Cost of Living: Energy and Housing

Julie Hilling Excerpts

Thursday 5th June 2014 Commons Chamber

[Mr Davey]

I simply do not recognise those claims. We have been doing a huge amount to tackle child poverty. The increase in the child care tax credit in the very first Budget was a major help for low-income families with children, so the hon. Gentleman should take that back.

[Julie Hilling (Bolton West) (Lab)]

When the right hon. Gentleman said that some people said that they wanted to go a little bit faster in paying down the deficit, was he referring to the Chancellor, who had promised that it would be got rid of in this Parliament?

[Mr Davey]

Many commentators thought we should cut the deficit faster, but we have taken a very responsible approach, to ensure not only that interest rates were kept low—that has been so vital for many families and the hon. Lady’s constituents—but that employment has risen so well. I would have thought she would be welcoming that.

The problem is that the Opposition used to criticise the coalition on unemployment—they used to say that unemployment was going to go up—but when the facts showed they were wrong and that unemployment has gone down they have had to change their economic argument. The Opposition keep changing the economic argument because they keep losing the economic argument. Let us examine their recent economic argument on the cost of living. I presume that everyone in this House accepts that the key measure of the cost of living remains the inflation figures. So if the cost of living is the measure by which to judge this coalition, let us see what has been happening to inflation. Inflation is lower than when the previous Government left office and it is falling.

I have to confess to the House that the Bank of England’s inflation target is not being hit—inflation is lower than the target. In March, inflation had slowed to just 1.6%. Of course for our constituents it is real incomes and real wages that actually matter: what people have to spend after tax and after inflation. Looking at things in that way, it is true that after the 2008 recession many people saw living standards fall. But let us remind ourselves what happened: a huge £113 billion was wiped off our economy in the great financial crash of 2008, and there was a £3,000 cost to every household in the United Kingdom. To put that right, and to keep employment rising, it was arithmetically inevitable that living standards could not rise in the turnaround period for our economy, but now we really are in recovery. Now it is not just employment that is rising—it is living standards too. How has that happened? Of course, it has been because of the coalition’s long-term economic plan.

Key aspects of that plan are really beginning to help, above all the implementation of the Liberal Democrat manifesto policy to increase the tax-free allowance to £10,000 a year. Our record not just of implementing this fairest of tax cuts, but doing more than we promised is helping more than 26 million people. It has taken 3.2 million low paid out of income tax and it has cut the income tax bill of a double-earning couple on average earnings by £1,600 a year. This Liberal-Democrat-turned-coalition policy has cut the number of low-income people paying income tax more in five years than any other Government have achieved in the same period since records began.

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[Jeremy Lefroy (Stafford) (Con)]

It is a pleasure to follow the considered speech of the hon. Member for Llanelli (Nia Griffith) and the insightful comments of my hon. Friend the Member for Esher and Walton (Mr Raab). I congratulate the proposer and seconder of the Loyal Address, my hon. Friends the Members for Portsmouth North (Penny Mordaunt) and for Mid Dorset and North Poole (Annette Brooke), on their excellent speeches yesterday.

The Queen’s Speech states that the aim of the Government is to strengthen the economy and to provide stability and security. Today we are debating, among other things, the cost of living, which is a matter of huge concern to all our constituents. That is why tackling the deficit is so important. In 2010, the deficit was at an unsustainable 11.8% of GDP. That should be compared with a maximum of 3% which, even in the eurozone, is seen as essential for long-term stability. The necessary measures that this Government have taken will, according to The Economist, reduce the deficit this year to 4.8% of GDP, which is still considerably higher than that 3% but a huge improvement none the less.

Unusually, I pay tribute to the Treasury for the efforts it has made in recovering tax from tax avoidance schemes. The amount of money coming in now has greatly increased on previous years, and that is a tribute to the work that the Chancellor and his team have done in bearing down on some of the ridiculous tax avoidance schemes that they inherited.

What would the consequences have been of not making such a reduction in the deficit? The Government would have had great difficulty in raising money on the markets and in financing borrowing. For the taxpayer, there would have been higher taxes to pay the increased borrowing charges. Let us not forget that we pay about as much interest at the moment as we spend on our entire school system, and soon it will be more. For home owners and businesses, it would have meant increased borrowing charges through higher interest rates. Tackling the deficit is therefore key and the first step in keeping the cost of living down. Any party serious about being in government has to state how it will do that and continue to bear down on the cost of living, because 4.8% is still far too high.

As earlier speakers have said, the Government have done much more to tackle the cost of living. First and most importantly, they have increased the number of jobs—or helped to increase them, because the Government themselves do not create many jobs; in fact, there are fewer people working in the public sector now than at the beginning of the Parliament. Nevertheless, the Government have created the conditions in which 1.7 million new jobs have been created, which goes to the core of addressing the cost of living crisis. They have increased the personal allowance to £10,000—it is to go up again next year—which helps to increase take-home pay and is important in tackling the crisis. They have also frozen fuel duty and supported councils to freeze council tax.

At this point, I add a note of warning about the Opposition policy of freezing energy prices. One consequence of such a freeze, as we have discovered with fuel duty and council tax, is that when we have done it once, people expect us to continue and continue with it. What happens after 20 months of frozen energy prices? What happens to that policy? Will people expect it to continue? Will they say, “You have done it for 20 months, and we need it to continue”? Council tax and fuel duty, however, are to some extent in the hands of Government—they are taxes—but energy prices are not wholly in our hands.

[Julie Hilling]

Perhaps I can answer the question for the hon. Gentleman. We will have reformed the energy market by that point, so we will have stopped the excess profit earned—or taken—by the energy companies. That is the plan; it is not only about the 20-month freeze, but about reforming the energy market.

[Jeremy Lefroy]

I understand that, and I think the energy markets need reform, but to expect that that will keep energy prices frozen, or at least at a stable level, when we are subject to world energy prices is to some extent pie in the sky. But we will see.

[Julie Hilling]

I thank the hon. Gentleman for giving way again. Does he agree that when world prices go down, energy suppliers should reduce our bills, rather than putting them up? Fair enough, when the prices go up, we expect our bills to go up—but should we not expect them to go down as well?

[Jeremy Lefroy]

We would. In some cases, our bills have gone down, and in other cases energy companies are freezing them. Furthermore, through the ability to switch, which many people take advantage of, they can also cut their energy costs. All I am saying is that once we introduce a freeze, it is less easy than we might think to take the freeze away, because people will expect prices to remain the same, and we have been finding that with council tax and the fuel duty. It is essential that the Government look at every sustainable way to keep downward pressure on the cost of living for households.

I want to concentrate my remaining remarks on three areas, housing, health, and international affairs, which sadly have not been included as a subject for the Queen’s speech debate, although they were mentioned in the Gracious Speech itself. The Queen’s Speech talks about increasing the supply of housing, and we all agree that that is vital: we need to build more houses. The question is not simply one of numbers; it is also about the type of houses, where they are built and infrastructure.

With changing demographics, we need more housing suitable for older citizens, including extra care housing, of which I am glad to say that more is being built in my constituency. It also includes building small, energy-efficient, single-storey homes, which many of my constituents say that they would wish to move into, if possible, but there are simply not enough of those homes. I saw an excellent example of such a development, which must have been built 20 to 30 years ago, when for some reason I happened to be passing through Newark recently. Unfortunately, we do not see that sort of development now. Why? Because developers tell us that such homes are not profitable, because they take up too much land. That shows a lack of ambition and imagination. Such developments would encounter much less opposition, because they can be seen as fulfilling a real need and keeping communities together by enabling older people to stay in the communities in which they have lived for so long.

Where houses are built is, of course, a matter of great controversy, but it is exacerbated by the irresponsible submission by developers of planning applications that are quite clearly outside democratically agreed local development plans. That is certainly the case in my area. I urge the Secretary of State for Communities and Local Government, whom I am glad to see in his place, strongly to resist such speculative developments, which fly in the face of properly agreed local plans.

Infrastructure is also a great concern. I worry that sometimes we look only at the narrow implications of development and perhaps suggest that problems can be addressed by, for instance, a controlled junction onto a new housing estate, rather than considering the wider knock-on effects of traffic across the whole area. In particular, once traffic lights are introduced, they are rarely removed or even modified to take account of subsequent development. We need to consider that. We tend to focus much too narrowly on the requirements of a specific development rather than those of the community as a whole.

I want briefly to speak about health. I have spoken on many occasions about the Mid Staffordshire NHS Foundation Trust and will continue to do so, both in order to speak up for my constituents and because I believe that what has been happening there is of national importance and has national implications. Medium-sized district general hospitals provide services that are prized by local communities. They often provide out-patient services and elective surgery, but they also provide general accident and emergency provision—not the most complex, but everyday provision—and consultant-led maternity services and paediatrics. For that to be provided and, of course, for safety reasons, there is a need for them to come together with the larger hospitals through networking, buddying or mergers, but such provision should be possible. That is why I fully support NHS England’s review of the possibility of continuing consultant-led maternity services at Stafford. I have also urged consideration of the possibility that urgent care could be available at night to supplement the 8 am to 10 pm A and E service that should be provided, although I believe that eventually a return to a 24/7 A and E will be necessary, especially given the housing developments taking place.

We are told that specialisation means that centralisation is inevitable. I disagree and I was very glad, after a conversation last week with Simon Stevens, the new head of NHS England, to find that he views district general hospitals and community hospitals as important in providing not just community services but acute services. I hope that he will succeed. Those of us who live and work in large towns and rural areas need a decent, truly national health service and not one that is increasingly sucked into the major cities.

Of course, there is the unpalatable issue of cost, and I shall not be afraid to address it in this place, as I have before. We will have to spend more on health, probably at least 2% of GDP. I have already suggested both in this place and in writing how we can do that, possibly by converting national insurance into a progressive national health insurance paid according to income and preserving an NHS free at the point of need. In my opinion, we must remove health from an increasingly sterile debate about taxation.

Finally, I want to touch on foreign affairs. I am proud to be a supporter of a coalition Government who have, with cross-party support, achieved spending of 0.7% on overseas development assistance. I am also proud to be a supporter of a Government who have introduced the Modern Slavery Bill, again with cross-party agreement.

Those things are vital, but I see four global challenges that we must confront. The first is to eradicate absolute poverty. The World Bank has set a target to get rid of it by 2030, and we as a country and a people need to do everything we can to support that. The second is to reduce income inequality. We have already spoken today about income inequality is in this country, and the World Bank has that we must concentrate on the 40% with the lowest incomes globally to reduce income inequality. I share that aspiration, as income inequality eventually leads to political instability and many other things.

Thirdly, there is climate change, which we cannot run away from and which any responsible Government must take fully into account in their policies. Fourthly, there is the whole matter of combating—not allowing—extremism. This relates to income and equality, but it is not just about income and equality as some of the most extreme people come from some of the most privileged backgrounds. We have to combat extremism everywhere and promote freedom of speech, thought and religion and the freedom to have no religion. That is the responsibility of this Government and this country. There is no magic solution to any of this, just constant, hard negotiation, peace making and engagement. We cannot do it on our own. We need to work with others to exercise our influence through the Commonwealth, the United Nations, the World Bank, the IMF and particularly the European Union.

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[Michael Ellis]

Yes, indeed, and careful consideration of measures is crucial. I practised law in the criminal justice system in Northampton for years before I entered the House, and I witnessed the criminal justice legislation repeatedly passed under the Blair Government and the subsequent Labour Government. Frankly, much of that legislation only served to grind to a halt the court process in England and Wales. It did not work, and in many cases it created further problems. It is important to get legislation right.

We want a Britain that pays its way in the world and a Britain that is more competitive. I wholeheartedly disagree with Labour Members who criticise concepts of profit and commercial endeavour. We want hard-working people and to give them peace of mind for the future, and this Queen’s Speech continues that series of policies. This Government have carried through such measures during the past four years, and will continue to do so for the next year.

For example, the deficit is down by a third. We still hear criticisms about how fast we are able to get down the deficit. As I have previously pointed out to the House, the reality is that for Labour to make such criticisms is rather like an arsonist criticising a firefighter for the time taken to put out a fire. The deficit is down by a third, and income tax has been cut for 25 million people by an average of more than £700.

[Julie Hilling]

The hon. Gentleman is praising the Government for reducing the deficit by a third—we are, of course, always pleased when the deficit reduces—but will he explain why they have not met their target of getting rid of the deficit over the term of this Parliament? I appreciate that the Parliament has a few more months to run, but it does not seem to me that they will hit the target of a 100% reduction.

[Michael Ellis]

I am pleased to hear noises from Labour Members about their wanting us to go faster in reducing the deficit. We are doing what we reasonably can, while adopting policies that will be fair across the board and across society, to make good the damage to the British economy that we inherited from the previous Labour Government. That is why we have created 1.5 million more jobs, which is an unprecedentedly large number of new jobs. They are quality jobs: in many cases, they are full-time jobs. I have heard Labour Members castigate such an achievement or try somehow to negate it by reference to the type of jobs created and the like, but these are new jobs that in many cases are giving people security and peace of mind. The huge volume of new jobs certainly beats the record of the previous Government and every Labour Government whom I can think of, going back generations. At the end of their term, unemployment was higher than the level they inherited.

[Michael Ellis]

I am told that that has always been the case under every Labour Government.

[Julie Hilling]

I really cannot let the hon. Gentleman get away with the outrageous statement that the previous Labour Government caused a global economic crash that started in America. My right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) may have been very powerful, but I do not believe that he caused the economic crash that started in America. Is the hon. Gentleman really trying to tell the House that the global economic crash was caused by my right hon. Friend?

[Michael Ellis]

The economy that this Government inherited was 20th out of the G20 leading industrialised nations. It was at the bottom of the heap. That was the responsibility of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), Tony Blair and the Labour party. That is the appalling legacy that we are seeking to improve.

Under this Government, there are 1.7 million more apprentices. We are looking to give people opportunities. Large numbers of apprenticeships have been created to do that. There are better standards and better schools for young people. Those are significant achievements of the past four years and the Queen’s Speech will follow through on them. Only by sticking to our plan will we secure a better and brighter future for Britain.

I accept, as the hon. Member for Bolton West (Julie Hilling) has pointed out, that there is more to do. That is why we seek another term. In my constituency of Northampton North, the rate of unemployment is 33% lower than it was in April 2010—the month before the general election. Youth unemployment is 41% lower than it was. However, there is more to do and the rate of unemployment is still too high. Like many colleagues on the Government Benches, I organise jobs fairs on an annual basis. During the last jobs fair that I organised, more than 2,000 people came through the doors and more than 40 companies were represented, including medium, small and large companies and charities. I accept that there is more to do, but we must stick to the long-term economic plan and get it right. The Chancellor of the Exchequer, the Prime Minister and all those on the Treasury Bench have been getting it right and we are seeing the results.

Her Majesty referred to the infrastructure Bill. Investing in infrastructure is a key part of the country’s long-term economic plan, because we have to think to the future, like the Victorians and many of our predecessors did. They thought of future generations. Stable long-term funding for the strategic road network is very important and is anticipated in the coming Session.

I have lobbied persistently—some might say nagged—on the issue of potholes. That might seem to many to be a micro-economic issue, but it is significant. In my constituency, and no doubt in other parts of the country, the issue of potholes is of serious and significant concern. I got together a petition to seek more assistance in that regard. I am happy to say that the Chancellor of the Exchequer announced in the Budget that he would allocate a further £200 million towards—

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[Julie Hilling (Bolton West) (Lab)]

I am very pleased to have an opportunity to speak in the debate. I wish that I could talk about the Gracious Speech, but in truth I do not believe there is very much to talk about, although I must say that I welcome the announcement of action on plastic bags.

My constituents cannot afford another year of complacency. They cannot afford another year of a Government who do not understand their situation and simply tinker at the edges. They cannot afford a year in which the Education Secretary proceeds with his plans to take our schools back to the 1950s, and in which the Government ignore the cost of living crisis faced by the people of Bolton West and do nothing to ensure that having a job means that people can afford to live, nothing to tackle the abuse of zero-hours contracts, nothing to address the widespread concerns about immigration, nothing to stop care workers being exploited, nothing to stop the privatisation of the national health service, the scandal of people being unable to see their GPs or the scandal of missed cancer and waiting-time targets, and nothing to freeze energy prices.

The Gracious Speech did not even include Bills that the Government have already produced in draft, such as the Wild Animals in Circuses Bill and the Bill to prevent smoking in cars. And what has happened to the legislation to regulate the taxi industry following the inquiry that the Government asked the Law Commission to undertake? Commentators have described this as a zombie Government, and I think that perhaps they have a good point. Government Members who spoke yesterday welcomed the next 11 months of lots and lots of general debates, but, much as I welcome the opportunity to discuss issues that are really important to the people of Bolton West, such debates are pointless if no action is taken to deal with those issues.

Members on the other side of the House talk proudly of the actions taken by their Government. They seem to think it is okay for there to be food banks in the fifth richest country in the world, and that it is okay to talk about jobs that are being created without any acknowledgement or understanding of the fact that they include unpaid jobs provided through Government schemes, jobs involving zero-hours contracts, jobs that have been transferred from the public sector, jobs that were created and then failed, and jobs in which people are self-employed. The fact that 30% of people who use the Atherton food bank in my constituency are in work provides evidence of the quality of some of those jobs. It shows that the quality of a job is important, rather than merely having a job.

Government Members make claims that they cannot back up with reliable evidence. Five million workers—one if five of us who are lucky enough to have a job—are paid less than the living wage. That is an increase of 400,000 in the last year alone. The situation is not just bad for those people, but bad for the rest of us. It costs the Exchequer £3.23 billion a year in in-work benefits and tax losses to support employers who do not pay their employees a living wage. Low pay is bad for the economy, and it is bad for the taxpayer as well. However, the Government have no plans to improve the national minimum wage.

One group of workers who are caught by both zero-hours contracts and abuses of the minimum wage are care workers. People who are doing one of the most precious jobs in our country, and whom we entrust to look after our elderly and disabled loved ones, are treated appallingly. Studies show that between 160,000 and 220,000 care workers are unlawfully paid less than the minimum wage.

[Nia Griffith]

When we talk about raising the minimum wage, we often hear scaremongering stories about jobs being offshored. Does my hon. Friend agree that, as care workers’ jobs cannot be offshored and will continue to be done here, there is no danger in raising their wages?

[Julie Hilling]

A great deal of nonsense is talked about raising the minimum wage. When we consider the cost to the people who are employed and the cost to the Exchequer, it is clear that we cannot continue to subsidise employers who could pay their employees a living wage.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

My hon. Friend is right to express concern about carers, many of whom are women. Would not many of them benefit the most from Labour’s commitment to provide extra child care assistance so that their children can be looked after, as opposed to the Government’s promise of jam tomorrow in autumn 2015?

[Julie Hilling]

My hon. Friend is absolutely right. Most carers are women, and most of them are now older women because of that very problem that people cannot afford to pay for care.

An investigation of 80 care providers established that nearly half of them were not complying with minimum wage regulations. A fifth of the adult social care work force are on zero-hours contracts. Many are not paid for travel time, and, unsurprisingly, there is a 30% turnover of care workers who work in people’s homes. This is not just bad for them; it is also bad for the people they care for. Imagine a situation in which someone does not know who will come into their home four times a day to get them up, to feed them and to put them to bed, and who does not know who will be washing their most private parts. Imagine the strain of their having to tell different people every day how to care for them, the strain on carers when their cared-for person is unable to speak up for themselves, or the worry for people of not knowing when carers will turn up and the panic when they think they might have been forgotten.

Then there are the mistakes that occur. Members will know that I speak from experience. My mum was given both her morning and evening tablets at the same time the other day because the carer accidentally gave her her evening tablets and then thought it would be a good idea to give her her morning ones as well. Another carer just gave her her evening ones instead of her morning ones, and, even worse, a new carer took my mother for her shower, wrapped her in a towel and left her to walk alone from the bathroom to the bedroom with the towel wrapped around her, Of course, my mother fell and has a head injury, and an arm injury that is still troubling her now several weeks later. I speak from experience and I know that this is exactly what is happening to hundreds of thousands of people every day when they cannot rely on the care service. Imagine the distress, too, of a cared-for person, day in, day out, having a parade of different carers.

Low pay, insecure work and zero-hours contracts are not just bad for the employee; they are bad for all of us. I fear that yet again my words are falling on the deaf ears of those who simply want to tell us that everything in the world is fine. Well, it may be fine in their world, but it is not fine in the world of the majority of my constituents in Bolton West.

Simply telling my constituents that things are getting better does not solve the problem. This Gracious Speech does not solve the problem that a third of private rented homes are non-decent homes. It will not build the affordable homes or the social homes for people and their children. It will not provide secure tenancies or affordable child care or raise the national minimum wage. It will not guarantee a job for the long-term unemployed. It will not freeze energy prices. It will not stop workers being undercut by the unscrupulous use of migrant workers. It will not make it easier for people to see their GP. It will not stop the privatisation of the health service, and it will not tackle the issues of dog welfare and dog control that put my constituents at risk; and, worst of all, it is not going to make work pay.

I hope that in 12 months’ time I will be welcoming all the things that I said this Gracious Speech will not do, and that I will be sitting on the Government Benches welcoming the next Queen’s Speech. Truly Britain deserves better than this.