Household Energy Bills: VAT

Part of the debate – in the House of Commons at 3:34 pm on 11 January 2022.

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Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (International Development), Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Defence), Shadow PC Spokesperson (Cabinet Office), Shadow PC Spokesperson (International Trade), Shadow PC Spokesperson (Foreign Affairs), Shadow PC Chief Whip 3:34, 11 January 2022

Energy prices are going to increase enormously. That is just a plain fact. The question is, of course, what we do about that and about the long-term cost of living crisis, which predates the pandemic, and particularly child poverty, which has been tragically high and indeed endemic in Wales for decades, since the deliberate destruction of our heavy industry for political reasons over 40 years ago and the neglect of manufacturing, all leading to chronic, deep poverty.

Nearly 20% of Welsh workers earn below the real living wage, earning essentially poverty wages. People are now indeed making the choice between whether to cook food or heat their homes. They are cutting back on spending for themselves and even having to cut down on spending for their children. On top of that, millions of people across Britain are already facing a rise in national insurance and are weeks away from a catastrophic rise in energy bills. We in Plaid Cymru agree with the Opposition proposal to cut VAT on energy bills, but this does not go far enough to cover the average estimated bill surge of £750, nor does it target support sufficiently at those who need it most.

The further top priority should be support for lower-income families, those unable to cut non-essential spending, all of whose spending is essential, and those who cannot draw on savings—they have no savings. We call for immediate Government action through the tax and benefits system. It is beyond belief that the UK Government have taken over £1,000 a year from the poorest through the £20 cut to universal credit. That direct attack on the poorest people in Wales and across the UK should be reversed both for those in work and those not working, for it has pushed 275,000 Welsh families even further into poverty.

The Government say that work is the answer to poverty. Forty per cent. of Welsh households claiming universal credit are already in work, and many are key workers, so the £20 uplift should be reinstated and extended to those on legacy benefits. Equally, we call for the warm home discount to be increased and the eligibility criteria extended to include all poorer working-age households. The cold weather payment should also be reformed, as per my private Member’s Bill in 2018, which was on an issue that I have campaigned on subsequently. However, in the long term we must end our dependency on fossil fuels and move to more renewables and, I should say, greater use of pumped storage, with retrofitting of our homes to make them more energy-efficient.