Cost of Living

Debate between Alec Shelbrooke and Stewart Hosie

Wednesday 27th November 2013 Commons Chamber

[Alec Shelbrooke]

I could not agree more. What I am saying is that we need to grow an economy to ensure that we can get to a living wage, and that at the same time we should be looking at how we reduce the cost of living.

Why is the cost of living so high today? That is the fundamental question. Fundamentally, the cost of living comes down to one very important point—energy. We have had a lot of debate in the House this afternoon about whether to have an energy freeze, but if we freeze energy prices for a fixed period, prices will get ramped up before and after the freeze, as happened with the beer price freeze in the 1960s. We must take a more long-term view.

How did we end up where we are? It is my personal view—I support what was in our manifesto, and I wish we had moved further on it—that we need to start replacing our power stations, and at the moment nuclear power stations are by far the best way forward. It has taken a lot of effort and lengthy negotiations to get to one nuclear power station; we should be building five or six. But at the same time the world oil price is rising, and will not go down despite what anyone thinks. To put it in context, in 1998 a barrel of oil was $5 a barrel, and yesterday Brent crude was $100 a barrel—I am sure the hon. Member for Dundee East (Stewart Hosie) will correct me if I am wrong. I believe that if oil reaches $140 a barrel, there is more economically recoverable oil in the North sea than has already been extracted. That is the reality of the situation.

Energy prices will not come down, so it is no good having a freeze for a period, because energy prices permeate every aspect of the cost of living—the price of food in the shops, the price of getting to work. We always talk about the petrol price, which has a big impact on getting to work, but we must do everything that we can to reduce the cost of getting goods to the shops, because that hits people’s wages. Since the start of this recession we have been on a wage freeze, if not a wage reduction, to prevent the runaway unemployment that we saw in the past.

What frustrates me in debates such as the one we are having today is not just the barrage of criticism from the Opposition of the way in which the Government have implemented their policies. That is fine; that is what we are in the House for. We are here to say that we have a route, we are sticking to it, and we think that it is working, and the Opposition are here to say, “We don’t agree.” But I have not heard any real alternative in the Chamber today. The closest we got—one of the more sensible speeches today—was the contribution by the right hon. Member for Oldham West and Royton (Mr Meacher), who is no longer in his seat. He actually came up with some suggestions. I did not agree with them—I thought they were pie-in-the-sky thinking—but at least he stood there and put forward some policies.

Sadly, proposals were completely lacking in the shadow Chief Secretary’s speech. There was a constant barrage on what the Government had, he thought, got wrong, but no recognition of the fact that if we are going to tackle the cost of living crisis, we must tackle its root causes. The cost of living is going up because energy prices are high, and that has nothing to do with the six energy companies—there were 14 when the Leader of the Opposition was Secretary of State for Energy and Climate Change, but there were only six by the time he left that office, so it is a bit rich of him to come across saying that it is terrible. The inescapable truth is that the price of oil is not going to come down.

[Stewart Hosie]

The hon. Gentleman is making an interesting speech. He talks about having more oil and it being economically extractable, but he will accept that part of the equation is tax? Does he not regret the massive hike in the North sea supplementary charge that resulted in project after project being cancelled, and made certain fields less viable?

[Alec Shelbrooke]

The hon. Gentleman will agree that the hundreds of millions of pounds of tax credits that the Government have made available to the oil and gas industry will help make that resource more exploitable in future and keep the supplies on. It comes down to a fundamental issue: what do we need to do to tackle the cost of living crisis? What we do not need, and what my constituents do not want to hear, is “It’s your fault for going down the austerity route” or “The collapse of the banks is your fault.” They want to say, “Look, we know all that—we know what’s going on.” That is why in most opinion polls, a majority of people still blame the Labour Government for the economic mess we are in. [Interruption.] It is all very well the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) shaking his head—that is what my constituents tell me, and I am out on the doorstep all the time.