Cost of Living Increases

Stewart Hosie Excerpts

Wednesday 16th March 2022 Commons Chamber

[Stephen Flynn]

Yes, absolutely. The reason why we are in the current situation is that the Government have not planned ahead. They have chosen to sit on their seat when they should have been looking to where we could go in future. I hope the Minister will address that point when he sums up the debate.

[Stewart Hosie (Dundee East) (SNP)]

As my hon. Friend knows, when the price of oil goes up, the tax yield to the UK Exchequer is increased; when the price of a gallon of petrol goes up, there is extra duty for the UK Exchequer; and when the price of domestic bills goes up across the board, there is additional VAT for the UK Exchequer. Does he not find it passing strange that Tory Back Benchers are not calling for the additional tax yield that the UK Government already have to be used to reduce the cost of domestic bills?

[Stephen Flynn]

Absolutely. As I understand it, the Treasury currently believes it is going to take in excess of £3 billion in relation to oil and gas in particular. Every single pound and penny of that £3 billion should be directed towards the provision of support for families up and down the country.

It is on that support that I wish to briefly reflect. We know the Government have gone nowhere near far enough in terms of their support for households up and down the country. What can they do? What should they be doing? We know that they should be scrapping VAT on energy bills. We know that they should be reversing the national insurance price hike—a tax that will impact not just households, but businesses, too. We know that they need to turn those loans that they have forced on people into grants, and we know that they need to overturn that £20 cut to those on universal credit. People need help, and they need help now. The Chancellor cannot continue to stand still as if nothing at all is happening.

When we discuss these things, the Conservatives often say, “Well, what are you doing? What are the Scottish Government doing?” Without getting into the technicalities of who has powers over law and where resources lie, because, of course, we know that those are the responsibility of the UK Government, it is worthwhile reflecting on what we in Scotland are doing differently to what this UK Government are doing.

We are, of course, in the middle of a fuel crisis, but an older or younger person living in Scotland can hop on the bus for free. A person in Scotland who is struggling with their health can rest assured that they will continue to get free prescriptions. A family worried about how they will feed their wee bairn will know that there are funded hours in nurseries where they will be fed, and that when they go to primary school, they will receive free school meals. With the limited welfare powers that the Scottish Parliament has, the Scottish Government not only introduced the game-changing £10 Scottish child payment, but are doubling it in a matter of weeks to £20 a week. Those are huge differences in policy objectives and intentions, and they are designed to assist people. Yet, at the very same time, we still have the dead hand of Westminster above us, forcing us to spend some £600 million each and every year just to mitigate its policies, such as the bedroom tax. We can and should be able to do so much more, but we are held back by this UK Government and their complete intransigence.

Another question that this Government rightly ask is: “You have quite a wish list there, how do you fund it?” That question is justifiable, which is why we have come forward today not just with problems—problems that we are all aware of irrespective of party—but with solutions, too. Is it right that Serco, Amazon, Netflix and Asos are able to benefit from the pandemic to the tune of billions of pounds because of the way that people’s habits have changed and because of the contracts that they have received from the Government while our constituents are struggling? Absolutely not; it is not right at all. That is why we are calling for a broad windfall tax—one that takes into account the changing landscape in the UK and globally so that we can respond to it to provide people with the support that they so badly need, and which is so badly overdue.

I accept—I think everyone in this Chamber accepts—that, ultimately, such a mechanism is for today; it is not necessarily for tomorrow. What do we do next year? What do we do the year after that? That takes me back to the point that the right hon. Member for Wokingham (John Redwood) stumbled into earlier in relation to renewables. We are very much in this mess not just because of Brexit, not just because of the pandemic, but because of the energy policies, over decades, of this UK Government. What they need to do is come forward with a clear and concise plan as to how they intend to turbocharge renewables: hydrogen; hydro pump energy storage; onshore wind; offshore wind; solar; and tidal. Scotland has the resources. Scotland has the ability to deliver that energy security not just for people living in Scotland, not just for people living in the rest of the UK, but for our friends and allies in Europe who need that energy security now more than ever. We need the Government to come forward with that plan and to do so now.

Finally, as I said earlier, food prices and fuel prices are soaring. When will the UK Chancellor finally set down his silver spoon, pick up his cheque book, and deliver the support and security that people so badly need?

--- Later in debate ---

[Helen Whately]

I just mentioned the importance of rebuilding the public finances. We know that the NHS is the No. 1 priority for the general public; it is vital that we reduce the backlogs that sadly built up during the pandemic, and that needs to be paid for.

To come back to the motion, last month we announced an additional package of support to help households with rising energy bills, worth £9.1 billion—a package that, according to the motion, the Scottish National party wants to scrap. Our package to help people includes a £200 reduction in household energy bills this autumn that will be paid back automatically over the next five years, and a £150 non-repayable council tax rebate payment for all households in council tax bands A to D in England, plus £144 million of discretionary funding for local authorities in England to support households who need support but are not eligible for that council tax rebate. As we cannot apply these council tax measures across the whole of the UK, the devolved Administrations are receiving almost £600 million through the Barnett formula. This overall approach is fiscally responsible while helping customers to manage the unprecedented increase in energy bills and helping to spread the increased cost of global prices over time.

[Stewart Hosie]

The Minister mentioned global prices and I was rather struck that she sounded like Gordon Brown saying that it was always someone else’s fault. It is absolutely true to say that there are global pressures causing inflation, but while some countries are capping their electricity price increases at 5%, we are allowing 50%-plus increases in domestic energy prices. For all the big numbers that she has read out, does she not understand that people cannot afford to heat their homes?

[Helen Whately]

We have the price cap in this country, which means that customers have been protected from the volatility in global energy prices over recent months. At the moment there is further volatility following the impact on those prices of Russia invading Ukraine, but that is not going to hit the vast majority of households’ energy bills over the coming months. We will have to get to October to see the implications of that. What we have done—as I have just mentioned; I am sorry if the right hon. Gentleman was not listening—is put in place a support package worth £9.1 billion particularly to help those who will find it more challenging to pay their bills.

--- Later in debate ---

[Ian Murray]

If the SNP has an argument for not taxing the oil and gas companies, it can have the floor to tell us. I am happy to take an intervention. I am also happy to take an intervention that clarifies what their motion means. Does the line that says “a windfall tax” include the oil and gas companies? Not one SNP Member, including the BEIS spokesperson, will intervene and tell me that that is what it intends. That tells us all we need to know. The SNP is sitting on the fence, hoping that the Government get the wrong idea, and putting out the press release to say that the Government are attacking it.

[Stewart Hosie]

This is a serious debate affecting some tens of millions of families in the UK, so the sooner he stops wittering on about Irn-Bru and Pets at Home and makes a substantive point, the better for the viewing public.

[Ian Murray]

I make this substantive point. Your motion, which you brought to the House to debate today, says that you are happy to tax Irn-Bru and Pets at Home, but you are not willing to tell me whether you will tax the oil and gas companies. Am I correct? I am correct. Excellent.

--- Later in debate ---

[Stewart Hosie (Dundee East) (SNP)]

As the motion makes clear,

“households will soon be suffering the worst income squeeze since the 1970s”.

The Bank of England has said that inflation could reach more than 7% in April. Households’ average energy bills are forecast to rise by 54%—almost £700 on average—and there is a very real fear that energy costs could rocket again by a comparable amount in October.

Let me put that in context. One in seven people in Scotland are already finding household energy bills unaffordable. That is 640,000 people, and equates to 7 million people across the UK. Whether the cause of these difficulties is simply inflation, the massive hikes in energy costs themselves, low pay or underemployment, the fact that 68% of working-age adults in the UK who are in poverty live in households where at least one adult is in work—the highest figure on record —speaks volumes about the Government’s failure even to understand, let alone take seriously, poverty and what it means in this country. What else could explain their hiking national insurance contributions, removing the universal credit uplift, and allowing energy companies to impose brutal increases on people many of whom were already having to choose between heating and eating? According to the Resolution Foundation, those ill-conceived policies could lead to a fall in real household income of £1,000 per year for working-age households.

Of course, what successive UK Governments have not done simply makes the situation worse. We have all seen—and have just heard about—petrol and diesel approaching £2 per litre, and in some cases it already costs more than that. That is £9 or £10 a gallon, which essentially means that it costs over £100 to fill up an average saloon car tank. That is prohibitively expensive for someone on modest wages who simply wants to fill up the car in order to get to work. Yet every Tory Government I can recall has set their face against a “fuel duty regulator”, which would at least have moderated some of these obscene increases. May I just respond to something that was said by the shadow Secretary of State, the hon. Member for Edinburgh South (Ian Murray)? Let us remind ourselves that Shell alone made £4.7 billion of profit in the final quarter of 2021, and £14 billion in the entire year. So someone is doing very nicely out of these rising costs.

I now wish to turn to a slightly different energy-related matter. Yesterday I received an email from my constituent Elisabeth Walton. She wrote:

“I am writing to you as, being my representative in the House of Commons, I am hoping you will be able to seek an answer for people like me who have been unable to heat their homes as a result of rising prices. I live in an electric-only home, and chose so in an effort to reduce my reliance on fossil fuels.

While I have done everything in my power to reduce the amount I spend on heating (switching from a prepay meter, insulating windows, draught excluders, blankets and hot water bottles), as a single income household with a disabled partner I simply cannot turn on my storage heaters due to the sheer cost.

Could you please explain to me why, with such investment in renewable energy, that my electric standing charge could have more than doubled despite the only price rises affecting oil and gas...

Why is VAT not being cut? Presumably this is one of the actual benefits Brexit could offer us? What is the government doing besides forcing repayable loans onto us?

Why are energy business profits not being controlled to avoid the exploitation of powerless people?

Is there anything I can do to apply pressure to these companies and ease this hardship?

I have gone to my employer to plead for a raise or increased responsibility to meet this increase in living expenses, particularly as I continue to work from home, but this has been flatly denied.”

This is someone who has already done everything she can, and yet is being hammered with energy price rises.

[Angela Crawley (Lanark and Hamilton East) (SNP)]

Many of my constituents have written to me expressing the same concerns. Furthermore, the majority are members of single-parent families, particularly women, who have already borne the brunt of austerity and the worst effects of the changes in universal credit. They will not now benefit from the £20 uplift that the Government have removed from so many families who needed it. Does my right hon. Friend agree that more needs to be done to support those families?

--- Later in debate ---

[Stewart Hosie]

My hon. Friend the Member for Lanark and Hamilton East (Angela Crawley) is right that more must be done across the board. So far, women have particularly borne the brunt of the universal credit reduction, and people on modest incomes will bear the brunt of the national insurance increase. Of course, we must take more action across the board.

On the narrow point about the increase in standing charges, what possible reason can there be for energy standing charges doubling other than blatant price gouging and profiteering? The UK Government could act to stop this today if they had the will. This House was prepared to expedite sanctions on Russian oligarchs—in fact, we all said they should have happened already—and, given that we are facing the worst inflation since the 1970s, I am pretty confident this House would be prepared to expedite legislation to outlaw the daylight robbery of people through this obscene profiteering.

I am conscious of time, so I will not take much longer. I am struck by the stark public warnings about the rise in the cost of living. Martin Lewis has said that people were already at risk of “starving or freezing,” and the anti-poverty campaigner Jack Monroe has said that the cost of living crisis will have “fatal” consequences. The Government need to listen not to us or even to high-profile campaigners but to the millions out there who I fear will soon be cold and hungry, and take urgent and immediate steps before this crisis spirals out of control.