Cost of Living Crisis: Wales

Gerald Jones Excerpts

Tuesday 19th July 2022 Westminster Hall

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to serve under your chairship, Ms Nokes. I add my congratulations to my hon. Friend the Member for Newport West (Ruth Jones) on securing today’s debate and the passionate way in which she started the case.

It is clear that the Government have a case to answer for their cost of living crisis, which is so damaging for people in Wales and across the UK. The Government’s response to the deepening crisis has been hugely disappointing. At the moment, they are too wrapped up in internal wrangling to care about dealing with the issues that matter to people. It is clear that the Government are out of touch, out of ideas and out of excuses. After 12 years of Conservative Government, we have a high-tax, low-growth economy, with the country suffering the biggest drop in living standards since records began, and the highest tax burden since world war two.

The Government initially refused to implement Labour’s policy of a windfall tax, until the pressure was too much and they finally caved in and had to take action. The Labour party’s plan to deal with the cost of living crisis would cancel the rise in national insurance contributions, which has come in during hugely challenging times. Labour would also cut VAT on home energy bills, and the red tape that has been created by the Prime Minister’s chaotic Brexit. Our policies would make it easier to buy, make and sell more in Britain.

We have had a passionate debate this afternoon. It is disappointing, though not surprising, that we have yet to hear a Tory voice. There are no Tory MPs here to defend their record. We heard from my hon. Friend the Member for Newport West, who talked about the worry and fear faced by many of her constituents. She put the blame for people not being able to provide for their families squarely on the crisis in Downing Street. She highlighted that prescription charges in Wales ease the burden somewhat, compared with the £9.35 cost in England, and that council tax band D properties on average pay £167 less than in England. There is also the £244 million council tax reduction scheme that helps 270,000 households in Wales. All those are policies of the Welsh Labour Government.

My hon. Friend the Member for Llanelli (Dame Nia Griffith) talked about the massive growth in inequality, the need for a redistributive tax policy, and the fact that the UK has the firepower and capacity to take action, but not the will. She gave examples of the work of the previous Labour Government, and some ideas that could be taken forward, such as cutting VAT on fuel. She, along with other Members, talked about the need to tackle issues around universal credit, particularly the five-week wait that causes so much hardship for our constituents.

The hon. Member for Ceredigion (Ben Lake) talked about the impact of the cost of living crisis in Wales, along with the energy price cap. He spoke of his concern, which I we share, about the possible outcome in the autumn, with further increases in the price cap. He talked about the challenges facing rural communities with off-grid energy costs, and the need to tackle the rise in fuel costs. Like other hon. Members, he talked of the need to address universal credit and restore the £20 uplift.

My hon. Friend the Member for Pontypridd (Alex Davies-Jones) talked about how this Government never take their responsibility to Wales seriously, and about the economic firepower of the UK Government—if only they had the will. She talked of her pride, which many of us share, in the Welsh Government, who work so hard and shoulder-to-shoulder with our constituents, to support them through these troubling times. She highlighted the fact that the windfall tax was too little, too late.

My hon. Friend the Member for Cynon Valley (Beth Winter) talked of how we are in a cost of living emergency, and that the freeze on pay over the longer term has caused so many issues. She again highlighted that the Welsh Government are doing as much as they can, doubling the investment over and above the devolution settlement. She raised her concerns about poverty becoming normalised in the fifth richest country in the world, gave examples of parents not being able to buy stationery for children to go to school, and spoke about the need for proper pay for our public servants.

My hon. Friend the Member for Swansea West (Geraint Davies) talked about the impact of the massive cuts on poverty and the family lives of many of our constituents, and pressed the Government to act now. He also spoke about local housing allowance and the recent report by the Bevan Foundation that said that many people are unable to find properties within the local housing allowance rate. Finally, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) talked about digital poverty and the need for a cap on the price of heating oil in Wales—and, of course, in Scotland.

In about two weeks’ time, I will host a cost of living crisis event in my constituency, and I know many others are doing the same. We are bringing providers and support agencies together to offer our constituents support and advice during this awful time.

In recent weeks, I have talked to constituents who have raised concerns. I talked to a young family a few weeks ago. Both parents work full time, and by the middle of the month they rely on the support of the food pantry to get them through the rest of the month—to feed themselves and their young child.

[Carolyn Harris]

I am sure my hon. Friend is aware of the food and hamper scheme that I have run in my constituency for the past six years. We provide food and hampers at Christmas and Easter, and during the summer. This year, more people who were previous contributors are becoming dependants. Does he agree that we are at a dangerous point, and that demand will eventually outstrip supply and we will not be able to help people?

[Gerald Jones]

I congratulate my hon. Friend on the excellent work she has done over many years on this issue. I absolutely agree that we are in danger of demand outstripping supply. I have talked to food banks and food support organisations in my constituency in recent weeks, and they all tell me of that concern. Week on week, they are extremely worried that their supplies of food will not be able to meet the ever-increasing demand.

Last week, I spoke to another couple, who go for a swim three times a week, which obviously helps with their health and wellbeing—it is supported by Welsh Government funding—but they use that opportunity to have a shower in the baths to save on water and heating at their home. The danger is that such examples are becoming normalised in 21st century Britain. That is worrying, scary and shameful.

I want to contrast the Tories’ record with that of the Welsh Government. As we have heard, the Welsh Labour Government have invested more than twice what they received in consequential funding to support households with the cost of living crisis. My hon. Friend the Member for Cynon Valley talked about the delivery of the £51 million household support fund, which is targeted at people who need the most support. The Welsh Government have doubled the winter fuel support payment to £200, which has helped 150,000 people across Wales.

My hon. Friend the Member for Newport West said that, from September, all primary schools in Wales will begin to receive free school meals; an additional 180,000 primary school children will benefit from the scheme. The Welsh Government’s warm homes programme has invested almost £400 million in more than 67,000 homes since 2011 to improve home energy efficiency across Wales, saving families money on energy bills. More recently, 57,000 unpaid carers across Wales became eligible to receive a £500 support payment.

The budget available for the Welsh Government to support the people of Wales is hampered by the reality that, over the spending review period, it is likely to be worth at least £600 million less than it was when it was first announced last autumn because of rocketing inflation. The Welsh Government’s spending power is likely to deteriorate further because of that. That is why they have called on the UK Government to update their settlement to reflect the significant impact that inflation is having on important budgets in Wales.

We have seen the smoke and mirrors, and sheer uncertainty, around the shared prosperity fund. There has been a lack of investment, despite the explicit manifesto promise in 2019 that Wales would not be a penny worse off; investment would make a huge impact on the cost of living crisis in Wales. As we heard from my hon. Friend the Member for Swansea West, designating HS2 as an England and Wales project, which it clearly is not, also denies Wales an extra £4.6 billion in consequential funding. The Welsh Affairs Committee and even the leader of the Welsh Conservatives agree with that assessment, but instead the Government are intent on short-changing Wales again. Once again, that money could significantly help to tackle the cost of living crisis in Wales.

What we have seen from the Tories at every turn is that they seem to make decisions to take money from people who can least afford it, such as voting to cut the £20 universal credit uplift, which Welsh Conservative MPs all voted for. They also voted to increase tax during the cost of living crisis, but voted against a windfall tax until they were forced by Labour to perform a screeching U-turn.

Our farming communities are suffering, too. Wales faces a UK Government who have broken their promises to the people of Wales. It has become clear that when providing a replacement for EU farm funding, the Government deducted EU receipts that were due to Wales for work that was due as part of the 2014 to 2020 rural development programme. That means that rural communities in Wales are £243 million worse off. Again, that is devastating for farming communities and the livelihoods of our farmers.

It is clear that this Government have no answers. Although the removal of the current Prime Minister is a step forward, none of the candidates for his job has any meaningful ideas to tackle the cost of living crisis and really make a difference to the lives of people in Wales. Rather than playing musical chairs and having the fourth Conservative Prime Minister in six years, what we really need is a UK Labour Government who will build a stronger, more secure economy, working hand in hand with the Welsh Labour Government for the benefit of everyone in Wales, and getting the cost of living crisis under control.