Corporate Profit and Inflation

Tulip Siddiq Excerpts

Tuesday 16th May 2023 Westminster Hall

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Mark. I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this important debate.

As I think everyone in this House will know, working people are facing the biggest hit to living standards since records began. Real wages are lower than they were 15 years ago, with families in the UK going into the cost of living crisis significantly poorer than those in comparable European countries. The price of everyday essentials has risen by an eye-watering £3,500 since 2020 and there have been 24 tax rises since 2019 alone, with working people facing the highest tax burden in 70 years.

After the former Prime Minister crushed the economy last year, the resulting rise in interest rates and economic instability has added hundreds of pounds a month to first-time buyers’ bills. Whether it is stagnant wages, rocketing prices and bills or sky-high taxes, at every turn it is hard-working people in our constituencies who are paying the price of economic instability. The Opposition have been calling for policies to support people with the cost of living crisis and rampant inflation. For example, since last August we were calling for a fairer deal for those paying a premium on energy prepayment meters. The Chancellor finally gave in in his 15 March Budget—after months and months of lobbying from the Labour Benches.

Since this crisis began, Labour has been calling for a windfall tax on energy giants to support working people with their energy bills. After months of the Prime Minister dismissing our proposals as “disastrous”, he was forced into a U-turn in May last year. But even after his party supported our idea of a windfall tax, the Government still did not adopt a comprehensive windfall tax as we have been suggesting. By refusing to backdate the tax to January 2022, end the investment allowance tax loophole and raise the rate in line with other countries, the Government has left £10.4 billion on the table, leaving working people to foot the bill.

The Labour party will always put ordinary families first, which is why we would: reverse the expensive cash giveaway to the wealthiest pension savers and introduce specific measures to keep doctors in work; scrap the unfair non-dom tax status, which cost the UK over £3 billion a year, in order to pay for free breakfast clubs and the biggest ever expansion in the NHS workforce; and slash business rates for small shops—paid for by properly taxing online giants—to cut the eye-watering cost of everyday items.

With the ONS figures confirming that 2022 was a record year for North sea oil and gas profits, Labour would prioritise the needs of working people by introducing a proper windfall tax to raise an additional £10.4 billion. We would use the additional funds to cut energy bills for domestic food manufacturers and processors to bring down food prices for people across the country.

Fundamentally, we understand that the UK needs a long-term economic plan to boost living standards for working people and bring down the prices of everyday essentials. The crisis has exposed structural problems in the British economy, and our constituents have been trapped in a cycle of stagnant growth, low wages and high tax. If our growth rate stays where it has been over the past 13 years, families in the UK will be poorer than those in Hungary and Romania by 2040.

That is why a Labour Government’s first mission will be to secure the highest sustained growth in the G7 and to create well-paid jobs in every part of the country. We want to achieve that through an active partnership with business and our modern industrial strategy, while our green prosperity plan will drive bills down and let British businesses and workers compete in the global race for the jobs and industries of the future. The US has passed the Inflation Reduction Act, and the EU has its own Net Zero Industry Act. The UK has fallen behind. In contrast, the Labour party’s economic plan will get the UK growing again. Our new deal for working people will ensure that they benefit from that growth by boosting living standards and wages across the country.

That is why I hope the Minister will listen to all the comments made in this debate and, in his closing remarks, finally commit to putting working people before the energy giants and lend his Government’s support to Labour’s windfall tax to help tackle inflation and the cost of living. More than that, I hope he will reflect on everything he has heard today from colleagues across the Chamber and get behind Labour’s mission to secure the highest sustained growth in the G7.