support is available to my constituents.
Of course, the Government are absolutely right that the biggest enemy of the cost of living is inflation and the subsequent rising costs of everyday goods. Interest rates affecting rents and mortgages, and the cost of energy to heat our homes, are problems that affect everyone in this country. I welcome the Government’s efforts in this area. Indeed, we have seen inflation come down drastically from its peak, and mortgage interest rates are coming down at many banks, but there is still a long way to go. The widespread effects make the cost of living an issue that we cannot ignore. We need to provide people with solutions to get them through this winter and beyond.
Most often, the most vulnerable in our society face the most severe consequences. Older people, who have weaved so much into the social fabric of our communities, have to contend with additional strain. Of my nearly 15,000 constituents aged over 65, roughly 1,800 have a long-term health condition and more than 4,500 are living alone. It is vital that support is there for them.
In recognising the gravity of the situation, I am heartened to share what has already been done by the Government and others to provide direct financial relief to those grappling with cost of living challenges in Carshalton and Wallington. First, I pay tribute to the Government for the 2022-23 cost of living payments, which stand as testament to their support for our constituents. The £650 cost of living payment, payable over two instalments, has been extended to claimants of universal credit, legacy benefits and tax credits. In my constituency, where roughly 8,000 households are on universal credit and 2,800 on legacy benefits and tax credits, that equated to an estimated total payout of about £7.1 million of support. That was exceeded in the following year of 2023-24, when it reached a staggering £9.1 million.
The £150 disability cost of living payment, which was provided to recipients of certain non-means-tested disability benefits, including personal independence payment and attendance allowance, aims to provide relief to 7,600 claimants in Carshalton and Wallington, with a total estimated payout of about £1.1 million last year and £1.2 million this year. In addition, the £300 cost of living payment for pensioners, coupled with the winter fuel payment, targets 10,600 households in my constituency with an estimated total payout of £3.2 million a year.
The £150 council tax discount, payable to all households in properties in bands A to D, stands as an additional measure to alleviate the financial strain on 30,500 properties in Carshalton and Wallington, with a total estimated payout of £4.6 million in 2022-23. In total, the estimated value of those payments to my constituency for the years 2022-23 and 2023-24 equates to £30.1 million. Those figures underscore the Government’s commitment to address directly the financial challenges faced by our community, for which I can only commend them.
Furthermore, the energy bill support scheme was designed to give support directly to those facing high energy bills. It was distributed in six equal payments between October 2022 and March 2023, providing an estimated £16.6 million to households in Carshalton and Wallington. The energy price guarantee, worth around £625 per household, significantly reduced bills between October 2022 and June 2023, and contributed an estimated value of £25.4 million to 40,641 households in my constituency.
Altogether, estimated support for the relief of energy bills in my community stands at an impressive £42 million. Those measures, coupled with the ongoing commitment to address the broader cost of living challenges, signify a comprehensive approach to ensuring that the wellbeing and financial stability of my constituents is at the forefront. Contrast that with the actions of Labour and the Lib Dems in my constituency: the Labour Mayor of London has increased his share of council tax on my constituents by a whopping 71% since 2016. That is without mentioning the £12.50 a day ultra low emission zone charge he has put on the poorest Londoners, including small businesses and charities. The Lib Dem-run council has whacked up council tax by 41% since 2010, increased parking charges, and voted in favour of expanding ULEZ to my constituency.
In commending the Government, I also encourage them to go further—to provide help for people and make sure that not only are they aware of the benefits that are available to them, but they know how to access them. We must put the needs of our constituents first, ensuring that they can afford a warm roof over their heads and alleviating the burden of meeting the costs of daily essentials. The support offered to my constituents by the Government has been generous, and I urge my constituents to look at the Help for Households website to see how they could be assisted further, but in order to have sustainable, long-term support, we need to take a number of additional measures.
As well as the support packages I have mentioned, the Government have already met their promise to halve inflation. In addition, the national living wage has been increased; the pensions triple lock has been protected; benefits have been uplifted in line with inflation; a new mortgage charter has been agreed with lenders to prevent unaffordable rises; national insurance has been cut, saving families £450 a year on average; business rates have been frozen; and much more has been done by this Government to try to help.
To build on that success, inflation must of course continue to fall but, as we know, that only slows the rate of growth. Therefore, we must be relentlessly focused on growing the economy—leading to even higher wage growth than we have at the moment—and continue to cut taxes further, leaving more money in people’s pockets and being put back into the economy. We must continue to build confidence so that interest rates can come down, build more homes to reduce the cost of housing, and back British business and the risk takers to create high-quality jobs, apprenticeships and opportunities for the next generation.
I commend the Government on the work they have done so far to provide support for my constituents, and indeed for many people throughout the country. I look forward to hearing from the Minister what further steps the Government can take, especially through this winter, to support our constituents through these difficult times.
The Economic Secretary to the Treasury (Bim Afolami)
I congratulate my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) on securing this debate. He is an asset to his constituents, who I am sure are pleased to be represented by him in the admirable way he has done so this evening. He is decent and has a clever mind, but most importantly he has a good heart, and that heart is in Carshalton and Wallington.
I think all of us in this place recognise the difficult times through which the people of this country, and indeed people around the world, have lived over the past couple of years. We have had the covid pandemic, Putin’s illegal war in Ukraine, and long-gathering inflationary clouds that have created a perfect storm for us all, but particularly for vulnerable people. However, this Government and this country have consistently fought back—against the virus, alongside our Ukrainian friends and, critically, from the perspective of the Treasury Benches, against the economic headwinds. As my hon. Friend outlined, this Government have provided one of the largest support packages in Europe over the past two years, in contrast to the damaging actions taken in his area by the London Mayor and my hon. Friend’s local Liberal Democrat council.
Some 11,300 households in Carshalton and Wallington were eligible for means-tested cost of living payments this financial year, and 8,500 individuals were eligible for the disability cost of living payment. Those households —my hon. Friend mentioned 30,500 properties in his constituency—along with all their neighbours, would have been eligible for the energy price guarantee, the £400 energy bills support scheme and the £150 council tax rebate, along with fuel and alcohol duty cuts. Energy support alone has paid for almost half of the typical family’s energy bill from October 2022 to June 2023 through both the energy price guarantee and the energy bill support scheme.
It is in part thanks to those measures that growth and real incomes have been stronger than expected this year—not just stronger than expected by the Office for Budget Responsibility, but stronger than expected by international economic forecasters. Inflation has also come down significantly to less than half its 2022 peak, and in November it fell to 3.9%, which is the lowest rate in over two years. Again, that was not forecast by the OBR or international forecasters. I do not deny that the outlook for real incomes remains challenging—it remains very challenging for many people, particularly vulnerable people in my hon. Friend’s constituency and across the country—as does inflation, but that is why we announced further support in the autumn statement in November to support the most vulnerable.
The Government will raise local housing allowance rates to the 30th percentile of local market rents in April 2024. In plain English, what does that mean? It means that 1.6 million low-income households will be better off to the tune of about £800 on average in 2024-25. Some, particularly Opposition Members, often say that that is not a lot of money, but I can tell the House that, for those 1.6 million low-income households, it is considerable support that they will welcome, as they will in my hon. Friend’s constituency.
The Government will also uprate all working-age benefits in full by the September 2023 consumer prices index rate of 6.7%, which is considerably higher than inflation, to make sure that working-age people on benefits are supported properly. That is 3 percentage points higher than forecast earnings for 2024-25 and, again, it will help support the most vulnerable while inflation continues to fall, with 5.5 million households on universal credit gaining £470 on average in the 2024-25 financial year.
My hon. Friend mentioned in his speech that 15,000 of his constituents are over 65, and we are maintaining the triple lock in support of those people and pensioners across this country, who have helped to build this country and have worked hard over years gone by. The basic state pension, new state pension and pension credit standard minimum guarantee will be uprated in April 2024 in line with wage growth of 8.5% in the usual reference period. In 2024-25, the full yearly amount of the basic state pension will be £3,750 higher in cash terms than in 2010 or, to put it more simply, £995 more —almost £1,000 more—than if it had been uprated by prices alone.
That comes on top of cost of living payments this year that are helping more than 8 million households on eligible means-tested benefits, 8 million pensioner households and 6 million people across the UK on eligible disability benefits. For individuals needing further support, local authorities in England continue to provide support through the household support fund, which is backed by £1 billion of funding. This allows local authorities up and down England to provide crisis support for the vulnerable households that need it the most, such as through supermarket or food bank vouchers. This means that, from 2022 to 2025, total support to help households with the cost of living will be over £100 billion—£104 billion—at an average of £3,700 per UK household.
However, I and the Government know that relatively short-term help is not enough. The only sustainable way to help vulnerable people in this country, including in my hon. Friend’s constituency, and to improve the living standards is to build a more prosperous future while remaining fiscally responsible. The best way to do that is to grow the economy and get more people into better paid jobs.
On growing the economy, this is not the time for more statistics, but I will say this: taken together, the measures in the autumn statement and the 2023 Budget represented the biggest upgrade in the GDP forecast that the Office for Budget Responsibility has ever scored. That shows the Government’s commitment to and delivery of a growing economy, which gives us all a better future.
When it comes to getting people into better paid jobs, from 1 April 2024, the Government are increasing the national living wage by 9.8% to £11.44 an hour for eligible workers aged 21 or over. That represents an increase of more than £1,800 in the earnings of a full-time worker on the national living wage and will benefit over 2.7 million low-paid workers. Just this month, employees’ main national insurance contribution rate has been cut by about 17%—that is, cut from 12% to 10%—and from April the main rate of class 4 national insurance for self-employed people will be reduced similarly, from 9% to 8%. That tax cut is worth £9 billion a year and is the largest ever cut to employee and self-employed national insurance.
The OBR expects that the measures announced at the spring Budget and autumn statement, taken together, will support nearly 200,000 additional people into work by the end of the forecast period. We do not do this for academic reasons or for fun; we do this because we know that giving people more of their own money—allowing them to keep more of their own money—improves their living standards, and we can do this while increasing funding for public services. Despite the difficulties of the last couple of years, over the course of this Parliament public services will benefit from the public purse by an increase above inflation of over 3%. We are doing this while supporting public services, while bringing down the deficit and bringing down the debt, and we can do all of it because of our careful management of the economy. That will benefit the vulnerable people in my hon. Friend’s constituency of Carshalton and Wallington and people across the country.
These measures underscore the Government’s unwavering commitment to supporting households up and down the country. We firmly believe that the key to a prosperous future lies in creating opportunities for everyone. The boost to the national living wage and the historic reductions in national insurance contributions are powerful tools in driving employment. Getting more people into work is not just good for them; it is good for our economy and for improving living standards, and it is clear evidence of a Government who have been willing to act to the tune of over £100 billion over the last three years. By putting more money into the pockets of hardworking people, we are not only bolstering their financial wellbeing but fuelling economic growth.
As always, we need to balance support for households with fiscal sustainability. The economic position remains challenging. We continue to keep options under review as we take tough decisions to drive down debt, drive down inflation and increase prosperity in every part of the United Kingdom. These are complex issues that affect all our constituents, wherever we call home.
I thank all hon. Members, but particularly you, Mr Deputy Speaker, because you are very kind, and my hon. Friend the Member for Carshalton and Wallington. He cares deeply for his constituents for whom he is a brilliant advocate in this place, and it is an honour to respond to him today.
Mr Deputy Speaker (Mr Nigel Evans)
Thank you for your kind words.
Question put and agreed to.