Living Standards

Part of Opposition Day — [Un-allotted Day] – in the House of Commons at 6:30 pm on 30th November 2011.

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Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Environment, Food and Rural Affairs) 6:30 pm, 30th November 2011

I am pleased to be called to speak in this important debate to which there have been so many good contributions, but I shall introduce a bit of a downer. If the ghost of Christmas present visited the streets of Ogmore and Bridgend as we run towards Christmas, he would not find a great sight, because we are seeing rising household prices, and a squeeze on incomes because incomes are falling. People who work in retail parks and shops are being asked to reduce their hours, and there is greater job uncertainty. It is not only low earners in working families who are being squeezed; middle earners are being squeezed too. There is a squeeze on the high street, and shops in my constituency are being closed for the first time in 20 years.

There are rises in some areas. There are rising queues at the job centres, and I am glad the Secretary of State is back in his place. He visited Wales not long ago, and we were pleased to see him. He visited Merthyr where he said there were plenty of jobs out there. On the day he was there, there were 39 jobs, but there were 1,670 people chasing those jobs. He suggested looking in Cardiff, where things would be better. They were better: there were 1,700 jobs there, and 15,000 people were chasing them. I suspect that the situation is no better today. That is the backdrop to this debate.

There are rising queues at my surgeries, at citizens advice bureaux, at housing advice surgeries and, most chronically, at food handout centres. Queues at food handout centres in this century are a repercussion of the current dilemma. Great people are setting up food distribution centres to hand out food, not just to low-earning families but to people who would previously have been thought to be relatively prosperous and doing okay, but are now finding that the squeeze is so acute that they must rely on food handouts.

That is a toxic mix. We are not seeing a rebalancing of the economy between public and private sectors jobs, or seeing private sector growth. We are seeing a rebalancing of the economy from growth to chronic contraction. Why is that coming about, and who is being hurt most? I suggest that the cumulative effect of some of the Government’s new and current policies—those they have put in place over the last year, as well as yesterday—is hurting working families, women and those who are struggling to make ends meet. The Department for Work and Pensions is cutting child care costs from 80% to 70%. That is £13 a week for working families in Ogmore, and around 400 families will be worse off. An Ogmore family with two children will lose an additional £3.70 a week by 2013-14 thanks to the Government’s freeze on child benefit.

In-work families in Ogmore will be £100 per claimant worse off thanks to the freezing of the basic and 30-hour elements of the working tax credit. An average Ogmore family will lose £160 a year because of the increase in the tax credit withdrawal rate. The baby element of child tax credit has been scrapped. No one can put a price on a baby—I have three children in my family—but some money can be paid towards that. The credit was £545, but it has now been scrapped. The average loss from the cut in the second income threshold will be £285 per family. In total, around 9,100 families in Ogmore will be affected by the tax credit cuts. That is a crying shame.

The Government often say that they do not want to learn lessons from the Opposition, so let them learn from Chris Johnes, Oxfam’s director of UK poverty. He said:

“Freezing working tax credits will penalise those who are trying to make a living by working their way out of poverty—this should be among the last places the Government looks to make savings. At a time when the lowest-income households are already struggling to make ends meet, it could push even more working people into poverty.”

That is the Government’s legacy.