Cost of Living Increases

Alan Brown Excerpts

Monday 24th January 2022 Commons Chamber

[Mr Clarke]

If we look at the Office for Budget Responsibility forecasts, we see that they are for 6.5% growth in 2021 and 6% growth in 2022. That is an incredibly strong economic recovery, and one of which we should be very proud. With regard to the Kickstart scheme, we obviously always want to encourage maximum uptake and we continue to work to refine that scheme and make sure it works to best effect, but it must be considered in the context of an unemployment rate that is now only just over 4%. We have a very tight labour market, and that very success is leading to some of the challenges that we face in getting people through every different scheme.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Given the increases in energy costs, can the Chief Secretary tell us how much extra VAT the Treasury is taking, what extra oil and gas revenues are coming in and how much extra is coming in from the increased price of petrol at the pumps? Why are the Government not using that money to mitigate costs for the 6 million households that will be plunged into fuel poverty when the cap rise kicks in in April?

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[Ian Murray]

I thank my constituency neighbour for that question. I hope that she watched with great interest the speech of the leader of the Labour party just a few weeks ago, and, indeed, the other speech he made before Christmas about making Brexit work. The reality is that this Conservative Government have given us a position whereby Brexit does not work. We have a thin deal that we said would fall apart, and it is falling apart. What we have to do is to get into power to fix the problems with that and to build on that relationship. That is the reality of where we are.

I listened with interest to the Minister not answering the hon. and learned Lady’s question about HGV drivers and the cost of food and supply chains. He rightly said that there is an ageing workforce, but that shows that the Government have not planned for the medium to long term in that regard—it is as if everybody just got older overnight, rather than there being some plan. It sums up the Government that they have not had the foresight to see some of those problems coming. None of the promises that the Brexiteers opposite made to us about sunny uplands have come to pass; indeed, the opposite has come to pass, as we can see in the supermarkets and in prices themselves.

Those of us elected to this place owe it to the millions of people across the country who face such hardship to do everything we can to alleviate and change it. In the UK in 2022, nobody should have to choose between heating and eating. The Government have shown no compassion and not even pretended to care. Let us remember that they voted to cut the £20 a week universal credit uplift for the poorest in this country and refused to feed school kids in the holidays. The only response to the crisis from the Government so far, in all the noise of partygate and everything else, was when they snuck out a £4.3 billion fraud write-off from covid funds and business loans, which was branded “nothing less than woeful” by their very own anti-fraud Minister, Lord Agnew, shortly before he resigned at the Dispatch Box a few hours ago in the other place. Maybe the Minister would like to do the same this afternoon: get to the Dispatch Box, resign, grab his folder and suitcase full of wine, and head for the hills. Any Minister with any kind of morality would be doing just the same thing.

I am pleased that the SNP has called the debate, but it is not a bystander in this crisis either. The SNP is the Government in Scotland and has been for 15 years. A 33-year-old today, struggling to feed their family while paying their energy bills, has spent their entire adult life under the Scottish National party Scottish Government. Such a person might wonder why the SNP did not support legislation put forward by Labour colleagues in Holyrood to enshrine as a human right the right to food. Perhaps we might be able to find out this afternoon why not.

Parliamentary time will be taken up “in weeks” with legislation for another referendum. People are having to choose between heating and eating, but that will be the SNP’s priority in Parliament and elsewhere for months. I accept that Parliament has the capacity to do other things, but nobody should be under any illusions. All the oxygen in the vacuum will be taken up in Scotland with another referendum or the thought of another piece of referendum legislation. That is the reality of what will happen. With the paralysis in this place, the Scottish Government are obsessed by what gets them out of bed in the morning, rather than the real, everyday issues of Scots.

[Alan Brown]

While the hon. Member is on the action of the Scottish Government, I presume he is going to commend them for bringing forward the £20 a week child payment as one way to help to mitigate the poverty being imposed by Westminster. Earlier he said that we all have a duty in this place to try to help people with the cost of living and energy crisis. In which case, why did Labour vote for the Nuclear Energy (Financing) Bill, the impact statement for which said that it could add up to £63 billion to household energy bills? How on earth is that helping people with the energy crisis?

[Ian Murray]

What a valuable and timely intervention that was, because I was just about to talk about the child payment. Indeed, we campaigned for the £20 child payment for some time in the Scottish Parliament and were delighted that the Scottish Government eventually introduced it. However, it is a key, targeted intervention that helps to address child poverty, so what we would like now—all the Scottish charities are saying this—is for it to be doubled to £40 a week.

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[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is incredible that in this cost of living crisis the UK Government have done nothing and that the Chief Secretary earlier did not give us one new Treasury policy. Even when there is a chance for Tory Back Benchers to vote for a VAT holiday on energy bills, the Brexiteers dutifully voted it down.

In only a couple of weeks’ time, Ofgem will undertake its review of the energy price cap and is likely to confirm the April increase of about £600, a 50% increase. There is limited time for action. Tinkering at the edges, such as delaying the impact of the £2 billion administration costs of 28 energy companies going bust, is not enough. Direct Government action is needed to prevent the cap rising or to support those affected by it. In UK Government policy, the Tories have already made matters worse for those who are struggling—a cut in pensions of more than £500 per year, the removal of the £20 a week universal credit uplift—and that in the midst of the cost of living crisis, with inflation at a 30-year high and household incomes dropping in real terms by up to £1,200.

National Energy Action estimates that the cap rising to £2,000 will lead to 6 million households in fuel poverty, a shocking 33% increase in only a six-month period. Worse, and shamefully, it also estimates that approximately 10,000 premature deaths a year arise from fuel poverty. How many more premature deaths will occur if the Government do not do something?

To date, the only direct Government intervention on energy has been the allocation of £1.7 billion for the development of Sizewell C. Not content with Hinkley Point C being the most expensive power station in the world, the Tories are determined to create another one. In their own impact assessment, they estimated costs of as much as £63 billion being added to our energy bills.

If people live in the Scottish highlands, they are more likely to be off the gas grid, so energy costs them more. Worse, many customers are on what are called restricted meters, so they pay about £400 more per annum for their energy, due to a 4p surcharge per unit of electricity. How is that fair? People in the highlands who export energy to the rest of the UK pay a surcharge for the privilege. It is time that the Scottish Tories stood up for their constituents on that.

To return to direct intervention, that can be paid for by levying a windfall tax on the Treasury. As our energy bills have increased, so has its VAT returns on them. As fuel prices have increased, the Treasury has raked in more money in fuel duty and VAT. As for the North sea, the November Budget confirmed that this year alone the Treasury would receive an extra £1.1 billion in oil and gas revenues, or £6 billion over the lifetime of the Parliament. The Treasury should release that money now. It is astounding that the Chief Secretary to the Treasury does not seem to understand that 5% of £2,000 is twice the value to the Treasury as 5% of £1,000.

By contrast, in Scotland, the Scottish Government are doing their best while operating on a fixed budget with limited borrowing powers. The Scottish Government’s child winter heating assistance supports 14,000 families with disabled children through automatic payments of £200 a year. The low income winter heating assistance will help 400,000 low-income households with £50 every winter, instead of complicated cold weather payments of £25. For families there is a game-changing £20 per week child payment; compare this with the hapless £20 a week universal credit cut.

It is absurd that Scotland has paid £375 billion of oil and gas revenues to the Treasury, and that this has been squandered, with no legacy. We only need to look at Norway to see what a small independent country that is in charge of its own resources can do, and I look forward to Scotland’s joining it.

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[The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)]

The hon. Member for Glasgow Central (Alison Thewliss) speaks with conviction —I know that from having listened to many of her debates in the past—but it will be no surprise that I will come to a very different conclusion in my arguments today. Let me begin by thanking all hon. Members who have taken part in this important and sometimes lively debate. The pandemic has been a very challenging time for many. We acted quickly to put in place unprecedented levels of support. Since the start of the pandemic, we have spent more than £400 billion protecting people’s jobs and livelihoods, supporting businesses and public services and providing unprecedented welfare support. That is not inactivity, as alleged by the SNP, and it has been conveniently overlooked by hon. Members, including the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey).

Universal credit has stood up to the challenge of covid-19, providing a vital safety net for 6 million people, thanks to the hardworking staff in DWP across the nation, including in Scotland. Thousands of work coaches worked tirelessly to ensure that the benefits system did its job. Our successful vaccine programme is providing us with the protection to fight the virus in all its forms.

The latest labour market statistics prove that time and again we have made positive decisions during the pandemic. As has been highlighted during the debate, it is important to put the rising cost of living in context. Prices are rising in countries around the world. I know that Members such as the hon. Members for Ceredigion (Ben Lake), for Glasgow East (David Linden) and for Edinburgh East (Tommy Sheppard) have raised concerns, but we need to look at the issue in context. As the global economy recovers from the pandemic, consumer demand is surging at a time when global supply chains are disrupted. We recognise and understand the pressures that is causing for people’s wallets, and their worries as they see the cost of food, energy and other essentials increase.

The Prime Minister, the Chancellor and the Secretary of State for Work and Pensions—and, indeed, the Chief Secretary sitting next to me—are listening to those concerns. As shown during the pandemic, the Government will do what it takes to support those most in need, and we are looking at the best way to build on the support that is already available. With the economy moving into a higher gear, it is time to focus our attention on getting people into work and progressing in employment. That was ably highlighted by my hon. Friends the Members for Broadland (Jerome Mayhew) and for Moray (Douglas Ross).

[Alan Brown]

The Minister said that the Government will do everything it takes to resolve the cost of living crisis. What will they do to mitigate the energy price cap rise in April?

[David Rutley]

We have shown what we can do when faced with challenge. We are monitoring the situation and looking at all the solutions—we will come forward—as, I understand, the Scottish Government are monitoring the situation to see what more they can do.