Cost of Living Increases

Robert Syms Excerpts

Tuesday 25th April 2023 Commons Chamber

[Sir Robert Syms (Poole) (Con)]

Nobody should be terribly surprised that we face difficult economic times if a Government lock an economy down for nearly two years; if they pay 7 million, 8 million or 9 million people to sit at home; if they provide grants to keep companies in business; and if they intervene on an unprecedented level. Indeed, the intervention to get us through the worst pandemic since 1918 was almost on the scale of a world war. The Government are to be commended for doing what they did to save lives.

Following that, we have had a major economic crisis and war in Ukraine. That has caused an almost unprecedented spike in energy prices. The last time they rose as much was in 1974. Both those factors have had a big effect on Governments, businesses and individuals. The Government have done an awful lot to try to safeguard people’s living standards. They have provided a cap on energy prices, they have provided a £400 grant, they have put the pension up by 10.1%, they have put benefits up and they are providing special payments. Billions have been spent on supporting people, and that is quite right in an extraordinary time.

Of course we can always have a political argument about whether we should do more or do less, but the most important point is to have an economic policy that gets us through the immediate crisis and into better times when the sun will shine. The good news is that in the course of this year, inflation is expected to fall substantially. We already see a fall in input price inflation figures, and a fall will come through in food prices and energy prices in the course of the year.

There is a debate about whether we will have 2% or 3% inflation, but given that it looks from the negotiations as though pay will go up a little bit, it is clear that inflation will fall below the level of pay increases sometime this summer. We will then have a situation where living standards start to recover. I do not pretend that people will immediately turn round and say, “This is great!”, because it takes several months for people to feel that that has happened, but we are heading towards a situation where the big reductions in living standards that have taken place over the last 12 months, and which have understandably made my party unpopular and made the public mood very scratchy, will start to reverse.

Through sound financial policies, the Government have done their best to keep a stable economy and set us on a path for growth. Looking at the public sector finance figures today, I hope that, when it is prudently responsible to do so, we will increase incentives by reducing tax. That in itself will help some of those who are struggling.

I think the Government are on the right track. I have no doubt that this is a difficult time for many of our constituents, but I do not think anybody can complain that we have not done what we can. I look forward, over the next three, six and 12 months, to a better economic situation. Ultimately, the argument that we are having on the Floor of the House is this: if people feel miserable and badly off, they will vote us out of office, and if they feel that things are going better, they may well vote us back in. I am optimistic.