Cost of Living Increases

Martin Docherty-Hughes Excerpts

Wednesday 16th March 2022 Commons Chamber

[Ian Murray]

My hon. Friend raises a critical point and we have to keep dragging the Government back to their responsibilities as a result of being in power. Much of the crisis in our public services, including the NHS and social care, also predates covid but the Government keep telling us that perhaps that is not the case.

Inflation hit 5.5% in January and is expected to rise even further. Scots are facing the prospect of council tax, water bills and train fares rising while wages, as I have said, are falling in real terms. Perhaps unsurprisingly, the Conservative party failed to back the fully costed plans of the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), to tax the oil and gas companies’ excess profits to reduce people’s energy bills. Instead, the Chancellor’s response to the crisis has been to make matters worse, not better. We have already heard about the buy now, pay later scheme using taxpayers’ money to lend money back to taxpayers via the energy companies that they will have to pay back on future bills. That is not helping; that is deferring the problem.

The Government have refused to exempt VAT on skyrocketing energy bills, which was supposed to be one of the much-vaunted Brexit dividends.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

When the Minister winds up the debate, I wonder whether he will address the point that, as the hon. Gentleman rightly alludes to, part of the energy cost is pre-Ukraine. We left the European Union and its single energy market, which is detrimental to the rest of the UK.

[Ian Murray]

Those are some of the consequences that we start to see when the chickens come home to roost.

When the Minister responds, perhaps he can also clarify the Government’s policy on VAT on energy bills, because VAT is one of the most regressive taxes. By removing VAT on energy bills, the Government would remove a regressive tax that affects the poorest the most. I understand that if they remove the VAT, they help everyone, but perhaps it could be done temporarily and perhaps the £2.5 billion-plus, and increasing, that is taken from VAT on energy bills could be diverted to those who are required to pay higher energy costs.

There will be the largest tax burden since the 1950s, which is astonishing for a Conservative Government, and a more than 10% increase in national insurance, not just for working people but for businesses. We have a Conservative Chancellor who is high tax and the highest-taxing Chancellor in more than 70 years.

--- Later in debate ---

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

It is interesting to follow the hon. Member for Blackpool South (Scott Benton). It was nice to hear that he believes his Government are not doing well enough. We on the SNP Benches certainly agree with that, if not with everything in his speech.

Modelling carried out by the fuel poverty campaigners Energy Action Scotland on the impact of energy price rises in April suggests that 41% of households in West Dunbartonshire will be living in fuel poverty following the increases. Indeed, the front page of the Lennox Herald in my constituency has had the headline, “Families are turning down food because they can’t afford to cook”. This was a quote from the local food bank in Dumbarton, Food For Thought, which revealed that people in need are actually turning away meals because they cannot afford the energy required to heat them. At the beginning of the century, food banks were a rarity in our communities, but after years of the austerity-driven agenda from the Conservative Government that caused great hardship to vulnerable households while letting big business cronies and foreign owners off scot-free, they have become life rafts in a sea of inequality.

My right hon. Friend the Member for Dundee East (Stewart Hosie) alluded to the 1970s, which some of us are old enough to remember, as well as growing up in the 1980s. It is woeful in this day and age that anyone should consider that people now turn off their washing machines and wash their clothes and bedlinen in cold water, or would use a brush and a pail rather than a Hoover. It seems absolutely ridiculous. I remember a single-parent family who had to do the exact same thing. They were lucky that they had family who could help them with that impact of the aggressive politics of the British Conservative party. How my father, as a single parent of four kids—one of them profoundly disabled; he never made to adult life—got through it, I have no idea. But all is not lost for the Government. They need to take urgent, real action before the irreparable damage that was done in the ’80s is foisted yet again on households such as those in West Dunbartonshire—indeed, across the whole of the UK. Introducing immediate emergency cash payments would make a difference for many households and save many from falling into hardship. It is the right thing to do from a moral point of view but also from an economical point of view.

While much attention is quite rightly focused on rising energy costs, there are other factors impacting on the cost of living that need to be addressed. Colleagues have alluded to them and will continue to do so, so I will raise just two factors and how they are affecting my own constituency caseload. My office has been inundated by families who, despite working, rely on universal credit to help make ends meet but who are now desperately calling for further help. The Government’s callous £1,040 cut for millions claiming UC in the middle of a cost of living crisis has had a devasting impact on these families, and the further price increases are leaving them vulnerable, scared and, indeed, impoverished. The Chancellor’s autumn Budget announcements barely tinkered around the edges and will not come close to compensating for the cuts to universal credit.

The UK has one of the lowest sick pay rates in the OECD. The current rate of £96.35 per week is wholly inadequate, and one in five workers is not eligible for it. The specific groups most likely at risk are women and those in insecure work. The UK Government must surely believe that increasing statutory sick pay in line with the real living wage, and removing the threshold and extending it to 52 weeks instead of 28, is long overdue given the traumas of so many during the pandemic.

If the Chancellor needs any pointers on how to tackle this issue, we need only cast our eyes to the Scottish Parliament and its Government, and the priorities that they are setting with the limited powers of devolution. In many areas where the Scottish Parliament has devolved powers, Scotland enjoys lower than average costs compared with those in England and Wales, be that average household water charges, council tax bills or rail fares. The Scottish Government are delivering their game-changing child payment, one of five family social security benefits, and unique in the UK. I say “social security” because it is not a hand-out: we pay for it; it is what socially progressive Governments do. That will double in value in April, impacting immediately on 110,000 children in Scotland. The Scottish Government are also committing more than £3.9 billion for social security expenditure in 2022-23, providing support to more than 1 million people; that is £360 million above the level of funding to be received from the UK Government. It will help low-income families with their living costs, including heating, and enable disabled people to live full and independent lives; it will pay for the new adult disability payment.

Those are just some of the actions taken by the Scottish Government, who care for the people they govern: a Government who are serious about tackling the inequalities that exist in our country—systemic inequalities founded in the traumas of the ’70s and ’80s —and who want to create a fair and better country for all.

The Scottish Government can only do so much at the moment with the limitations of devolution, but with the full powers of national self-determination delivering independence they can deviate from both the previous courses of British Governments and the present Government, who have never worked for the people of Scotland, as well as the people of England, Wales and indeed Northern Ireland.

As I have said, serious times call for serious measures and I, like my constituents, have no faith that the UK Government are able to, or capable of, delivering them.

[Several hon. Members rose—]