Fairness and Inequality

Part of Opposition Day — [20th Allotted Day] – in the House of Commons at 5:32 pm on 11th February 2014.

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Photo of Nia Griffith Nia Griffith Shadow Minister (Wales) 5:32 pm, 11th February 2014

Fairness and equality are fundamental to Labour’s vision for society. Our roots are in the philosophy and movements that worked for a fairer society, such as the democratically controlled non-conformist chapels, friendly societies and trade unions. We believe in a community in which power, wealth and opportunity are in the hands of the many, not the few. We want to see a fair day’s pay for a fair day’s work. However, it is not just the less well off who benefit from a more equal society. As has been well documented, more equal societies deliver better outcomes not only for the less well off, but across the whole community —not only are the least well off less disadvantaged, but people feel more secure, safer and less threatened, and society is more cohesive.

Tackling inequality is about challenging those structures that perpetuate inequality and about creating the necessary structures to challenge and mitigate that inequality. It is about challenging and ending exploitation in its many guises. It is about responsible trade unions negotiating with managers to ensure a fair share of rewards for working people and, as we saw in 2008, safeguarding jobs and retaining skilled workers, even if that meant their accepting temporary reductions in pay or hours. Tackling inequality is about siding with ordinary people against the powerful, against whom they feel they have no redress. It is about empowering them and giving them the means to achieve that redress. It is about setting priorities to try to redress inequalities and developing the tools and structures to continue to tackle inequality.

Things do not stand still. We need to continue to tackle inequality. For example, we have said that we will impose a freeze on energy prices, but that is not enough. It is the immediate first step. We will then break up the energy market to make it work better for the consumer. In other words, we need an ongoing solution. We will also introduce a tougher regulator to ensure that the market works for people. It will have the power to tackle the off-grid issues that many hon. Members have mentioned today. With this Government there is absolutely no redress for the ordinary person. They are not standing up to the energy companies, which are making massive profits, but instead are just moving the green taxes on to general taxation.

The Government have imposed massive cuts to legal aid and introduced disproportionate charges for employment tribunals. Someone who is wrongly dismissed from a low-paid job will have to pay £500 up front to go to an employment tribunal, but because they were on low pay they might not have any savings. The Government are trying to tear up employment legislation and make people feel even more insecure than they do now.

The Government are using the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014 to attack trade unions that are standing up for workers’ rights. Despicably, they have been using the same Act to attack charities standing up for, and highlighting the needs of, vulnerable people. They are charging people an up-front fee to go to the Child Support Agency to get an estranged parent to pay their fair share of child maintenance.

Everywhere we look, the Government are making it harder for ordinary people to get what they are entitled to: harder to get a fair wage for a fair day’s work; harder to get energy supplies at a fair price; harder to make ends meet if they fall sick, lose their job or cannot find more hours to work; and harder to stay in their house, which might have been specially adapted, if they are hit by the bedroom tax—a cruel and ill-thought-out tax that Labour would reverse.

We all understand that the banking crisis has led to severe financial restraint, but there are still different options and priorities that Governments can adopt. They can choose to give tax cuts to millionaires, as this Government have done, or they could ask the better-off to bear a greater share of the burden. Under this Government, however, we have seen the very poor get even poorer.

Successive Governments have uprated benefits in line with inflation, mostly using the retail prices index until 2011. Since then we have seen the breaking of the link between inflation and the rates at which benefits rise. Do not forget that 68% of those affected by the Government’s benefits changes are in work. Universal credit will be subject to annual review, but not to mandatory uprating. There is a huge danger that it will fall behind inflation.

However, well before we get to universal credit, with its myriad problems, which are not helped by the sheer incompetence with which it is being introduced, the Government should look at the impact of the Welfare Benefits Up-rating Act 2013. Most working-age benefits have been limited to rises of 1% a year, yet the cost of basic items, such as food and energy, are rising by significantly more. Even Government estimates suggest that there might be 200,000 more children living in poverty, and the Child Poverty Action Group estimates that there could be 1 million more children living in poverty by 2020.

Let us look at some of the benefits that have been affected. The first is tax credits, which have a huge impact. We have called the cut to tax credits a strivers’ tax, because it affects the very people who are desperately trying to make ends meet, often working two or three jobs and patching together a few hours here and a few hours there. Then they are told that they have to find more hours, but they are simply not available—otherwise, they would be working them. Those are some of the issues that I think the Government need to address. In particular, they need to look at how they are hitting those who are in work and doing their best to try to make ends meet.

We all know the proverb, “Give a person a fish and you feed them for a day; give them a fishing rod and they can feed themselves for life.” In the same way, we need measures that can make an immediate difference to inequality. For example, Labour introduced pension credit as a fast and targeted means of taking the very poorest pensioners out of poverty. Many of them were women who had had little opportunity to earn much money outside the home.

We also need mechanisms and structures that can continue to make a difference. In 1998 Labour introduced the national minimum wage despite fierce opposition from the Conservatives—I welcome their late conversion— and complete indifference from the Welsh nationalists, who absented themselves from the vote. During our time in office, we raised the national minimum wage to above the rate of inflation, but what has happened under this Government? As I warned when speaking for the Opposition in the debate on this Government’s first statutory instrument on the subject, the national minimum wage has been weakened by galloping inflation. I am glad that the Chancellor is now talking about the need to raise it to £7, but the question is when, because as the national minimum wage moves forward, so does inflation. Any rise needs to be tied to a particular time and we need to know exactly what is planned.

We have clearly stated that we want to strengthen the national minimum wage and pursue firms that are trying to find ways of avoiding it by, for example, exceeding the limit for deductions for accommodation. We introduced the Gangmasters (Licensing) Act 2004 to tackle abusive exploitation of workers, and we want to extend such provisions to the construction and care sectors, yet many Government Members want to get rid of it, just as they got rid of the Agricultural Wages Board.

We want to incentivise wider adoption of the living wage, so we will bring in tax breaks for the first year to encourage employers to introduce it. We could make £3 billion-worth of savings simply by helping people to earn more and pay more tax, and then we would not need to pay out so much in tax credits. As the shadow Secretary of State for Work and Pensions, my hon. Friend Rachel Reeves, has said, and has been quoted today as saying, we will get the benefits bill down. We will do that by putting people back to work, by ensuring that the national minimum wage keeps up with inflation, and by bringing in measures to encourage employers to introduce the living wage. In those ways, we can save on tax credits, make sure that work pays, and bring the benefits bill down without hitting the poorest hardest.