Budget Resolutions and Economic Situation

Melanie Onn Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Melanie Onn (Great Grimsby) (Lab)]

I want to focus my comments on homelessness and the effects on it caused by the Budget and the changes over the past six years, specifically because I attended an event this weekend organised by Rucksack, a charity that gives advice and clothing to homeless people in Grimsby and the surrounding area. It directs rough-sleepers to hostels with spare beds and other organisations that can offer help, such as the YMCA, Salvation Army and Harbour Place, which is a well-known local organisation. They all do fantastic work but, due to the recent surge in homelessness, some local hostels have extensive waiting lists of 15 people who cannot get beds. Rucksack tells me that each of those organisations is substantially overstretched in offering their provision to local people in dire straits. Homelessness is not caused by fluctuations in the economy; it is about people’s support structures.

In my area—I am sure the situation is replicated across the country—there is a critical shortage of appropriate properties for people suffering varying degrees of disability, and their partners, children or people they care for, because of the funding available for adaptations in social housing and private housing for people with disabilities. It is becoming more difficult not only because the funding is decreasing significantly, but because the thresholds that people face to qualify for it are so high.

It is a test for our society. I heard colleagues say eloquently yesterday that the debate is about whether we are compassionate enough to ensure that help is there for people in their most difficult time. We have failed that test in recent years. The Treasury briefed The Sun before the Budget that the Chancellor was drawing up plans to eradicate homelessness. How typical was that of the Chancellor! There was a great pre-Budget story for the papers, complete with a celebrity endorsement from Richard Gere to catch attention. On the day itself, that grand scheme turned out to be nothing more than a sticking plaster. I defy any Government Minister to stand up and say, with a straight face, that the scheme will get us anywhere near eradicating homelessness. As the chief executive of Crisis said, the measures do little to tackle the underlying problems.

I am no spreadsheet geek, by any stretch of the imagination, but I have had a look at tables 2.1 and 2.2 in the Red Book, which deal with measures in this Budget and those in previous Budgets and autumn statements that are due to come into effect this year. They relate to housing benefit changes, the temporary accommodation funding mechanism and reductions in social housing rents, which have impacts on the ability of housing associations to invest in existing properties or to build new ones. All those things have a significant impact on homelessness and the likely increases in it. The £115 million proposed is therefore a case of giving with one hand and taking significantly away with the other. I know that organisations such as Rucksack and other small charities in my constituency, such as Harbour Place, will say that they are not clear where that £115 million is going to go. It really needs to go to those who need it the most and the organisations that provide direct care and help. Under their welfare reforms, the Government made those under the age of 25 ineligible for housing benefit. That is another cut within this Budget, but I will end there.

Budget Resolutions and Economic Situation

Melanie Onn Excerpts

Monday 21st March 2016 Commons Chamber

[Greg Clark]

My hon. Friend draws attention to a very important point. We have doubled small business rate relief, benefiting businesses right across the country—the small businesses that are the backbone of our economy and that are contributing a record number of jobs, meaning that we have more people employed than ever before.

[Melanie Onn (Great Grimsby) (Lab)]

Will the reduction in small business rates have an impact on local authority incomes?

[Greg Clark]

If the hon. Lady had attended DCLG questions earlier in the day, she would have heard me confirm that every penny will be made up. I am sure she is delighted to hear that.

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[Helen Hayes (Dulwich and West Norwood) (Lab)]

In the short time available, I would like to make just a couple of points about what I believe to be a cynical and desperate Budget. It is cynical because it is designed to deliver appealing messages to some parts of the electorate, while hoping that no one will notice how these benefits are being delivered. It is desperate because the context is the Chancellor’s failure to meet any of the targets he has set himself and he is scrabbling around throwing all common decency out of the window to save face.

The proposal to deliver cuts in corporation tax and capital gains tax, overwhelmingly benefiting large firms and well-off individuals, by cutting personal independence payments to disabled people was a despicable plan. Further cuts to support for disabled people are straightforwardly unacceptable. Making such cuts to precisely the type of support that enables many disabled people to have greater control and lead more independent lives is as incompetent as it is cruel. People across the country have made their outrage at this proposal clear. I am relieved that the Government have U-turned on this plan, but quite frankly it beggars belief that the Chancellor ever thought it was acceptable.

I am compelled to draw attention to the announcement in the Budget relating to homelessness. The Chancellor was so pleased with this announcement—£115 million to tackle rough sleeping—that he leaked it to the Evening Standard the day before the Budget. The Communities and Local Government Committee, of which I am a member, is currently undertaking an inquiry into homelessness. Last week we visited The Connection at St Martin’s, which supports rough sleepers just a few hundred metres from this place. Its dedicated staff told us how the number of rough sleepers is increasing, how they struggle to keep up with the demand for their services and how Government policies, across a range of different areas, are contributing directly to making the problems worse.

Homelessness has increased by 36% since 2010 and rough sleeping in London has doubled. In Lambeth alone, there are over 1,800 households in temporary accommodation, including almost 5,000 children in one single borough living without the security of a permanent home. Additional funding to help rough sleepers is of course welcome, but while £115 million sounds like a big number it is a sticking plaster on a severed artery.

[Melanie Onn]

There are an additional five housing measures in the Budget, all of which raise more money for the Treasury. Does my hon. Friend think that they will have an impact on homelessness, because they relate to some of the core fundamentals of providing housing in this country?

[Helen Hayes]

The Government’s approach to housing is broken from top to bottom. The Government must recognise, as the previous Labour Government who reduced homelessness by 62% recognised, that tackling the causes of homelessness is within their gift. The single biggest cause of homelessness in London is now the ending of a private sector tenancy, yet the Housing and Planning Bill will do nothing at all to reform the private rented sector. Even to the Chancellor, it should be crystal clear that rough sleepers cannot afford starter homes and will not benefit from lifetime ISAs or the cut in capital gains tax. The growth in homelessness in London in the 21st century is this Government’s shame. In that context, it is imperative that the Government rethink the Housing and Planning Bill and ensure that sufficient public sector resources are being directed into the building of the genuinely affordable homes that are so badly needed.

This is a cynical, desperate Budget and I think the Chancellor has been found out. I hope the Government will take the opportunity that has been presented to them this weekend to rethink the Budget comprehensively, and that the Chancellor himself will come back to the House with a fair deal for disabled people, a fair deal for our councils, and a plan for addressing the causes of homelessness, not just the symptoms.

Equitable Life

Melanie Onn Excerpts

Thursday 11th February 2016 Commons Chamber

[Melanie Onn (Great Grimsby) (Lab)]

I have been contacted by a number of constituents who were affected by the collapse of Equitable Life. One woman wrote to me to say:

“I myself have lost over £40,000, and have only received £12,000 in compensation. Does this sound fair to you?”

Successive Governments have failed to appreciate the anger that this issue has caused people. A couple who contacted me asked why the Treasury had provided 100% compensation to Icelandic bank depositors, when they had received only a fifth of the sum that they were due and had planned their retirement around. They said:

“In the years prior to our retirement we actually took money from our own savings to top up our pension payments and feel that we have lost twice over. We would have been better off being irresponsible and spent every penny we had and then relied on the State. It seems the government departments are hoping that we will die and the problem will go away.”

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

The Library briefing points out that there is a ticking time bomb because the beneficiaries of the scheme are elderly. Like my hon. Friend, I have received representations from many constituents. Has she heard the same sentiment that I heard expressed by Brian Watkins, who faces losing up to £40,000 and thinks that the Government are waiting until policyholders die, so that they do not have to deal with them? Surely, we should reassure those people, and the Chancellor should find that money down the back of the sofa.

[Melanie Onn]

I agree, and our constituents in London and the north of the country clearly share the view that this is a significant issue. People feel seriously let down by the Government’s failure to act on this matter in a timely fashion. I wonder whether the Minister is confident that the current regulations are strong enough to prevent any repeat of what happened. Future investors will be particularly keen to know that they are not going to fall into a similar trap and that if a similar situation were to come to light in the future, the Government would engage with the victims and allow their voices to be heard when trying to devise a solution.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

My hon. Friend is making an important point about victims feeling that their voices are not being heard; that is the message that has come across loud and clear from my constituents, who have also been affected and have found themselves re-mortgaging their homes in their old age just to make ends meet. Does she share my concerns on that?

[Melanie Onn]

It must be a significant concern to people to find themselves at retirement age without the money they were expecting, having prudently invested. The example I gave was of people taking money out of their savings to top up their pensions, and they would have expected to have some security in their older years.

It is welcome that the Government do step in where regulation has failed; but unfortunately, the delivery is too often lacking. We know about this in Grimsby, because there has also been appalling maladministration of the fishermen’s pensions and the fishermen’s compensation scheme. Despite it being 30 years since those were due to pay out, a constituent of mine is still waiting and has not received the £3,000 that he is due, simply because of poor record keeping. The Government must understand that when compensation packages are devised, the mechanism to deliver them must be properly put in place and all the calculations must be done appropriately, and where money is promised, it must be delivered. The Government need to ensure that the regulation of these industries is robust and they need to be quicker to compensate those who lose out in the future.

Welfare Reform and Work Bill

Melanie Onn Excerpts

Tuesday 27th October 2015 Commons Chamber

[Owen Smith]

I will in a moment.

That is why the Bow Group, the Adam Smith Institute, Lord Lawson and many other respected Conservative economists think that this change is a false economy. Not only will it damage the incomes of working people; it will damage our economy. The Bow Group—which you will remember well, Mr Speaker—said that these cuts will be “devastating” for our economy.

[Melanie Onn (Great Grimsby) (Lab)]

An employer contacted me this week in despair because employees have been reaching out to him and asking for more hours to mitigate the loss in income from the changes to tax credits. At the same time, he has to consider reducing staff numbers to meet the requirements of the new increased minimum wage. Does my hon. Friend agree that the changes will result in reductions to household incomes, as well as job losses?

[Owen Smith]

I fear that may be correct, and Government’s lack of forethought, analysis and scrutiny on these measures, and the way they have tried to bowl them through both Houses in double quick time, is a measure of their fear that such analysis will reveal the fundamentally misconceived economics behind these cuts, which are unfortunately designed to make an ideological political point.

Tax Credits

Melanie Onn Excerpts

Tuesday 20th October 2015 Commons Chamber

[Graham Evans]

The hon. Gentleman is saying that the Scottish National party is happy to increase the national debt. That is the message: the national debt is going to go up. That is what socialism does and what socialists say. They are not concerned about the national debt, which is currently £1.4 trillion and getting higher. We can hear the message coming through loud and clear from the SNP.

Tax credits cost £l billion in their first full year, but have since risen to an estimated £30 billion over the last year, yet over the same period in-work poverty rose by 20%. The status quo on tax credits is clearly not working. Indeed, the former Labour Chancellor of the Exchequer, Alistair Darling, said that tax credits were

“subsiding low wages in a way that was never intended.”

It is vital to address the root causes of low pay rather than simply continuing endlessly to subsidise low pay through the benefit system. Reforming tax credits is crucial to achieving a sustainable welfare system that is fair both to the most vulnerable in society and to hard-working taxpayers who have to pay for it.

These reforms do not stand in isolation, but are part of a joined-up, wider offer to working people by this Government. With the announcement of the introduction of a new living wage by my right hon. Friend the Chancellor during his summer Budget, and the strides taken to raise the personal allowance, people will not only earn more but keep more of what they earn. It always pays to work.

On top of that, we doubled the number of free childcare hours of which parents can take advantage to 30, introduced tax-free childcare and froze fuel duty, saving a family £10 every time they fill up their tank.

[Melanie Onn (Great Grimsby) (Lab)]

The hon. Gentleman is talking about how people working on low pay should be grateful for the so-called living wage. Let me make the point again that this is not a living wage: it is not £7.85; it is not enough for people to live on. Let me provide an example. On the basis of changes to the tax credit threshold and the taper, a medical secretary with two children earning £22,236 a year can be expected to be £2,109 a year, or £40 a week, worse off in 2016 than in 2015. Will the hon. Gentleman comment on that?

[Graham Evans]

What I will say is that employers must step up to the plate. They must pay higher rises—rising salaries. The living wage will rise to £9 during the term of the present Parliament, and because the Government have increased the personal allowance, people will earn £12,500 before paying any tax whatsoever.

The combination of those changes will make eight out of 10 working families better off. A typical family in which someone is working full time on the minimum wage will be £2,400 a year better off by the end of this Parliament. By 2020, the annual income of a single parent with one child working 35 hours a week and receiving the current national minimum wage will have increased by more than £1,500.

Poverty can be left behind only through work. The reforms of tax credits focus support on the families on the lowest incomes, while favouring support for working families through the tax system and earnings growth rather than through benefits. They will move Britain from a high welfare, high tax, low wage economy to a lower welfare, lower tax and higher wage economy.

--- Later in debate ---

[Melanie Onn (Great Grimsby) (Lab)]

I congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her excellent maiden speech.

Prices have risen faster than wages during the vast majority of this Government’s time in office. Working people in Grimsby have seen their earnings fall by more than £2,700 since 2010. Today, one in three of my constituents earn less than the real living wage of £7.85 an hour. Grimsby desperately needs a pay rise, but what this Government are doing instead is cutting people’s incomes by at least another £1,300 a year. People simply cannot cope with a further reduction in their incomes.

The Government say that people simply need to work harder for a few more hours a week in order not to lose out, but for many, that is completely unrealistic. Many people in my constituency do not have that option; some are already working two or three jobs just to make up the hours. Conservative Members were given a mandate by their constituents based on their party’s manifesto and on what the Prime Minister said during the election campaign. They do not have a mandate to cut tax credits; in fact, they have a mandate not to cut them. What does it say about the regard in which Conservative Members hold the voters of this country if, just five months later, they walk through the Lobby and do precisely the opposite of what the Prime Minister promised?

The irony is that I agree with what Ministers have been saying: we do need a higher-wage economy, with less being paid out in welfare as a result. We need to support and help to grow the industries of the future, but the Government are doing the opposite. Three of the UK’s solar energy companies have entered administration in the past two weeks, the green deal has been scrapped and investor confidence in the wind energy sector is drying up. The Government have failed to make any real attempt to save the thousands of jobs being lost in the steel industry. That shows what is actually developing under the Conservatives: an economy in which more and more jobs pay less than the real living wage.