Cost of Living: Fiscal Approach

Debate between Gerald Jones and Derek Twigg

Wednesday 25th May 2022 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Twigg. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing what is an extremely timely debate, given that this is the biggest issue facing our country and our constituents.

The cost of living crisis is causing great hardship in Merthyr Tydfil and Rhymney, and right across the country. We desperately need measures to tackle it and, at the very least, an emergency Budget that introduces a windfall tax to bring people’s bills down now. Yesterday’s news that the energy cap could increase to £2,800 in the autumn is truly frightening.

The Government do not seem to have a plan. During the Queen’s Speech debate, the Prime Minister hinted that help would be announced “in the coming days”, only for the Treasury to announce in the following hours that that was not the case. That is an example of the lack of a joined-up approach across Government.

Recently, I met my local citizens advice bureau, which highlighted growing hardship across the constituency. I was alarmed to hear that overall client numbers have doubled in recent months. Queries about energy have increased by 250%, which is evidence of the fuel poverty crisis, and are now mainly about support to pay fuel bills. Debt numbers have increased by 200%, and council tax debt is now the biggest issue. That is worrying, as those are household debts. Probably most worrying, however, is the massive increase—more than 500%—in requests for food bank vouchers and other charitable support. My local food banks operate in challenging times and, on a number of occasions recently, have come close to running out of food, given the huge demand.

The fact that nothing in the Queen’s Speech tackled this growing crisis demonstrates that the Government are not listening or, if they are, that they are failing to act, which shows a shameful lack of compassion. A windfall tax would be a start. As we have heard, it is grossly offensive that energy giants are announcing their highest ever profits—recently, Shell announced profits of more than £7 billion in the first quarter of the year—and yet the Government have so far refused to implement a windfall tax. At the same time, people are struggling to choose between heating and eating. The Government must rethink their approach. We need a proper plan, and we need it now.

We also know that many public service workers are out of pocket from just doing their jobs. Many use their cars to do their job, such as care workers and social workers, who visit vulnerable adults and children. They are now repaid less than what they spend on petrol, thanks to the out-of-date HMRC mileage rates. I support the call of my hon. Friend the Member for Barnsley Central to review those rates.

It is clear that public sector pay is also key to levelling up, as public sector workers make up one in seven employees in every region of the UK. In the north-east, Wales, Scotland and Northern Ireland, increasing public sector pay would provide a boost to the economic regeneration of the country, given that we are seeing the steepest drop in living standards since the 1950s. The Government have levers at their disposal, and they must use all of them to help ease the huge pressure on thousands of families across the country. Talk on this issue simply is not enough; we need action, and we need it now. I look forward to the Minister’s response and hope that she can demonstrate that the Government will act, and act quickly.

[Derek Twigg (in the Chair)]

I am afraid I will have to reduce the limit again, to three minutes. I call Jim Shannon.