Cost of Living in Wales

Debate between Christina Rees and Jessica Morden

Tuesday 22nd February 2022 Westminster Hall

[Christina Rees (Neath) (Lab/Co-op)]

Does my hon. Friend agree that things would be a lot worse in Wales if it were not for the Welsh Labour Government’s £330 million package to tackle the cost of living crisis, targeted at helping the most vulnerable through the winter support scheme and the discretionary assistance fund?

[Jessica Morden]

I thank my hon. Friend for her excellent intervention. In fact, we saw a further announcement and more detail last week.

--- Later in debate ---

[Jessica Morden]

We have some of the lower council tax rates, compared with the UK as a whole. The support packages from the Welsh Labour Government are more generous than those of the UK Government. The hon. Gentleman’s intervention was timely, because I had just asked what we have had so far from the Chancellor. The answer is a £150 council tax rebate for a limited number of households, which is already less generous than the council tax reduction scheme in Wales, where on average people will pay £17 less on their council tax bill. An average band D council tax bill in England is £167 more than in Wales.

The second measure the Government have come up with is the buy now, pay later scheme of a £200 loan to help with bills, which the public are expected to pay back in full over five years, even if their wages fall in the meantime or energy bills rise further still, or even if they become a bill payer later and do not receive the initial £200 loan. The TUC General Secretary, Frances O’Grady, has highlighted that, for most families, the Chancellor’s support package equates to just £7 a week, with more than half of that having to be paid back. As she said,

“It’s too little, it’s poorly targeted, and it’s a stop-gap measure instead of fixing the big problems.”

Conservative MPs voted down Labour’s proposal to cap VAT on energy bills, after suggesting that we could do that once we left the EU. The Government, let us not forget, have casually written off £4.3 billion lost to fraudsters, but refuse to tax properly North sea oil and gas profits, despite the fact that leading energy companies such as BP are boasting about being cash machines, as gas prices across global markets reach record highs.

In contrast to the Tory Government, in Wales we have a Labour Government who are prepared to step in and help by using the levers that they have. Last week, the Welsh Labour Government set out a £330 million package of extra help. That is a funded package that is significantly larger than equivalent support provided by the UK Government. It includes matching the UK Government’s £150 council tax rebate and extending the eligibility criteria, so that many more households will benefit. That is funded by the Welsh Government, as the UK Government made no extra money available, even though they said they would.

The Welsh Government have also announced an extra £200 for low-income households, by extending the winter fuel payment this year and next winter, £25 million for local authorities to help struggling households, and an extension of the Wales national discretionary assistance fund. They have also invested in crucial advice services, food banks and community hubs.

[Christina Rees]

My hon. Friend might have been about to come on to this point. Will she also congratulate the Welsh Labour Government on their basic income pilot scheme for care leavers in Wales? That will give care leavers the support they deserve to develop and become independent young adults.

[Jessica Morden]

I thank my hon. Friend for that intervention. I am glad she mentioned that scheme because I am running out of time, and it is another thing we are able to highlight. All those steps are in addition to Wales’s more generous council tax reduction scheme, the warm homes programme, free prescriptions, a free school meals programme and more. Their actions ensure that people who need support get support, but many of the solutions fall in non-devolved areas, which is why it is the responsibility of the UK Government to step up.

The Government should look again at the practical solutions Labour is putting forward. A one-off windfall tax on North sea oil and gas profits could pay for the removal of VAT on energy bills for a year, and an increase and expansion of the warm homes discount. That is a support package that could mean up to £600 for those who need it most. The UK Government should also reconsider their increase to NI and cuts to support.

The Minister should look at the sensible five asks on the cost of living that the Welsh Government put forward last month, none of which has been responded to. They include the social energy tariff to support lower-income families, increasing local housing allowance, increasing the support available through the warm home discount and other winter fuel payment schemes, expanding suppliers’ ability to write off household energy debt and removing the regressive social policy costs imposed on household energy bills by moving those costs to general taxation.

In the longer term, we need a fundamental reform of our energy system. We also need the Government to set out a national strategy for food, including how they intend to ensure access to high quality, sustainable, affordable food for all and meet the United Nations goal to end hunger by 2030. The national Food and Drink Federation has been clear that it wants greater collaboration between the industry and Government on finding a solution. The next Labour Government would support business to bolster the sustainability and affordability of good quality food.

As the Welsh Government said last week:

“Paying bills, heating homes and putting food on the table shouldn’t be so hard.”

They have taken the action they can with the levers they have available to them. If the Conservative party will not take action, the Opposition stand ready to.