Oral Answers to Questions

Kerry McCarthy Excerpts

Tuesday 17th April 2018 Commons Chamber

[Robert Jenrick]

My hon. Friend makes an important point. We are trying to roll out our changes in apprenticeships, T-levels and other matters as quickly as possible across the country. We commissioned the Juergen Maier “Made Smarter” review to increase the adoption of digital technology in businesses—particularly small and medium-sized enterprises—and we will follow up on that in the months to come.

[Kerry McCarthy (Bristol East) (Lab)]

The circular economy has the potential to create hundreds of thousands of jobs in this country. What discussions has the Minister had with the Secretary of State for Environment, Food and Rural Affairs about how we can maximise these opportunities?

[Robert Jenrick]

The hon. Lady raises an important point. We are working closely with the Department for Environment, Food and Rural Affairs, and my right hon. Friend the Chancellor announced a call for evidence on single-use plastics in the spring statement. We intend to make proposals in due course.

Taxation (Cross-border Trade) Bill

Kerry McCarthy Excerpts

2nd reading: House of Commons
Monday 8th January 2018 Commons Chamber

[Mr Leslie]

Oh, that’s right—he is not here anymore. I vaguely remember who the Prime Minister was at the time.

The ballot paper text is a matter of record for all to see. It asked whether we should remain in or leave the European Union, but it did not go into the details, because in a parliamentary democracy those sorts of details are naturally left to us. This is on our shoulders. We are accountable to our constituents for interpreting that referendum result and putting it into effect, always with an eye on protecting their best interests. That is our job—it is what we are elected to do.

Government Members may think that it is in their best interests to leave the customs union, but that was not on the ballot paper. I disagree with them. I do not think that leaving the customs union is in our best interests, and certainly not those of my constituents. We are talking about a potential impact on half the goods traded by the United Kingdom, as half our goods trade goes to the European Union. These are not inconsiderable issues. Some 2.5 million lorry journeys a year through Dover might be affected. Whole businesses have set up “just in time” business models, down to a matter of minutes, for how goods and components will be sourced throughout supply chains and how inventories will be sourced from across the whole European continent, but they now face being upended not only by the potential duties imposed by the Bill, but by other, non-tariff barriers including bureaucracy, additional form-filling, registrations and inspections. Goods coming in might have to go to one side, both at the port of departure and at the port of entry, to be checked for sanitary and phytosanitary compliance. There are all sorts of inhibitors to the free flow of goods. I and other Opposition Members are talking about free trade. That is what we should be standing up for, which is why this is an incredibly important issue.

[Kerry McCarthy (Bristol East) (Lab)]

I draw attention to my entry in the Register of Members’ Financial Interests. This is not just about goods being physically sold in other European countries. Musicians who tour Europe face real uncertainty about whether their instruments and merchandise, whose sales a lot of bands rely on, will be viewed as imports into those countries. There is a lot of uncertainty about what will actually be classed as a good crossing a border.

Duties of Customs

Kerry McCarthy Excerpts

Ways and Means resolution: House of Commons
Monday 20th November 2017 Commons Chamber

[Mr Marcus Fysh (Yeovil) (Con)]

It is a pleasure to stand here tonight and to talk about this Bill on behalf of my constituents. Having listened to the speech by the hon. Member for Bootle (Peter Dowd), they might have been a bit surprised to hear that there was no point to this place at all. However, what we are doing tonight, if we pass these resolutions, is giving our consent to the Government bringing in a Bill that is a key part of enabling us to have the proper machinery of Government if, and as, we leave the European Union. This is not a warm-up act for the Bill itself; this is a gateway we need for the Bill, and it is entirely sensible. This is about giving our consent to the Government making changes to financial matters that will affect every one of our constituents.

As part of those mechanics, we have a massive opportunity to set our own tariffs and duties as we go forward as a nation and to set our own trade policy and all that goes with that. However, this is a very technical matter.

[Kerry McCarthy (Bristol East) (Lab)]

The hon. Gentleman talks as if it was an entirely unilateral decision on our part what tariffs and trade agreements we have. We have to get out there into the wide world and try to negotiate these trade agreements. Does he not acknowledge that we are in a much weaker bargaining position than we were when we were negotiating those as part of the EU?

[Mr Fysh]

I do not accept that at all, but I thank the hon. Lady for her intervention. We have a major opportunity to think about what tariffs are best for all of our economy, rather than always having to think about just the EU. This is a really big opportunity to shape many of our industries, when we have just had to cope with a one-size-fits-all solution for many years now.

Our ability to cope on day one is dependent on the measures in the Bill being effective. I have to thank my right hon. Friend the Minister for listening so intently when I have slightly harangued him about trying to ensure that we have enough resource and application on these detailed matters. It is absolutely right that leaving the European Union is a complex business; it is not something we can just assume will be fine. We really need to devote resource, time and application, and to get as much as we can out of the private sector advising and helping us, to make sure we have the necessary technological solutions as part of these processes.

Money Laundering: British Banks

Kerry McCarthy Excerpts

Tuesday 21st March 2017 Commons Chamber

[Simon Kirby]

The hon. Gentleman raises an interesting point. It is important to co-operate with countries around the world. We have been very clear that we will work with the Financial Action Task Force and other regulators around the world, and that is important. This is not something we can solve domestically on our own.

[Kerry McCarthy (Bristol East) (Lab)]

Investigators at the National Crime Agency are saying that Russian officials have been hampering their investigations by refusing to co-operate. What discussions has the Minister had, or will he have, with his Foreign Office counterparts to see whether they can broker a better relationship with those Russian officials?

[Simon Kirby]

I would imagine that the FCA is in contact with the Foreign and Commonwealth Office, and, if appropriate, they will have conversations about this issue. What is important is that, if these allegations are correct, and any new information is presented, the NCA and the FCA act on it appropriately.

Budget Resolutions

Kerry McCarthy Excerpts

Thursday 9th March 2017 Commons Chamber

[Kerry McCarthy (Bristol East) (Lab)]

I did not agree with everything the hon. Member for Harrow East (Bob Blackman) said, but he did make some very thoughtful points. I hope that the Economic Secretary was paying more attention than he appeared to be and has taken them on board.

I was disappointed by the lack of ambition in yesterday’s Budget. I suppose that we should take some consolation from the Chancellor’s acknowledgement that the Government still have a lot of work to do. Perhaps when we have the combined autumn statement and Budget we will see more ambition from him.

The Chancellor talked about improving productivity and ensuring that young people have the skills they need. I agree with that. He identified some of the challenges, but he singularly failed to address Brexit—the elephant in the room that is in danger of trampling everything else underfoot.

The Budget failed to offer any comfort for Bristol in terms of city governance or for my constituents. Bristol is a prosperous city with thriving industries. It is the only city outside London that makes a positive contribution to GDP. That sometimes means that we are seen as having everything sorted and having everything going for us, but not everyone in the city is able to share in its success. Our mayor, Marvin Rees, is working to make Bristol a more equal city and to share the prosperity beyond the wealthy and the recently gentrified parts of the city, so that it works for people who have lived in Bristol all their lives, as well as for people who have been attracted to move there because it is such a thriving place. I fear that yesterday’s Budget made his task that bit more difficult.

According to the Children’s Society, more than 5,000 children were living in poverty in my constituency of Bristol East last year. The Chancellor spoke yesterday of the “dignity of work”, but the majority of those children are in working families. The issue of in-work poverty has been raised frequently in this House and needs to be tackled. It is not enough simply to suggest that moving people into work from welfare is the only solution. Universal credit cuts will only make the situation worse.

There was nothing yesterday in response to the Resolution Foundation’s warning that incomes will rise for high-income households, stagnate for the middle and fall at the bottom. In my constituency of Bristol East, there are very few who fall into the high income category, but very many who fall into the middle or the bottom and who will not benefit. The Resolution Foundation said that the result will be

“the biggest rise in inequality since the late 1980s.”

I do not know how the Chancellor can lecture low-paid workers about the dignity of work, when he is watching their living standards fall.

The Chancellor is increasing the taxes of self-employed workers, despite the fact that they earn half as much as employees and have fewer rights. I grew up with a stepfather who was a self-employed demolition contractor. My sisters took over his business when he died. He was not quite a white van man—he had a lorry instead—but in all other respects he fitted that definition, as did virtually all the family friends who came round our house. They were all builders, electricians, plumbers or window cleaners. They did pretty well for themselves, but they did it by working incredibly hard.

My dad did not take a day off sick, not least because he would not have earned any money if he had done so. When we went on family holidays, he had to calculate not only the cost of taking a family of eight abroad, which was pretty extortionate, but how much he would lose in earnings and whether he would have to pay other people to keep his salvage yard open. Three of my five sisters are now self-employed. I know how they have to grapple with the fluctuations in income. It is not easy to plan, because they do not know from one moment to the next when the money will come in. They have additional burdens.

According to the FSB, 6,500 self-employed people in my constituency have to make the same calculations. They will now have the added responsibility of extra national insurance contributions, without the security of employment. I had an email from a constituent today, who wrote on behalf of her son who is a construction worker. She pointed out that he has to buy his own tools, his own work safety gear and his third-party liability insurance. He has to have something called a CSCS card and has to pay to travel to jobs. Quite often at the end of one job, there is a break when he does not know whether another job is in the pipeline. Clearly, some of that is tax deductible, but not all of it is. We have to acknowledge that self-employed people are not the same as employed workers, with the security that they have.

[Stephen Doughty]

My hon. Friend is making an excellent point. I, too, know many people in self-employment in the types of jobs she is talking about, including among my family and friends back home in Wales. She mentions insurance. Is it not the case that people find it difficult to get insurance against loss of earnings, as well as insurance for high-priced items such as tools? The Government have not dealt with all those additional costs that come with self-employment in this Budget.

[Kerry McCarthy]

As I said, we have to acknowledge that the self-employed are in a very different situation from people who have an employer who takes care of all their needs. The Chancellor has singularly failed to recognise that. He seems to be blaming the self-employed for not reading the non-existent small print in the Conservative manifesto. He cannot get away with saying that this is not a broken promise, given what the Conservatives said in 2015.

[Seema Malhotra]

My hon. Friend makes a point about her family. My father was self-employed when I grew up, also in a family of eight. I was in a similar situation. We never had a holiday when we grew up. Our summer holiday was a daytrip to the seaside with food that we took for ourselves. That is the reality of the struggle it can be to make ends meet when people take that risk. Does she agree that this added pressure, when there are already pressures on family budgets, could be what turns those who are just about managing into those who are no longer managing?

[Kerry McCarthy]

I very much agree with my hon. Friend and recognise the points she makes about the family she grew up in.

Surely we want to encourage more people to become entrepreneurs—to strike out on their own and create the thriving businesses of the future. Some of our most successful entrepreneurs started out as self-employed, then set up small and medium-sized enterprises, and went on from there. I think that this short-sighted tax grab by the Chancellor will deter people from doing that.

[Bob Stewart (Beckenham) (Con)]

Forgive me for not being here earlier, Madam Deputy Speaker. I thank the hon. Lady for letting me intervene on her. As I understand it, this measure will be tapered, so someone who is earning below £16,250 a year will be better off. It is only as people get to the top end of earnings that it will apply. Moreover, it will not come in until the summer, when we look at the national insurance Bill.

[Kerry McCarthy]

As the Bill goes through Parliament, we will have to scrutinise the detail. All I know at the moment is that I have constituents who are extremely worried about this proposal and it is making them think twice about whether they should continue as self-employed or look for jobs that are potentially less lucrative, but that have more security.

[Peter Dowd]

Does my hon. Friend agree that if the Government get away with this proposal, it will be a down payment on more NIC and tax increases?

[Kerry McCarthy]

That is certainly the concern. As has been said by several hon. Members, if people cannot trust the Government on this matter, they will think that they cannot trust the Government on anything in respect of their future economic security.

[Mr Jackson]

The hon. Lady is making typically lucid points, but is it not incumbent on her party, given that there is a broad consensus that we need to fund social care better—the Chancellor announced an extra £2 billion —to identify where that money would come from? If she does not want it to be raised through national insurance contributions, where else will it come from?

[Kerry McCarthy]

That leads me very nicely on to my next point, which is that the Chancellor claims the Government have no choice but to raise national insurance contributions. However, he has somehow managed to find £70 billion in tax cuts for the rich and for corporations, including £1 billion for the Government’s pet concern, inheritance tax. I pay tribute to my hon. Friend the Member for Leeds West (Rachel Reeves) for her work on this. From next month, the inheritance tax threshold for a couple will start to rise from the current £650,000 to £1 million. Over the past two years in my Bristol East constituency just 17 homes sold for more than £650,000, and not all of them would have been subject to inheritance tax. My constituents are paying the price for a tax cut that will benefit only 0.04% of the people, many of whom live in the far more affluent constituencies of Cabinet Ministers.

The Chancellor also managed to find funding for the Prime Minister’s grammar school project, despite a dearth of evidence to support the policy. It baffles me why he thinks this is more important than helping the schools we have at the moment, which face a £3 billion shortfall. What good will new grammar schools do for children and teachers at Bristol Met, where half of all pupils are on free school meals but their funding is being cut by 21%, or at Begbrook Primary, which has seen a 16% cut in per pupil funding between 2013-14 and 2019-20? West Town Lane academy has seen a 16% cut and Waycroft academy a 14% cut. I could go on. The Government’s chaotic approach to children’s education is emblematic of a Budget incapable of joined-up thinking or long-term planning. The funding is there when the Government want it to be, but not when people need it to be.

The Government seem incapable of looking beyond the short term and of recognising that cuts have consequences. Ministers are denying 18 to 21-year-olds housing benefit, but if just 140 young people are pushed on to the streets the policy will cost the Government more than it saves. Centrepoint estimates that about 9,000 young people will be put at risk of homelessness by the policy. That is not just short-sighted; it is—if you will permit me to say so, Madam Deputy Speaker—gross stupidity on the part of the Government. It is too high a cost for the sake of making very short-term savings.

I referred to the success of Bristol as a city, but that success comes at the price of a booming housing market that means homes are increasingly out of reach for Bristolians. On average, tenants are having to spend 64% of their disposable income on rent. Our Mayor has created a multi-disciplinary housing delivery team and a city office that has been working hard to try to get more affordable housing built and to find temporary beds for the homeless. They will not be helped by cuts to housing benefit and Ministers’ preoccupation with £1 million houses. I urge the Government to consider our Mayor’s request for the power and support necessary to tackle the housing crisis. It is not enough just to devolve the responsibility; the resources and the money have to go with that if he is to do what he is being asked to do.

On housing, just as on social care, public health, funding cuts and tax increases, the Government’s instinct is to pass the buck to local authorities. Bristol’s funding has fallen by £170 million over the past six years. Over the next five years, we face a £104 million funding gap as costs rise. The further 30% cut to the Department for Communities and Local Government’s budget suggests Ministers are oblivious to the difficult decisions councils are having to make. There is no recognition of the long-term costs of neglecting our infrastructure and key services. A temporary sticking plaster next year will not rescue our social care system or relieve the burden on council services.

The situation will only get worse with Brexit. Bristol City Council received £22 million of EU funding in the 10 years to 2015. The city’s two universities receive over £20 million a year from EU sources. I pay tribute to all the work my hon. Friend the Member for Bristol West (Thangam Debbonaire) is doing with universities on Brexit. The European Investment Bank facilitated initiatives such as Bristol Energy, the council’s energy company. Two thirds of exports from Bristol, Exeter and Plymouth go to the EU, which is far higher than the average for UK cities.

The Chancellor claimed there would be no complacency, but neither is there any strategy. The Government have no clue about what will replace that EU investment or how to guarantee our exports market. Blithely pretending everything will be fine and dandy is not a legitimate plan. Ministers are rushing headlong into a hard Brexit and abandoning the single market, ignoring how trade with the EU is a major driving force for our economy. Turning us into a bargain basement tax haven may be what some Ministers have always wanted, but it is not what Bristol or the country needs.

The Chancellor boasted of infrastructure projects, but my constituents are fed up with broken promises and bad management. We have endured disruption because of the electrification of the Great Western line and the taxpayer has had to cope with the spiralling cost. Now the programme has been delayed indefinitely—at a cost of £330 million. The people of Bristol do not know if they will ever see the benefit, but we have already paid the price.

Time and again, Ministers do not bother to consider the bigger picture. Environmental regulation, for example, is dismissed as red tape. I have given up hoping that some Conservative Members will see the environmental necessity of so-called green crap—apologies again, Madam Deputy Speaker—but I had hoped that some would see the economic potential. The Government have chosen not to engage, or to take a very half-hearted approach, with the EU’s circular economy work, despite its potential to create half a million jobs and support a genuinely forward-thinking industrial strategy that is fit for the future. The Chancellor promised us skilled jobs and meaningful training, so I hope he will go back to his colleagues at the Department for Environment, Food and Rural Affairs and look at how a genuine focus on the green economy can support that and ensure Britain really is world-leading. That would reassure me and my constituents that the Government are capable of working with cities like Bristol to help everyone to achieve their full potential.

Oral Answers to Questions

Kerry McCarthy Excerpts

Tuesday 29th November 2016 Commons Chamber

[Mr Hammond]

I understand that the Heart of the South West local enterprise partnership bid for this scheme is part of its local growth fund submission; as I said, £191 million has been allocated to the south-west, and details of the individual LEP allocations will be announced in the near future. The Government are very supportive of using infrastructure to open up house building and employment opportunities, and from what she has said about this road, it sounds as though the project in question would fit very well with Government priorities.

[Kerry McCarthy (Bristol East) (Lab)]

As the Chancellor will know, Bristol is making a real contribution to productive growth, not just in the south-west, but across the country. But as the mayor of Bristol said in his response to the autumn statement,

“if the government wants a ‘watertight’ UK economy it needs to stop punching holes in local government’s hull.”

Will the Government commit to giving Bristol and cities like it the devolved powers, infrastructure investment and funding they need to deliver on productive growth locally?

[Mr Hammond]

The Government remain committed to the devolution agenda and, in particular, to supporting mayoral authorities, to ensure that economic growth and productivity are driven from the bottom up. We will continue to work with those authorities to make sure we deliver the funding available in the most effective way to get the result the national economy needs.

Oral Answers to Questions

Kerry McCarthy Excerpts

Tuesday 19th July 2016 Commons Chamber

[Mr Hammond]

Yes.

[Kerry McCarthy (Bristol East) (Lab)]

T9. In a new report on living standards, poverty and inequality in the UK, the IFS finds that young people in their twenties are still earning 7% less than before the financial crisis, yet we know that the pressures on their incomes, particularly housing costs and student fees, are higher than ever before. What are the Government going to do to help this generation that is being left behind?

[Mr Hammond]

We have already had this question from the shadow Chancellor. Of course, we have introduced the national living wage, which will make a difference to people on low earnings at the bottom of the income scale. Interestingly, the hon. Lady perhaps hints at something else—questions of inter-generational fairness. The Prime Minister signalled early on in her tenure of office that that is one of the areas that she wishes to address.

Article 50: Parliamentary Approval

Kerry McCarthy Excerpts

Monday 11th July 2016 Commons Chamber

[John Penrose]

The hon. Lady is right: the details will become a great deal clearer as the negotiation goes through. We will all discover more about the various facets of how Brexit will affect different parts of our lives as the negotiations near completion. However, I must repeat what I have said several times already: we shall not be able to say how Parliament will engage with that until the new Prime Minister has had a chance to lay out her timetable for the negotiations, whereupon it will be possible to assess when opportunities for debate and discussion will occur.

[Kerry McCarthy (Bristol East) (Lab)]

This was not the question that I was going to ask, but given the Minister’s response to my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), I want to press him on the extent to which devolved institutions will be consulted. Much of the work of some Departments is devolved—food and farming, for example—yet in terms of the European Union, this will be a UK Government negotiating position, and that really does need to be resolved.

[John Penrose]

The hon. Lady gives a good illustration of instances in which it will be important to ensure that the constituent parts of the United Kingdom are closely involved so that their views can be factored in, whether the issue in question is devolved or non-devolved. There will be plenty of occasions when views will need to be fed back very carefully to inform the discussions and the negotiating team that is undertaking them.

Oral Answers to Questions

Kerry McCarthy Excerpts

Tuesday 27th January 2015 Commons Chamber

[Mr Gauke]

My right hon. Friend is absolutely right; the Opposition have given no indication of the balance between tax and spending and how they are going to find that £30 billion. At a time when Labour Back Benchers are saying that Syriza shows the way while those on the Labour Front Bench apparently support a £30 billion fiscal tightening, all we get from the Opposition is chaos.

[Kerry McCarthy (Bristol East) (Lab)]

2. What recent representations he has made to the EU on the cap on bank bonuses.

[The Economic Secretary to the Treasury (Andrea Leadsom)]

The Government keep their opposition to the EU-wide cap on bonuses, but we withdrew our legal challenge in November 2014 after it became clear that it was not likely to succeed. We believe that the cap is flawed, and will just serve to put up fixed salaries, but instead of pursuing the legal challenge we are looking at other ways of building a system of pay in the banking system that only rewards excellence and clearly promotes responsibility.

[Kerry McCarthy]

Can the Minister tell the House how much the Chancellor spent on legal fees alone in that failed legal challenge? Was that not a huge waste of money when the priority should have been to help those people most in need?

[Andrea Leadsom]

No. The amount spent was £43,000. The Government believe fundamentally that we need to have the toughest regime in the world of any global financial centre on pay, and that is what we have. We have ensured that bankers will be remunerated in future on performance and that pay can be clawed back. We have put in place a system that is far better and far more accountable than anything that the previous Government attempted.

The Economy

Kerry McCarthy Excerpts

Wednesday 26th November 2014 Commons Chamber

[Priti Patel]

This Government have cut the deficit by over a third, so we will not take any lectures from the Opposition or the hon. Lady about that—notwithstanding the fact that when in office Labour failed to prepare our young to compete against the brightest and the best when it came to skills, jobs and education, and that was just the tip of the iceberg.

Since 2010, this Government have worked hard to turn this situation around. By working to our long-term economic plan, we have seen the deficit cut by over a third, income tax cut for over 25 million people, benefits capped to reward work, and 1.7 million more people in employment, while over 2 million more private sector jobs have been created and employment is the highest on record. We have created 1 million apprenticeships. The state pension has increased. More children are in good and outstanding schools. Over 50,000 families now have a home thanks to our Help to Buy policy. This is a good start, but we are the first to recognise that the job is far from finished.

[Kerry McCarthy (Bristol East) (Lab)]

I gather the Minister is visiting my constituency tomorrow, although her office was not prepared to tell us what she will be doing there; perhaps she can tell me now. May I urge her to meet some of my constituents, and go around some of the estates and find out what life is really like for those people, because it bears very little resemblance to what she is telling us now?

[Priti Patel]

I am looking forward to coming to the hon. Lady’s constituency tomorrow.

I have made it perfectly clear that we have made a good start but the job is not yet finished. The UK currently has the highest rate of growth in the G7; it is over twice that of Germany.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

We could spend a lot of time trading statistics about the economic recovery, the debt, the deficit and how much more the Chancellor is borrowing at this point in the economic cycle than he said he would. Those things are important but, frankly, they mean little to my constituents, who are tired of the blame game and of hearing the Government constantly saying that everything is the previous Government’s fault, given that they have been in charge for four and a half years. What matters to my constituents is their own jobs and living standards, and economic security for them and their families. It is about whether they can heat their homes, put food on the table, keep their cars running or afford the bus into the town centre to get to work, and keep a roof over their heads. The limited recovery that we have seen, which is barely bouncing along the bottom, is not being felt in east Bristol. That is why I asked the Minister, when she is in east Bristol tomorrow, whether she would be prepared to come and see some of that reality on the ground.

The unemployment figures seem to be moving in the right direction, which is good news. Labour has always had the ambition to move people from welfare into work as a route out of poverty. The right is fond of trying to caricature and misrepresent Labour and our voters as being wedded to welfare dependency. That is simply not the case. Labour has always been the party for workers; welfare for those who need it as an essential safety net and a support for those making the transition to work, and work for those who can and who, despite the misrepresentation, in 99% of cases desperately want to work. But under this Government we have seen a rising phenomenon of in-work poverty; a problem that is masked by the superficially encouraging trend in employment figures, but is undeniably there and is a feature of many people’s lives.

The Joseph Rowntree Foundation has just published a report on this year’s statistics. It says that it

“shows a real change in UK society over a relatively short period of time. We are concerned that the economic recovery we face will still have so many people living in poverty.”

It is estimated that about 13 million people in the UK are in poverty. Poverty among working age adults without children is at a record high, but about 40% of working age adults in poverty are working. So it is not simply an issue about moving people from welfare to work; it is about making work pay. Among children in poverty, most—more than 2 million—are in a working family.

[Andrew Gwynne]

My hon. Friend makes a powerful point. Is not this why we need a more concerted effort on the living wage? She will know that during this Government’s lifespan, the number of people paid less than the living wage has increased by 1.5 million, and that puts enormous pressure not just on those families and individuals but on the social security system.

[Kerry McCarthy]

I agree entirely with my hon. Friend. Nearly 20% of working people in Bristol East earn less than the living wage. According to the Joseph Rowntree Trust, two thirds of people who moved from employment into work in the last year are paid below the living wage. That is why in Bristol we have been running a living wage campaign. We have finally managed to persuade the mayor of Bristol to introduce that at the council level, and we want to encourage the organisations that do business with the council, with procurement contracts and so on, also to do that, and for the private sector to follow suit. That is incredibly important.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

My hon. Friend is making an important speech about Bristol, and I was interested in her comments on the living wage. Will she accept that the living wage is equally important for seats such as mine in outer London, where those who travel into central London have recently been hit by a 38% increase in the cost of the tube as a result of the Mayor of London’s recent decision?

[Kerry McCarthy]

I entirely agree with my hon. Friend. I will come in a moment to some of the living costs that are hitting people’s pockets hard. In Bristol, First Bus announced this month that the price of a day rider ticket would increase by 10%. That may not seem a huge amount, but when people are squeezed to the last penny and are struggling to afford to go to work and for work to pay rather than being on benefits, such transport fare rises make a huge difference to their weekly outgoings. That is another part of the jigsaw puzzle of how people are struggling to make ends meet.

My hon. Friend the Member for Coventry South (Mr Cunningham) mentioned zero-hours contracts, and constituents have come to see me recently about the uncertainty in which those place them. Usually people would be added to the payroll in the middle of the month and paid at the end of the month, but if people do not know until the end of the month how many hours will have been worked, they end up being paid a month in arrears. I had a woman come to see me the other day who had started work in September just too late to get on the payroll for that month. She could not be paid for the full month in October because she would not know until the end of the month how much she had worked, so she would not be paid until the end of November. Not only did she have to cover the period without an income, but it was impossible to plan ahead. It was impossible to claim in-work housing benefit and difficult to asses what she was entitled to in child care tax credits and other tax credits. It meant that she had to employ a childminder without knowing whether she needed that or could look after her child herself.

My hon. Friend mentioned season tickets. How does someone know whether it is worth buying a monthly season ticket to travel into work without knowing how many hours they will be working? All these things add up to make life incredibly difficult for people on zero-hours contracts. It is exploitation and it has to stop. Workers are being underpaid and underemployed. They are being treated as just another inanimate resource rather than the human beings that they are.

Some 1.4 million contracts do not guarantee a minimum number of hours and 1.4 million adults are in part-time work because they cannot find full-time work. In the last year, not a single employer has been prosecuted for paying below the minimum wage. The last successful prosecution was in February 2013, which was only the second prosecution under the coalition Government. Last year, the TUC estimated that 350,000 workers were paid less than the minimum wage. Again, that has to stop. These laws are there to protect workers and to ensure that work pays, and they are simply not being enforced.

The Joseph Rowntree report

“highlights the way the housing market has had a negative impact on people in poverty. There is not enough social housing”—

as we all know—

“which means more people in poverty are living with insecure tenancies in the private rented sector. The number of private landlord repossessions is now higher than the number of mortgage repossessions.”

The number of working people claiming housing benefit is rising and the amount that they need to claim is increasing too. Last year, the south-west of England saw the biggest increases in rent, with a rise of nearly 5%. Bristol is second only to London in yearly house price growth, with average prices in our city increasing by more than 13% last year. On top of that are the increases in transport costs. Between 2010 and 2013 energy prices for households rose by 37%.

Finally, there is food poverty, which Madam Deputy Speaker will know is an issue dear to my heart. In the UK, more than 4 million people are affected by food poverty. UK food prices increased by 43% in the eight years to July 2013. We all know that more people are having to use food banks. According to the Oxfam and Church Action on Poverty report “Below the breadline”, the three main food aid providers gave more than 20 million meals in 2013-14, a 54% increase on the year before. Problems with the social security system, such as delays and sanctions, continue to be the biggest overall trigger for food bank use. About 45% of people who use the service do so because of problems with the benefit system. Despite repeated questioning of various Ministers, including even the Prime Minister, the Government refuse to accept that it is the failings of their own welfare system that are driving people to the food banks in poverty.

Another emerging trend is the 22% of Trussell Trust food bank users referred because of low income—compared with last year 51,000 more people were referred owing to low income. Again, this is in-work poverty. These are not people who are playing the system, who, as one Minister said, are making use of the food banks simply because they are there so that they can spend their money on beer and bingo. These people are doing their best to try to get by in work but simply cannot afford to feed their families without resorting to food banks.

My hon. Friend the Member for Nottingham East (Chris Leslie) has outlined some of the measures that Labour would take in terms of taxation and trying to raise incomes to address some of these problems, but above all it is a question of priorities. The Government have completely the wrong priorities—giving tax cuts to millionaires rather than tax cuts and support for people at the lower end of the income scale who are the ones who really need it. Cutting the 50p tax rate did nothing to help the people in my constituency who are struggling to get by. I urge the Government to rethink this because their priorities at this time are simply wrong.