Budget Resolutions — House of Commons, 2021-11-02
Topic: Social Welfare
Yvonne Helen Fovargue (Labour, Centre-left): It has been a good Budget for Beatles’ fans with the Chancellor’s £2 million for preliminary work on the Fab Four attraction on the Liverpool waterfront. But if it is "Here Comes the Sun" or "Good Day Sunshine" for them, it is more like "A Hard Day’s Night" for the millions of ordinary people who have suffered greatly in the pandemic and can gain little comfort from the Budget, because it hit the less well off the hardest. We are not all in it together. The increased debt burden has disproportionately affected young people, disabled people, black, Asian and minority ethnic people and those who rent. More than 11 million people have built up £25 billion of arrears and debt to pay and 14 million people have suffered an income shock during the pandemic, with almost half turning to crisis borrowing for essential costs Those groups will also suffer disproportionately from rising prices, because they spend more of their income on essentials. The rise in wholesale energy prices, when it filters through to bills, will hit them particularly hard. For many this winter, it could come to a choice between putting food on the table or turning the heating on. Many advice agencies forecast that a huge rise in unmanageable debt is just around the corner There is some good news. I welcome the £65 million of rent arrears support, which might reduce the immediacy, but much more will be needed to turn the tide on the £360 million backlog of rent arrears built up during the pandemic. I welcome the increase in the national living wage and the improvement to the universal credit taper, but that does not do anything for people in receipt of universal credit who are out of work and looking for a job or for the 1.7 million people unable to work because of disability, health issues or caring responsibilities. About 5.8 million people are on universal credit, at least 2.5 million of whom will not benefit at all from the changes to the taper rate Lower income households are still likely to be worse off than they were before the temporary uplift with the increased national insurance contributions looming for many households from next year. A local secondary school head in my constituency told me that last Christmas, they did not give hampers but paid for a weeks’ essential shopping for struggling parents. This year, they are doing the same but are having to budget for double the amount of recipients. Those are parents in many different circumstances—some are working full time, some are sick and some are disabled—but what they have in common is that they are struggling to pay their bills and put food on the table Much more needs to be done if our poorest families are not to face a bleak future. We need to revisit social security levels to ensure that the system is truly a safety net. People on universal credit were struggling even with the uplift. We need a major rethink of the basic level of benefits, and we need to ensure that deductions from benefits are affordable and do not undermine claimants’ ability to meet their basic costs We need to look at the move towards decarbonisation, which will create additional problems for people in low-income groups, who will struggle to meet the inevitable higher costs without help. Net zero should be seen as an opportunity to help the poorest. As the Resolution Foundation said, "Reducing the number of families living in fuel poverty should be the lens through which the Government addresses both the immediate gas price crisis, and future plans to decarbonise our homes as part of the UK’s net-zero transition." In practice, that means more direct help with energy bills beyond the warm home discount and the cap, including backing a social tariff that is linked to income, so that no one pays more than a percentage of their disposable income on energy. The pandemic made the lives of the less well off in our country worse. More people are struggling to pay bills and are building up personal debt, none of which is their fault. The Budget was an opportunity to ensure that all people are better able to recover and place their finances on a sustainable footing, and to tackle the poverty premium. It lacks the vision or the policies to deliver that.