Mr Brown: Let me just mention one or two other things. The hon. Member for Suffolk Coastal (Dr Coffey) has left the Chamber, but she spoke about paying down

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debt. In case the House has forgotten, when we came to power in 1997, there was 43% debt, and we paid down debt as we progressed over the years to 37%.

The hon. Member for Aberconwy spoke about taxation. I do not have a problem, as he has, with a 50p income tax rate, but I do have a problem with value added tax. Our colleagues in the SNP need to be absolutely clear and honest with the people of Scotland: if Scotland achieves independence on 18 September and becomes a full EU member state, the people of Scotland will be looking at VAT on food, children’s clothing, and books and newspapers. That is fact.

The SNP is very good—and I have heard this a couple of times this afternoon—at comparing other small nations with Scotland. It is keen to mention Sweden, and all too often it mentions Norway, but the problem is that they have Conservative Governments. I do not know if that is what it wants in an independent Scotland.

Jacob Rees-Mogg: Will the hon. Gentleman give way?

Mr Brown: I would be more than delighted to do so.

Jacob Rees-Mogg: I think that a Conservative Government for Scotland is being a little optimistic.

Mr Brown: I am absolutely delighted that I allowed the hon. Gentleman to intervene. I have no wish to see that either.

The one thing that the SNP does not tell the people of Scotland is just how high taxation is in those countries that they are keen to mention and with which they make comparisons. It cannot run away from that.

On how the devolved Governments have operated in the UK until now and their record on increasing fairness and tackling inequality, the Welsh Labour Government, even in tough times, have worked to protect the most vulnerable in Wales from the Tory Government with Jobs Growth Wales, which will create over 16,000 jobs for young people in Wales, and the £35 million boost to the pupil deprivation grant in the next year. The same cannot be said for the SNP Government in Scotland. A recent report by the Joseph Rowntree Foundation noted that cuts by the UK Government and the Scottish Government in England and Scotland have meant that the most deprived local government areas receive £100 a head less in funding. Professor Arthur Midwinter of Edinburgh university recently concluded that

“the SNP’s budget strategy adds to the austerity agenda”.

I made a similar point in an intervention, as £l billion has been removed from anti-poverty programmes since 2008. Analysis by the House of Commons Library shows that cuts to the most deprived areas in Scotland are greater than those for the least deprived.

On local government and the underfunding resulting from the council tax freeze in Scotland, this is a debate about fairness and equality, so let me share with the House what we have seen as a result of local government being badly underfunded. Some of the poorest and most vulnerable people in our communities—those who need social services or who have to pay for services—have seen an increase in the cost of services or, if those services were free, charges have been introduced. That hits the poorest and most vulnerable the hardest.

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Mr MacNeil: How much does the hon. Gentleman want to raise council tax by and what else is on the agenda for the cuts commission of Johann Lamont?

Mr Brown: That really is a naive question, but it is not unexpected. I am not asking for a council tax increase; I am asking for local government in Scotland to be properly funded. It has to be properly funded. To do otherwise is a false idea, especially when it falls on the shoulders of the poorest.

If the SNP was serious about tackling inequality in Scotland, it would be using the tools of the Scottish Government, like our colleagues in Wales, to protect people from the worst of the Tories. Instead, it would rather not let Westminster, in the words of its Finance Secretary, off the hook. At no point in the debate have SNP Members explained why they think this is acceptable for the people of Scotland. I would only hope that if there are to be further contributions from their Benches, they will explain away some of the inaccuracies that they think are in my contribution.

4.1 pm

Lorely Burt (Solihull) (LD): As a Member of Parliament from Solihull, I would not dream of presuming to talk about the very specialised problems of other parts of the UK, but I hope that I have a word or two to say about fairness and inequality. What was unfair was inheriting a £160 billion deficit from the Labour party. I appreciate that it was not all the fault of Labour. The banking crash all started with a company called Lehman Brothers, which makes one wonder what might have happened if it had been called Lehman Sisters. I can blame Labour for failing to regulate banks properly for 13 years, and then having to bail them out with a £500 billion rescue package. I can also blame Labour for allowing welfare spending to spiral up by 20% when the economy was growing. That has made circumstances difficult for our coalition Government.

I am proud of what the coalition Government have succeeded in doing. We have cut the deficit by a third, with more coming from the better-off, I hasten to say. Our flagship policy of raising the tax threshold at which people start to pay tax to £10,000 has taken 2.7 million people out of tax altogether, of which 60% will be women.

Mr MacNeil: The hon. Lady says that more tax is coming from the better-off, which is true, but are the better-off not getting a far larger slice of the productivity pie than they have in years and decades past?

Lorely Burt: I am not entirely sure what the hon. Gentleman means by the productivity pie, but over the same period of time a millionaire would have paid over £300,000 more in tax under the coalition Government than under the previous Labour Government. In addition, 24 million people have had a tax cut of £700 or more. Those are good things. In addressing unfairness, we seek to ensure that those with the broadest shoulders bear the greatest burden of the tax. The coalition helped 900,000 people out of poverty altogether between 2010 and 2012, so when Labour Members talk about increasingly harmful circumstances, it should be pointed out that poverty increased under the Labour Government and has decreased under this Liberal Democrat and Conservative Government.

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We have also helped the rich to be relieved of more than their fair share of tax by increasing capital gains tax and closing pension loopholes. No company now will review its tax arrangements without considering the general anti-avoidance rule that we have introduced, which helps focus the mind because it concentrates on the spirit in which tax is paid, as well the fact. Sticking strictly to the law is no longer an excuse for not paying a fair share of tax. Under Labour, capital gains tax was 18%. We have increased that to 28%.

We fully appreciate that households are under great pressure and we have taken steps to remedy that—for example, by abolishing Labour’s fuel duty escalator, so that when the average motorist fills up their tank, they are paying £7 less to do that. No one denies that it is still expensive, but we are doing what we can to help.

Liberal Democrats have made a big contribution on fairness. There is now free child care for all three and four-year-olds, as well as for 260,000 two-year-olds. For parents who have children in child care, we have a £1,200 tax break coming down the line. We have frozen council tax and helped local authorities to achieve that. The average family will be paying around £600 less today in council tax than would otherwise have been the case. There are now 494,000 more women in employment and 100,000 more women in self-employment, which is an encouraging step. We will be introducing free schools meals for five, six and seven-year-olds, and as I have already mentioned, 60% of the 2.7 million women on low pay will be taken out of tax altogether.

Mike Thornton (Eastleigh) (LD): Does my hon. Friend agree that it is a wonderful aim of the Liberal Democrat party that everyone on the minimum wage should be taken out of tax altogether?

Lorely Burt: Indeed. As I said to the hon. Member for Aberconwy (Guto Bebb), if our aspirations are realised and we can raise the threshold at which people start to pay tax to the minimum wage, we will achieve something very close to what is currently regarded as the living wage. That would be a tremendous help to the lowest-paid in Britain today.

The hon. Member for Brighton, Pavilion (Caroline Lucas), who is no longer in her place, mentioned women on boards. Although we do not subscribe to a compulsory threshold of 40%, it is encouraging to see that the percentage of women on boards has risen from 12% to 19% since 2010.

Pensions are an extremely important issue for women because they have been suffering as some of the lowest pension receivers in the United Kingdom. The triple lock is creating a lot of support for women, but it will make a big difference when we reach the citizen’s pension and women receive, as they deserve, the same amount a week as men, at £140 a week or whatever the equivalent will eventually be. There are many other Liberal Democrat policies coming down the line, such as flexible working and shared parental leave.

In conclusion, the Liberal Democrats will continue to work for greater fairness, not by stripping down the state, like our coalition colleagues, but by creating strong public services. We have stopped some of the more ambitious aspirations of our coalition colleagues, such as the Beecroft report’s proposals on firing at will. We have stopped schools being run for profit and stopped

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inheritance tax breaks for millionaires, and we are continuing to work to raise the threshold at which people start paying income tax.

We want more equality and more fairness, but we also want opportunity for everyone. The work we are doing, particularly in relation to young children, will make a big difference. We want everyone to have opportunity, but we also want to have a safety net. We are yet to persuade our coalition colleagues that our proposed mansion tax on properties worth more than £2 million is a brilliant idea, but I think that it will be. I understand from the research that we commissioned—I will now make my only reference to Wales and Scotland—that the millionaires’ tax will apply to no one in Wales, and we identified 17 mansions in Scotland. I think that is very fair, and I am sure that Welsh and Scottish colleagues in the Chamber will applaud that as a very fair tax for the people they represent.

4.11 pm

Mr Mike Weir (Angus) (SNP): The Scottish National party’s manifesto for the 2011 Scottish Parliament elections stated:

“Scotland can never be considered truly successful until all of its citizens consider themselves to be equally valued members of society. We are determined that Scotland will constantly strive to be a more equal society.”

We said that because we believe in Scotland.

Within the UK, Scotland is unfortunately part of an increasingly unequal society, with too many trapped in poverty and prevented from reaching their full potential. As has been said, the UK ranks 28th out of 34 nations on the measure of overall inequality. OECD analysis shows that since 1975 income inequality among working-age people has increased faster in the UK than in any other country in the organisation. Academic analysis also suggests that the UK is the fourth most unequal nation of the world’s richest nations.

In a rich nation such as Scotland, it is ridiculous that in 2011-12, 710,000 people—14% of our population—lived in relative poverty. That includes 420,000 people of working age, 150,000 children and 140,000 pensioners. Despite periods of time when overall poverty has reduced, in-work poverty has remained high. Two thirds of children who live in poverty in the whole UK have at least one parent in paid work. We believe that it is absolutely unacceptable that in a nation with the wealth and resources of Scotland one in seven of our population live in poverty.

Since devolution, Scottish Administrations have sought to promote social inclusion and cohesion. Since devolution, child poverty levels in Scotland have fallen substantially, from 28% in 1999-2000 to 15% today, compared with a UK rate of 17%. That is a tremendous achievement by the Scottish Parliament. However, 200,000 more children across the UK will be pushed into relative poverty by 2016 as a result of the 1% cap on increases in benefit payments. That equates to around 15,000 children in Scotland. The Child Poverty Action Group has estimated that Scotland’s child poverty rate will increase by between 50,000 and 100,000 by 2020 as a result of the UK Government’s tax and benefits policy. That is a terrible indictment of what is happening in our country. That is why we seek independence: to tackle these problems.

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With devolution, the Scottish Parliament has used its limited powers to tackle inequality. Our continuing commitment to a social wage will deliver benefits to everyone in Scotland in tough financial times. We have maintained the council tax freeze, saving the average band D taxpayer about £1,682 by 2016-17. We have kept higher education fee-free and we are keeping student debt levels the lowest in the UK. To me, that is vital. I was the first of my generation to go to university, and I was able to do so only because there were no tuition fees and I got a grant. My daughter has recently gone through university and, even with no tuition fees, it is now a very expensive process. I dread to think about what debt has been piled up on kids who are going through university now and how they are ever going to start in life, buy a house, buy a car or get married. As my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) said, there is an increasing trend for children to stay at home much longer and to live in flat-shares well into their 40s, in some cases, because they simply cannot afford the price of property.

The Scottish Parliament has abolished prescription charges, making the NHS truly free at the point of need, and we are supporting concessionary bus travel for over 1.2 million of our people—over-60s, people with disabilities, and injured veterans. We have provided NHS eye examinations free for all, and we have committed to free personal nursing care, benefiting more than 77,000 older people. Labour attacked many of these things in its cuts commission. The Labour leader said they were just wee things it is not in favour of—unless, of course, it is fighting by-elections, when it tries to take credit for them.

Mr Russell Brown: The hon. Gentleman mentioned free prescriptions. Why am I now coming across pensioners in my constituency who are visiting their doctor and instead of being given a prescription for painkillers are told to go to the chemist and buy them over the counter?

Mr Weir: I have never heard of that one; perhaps the hon. Gentleman should ask the doctors why they are doing that. We have made it clear that free prescriptions are an important policy for pensioners throughout Scotland. Too often, pensioners and those with multiple prescriptions had to choose whether to buy their prescription or eat, and they do not have to make that choice any more. This is a really progressive policy, despite what his leader may say.

We are investing in skills, training and education for our young people to make sure that they all have an opportunity in life. I recently visited the Angus training group in my constituency, where tremendous work is being done to train youngsters who are leaving school and have got apprenticeships in engineering. While the Chancellor may talk about the march of the makers, we are making sure that that actually happens and there is power behind it. We are protecting the education maintenance allowance for 16 and 19-year-olds while the Westminster Government have scrapped it. These are just a few of the things that we have already done.

We are committed to ensuring, where we can, that people get paid a decent wage. Since 2011-12, the SNP Government have paid all staff covered by Scottish Government pay policy a living wage, and that includes NHS staff. No compulsory redundancy policy has been

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in place since 2007, helping to protect about 10,000 jobs a year. We are funding the Poverty Alliance to deliver the living wage accreditation scheme to promote the living wage and increase the number of private companies that pay it.

We have done a lot to deal with inequality in Scotland, but what holds us back so much is the fact that the Scottish Parliament has to depend on and fit within a block grant determined by Westminster that has been steadily cut in the past few years. The Chancellor has said that another £25 billion of cuts is coming round the corner, so we can only imagine what will happen to the Scottish block grant in that event.

Sheila Gilmore: The hon. Gentleman made a great deal of issues such as free personal care. Does he not accept that there are still major problems in Scotland, and if we do not address them but simply say, “We’ve cracked it, we’ve solved it”, we are not helping the people who give and who need care? When care workers have very poor conditions and people are getting 15-minute visits, if that, we have not really solved the problems. Should we not be talking about them instead of being so complacent about somehow having solved them all?

Mr Weir: I cannot believe what I am hearing from the hon. Lady. What I said is that the Scottish Government have taken action on and invested money in those matters. We have not claimed that we have solved every problem under the sun—we cannot possibly do that—but what we have said is that we have done all we can with the powers we have and that with the powers of independence we will be able to do so much more.

Pete Wishart: My hon. Friend is making a very powerful speech. Does he share my great concerns about the cuts commission? Labour has said that everything is on the table and has set out a whole list of things, including tuition fees, free bus passes, prescription charges and free personal care. Is my hon. Friend as worried as I am that if Labour gets its hands on the levers of power, those things will be under threat?

Mr Weir: I do indeed have great fears about what will happen to our country if we do not get a yes vote in September, because either this lot will continue in power with the cuts already promised by the Chancellor, or we will have the Labour cuts commission and heaven knows what it might come up with.

We have a different vision for our country. We will be able to do many things with independence that we cannot do under devolution. The problem of child care, for example, is not just about improving the early education of our children and helping families, important as those things are; it is also an important economic policy. If we can raise female participation in the labour market to the levels achieved in, for example, Sweden, we will not only boost general economic performance, but raise an extra £700 million a year in tax revenue.

Under devolution, the Scottish Parliament has been able to increase the amount of child care available and it has recently announced a further extension, but with independence we could go beyond that and deliver our ambitious plan for the provision of free universal child

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care for all children aged one to five—a policy that, when fully implemented, would save families up to £4,600 per child per year.

Why do we need independence to deliver that? Because at the moment, as I have said, Scotland receives a fixed budget from Westminster. We would not receive the increased tax revenues resulting from having more women in the workforce unless Westminster decided that we should, so under devolution the costs of providing increased child care would have to be met from within a fixed budget, which would inevitably mean cuts in other services. Those who are making that argument need to tell us where they want to see the cuts. That social and economic transformation can be achieved only when we have access to all of Scotland’s resources, and that is why we need independence delivered to the full.

We could also take action to ensure that most people are treated fairly and that work is genuinely a route out of poverty. We should not accept this as a given, but the fact is that many women work in low-paid jobs, so what we do with the minimum wage really matters to the living standards of women and their children. With independence, we will able to guarantee that the minimum wage will rise at least in line with inflation every year and not leave it to the whim of the Government of the day.

It is interesting to note that, if the minimum wage had increased in line with inflation over the past five years, the lowest paid would be £600 a year better off than they are now. That has been the cost to the lowest paid of not being able to take such decisions ourselves and of not being able to make the impact we want on the inequality that stalks our nation.

With independence, we and not Westminster will be responsible for implementing the Equal Pay Act 1970, closing the scandalous 32% gap that still exists between the pay of men and women. Why is it that 44 years after that Act was passed there is still such a huge gap between their pay?

Decisions being made down here about the retirement age are also a problem. Just a few years ago, women could expect to retire at 60. By 2020 the retirement age for women will be 66—an increase of six years in just a decade. As things stand, young women entering the work force today will probably have to work until they are about 70. Of course, we all have to accept that people are living longer and that things cannot stand absolutely still—we accepted the first rise in the retirement age—but the rapid increases being imposed by Westminster are not right for Scotland, because we have different demographics. We have serious problems in some of our communities and we are working hard to deal with them. The fact is that life expectancy is often much lower in some of those communities than in the general population. It is, therefore, surely better that decisions about the retirement age are taken in Scotland, where such distinctive circumstances will be properly taken into account.

I have often spoken in the House on energy, and it will be no surprise that I want to say a few words about it. In its recent campaign, Energy Bill Revolution made the point that fuel poverty has increased across the UK by 13%, but one gain from devolution is that that is not the case in Scotland. Under the latest Scottish house condition survey, which was revealed at the end of last year, the number of those in fuel poverty in Scotland

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has decreased by 3.4% at a time when energy prices are rocketing. That is a tremendous achievement by successive Scottish Administrations, who have made real efforts to tackle fuel poverty. However, there is so much more we could do.

Mr McKenzie: On fuel poverty, will the hon. Gentleman explain why the SNP Scottish Government have changed the criteria for boiler replacements for the elderly, which Labour set up? None of them can get boiler replacements.

Mr Weir: The Scottish Government have invested much more in fuel poverty measures: more is now being spent than was spent in the last year in which Labour was in power, and much more is being spent there than is spent down here. As I have said, we have reduced fuel poverty at a time when it is rising in the UK as a whole, but we need to do more. We need to transfer fuel poverty measures from energy bills, which need to be reduced, and put money into a direct programme to increase the fuel efficiency of many houses in Scotland—particularly hard-to-heat houses of solid wall construction—which will help people.

Mr Bain: Perhaps there is surprising consensus between us on energy bills, because I support an energy price freeze. Will the hon. Gentleman tell us whether he and his party do so?

Mr Weir: I am getting a bit tired of hearing that from the Labour party. I have explained our position on the energy price freeze time and again. The freeze will not work. There has already been a massive increase in bills prior to its coming in, and there is likely to be another after it comes in. We had a debate in the Chamber last week about inequalities in the system of billing by energy companies. Those inequalities will be frozen in place by an energy freeze, making things even worse for Scottish consumers. A freeze will also hit the investment needed to ensure that we have jobs for the future and can bring down energy prices through moving to renewables.

Gregg McClymont: Will the hon. Gentleman give way?

Mr Weir: No, I have given way enough for the moment.

The present UK Government have repeatedly said that they took powers in the latest energy legislation to implement the Prime Minister’s promise to put everyone on the lowest tariff. I have pointed out before, and I will do so again, that the measures in the Energy Act 2013 will not have that effect. The relevant sections do not require energy companies to do that, but only to make an offer, which may well be lost in the mass of paper that people receive from them.

Even if those changes work, they will do nothing to help some of the poorest in our society—those who have to rely on prepayment meters. It may be fine for someone on a direct debit tariff, but those on prepayment meters will be stuck on a higher tariff. Such tariffs are generally higher than those available to someone paying by direct debit, as would happen under Labour’s price freeze. That locks in price inequality. It seems to me that if the Government are truly intent on ensuring that everyone has the lowest possible bill, they need to ensure that that does not apply only within the type of contract people already have, but allows them to move to a cheaper type of contract.

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I have already mentioned the particular problems with prepayment meters. As I have always said, they seem to me to be slightly perverse: it is one of the few examples of consumers ending up paying much more by paying cash in advance. It was interesting to see the hon. Member for Harlow (Robert Halfon) introduce his ten-minute rule Bill earlier this afternoon. I very much hope that it is successful, but given how many Bills are to be debated on 28 February, I somehow doubt it.

Citizens Advice Scotland recently issued a report on energy that shows the true difficulties people face. It states that

“the cases highlighted by bureaux regarding difficulty paying are most commonly with regards to prepayment meters recouping an unaffordable amount for arrears every time the consumer tops up.”

Citizens Advice Scotland quotes an example that sticks in my mind of a single parent with two children who has to lose £7 towards arrears every time she puts £10 in the meter; the £3 remaining is entirely insufficient to heat her home. That is totally unacceptable and is a clear example of the inequalities facing many of our fellow citizens. In those circumstances, she has no chance of getting out of the cycle of debt—the hon. Member for Bedford (Richard Fuller) made that point—or even keeping her home warm.

Many of our people are being forced into household debt by the difficulties they find themselves in. The rise of the payday lenders is one of the horrible side effects. We heard last week about the difficulty for those who cannot pay for their energy by direct debit and who have to pay higher prices. It was pointed out that some £2 billion sits with the energy companies, making money for them rather than for consumers—another inequality that afflicts our society.

Gregg McClymont: The hon. Gentleman is being most generous. He is talking about the profits made by energy companies. Is he aware that anyone in Scotland listening to this debate will be surprised that he and his party do not support a price freeze, but instead are in the same position as the energy fat cats?

Mr Weir: The hon. Gentleman is like a broken record. I have explained already, and have done so on numerous occasions, our objections to the energy price freeze. It is easy for Labour to say, “Let’s have an energy price freeze.” It sounds great and I am sure many people love to hear it; unfortunately, it simply will not happen. It will not lead to lower bills, it will freeze in the inequalities already in the system, and it will leave people with higher bills, while his party leader flails about trying to find some flesh to put on the bones of that policy.

Mr MacNeil: When Labour Members talk about an energy price freeze, are they not basically saying to the people, “Do you want your energy bills to go up before we announce the freeze and to go up again afterwards?” It is a total con, and they know that full well. It was done one weekend for a headline in a Sunday newspaper and they are sticking with it now. That is the long and the short of it.

Mr Weir: My hon. Friend makes a very good point.

Alun Cairns: Does the hon. Gentleman agree that it is easy for Labour Members to call for an energy price freeze when it involves other people’s money or other companies’ money, but it is different when it comes to

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council tax rates? They have the power to freeze council tax rates in Wales, but in the past three years we have seen a 9% increase in council tax. Would they not do better to channel their efforts into an area of policy where they have control and could deliver lower bills?

Mr Weir: The hon. Gentleman makes his point. I just point out that in Scotland we have frozen council tax for several years. We have also taken action to pay extra money from our already constrained budget to get rid of the effects of the bedroom tax in Scotland. We cannot get rid of the tax itself because that is controlled by the Westminster Government; we can only mitigate the effects.

Another issue I have talked about in the past is the inequality between rural and urban areas and between different sections of society, particularly in relation to energy and the problems of those who are off the gas grid. Far too often when energy is discussed, we focus on the evils of the big six. It may be good to give them a kicking in passing, but there are also serious problems in the off-grid market. All of us who are off grid will have found that prices have rocketed, much higher than the price of energy from the big six companies and from the grid. Pensioners in particular face serious difficulties in paying their winter bills.

I have twice introduced Bills in this House and on two occasions, I think, I have tried to amend energy legislation to tackle the problem by suggesting that the winter fuel allowance should be paid earlier. I do not think it would be terribly difficult, but this Government, like the previous Government, seem to have a horror of doing that and making a real difference to the people affected by the problem.

Nia Griffith: I give credit to the hon. Gentleman for the introduction of those Bills, but does he not recognise that it is now the policy of the Labour party to pay the winter fuel payment in the summer so that customers can benefit from cheaper prices? Will he also support Labour’s policy of having a tougher regulator that can look at off-grid issues?

Mr Weir: I am glad that Labour has finally adopted that policy—better late than never. In the last Parliament, I had numerous discussions with Labour Ministers who would not adopt it. I would be interested in what powers a stronger regulator would have. I have often argued that the regulator should have powers over the off-grid sector. When I sat on the Business and Enterprise Committee, before the Department of Energy and Climate Change was formed, we produced a report that asked for that to happen. I have raised that issue repeatedly.

After an intervention by the hon. Member for Wealden (Charles Hendry) earlier in this debate, I raised the way in which the energy company obligation discriminates against off-grid gas consumers. The ECO is controlled by the big six energy companies and none of them include off-grid gas boilers in their schemes. I wrote to all of them and received various letters back that tried to obscure that fact, but there was no getting around it at the end of the day. I raised the matter at DECC questions last month. The Minister of State, Department of Energy and Climate Change, the right hon. Member

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for Bexhill and Battle (Gregory Barker) replied that he was meeting the suppliers to tackle the issue. If the Under-Secretary of State for Wales takes nothing else away from this debate, perhaps he could ask DECC Ministers whether any action has been taken. I am sure that it is a huge issue in his constituency, as it is in mine. Such action would not solve these problems completely, but it would help many off-grid customers.

I will end by saying a little about the Scottish Government’s energy assistance package, which has helped 150,000 people on low incomes to reduce their energy bills. It has been extended for two years, which should help a further 300,000 people. Originally, it was targeted at pensioners, but it has been extended to help other vulnerable people in these difficult times, such as the disabled—including those with severe disabilities—families with young or disabled children, the terminally ill and people who are on carer’s allowance. It is now a much greater scheme than the one that was introduced originally. The number of homes installing loft insulation has more than doubled from 40,000 in 2008-09 to 104,000 in 2011-12. That was praised by the Committee on Climate Change in its report, “Reducing emissions in Scotland”, which was published in March.

While the UK Government have slashed their schemes, the Scottish Government have continued to invest. We have invested £220 million since 2009, which has resulted in an estimated return in household income of more than £1 billion. A further £250 million will be invested over a three-year period to tackle fuel poverty. That is a great record. As I said earlier, the number of people in fuel poverty is falling in Scotland, unlike in the rest of the UK. Those are significant improvements, but we still have much to do.

We could achieve further improvements much more easily if we had the full powers afforded by independence. We would really get to grips with inequality if we did not have the dead hand of Westminster holding us back. It is interesting that the Labour party is quite happy to let the Tories stay in power, rather than have Scotland tackle its own problems.

4.39 pm

Jacob Rees-Mogg (North East Somerset) (Con): I am glad, as an Englishman, finally to be allowed to enter into this debate, because the motion refers to the United Kingdom. It is a great honour to speak in this debate, because the nationalists appear to have a very clever plot, whereby they send their best and brightest people down to Westminster to make us realise how much we would miss them if they went independent. Since entering this House in 2010, I have become more and more pro-Union, simply because of the fantastic speeches we hear from nationalist Members.

Today was a model of its kind. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) gave an absolutely brilliant speech that started with the ancient history of Wales and had the House gripped by his every word. I was sorry that I could not hear the whole speech by the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), as I had to go to European Committee A for a moment, but I was relieved that he was not too brief because there was so much to be said, and he was almost still speaking by the time the Committee ended.

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The motion itself, however, though presented with panache and oratory, is fundamentally misplaced. It goes completely the wrong way about tackling issues of inequality because it argues fundamentally that we should all be impoverished. It is an argument that says that inequality is the important issue, not how prosperous people ought to be. It mentions the

“underlying trend of rising income inequality”

but the problem is that the point at which income inequality has been reduced has coincided with the recession. Yes, it is easy to reduce income inequality if we ruin the economy. If we make everybody poorer, we can all be poor—and perhaps happy—together. Actually, I think the British people will not be happy if they get poorer; they will be happier if they get richer. It is of no pleasure to me that during the recession, the income of the top decile of income receivers in the United Kingdom fell by 9%, and that of the bottom decile by 2.4%. Although it could be argued that the better off are making a bigger contribution than the worse off, I do not want to see anybody’s income decline. I want everybody’s income to increase, and that requires the economic policies that this Government have followed.

Mr MacNeil: As our state is getting wealthier and productivity is growing, does the hon. Gentleman agree that all should share in that, and that the rent seekers at the top end should not abuse their positions as CEOs or hedge fund managers and see their wealth grow by 60% to 80%, while over a decade the equivalent bottom 90% will see their wealth grow by only 17%?

Jacob Rees-Mogg: Where I disagree with the hon. Gentleman is when he fails to recognise what those very wealthy people do. By and large, hedge fund managers and corporate tycoons spend their money, and if they do not spend it they save it.

Mr MacNeil: They spend it on wine!

Jacob Rees-Mogg: If they spent it on wine, that would help the French, rather more perhaps than the English, but that is slightly beside the point. They might spend it on whisky, which will help the hon. Gentleman’s constituency. If they spend money, they create employment and economic activity, and if they save it and put it in a bank, they provide the deposits against which banks can lend. One of the great problems of the banking crisis was that the loan-to-deposit ratio went way above 100%—I think the Royal Bank of Scotland got up to 135%. It is not practical for banks to lend when they are not taking in deposits, because they then become dependent on overnight money, which can be withdrawn much more easily, and has a tendency to be withdrawn more quickly than long-term stable deposits. When the income of the wealthy is saved, it is an economic good.

Mr MacNeil: Is the hon. Gentleman saying that before the crash the wealthy were not saving enough of their money and were perhaps squandering it in various ways, and that one of the main reasons for the crash was that the banks did not have enough deposits from the wealthy? Surely if it had been in everybody’s hands, it would have been in the banks.

Jacob Rees-Mogg: The hon. Gentleman has taken one bit of what I have said and applied it incorrectly. It is uncharacteristic of him not to listen more carefully, and I will come on to the issue of spending cuts.

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Mr Bain Will the hon. Gentleman give way?

Jacob Rees-Mogg: Of course I will give way to a Member who represents a seat with “North East” in its title.

Mr Bain: What would be the hon. Gentleman’s answer to those well-known leftists in the International Monetary Fund who have published detailed research indicating that when the gap between rich and poor gets too large in an economy, it diminishes growth and therefore living standards for everyone?

Jacob Rees-Mogg: The IMF is not full of well-known leftists, but it does seem to be run, by and large, by the French, who have a very different understanding of economics, an absolutely rotten economy, and are the last people from whom I would take lessons. We will not in this Chamber go into the behaviour of the previous managing director—it would shock the viewers of the Parliament channel if they were to consider how Monsieur Strauss-Kahn had behaved. Anyway, I will not be told what to do by people who cannot behave.

I want to come back to the economic benefits of the spending and saving of the wealthy. That is what provides the employment and investment that leads to economic growth, and leads to the rising of living standards for the poorest in society. That is not done by the state. The state can indeed pass money around—it can reallocate money from pot A to pot B—but that does not increase the fundamental size of the pot. It merely reallocates what is already there, whereas the expenditure, saving and investment of individuals in the private sector grows the total amount that is available and therefore leads to cascading wealth.

This is where I must come on to the specific point in the motion calling on the Government

“to halt its further spending and welfare cuts”.

The spending cuts have been essential. The Government and the Chancellor of the Exchequer have been a model to other countries in how they have behaved. In a cross-partisan moment, I thank the Liberal Democrats for the role they have played. It must have been particularly difficult for them to take these tough decisions, having not been in government for so many generations and facing up to more serious responsibilities than parties in opposition sometimes have to deal with. I think they deserve a huge amount of credit for the support they have given to the Conservatives. Lots of economists, some of them quoted by the hon. Member for Na h-Eileanan an Iar, were saying that it was the wrong thing to do. Even the IMF had to eat its words a year after saying that austerity was not the right thing to do. The IMF was wrong and the Government were right. Why was that?

First, when the Government came into office there was a risk that there would be a funding crisis. There was a risk that the Government would simply not be able to raise the money in the gilt market that they needed to pay for the services that the British people wished to receive. That was the first problem. The second problem was that Government expenditure and very high debt crowd out private sector activity. If the Government had not reduced spending, businesses would not have been able to have access to the capital they needed to begin the recovery. The third problem was that by taking money out of the economy, there was a

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general depression of economic activity as individuals and their families had less to spend throughout the economic spectrum. It was being taken out of productive capacity and used unproductively merely on a money merry-go-round of the state.

This is, again, where I like the fact that the coalition has raised the basic threshold of income tax. I share the ambition of my hon. Friend the Member for Solihull (Lorely Burt) that this should be increased. It is absolutely barmy to tax people on low incomes and then give them their own money back in benefits. Not only do we want to get it to £10,000, we want to get it to the point where people on the minimum wage are neither paying national insurance nor income tax.

Mr MacNeil: The hon. Gentleman is mainly making points about redistribution and I disagree with him on that. In one of the longest parts of my speech, I made a point on the living wage and the number of people who are now working poor. He mentioned the billionaires and rich people that we have in apparent abundance around the place. Should we not be seeing people at least earning a wage that means that they do not need to benefit from state welfare to top up the lack in their wages?

Jacob Rees-Mogg: The wages that people are paid in this country are set on an economically competitive basis, not just against what goes on in this country but on what goes on in the rest of the world. As a nation, we need to produce goods and services that people will buy. Then, when we have profitability and successful businesses that grow, there will be money to pay people more. We want more billionaires, because billionaires spend money. Who do we think are buying all these Rolls-Royces, Bentleys and Jaguars? In Portugal, the people buying them might be quite poor, because it has a special scheme where one can win a car if one buys a cup of coffee and makes the person selling the cup of coffee promise to pay tax, but outside Portugal—in China, India, America and the United Kingdom itself—the people who buy these luxury goods are those who are well off. We need those people to provide the good jobs.

I want to move on to the dead hand of welfare, as it appears that the feeling expressed by those on the Opposition Benches—particularly by the nationalists, although Labour is not a million miles away—is that if a Government take money and dish it out that helps people. I fundamentally disagree. I do not think that it is fair that people who do not work should be better off than people who do. Indeed, I think that is wrong. I do not think that it is fair that people should be trapped in poverty by decisions that the state makes.

One of the noblest things that this Government are doing is the reform of the welfare state. I agree with my hon. Friend the Member for Aberconwy (Guto Bebb) that if people are lifted out of state dependency, they can take charge of their lives and become prosperous. They can then contribute to the overall economy. If benefits are set too high and the percentage of its withdrawal is so high that there is no incentive to work, people are trapped.

Mr MacNeil: The hon. Gentleman will be aware of yesterday’s report on working poverty by the Archbishop of York. It showed that most of the people in receipt of

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benefits are working and the efforts people are making to earn a decent wage are not having an effect because they are not being paid properly. Let me ask the hon. Gentleman again: does he support efforts to ensure that people are paid properly so that companies are not subsidised by the state? In the United States of America, one of the biggest recipients of welfare is Walmart and we have different examples in this country.

Jacob Rees-Mogg: Once again, I am sorry to say that I disagree with the hon. Gentleman on that specific point. It is much preferable that the state should pay benefits to people who are working and being paid the economic rate for their job.

Nia Griffith: Will the hon. Gentleman speak to his right hon. Friend the Secretary of State for Work and Pensions about the specific issue of universal credit and its acting as a disincentive, particularly for the second earner in a family?

Jacob Rees-Mogg: The basic principle of universal credit, which is that everybody should be better off in employment than not in employment, is fundamentally right and reducing the withdrawal rates is possibly the most exciting thing that the Government are doing. If we go back to 1979—I promise you, Madam Deputy Speaker, that this will not be a history lesson—and look at the reductions in the tax rates from 98% to 80% and then to 60%, we see that on every occasion the incentive to work increased and revenue to the Government increased too. Some of the percentages for the withdrawal rates for benefits are in the 90s. If people would not work harder when taxed at 98%, surely they will not work harder when benefits are withdrawn at 90%-plus. The model follows that if the withdrawal rates are reduced, motivation to work will miraculously be improved and increased.

That benefits the whole of society and brings me to the fundamental flaw in the motion, which is that it takes the view that there is a bottomless pit of money to be spent and that we can go on spending like there is no tomorrow, ignoring the financial markets.

David T. C. Davies (Monmouth) (Con): Does my hon. Friend find it as surprising as I do that people on the left of the political spectrum seem to want to borrow more money and therefore make us even more dependent on the banks that they pretend to dislike? Why not put up a sign saying “Borrow more money and make us more dependent on the banks” instead of calling for more state spending, as they mean the same thing?

Jacob Rees-Mogg: My hon. Friend makes a good point. There must be fears that if the Bank of England goes on printing money, the printing presses will eventually wear out in an inflationary burst.

There is hope from the Opposition Benches. We heard that the hon. Member for Na h-Eileanan an Iar supported the reduction in corporation tax in Scotland because he thought that it would produce more revenue, more business and more prosperity for Scotland. That is the vision of fairness and of reducing inequality that we should have. It is a vision in which people succeed through their own efforts rather than being trapped by

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the state; in which people prosper through their own efforts, rather than being held down by the state; and in which people contribute through their own efforts to the growth of the rest of society and the economy, rather than being prevented from doing so by the state and being left unproductive .

Mr MacNeil: The hon. Gentleman talks about the state as a malign influence, but does he accept that markets have their flaws and do not work properly? Influences and biases in the markets can conspire so that the CEO gets far more, in ratio with the pay at the bottom end, than at one time he used to whereas the people at the bottom end cannot even make a living wage. There are huge iniquities in the private sector and it is not all “State bad”. The hon. Gentleman should realise that the state can be good as well and there can be big problems in the private sector.

Jacob Rees-Mogg: The hon. Gentleman and I are co-religionists, and if we are not careful we will start talking about original sin and the imperfectability of mankind. It is true, of course, that there is no perfect man-made system, and that would be an interesting debate for another day, but by and large the markets work better than state direction, which essentially re-circulates money that is created in the private sector. We need a flourishing private sector if we are to help people to improve their standard of living, their lives and their livelihoods, and if we are to take them out of this awful poverty trap. There is great nobility in what the Government are doing. They do not want unfairness; they want fairness for those people and families doing their bit for society, working hard and getting on, and they want to take away the clamping down, the closing down, the almost bankrupting of the country that was being done before.

For those reasons, I oppose the motion. It is fundamentally wrong-headed in all it seeks to do, and I hope the Government stick to their guns and carry on with economic and welfare policies that enable people to become better off through their own efforts.

4.56 pm

Debbie Abrahams (Oldham East and Saddleworth) (Lab): I was not sure whether the hon. Member for North East Somerset (Jacob Rees-Mogg) agreed or disagreed that inequalities are bad. I certainly believe—and I can present evidence—that inequalities between rich and poor are bad not just for the people who experience them, but for society as a whole. A large swathe of international academic evidence shows—most poignantly in “The Spirit Level”, published a few years ago—that the gap between rich and poor is bad for everyone in society. Inequalities affect life expectancy, mental health, social mobility, educational attainment and the extent of crime. So I start from the premise that inequalities are bad.

In my previous life in public health, I worked on socio-economic inequalities and their impact on health inequalities, which is what I want to discuss today. Again, I was not clear from what the hon. Gentleman said, but he talked about the separate position of the state and the responsibility of individuals within society. I believe—again, I think there is evidence to support this—that the Government set the tone for the culture of a society, in both their explicit and implicit policies, and how we divvy up spending reflects those policies.

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As I said, considerable evidence shows that the systematic, socially produced differential distribution of resources and power—I mean income, wealth, knowledge, status and connections—is the key determinant of health inequalities. Mortality and morbidity increase as people’s social position declines. My constituency contains an affluent part, in Saddleworth, although there are pockets of deprivation, as in every community, and a poorer part, in Oldham East, and that differential is reflected in a 10-year difference in life expectancy, which is a situation that can be replicated across the country.

That social pattern of disease is universal. It is produced by social processes influenced by Government policies, both written and unwritten, rather than by biological differences. There is no law of nature that decrees that children born to poor families will die at twice the rate of children born to rich families. We should, however, take some comfort from the fact that those inequalities are socially produced and, as such, neither fixed nor inevitable. That means that we have some hope of doing something about them.

I am very concerned about the direction of Government policy, which, although largely driven by the Tory party, is to a large extent supported by the Liberal Democrats. The Health and Social Care Act 2012, for instance, completed its passage because it was propped up by them. One of the key objectives of the original policy was to reduce health inequalities, but there is absolutely no evidence that this privatisation Act will do anything of the kind. The Government have tried to suggest that increasing competition in the NHS will improve quality and reduce the number of inequalities, but I recently organised an inquiry in my capacity as chair of the parliamentary Labour party’s health committee, and eminent academics were saying exactly the opposite. One was

“shocked to see the move to wholesale competition and Any Qualified Provider as a primary driver in NHS reforms on the basis of”

very few observational studies conducted by the London School of Economics and others. Another said that

“clearly different drivers are motivating the private healthcare sector”.

In the US, there is both under and overtreatment, and huge disparities in health care. We know that the Government are already putting out to tender seven out of 10 contracts.

Before the Health and Social Care Bill became an Act, directors of public health and public health academics wrote that it would exacerbate inequality rather than reduce it, but the Government pressed on, and they continue to press on. The implications of the EU-US trade negotiations are of particular concern, because the Government have still not committed themselves to exempting the NHS from the free trade agreement. We will challenge them vigorously on that.

The recent debacle over NHS resources allocations is another example of the Government’s total lack of commitment to reducing health inequality. We saw the writing on the wall back in 2012, when the former Secretary of State for Health—the present Leader of the House, the right hon. Member for South Cambridgeshire (Mr Lansley)—reduced the health inequalities weighting from 15% to 10%, which would have a direct impact on areas where health was particularly poor. Following last year’s consultation about how NHS resources should be

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allocated, the Government were prompted to withdraw their previous policy and include an element that took account of deprivation in order to avoid another furore, but there are still major problems in connection with the allocation. A recent analysis undertaken by academics shows that the Labour Government’s health inequalities weighting saved lives: three lives per 100,000 in the population. I am extremely concerned about the new formula, and about its failure to take inequalities into account.

However, health policy is not the only problem. Other Members have already mentioned the Government’s economic policies. Although the personal allowance has been increased, the cut in tax credits means that 40% of the worst-off members of the population will be about £1,500 worse off. Those policies are doing nothing to reduce the economic inequalities that ultimately lead to health inequalities.

The Government are reducing access to education by trebling tuition fees and by scrapping education maintenance allowance, which was a key funding mechanism to enable young people from deprived areas to buy books and travel to college. They have now been denied that.

Nia Griffith: Will my hon. Friend join me in congratulating the Welsh Government on protecting education maintenance allowance for the poorest families, for the reasons that she has outlined?

Debbie Abrahams: I will indeed. I also want to pay tribute to Oldham college, which has introduced its own system to ensure that people from the poorest backgrounds can still attend college without being financially penalised.

The Government are restricting access to justice through their legal aid changes. Inequalities are also being created through job insecurity resulting from zero-hours contracts. The swathe of policies that the Government have introduced have done nothing to reduce inequalities. On the Government’s so-called welfare reforms, I absolutely detest the divide and rule narrative that has been deliberately introduced in an attempt to vilify people receiving social security as the new undeserving poor. The pejorative language of “shirkers” and “scroungers” has been really disingenuous, and the Government are distorting statistics to try to prop up their welfare reforms. That is absolutely shameful.

Collectively, the impact of public spending cuts is significantly greater in deprived areas. Academic studies also show the relationship between public spending and, for example, life expectancy at birth. The immediate impact of these socio-economic inequalities on health inequalities is already showing. Following the 2008 recession, there was an increase in male suicides, with an additional 437 suicides registered in the UK in 2011, roughly mirroring the increase in unemployment. It will take time for health conditions such as cancer and heart disease to develop. There is always a time lag between such conditions and their immediate precursors. We also know that the protective, positive factors that can mitigate these negatives are being eroded.

Mr MacNeil: The hon. Lady is making a clear, thoughtful speech. She has touched on regulation, and on positive factors. Does she agree that one of the malign aspects of

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state regulation is the excessive regulation of trade unions, especially when the OECD has shown that strong trade unions can help to reduce inequalities? Does she also agree that this is one area in which the UK has definitely gone too far?

Debbie Abrahams: I am a trade unionist and I fully support trade unions.

On the current policy trajectory, the social pattern of health inequalities will continue. For example, the gap in life expectancy is set to increase, rather than decrease. In England, there is now a nine-year difference for men and a seven year difference for women. The Government’s indifference to inequality reflects their belief in the dated theory that reducing inequality reduces incentives and slows growth. That theory has had a number of iterations, but the converse has been shown to be the case. For example, Stiglitz produced evidence last year to show that inequality caused financial instability, undermined productivity and retarded growth.

The previous Labour Government did not get everything right, but I am proud that we achieved our targets on health inequalities. Our key successes were in achieving our objectives, first, to reduce health inequalities by 10% as measured by life expectancy at birth for men in spearhead areas, and, secondly, to narrow the gap in infant mortality by at least 10% between routine and manual socio-economic groups and the England average. That was quite a feat, and it has not been acknowledged by this Government. I am sure that the Minister will take an opportunity to mention it in his closing remarks. We did not get it right, but we are definitely moving in the right direction with the policy initiatives we have announced: strengthening the minimum wage; increasing support on child care; freezing energy bills; repealing the bedroom tax; providing support on business rates; and improving the quality of jobs.

Mark Durkan (Foyle) (SDLP): Reflecting on not just the previous Administration, but the previous Parliament, does the hon. Lady agree that one of their collective achievements was the Child Poverty Act 2010, which was supported by all parties? The Welfare Reform Act 2012 was used to gut the key component of that Act by removing the key element of targets and annual reports. That was not done properly, by its inclusion in the original Bill, but by a Government-sponsored amendment in the Lords, which came back here and was not even voted on.

Debbie Abrahams: I share the hon. Gentleman’s concern about the increase in child poverty. The Labour Government made some strides in reducing that. As he will know, the Institute for Fiscal Studies estimates that child poverty will increase by 1.1 million by 2020 because of this Government’s policies.

Let me finish on a quote from my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson), a former Health Secretary:

“Inequality in health is the worst inequality of all. There is no more serious inequality than knowing that you'll die sooner because you’re badly off”.

I hope that focuses all our minds.

5.12 pm

Richard Fuller (Bedford) (Con): The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) brings to this House a wealth of experience and

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understanding from her previous work in the area of health, and I hope that the House listened carefully, as I did, to her comments about the interaction between differences in health and the perpetuation of inequality in our country. However, I did disagree with some points in her critique, which I shall discuss later; most importantly, there was an absence of a full understanding of the context in which this Government are taking actions to address fairness and inequality.

I, like many people, get somewhat concerned and uneasy when I hear politicians bandying around words such as “fairness”, “equality” or “inequality”. History has taught people that when politicians profess themselves in favour of fairness, they too often end up enriching themselves and those politicians who would rally people to the banner of equality too often end up repressing those same people once power has been given to them. So it was with some trepidation that I came to this debate, but the prospect of being able to listen to perspectives on those issues from Members of this Parliament from different parts of the UK attracted me, and I have not been disappointed, either by the opening speech or by those of other hon. Members.

Judgments about what is fair or not fair, or about the balance between equality and inequality, are best left to individuals and families. People are perfectly capable of making those decisions based on what they have learned from their parents and grandparents, on what they have been taught in school or, perhaps, on the lessons they have learned in their church, synagogue, mosque or temple. Politicians fall rather low down the list of people who can be persuasive on those topics. Nevertheless, we shall battle forth.

Mr MacNeil: I do not disagree in any way, shape or form that people can make assessments about what is iniquitous or unfair, but the hon. Gentleman needs to go further down the road, because when people see inequity and unfairness they do not have the power to do anything about it. That is when this place and national Parliaments around the world have to regulate, reform things and so on to make sure we have the situation we had after world war two: a better settlement for the greatest breadth of citizenry.

Richard Fuller: I am grateful to the hon. Gentleman for that helpful intervention. Let us assess the ability of Government today to fulfil that positive role. One of the most important aspects of fairness is the future that we bequeath to our children and grandchildren. It is a natural aspect of human behaviour to want to give the best start in life to our children and grandchildren. One of the worst aspects of the context in which we are operating today, as a Government and as a Parliament, is that under the previous Government, we built up the most significant amount of debt to pass on to our children and grandchildren. One of the most important aspects of what the Opposition call the cost of living crisis—my constituents think of it as trying to meet the family budget—is the debt that was left by the previous Government for this Government to deal with.

The Opposition like to talk about the level of Government debt at that time, but a Chancellor of the Exchequer is custodian not just of part of the economy but of the entire economy, and, before he makes a decision, he has to look at the strength of the economy.

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It is an incontrovertible fact that the level of indebtedness of this country in 1995—Government debt, household debt and corporate debt—was about two times the size of the economy, and when the Labour party left office, it was five times the size of the economy. We do not need to have a credit card to know that we have to pay off all that debt, and not just part of it.

Debbie Abrahams: Will the hon. Gentleman explain the decisions that were made in the Health and Social Care Act 2012, which had nothing to do with the debt? We recognise the economic context, although we could quibble about the causes and whether we reduced the level of debt. I believe that we reduced it while we were in power. None the less, the specific policies of the Act had nothing to do with that debt. They were choices that the Government would have driven through regardless of the economic context.

Richard Fuller: The hon. Lady is repeating the point that she made in her speech. I am sure that the Minister will want to address it now or later. Earlier on, she missed this major contextual factor, which is somehow the Government must be able to manage the economy while dealing with a substantial overhang of debt, and individual families are doing that as well. That is a root and crucial part of how we can achieve a more equal society. We cannot achieve an equal society if we permit Government to pass on massive debts to future generations without any liability themselves.

David T. C. Davies: My hon. Friend is making an excellent speech. Does he find it as extraordinary as I do that that debt was being racked up from 2001 onwards at an average rate of about £30 billion a year, long before the financial crisis struck?

Richard Fuller: I appreciate my hon. Friend’s intervention. He is drawing our attention to the Government part of the debt, but I have to tell him that the stewardship of the economy by the Government was worse even before then. We, as people who can vote in Governments and as citizens, have to take that responsibility ourselves, too. We are responsible for what this generation does, whether it is our Government, our corporations or any other aspect of society, but we pass on those consequences to our children and grandchildren and they will inherit either a more equal and more prosperous society or a less equal and less prosperous society because of the decisions that we make as individuals and the way in which we hold our Government to account.

Sheila Gilmore rose—

Richard Fuller: With respect, others wish to speak, so I will move on now to specific parts of the motion.

Let me address the issue of austerity measures and why they are in place. First, there is the fact that we have accumulated too much debt. Another issue is the ripple effects of that debt crisis. As the Government deal with the overriding debt, individual families, especially those in vulnerable circumstances, are pushed to the edge and need to go to payday lenders and other high interest rate lenders to deal with the consequences of that macro-financial situation. The individual circumstances of individual households have to be taken into account.

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The other issue—again, it is the legacy of what occurred in preceding years—is the way in which house prices have become detached from incomes. Shelter is running a campaign on the issue, and although it is an interesting point to raise, I think that it is about 10 years too late. In the Living Wage Commission report, to which many hon. Members have referred, there is an interesting chart—figure 1.21—which looks at the ratio of house prices to earnings for the years 1952, 1975, 1997 and 2012. For the entire period from 1952 to 1997, the ratio of house prices to income fell. In 1952, it was five times the average income, but by 1997, it was 4.1 times. In the period from 1997 to 2012, it rose from 4.1 times to 6.7 times; 100% of that increase took place in the period to 2007. If we look at the cost of living and the cost of housing—part of enabling people to own their own home, get on the property ladder and pay their rent—we see that the issue of inequality will take time to resolve, because it took us a long time to get into that mess in the first place.

The motion refers to women and relative pay. I want to draw to the attention of the House, not by way of answer but by way of contribution to the argument, the House of Commons economic indicators report for February 2014. It looks at the gender pay gap and it makes the broad point that the overall pay gap between men and women has decreased steadily from 1997, but in considering whether the gap will be perpetuated in the future, it examines the gender pay gap by age range. For women and men between 18 and 39, the pay gap oscillates between 1.4% and 0.3%. For women over 40, it oscillates between 12% and 18%, which raises a question for policy makers such as the Minister: is that issue to do with career breaks and will it persist over time, or is it the result of a fairly good news story, with younger women and younger men on average having access to the same sort of jobs and pay, so that in about 20 years’ time the differential will go down? I do not put that forward as an answer, because I do not know the answer, but as a contribution to the debate and to broaden understanding.

There have been a number of contributions about the working poor, poverty and the living wage. We have discussed raising wages from the minimum wage level to living wage levels, but too frequently that would result in a small pay increase for the individuals concerned. It is a transaction between the employer and the Government in terms of the interaction of benefits and compensation. To contradict my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), who discussed the free market in wages—it is a small difference—I would argue that if in the low-pay sector Government are topping up wages to the tune of £10,000 on a £13,000 wage, which is the case for a married person with two children earning the minimum wage, the free market is far from working. There could be a strong argument, not only from the point of view of public finances but in order to have a freer market, for urging the Government to increase the pressure on companies by removing that subsidy, which is supporting labour. However, I should be interested to hear more from my hon. Friend.

Jacob Rees-Mogg: Is my hon. Friend aware that someone working 40 hours a week in receipt of the minimum wage would pay over £2,200 a year in tax, which must be part of the problem? I include in that employers’ national insurance.

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Richard Fuller: My hon. Friend is absolutely right. This Government have sought to reverse the level of tax that people on low incomes pay, unlike the previous Government. In addition, with the employment allowance, the Government have a tool to encourage employers to increase pay for people on low incomes, and I hope that the Chancellor will do something about that.

We talk a lot about improving skills, which is important, but that does not work for everyone. Not everyone will want to take on additional skills. One aspect of pay that during my career in business changed dramatically was the recognition of tenure. It used to be the case that by doing the same job for two, three, five or 10 years, not improving one’s skills but just getting better at what one did, an increase in pay could be anticipated. We have lost sight of that too much over the last 10 or 15 years. We have said it is just one rate for the job, with no regard to tenure. I ask the Government to look at tenure as part of a more widespread response to the persistence of low pay in this country.

In addition to the promotion of a living wage by councils, there is an important point about the commissioning that councils do. There have been reports in the media recently about the commissioning of various types of service by local authorities that impact on the pay that can be earned by individuals, which is also an important point for the Government to consider.

I will not get into the debate about the rise of food banks under the last Government compared with now. Food banks provide a good service and I encourage people to support them as much as possible. I went to the food bank in Bedford and I pay tribute to the All Nations Church, to the Salvation Army and to the other Churches that run the food bank.

Gordon Banks: May I entice the hon. Gentleman to go into the matter of food banks a little? Has he seen the latest newsletter from the Trussell Trust, which somewhat contradicts the Minister’s position earlier? It says that 42% of all food bank users cite benefit-related problems as the reason why they use food banks.

Richard Fuller: I have not seen that report, but I have seen the data on those using the food bank in Bedford. For a large proportion of people the causes are related to benefit changes. I do not have the statistics, but within that group some people have been sanctioned for not complying with the benefit rules. Would the hon. Gentleman support policies that sanction people for not conforming with the benefit rules, or does he believe that they should not be sanctioned?

Sheila Gilmore: My constituents are not being sanctioned for not looking for a job, but for one-off incidents. One constituent rearranged an interview with the Work programme provider because of difficulties with her child’s school start times and was told that that was okay, but she was subsequently sanctioned. People are being sanctioned for minor infringements, almost on a whim.

Richard Fuller: I do not want the hon. Lady to conflate two things. If the 42% figure reflects the situation in Bedford, it is to do with the broader issues of benefits, which includes sanctions, changes to benefits and the specific examples that the hon. Lady mentioned, where the reason is fairly spurious or there is just a plain error.

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I do not believe such cases make up the 42% proportion, but they are part of it. But I am a Tory, so I understand that large bureaucracies forget the individual and people are caught by that. In my constituency—as I am sure the hon. Lady is in her constituency—I am creating a form with the local food bank provider so that when circumstances such as she describes occur, my office can be informed straight away. It is important that we as Members of Parliament use our power, when such spurious changes to benefits are made, to shorten the time that they take to resolve. For some of my constituents that can take six, seven, eight weeks or more, which is not correct if a sanction has been inappropriately applied.

Gordon Banks: I endorse what my hon. Friend the Member for Edinburgh East (Sheila Gilmore) said. I commend the hon. Gentleman on his work in moving things on for his constituents in respect of food banks. I do the same, as I am sure do many other right hon. and hon. Members, but I have had constituents who have been sanctioned because they have been ill and then, because they are sanctioned, they have no money to go to appointments, and are sanctioned again. That system is totally out of control.

Richard Fuller: I will not dwell on the matter. I have asked the hon. Gentleman whether he supports the process of sanctions. I would be interested to hear him explain in his speech what type of sanctions he supports and how he would implement them, if he had to take that responsibility.

The final part of the motion asks the Government to halt their spending cuts. If they halt that process, they have to look at increasing taxation. I am sure many hon. Members know that the ways in which we raise tax are moving more and more towards fewer people paying a larger proportion of tax, with 1% of the population paying 30% of income tax and 29,000 people paying 14% of income tax. On the one hand, this may be seen as an aspect of inequality. On the other, it may be seen as a fairly dangerous way in which a Government can raise money, in which case the shadow Chancellor’s proposal to increase tax rates again is probably inappropriate.

In some of the contributions from even those on the Government Benches, we convey the impression that the Labour Government were benign on tax. I draw the attention of the House and the Minister to what was going on between 2000 and 2010. It is in a House of Commons Library note called “Income tax: the additional 50p rate”, which looks at the top rate of tax, including social security contributions, between 2000 and 2010. It shows that in France that rate went down 10.6 percentage points, in Germany it went down by 5.8 percentage points, but in the United Kingdom between 2000 and 2010 that rate went up by 11 percentage points. So it is not fair to use the word that has been common in this debate or to maintain the perspective that somehow, under the Labour Government, the rich were getting off with low tax rates. The Labour Government were taxing people at a high rate. They started the process of a higher proportion of taxes being raised from fewer people, which results in a very difficult situation for people overall.

We have had an interesting debate and I look forward to hearing more contributions from hon. Members on fairness and equality. I have not yet been persuaded that politicians are best placed to determine that. I believe that individuals make their own judgments. I hope that

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by using some of the information that I have presented today, other contributions may be better placed to consider the issue.

5.32 pm

Nia Griffith (Llanelli) (Lab): 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.

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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—

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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 the Member for Leeds West (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.

Stephen Crabb: The hon. Lady talks about Labour’s promise to bring the welfare bill down. I remember that on the eve of the 1997 general election, the Labour leader, Tony Blair, promised to do exactly the same thing. What went wrong over the 13 years that Labour was in power?

Nia Griffith: We are saying now that we want to tackle the reasons why people are on such poverty wages. If we try to reduce the price of fuel, that helps people with the amount of money they have in their pocket. If we look at the amount that they earn, that helps them to get the right amount of money in their pocket without it having to be topped up so much by the tax system. There are ways forward and we have to tackle these issues. It would be very welcome if this Government were prepared to look a bit more at ways of doing so.

We will also tackle zero-hours contracts. In September, my right hon. Friend the Leader of the Opposition announced Labour’s plans to tackle zero-hours contracts where they exploit people. This would be achieved by banning employers from insisting that zero-hours workers be available even when there is no guarantee of any work, by stopping zero-hours contracts that require workers to work exclusively for one business, and by

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ending the misuse of zero-hours contracts where employees are, in practice, working regular hours over a sustained period.

Jonathan Edwards: As the hon. Lady is aware, Carmarthenshire county council—run, of course, by the Labour party—makes extensive use of zero-hours contracts across its portfolio of employment. Will she join me in strongly condemning its leadership for the manner in which it uses zero-hours contracts to exploit its workers?

Nia Griffith: As the hon. Gentleman points out, there is still a long way to go. There are still many things that we all need to put right. Carmarthenshire county council has decided that over the next two years the 1% pay increase should be weighted towards those on the lowest pay to try to bring them up to the living wage, thus penalising the people at the top, because that is a way of bringing in a measure of equality.

Yes, of course there is still a lot to do. We began with the Gangmasters (Licensing) Act and the agency workers directive, but there is still a lot more to be done on the whole issue of zero-hours contracts, including using procurement, in the same way as the Welsh Government, to tackle blacklisting. When someone is blacklisted—they can no longer get employment in particular industries because their name has been passed round from employer to employer—it can be a terrible blight for a family. As in Wales, through the power of procurement we will say that we do not want public bodies to use contractors that are blacklisting people. That will be a powerful provision to raise the living standards of all those being paid from the public purse, whether by councils directly or by contractors.

People are able to make choices and there are mitigating factors and different ways of tackling poverty. In Wales, for example, by 2015 the Welsh Government will have doubled the number of children and families benefiting from Flying Start, whereas in England 500 Sure Start centres have closed. The Jobs Growth Wales programme is ahead of target in enabling 4,000 young people a year to take on a job, mostly in the private sector. It has a very high success rate, with some 80% being offered permanent jobs at the end of their stay. The Welsh Government have also increased the funding of the pupil deprivation grant, giving it a £35 million boost to help those from the least well-off homes to achieve their potential.

Equality is also about making those with the broadest shoulders take the biggest load. That is why we introduced the 50p tax rate, and we would reintroduce it for those earning more than £150,000 per annum. It has now emerged, from figures produced by Her Majesty’s Revenue and Customs, that almost £10 billion more was raised by the 50p tax rate during the three years it was in place than was originally estimated by the Government in 2012. The shadow Chancellor, my right hon. Friend the Member for Morley and Outwood (Ed Balls), has confirmed our support for a mansion tax. We have used the tool of a bankers’ bonus tax in the past and would do so again in order to provide thousands of job opportunities for young people. We would roll out a house-building programme of 200,000 houses a year to help bring down the price of housing. Labour’s Companies Act 2006 includes provisions the Government have

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refused to implement that would enable pensioners and investors to see how pension fund managers vote on remuneration packages, which would bring transparency to what is happening at the very top of the pay scales.

As prices continue to rise faster than wages, people are unable to cope with the expenses they face at the end of the month, which is making them ever more prey to exploitation by payday loan companies charging exorbitant interest rates and costs. That is why we have called for the Financial Conduct Authority to use its powers to implement, as soon as possible, a total cost cap on the amount that payday lenders can charge, in order to protect borrowers and ensure that Britain has a consumer credit market that works for everyone. Under pressure from Labour and other campaigners, such as Sharkstoppers and Debtbusters, the Government have now agreed to grant the newly created FCA the power to cap the total cost of credit through the Financial Services Act 2012 and to compel it to use that power through the Financial Services (Banking Reform) Act 2013.

As well as capping interest rates, we need to find alternative sources of loans to help people in difficult circumstances and to put further pressure on the payday loan companies and squeeze them out of the market. With some lenders making profits of as much as £1 million a week, my right hon. Friend the Leader of the Opposition has called for a levy on such profits in order to raise capital for alternative and affordable sources of credit such as the credit unions. That would give an additional £13 million to credit unions to offer more financial support to people who are in need of loans.

Guto Bebb: Like the hon. Lady, I am a great supporter of the credit union movement, so I was surprised to be informed by my local credit union last Friday that the funding from the Welsh Labour Government to the credit union movement in Wales will be reduced dramatically next year.

Nia Griffith: I am not aware of that, so I will not comment on it, but we certainly need to look at alternative forms of credit in order to stop people having to go to payday loan sharks. Given the explosion in the volume of payday loan company adverts in the past few years, we have also pledged to take action to exclude them from children’s programming in the same way as alcohol and gambling advertisements are excluded.

We very much support setting up a commission of inquiry to investigate the impact of the Government’s welfare reforms on the incidence of poverty. I, together with many Labour colleagues, spoke in favour of such a commission in the debate on 13 January, and I am wondering what the Government will do about that. I urge them to set up such an inquiry as soon as possible.

Several hon. Members rose—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. Before I call the next speaker, it may help the House to know that we have plenty of time left for this debate. I consider it important, however, that the parties that tabled the motion should have adequate time to complete a proper winding-up speech. I therefore propose that Back-Bench speeches should finish at about 6.30 pm. If every hon. Member who is still to speak speaks for

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approximately 10 minutes, that will give all their colleagues and fellow Members an equal opportunity to make their points.

5.50 pm

Jim Shannon (Strangford) (DUP): I certainly understand the motion’s sentiments. When I looked through it, several things came to my attention—income inequality, the impact on low and middle income families, the number of workers on the minimum wage and zero-hours contracts, people in working poverty, the sharp rise in the number of people using food banks, and welfare cuts. I very much understand and would want to speak about all those points in the motion.

At the same time, I do not totally agree with my colleagues in Plaid Cymru and the Scottish National party about their wish to break up the Union. As a committed Unionist who sees the importance of the United Kingdom of Great Britain and Northern Ireland, I want the four regions of England, Wales, Scotland and Northern Ireland to be together as one nation—one nationhood together—under the Union flag. I cannot agree with them about that, but I honestly have real affection, as they know, for each and every one of them. I want to see them in this Chamber after the referendum in Scotland and the one, whenever it is—perhaps a decade or two away—in Wales.

Mr MacNeil: I want to make sure that the hon. Gentleman fully understands that the hand of friendship is there: whenever he wants to visit Scotland after independence, I will personally make sure that he is made very welcome.

Jim Shannon: I knew that there would always be a welcome for me in the hillsides. It is a real pleasure to know that the hon. Gentleman would do that.

Any hon. Member who works in their constituency will have come across the problems that people face, but I know that a lot is being done to combat those problems in many Departments, as should be noted. Perhaps full credit has not been given to the Government of the day for the economic turnaround that we have had. It is only fair to say that, and I want to put it on the record. I know that much blame passes from side to side in this Chamber about why we are where we are. My friends on the Government Benches point to the legacy left by the previous Government that is still being felt, and my friends on the Opposition Benches mention the austerity cuts and decisions that have been taken, but we in the middle are simply saying, “Let’s forget the blame, and focus on how we can make things better for our constituents and our country.”

I am conscious that the debate is about fairness and inequality, which of course relate to many spheres of life. It was only fair, because the best team won, when Ireland beat Scotland 28-6. As for inequality, we saw an example of it when Ireland, the better team, beat Wales 26-3, an indication of skill and experience. Fairness and inequality therefore go into many things, and that is just one of them.

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Ms Ritchie: Irrespective of our political differences and affiliation, does the hon. Gentleman agree that it was Ireland as a united country that played in that rugby team?

Jim Shannon: I know that, of course, but it would not have been a team without the Ulstermen, and that—

Madam Deputy Speaker (Mrs Eleanor Laing): Order. It may help the hon. Gentleman to know that if he mentions the Calcutta cup on Saturday, he will be in big trouble.

Jim Shannon: Who am I to get on the wrong side of you, Madam Deputy Speaker? Of course I will not mention it.

We are coming out of a recession, and times are tough for many people throughout the whole of the United Kingdom, but may I point to the fact that there have certainly been some successes? I am thinking of the recent contracts and job creation secured in Northern Ireland, thanks in no small part to the tremendous work done by the Minister of Enterprise, Trade and Investment. Yesterday, for example, she secured a contract in Singapore to supply defibrillators to the Singapore army, and she has secured a new contract through her “Going Dutch” campaign. Of course, everyone here knows that Northern Ireland has a strong relationship with Holland—something to do with the 16th and 17th centuries—but we have relationships across the whole of the United Kingdom and into Europe, where Northern Ireland can have influence and be better for it.

David Simpson (Upper Bann) (DUP): I agree with my hon. Friend that we are seeing some economic recovery and that is very important, but does he agree that we still have inequality and unfairness affecting the younger generation, who want to buy homes but cannot and will not be able to do so for the foreseeable future?

Jim Shannon: I thank my hon. Friend for making that point—not one of us here would disagree. Just this morning, we discussed VAT and tourism in Westminster Hall, in a debate led by the hon. Member for South Down (Ms Ritchie). We talked about opportunities for jobs in tourism, and most of those who benefit will be young people, so we would like to see that happen.

My hon. Friend is right: I cannot, in all fairness, paint a completely rosy picture. People are struggling, and we in this place are tasked with finding ways to help them and to help those who are trying to help others. As time has passed in this economic climate, we are seeing people who once had more than enough struggle to make ends meet. I can think of developers who, five years ago, were donating hundreds, sometimes thousands, of pounds to charity, but who are now seeking help with their benefits as a result not of losing the desire to work, but of losing the work to do. That is a fact facing many people in my area.

With more and more people struggling, one of the local churches took matters into its own hands and set up the first Trussell Trust food bank in Northern Ireland. Like the Minister, I see the benefits of the food bank in bringing people together, with people energised to help others in a clear, practical and physical demonstration of love for others. Thriving Life church in Newtownards

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realised that people simply needed help and was the first to do this, but there are now 12 food banks across the Province, all manned by people who volunteer to make a difference, all stocked by a community who understand that by donating a few groceries, they can help others who are struggling.

Since opening, the food bank in Newtownards has fed some 3,000 people and the number rises every day. Forty tonnes of food were donated by the local community. The food bank is staffed by a group of volunteers who collect, sift and sort through donations and make up the packs—they even have foodstuffs specifically for diabetic people donated by constituents. They keep a record of why people are referred to the food bank and they worked out four reasons, of which the first is low income. At the time the work was done, last summer, there were 604 referrals because of low income, almost 500 because of debt, just over 410 because of benefits changes and almost 400 because of benefit delays, so 65% to 70% of people were referred because of low income or debt and 30% to 35% because of benefit issues.

There are 86 regular donors to the food bank, including churches, businesses, schools and community organisations. Mash Direct and Willowbrook Foods—two major companies in my constituency—give regularly, and such donations are crucial to the Newtownards food bank. The sense of community has been expanded to supermarket stores such as Tesco and Asda, whose partnerships are crucial: not only do they allow store collections, but one store recently donated an additional 30% of food to what had been collected in a two-day drive. I have been pleased to be present and helping on the two occasions they did that. The big stores recognise the problem and try to help.

Not only does our food bank provide food in a crisis but, through the organisation Christians Against Poverty operating from the church, it also provides professional assistance with budgeting and debt issues and teaches people how to live on their income. Trained workers go through people’s debts to find a manageable payment scheme and do all the set-up work. That work is very important and must happen. Not only can people get food to feed their children, but they can get help to lift them out of the dark hole of despair that many are in.

This does not absolve the Government of doing all they can to ensure that no family in the UK goes to bed hungry. We have a role to play through ensuring that our welfare system runs smoothly, so that delays in benefits do not mean delays in provision. The Government have a massive role to play. They must begin by thanking the individuals and groups that work tirelessly to make a difference to people’s lives and to communities, and by asking how they can assist them.

In conclusion, tough decisions have been made. I have agreed with some and disagreed with many others. I oppose the implementation of the bedroom tax when no housing is available for people to move into. We have to work in this House to make savings. At the same time, we must work hard to ensure that we change lives for the better. Further, we must ensure that when the game of blame is finished, we are taking action to make those changes.

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6 pm

Mr William Bain (Glasgow North East) (Lab): It is a pleasure to speak in this debate.

I agree with some of the analysis that the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) presented in his opening speech. He was right to talk about the industrial policy successes that have been seen in Germany over the past few decades. Such successes are greatly needed in this country. I want to strike just one discordant note by reminding him of the record of the previous Government in reducing child poverty in the UK by 1.1 million and in cutting pensioner poverty by two thirds.

I turn to the speech of the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). At one point, I thought that he might set a record in Parliament by exceeding the four hours and 45 minutes that Gladstone took to deliver his Budget in 1853. However, the hon. Gentleman curtailed his remarks to below an hour. He had some interesting things to say. Again, I will pick out the points of agreement. He was right to point to the work of the many esteemed economists who have said that the share of growth that goes to people in the lower half of the income scale has been insufficient over the past 30 years.

It was revealing that there was a philosophical difference between the hon. Member for Na h-Eileanan an Iar and the hon. Member for Angus (Mr Weir) in their approach to markets. The hon. Member for Na h-Eileanan an Iar pointed out that markets should serve the public interest, but the hon. Member for Angus did not seem to think that the reforms to the energy market that Labour Members want to see, which would give people a welcome freeze in energy prices to tackle the cost of living crisis that is hurting households across Scotland, were required. It was interesting to see that philosophical dissonance among the Scottish nationalist parliamentarians, who are usually a steely monolith.

The hon. Member for North East Somerset (Jacob Rees-Mogg), who is sadly no longer in his place, spoke about what has caused the reduction in the wage share. If he were in his place, I would direct him to the excellent report issued by the Resolution Foundation today, which demonstrates that 72% of the falling wage share over the past two decades has been down to growing wage inequality. The hon. Gentleman and his hon. Friends should reflect on that.

There was a fine speech by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who reflected many of the points that were made in the Social Mobility and Child Poverty Commission report that was published last year. Prolonged periods of income inequality lead to massive and dramatic health and educational inequalities. I see that in my constituency and across many parts of the United Kingdom.

As my right hon. Friend the Member for Doncaster North (Edward Miliband) set out in his Hugo Young lecture last night, the economic model that has persisted over the past 30 years is not fit to generate the sustainable growth shared properly across the whole of society that will be needed in the next 30 years. Oxfam showed only last week that the 85 richest people in the world have the same wealth as the 3.5 billion people who make up the poorest half of the world’s population. We need growth

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that serves the interests of people across the United Kingdom and the world. It is also important to put on record that there is absolutely no tension between tackling poverty and inequality in these islands, and our responsibilities to the poorest and most disadvantaged in other parts of the world.

The fundamental point of this debate is that when we look at the condition of our country, we see that people are working harder. The numbers of hours worked are higher than they were before the crisis hit in 2008, but people have a lot less to show for it. We know from the Institute for Fiscal Studies that, taking into account tax and benefit changes, on average people are £891 a year worse off under this Government. In 2015 this will be the first Government in decades who have to go back to the electorate, unable to answer the question about whether, during their time in office, they made people better off than they were before.

The reason our economy is not working for ordinary people and the recovery—welcome though it is—is not yet sustained and secured, and is different from those of the ‘80s and ‘90s, is that we have not seen the promised rise in business investment. Productivity has fallen in seven of the past nine quarters under this Government, and in 2012 this country saw the biggest fall in productivity in the EU, and the second biggest in the G20. We can begin to detect the reasons for that slump in productivity because people’s wages—even people in part-time employment—have steadily fallen in the past four years. That failure to have a wage, investment, and trade and export-led recovery poses severe questions about the durability of the economic model that the Government are following.

Under that flawed model, more than 13 million people are in poverty on these islands—more than half in working households—and two in every three children are growing up in poverty in a household where at least one adult is in work. Given that, it is no surprise that three out of four people are severely concerned about what rising inequality means for every person across our country.

Today, Shelter published data that demonstrate the impact that the lack of housing supply—a responsibility in my constituency of both this Government and the Scottish Government—is having on inequality. House prices are now 87 times what they were half a century ago, while wages have lagged way behind. Rising house prices in the past year have not been matched by the adequate supply of housing from either Government that is necessary to deal with the cost of living crisis.

The Joseph Rowntree Foundation pointed out last week that in Scotland poverty among workless households has reached 54%. In my constituency, and in many like it in west and central Scotland and parts of eastern Scotland, between 600 and 700 people who are under 25 or who have not worked for two years or longer would benefit from the right to work. They want to be in work but cannot find it, and it is incumbent on both Governments to ease those people’s personal cost of living crisis by implementing policies that will give them a proper jobs guarantee. That is critical in securing greater equality for the constituents I represent, who are on an average wage of £342 a week—5% less in real terms compared with 2012.

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We have also seen the hollowing out of our jobs market, and a lack of jobs in the construction and manufacturing sectors. We have seen a welcome increase in jobs in business and the financial services, but nothing has replaced the jobs lost in construction in 2008 and 2009. It is incumbent on Government at every single tier to ensure that this hole in our labour market is repaired.

The banking sector also needs to be reformed, as the hon. Member for Carmarthen East and Dinefwr pointed out. We have not seen the degree of lending to small businesses in this country that we have seen in Germany, and that speaks to a structural flaw in our banking system. There are insufficient banks to provide the necessary competition. We do not have a proper and fully fledged investment bank to support firms that want to invest in infrastructure. The UK Green Investment Bank does not have the borrowing powers it needs to drive investment in the renewables sector.

Only a Labour Government, in the Scottish Parliament and in this Parliament, can get to grips with the root causes of this unbalanced recovery: the lack of a sectorally and regionally balanced industrial policy, weak business investment, skill shortages, poor exports, a worsening productivity crisis and the lowest number of new starts in housing since the 1920s. We need to earn and make our way to a real recovery in Britain with a long-term plan to raise living standards for all.

6.11 pm

Sheila Gilmore (Edinburgh East) (Lab): In some ways this is a triangular debate, because there so many different views across the House.

We were treated to what I can only call a reprise of the 1930s from the hon. Member for North East Somerset (Jacob Rees-Mogg), who is no longer in his seat. Many of his arguments were made in this place in the 1930s on issues such as unemployment benefit. Many people said then that unemployment benefit, such as it was, was holding people back from working because it made them lazy and they did not try very hard to get jobs, and it was a very bad thing. Indeed, we could probably go back even beyond the 1930s. I suspect that the hon. Gentleman’s great, great, great, great ancestor in the early 19th century was probably saying something similar about the poor law—that provisions had to be made really tough and that people should not get out-relief but in-workhouse relief, because it was making them lazy and unwilling to work for low wages. This argument is constantly reproduced. Nobody—I think nobody—would say now that high unemployment went on for so long in the 1930s because unemployment benefit was too generous. Blaming the problem of unemployment on the unemployed is no new thing, but it is, frankly, wrong, and it is too simple an explanation.

At the other extreme, we have the “wouldn’t it be nice if we could do everything” brigade, which is how much of the yes to independence campaign is being waged in Scotland. This is the idea that we can do it all and can have everything: a lower retirement age, better social security benefits and lower taxes all at one and the same time, and that this is the solution to all our problems. Back in the real world—which, I have to say, will be the world facing a Scottish Government whether under independence or not—there are real challenges and we have to consider how we can deal with them properly.

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Other myths have been perpetrated. The hon. Member for Bedford (Richard Fuller) wanted us to feel that he and many of his colleagues would like to reduce inequality, too, and that the way to do it is to get the economy back on its feet; there would be no reason why inequality would not then be reduced. The problem—he is no longer in his place to intervene to tell me I am wrong—is that I suspect he thinks that the Conservative Government in the years between 1979 and 1997 were right in the way they ran the economy. The trouble is that during those years inequality rose at a very fast rate. In these debates, Members frequently say that it continued to rise under the Labour Government, but it rose far less and the big rises in inequality came during the years of Conservative government. During those years—when, in the view of Members such as the hon. Member for Bedford, the economy was getting back on the right path—inequality rose substantially, so if some of us are less than convinced that this Government want genuinely to deal with inequality, we have historical precedents on which to base that opinion.

Stephen Crabb: We have had some discussion about income inequality. Let me put it on the record once again that income inequality reached record levels during the previous Parliament and under the previous Labour Government. Income inequality is falling under this Government.

Sheila Gilmore: The big increase in income inequality was clearly between 1979 and 1997. Any graph will make that quite clear.

There is a danger in perpetuating the myth mentioned by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). I apologise to the House for missing some speeches, including the one by the Member who represents the Western Isles—I am sorry, but as a lowland Scot I genuinely find it difficult to pronounce the name of his constituency in Gaelic so I shall just call it the Western Isles. I missed his virtuoso performance because I was sitting on a Public Bill Committee, not because I did not want to hear what he had to say.

The hon. Member for Carmarthen East and Dinefwr said that there was no difference between a Labour Government and the current Government. As I have said in some of my interventions, that is not correct. It is dangerous to say so, too, because it makes a lot of people think that there is no point in voting or trying to change things because Governments do not make any difference and because there is no difference between the parties.

For example, the reduction in pensioner poverty during the years of Labour government should not be forgotten. Many pensioners will not forget that. A lot of what that Government did created the base on which this Government propose to build with the single-tier pension. As I have said before, it was not the triple lock that produced the highest cash payment to pensioners but inflation—an inflationary rise made necessary by the Government’s own—[Interruption.] I apologise to the Chair of the Select Committee on Work and Pensions, of which I am a member, for not seeing her try to intervene.

Dame Anne Begg (Aberdeen South) (Lab): Does my hon. Friend agree that one of the great achievements of the previous Labour Government on pensioner income,

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in particular, was the introduction of pension credit, which took every single pensioner out of absolute poverty? Not one was left in absolute poverty at the end of that Labour Government.

Sheila Gilmore: I entirely agree. That was a hugely important step forward, but we also addressed the issue of getting people back to work. One myth is that we are not at all interested in getting people back to work, but the tax credit system did a lot to help people to get into work, particularly single parents—350,000 of them were helped into work as a result of that policy—and that is important.

I accept that employment for those who are fit and able to work is an important prerequisite of increasing their income—remaining on benefits is not the way to increase one’s income and has not been under any Government—but that is not always sufficient as a marker that people can become better off. It is a necessary beginning, but it has not been sufficient and we must consider the hours of work that people are doing and the low wages that many receive. If we do not tackle that, people in work will still be very poor, as they are now. That is why the child poverty measures show that 60% of those in child poverty have members of their families in work.

We should look at what is happening in places such as Scotland, instead of assuming that these problems have been magically addressed, because there are still problems, some of which, in relation to social care, I alluded to earlier. I am not saying that free social care should not be looked at—it was introduced not by the current Scottish Government, but by the previous Administration—but it does present severe challenges, and if we do not discuss those honestly, we will confuse people about what we can achieve, and then no wonder they become cynical. Those in Scotland struggling with poor quality care know that. In addition, there are issues in Scotland in the education field. Universities give free tuition, but as a result the colleges, which are hugely important for social mobility—they give people a second chance in education—have been starved of finance. That is important.

To sum up, we have to be somewhere in the middle and make real changes in people’s lives, not pontificate about what might be possible in some wonderful place where the sun always shines and no one is ever poor.

6.21 pm

Pamela Nash (Airdrie and Shotts) (Lab): The sun is certainly not shining in Scotland; I have had to send my constituency office staff home because of the snow back in Airdrie.

I am delighted to make a late contribution to this debate, the title of which—fairness and inequality—is the essence of why I got into politics. I am sure that many of my colleagues, at least on the Opposition Benches, would say the same. Much has been said already about the tragedy of in-work poverty, so I shall restrict my comments to the impact of welfare reform and Government cuts on inequality, and I will add my voice, and that of my constituents, to the call for a commission of inquiry to look into the impact of welfare reform and the Government’s other austerity measures on inequality and poverty.

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Jonathan Edwards: I believe the hon. Lady when she says that fairness and inequality were why she entered politics in the first place, but will she tell the House how she will vote later when we divide on our motion?

Pamela Nash: It will not come as a surprise that while I agree with the majority of the motion, I am disappointed by its tone. It does not recognise what the Labour Government achieved on inequality between 1997 and 2010—in fact, it attacks that Government—so I will be abstaining, and I am glad to have had the opportunity to put on the record my reasons for doing so.

In my region of north Lanarkshire, the welfare reforms will take £55 million out of the economy every year, which affects not just individuals whose benefits are being cut, but local businesses in our town centres which are now struggling to cope with a vast reduction in customer numbers. That is damaging the development and visible progress of the last 20 years, during which time we have struggled to repair the damage done to our depleted heavy industry and manufacturing in the west of Scotland.

Partly owing to our industrial heritage, my constituency has relatively high levels of disability and chronic illness—as a result of old injuries from those days—and that has made my community particularly vulnerable to the welfare cuts. Many households have a member living with a disability or illness, as I see every day. I have been particularly perturbed by the scrapping of crisis loans, which is affecting the most vulnerable in our society, and although many of the changes have been mitigated by the Scottish welfare fund, many people are still being left in dire straits. Every day I see people whose benefits have been sanctioned and who are no longer entitled to a crisis loan.

Dame Anne Begg: I am sure that my hon. Friend will be as disappointed as I was to learn that, according to figures published today, the Scottish welfare fund has been underspent by a considerable amount. Obviously, those who are losing out are the most vulnerable families. It is a great shame that the SNP Government did not see their way to ensuring that the money was properly spent and properly allocated.

Pamela Nash: That does indeed upset me. When people come to me and tell me that their benefits have been subject to sanctions, it usually proves to have been due to an honest error; but are we really saying that, in this day and age, even those who have been sanctioned through their own fault should be starving? The only places that I can tell those people to turn to are my local food banks—and food banks throughout the country are confirming that benefit sanctions are one of the main reasons why people are going to them to obtain food just to survive.

I know that time is limited, so I shall try to keep the rest of my comments brief. The myriad statistics that have been shouted across the Chamber today, and all the political posturing, have sometimes made it difficult to bear in mind that individual people with whose cases we all deal as constituency Members are affected by the cuts that are taking place. An old classmate of mine from primary school came to see me a few weeks ago. He is a former serviceman, and when he came out of the Army he became a security guard, but he is now struggling

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to find employment. How can he be expected to find a job at a time when more than 2 million people are still unemployed, and at a time when many other servicemen and servicewomen will be joining him in the dole queue as further job cuts in the military are announced?

Most of the jobs that will be available to that ex-serviceman will be part-time jobs, or jobs involving zero-hours contracts. Moreover, he depends on housing benefit to keep a roof over his head, and he has been hit by the bedroom tax. His child’s bedroom has been deemed to be a spare room by the Department for Work and Pensions, because the child also has a bedroom in the mother’s house, so he has had to pay bedroom tax for a long time in order to ensure that he still has regular access to the child.

The Scottish Parliament recently passed a budget to fund complete mitigation of the bedroom tax. I welcome that measure, and I am glad that the Scottish Parliament eventually listened to the Scottish Affairs Committee—of which I am a member, although we are not allowed into the Parliament—but many people have already been affected by the tax, and I have to say that the “smoke and mirrors” approach taken by the SNP to one of the clearest examples of UK Government policy making the poor poorer has been nothing short of shameful. They have sat on their hands and done nothing when they could have taken action.

The UK Government made it very clear that the Scottish Government had the power to mitigate the bedroom tax long ago. The SNP said that there was no cash, and then found £20 million. It subsequently said that its hands were tied, but the Scottish Affairs Committee was told by the Scotland Office months ago that that was rubbish, and that the Scottish Government already had the power to mitigate the tax for all the people who were suffering in Scotland. I ask them now to think about the people who have suffered since the bedroom tax was introduced 10 months ago, and to consider apologising to those people and telling them how they will be recompensed.

As I have said, I regret the tone of the motion, which does not acknowledge the progress made under the Labour Government in alleviating the poverty of families both in and out of work. I hope that the Government will heed the many important points that have been raised by members of all parties today, and that they will establish a commission of inquiry to examine the impact of welfare reform—on the most vulnerable in particular—and to investigate inequality throughout the United Kingdom. I also hope, for my constituents’ sake, that the Scottish Government will immediately take advantage of every lever that their devolved powers have made available to them to protect the people of Scotland, and will not continue to pretend that they are powerless to tackle inequality without independence.

6.29 pm

Dr Eilidh Whiteford (Banff and Buchan) (SNP): Inequality is one of the great political scandals of our age, and it is important that we have had a chance to debate the subject at length today. I have been somewhat disappointed, however, at how few speeches there have been from Government Members. Nevertheless, what we have lacked in quantity we have made up for in quality, with a number of substantial and considered speeches from both sides.

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Over the past three decades, the gap between the rich and the poor in our society and elsewhere has grown exponentially. The rewards of economic growth have become increasingly concentrated in the hands of a small minority, while those in the lower half of the income spectrum are being increasingly deprived of the just rewards for their efforts. We on these Benches have made the case that inequality, on the scale that we see in the UK and internationally, is bad for all of us. It is in no one’s interest to have a society that is so divided by extremes of income and so damaged by social deprivation, but it is especially bad for those people who find themselves trapped on low incomes and who have seen their spending power and social mobility reduced dramatically over the past 25 years.

We have had a wide-ranging debate today. It has tackled issues as diverse as land ownership, fuel poverty, health inequalities, taxation and social policy, as well as a range of other disparate policy issues that would normally be debated separately. All those topics have been underpinned by the issue of economic inequality and the income gap that has grown so wide over recent decades. We have argued that inequality is not inevitable, and that it is a political choice. The Government have at their disposal the fiscal levers to enable progressive and more redistributive measures, but in recent times we have seen tax and benefit policies that have allowed the gulf between the haves and the have-nots to widen. A number of hon. Members have pointed out that the impact of the tax and benefit changes has fallen disproportionately on those in the lower half of the income distribution, particularly those in the lowest quintile, who have paid the highest price for economic austerity.

Mr MacNeil: It is important to bear in mind that redistribution applies not only after tax but before tax. In regard to productivity gains, we need to ensure that people get a fair day’s pay for a fair day’s work.

Dr Whiteford: My hon. Friend makes a useful point.

It is also important to note that those fiscal levers are not the only tools at the Government’s disposal for tackling inequality. Addressing the underlying drivers of wage inequality requires sustained effort and a fresh mindset about the policy choices that we can make to further a more equitable model of economic growth and to build a fairer, more inclusive and less divided society.

My hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) outlined some of the positive ways in which equitable growth could be pursued in Wales. He opened the debate by drawing our attention to the geographical distribution of inequality across the UK, and argued convincingly that while much of Government policy was oriented towards the needs of London and its surrounds, the consequences of that for the other nations and regions of the UK could be dire. Many of us have paid a heavy price for London’s prosperity.

It is notable that, with a few honourable exceptions, the speakers in today’s debate have come from Wales, Scotland and Northern Ireland. Perhaps that shows how seriously the issue of inequality—which is distinct from, but related to, poverty—is taken in these islands. It is obviously a pertinent issue in the context of Scotland’s referendum later this year, as we weigh up the two futures

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that are opening up before us and consider not only the benefits of making policy decisions based on our own values and aspirations but the uncertain consequences of continuing along the path that the UK seems determined to follow, with wealth and opportunity being increasingly concentrated among a small elite.

Dame Anne Begg: Obviously, if we are going to pursue a more equal society, we will have to ensure that those at the top do not get richer. What are the SNP’s policies for ensuring that those who are already rich become poorer in order to narrow the income gap?

Dr Whiteford: Had the hon. Lady been here for the earlier part of the debate, she would have heard some back-and-forth chat about tax rates and such like. I will not rehearse those arguments. For Labour, there still seems to be a zero sum game in which rich and poor have to share out a very small cake. The fundamental point that my hon. Friend the Member for Carmarthen East and Dinefwr made earlier was that if we want to tackle inequality, we need to grow the economy. Once we have done that, we will be in a much better position to tackle inequality and poverty alike.

Mr Bain: Will the hon. Lady give way?

Dr Whiteford: I will not give way. I want to make some progress; I have a lot to get through in a limited amount of time.

The extremes of income inequality that we see today had their genesis in the late 1970s. The hon. Member for Dumfries and Galloway (Mr Brown) challenged the motion’s wording about the upward trend of inequality in the UK. I am prepared to grant him that, in the early years of the Labour Government after 1997, there was a stem in the rising tide of inequality, but if we look at the long-term historical perspective we find that it is clear that from 2003 onwards inequality started to rise again. We can argue the piece about that, and I would not take away from the Labour party things it managed to achieve in government that were beneficial to people, but I question the lack of responsibility we have seen from Members on both sides of the House. They have tried to blame each other for not only the financial collapse, but how we have been dealing with the aftermath. It is incumbent on us all to take responsibility for the situation in which we find ourselves and work out how we can build a more prosperous future for everyone, in which the rewards of our prosperity are shared more evenly.

Today, the richest 10% of the population across the developed world have incomes nine times greater than those of the poorest 10%, but in the UK the margins are even more stark, with the richest 10% having incomes 12 times greater than the incomes of the poorest 10%. Can we really say that a person’s contribution is worth 12 times that of another person? I find that a difficult piece of maths to do; I certainly do not think I work 12 times harder than people who are earning a lot less than me in my constituency, as I know they work very hard in difficult and often demanding jobs.