UK Energy Costs

Debate between Mike Wood and Baroness Winterton of Doncaster

Thursday 8th September 2022 Commons Chamber

[Mike Wood (Dudley South) (Con)]

The speed and scale of the support announced by the Prime Minister is hugely welcome and, obviously, hugely necessary for the many households that simply could not have afforded energy bills of £3,500. Together with the £400 payments to each household, the £650 to those on low incomes and the £300 to pensioner households, it will make a real difference. I hope that we can have some clarification on the position of those residential properties that are on commercial meters, perhaps because they were converted from commercial businesses.

The support will also make a real difference to many businesses, whether they are energy-intensive businesses, such as those in ceramics and glassmaking in my constituency, or whether they are in hospitality. Similarly, perhaps we can have further clarification on the position for those businesses that have recently had to enter into new contracts. Will they still be able to switch to the new price cap or the support that has been announced?

Let me deal with the criticisms that have been made. There is some superficial political attraction to extending the windfall tax—of course, we already have a windfall tax set at 25% on top of the 40% tax already paid by British oil and gas producers. The attraction is more superficial and political than real and effective, because the revenue that an extension would raise would be small in comparison with the cost of the necessary support. It would affect less than half of the oil and gas we use in the UK, because that is what is produced in the UK. Making UK oil and gas production less competitive will, in the medium and long term, reduce our energy security at the worst possible time. That is something that we cannot afford.

It has also been suggested that the package will affect price signals. As a reformed economist, I know that economists can sometimes dwell a bit too much on good theory and ignore the real world, but I find it hard to credit that people would be less careful with their energy when the price cap is at £2,500 than they would be if it were £1,000 higher. Clearly there would be a huge impact if energy were free, but we are already at a level at which people are being very careful with what they use.

This is the right package, and it is an effective package. We need to get it into the pockets of households and businesses—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order.

Reducing Costs for Businesses

Debate between Mike Wood and Baroness Winterton of Doncaster

Tuesday 11th January 2022 Commons Chamber

[Mike Wood (Dudley South) (Con)]

The covid pandemic has presented unprecedented challenges for businesses in every part of the country and in virtually every sector of the economy, but the Government have met them with unprecedented levels of support. While the last Labour Government bailed out the banks while dole queues doubled, this Government have provided support—whether through the furlough, grants, loans or business rates support—on a scale that I think few could have anticipated from any Government of any political colour before the pandemic. Of course, things have still been extremely difficult—many businesses have struggled from one week to the next, and sadly some have not been able to survive this long—but for many, many businesses, the support provided has made the difference between survival and going to the wall.

Every part of the economy has been affected and many businesses have suffered, but some have been hit harder than others, particularly the hospitality sector and the businesses that rely on its success. It was a brutal December for the sector; December usually accounts for about a quarter of hospitality’s trade for the year, but we have now had two Decembers in a row that were well below normal trading levels. The support announced before Christmas has allowed most hospitality businesses that qualified to get through the Christmas period into the new year and stand a chance of surviving, but we also have to look at the supply chains.

There are businesses that may not be immediately within the hospitality sector, but that rely on it. Brewers, catering, event management and, for that matter, hair and beauty rely on large events. We need to make sure that local authorities are prioritising businesses like those with the discretionary support that is available, and I would encourage Ministers to make it clear in guidance for discretionary support that those businesses are precisely the kind of businesses that that support is aimed at.

But of course what businesses need more than anything is to be able to do what they do best—provide the goods and the services that consumers or other businesses want to buy—to get back to some kind of normal. The last thing we need would be to have taken the advice of some of the Labour Members before Christmas, and had further restrictions sooner and for longer, or endless furloughs.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order.

Health and Social Care Levy

Debate between Mike Wood and Baroness Winterton of Doncaster

1st reading
Wednesday 8th September 2021 Commons Chamber

[Mike Wood (Dudley South) (Con)]

My hon. Friend the Member for Bolsover (Mark Fletcher) rightly said that to govern is to choose. One of the reasons for the result of the last general election was that voters knew that this Government were more likely to make the difficult choices that were needed. The choices we have to make are not always between the good and the perfect. Many of them involve choosing the less bad option. As a Conservative, I believe that raising taxes is certainly a bad option. It clearly breaches a manifesto pledge, and it is both economically and morally wrong. It is economically wrong because higher taxes will dampen growth and prosperity in the longer term, and it is morally wrong because it means taking money away from those who have worked hard, to be spent elsewhere. That needs to be kept to a minimum.

However, if raising taxation is a bad option, surely the alternative—not acting—is far, far worse. Not acting would mean allowing the backlogs that have built up in the NHS through the pandemic to continue. That would put people’s early diagnoses at risk and delay treatments further, clearly endangering lives. It would mean not reforming social care, despite there being almost universal agreement that that reform is long overdue. Government after Government have promised to take this on, to reform social care and to put it on a sustainable footing financially. There have been endless reviews, but each time they have ended up in the “too difficult” box.

How many of us can go for a week without getting an email from a constituent about social care, whether it is about the quality of social care, access to social care, top-up fees, their ability to pay or the fear that they will have to sell everything they have worked hard and saved for all their life? That is why something needs to be done. If we agree that action is needed and that we need more money to be spent on the NHS to clear the backlog and reform social care, the only decision we have to take is how we pay for it.

In the long term, borrowing to pay for this is not a sensible option. There are very few taxes that can raise anything like enough money to meet the challenges we face. Of course this could be put on VAT, but that is clearly a much more regressive option that would place a disproportionate burden on the least well off. There have been various fanciful ideas from some Opposition Back Benchers that basically suggested that someone else should pay for it, or that there was a hidden pot of money that could be raided. It is not there! The fairest way is to have a levy on national insurance contributions, sharing the cost between employees, employers, the self-employed and those who get income from dividends, so that those who earn more pay more.

I think the shadow Chancellor suggested that this could be funded by charges on the sale of land, property and shares, but the truth is that combined revenues from all stamp duties on land, property and shares comes to about £15 billion, which is nothing like enough to pay for what is needed. So national insurance is the fairest option. Gordon Brown was right, on this one occasion, that it is the most regressive option—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order.