Winter Fuel Payment

Ellie Chowns Excerpts

Tuesday 10th September 2024 Commons Chamber

[Ellie Chowns (North Herefordshire) (Green)]

Fuel poverty is an enormous issue in my constituency due to a combination of demographics, geography, the housing stock and, indeed, living standards. I rise to speak on behalf of the many hundreds of my constituents who have written to me to express their deep concern about the Government’s policy. I do not have time to read out extracts from their very moving emails, but I know that Judy, Kenneth, Pat, Tom, Robert and Gwen are all deeply concerned about the impact that it will have. They have reported their health issues, their partners’ disabilities, and the fact that they are just over the limit and will not be able to access the winter fuel payment. That will force them into the classic, depressing choice between heating and eating that this country must avoid.

I have voted against the Government’s policy today for three reasons. First, it is socially regressive and will increase poverty among about 2 million people, nearly 1 million of whom ought to be getting pension credit. The Labour party’s efforts are nowhere near fast enough to avoid increased poverty this winter.

Secondly, the policy is economically innumerate. It will not save the money that the Government argue it will save. There are far better ways to save that money, and to fund the action that is certainly needed to support our public services.

Thirdly, the policy is, frankly, politically inept. I really cannot believe that this Government have spent political capital on making such an unfortunate and unjustifiable political decision.

The winter fuel payment is not, and never was, a perfect policy. I have some sympathy with Members who have spoken today about the inequity of the inclusion error, whereby those who have significant wealth were still receiving the payment, but that has been replaced by a policy with an enormous and dangerous error of exclusion for those 2 million people who will no longer get the support that they need.

[Ben Maguire (North Cornwall) (LD)]

Of course millionaires do not need the winter fuel payment, but does the hon. Member agree that there must be support for pensioners who really need it, rather than this cruel cliff edge, especially for those living in rural areas such as my constituency who are not connected to the mains gas grid?

--- Later in debate ---

[Ellie Chowns]

I thank the hon. Member for his point. Like him, I live in a rural constituency with many people who are not connected to mains sources of power. This cliff edge is a key problem, and it has been referred to today by Members from across the House.

There must be a better way, and that requires a better sort of politics. I have been in this Chamber today for the entirety of this debate and the one before on the statutory instrument and I have been very disappointed by the tone of some of the comments, the discussion, the debate and the argumentation that I have heard. It is the sort of politics that puts people off what we do here in this Chamber. This is a classic example of how we need to find ways to speak better about such fundamental issues. There must be an option to find some common ground.

In the spirit of constructive criticism and constructive engagement, I urge the Government to stop, to review, to think again and to work out a way of meeting their need to find funding for public services in such a way that it does not place the burden on those not with the broadest shoulders but effectively with the narrowest. We need to find a way of talking not just about how we deal with fuel subsidies but about making sure that every house is warm and well insulated, so that the money is not just going up the chimney, out of the windows and into the pockets of the energy companies. We must invest for the long term so that every home is warm and every pensioner can keep warm.

Budget Responsibility Bill

Ellie Chowns Excerpts

Committee of the whole House
Wednesday 4th September 2024 Commons Chamber

[Ellie Chowns (North Herefordshire) (Green)]

I pay tribute to the hon. Member for Dudley (Sonia Kumar) for her excellent maiden speech. Indeed, we have heard more than half a dozen excellent maiden speeches today, several of which touched on the climate crisis and the future of children in our country, themes that relate to my amendment. I was touched to hear the passion with which all the new Members spoke about their experiences and commitments.

My amendment 5 requires the OBR to report on the impact of fiscally significant measures announced by the Government on the UK’s statutory net zero target. The justification for my amendment is that we simply cannot separate the economy and the climate—they are interlinked. To deliver the green economic transformation that we so urgently need, as referenced by hon. Members speaking earlier, every single policy must be aligned with the UK’s net zero target and every Government spending decision should be as well.

It makes sense to increase the OBR’s remit on net zero to specifically consider the impact of climate risks on economic stability, and how far policies introduced at fiscal events will reduce or increase these risks. Fiscal events, namely Budgets and spending reviews, lock in what is happening in our economy for years to come, even generations, so it beggars belief that they are not properly taking account of climate impacts. Whether those policies are spending on new roads, subsidies and tax breaks for oil and gas, investment in renewables infrastructure or giveaways like a freeze on fuel duty, they all have direct impacts on the UK’s prospect of meeting our net zero targets. Those impacts should be made clear and considered explicitly in the policy-making paper. We need to be thinking about the impacts of today’s economic policies on the prospects for future generations.

The costs of failing to take an approach that considers climate impacts are eye watering. A 2022 report by the Grantham Institute found that climate change damages to the UK are projected to triple by 2050 and more than double again 50 years later, so climate prudence and fiscal prudence are one and the same thing. Given that the OBR’s main duty is to assess the health of the UK economy and the sustainability of its public finances, it needs to be charged with assessing whether fiscal events are reducing or increasing climate risks to the economy.

Bringing net zero into the OBR’s mandate is consistent with the Government’s five missions. Indeed, in announcing its clean energy superpower document, Labour said that it will add net zero mandates to all relevant regulators that need it. I would argue that the OBR is a relevant regulator that needs a net zero mandate. That is why I am proposing this probing amendment today. As other Members have mentioned, it would also represent increased transparency around how fiscal policy choices are impacting the UK’s progress towards our net zero targets and help ensure that future Governments also consider that.

It is also an important stepping stone towards a net zero test, which would assess the aggregate climate and nature impact of every fiscal event. Again, this is something that Labour committed to in opposition. In his winding-up remarks, will the Minister comment on whether he is able to ensure that this test is integrated into the legislation that he is proposing?

I hope that Labour will use this opportunity to commit publicly to introducing a net zero test in Government, and will take a step towards doing that by backing my amendment.

[The Second Deputy Chairman]

I call Lauren Edwards to make her maiden speech.

--- Later in debate ---

[Darren Jones]

The hon. Gentleman is enjoying himself, but he knows the answer: wait for the Budget.

The amendments from the official Opposition are therefore not necessary. To answer the question from the shadow Financial Secretary, the hon. Member for Droitwich and Evesham (Nigel Huddleston), as I have been invited to do so, the Chancellor has already confirmed that the Government will set out the precise details of our fiscal rules at the Budget on 30 October, alongside an updated OBR forecast.

amendments 6 and 7, tabled by my hon. Friend the Member for Walthamstow (Ms Creasy), focus on the definition of “fiscally significant” measures to which the fiscal lock will apply. They would extend the definition to include measures that have a cumulative effect on public sector net debt or contingent liabilities. I welcome my hon. Friend highlighting this issue, on which I know she has worked for many years. The draft charter text states that measures will trigger the lock when the combined costing is at least 1% of GDP in any year, and specifically:

“The costing of a measure is the direct impact of a policy decision on the public finances”.

It is difficult to set and interpret a threshold consistently for contingent liabilities as they can often be large in maximum exposure, but low in expected or reasonable worst-case losses. Effective management of contingent liabilities is important, and transparency is key to good fiscal management. The Government plan to announce new significant contingent liabilities at fiscal events to make sure there is transparency with Parliament. We will of course continue to notify Parliament of new contingent liabilities, as set out in “Managing Public Money”.

The amendments would also place a condition on policies with a cumulative impact on public sector net debt, and my hon. Friend noted public-private partnerships as an example. She was referring to PFI and PF2 models, which the previous Government had no longer proceeded with, and there has been no change to this policy. As the Chancellor said in her Mais lecture earlier this year, we will also report on wider measures of public sector assets and liabilities at fiscal events to ensure transparency across the whole balance sheet, which includes non-debt liabilities. Reporting transparently on the Government’s stock of contingent liabilities is key to ensuring we do not take excessive risk. I can therefore confirm today that the Government will publish a report on our contingent liabilities. I expect the contingent liability central capability to do this in early 2025. Having said all that, I recognise the issues my hon. Friend raises, and I will arrange to meet her to discuss them further.

Moving on to the Liberal Democrat amendments, amendment 2 was tabled by the hon. Member for Richmond Park (Sarah Olney). As she said, it would enable the OBR to notify the independent adviser on Ministers’ interests if the fiscal lock was triggered. I remind hon. Members that the purpose of this Bill is to ensure that never again do we find ourselves in a situation, like at the 2022 Liz Truss mini-Budget, in which fiscally significant measures are announced without accompanying OBR analysis. If a future Government were to act in this way, the Bill provides a clear remedy. The OBR is empowered to independently notify the Treasury Committee and to produce its own report. This would be available for full scrutiny by stakeholders and Parliament, which would be able to hold Ministers to account in the normal way. We therefore do not consider the amendment necessary.

Amendment 1, also tabled by the Liberal Democrats, would broaden the definition of fiscally significant measures to cover anything that is likely to have an impact on the cost of Government borrowing, interest rates or economic growth. The Bill is focused on preventing irresponsible large-scale fiscal announcements that could undermine macroeconomic stability, such as at the mini-Budget. To support that, we need clear and robust legal frameworks that ensure the provisions are triggered only when appropriate. This requires precise definitions that everyone, including the OBR in particular, can understand clearly and work with practically. It would therefore not be helpful, in the Government’s view, to have a broader, vaguer definition that might repeatedly trigger the fiscal lock under many different circumstances.

Amendments 3 and 4 would require the Treasury to consult the OBR and the Treasury Committee before the charter can be updated for the purposes of the fiscal lock, and to publish a report on the outcome of any such consultations. It is of course important that the views of the OBR and of Parliament are taken into account when making changes to the charter. However, I hope the hon. Member will accept that it will not be necessary to set out this specific process in primary legislation, because the Bill already includes an important safeguard on the fiscal lock, which is the requirement that any changes to the charter for budget responsibility are published in draft at least 28 days before they are laid in the Commons. That will ensure that the OBR, the Treasury Committee, this Parliament and all stakeholders will have a clear opportunity to make representations to the Treasury and to publish their views, as they see fit.

Amendment 5, tabled by the hon. Member for North Herefordshire (Ellie Chowns), would require the OBR to take net zero targets into account when preparing a report on fiscally significant announcements. Strong legal frameworks are already in place in the Climate Change Act 2008 to support the transition to net zero in 2050. The Act legislates for interim five-year carbon budgets, and requires the Government to report on those periodically. Parliament and its Select Committees already scrutinise that in great detail. The Green Book, the Treasury’s guidance on how to appraise policies, projects and programmes, requires Departments to assess the climate and environmental impacts of policy proposals, with major bids and proposals at fiscal events being assessed accordingly in that way. We therefore do not consider the amendment to be necessary.

[Ellie Chowns]

Does the Minister agree that having committed to give a net zero mandate to all relevant regulators, the OBR is indeed a highly relevant regulator?