The petition of residents of the constituency of Linlithgow and East Falkirk,
Declares that in a time of crisis in the cost of living, one in four UK households with children have experienced food insecurity, affecting an estimated four million children; further that in their struggle to feed their children, 28% of young mums are skipping meals each day, with this figure increasing to 37% among young mums on Universal Credit; and notes that while the spiralling cost of energy is affecting he cost of food production, storage and transport and families find themselves choosing between heating and eating, oil and gas companies post record profits, paying out billions to shareholders and continuing to be aided by UK Government subsidies and tax reliefs.
The petitioners therefore request that the House of Commons urge the Government to review the rate of Universal Credit to ensure it covers the essentials and that no parent or child goes hungry, and also that the Government introduces measures to stop oil and gas companies profiting at record levels whilst families are unable to afford necessities.
And the petitioners remain etc.—[Presented by Martyn Day, Official Report, 30 January 2024; Vol. 744, c. 832.]
[P002906]
Observations from the Minister for Employment (Jo Churchill):
Universal credit awards include a standard allowance, which is the core component of any award and is paid according to age and household unit. The purpose of the standard allowance is to provide for basic living costs. Additional amounts are added to provide for individual needs such as housing, children, disability, and childcare costs.
There is no objective way of deciding what an appropriate level of benefit should be, as each customer has different requirements depending on their circumstances.
Income-related benefit rates are not made up of separate amounts for specific items of expenditure, such as food. Each customer’s requirements vary and to attempt to base rates upon personal expenditure would produce an unfair and unsustainable system.
The Government do not consider it appropriate to introduce changes that would prioritise one particular area of household expenditure over the cost of other essential goods and services. Individuals should be free to spend their benefit as they see fit, in the light of their individual commitments, needs and preferences.
The Government have spent around £276 billion through the welfare system in 2023-24, including around £124 billion on people of working age and children, and from April 2024 most benefit rates will increase by 6.7% in line with prices growth.
Since 2022, the Government have demonstrated their commitment to supporting the most vulnerable by providing one of the largest support packages in Europe, with help for households with the cost of living totalling £96 billion from 2022-23 to 2023- 2024.
Since October 2022, the consumer prices index has already more than halved from 11.1% to 3.4%. This is stabilising the financial situation for many families, and the Office for Budget Responsibility expects that by quarter 4 of 2024 CPI will have fallen to 1.4%.
However, we recognise that some people will need further, targeted help to get back to a stable financial position.
The Government are providing an additional £500 million to enable the extension of the household support fund, including funding for the devolved Administrations through the Barnett formula. This means that local authorities in England will receive an additional £421 million to support those in need locally through the household support fund.
The funding will be available to local authorities in England from 1 April 2024 and will run until 30 September 2024.
In response to huge energy bill spikes caused by Russia’s illegal invasion of Ukraine, the Government provided unprecedented levels of assistance to households last winter with the typical household receiving £1,500 of support from October 2022 to June 2023.
Energy prices have significantly fallen in the past year alone and the Q2 2024 price cap of £1,690 was announced by Ofgem in February 2024. This is the lowest that energy prices have been for two years.
The Government continue to provide support through the warm home discount, which provides low-income households with an annual £150 rebate off their energy bill every winter.
Since May 2022, companies engaged in the production of oil and gas in the UK and on the UK Continental Shelf have been subject to energy profits levy, which was introduced to respond to exceptionally high prices that meant that oil and gas companies were benefiting from unexpectedly high profits. Currently, inclusive of the EPL, oil and gas companies are subject to a 75% headline tax rate on their profits.
At spring Budget 2024, the Government confirmed that they would extend the sunset of the EPL by one year until March 2029. This means companies exploring for or producing oil and gas in the UK will continue paying a 35% additional tax on their profits while prices are projected to remain high. The additional £1.5 billion raised from the sector will help the Government to cut taxes for hard-working families, reward hard work and support growth in the economy.
From 2023-24 to 2028-29, the Office for Budget Responsibility expects the EPL to raise over £12 billion. Revenues from the levy are on top of over £8 billion in tax receipts expected from the sector over the same period through the permanent tax regime, ensuring the oil and gas sector pays its fair share. The more than £6 billion revenue raised by the EPL since its introduction has helped fund vital cost of living support, including the energy price guarantee on household energy bills and additional support for those most in need. While the UK still needs oil and gas, it makes sense to encourage investment in domestic resources and retain the economic benefits and support UK jobs. That is why the more a company invests, the less tax it will pay. This helps to encourage the oil and gas sector to reinvest its profits in the UK.
Reducing inflation and growing the economy are the most effective ways to build a more prosperous future for all. This Government committed to halving the rate of inflation, and have achieved that.