Cost of Living Increases

Owen Thompson Excerpts

Wednesday 16th March 2022 Commons Chamber

[Ian Murray]

It certainly is. To correct the Minister—I hope it is not the third time already; I am on only the second page of my speech—she assumed that the SNP motion backed a windfall tax on oil and gas, but it is actually the opposite. The motion is not to back a windfall tax on oil and gas, but to back a windfall tax on everything but oil and gas—maybe the SNP can clarify that later.

This Chancellor is also presiding over the largest hit to disposable income since the second world war. How are any of those policies helping, alongside, as we have already heard, the largest ever overnight reduction in support for the poorest households through the reduction in universal credit and the scrapping of the triple lock for pensioners? They are making people poorer and taking more money out of their pockets at a time when everything is going up—a cocktail of Government decisions that mean the discussions around the dinner table for many families are about the worry of paying the rent, the mortgage or the energy bill or for the weekly shop or to fill the car they need for work.

Families face a perfect storm of the Government’s own making: rising taxes, rising bills and rising inflation, and lower wages in real terms. This is all the result of over a decade of Conservative mismanagement of the economy. They like to think they have been in government only since 2019, but they have now been in place for 12 years. The policies of a succession of Tory Chancellors have created a low-wage, low-growth insecure economy.

I want to talk for a minute or two about the Scottish Government’s role in this. As the hon. Member for Aberdeen South (Stephen Flynn) rightly said when he moved the motion, the Scottish Government have a stake in this and I am grateful that the SNP has brought this debate to the House. The SNP is correct to point out the lack of action by the UK Government in trying to tackle this, as we have all discussed, but it is not an observer in this crisis as it is in government and can also help.

Scots are facing the prospect of higher council tax bills, because for over a decade the Scottish Government have decimated local government funding and spent 15 years promising to scrap the council tax—a promise that they continue to break at every election.

[Owen Thompson (Midlothian) (SNP)]

I find it particularly useful that the hon. Gentleman mentions council tax, given that the Labour administration in Midlothian proposed a 4.7% increase in council tax. Thankfully, the SNP amendment to that ridiculous proposal was accepted and that amount was reduced.

[Ian Murray]

We do not want to see council tax bills rising anywhere across the country, but my own council, the City of Edinburgh Council, has had £1 billion ripped out of its budget over the last 10 years by decisions to take Conversative austerity, times it by four and pass it on to local authorities. [Interruption.] I hear the cries of “What?” behind me, but these figures can all be checked. The 3% of Conversative austerity is multiplied by four and passed on to our local authorities who are delivering these services. Councils are forced to make decisions that they do not want to make. [Interruption.] All those figures can be checked, Madam Deputy Speaker, despite the SNP Members chuntering from the back.

The Chancellor’s measly council tax rebate scheme, while welcome at £150, will distribute more money to the Scottish Government, but the SNP response is just to reflect that entire policy. The Minister mentioned this. To put that into context, there will be £150 off council tax in bands A to D in Scotland, which means I will get £150 off my council tax. How is that fair? Of course, I will be donating it to local charities, but that policy is money wasted that should be directed to those who need it the most.

What of this one-off windfall tax on the unexpected cash bonanza for the oil and gas sector? The SNP group here in Westminster has been more interested in standing up for Shell than standing up for Scottish taxpayers. [Interruption.] Again, Hansard has all of this documented. When my colleagues and I put down a motion in this House for a vote on a windfall tax on the enormous excess profits of the oil and gas companies, the SNP sided with the Conservatives and failed to back it. In fact, the SNP BEIS spokesperson, the hon. Member for Aberdeen South, who is sitting not yards from me and who moved this motion, defended that position vociferously in this House. The deputy leader of the SNP did not back our motion on BBC “Politics Scotland”, live on television, and the hon. Member for Gordon (Richard Thomson) said:

“I am sorry to say that I have not heard anything to persuade me why a one-off smash and grab on the North sea industry is the best way to deal with this crisis.”—[Official Report, 1 February 2022; Vol. 708, c. 239.]

Let us see what this crisis is doing. Shell’s profits have quadrupled, in what its CEO has described as a “momentous” year, to an unexpected $19 billion. That is $600 a second in profit, driven primarily by the huge increases in energy prices. While Scottish families face the heartbreaking choice between eating and heating, the CEO of BP is describing the energy sector as a “cash machine” for his business. Under our proposals, he would be popping his corporate credit card in the cash machine, and giving a little bit of that money back to struggling families. Before both Governments—the Scottish Government and the UK Government—trot out the usual defence of harming investment, most of that unexpected profit is going to additional bonuses for shareholders in dividends and buybacks of shares, so such businesses will not be using that money for investment.

Now we see that the SNP, after weeks of defending not backing a one-off windfall tax to help Scottish people pay their bills, has its own proposal with one line in the motion about

“a windfall tax on companies which are benefitting from…impacts associated with the…pandemic or the…international situation”.

Surely that means oil and gas. Does it mean oil and gas? Does the BEIS spokesperson want to intervene and tell us if it means oil and gas? [Interruption.] Nobody on the SNP Benches is saying it means oil and gas, so what on earth does it include? Will it not affect investment, if that is the defence for oil and gas, in other industries? Do they have any detail on how much that would raise, how it would be implemented or who would be impacted?

Does this include every business that has turned a profit during covid? What about small businesses such as the micro-breweries that turned their hand to making hand sanitiser during the pandemic—should they pay? What about Pets at Home, because of the boom in people buying pets during the pandemic? The critical argument is that these businesses’ profits are not driven by the increases in energy costs that are hitting family finances directly. It is the oil and gas companies’ profits that are driven by the crisis, and it is they that should pay a little more. It is their additional, excess and unforeseen profits that are directly linked to the rise in bills paid by millions of families, and I have yet to receive an intervention to find out whether the SNP motion includes oil and gas—nothing. Quite obviously, we can come to our own conclusion that it wants to tax Irn-Bru, but not tax oil and gas.

--- Later in debate ---

[Owen Thompson (Midlothian) (SNP)]

It is a great pleasure to follow my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock). While we cannot completely swerve the growing crisis around the globe, a sensible emergency package of financial measures could soften the blow, and it is incumbent on the Government to take decisive action now.

I speak on behalf of the people of Midlothian who, like the rest of the UK, are about to face the worst income squeeze for a generation. As a former coalmining community, my constituency unfortunately has first-hand experience of Tory Government policies leaving people high and dry and struggling with hardship. We are a resilient bunch though. It should not be too much to expect a little support from the Government rather than their hindering our efforts to tackle poverty and build back opportunities after the pandemic, but there is little evidence of that from this Administration.

It does not help the economy to take more money out of people’s pockets and risk more people entering a spiral of debt and despair. Let us not soft soap this. As anti-poverty campaigner Jack Monroe warned the Work and Pensions Committee, this crisis will have fatal consequences for some families. It is not an exaggeration to say that more people will be forced to skip meals and face ill health, hunger and cold. This is 21st-century Britain; inequality is on the rise. Yes, there are global issues—I have not heard anyone try to deny that today—but they have simply compounded the crisis that we were already facing after years of Tory austerity. The ideology imposed by the Government, which we have had to endure, has left public services running on empty. We have seen drastic cuts to benefits, which hurt the most vulnerable, along with the refusal to protect pay and conditions to make sure workers earn enough to get by, the betrayal of pensioners, the absolute wrecking ball of Brexit and the half-hearted commitment to green energy investment.

As things stand, poor decisions and self-inflicted damage over a decade have left the UK without the resilience to cope when external factors such as covid or the war in Ukraine take their toll. We have had a poverty problem in the UK for years, yet more and more families on modest earnings are finding that they are being pushed into poverty. The New Economics Foundation warned that by April, half of children will be in families who cannot afford the cost of living. It should be a matter of shame for this Government that food banks have become an accepted thing in our towns. I pay huge tribute to the Trussell Trust and Midlothian Foodbank, Food Facts Friends in Penicuik and all the volunteers involved with them, but they should not be necessary. We need Government action, and we need to reduce the size of the storm that households are about to face.

The £200 loan announcement from the Chancellor is put into perspective by what is actually needed. We do not need loans that people have to pay back. The SNP has suggested a range of measures, but the Government simply will not listen. My constituency of Midlothian is not only poorly served by this Tory Government but has a cloth-eared Labour administration in the council that simply does not listen to the communities that it is there to represent. It is sluggish and poor to listen and drags its heels on bringing forward proposals from the Scottish Government that are designed to help ease the financial burden on households. Only a few weeks ago, the Labour administration proposed a whopping 4.7% increase in council tax, backed by some of their Tory chums. Thankfully, the SNP’s alternative proposal to the budget was accepted, yet the council administration continues to implement what is now an SNP budget. Hon. Members can make of that what they will. It is time for action to be taken and we need it now.