Cost of Living Crisis: Wales

Caroline Nokes Excerpts

Tuesday 19th July 2022 Westminster Hall

[Caroline Nokes (in the Chair)]

Before we start the debate, I would like to say something about the exceptional heat. I am content for Members not to wear jackets or even ties in Westminster Hall. Mr Speaker has announced similar arrangements for the Chamber. When the House returns in the autumn, Mr Speaker and the Deputies will expect Members to revert to wearing jackets and will strongly encourage male Members to wear ties when speaking in the Chamber and Westminster Hall. I call Ruth Jones to move the motion.

[Ruth Jones (Newport West) (Lab)]

I beg to move,

That this House has considered the impact of the cost of living crisis in Wales.

It is a pleasure to serve under your chairship this afternoon, Ms Nokes. Thank you for the warning about the heat. I am grateful for the opportunity to lead the debate on behalf of the many families in Newport West who have written to me, called me and messaged me with their stories, experiences and fear for the months and years ahead.

I was elected to the House three years ago. In that relatively short time, despite the devastating pandemic and all the pain associated with it, until now I have never seen such worry and fear in the eyes of my constituents. I am so angry that they have been forced into that position by the actions of this 12-year-old Tory Government. Let me be clear: this is a cost of living crisis made in Downing Street. The biggest challenge facing us all is that we have a caretaker Prime Minister who is more focused on hosting parties than attending Cobra meetings, and more focused on holding power than using power. He is so evidently uninterested in ensuring that the people of Newport West, of Wales, and across the United Kingdom have the support they need and the good government they deserve.

I have shared this story before, but it speaks volumes to the challenge that the cost of living crisis has placed on people in Newport West. My constituent says this:

“Thank you for responding to my e-mail Ruth Jones, these are my concerns. We are in a position right now where we’re not coping. Our energy bills have risen 54% and I am afraid that myself and many others will not be able to provide for our families. My husband’s parents are on a state pension of £82.45 a week, we are concerned for their welfare as they cannot afford to heat their home nor pay for food if these energy prices continue. Many of my friends are concerned for their own families too, we are all struggling, and instead of living, we’re surviving day to day. If these prices don’t change, we must have an increase in the minimum wage.”

That is just one example of the constituents’ emails that I get every day.

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[Several hon. Members rose—]

[Caroline Nokes (in the Chair)]

I am hoping to avoid having to put a time limit on Members, so they might like to think about how many of them are currently standing.

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[David T. C. Davies]

If that is such a good idea, why are the Welsh Labour Government not doing it in Wales? They have the power to do so.

[Caroline Nokes (in the Chair)]

Order. I gently remind the Member that this is a debate about the cost of living in Wales, not transport.

[Geraint Davies]

I know that, yes. It is not the Welsh Government’s decision: we do not have the money to do that, and it is not devolved. The Exchequer runs UK plc; we all know that. We do not charge the windfall tax. The Welsh Government are not in a position to introduce a windfall tax or nationalise the oil companies, sadly, although they have done something about rail.

[Geraint Davies]

I am not talking about raising taxes; I am talking about taking back the money that has been stolen from the travelling public by oil companies. They did nothing to earn that money: it was simply that Putin invaded Ukraine, and they said, “We’ll put the price up, take the money and fill our pockets.” The Government belatedly took a small share of that money, and now they are going to give 90% of it back to drill for more oil, when what they should be doing is investing in scaling up things like organic batteries. Swansea University has identified that the renewable energy from wind farms is only put into the grid at breakfast time and teatime, and is saying, “Let’s use that wind, create hydrogen, and put that hydrogen in the gas grid”—which takes up to 40% of hydrogen, as used to be the case for coal gas. That would reduce the carbon footprint.

[Caroline Nokes (in the Chair)]

Order. The debate is about the cost of living in Wales.

[Geraint Davies]

I am talking about Wales.

[Caroline Nokes (in the Chair)]

Hydrogen is stretching my tolerance slightly.

[Geraint Davies]

It is permissible on a Wales-only basis, and that is what Swansea University suggests we do. Obviously, we would have to work in co-operation with the UK Government to do that, but the idea would be to put that gas into the grid, or put the hydrogen into cylinders and send it to Ceredigion in place of the oil, so that people in rural environments would have a lower carbon footprint and a lower energy bill.

Whether it is those innovations or whether it is the tidal lagoon, there is no shortage of ideas; what there is a shortage of is Government focus on greening the economy and powering us up in a sustainable way. Instead, they just go to their mates—the oil barons—who say, “You’ve had to do this windfall tax. Give us 90% back to drill for more oil and destroy the environment.” Look at the temperature outside! It is absolutely disgraceful. The Government would not even help us with the tidal lagoon. That is not going to stop, is it? Of course, they said, “We are not helping.” That does not make any sense, even though it will go on for 100 years. The council and the Welsh Government have had to deal with it on their own.

We need a Government who care about people and stopping them starving. People may have heard of Professor Amartya Sen, a Nobel prize-winning economist who had the joy of teaching me on one occasion. He wrote “Poverty and Famines”, and found that famines were not a function of food shortages, but a function of high prices, low wages and some food logistics. He was not writing about the UK at the time, but that is precisely what we are now finding in the UK. We see pockets of starvation. We should stop that. The Government are empowered to stop it and they should, whether by indexing social security and universal credit, increasing rent, investing in green technologies, or stopping obeying everything the oil barons say. I will leave it there.

[Caroline Nokes (in the Chair)]

I call Jamie Stone—to speak on Wales!

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is always a pleasure to serve under your chairmanship, Ms Nokes. I congratulate the hon. Member for Newport West (Ruth Jones) on securing this highly important debate. I rise with some trepidation as the sole Scot among so many Welsh colleagues, but I rise in support of some excellent contributions.

As everyone is saying, this is about families who are right up against it. One of my daughter’s best friends is a single mother who lives in social housing. I sat down with her and said, “Can we go through the budget?” She went through how difficult it is to make ends meet, and how everything matters. Each week and each month is down to just a pound or two. That was a year ago, and we are where we are now, which is a very different situation indeed. It is with her in mind that I think of my huge, far-flung constituency. The hon. Member for Pontypridd (Alex Davies-Jones) said that this affects all of the UK, and it does—right up to the north of Scotland, which I have the honour of representing. The village of Altnaharra in my constituency is—

[Caroline Nokes (in the Chair)]

Order. Mr Stone, please do not stretch my tolerance. This debate is about the cost of living in Wales, not in your own constituency.

[Jamie Stone]

I am sorry, Ms Nokes. I stand corrected. This particular village has the coldest climate every single year. Am I out of order, Ms Nokes?

[Caroline Nokes (in the Chair)]

Yes. The debate is on Wales, not the climate in Scotland.

[Jamie Stone]

Very well. In that case, I will echo two points made by the hon. Member for Ceredigion (Ben Lake). We need a cap on the price of heating oil. As he said, so many homes in Wales have no alternative at all. They are off grid; they cannot use gas. I approached the Minister of State for Energy in March this year, and he said that it was not going to work because of a survey done in 2011 that said so. How different is our situation now from March of this year, let alone 2011? The first point made by the hon. Member for Ceredigion is absolutely correct. His constituents—and I might say, sotto voce, mine too—are petrified of their bills. They are really terrified. I am the oldest member of the Lib Dem group in this place; I am getting on. I know that old people feel the cold more than young people, and they worry about money more than young people. I go back to my young friend who I mentioned earlier on, who is trying to balance a budget. It is a pretty desperate situation.

The other point made by hon. Member for Ceredigion was about the lack of choice other than to use a car. The price hike on petrol and diesel is really cutting into budgets. Some years ago, a scheme was put in place for certain parts and certain postcodes of the UK. As he said, we seek to extend that to other needy areas, such as Wales and—dare I mention, also sotto voce; I fear that I am sailing close to the wind—the north of Scotland..

I have one final point, in a Welsh context. There is such a thing as digital poverty. We have social tariffs, but their take-up is lamentable. When we look at a food bank anywhere in the UK, many of those people would not quite quality for the Department for Work and Pensions triggers to be put forward for a social tariff. However, we still look at them and say, “I bet you need help.” We need to mobilise. All of us—the Government—need to think about getting people access to social tariffs. It is about information, and working through local authorities and, maybe, banks. Who knows? There could be a huge, much bigger take-up, which would help families all over the UK to balance their budgets.

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[The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)]

It is a pleasure to serve under your chairmanship, Ms Nokes.

I thank the hon. Members for Pontypridd (Alex Davies-Jones), for Newport West (Ruth Jones), for Llanelli (Dame Nia Griffith), for Swansea West (Geraint Davies), for Ceredigion (Ben Lake), for Cynon Valley (Beth Winter), for Cardiff North (Anna McMorrin), for Swansea East (Carolyn Harris), for Merthyr Tydfil and Rhymney (Gerald Jones), and—last but certainly not least—for Caithness, Sutherland and Easter Ross (Jamie Stone). I may have left somebody out; if I have, I apologise. A lot of points were raised during the debate and I will try to deal with them as best I can within the confines of the time that I have.

First of all, may I make it absolutely clear that, although I am pleased that we are having a debate on this matter, there is absolutely no doubt at all in my mind or the mind of anyone in Government not only that we have a cost of living challenge, but that it is a global matter? Hon. Members can just look at the statistics for any countries across western Europe or the rest of the world to see that the problem is not an isolated one; it has come about for reasons that I will turn to in a minute. Before I go into detail on the UK Government’s commitments to support the people of Wales, I just want to make it clear that things such as the pandemic and the war in Ukraine have had a significant effect on the global economy.

The UK Government have been steadfast in our support for the people of Wales throughout these global economic challenges. We have certainly not been asleep on the matter of Wales—far from it. My right hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart), who is my former ministerial colleague, and his successor as the Secretary of State for Wales, my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), who of course is from Llanelli, are well aware of the problems in Wales and have been raising them at all times in Cabinet.

I often stood in for Mr Hart when he was unable to attend meetings—

[Caroline Nokes (in the Chair)]

Order. Could you please use Members’ constituency names and not their own names?

[David T. C. Davies]

Yes. He is one of the Pembrokeshire seats—[Laughter.]

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[Geraint Davies]

The Minister’s basic proposition is that this cost of living crisis is some sort of global issue. Will he accept that the issue is about the level of underlying resilience before these global shocks occur? If the rate of growth under the Labour party had continued thereafter, according to the Institute for Fiscal Studies, the average wage would be something like £13,000 better, so we would be in a much better place to take the shocks. Instead, we are impoverished by the Minister’s party.

[Caroline Nokes (in the Chair)]

Order. I remind hon. Members and the Minister that they should stick to the question.

[David T. C. Davies]

If we are going to have an economic history lesson going back to 2010, we will have to look at the enormous amounts of money that the then Labour Government borrowed, the financial crisis and its impact, and then the impact of covid and then a war. Generally speaking, every 10 years or so, a Government will face a serious crisis of global proportions. It could have been the fall of the wall in 1989.

[Caroline Nokes (in the Chair)]

Perhaps the cost of living in Wales, Minister.

[David T. C. Davies]

Let me go back to what the Government have been doing. We have been steadfast in our support. We have provided more than £37 billion across the UK to help people with the cost of living challenge. Millions of the most vulnerable households across the UK will receive at least £1,200 of one-off support in total this year to help with the cost of living. The maximum possible benefit for a household is more than £1,600. We put in place a targeted £12 billion energy bill support scheme for domestic electricity customers in Great Britain to help with rising energy prices. We are supporting people across the UK with one-off cost of living payments, including £650 for 8 million households on means-tested benefits, £300 for more than 8 million pensioner households and £150 for around 6 million people who receive disability benefits. We are increasing the national living wage by 6.6% to £9.50 an hour, which was also mentioned here. Along with increases to the national minimum wage, we expect to be able to give a pay rise to 120,000 workers in Wales.

We also want to ensure that people across Wales keep more of what they earn. We are raising income tax personal allowances and freezing alcohol and fuel duty, saving car drivers up to £15 every time they fill up. We have reduced universal credit taper rates from 63% to 55% and we are increasing universal credit work allowances by £500 a year. Those together will see households keep an extra £1,000 a year on average. This July, we raised the national insurance contribution threshold to £12,570, meaning a typical employee will save more than £330 this year. Frankly, I could go on and on.

Opposition Members may say we are not doing enough, but to say that we have slept through this crisis and do not care is ridiculous and outrageous. I have lists and lists of stuff that the Government have been doing to support people across Wales. It is a £37 billion package. To try to suggest that there is not an enormous amount of work going on or that we do not recognise the problem is unfair. We absolutely recognise the problem—I cannot say it enough times. There is a cost of living challenge out there and there are people suffering. I do not want to hide from that in any way. At the same time, it would be nice if Opposition Members could at least recognise that when we put £37 billion into a whole host of schemes, it is deeply unfair to suggest we do not know about the challenge, we do not care about it and we are doing nothing about it. That is simply incorrect.

To take one example, the hon. Member for Newport West, who I greatly respect and who I appreciate is a hard-working MP, made a point about prescription charges. Yes, prescription charges are free to everyone in Wales. Wonderful. I get a free prescription as a Member of Parliament. In England, the number of people who get free prescriptions is very large. People in full-time education, who are pregnant, who have certain medical conditions, NHS in-patients and people on income support, income-based jobseeker’s allowance, employment support allowance, pension credit guarantee or universal credit. Anyone who faces difficulties will not have to pay for their prescription in England, but the hon. Lady did not make that point. She gave us half the story and gave the impression that everyone is paying for their prescriptions in England. That simply is not true. In fact, it is rather more progressive to target free prescriptions at those who need them because they cannot afford to pay than just to give them out to everyone.

It has taken me probably a minute just to rebut that single point. That is the problem I face. There are quite a few other points I would not mind rebutting if I get the chance to do so.

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[David T. C. Davies]

I was not aware of that, although I would be registered for it in Wales if I was. I do not think the hon. Lady got around to making her fair comment—no doubt the press can have some fun with that. I think she was also going to lead into the situation with women and the menopause; there is possibly an unfairness that needs correcting. She has been very good at raising that issue, and I praise her for it. I am not pretending that we get everything right all of the time, so I always listen to the hon. Lady with interest, because she can sometimes shed light on things that need changing. There might be an unfairness, but I am not here to discuss health policy; I am sure the hon. Lady will raise her point elsewhere.

To go back to Wales, this July we raised the national insurance contributions and I am also pleased that the Welsh Labour Government have used the £180 million Barnett consequentials from the UK Government to match the UK Government’s £150 council tax rebate offer in England. Frankly, that was a scheme brought about by the Conservative Government: the money was given to Wales, and I am delighted that Welsh Labour are following our lead in this. If hon. Members want to take the credit for it, that is fine, but let us remember that it was a Conservative Government policy, brought about by a recognition of the problems that the current crisis creates.

Our support does not end there. We are expanding eligibility for the warm homes discount by almost a third, meaning that 3 million vulnerable households across the UK will benefit as a result. We are increasing the extension of the warm home discount, and shielding the most vulnerable across the UK from the impact of global recessionary forces. I am somewhat concerned because I think, Ms Nokes, you are about to inform me that I am about to run out of time.

[Caroline Nokes (in the Chair)]

Ninety seconds.