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Mr. Deputy Speaker:
Order. If I am to be fair to everyone who wants to speak in the debate, I should now reduce the time limit to 12 minutes. With any luck,
and without too many interventions, we might be able to ensure a complete tally of the hon. Members who wish to contribute.
5.42 pm
Ms Sally Keeble (Northampton, North) (Lab): It was interesting to listen to the speech of the right hon. Member for Wokingham (Mr. Redwood), because his critique included points that I have never heard him raise previously. During all the time that the CAP was being renegotiated to decouple subsidies from food production, I never heard him make the point that we should use the CAP to increase food production. Nor have I heard him argue previously for increased support to ease the pressures on low-income families. More of his critique was based on his profound disagreement with this Government’s overall economic policies—that is clear, as he is in a different party and has different priorities.
Today’s debate touches on one of the most fundamental issues affecting our constituents: their family finances and budgets. A lot of the debate is fairly self-evident. It is obvious to anyone that the cost of living is going up, and that there are differential increases between the rise in the costs of fresh food and in those of manufactured food and manufactured goods generally. For example, the cost of clothing, which is an important factor for many households, has gone down by 6.7 per cent.
It is also clear to everyone that the cost of fuel has gone up. If we examine the details, we see that we are in the third phase of very large fuel price increases. In the first, in 1973, oil prices quadrupled, producing sharp inflation. In the second, in 1989, oil prices went up two and half times, which was a major factor in a massive recession. Since then, oil prices have gone up from $30 a barrel to about $140, and those costs have substantially been managed and absorbed, albeit that we now see the pressures. It is also clear to everyone that apart from fuel prices, a major factor in the cost increases is the increase in commodity prices. People have seen food riots happening in countries around the world.
Mr. Redwood: The hon. Lady is making some good points about the impact of food prices on her constituents. Can she explain why no other Labour Members want to hear about that? Do they not understand it?
Mr. Graham Stuart: Where are they?
Ms Keeble: They probably decided to leave it to me, in the sure knowledge that I would make a good job of it. This issue of is of concern to me because it is of profound concern to my constituents, and I think it right for questions about it to be dealt with. There is also the impact on family households of the credit crunch, which, although it may not be immediately apparent to some of them, is felt through pressures on house prices and house building.
I have to say that I disagree with the detailed analysis presented by the right hon. Member for Wokingham. Having sat in the Select Committee and listened to explanations from the Governor of the Bank of England and others, I have not heard them blame the restructuring of the Bank in 1997 for the credit crunch, although there have been arguments about the tripartite arrangements. Most of my constituents probably realise
that whatever mistakes were made in that regard, much more profound mistakes were made by the board of Northern Rock and much more substantial problems arose in the sub-prime market in the United States, which continue to affect our lives and those of our constituents.
What my constituents probably want to know, much more than they want to hear tit-for-tat arguments between the political parties, is what will happen in the years to come, and which party has the policies to take them through what everyone knows, and what the Governor of the Bank of England has said, will be a difficult time for quite a while. He said it would be difficult until next March or April, and I am sure he is right. This has to do not just with how much the cost of living goes up but with what happens to family incomes, and ours is the party that provided a safety net for family incomes through the minimum wage.
Mr. Stuart: I am sure the hon. Lady knows, through her membership of the Select Committee, that real disposable incomes have not risen for many years, except for those at the very top of the pile. What my constituents want, and what traditional Labour supporters want, is a Labour party that cares about the incomes and costs of living of those who have least in society.
Mr. Deputy Speaker: Order. I cannot allow two Members to be on their feet at the same time arguing with each other. The hon. Lady gave way to the hon. Gentleman; now it is her turn again.
Ms Keeble: Thank you, Mr. Deputy Speaker.
What the hon. Gentleman has said about earnings is completely untrue. In fact, there are two issues. During the last big recession, when wages fell, the hourly rate for people doing basic jobs, such as grass-cutting, in London fell to £1.20. There was no minimum wage; it was a case of “How low can you go?” The union members who are now arguing for pay increases were then struggling to get wages raised to £1.20 an hour for key public sector jobs in the capital. People were being bussed into London to do those jobs. Now we have a minimum wage that provides a safeguard for people, and they know that whatever the cost of living, they have that protection—a protection given by this party in government.
Mr. Stuart: According to the Institute for Fiscal Studies,
“Real income growth... was close to zero”
across most of the income distribution
“between 2005—06 and 2006—07. Only incomes towards the top... showed...growth”
Ms Keeble: The hon. Gentleman is talking about only a couple of years, and about different sections of the pay scale. If he were to look at the figures over a period of time, they would be quite different from those he has quoted.
People facing difficult times want the reassurance that however much prices increase, their incomes will be safeguarded. If they have a family, they will also want to know that the party in government understands that having children costs more, and that those costs need to be covered. That is why this Government were right to increase child benefit and to make changes to the tax credit system to ensure that in difficult times people know that some safeguards are built into the system for their children. That has been a hallmark of this Government, and the Conservatives have consistently opposed it.
I must add that the Liberal Democrats have also consistently opposed that, too. Their attack on the Conservative party during the debate has been disgraceful, because I am sure it is mostly to do with the Henley by-election, after which they will resume normal business and criticise us instead of the Conservatives.
Daniel Kawczynski: A very well made point.
Ms Keeble: I am grateful to the hon. Gentleman for his support on that subject.
Mr. Jeremy Browne: I am extremely flattered that the hon. Lady thinks that anything I say in this Chamber will influence the vote in Henley. The point that I and other Liberal Democrats have consistently been making is that, given that Labour has presided over such a mess in our economy, it is extraordinary that the Conservative party has chosen to adopt Labour party economic policies lock, stock and barrel.
Ms Keeble: If the Liberal Democrats care about what happens to people during these difficult economic times—we must all accept that we are currently going through difficult economic times, and that they will continue for a while—they should be committed to policies that protect those on low pay and families, and give people the chance to rebuild their families’ finances, and help to build the UK economy.
This Government’s other big commitment is tackling child poverty. I am sure that the hon. Member for Beverley and Holderness (Mr. Stuart) will produce some recent figures showing an increase in the number of children living in poverty. However, if he looks at the Joseph Rowntree report produced last year, he will see that the big increases in child and pensioner poverty both occurred during the ’80s. It is widely recognised that the current Government’s policies have served in particular to increase the incomes of families with children and those of pensioners, which is why much of the recent debate about the tax credit and the 10p tax rate focused on the single working poor. When my hon. Friend the Minister winds up the debate, I hope she will say what the Government will do to make sure that the incomes of people in that group are protected as well.
I have a few further points to make about those policies of ours that will particularly stand my constituents in good stead. I well remember that during the last recession the nutritional value of the food consumed by some of the children in our capital city deteriorated to an unacceptable extent. The Government have done good work on food for schoolchildren, such as making
sure that schools have kitchens and that children have free fruit, and similar support will be important now. That is a crucial element of this Government’s commitment to protecting people on low incomes. Another is the winter fuel allowance. That replaced the Conservatives’ awful cold weather payments, which in fact left most people cold during the winter.
One of the biggest changes—and one of the major ways in which the Government have equipped people to withstand recession—is the strong commitment to employment and job creation. That, above all, will make it possible for people to manage, although there will be problems with pay and the cost of living. In particular, it will make it possible for them to maintain their mortgage payments and keep their homes, which is extremely important.
When my hon. Friend the Minister responds to the debate, I will be grateful if she deals with the following points in particular. What steps will the Government take to support single working people—particularly young people—who will face difficult times in the coming period? Secondly, might the Government extend some of the fuel poverty provisions? We have been incredibly generous to pensioners with winter fuel payments, but might that be extended to people with disabilities and people with young children, who will also find it difficult to pay their fuel bills if prices increase further and their income does not? Will she also think about driving costs, which particularly affect people such as my constituents who live in an area that does not have very good public transport to take them to work, and many of whom work shifts? In particular, will she consider the Council of Mortgage Lenders proposals for providing some support for families who get into financial difficulties with their mortgages, so that they do not have to wait nine months to get relief? I am sure that that will be an increasing pressure for some families, and I would be grateful if she addressed that point.
Finally, let me repeat that I believe that people will see that it is our party and our Government that have the policies to carry them through the difficult months ahead.
5.57 pm
Mr. Geoffrey Cox (Torridge and West Devon) (Con): A Department for Communities and Local Government report released this April measured according to seven indices of deprivation. One of them was “Barriers to...Services”, half of which consisted of geographical barriers. This is the index of deprivation that measures distance from a GP surgery, a general store or supermarket, a primary school and a sub-post office. England was divided into 32,000 areas, and the wards of Bridestowe, Forest and Milton Ford in my constituency are in the top 100 most “geographically deprived” areas in the country, while Walden, Two Rivers and Broadheath are in the top 200, and no fewer than 21 parishes in my constituency are in the top 1,000 of those 32,000 wards.
In a rural area such as my constituency, the key indices of the cost of living include in particular heating oil, which has doubled in price in the last year. On 25 June last year, the price of heating oil across the country averaged 32.5p a litre; today the price is 60p a litre—and some research undertaken by my office proved that in my constituency a bulk order of 500 litres of
heating oil costs on average 62.3p a litre. How is a pensioner household in a small village or hamlet in Torridge and West Devon, or in the rest of rural England, to cope with a doubling in the cost of heating oil, which in rural areas is usually the only choice people that have for heating their home?
The diesel price in the south-west has risen by 27 per cent. since 2005. It cost 97.6p per litre, on average, in June 2007. It is now selling in my constituency at £1.349 per litre, and that was just yesterday. These rises in costs fall oppressively hard on those who live in remote and isolated rural communities. They have no choice but to travel from their village into the nearest market town, and often that is 15 or 20 miles—a 40-mile round trip.
The burden of my short speech today is this. If, as we all acknowledge, the cost of living is rising—and if, as the Government say, many of the causative factors are to be laid at the door of the global situation, rather than being a result of the Government’s action—why on earth are the Government about to make the situation worse? Why are they to load more tax on diesel? Why are they to increase the operation of motor cars in rural areas?
Let me give you, Mr. Deputy Speaker, and the House a reason why that burden falls more heavily on the rural dweller than on the city or the town. In my constituency car ownership is very high, but that is not because the residents of Torridge and West Devon—Torridge being the most deprived district in Devonshire and one of the three or four most deprived districts in the south-west—are rich. It is not because they gratuitously indulge themselves, like Toad of Toad Hall, in a casual drive on a Sunday afternoon. It is because they need a motor car to get to the nearest service. It is because they need it to reach a doctor or a pharmacy. It is because they need it to reach an essential service that they require.
Mr. Brian H. Donohoe (Central Ayrshire) (Lab): Will the hon. and learned Gentleman give way?
Mr. Cox: I will not just for the moment; time is short.
A rural dweller in a countryside community of the type that I represent needs a motor car, and often those motor cars will be old. Frankly, they will just about be roadworthy. With a bit of sticking plaster and a bit of tender loving care, they will have passed their MOT, but they will not be Rolls-Royces or limousines such as those in which Ministers sail into this House of an afternoon; they will be older cars. And what have the Government done to those who cannot afford the rich cars—the Jaguars and the BMWs? Why, they have decided to double vehicle excise duty on older cars. So not only do such people experience difficulties buying the diesel and the heating oil that they need to live; on the motor car that, by scrimping and saving weekly, they manage to keep on the road—just about—the Government are about to double vehicle excise duty to hundreds of pounds more. Ministers look upon that with indifference. I see them smiling. The inhabitants of the rural communities whom I represent have no cause to smile. An extra couple of hundred pounds a year will be a serious burden on these people. It is a keenly felt axe upon their quality of life.
What else do the Government do to improve the lot of the communities whom I represent? They close their post offices.
Mr. Donohoe: Will the hon. and learned Gentleman give way?
Mr. Cox: No, I will not give way; time is short.
Twenty post offices in my constituency are to close. In 20 small rural villages, hamlets and communities, 20 post offices are to close, and of that 20, seven are the last shop in the village. Where are the villagers to go for their essential supplies? Why, they have to climb into their old car or their disability buggy and travel all the way to the nearest market town. How is it consistent—
Mr. Jeremy Browne: Will the hon. and learned Gentleman give way?
Mr. Cox: No, I will not give way. Many people want to speak, and I am going to be quite brief.
The position is this. The Government, at a time when the axe of the cost of living is falling keenly on the people whom I represent, are going to increase their costs with taxation and by withdrawing their services from rural communities. It is no laughing matter to the communities whom I represent to close post offices that are the last shop in the village.
Mr. Browne: Will the hon. and learned Gentleman give way?
Mr. Cox: No, I will not give way.
Those people will have to climb into their cars and drive miles, at great expense, given the heightened cost of fuel, to reach the essential source of supply that village shops and post offices represent. But the Government are not going to stop there. They are saying in their White Paper that they are going to close doctors’ dispensaries in small villages within a few miles of a market town. So again, the elderly, the infirm—those who otherwise would not have to travel into a town to get their prescriptions and repeat prescriptions—will have to go into a town to visit a pharmacy, rather than having on their doorstep the service that they require.
Mr. Donohoe: Will the hon. and learned Gentleman give way on that point?
The withdrawal of these services will cost extra money, at a time when the cost of travel, heating and fuel is rising exponentially. Water charges in the south-west have risen by 27 per cent. since 2005. We have the most expensive water charges in the country. The nearest average water price is £100 lower, in Wales. The truth is that those charges are falling heavily upon rural dwellers.
I listened with incredulity to the hon. Member for Edinburgh, South (Nigel Griffiths), who gave us the most astonishing apology for the Government’s behaviour over the past 10 years. Not for the first time, I felt that I was inhabiting a different world.
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