PARLIAMENTARY DEBATE
Living Standards - 29 October 2024 (Commons/Commons Chamber)

This is likely to be the last time that the shadow Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt), is up against me at the Dispatch Box. We have had the privilege of these exchanges for just over two years now, and I have a huge amount of respect for him. He steered our country through a very difficult time after the mini-Budget, and I wish him well in whatever he chooses to do next.

If UK living standards, as measured by real household disposable income per capita, had grown by the same amount between 2010 and 2023 as they did between 1997 and 2010, the amount would have been over £4,000 higher in 2023. We are committed to boosting economic growth to turn that around. Although it will have been welcome news for millions of families that inflation is now below 2%, there is still more to do. Earlier this month, we delivered our first international investment summit, announcing over £60 billion of investment and unlocking nearly 38,000 jobs in the UK, all focused on creating and spreading opportunities to lift living standard.

The Conservatives oversaw a living standards disaster. In places such as Hexham, Prudhoe and Throckley in my constituency, people saw hardly any improvements to their incomes in over 14 years. Surely the clearest sign of whether government is working is whether working people feel better off. Does the Chancellor agree that papering over Tory failure is not enough, and that in tomorrow’s Budget we must reset the foundations of our economy?

My hon. Friend is right: the previous Parliament was the worst ever recorded for living standards. Tomorrow’s Budget is an opportunity to fix that and turn the page so that we can start delivering for families in Hexham and all around the country.

The bottom 50% of the population owned less than 5% of wealth in 2021, while the top 10% stacked up 57% of it—up from 52.5% in 1995. In our communities, the less well-off are struggling with energy prices and other costs. What will the Government do to ensure that the gap closes?

We have already announced the child poverty taskforce, which is working to publish a comprehensive strategy to tackle child poverty. We will publish that strategy in spring next year. We have also provided £500 million, including the Barnett impact, to extend the household support fund in England until the end of March next year, which will help the most vulnerable households to cover the costs of essentials such as food, energy and water.

Shamefully, under the last Conservative Government, the need for food banks soared to levels even higher than during the pandemic. Recent research shows that in my Bathgate and Linlithgow constituency, the number of food parcels distributed has risen by 77% over the past five years, and that in 2022-23, 27% of children were living in poverty after housing costs. What steps are the Government taking to reduce the need for food banks in the context of child poverty?

I thank my hon. Friend for her question and congratulate her on her great work on the Co-op’s food justice policy. As she knows, we are right behind her in our commitment to raise living standards across the country. We made a manifesto commitment to update the remit of the Low Pay Commission so that, for the first time ever, it will take into account the cost of living when making recommendations about the minimum wage.

As my right hon. Friend will be aware, coastal communities such as mine struggle with a low-pay, low-skill economy. Does she acknowledge the importance of the minimum wage in tackling this problem and supporting our communities and local economies?

My hon. Friend is absolutely right. It is why we will ensure that the Low Pay Commission takes into account the cost of living, and why we will close the gap between the youth rate of minimum wage and the overall rate, so that all adults can be paid a fair wage for their work.

As the hon. Lady knows, because of our commitment to the triple lock, the basic state pension and the new state pension will continue to rise. This winter, the new state pension is worth £900 more than it was a year ago, and it is likely to rise by a further £450 next April. Indeed, during the course of this Parliament, because of the triple lock, the new state pension is likely to be worth £1,700 more—much more than the value of the winter fuel payment.

I am sure that the Treasury was pleased to receive £1.5 billion in a windfall tax from Octopus Energy. Would the Chancellor consider using that money to reinstate the winter fuel allowance for one year until the Treasury has had the opportunity to find a better system of means-testing, so that my vulnerable residents and pensioners in Chichester are not falling off a cliff edge this winter?

I can understand the hon. Member’s concern, but of course, that £1.5 billion was already baked into the forecast—it is not new money to spend on initiatives. As she knows, we inherited a £22 billion black hole in the public finances; we will set out the detail of that at the Budget tomorrow, but because of that, we have had to make very difficult choices. Even in those difficult circumstances, though, we have protected the winter fuel payment for the most vulnerable pensioners who are on pension credit. We have also boosted the uptake of pension credit, so that people get the support they are entitled to.

Residents of Joseph Rowntree’s St Ellens Court all gathered recently to tell me about the devastating impact that the cut in the winter fuel payment will have on their living standards, and people in Withernsea gathered Saturday last to demonstrate against it. Tomorrow, the Chancellor can do the right thing; will she?

I am sure the right hon. Gentleman told them about the £22 billion gap in the public finances that his Government left, which has required the difficult decisions this Government have had to make to clean up the mess left by the Conservative party.

With the promised £300 cut in energy bills not materialising, the winter fuel payment scrapped for pensioners, and now the bus cap lifted for working people—whatever definition of that term the Chancellor is using today—can she honestly say that living standards will improve for everybody under this Government?

On the bus price cap specifically, the hon. Member will know that the previous Government put no money in to extend that cap. We have put money in to ensure that the bus price cap remains at an affordable level for people, unlike the previous Government, who just had short-term gimmicks.