I beg to move,
That this House
notes there is a cost of living crisis hitting homes across the UK;
regrets the UK Government’s current plan of reductions in certain benefits and tax rises coupled with rising costs of the UK leaving the EU;
is concerned that the UK has the worst levels of poverty and inequality in north west Europe and the highest levels of in-work poverty this century;
and calls on the Government to take immediate action with a package of measures to boost incomes and reverse rising poverty, including reinstating the £20 universal credit uplift, introducing a Real Living Wage of at least £10 an hour, introducing an energy payment for low income households, and matching the Scottish Government’s Scottish Child Payment for families across the UK.
Normally, during an Opposition day debate the Tories will berate Opposition parties for not dealing with the issue of the day, crying distraction and somehow suggesting that the discourse in this place of those on the Opposition Benches is focused solely on the interests of the SW1 chatterati, not what matters most to our constituents back home. However, today of all days, not least in the light of what Lord Agnew has just done along the corridor, that seems somewhat ironic, given that the Tories themselves are engaged in a civil war and are besieged by paralysis, with a Prime Minister who might be in office, but is certainly not in power. Let us be clear that we have a British Government and Prime Minister who are so focused on saving their own skins that they are neglecting to get on with the day job; indeed, they are overlooking the biggest issue of the day: the cost-of-living crisis.
The impact of the cost-of-living crisis is far-reaching, but as constituency MPs, we know that it is certainly impacting the poorest and most vulnerable members of society, and yet this British Government indulge in navel-gazing, while our constituents are stuck in the middle of an economic tornado. Simply, the Tories are more focused on saving “Big Dog” than on saving our constituents’ money from spiralling energy bills, and more focused on Operation Red Meat when our constituents can hardly afford red meat, as inflation causes the average supermarket shop to skyrocket.
Like most Scots, I think that the Prime Minister is utterly unfit for office and should have resigned long ago.
The hon. Gentleman just spoke about the Government navel-gazing and having the wrong priority. Does he therefore agree that Nicola Sturgeon has absolutely the wrong priority? She was on TV again yesterday, saying that she is going to kick-start yet another campaign for independence, at a time when we should be focused on the economic crisis, the energy crisis, affecting all our constituents?
I am grateful to the hon. Gentleman for his intervention. I have great respect for him, and I only wish that that was extended to him by the Leader of the House, who I think said he was a “lightweight”. The reality is that the people in Scotland have voted in successive elections to put Scotland’s future in Scotland’s hands, to ensure that the likes of the Prime Minister and the Chancellor, who are posted missing, do not have the economic levers that are causing such distress just now.
The hon. Gentleman made reference in his previous comments to the impact on constituents of the cost of living. I therefore ask him to take this opportunity to tell the Labour Front Bench that Andy Burnham’s Greater Manchester clean air zone, a tax on business and jobs in my constituency emanating from the Labour party, should not come into place—it should be scrapped. I would welcome the hon. Gentleman joining me in our joint campaign to improve the standard of living for constituents all across the country.
Gosh, that could have been a career-ending one for me there. At the moment, it appears that the Labour party and the Conservatives are getting on quite well. The fact that a Tory MP can cross the Floor to the Labour party suggests that the back channels between both parties are relatively good at the moment. I am sure that those can convey whatever message to Andy Burnham that the hon. Gentleman wishes.
As I was saying, if Scotland were independent, we would not have the likes of Boris Johnson and his ilk anywhere near the levers of economic power. In many respects, however, revelations about Downing Street being turned into a frat house during a deadly pandemic are just the latest in a long litany of bad decisions by a Prime Minister Scotland did not vote for. So I must confess that I find myself somewhat baffled and wondering why being economical with the truth in this Chamber is the tipping point for Tory MPs on the Prime Minister.
Why did Tory MPs not see the Prime Minister for what he really is when he compared Muslim women wearing the hijab to looking “like letter boxes”? Why did they not see him for what he really is when, talking of the war-torn Libyan city of Sirte, he said it could be the “new Dubai” and that all that had to be done was
“to clear the dead bodies away”?
Why did Tory MPs not see him for what he really is when he unlawfully shut down Parliament, misled the Queen and tried to run the country like a tinpot dictator?
The fact is, this Prime Minister should resign because he is morally bankrupt—he always has been. But if we do not tackle the cost-of-living crisis now, frankly, it will be many of our constituents who are bankrupt. [Interruption.]
I see that Daniel Kawczynski, who has managed to come to the Chamber rather than touting for a second job, wants to intervene. If he wants to intervene on the speech, he is welcome to do so, otherwise than chuntering from a sedentary position.
I find it rather ironic to take lectures from the hon. Gentleman about getting on with the job. He was touting for plenty of jobs recently, so that is rather a sticky wicket for him to be on. If he bears with me for a moment, we will get on to the substance of the matter. I look forward to seeing how he votes on the motion tonight and what he does for his constituents in Shrewsbury.
At the beginning of the pandemic, the Chancellor of the Exchequer was everywhere; he was all over the airwaves. Indeed, if Rishi’s slick Instagram graphics could be used as a currency, we would probably all be millionaires, just like the Chancellor himself. However, it is clear that the Chancellor does not have a plan for the biggest issue of the day: soaring costs. He talks endlessly about his plan for jobs, but it is clear that his only plan for a job is moving next door when the Prime Minster is forced from No. 10. But I guess we can all console ourselves that at least when he does take over Lord Brownlow will not have to worry about WhatsApp messages looking for a tap to pay for an expensive new wallpaper.
Spending £840 on a roll of wallpaper gets to the very heart of why this Government are so detached from the economic reality of the everyday lives of our constituents. Inflation is rising at a frighteningly rapid pace: this month it rose to 5.4%, the highest in almost 30 years, since March 1992, when it was 7.1%. But we have not reached the summit yet: Paul Dales of Capital Economics has said that inflation is now expected to hit 7% by April.
These abstract figures have a very real impact on people in difficult financial situations, and they often under-represent the true effect of rising inflation, as highlighted in an excellent Twitter thread by Jack Monroe, which I commend to the House. Monroe wrote:
“This time last year, the cheapest pasta in my local supermarket…was 29p for 500g. Today it’s 70p. That’s a 141% price increase as it hits the poorest and most vulnerable households.”
That rise becomes a pattern for many essential household items. The cheapest rice was 45p for a 1 kg bag; today it is £1 for 500 grams.
May I ask a quick question? Can the hon. Gentleman recall which of the following schemes rolled out since March 2020 he did not approve of: the job coaches or kickstart schemes; the restart schemes; the lifetime skills guarantee; the holiday activity fund; the household support programme; or perhaps we should just remember the furlough schemes that protected the jobs and livelihoods of millions of people throughout the United Kingdom? Did any of those schemes not help the Scots?
It is on the record that the SNP supported a number of those schemes. For example, the furlough scheme was hugely important, certainly at the beginning of the pandemic; about 13,000 of my constituents were involved in that scheme and it was something the SNP called for. However, we profoundly disagreed with the Government winding the scheme down too early, and there was such a lack of clarity on that; I know personally many constituents who lost their job in the intervening period from the Government saying it would be wound down to then extending it. The Government could have continued with a number of other schemes, too. We know fine well that as we come out of the teeth of this pandemic the economy is incredibly fragile, and my criticism, which I would reflect back to the hon. Gentleman, is that so many of these schemes were wound down far too early and that has led to the difficult financial pressures many of our constituents feel right now.
I was telling the House about some of the rising costs our constituents are facing in their average supermarket shop. Canned spaghetti was 13p and is now 35p, a price increase of 169%. These price changes will force more people towards food banks, and more people towards having to make that horrendous decision between heating and eating.
On top of the increasing price of food bills, energy prices are surging, delivering yet another devastating blow to families who are already struggling. Household energy bills were the biggest driver of inflation after Ofgem, the energy regulator, lifted the price cap on domestic gas and electricity. That meant that gas bills rose by 28.1% in the year to October, while electricity climbed by 18.8%. National Energy Action estimates that there are already 4.5 million fuel-poor households in the UK, which is nothing short of a disgrace, and if the cap rises, as is predicted, the number will rise to 6 million. Only two weeks ago there was an Opposition day debate in this Chamber and I was highlighting the rising cost of energy to Ministers, yet still, two weeks on, no action has been taken; indeed, if press reports are to be believed, a meeting between the Chancellor and the Prime Minister on this issue was cancelled last Wednesday because they were both so busy courting Tory backbenchers. When I met with Age UK and Age Scotland after their snap survey, it was revealed that 96% of their respondents were worried about their energy bills.
Again, these statistics have real-life consequences. I have heard far too many stories of people in my constituency moving their beds into their sitting room so they will only have to heat or light one room over the winter months. That an image not of Victorian Britain but of 21st-century global Britain.
My hon. Friend is making a very powerful point about the poverty faced by people in this current cost of living crisis. The all-party parliamentary group for terminal illness last year produced a report that pointed out that the energy costs for people diagnosed as terminally ill double when they are at home. When people are struggling anyway, that is an absolutely damning statistic for people with a terminal illness, yet the Government have failed to move on bringing forward faster access to benefits to support them. Does my hon. Friend agree that that is just a disgrace from this Government?
It is. I pay tribute to my hon. Friend, who very ably chairs the all-party group for terminal illness. It is one of the things that really sticks in the craw of many of us. My hon. Friend highlights some of the very real struggles facing people with a terminal illness. The idea that the biggest issue of the day—the cost of living crisis and spiralling energy bills, which people who are terminally ill are struggling with—is being overlooked at the expense of things like “Fizz with Liz”, and the Chancellor and the Prime Minister courting the Tea Room really is an absolute disgrace.
I thank the hon. Member for giving way; he is being generous with his time. On energy bills and the cost of living, does he agree that one of the great losses to these islands is the fact that the Government prevented more land-based wind turbine arrays which would have brought down the cost of energy significantly as the cheapest provider of electricity? That would have made a significant difference to energy costs.
I am grateful to the hon. Gentleman for that intervention. I agree that it is important that we invest in renewable energy. That is why we on the SNP Benches are fully committed to that. It is only a shame that the official Opposition have such a bizarre fascination with investing in nuclear, but perhaps he will reflect on that.
The current Tory austerity policies do absolutely nothing to relieve the suffering of people who are impacted by the cost of living crisis. In the last year alone, the British Government cut the £20 a week uplift to universal credit. Indeed, they refused to extend the £20 uplift to the 2.5 million disabled people on legacy benefits. That is subject to proceedings in the High Court at the moment. The Government battled against extending free school meals to the poorest children in society. We learned only at the weekend about the allegations that the then Secretary of State for Education, Gavin Williamson personally threatened Members of this House who dared to vote for that with the withdrawal of funding from their constituencies. The Government scrapped the triple lock for pensioners who already have one of the worst pensions in the OECD.
All of that is important, because those cuts only deepen and cement the inequalities in our society. They will impact the lives of the poorest people we represent for decades to come. The British Government must reflect on that. When people fall into destitution, it is other parts of the state, almost certainly councils, that have to bear those eye-watering costs. We know that destitution is bad for the economy. It is not good for the economy for people to be unable to afford their weekly food shop or heating bills. Let me be especially clear to the Government that a proliferation of foodbanks is not a sign of the big society; it is a sign of bad policy from people who think that spending £840 on a roll of wallpaper is somehow normal.
My hon. Friend is making a number of excellent points about the damaging nature of UK Tory policy. Does he agree that the benefit cap is one of those problems as well? Is he happy today to put on record the SNP’s support for the Poverty Alliance “Scrap the Cap” campaign?
I am grateful to my hon. Friend for that intervention. Yes, absolutely. The SNP has stood on successive election manifestos with a commitment to scrap the cap: both the benefit cap and the welfare cap. I am only disappointed that the SNP had to lead the charge against the welfare cap in a vote only a couple of weeks ago. Perhaps when people in Scotland are considering who best serves them, whether it is Westminster or the Government they elect in Scotland, they will reflect on that. My hon. Friend makes a very good point.
It is imperative that the Government bring forward solutions to address the cost of living crisis and lift millions of people from experiencing poverty this year, just as we have set out in the motion. The Government must introduce an emergency package to boost household incomes and reverse rising poverty levels across these islands. We want the Chancellor to launch a multi-billion-pound Brexit recovery fund to mitigate the worst, and growing, costs of Brexit.
Those solutions should go hand in hand with other suggestions to tackle rising energy prices. We need a one-off payment to low-income households, which could be identified by way of the council tax reduction mechanism. We must increase and extend the warm homes discount, delivered through customers’ bills and funded by the UK Government. We need the child payment, as seen in Scotland, to be rolled out right across these islands. We need the April benefits uprating to better reflect inflation rates and to reinstate the £20 a week uplift to universal credit which so many of our constituents described as a lifeline.
There is no shortage of suggestions to Ministers for how we can alleviate family income pressures, but there is, I am afraid, a shortage of urgency and energy on the part of a Government distracted by their own internal wrangling. I have a huge amount of respect for the Chief Secretary to the Treasury, but the fact that, on a day when we have another debate about the cost of living increase, the Chancellor of the Exchequer is nowhere to be seen raises a lot of questions about what he is doing.
In contrast to the cruel policies in Westminster, the Scottish National party Government have committed to relieving poverty wherever they have the power to do so. That is why we have doubled the Scottish child payment, rolled out 11 benefits—seven of them brand new—extended free school meals and are working actively to reduce poverty and inequality, and all the while Westminster undermines those efforts. However, the constitutional reality is that, with limited tax-raising powers, no borrowing powers and 85% of welfare spending still controlled in this place, those policies can only go so far when they are continually undermined by Tories and Tory Governments whom Scotland did not elect.
Since being elected four years ago, I have stood in this Chamber warning the Government about the impact of their policies that make life so much harder for my constituents in Garthamlock, Craigend and Easterhouse. When I make those pleas, it is not from a purely dogmatic or ideological point of view. I do so because every Friday morning at my surgeries I meet people who, because of the way life has panned out, rely on the safety net of the social security system, to which we all contribute and which is frankly no longer able to cope. I appreciate that a Tory MP in the home counties probably does not have much care for, or cause to interact with, the Department for Work and Pensions on a daily basis.
It is interesting listening to the number of fiscal policies mentioned that are so terrible and have led to the United Kingdom’s recovery being so poor. Can the hon. Gentleman then explain why every economist predicts that the United Kingdom economy is expected to show the highest growth and bounce back of any nation within the G7?
I ask the hon. Gentleman to reflect on the fact that the UK was one of the worst hit by coronavirus, perhaps due to the bungling of this Government in the initial days in locking down far too slowly.
One thing the hon. Gentleman has not mentioned in the course of his speech is the extent of the national debt. We have a debt-to-GDP ratio of over 100%, we have more than £2.4 trillion in debt and we are spending more on servicing the national debt than on the entire education budget—£55 billion. Will he not at least acknowledge that the extraordinary levels of debt incurred over the banking crisis and now the pandemic inevitably mean that the Treasury is unable to do straight away everything he seeks to have it do for our constituents?
The problem with the hon. Gentleman’s intervention is that he suggests that this is some issue the Government have just happened upon. His Government have been in power for 11 years, so the level of national debt is something they have a direct link to. He should reflect on that.
As I said, a Tory MP in the home counties—or indeed Shrewsbury—might not have much opportunity to interact with the DWP on a daily basis, but I do, and my constituents often tell me—[Interruption.] Mr Deputy Speaker, the hon. Gentleman chunters somewhat. I know he might be quite excitable, and he is probably envisaging this as some sort of on-screen job interview, but if he will calm himself for a moment, I can perhaps make a little bit of progress with my speech—[Interruption.].
I say to the Government that although the DWP does not often act very helpfully towards my constituents, it is clear from people back home in Glasgow East that the Government are out of touch and do not have the solutions for the big issues of the day. They say that a week is a long time in politics, and yes, for Westminster watchers and the chattering classes, defections, letters to the 1922 committee, Tea Room gossip and “fizz with Liz” are probably all very exciting, but for most of us, it just feels like groundhog day. The Prime Minister, the Chancellor and this whole Tory Government are simply not listening. They are not listening to charities and non-profits, which have repeatedly highlighted the cost of inaction, with soaring prices. They are not listening to the voices of Opposition Members, even though we were told that Brexit meant that Parliament would take back control. Ultimately, and worst of all, they are not listening to the people of Scotland and they are not acting when people need help most.
Inflation is rising, costs are soaring and time is running out for hard-pressed families. The Tories need to stop navel gazing and start acting to head off the cost of living crisis. Frankly, anything less is only a further dereliction of duty on the part of a Government whose focus is elsewhere. Yes, we can debate this tonight, but in reality, the time for talking has passed. Talk alone will not pay our constituents’ energy bills at the end of this month. We need to act now and the Government need to start getting on with the day job. I commend the motion to the House.
I am glad to have this opportunity to respond on behalf of the Government. The UK economy is roaring back to life following the unprecedented challenges that we faced during the height of the coronavirus pandemic. It may have escaped the attention of Scottish National party Members, but job vacancies have hit record highs while the unemployment rate has fallen sharply. Our GDP has rebounded. We are set to enjoy faster growth this year than anywhere in the G7, and our economy is now bigger than it was before the pandemic.
Job numbers are rising, unemployment is falling and the economy is back to its pre-covid level, but that has not happened by accident. The economy has been able to bounce back so strongly and quickly only because of the decisions made by this United Kingdom Government. Let me remind the House of those decisions. The £400 billion of direct economic support has protected millions of people’s livelihoods in every part of the United Kingdom, with the furlough and self-employment income support schemes safeguarding, in Scotland alone, more than 1 million jobs. The success of our vaccine roll-out has meant that we have retained the most open economy and society anywhere across Europe. And our plan for jobs is creating work opportunities and ensuring that people have the right skills to get into work.
Those achievements are underpinned by the fiscal strength and stability of our economic union. That is why, at the autumn Budget, we confirmed that the devolved Administrations are receiving an extra £12.6 billion of Barnett-based funding this year, taking total block grant funding to £77.6 billion.
In that glowing list of statistics that the Minister had prepared for him, does he have a figure for the current level of child poverty on these islands, and if not, why not?
What the hon. Gentleman misses is that a jobs-based recovery lies at the heart of this Government’s plan. If he cares to look at this Government’s record, as opposed to that of the Government in Holyrood, he will see that the United Kingdom Government outperforms Holyrood every day of the week on job creation, growth and stability, which, in the end, goes to the heart of all our constituents’ life chances.
Over the next three years, the Government are providing, on average, an additional £8.7 billion a year to the DAs on top of their annual £66 billion baseline. That funding equates to an average of £4.6 billion a year more for the Scottish Government, £2.5 billion more for the Welsh Government and £1.6 billion a year more for the Northern Ireland Executive. It will support the devolved Administrations as they shape the economic recovery and decide how best to invest in the vital public services on which people rely.
We are acutely aware of the cost of living challenges that people face. Inflation is expected to average around 4% this year, 2.6% next year and then to return to target by the end of 2023. It is true that almost every other developed economy is facing similar issues due to increasing global demand after the pandemic and a global spike in wholesale gas prices.
The Minister says that almost every other economy is facing similar issues, but, of course, other economies have not recently left the European Union. The British Retail Consortium has said that labour shortages—shortages of HGV drivers and warehouse workers—which affect the supply chain are one factor behind the increases in food prices that all our constituents are experiencing. What assessment are the Government conducting of the impact of leaving the EU on the huge increase in food prices in our supermarkets?
Contrary to that rendering of events, the challenges we face in relation to the supply of HGV drivers are those faced by countries across Europe. This workforce is predominantly elderly, and has been badly affected by the covid pandemic. Industries across the world, let alone Europe, continue to be affected by the same challenges that we all face of constrained supply and rising demand as the world wakes up from the pandemic. This has absolutely nothing to do with Brexit, and it is fundamentally misleading to suggest otherwise.
As I said to the House earlier this month, we are focused on easing the pressures caused by the cost of living wherever and however we can, and of course we are constantly considering what more we can do. I should remind the House that we are providing support, worth about £12 billion in this financial year and next, to help families with those challenges.
The Minister has said that the Government will do whatever they can to help people. I have raised this point before. The Government promised people who have been diagnosed as terminally ill that they would ensure that the six-month rule was moved aside so that those people could gain access to their benefits and survive this cost of living crisis, but nothing has been done. The Government are dragging their heels yet again. Will the Minister give a commitment now to taking this issue back and making sure that it is sorted out once and for all, so that those people who are dying, and their families, can have the support they deserve?
I recognise the passion with which the hon. Gentleman speaks in this place. I am happy to take away the issue to which he alludes and to look at it with my Department. However, the wider point stands: we are providing £12 billion this year and next. That is a huge package of support, targeted precisely at the issues that face this country and countries around the world.
To help working people, we cut the universal credit taper rate from 63p to 55p—that is a huge reward for making work pay—and increased the work allowance by £500 a year. That is a tax cut for nearly 2 million low-income families, worth £2.2 billion in the next financial year, or, on average, about an extra £1,000 in their pockets. Furthermore, from this April we will increase the national living wage by 6.6% to £9.50 an hour, benefiting more than 2 million workers across the UK. We have also frozen fuel duty for the 12th year in a row, which means that the average UK car driver will save about £1,900 compared to the level in 2010. All that builds on the help we have already provided elsewhere, such as the increase in the local housing allowance. We have increased it significantly Great Britain-wide, so that it stands at the 30th percentile of market rates, and we have made a commitment to keep cash levels at those higher rates in the future.
For those who needed extra help with their housing costs, we provided £140 million for discretionary housing payments in England and Wales this year; about 4 million people are being given help with their council tax bills; and we are investing over £200 million a year to continue the holiday activities and food programme for disadvantaged children in England. We are providing nearly £5 billion to help children and young people catch up on lost learning. On top of that, we are taking a range of further steps to relieve the financial pressures on the most vulnerable: for instance, we are expanding the Great Britain-wide warm home discount to about 780,000 additional households. In September we announced the £500 million household support fund to help vulnerable people throughout the UK with essentials such as energy, clothing and food bills this winter. Of course, we are also giving NHS workers throughout the United Kingdom a 3% pay rise in recognition of their service during the pandemic.
As I have said, the Government are striving to shield families from the rises in the cost of living, but as I also said a moment ago, the best anti-poverty strategy is a jobs strategy. That is why we believe that supporting, protecting and creating employment opportunities, and giving people the skills that they need, is economically right for this country. That vision is being turned into reality through our investment in the plan for jobs, which is benefiting people in every part of the United Kingdom.
May I make two points? One is about jobs. I think the Minister would accept that the kickstart scheme has been disappointing. The target was set at 250,000 jobs, but I think that only 100,000 have been filled so far. If I could draw his attention back to a point he made earlier about our economic performance and growth in GDP, he said that we were the strongest in the G20. But when we look at the statistics on the OECD website, between Q3 2019—pre-pandemic—and Q3 2021, we are the third worst performing country in the G20.
If we look at the Office for Budget Responsibility forecasts, we see that they are for 6.5% growth in 2021 and 6% growth in 2022. That is an incredibly strong economic recovery, and one of which we should be very proud. With regard to the Kickstart scheme, we obviously always want to encourage maximum uptake and we continue to work to refine that scheme and make sure it works to best effect, but it must be considered in the context of an unemployment rate that is now only just over 4%. We have a very tight labour market, and that very success is leading to some of the challenges that we face in getting people through every different scheme.
Given the increases in energy costs, can the Chief Secretary tell us how much extra VAT the Treasury is taking, what extra oil and gas revenues are coming in and how much extra is coming in from the increased price of petrol at the pumps? Why are the Government not using that money to mitigate costs for the 6 million households that will be plunged into fuel poverty when the cap rise kicks in in April?
I thank the hon. Gentleman for his question. The concept of some kind of VAT windfall is fundamentally misleading. VAT is charged at 5% on energy and if people are spending more of their disposable income on energy and less on issues that are taxed at the full rate, the Exchequer gets less money rather than more, so it is a net cost to the Exchequer.
We have doubled the number of work coaches and we have provided vital help for those who have been unemployed for over three months through the job entry targeted support scheme, which is worth £200 million. Of course, we are not just helping people into work: we are also supporting them to develop the right skills so that they can adapt and thrive in the job market. In the Budget, we committed to increasing skills spending in England by £3.8 billion over the Parliament, and the plan for jobs is therefore giving people the invaluable tools they need to succeed.
This is an important motion as it gives the House an opportunity to debate the cost of living crisis. It would be churlish to ignore some of the good measures that the Government have brought forward, but in talking about support for people to get into work and for those in work, there appears to be some contradiction with the proposed hike in national insurance. There seems to be some prevarication today around that policy and the suggestion that the Government may change tack. Is the Chief Secretary in a position to update us on that?
It is good to see the hon. Gentleman back in the Chamber. The reality is that nobody came into politics to raise the burden of tax on our society. We all feel that keenly, but we are equally clear that we face a £400 billion bill for covid costs. We have a clear programme of targeted investment in the NHS and in social care, designed to alleviate the backlog in treatment and the longstanding challenges that we know we face with an ageing society. We owe it to people to be candid that there are no easy solutions to how to pay for that. I certainly do not want—and I know the Chancellor does not want—to put more borrowing on to the books, when we know that those are structural challenges that need to be paid down, and therefore a tax increase is the most sensible and honest way for us to pay for that. In that spirit of total candour, that is why we are bringing that forward, and we believe that it is the right thing to do. The sadness is, of course, that the Opposition did not support us in that, and persistently criticise us for not spending enough on the NHS when they will not will the means for that investment.
Direct financial assistance, help to find work and support for people in every region and nation of the UK are just some of the ways in which the Government are aiming to secure a more prosperous future for this country. I note that the motion tabled by David Linden calls for the Government to spend more. I should remind him that the devolved Administrations already have the power and the money to make spending decisions of their own. The Scottish Government have significant tax and welfare powers, so they can choose to raise more tax if they want to spend more on welfare.
For our part, we have shown unequivocally that we are not afraid to make the big decisions to do right for the people of this country. That is why we are investing £600 billion in the public sector over the course of this Parliament, on our health service, our education system, and securing our borders. That is why, at the spending review, we took the total we have committed to the economic infrastructure to £130 billion. That is why, to respond the hon. Gentleman’s point, we are spending more on the NHS as a result of the health and social care levy as well.
The Chief Secretary to the Treasury talks about the big decisions that the UK Government have taken. Of course, part of the reason they can take these so-called big decisions is that they have the ability to borrow; he just talked about £600 billion. He knows fine well that in Scotland we do not have those powers. If he wants people in Scotland to have them, why will he not give Scotland the borrowing powers to do so?
This Government have worked very closely and co-operatively with the Scottish Government in Holyrood to make certain that we can, together, provide the most effective, targeted package of support for all our constituents. I have talks with Kate Forbes, the Scottish Government Finance Minister, coming up later this week as part of the fiscal framework. We continue to discuss all the issues that fall within the relationship between Holyrood and Westminster, and we do so on a genuinely open and constructive basis. We are quite clear that we have provided the devolved Administrations with a huge—indeed, a record—Barnett settlement precisely to make sure that all contingencies thrown up by the pandemic can be covered.
The broad context of our need to deliver the right package of support does not come at the expense of our commitment to safeguarding the country’s finances. As I have said to the House before, reckless promises are the privilege of opposition; tough choices are the task of parties that are in government. We cannot fritter away our achievements on unfunded pledges. That is particularly true at a time like this when our level of debt means we are vulnerable to shocks, including changes in interest rates and inflation. In fact, a sustained one percentage point increase in interest rates and inflation would cost over £22 billion by 2026-27. Given that this country has suffered two so-called once-in-a-generation shocks in just over a decade, the case for building a stronger economy with the headroom to guard against shocks is clearer than ever. We must act to build on that headroom now, because to fail to do so would be folly.
I recognise, as do all my ministerial colleagues, the very real pressures that are facing families in every part of the United Kingdom right now. I have set out the comprehensive action we are taking to address those challenges. That is why, as my hon. Friend Douglas Ross said, it is so disappointing that Nicola Sturgeon’s first priority, as the omicron wave eases, is not the cost of living but rather another divisive independence referendum. The SNP’s record of failure in government stretches back years. Before the pandemic, the SNP presided over the lowest rate of job creation in the United Kingdom. Under the SNP, Scottish schools have plummeted down international league tables, denying children a good education. Scotland has the highest drug death rate in Europe, tripling on the SNP’s watch.
Now, instead of supporting Scotland to recover from the pandemic, here we are, on an Opposition day, with the SNP again fixating on issues with the negativity that has become its hallmark. The SNP has entered into a nationalist coalition with the Scottish Greens, taking on extreme policies that will be hugely damaging for Scottish workers, in exchange for pushing ahead with its plans for that divisive second referendum. It is more focused on the break-up of our United Kingdom than on supporting Scotland to recover from the challenges the pandemic has created. By contrast, throughout this pandemic, the United Kingdom Government have taken the difficult decisions necessary to steer the country through the crisis we have faced. We will continue to strive to secure the better and more prosperous future that the people of this country deserve.
May I say how pleased I am that we are having this incredibly important debate today? While Parliament has been hopelessly paralysed by the Prime Minister’s refusal to do the decent thing and resign, I hope that the debate allows us an opportunity to discuss the human reality of this Government’s cost of living crisis.
Up and down this country, people are facing the anxiety that comes from worrying about whether they can pay their bills and heat their homes. Having to decide whether to eat or heat is an awful indictment of Britain in the 2020s. If that decision has to be made by one person, that is one person too many, but, under this Government, millions of people are having to make that decision. Moreover, there is total inaction; there is nothing to say. There is also nothing in this light parliamentary timetable to help. The Minister himself, in the near 20 minutes that he spoke, gave nothing to help families in this country in the cost of living crisis. The Government could have tabled an amendment to the motion—I am sure that David Linden would have allowed it—for us all to vote for and back to help the people of this country with the cost of living crisis, but we have radio silence. Because of that inaction, more and more face hardship and worry.
Inflation stands at more than 5%, a 30-year high. Energy bills are to rise by 40%—on average by £700 per household—shortly. The average UK worker is still not any better off than they were when this Government took power more than a decade ago. The Chancellor is planning the largest tax hike in living memory, taking the tax burden on working people to its highest since 1950. What a record that is: a high-tax, high-inflation, low-growth Tory party. This weekend, we were led to believe that the entire Cabinet would get behind stopping the planned national insurance tax rise, but what did we hear today? We heard the Chancellor turning against his own national insurance hike by calling it the “Prime Minister’s tax”. That is a whole new definition—the Chancellor of tax-dodging. Nobody in the country is buying it. The Government should bring the question back to this House if they want to vote the national insurance rise down.
The human cost of the situation is stark. In the past year, Citizens Advice Scotland has seen a 38% increase in the number of people coming to it for advice about being unable to pay their mortgage. The figure is much higher for those unable to pay their rent. Polling conducted on behalf of the same organisation found half a million Scots cutting back on their food spending in order to pay their energy bills this winter—before those huge rises. What is worse is that official statistics on inflation do not capture the full extent of the difficulty facing families, especially those on low incomes. The food blogger, Jack Monroe, who rose to fame with recipes showing how to cook family meals for less than £10 a week, highlighted that on social media over the weekend. They gave examples of the cost of the cheapest pasta in the local supermarket rising by 141% in the past year, the cost of the cheapest bag of rice rising 344% and the cost of baked beans rising 45% year on year. At the same time, those on the lowest incomes have seen universal credit cut and their budgets tightened even further.
To make matters worse, as the hon. Member for Glasgow East mentioned, the costs of filling up the car have risen to their highest level ever and, while they rise like a rocket, they fall like a feather, needlessly costing families much more. Then we have Brexit infiltrating the supply chains, making it much more difficult to get food into the country, increasing costs in our supermarkets. That is the reality not of a global market, but of this Government’s decision making. Families are working every hour under the sun but are still unable to make ends meet, and the position is getting worse, not better.
I am grateful to my constituency neighbour for giving way. He is talking about the price of food in the supermarket. Earlier, he will have heard me put to the Minister the problems identified by the British Retail Consortium with labour shortages affecting the food supply chain. Unless we were watching the BBC, we will all have seen the queues at the Kent ports over the weekend. What assessment has the Labour party made of the impact of Brexit on food price increases, and what does the Labour party intend to do about the problems of labour shortages and supply shortages caused by Brexit?
I thank my constituency neighbour for that question. I hope that she watched with great interest the speech of the leader of the Labour party just a few weeks ago, and, indeed, the other speech he made before Christmas about making Brexit work. The reality is that this Conservative Government have given us a position whereby Brexit does not work. We have a thin deal that we said would fall apart, and it is falling apart. What we have to do is to get into power to fix the problems with that and to build on that relationship. That is the reality of where we are.
I listened with interest to the Minister not answering the hon. and learned Lady’s question about HGV drivers and the cost of food and supply chains. He rightly said that there is an ageing workforce, but that shows that the Government have not planned for the medium to long term in that regard—it is as if everybody just got older overnight, rather than there being some plan. It sums up the Government that they have not had the foresight to see some of those problems coming. None of the promises that the Brexiteers opposite made to us about sunny uplands have come to pass; indeed, the opposite has come to pass, as we can see in the supermarkets and in prices themselves.
Those of us elected to this place owe it to the millions of people across the country who face such hardship to do everything we can to alleviate and change it. In the UK in 2022, nobody should have to choose between heating and eating. The Government have shown no compassion and not even pretended to care. Let us remember that they voted to cut the £20 a week universal credit uplift for the poorest in this country and refused to feed school kids in the holidays. The only response to the crisis from the Government so far, in all the noise of partygate and everything else, was when they snuck out a £4.3 billion fraud write-off from covid funds and business loans, which was branded “nothing less than woeful” by their very own anti-fraud Minister, Lord Agnew, shortly before he resigned at the Dispatch Box a few hours ago in the other place. Maybe the Minister would like to do the same this afternoon: get to the Dispatch Box, resign, grab his folder and suitcase full of wine, and head for the hills. Any Minister with any kind of morality would be doing just the same thing.
I am pleased that the SNP has called the debate, but it is not a bystander in this crisis either. The SNP is the Government in Scotland and has been for 15 years. A 33-year-old today, struggling to feed their family while paying their energy bills, has spent their entire adult life under the Scottish National party Scottish Government. Such a person might wonder why the SNP did not support legislation put forward by Labour colleagues in Holyrood to enshrine as a human right the right to food. Perhaps we might be able to find out this afternoon why not.
Parliamentary time will be taken up “in weeks” with legislation for another referendum. People are having to choose between heating and eating, but that will be the SNP’s priority in Parliament and elsewhere for months. I accept that Parliament has the capacity to do other things, but nobody should be under any illusions. All the oxygen in the vacuum will be taken up in Scotland with another referendum or the thought of another piece of referendum legislation. That is the reality of what will happen. With the paralysis in this place, the Scottish Government are obsessed by what gets them out of bed in the morning, rather than the real, everyday issues of Scots.
While the hon. Member is on the action of the Scottish Government, I presume he is going to commend them for bringing forward the £20 a week child payment as one way to help to mitigate the poverty being imposed by Westminster. Earlier he said that we all have a duty in this place to try to help people with the cost of living and energy crisis. In which case, why did Labour vote for the Nuclear Energy (Financing) Bill, the impact statement for which said that it could add up to £63 billion to household energy bills? How on earth is that helping people with the energy crisis?
What a valuable and timely intervention that was, because I was just about to talk about the child payment. Indeed, we campaigned for the £20 child payment for some time in the Scottish Parliament and were delighted that the Scottish Government eventually introduced it. However, it is a key, targeted intervention that helps to address child poverty, so what we would like now—all the Scottish charities are saying this—is for it to be doubled to £40 a week.
I hear hon. Members behind me asking from a sedentary position what we would cut—which is surely the same budget dilemma facing the Government that they have just been arguing about. What I would do is this. I would not spend money on an independence referendum; I would feed hungry Scottish children instead. Such a move, Mr Deputy Speaker—[Interruption.] SNP Members seem to have woken up. It tells you all you need to know about how Scottish politics works that when this Government are in total disarray, rather than turning their guns on them, they are turning them on the Labour party. Such a move to double the Scottish child payment—[Interruption.] “Where would you get the money from?”, they keep shouting. Such a move would take 80,000 Scottish children out of poverty overnight, so let us find the money indeed, with all these vanity projects and the wastage we have seen in Scotland.
The hon. Member talks about the SNP turning our guns on the Opposition; perhaps if he was not so utterly thirled to trident missiles, we could find the money to lift Scottish children out of poverty. While the Labour party remains thirled to Trident, we cannot do it.
Unfortunately, we on the SNP Benches have to turn our guns everywhere because there are very few guns behind the hon. Gentleman. He is focusing on social security and what we can do—I agree with him about how we can alleviate poverty and inequality—so will he tell us from the Dispatch Box that the next Labour manifesto will commit to the abolition of the welfare cap, about which Labour had nothing to say two weeks ago?
There was not a vote on the welfare cap a few weeks ago. It was about giving more money to the poorest people in this country and SNP Members know that. I take umbrage with what the hon. Gentleman said about the number of people on the Labour Benches, because the criticism we always hear during SNP Opposition day debates is that the Labour party takes up too much time. We leave most of the time for SNP Members to speak and that has always been the case. SNP Members constantly complain that they do not get enough time in this place; they will get as much time as they like today.
I was delighted by that intervention; let me repeat my paragraph. Young children and families in Scotland might be wondering why the Scottish Government will not listen to charities or, indeed, to Scottish Labour’s policy and increase the Scottish child payment to £40 a week. SNP Members cry, “Where would we get the money from?” Such a move would lift 80,000 Scottish children out of poverty and could be done tomorrow under the powers of the Scottish Government. They are wasting money on ferries, Prestwick and vanity projects. The underwriting of the Gupta organisation puts half a billion pounds on to the taxpayer of Scotland. That is what we should focus on.
The Scottish Government passed their budget last month and pushed incredible cuts on to local authorities. They then turned round to those local authorities and said, “If you want the money to run local services, put it on council tax.” Nothing affects Scottish people more than their having to pay massively increased council tax bills because the Scottish Government are slashing the budgets of local government.
There is no better example of dither and delay than the devolution of welfare powers. In 2016, we agreed on a cross-party basis to the devolution of a whole host of welfare powers to the Scottish Parliament. Indeed, in essence the Scottish Parliament could now create its own welfare system if it implemented the policies. Six years on, the Scottish Government still delay the full implementation of the policies. In fact, they will take until 2025 to take full control of the devolved powers. It is important because with skyrocketing energy bills and increasing child poverty, the powers could be used to give, for example, a supplement to the winter fuel payment to help pensioners who are stretched by increased fuel bills. That is what should happen in respect of the changes to welfare powers in Scotland, but it cannot, because the welfare powers have not yet gone through as they should have.
We know that the best way out of poverty is the creation of highly skilled, highly paid jobs, so I must give credit to the SNP Scottish Government because over the past 15 years they have created a host of highly skilled jobs in turbine development, in the construction of ferries and in steel manufacturing. But none of those jobs have been in Scotland: they have been in China, Turkey, Poland and elsewhere. The decisions that the Government make have a fundamental impact on the way we deal with things in Scotland. The newly announced Scotland projects could generate billions of pounds of economic activity in Scotland, so every single job created should be in Scotland, with fabrication plants, British Steel and others.
Of course, as the cost of living crisis develops, the Prime Minister faces some difficulties of his own. Although much of the country is about to spend all their income from their jobs on energy, the Prime Minister is spending all his energy on saving his job. It seems that the choice in No. 10 is not so much about heating or eating but about whether it should be red or white. Little does the Prime Minister know that the cost of living crisis will affect him as well as everyone else in the country. Will the Minister tell us how much more a suitcase of wine from the Co-op will cost next year than it did this year?
As the Government party through the night, Labour offers a serious solution and leadership on the crisis. While the Government are hopelessly distracted by the chaos of their own making and more focused on infighting than on tackling people’s energy bills, we are calling on the Government to address the situation now. They could bring in a motion now to sort out this problem, with fully funded measures to reduce the expected price rise in people’s energy bills in April through a VAT cut on home energy bills that would save most households £200 or more, and targeted extra support for the squeezed middle, pensioners and the lowest earners, who would receive £600 off their bills, paid for by a one-off windfall tax on the North sea oil and gas producers who have profited from the price rises. Under Labour’s plan, every household in Scotland would save more than £180 off their energy bills, and 800,000 households in Scotland struggling with the cost of living would get an extra £400 in additional support. That is nearly £600 for those hardest hit by the energy price rises—critical money into the pockets of hard-pressed Scots now.
While everyone is dithering and delaying as we talk about new referendum Bills and why the Prime Minister is more concerned about his job, Labour proposes genuine action that would help families pay their bills over this most difficult year. That is the difference that Labour and leadership can make, and we will make it in power. With the support of the people of Scotland and those across the United Kingdom, that is exactly what we plan to do at the next election.
I will begin by picking up a few remarks made by David Linden in opening the debate. First, he criticised the Chancellor for not being here. I apologise for any harm that this does to his career, but I must say that I am delighted that my right hon. Friend the Chief Secretary to the Treasury spoke for the Government in these opening speeches. It did irk me slightly that the hon. Gentleman felt he should highlight that the Chancellor was not here, because I remember being in Holyrood in the Scottish Parliament just a few weeks ago when—[Interruption.] SNP Members can laugh at this if they want, but we were discussing kids dying at the Queen Elizabeth University Hospital, and I led for the Scottish Conservatives, Anas Sarwar led for Labour and Alex Cole-Hamilton led for the Scottish Liberal Democrats. Every party leader turned up to that debate with the exception of Nicola Sturgeon, who is the local MP in Glasgow and was the Health Secretary when that hospital was created. She has many questions to answer, but she could not even turn up to a debate about that. Not only that—she could not even be bothered to vote. When SNP Members pick fights and say who should or should not respond to these debates, they should remember what their own leader does in Holyrood.
Secondly, the hon. Member spoke about groundhog day. We are in groundhog day in Scotland because, in the run-up to another party conference and elections, we have got Nicola Sturgeon and the SNP yet again speaking about Scottish independence. She was on the TV yesterday saying that she is putting civil servants to work to get ready to fight the case for another independence referendum. Businesses in Scotland are still struggling as a result of restrictions put in place by the SNP. Even Pete Wishart, who is no longer in his place, said it was a fair point that they went too far before Christmas, yet Nicola Sturgeon thinks that now is the right time to recharge her efforts to separate Scotland from the rest of the United Kingdom. That is the wrong focus, and it is groundhog day all over again.
Finally, the hon. Member for Glasgow East spoke about the economy and currency. The SNP Benches are very full, so I want to ask SNP Members this once more. They all support independence and want to separate Scotland from the rest of the United Kingdom, so who on the full SNP Benches can tell me what currency an independent Scotland will have? I will give way to Steven Bonnar, who put up his hand—we stand up in this place.
The Scottish pound—there we go. That has answered all the problems. There are no concerns about what the Scottish pound would be or when it would be introduced. I think that the muted response of the hon. Member’s colleagues tells him that that was not the best intervention to make. Yet again, none of them can answer that question. I have asked them many times before, but none of them can credibly say what currency an independent Scotland would have. I think that is telling.
They are all excited now. I will give way to Hannah Bardell in a moment, but we are speaking about the cost of living crisis and the SNP leader in Scotland wants to start the campaign to separate Scotland all over again. If Scotland were to separate from the rest of the United Kingdom—which I hope never, ever happens—surely the SNP can tell us what an independent Scotland’s currency would be.
I am sure the hon. Gentleman will be pleased to know that in the run-up to the independence referendum in 2014, we offered the public in Scotland more information about the currency alone than his party offered voters across the UK on the whole Brexit debate.
I note, having asked the hon. Lady to tell me what currency an independent Scotland would have, that she failed to do so. She did, however, mention the White Paper, which was very detailed. It said that oil would be worth $114 a barrel. I am not sure that oil ever achieved that figure; it is certainly not worth that much at the moment. I really do not think that the White Paper is a strong argument for the SNP to focus on, but—
Order. I know that the hon. Member is having fun, but this is about the cost of living increase and not some possible referendum in Scotland, so could we get back to the subject matter, please? [Hon. Members: “Hear, hear!”]
SNP Members are cheering because they are hoping that I move on very quickly. Like any good official, I will follow the rule from the referee and agree to do so. However, I think that many people in Scotland will be watching and will have heard that not a single SNP Member was able to answer such a crucial question for Scotland’s future.
I welcome the opportunity to discuss an important issue for my constituents in Moray and for constituents across Scotland and the United Kingdom. Households are struggling with the rise in global energy prices; with inflation as a result of spending decisions taken by Governments across the world, including this Government, who have invested £315 billion to get us through the global pandemic; and, of course, with rising prices of essential items such as food because of continued supply chain issues, again as a result of the pandemic.
I have given way quite a few times—[Interruption.] Okay, I am happy to give way, but my answer to the hon. and learned Lady will be that, as the Chief Secretary to the Treasury has said, this is a global problem. We are seeing problems with shortages—[Interruption.] She says that she has not asked the question. I am about to give way, but I am pretty sure that her question is going to be about the British Retail Consortium and the points it has made, because she has asked it three times already.
Clearly the hon. Gentleman, having been described as a lightweight by his colleagues, is planning a future career as Madam Zelda looking into a crystal ball, because he seemed to think that he knew what I am going to ask.
The hon. Gentleman’s constituents in Moray, like mine in Edinburgh South West, will have noticed a very significant increase in food prices in supermarkets. The British Retail Consortium—I know how much he loves British things—says that labour shortages, including shortages of HGV drivers and warehouse workers in the supply chain, are contributing to those increased prices. Many commentators have said that the red tape on food imports from the EU is contributing to those increases, too. In the interests of the hon. Gentleman’s constituents and mine, and given his lofty standing—in the Scottish Conservative party, at least—will he tell us what request he has made of the Treasury to assess the impact that leaving the European Union in the middle of a global pandemic will have on the cost of living crisis?
It turns out that that was exactly the same question and the same point that the hon. and learned Lady has already made three times. She mentions the British Retail Consortium, but she also has to accept that there have been labour shortages and driver shortages in other parts of the European Union, the United States and many other parts of the world. I understand that it fits her narrative to paint her question in that way, but we also have to remember that these are global issues that Governments across the world are having to address.
Governments in this country have to think carefully about the effect that their policies have on family budgets. That is why I was amazed, but sadly not surprised, that there was not a single mention in the SNP motion calling on the nationalist coalition of the SNP and the Greens in Holyrood to take some decisions itself that could make an immediate and direct impact on the cost of living in Scotland. The SNP motion that we are debating makes reference to tax rises, which is very interesting given that for the past decade and a half SNP colleagues have been running the country that is the highest-taxed part of the United Kingdom. [Interruption.] Angus Brendan MacNeil says it is about the rich, but it is not; it is about the 1.1 million Scottish taxpayers who earn more than £27,393. That is not rich; that is 1.1 million people across Scotland. Those who earn just over £27,000 are not the rich; people across Scotland are being punished by SNP decisions.
It is reassuring that at least today the mantra from the Tories is that Scotland is the highest-taxed part of the United Kingdom, because sometimes we are told we are not doing anything with our tax powers.
To go back to the point of what we are doing for people on low incomes, the hon. Member will know that the regressive tax hike in national insurance will take away 20% of the pay increase for a band 5 nurse in Scotland. Does he support the Government’s plans for a tax hike in national insurance?
I have listened carefully to the hon. Gentleman, and I make this point: the tax rises that his Government are introducing in Scotland have made Scotland the highest-taxed part of the United Kingdom, and that is affecting nurses, teachers and police officers. That is who it is affecting right now in Scotland.
We have been clear, as my right hon. Friend the Chief Secretary to the Treasury said, that the Government have taken a difficult decision to focus that vital funding on health and social care—an issue that has not been grappled with for decades by parties on either side of the Chamber. It certainly has not been grappled with by the Scottish Government. Sometimes difficult decisions must be taken to ensure that we have a health service and support for older people in this country that has not always been available.
The hon. Member for Glasgow East mentioned local government, and I suddenly got excited, because I thought we were finally going to hear an SNP politician standing up against the disastrous cuts that Nicola Sturgeon and the SNP are imposing on local government, but he said “local government”—Hansard will show this when the report is published—and then did not say another word. The SNP has the highest ever block grant since devolution. Since 1999, more money than ever before has been going from the UK Government to the Scottish Government, and what do they do to local councils? They cut the local government budget by £371 million. That is a cut from the SNP Government to local government, when the UK Government are giving them more money than ever before to spend.
I will give way in a second, if the hon. Gentleman will show that he stands up for his constituents, just like SNP council leaders have stood up to the Scottish Government and said, “That is a cut too far”, and that they should change their view on the £371 million cut to local government.
I know the hon. Gentleman is used to running the line on a Saturday, but we are not all going to play his game this afternoon. On the issue of local government, will he pass comment, given that he has the floor, on Councillor Tim Eagle from his council in Moray, who suggested that free school meals, free tuition and free bus travel for under-22s are somehow “little treats”?
The hon. Gentleman knows that that was taken completely out of context. If he wants to repeat to the House the entire comment that Councillor Eagle made to the Moray Council committee meeting, he is welcome to do so. I gave way to the hon. Gentleman, so I will do so once more: does he agree with the SNP council group leaders who are saying to the SNP that the cuts are too much?
I am grateful for your generosity, Mr Deputy Speaker, and I will begin to conclude my speech.
It is interesting that the Scottish National party uses such tactics when David Linden, who introduced the debate, cannot stand up against the party in Holyrood and say that its cuts have affected the cost of living in Scotland.
The hon. Gentleman will be cognisant of the fact that Norway has an oil fund that is worth more than $1 billion, while Scotland’s oil fund is worth absolutely nothing on his party’s watch. Does he regret the fact that the UK Government have mismanaged Scotland’s resources for decades?
I have given way to the hon. Gentleman. That money was provided to support individuals, families and communities across Scotland. No matter how the SNP tries to paint it, its position on oil and gas is fundamentally different from what it was only a few years ago, and people in the north-east can see that and what it means for their jobs and communities. On the topic that we are discussing today, they can see what it means for the energy bills that they will receive in the weeks ahead.
I have given way a lot, and I realise that your patience is being tested, Mr Deputy Speaker.
I am grateful for the opportunity to discuss all these important issues. I only hope that SNP Members reflecting on today’s debate will begin to ask serious questions of their Government in Holyrood, as they have been in power for a decade and a half and have many of the tools, levers and, indeed, the funding to deal with this issue right now in Scotland.
It is a pleasure to contribute to this important debate. May I begin by thanking my hon. Friend David Linden for securing it and, indeed, for introducing it in such an impressive manner?
I should like to put on record my disappointment that the Government have done very little to counter misplaced rhetoric that falsely links net zero commitments to the cost of living crisis. We have heard a great deal about oil and gas imports, and it is true that 87% of the price cap increase is due to increased gas prices, with the remainder due to supplier failure. The green transition is not the cause of rising energy bills. Inflation, reflecting the confluence of factors at play in the crisis, is running at 5.4%—the highest it has been in nearly 30 years. Worse, contrary to Government rhetoric, wages are not keeping up, which means a decline in real wages for UK households.
Sky-rocketing fuel bills, and the challenge of that to households and businesses alike, is a key element of the crisis. To help them both in the immediate term, I urge the Government urgently to consider that short-term measures be taken to alleviate the cost of those bills. Members across the House have in recent weeks raised the merits of a temporary VAT cut on energy and the Government must consider that. Both the UK and Welsh Governments should be looking to expand support to in-need households through existing channels, whether universal credit or the winter fuel support scheme. Finally, in the short term the Chancellor should reconsider the merits of planned tax rises in the new financial year. The national insurance hike has already been discussed in detail; that would harm many of my households in Ceredigion and come at a time when costs of living are rising.
The hon. Gentleman represents a rural constituency, as I do; I represent one of the vastest and most remote constituencies in the UK. As well as household costs, if the price of petrol and diesel goes up, as we are pretty sure it will, that will in turn impact on my constituents, some of whom are trying to work on a very tight, balanced budget. If they get the household heating fuel bill and the extra cost of getting the kids to school and everything else, that will be a pretty nasty vicious circle.
I thank the hon. Gentleman for that intervention. Like him, I represent a rural constituency, where concern about rising petrol and diesel costs is bearing down heavily on families. For people in Ceredigion private cars continue to account for the overwhelming majority of commutes. Indeed, in Wales as a whole about 80% of people have to commute by car. Sadly, for people in Wales, and particularly in rural areas, there is no short-term alternative to using private cars, so those rising fuel costs are having a devastating impact. Of course the long-term solution would be greater investment in public transport infrastructure, but, as an MP representing a rural area, I know how devastating cuts to bus services have been in the last decade so, sadly, for the time being using the bus instead of a private car is not a viable option.
The crisis has also demonstrated the need for longer-term action, such as action to boost productivity, and green solutions to help address the energy supply emergency and in so doing to alleviate stagnating living wages. We can ease the crisis in the long term by reducing energy demand. We have discussed that often in this place and debates have also been held in the Senedd in Cardiff. If we reduce fuel and energy demand, we also reduce fuel bills.
A good place to start is with the simple measure of improving household heating efficiency. At the autumn Budget I called on the Chancellor to make a £3.6 billion investment over 10 years, in conjunction with the Welsh Government and the private sector, to improve home insulation in Wales. It is well-documented that the quality of Welsh housing stock is poor by both British and European standards, and its energy efficiency is, sadly, a sight to behold. Introducing measures to improve the heat and energy efficiency of our homes would not only boost employment in areas that are desperately in need of levelling up through the retrofitting schemes, but would also address fuel poverty. A report by the Future Generations Commissioner for Wales has suggested that with such a package of investment over 10 years we would be able to end fuel poverty in Wales, producing average annual savings of £418.
One great problem is inequality —there is always a fuel poverty issue in good times as well as bad times in the United Kingdom. I was Chair of the Energy and Climate Change Committee. We visited the Technical University of Denmark in Copenhagen and a Conservative member asked an academic there about fuel poverty in Denmark; the response was, “In Denmark, folk can afford stuff.” There is a structural problem in the UK in that the problems are not always acute but are always there.
I agree with my hon. Friend. He makes an important point. Those who had the fortune of being able to listen to the debate in the Welsh Grand Committee last week will have heard that this matter as it relates to Wales was looked into in great detail. Sadly, we have a situation where, too often, I can walk to a petrol station in London, for example, and the price of energy, of petrol from the pump, is the same or cheaper than it is at a place in Felinfach in my constituency, and yet London has the benefit of the tube, the overground and regular bus services, whereas Felinfach is lucky to have two services a day.
To conclude—I have spoken for some time already—we must also bolster local renewable energy supply if we are serious about tackling the longer-term issues of our fuel and energy supply. In closing, I raise Plaid Cymru’s call for the devolution of the management of the Crown estate in Wales. Simply put, with many colleagues from Scotland in attendance this afternoon, if Scotland can, why not Wales? Devolving the management of the Crown estate in Wales would bolster Welsh revenues, increase our bargaining power with the private sector and support renewable energy deployment, all the while ensuring that the communities in which this energy is generated will be where its benefits are enjoyed the most.
In sum, the Government need urgently to do more to tackle the immediate crisis. The cost of living crisis is worsening, not abating, and households and businesses need support now—but let us not forget about the longer-term action that is required if we are not to find ourselves in this situation again in future.
I am grateful to the SNP for calling this debate. As parliamentarians, it is absolutely right that we should debate in this Chamber the issues that are of most importance to our constituents when those issues are high on the political agenda, so I am grateful for the opportunity to talk about the cost of living and what we can do about it.
In the opening remarks of the Chief Secretary to the Treasury, we heard the long list of targeted assistance that the Government are providing. I will come back later in my speech to dwell on some of those. Overwhelmingly, however, the best solution for cost of living squeezes is high levels of employment and increased levels of pay when in employment. It is because of the Government intervention in response to the covid pandemic that we have an employment field that is so strong at the moment.
The Government intervened right at the start of the pandemic to save jobs through the furlough scheme, which supported more than 1 million jobs in Scotland alone, and other schemes, from the self-employment income support scheme—I refer to my entry in the Register of Members’ Financial Interests—to the business bounce back loan scheme to CBILS, the coronavirus business interruption loan scheme. Those saved thousands of jobs, including in the business of which I formerly had the honour to be managing director. Without a CBIL, that company—which employs more than 1,000 people, including several hundred in Scotland—would likely have gone to the wall. It has not and is now growing again—probably because I am no longer directly involved in it—and it is creating many hundreds more jobs, here and in America.
The impact of all that is that we did not suffer from 12% unemployment, which was the estimate of economists at the time. Now, as we leave this dreadful pandemic behind us—I hope—we have 4.2% unemployment throughout the country. In my constituency, it is at about 3.2%. Instead of having a jobs crisis in which people need jobs, the crisis in Broadland is the lack of people to fill the jobs available as our businesses grow.
It is always better to have good jobs with rising wages —which I will come on to—than to rely on a statist solution of increased benefits under universal credit, with the exception of the taper rate. The reduction of the taper rate from 63% to 55% should make good tabloid headlines. All those involved in that part of the economy know the importance of that injection of about £2 billion into the pockets of those who are least well off, as they move from benefits into employment. That is incredibly important, and I am grateful to the Government for focusing their firepower on the taper rate, rather than on the attention-grabbing £20-a-week part of universal credit, because that is where it can do most good.
There is now more employment in this country than in pre-pandemic times—over 400,000 more jobs—and we should celebrate that, but employment is only the first issue. The second is the amount people are paid when they are employed. I have already referred to the universal credit taper rate, and we should not underestimate how hugely important it is, but the other factor is the hourly rate people receive for their work.
The hon. Gentleman is right that it is not so much about jobs as about earnings. Does he think the average worker would be better off in the UK, or in one of the Nordic countries, such as Norway or Denmark?
There is a trade-off between earnings and taxation: what people get to take home. I do not have the data, and I confess I do not know the full tax rates in Nordic countries, but I can say that the hourly rate in this country has risen consistently under this Government because of the national living wage—a Conservative Government development. The most recent rise of 6.6%, to £9.50, well above the forecast average inflation rate of 4% for the rest of this year, is the latest in a long line of above-inflation hourly rate rises under the national living wage.
From my local experience, I see the localised wage pressures to attract new staff in my constituency. Numerous businesses I have spoken to have told me they are raising their hourly rates above minimum wage to attract good new staff. There is a whole swathe of businesses, like the one I had the honour previously to lead, where, although the hourly rate is not the national living wage, it is in some ways pegged to it. The national living wage has a positive effect on hourly rates right across the economy.
The Living Wage Foundation has classified a living wage as an hourly rate of £11.05 in London and £9.90 outside London. That is significantly higher than the minimum wage set by the Government—it was George Osborne as Chancellor in a former Conservative Government who changed the branding from national minimum wage to national living wage. Does the hon. Gentleman agree that the Government should support the Living Wage Foundation and the rates it independently sets?
I am grateful to the hon. Gentleman for that intervention. The Government are on a journey to get the national living wage to two thirds of the median income, and they are making good, above-inflation progress to get there. We have to balance the needs of the recipients of hourly rates against the viability of the businesses that pay them; they need to thrive as well.
The Chief Secretary to the Treasury mentioned a long list of assistance in his opening remarks. Particularly important, from my perspective, are the household support fund, with £500 million going directly towards utilities support; the warm homes discount, which reduces the price of heating by £140 per household, at a cost of £200 million to the taxpayer; and cold weather payments, which provide £25 per week to up to 4 million people in this country. The Government have taken proactive steps to support those most in need while supporting the entire economy of our country, in Scotland and elsewhere.
If the SNP was really worried, it would reduce its income tax, which costs £800 million more to taxpayers in Scotland than the rest of the United Kingdom—I was shocked to hear that it applied to taxpayers earning just over £27,000 a year and above—support continued access to North sea oil and gas reserves, and regret Nicola Sturgeon’s assertion that she would not give the go-ahead to the Cambo oil field. We need security of supply and we need to support domestic extraction during the period of transition between now and 2035. That supports our domestic prices and helps us in our transition to net zero. The Committee on Climate Change itself recognises that we need oil and gas resources between now and 2035
I rise to my feet as somebody who worked in the oil sector, but that is not what I want to address. The furlough scheme meant that the money paid out in my constituency was reinjected back into the local economy and the UK economy. It was not salted away in Zurich. In terms of supporting families through these hard times, the money does not go into a black hole. It is recycled. It can be clawed back by corporation tax on companies and so on. Perhaps it would be a good thing if all of us, including Her Majesty’s Government, looked at that as we tackle the problem of fuel poverty that lies before us.
I am grateful to the hon. Gentleman for his intervention. Treasury Ministers are attending this debate and I am sure they were listening very carefully to what he said.
In conclusion, there is a difference between grandstanding on these issues, which the SNP appears to be doing—there seems to be a certain amount of virtue signalling here—and what the Conservatives have been up to in government, taking practical steps to improve the lives of people right across the United Kingdom.
The last few years have been times of great adversity and challenge for people across the globe. In every country in the world, people’s ability to cope with those problems has relied on them having a sense of a common endeavour, a sense, to coin a phrase, that we are all in this together. The problem with Britain today is that there are many people who no longer believe that we are all in this together. The statistics, as we look around us, show that that is the case. This is a country where there is great poverty, but what is worse than the fact that millions of people are working themselves into an early grave through mental illness because they fear they cannot afford to feed their children, is that there are many people in this country for whom the story is the complete opposite.
Last year in Britain, a record number of billionaires were recorded. As I said in this House last week, the most alarming statistic to me is that 171 of the richest people in Britain could afford to cover every single penny the Government have spent in responding to covid—more than £400 billion. They alone could afford to cover that bill and still be the richest people in Britain. The stock exchange has never been higher and the people who own stocks and shares have never been wealthier. Because of the increase in property prices, those who own the biggest and the most properties have done far, far better than those who own a modest home. That is the dreadful story of unequal Britain that we have today—a story of poverty on the one hand and great wealth on the other.
Let us not pretend that we are all in this together, because the truth is that those people at the lower end of the scale, in particular those on fixed and low incomes, are the ones who will disproportionately pay the cost of this crisis. When prices rise, it is the people on fixed and low incomes who are hit disproportionately. When general taxes increase across the board, it is they who are hit. When benefits or state spending is withdrawn, it is those who are already suffering who are asked to suffer even more.
That is the state of Britain today and you would think, Mr Deputy Speaker, that any Government—not just a Tory Government, but any Government—would be concerned about those figures and would want to do something about them. Yet in every respect, the Government’s only response is to either do nothing or demonstrably make things even worse.
Let me illustrate that in two ways. First, we have had a big debate about rising energy prices. Probably the most bizarre thing, which was alluded to by my hon. Friend Alan Brown, is that when energy prices rise, Government income rises from taxes on the production and taxes on the consumption of that energy. The Government are facing a huge windfall in energy taxation and at the very least—the very least—we would expect them to say, “Let’s put this back into the pockets of the people we’re asking to pay these bills”.
Forgive me, but I think that most people will find that argument rather perverse: 5% on someone’s electricity bill is still 5%, and if it doubles or trebles, that is two or three times more than the Government were taking before.
If the hon. Member does not mind, I would like to continue.
What the Government ought to be doing is recognising that we are coming towards a crisis in the cost of living, particularly with the fuel bills coming in April. They ought to make sure that the energy cap remains in place and does not rise. They ought to provide support for energy supply companies to be able to deliver that. They ought to make sure that the people who have already faced an increase in their bills are given a one-off payment to enable them to get through the rest of this year. But instead of doing that, they do nothing. Tax is another example of where the Government go out of their way, it seems, to make things worse.
When I talk about tax, it is worth bearing in mind that benefits are also part of the tax system. If the Government choose to withdraw benefits from people, the effect is exactly the same as if they were to increase taxes on their wage bill. That is why the cut of £20 a week to the 6 million poorest households in Britain is so iniquitous and so immoral. It would be at any time, but to do it in the middle of a cost of living crisis is beyond imagination. Of course that ought to be reversed, and of course the Government ought to do more to try to help those who are on fixed and low incomes, particularly those living on meagre state benefits. The fact is that, if the Government do not uprate in the next 12 months the level of benefits paid to those people who desperately need them, with rampant inflation, the real value of those incomes is going to go down even further, and the people who can least afford it are going to be the ones who will pay the most.
Of course, the increase in tax that the Government are proposing—the national insurance increase—is a tax increase that everyone will pay, and the proportion they will pay is exactly the same, no matter how rich or how poor they are. I have heard Ministers on the radio talk about this as a progressive tax. It is the farthest we can get from a progressive tax. It is fundamentally regressive. The reason it is being brought in is that this Government, who have to increase revenues because of the economic crisis, do not want to ask the very richest or the very wealthiest in our society to pay a bit more. If they had any morality to them, in a situation where they knew they needed to raise income through taxation, they would first consider taxing those who have the most and taxing accumulated wealth, before they levied a tax on people on poor and fixed incomes.
I think there are many Government Members who can see that this is not a good situation and that the Government’s response is quite abysmal. By the way, I do not know how much of this is by design, or how much of it is turbocharged by the fact that the current Administration are in complete inertia and paralysis; they are unable to do something because they are so scandal-ridden at this point in time. I accept that the lockdown crisis the Government have makes it harder for them to govern, but either way this Government’s honeymoon is long over—the veneer is disappearing. Those people in the red wall seats in the north of England who were conned into believing that this Government—this Tory Government—would stand up for their interests are going to see over the next 12 months things laid out very clearly for them. That is why, of course, there are a lot of nervous people on the Government Back Benches, and there are going to be a lot of problems for the Government in the 12 months ahead.
Let me turn, in my final remarks, to the situation in Scotland. I was going to congratulate Douglas Ross, but he is no longer in his place. He brought into the debate the question of Scottish independence. He introduced it—it is not an SNP obsession. If we look at the text of the motion, the words “referendum” and “independence” do not appear in it. That is not just because we are capable of talking about many other things: it is because this debate, by itself, makes the case for independence. We do not need to write it down—it is self-evident.
If people want to see how things might be done differently or a different set of instincts, aspirations, attitudes and character at work, they can look north of the border and at what the Scottish Government have tried to do within the competence that they have available. The discretionary housing payment is ameliorating the bedroom tax. The child payments, already introduced and doubling in April, will mitigate some of the attacks on the very poorest in our community. Income tax increases for those who can afford to pay more, which the Conservatives claim make Scotland the most taxed part of the United Kingdom, in fact make Scotland the fairest taxed part of the United Kingdom.
My hon. Friend is making a very powerful point about independence. Does he agree that the real fear on the Government Benches and in the establishment at the heart of Westminster is that when Scotland becomes independent the other nations of the UK will look north, see what we do with the full powers of independence and will want change for themselves, away from the corrupt, scandalous bunch running things here?
Indeed I do, but in closing I want to point to the monstrous deceit in this argument. It is a fact of life that no matter what the Scottish Government try to do in terms of the Scottish economy, they live with the reality that it is a regional economy of the United Kingdom, not the economy of an independent country. Therefore, for example, the decisions that we make on income taxation are very limited, because the Scottish Government have no authority or power over the movement of capital or labour within our borders. If it was an independent country, those things would be very different. I am afraid to say that that is compounded by Labour party Front Benchers. When they criticise the SNP Scottish Government, they basically think of a number and double it, without any regard to the actual powers, authority or legal status of that Government to deliver on the cost of living crisis.
The Scottish Government are doing some very good things, but those are only an illustration of what could be done if we had the full powers of a normal independent country. That argument has already become much more attractive to people in Scotland. Opinion is divided about whether we should have another referendum. I know that Conservative Members say that should never happen—
To the point about opinion being divided, I refer the hon. Gentleman to a survey on
Order. Interventions must be brief. We have a lot of Members who wish to speak and I will have to put a time limit on almost immediately.
I conclude by saying that it is a complete deceit to criticise the Scottish Government for not doing something that the House actively prevents them from doing. The simple way to test the truth of that is to let Scotland become an independent country, which is what people voted for at the last election in Scotland. Let them have that choice and, when it comes, we will put before the people a complete proposition that will answer all the questions that the hon. Member for Moray wants and many more. I believe they will choose a different way, an alternative way, of running their economy than what we get from this Tory Government.
Order. I am sorry, but as I said, I will have to put a time limit of six minutes on speeches; otherwise, people are not going to get in. I have been able to warn Andrew Bowie about that.
Duly warned and noted, Madam Deputy Speaker. I will not take up much of the House’s time—I am sure that will delight SNP Members more than anyone else—because up and until Tommy Sheppard spoke, I was struggling for something to say in this debate. David Linden, who led the debate, is a passionate campaigner for combating poverty in his constituency and around the country, and I know how hard he works on behalf of his constituents to alleviate the burden that so many people find themselves under across this country.
However, the problem is this: the hon. Member for Edinburgh East said that we would not find any reference to independence in this motion, and he is right, but unfortunately, it does refer to the
“rising costs of the UK leaving the EU”.
Unfortunately, we cannot get away from the deep irony of Scottish National party Members coming here today to talk about the cost of living crisis, which genuinely is one of the most important things we can speak about at this time, and the cost of leaving the European Union while making no reference to the inordinate cost and huge challenges that would be put on businesses and individuals in Scotland if it were to separate from the rest of the United Kingdom. They cannot make one case to answer that.
Is the hon. Gentleman saying that walking out of a trade bloc and increasing red tape, meaning that the UK has to have paperwork with every country that it exports to, is the same as repatriating political powers? Is he saying that Ireland or Finland are not independent, because if he is, he will be laughed at all over Europe?
The hon. Gentleman knows very well that separating Scotland from the United Kingdom would be far more than just repatriating powers to Holyrood; it would be the break-up of an economic, political and social Union that has been in existence for 300 years and, in fact, it would make Brexit look like a cakewalk. I understand the concerns of the hon. Gentleman, who stands up and fights for, for example, his exporters and fishermen, who are struggling with some of the burdens that Brexit has brought—I have said openly that I recognise that—but that is as nothing compared with the burden that independence would put on businesses and people in Scotland.
My hon. Friend makes an excellent point about the cost and financial strife that an independent Scotland would inevitably go through, but does he also agree with me and many others, especially in the business community, about the cost of an independence referendum and how investor confidence would be shaken up by merely having an independence referendum?
Yes. That goes to the heart of one of the arguments that was made earlier about uncertainty for business. Actually, I take issue with what my hon. Friend Douglas Ross about Stephen Flynn being a lone voice on the SNP Benches in calling for continued investment in the North sea, because he is not. A couple of other SNP Members are in the Scottish Parliament. For example, Gillian Martin, the SNP MSP for Aberdeenshire East, said that decreasing domestic oil and gas supply would lead to greater imports. Jackie Dunbar, the SNP MSP for Aberdeen Donside, said that
“a hard shutdown of the oil and gas sector” would see Scotland “with thousands left unemployed”. What does that say about uncertainty for businesses that are looking to invest, create jobs and take people out of the cost of living crisis in my constituency in the north-east of Scotland, and around the entire country?
Let me go back to the point I was making about independence. I understand that SNP Members do not believe what I say—that independence would be a bigger shock to the system than our leaving the European Union —but they might believe their own growth commission, which the SNP commissioned a couple of years ago. [Laughter.] There is laughter from SNP Members. Maybe they are laughing at the SNP’s growth commission, which said that creating a separate state in Scotland would cost £450 million. I wonder what that would do to the cost of living. It also says that £5 billion would be paid to the rest of the United Kingdom annually to account for its share in the national debt, while public spending—despite what the hon. Member for Glasgow East would like to do to combat child poverty and poverty across the board—would have to be capped at 1% less than annual GDP growth. What would that do to the cost of living in Scotland?
I genuinely respect the efforts of quite a few SNP Members in what they do in their constituencies, along with Members across this House, to combat poverty in this country. The problem is that they cannot argue that the impact on business of leaving the European Union was bad for growth and created more poverty while saying that independence and the hammer blow that it would bring to the economy would be good. I am afraid that that is why I will not be joining them in the Lobby tonight.
Due to interventions, which obviously give others extra time, I am afraid that after the next speaker I will reduce the time limit to five minutes.
It is a pleasure to follow Andrew Bowie. I listened to his contribution with interest. I just remind Conservative Members, in the politest of manners, that in last year’s May elections the people of Scotland continued our tradition of rejecting the Conservatives’ xenophobic and far-right policies.
Before I continue, I want to put on record my congratulations to my predecessor and constituency colleague, Neil Gray, who is set to join the Scottish Government as Minister for Culture, Europe and International Development. I know he is well respected across the House.
Yesterday we heard the interesting news that there were further allegations of Islamophobia within the Conservative party. That came as no surprise to me, of course, because we have seen Conservative MPs support a Prime Minister who has openly and publicly said that veiled Muslim women look like letterboxes. However, regardless of faith, or no faith, there is one community that the Conservatives have continually attacked since coming into power in 2010—the working-class community. The Conservatives have proved time and again that they only have the interests of one community at the heart of their policies, and that is those who are rich. The United Kingdom has the highest poverty rate in north-west Europe, and most people across all four nations have experienced some sort of financial hardship through the pandemic. But at the exact same time, we saw the UK gain a record number of billionaires, and it now stands at 171. Those billionaires do not have to worry about spending money on food or fuel, about how they will afford rent, or about losing their jobs. The Government did create some policies in response to the pandemic, but the crucial matter to remember is that while the Tories gave with one hand, they took with the other. I was inundated with correspondence from constituents when the Government made the horrific decision to cut universal credit by £20 a week. Then, just weeks later, they decided that they would hike national insurance. This is a series of continued attacks against working class communities.
The reality for people is that the cost of living is mounting. In my constituency of Airdrie and Shotts, I receive regular correspondence on this. My team and I are currently working with a constituent whose only source of heating, due to a number of different factors, is two halogen heaters. They are expensive to run, and his running costs are over £60 a week. By comparison, according to Usave, the average cost for heating a one-bed flat is about £29 a month. So my constituent is faced with a decision every single day—does he heat his food or does he heat his home? His reality is not having parties in his back garden, or asking his rich mates to decorate his flat, or deciding what cheese goes with what wine. His reality is that the majority of his income has to be spent on heating his property, so he is often left without money for food or other essentials. Just yesterday, I also received correspondence from an elderly constituent, worried that she will be unable to keep up with fuel costs. That is the reality of our jobs as Members of Parliament. I am receiving regular correspondence from constituents who are genuinely worried about how they will afford the growing cost of living.
The Chancellor has an opportunity to introduce an emergency financial package to help people with that growing cost. There are a number of things he could do. One option to tackle fuel poverty could be reducing VAT on energy bills, which would save about £90 per customer and is backed by some in the industry. Loans could be given to energy companies which would, in turn, help consumers. The Government could increase minimum wage rates to bring them into line with the real living wage, and the completely inadequate statutory sick pay could also be increased to match it. Those are just a few steps that the Government could take to ensure that the most vulnerable in our communities are not left to suffer.
We have a Prime Minister who is asleep at the wheel, a Government who are trying to keep him in power, and Back-Bench Tory MPs who are either writing letters to the 1922 Committee or trying to Save Big Dog—who knows?—while households across the country are having to prepare for the uncertainty that is about to follow. With soaring energy prices and inflation and the cost of living rising, the Prime Minister seems to be intent on ensuring that his own skin is saved, rather than protecting the most vulnerable in our society.
In opening the debate, David Linden rightly pointed out that it is a UK-wide debate on an issue that affects constituents throughout the country, but in some parts of the country, pressures on the cost of living come from different sources and are very onerous. Wanting, as ever, to help, I have come to the Chamber today to highlight something that all politicians across Greater Manchester can do to prevent those pressures from being increased, namely ensure that the Greater Manchester clean air zone—created by the Mayor of Greater Manchester, supported by all the local authorities, and emanating from Greater Manchester Combined Authority and Transport for Greater Manchester—is scrapped. It is a ludicrous proposal that will place burdens on those such as the taxi drivers who today have rightly staged a go-slow throughout Bury town centre. To go to work, if they are in a non-compliant vehicle, they will have to pay £10 a day, which will be devastating, while lorry drivers will have to pay £60 a day. That affects businesses of all kinds. It affects employment, and all the other things that we have been discussing. The Greater Manchester clean air zone will put people out of business and out of work, and will increase already onerous costs.
I visited a haulage yard in my constituency and talked to Mark Hinchliffe, who set out very clearly the costs faced by his business and others like it. There is a transport café in Walmersley Road, and lorries travel along the motorway two minutes away from it. Any lorry driver who wants to have his or her breakfast in that café will have to pay a £60 congestion charge, which is ludicrous. The business that comes from everyone who goes to that small café, which has been open for decade upon decade, will be obliterated by a charge and a process that emanate from a plan delivered by Greater Manchester Combined Authority to central Government on
In discussing the cost of living today, we have heard SNP Members quite rightly talk at great length about matters involving the Scottish Parliament. We have also heard Ben Lake talk about the Welsh Assembly. However, we, too, have devolved government in Greater Manchester. It is a disaster, but it is devolved government all the same. When required to be there for the constituents of Bury and every other part of Greater Manchester during this difficult period, the best thing that the Mayor of Greater Manchester, the leader of Bury Council and all the other local authorities could do was to impose onerous taxation on businesses and individuals that will destroy their ability to earn a living. It is ridiculous.
I understand that the Mayor of Greater Manchester is coming to Westminster this week, as he should, to speak to Ministers. He has been thinking for years and years and years that this is the greatest plan in the world. On his visit here, I encourage him and all politicians—
Does the hon. Gentleman agree, that, since 2019, the market for vehicles has changed dramatically in the UK? That has a lot to do with covid, but also with the global semi-conductor shortage. Does he not think that the onus is on the Secretary of State to support the local authorities in Greater Manchester to make sure that they can make a just transition so that the population of Greater Manchester can breathe much cleaner air?
I thank the hon. Gentleman for his point. We have a complete difference of opinion. Both he and his Labour colleagues do not wish to scrap the scheme. They wish to go back to Government for further funding—for a hardship fund. That hardship fund has not been defined, but estimates of the funding required are in the region of £2.2 billion to £2.5 billion of income. I would be interested to hear where he proposes that income should come from. I hope that, instead of that and to support his constituents in Stockport, he will join me in telling the Mayor of Greater Manchester to say to the Secretary of State, “I got this wrong. We got this scheme wrong.” The consequences of it for my constituents and for the constituents of the hon. Gentleman are too severe.
Surely no politician, whether in Greater Manchester, Scotland, Wales or England, would simply go ahead with the plan of the Mayor of Greater Manchester, of the GMCA and of Transport for Greater Manchester to put people out of business. Why would anybody do that? It is incumbent on the Mayor of Greater Manchester to come to London this week and say, “This plan is wrong. I got it badly wrong.” He needs to ask the Government to look at it in that context and not dance around the edges. He should not say that we need extra money—a bit here and a bit there. He must say that the plan is a disaster in terms of the cost of living of my constituents and the constituents of Navendu Mishra. Every single politician who believes in supporting their constituents with the cost of living, which has been talked about today, should completely and utterly oppose the Greater Manchester clean air zone.
While the immediate cause of the current cost of living crisis is being blamed on rising international gas prices, the real story is that of decades-long abdication of duties by the UK Government and an ideological frenzy of free market extremism.
Fundamentally, the UK’s system of economic regulation is aimed at maximising returns for investors and shareholders, not ensuring a comfortable standard of living for the bulk of people across these isles. If we add Brexit to that mix, the UK Government are overseeing—nay promoting—a cost of living crisis that will impact every resident of the UK, but that will, as ever, impact the poorest and most vulnerable hardest.
There should be no doubt about what Brexit is costing households. Every minute, haulage firms are being held up at the new EU border as more costs are being passed on to consumers. Every extra worker hired to deal with the exponential increase in paperwork caused by Brexit is an additional cost added to sales. Every hurdle put in place by Brexit is another increase in living costs for every household and every family.
Perhaps the Prime Minister and his colleagues could dig out their old bus and slap the truth on the side of it—that Brexit will seriously damage household wealth. However, that sort of honesty would be out of character for the isolationists. They will still maintain that the uplands of Brexit are sunlit and that the confusion and barriers that they have erected are having no impact on the cost of living.
Scotland is being hit hardest despite voting against Brexit and voting, yet again, against the Conservative party. The inflationary pressures caused by the record vehicle fuel prices that others have mentioned are seen right throughout the UK economy but felt hardest in Scotland. The sad irony that we experience higher petrol and diesel costs while being responsible for getting much of the stuff out of the ground in the first place is not lost on many Scots. Until we have fully transitioned to a net zero society, that irony will continue to demonstrate the particular impact that Scotland has to endure as prices rise.
It is scandalous that in an energy-rich country such as Scotland, which has now been awash with both carbon-based and renewable energy for decades, nearly one quarter of households are in fuel poverty. The Scottish Parliament’s limited powers mean that its actions are limited to measures such as programmes to improve household energy efficiency and insulation—programmes that have, in fairness, been pushed hard by both Labour-led and SNP Governments since devolution.
The plain fact is that the fundamentals of the energy market and the radical changes needed to tackle this scourge are in the hands of the UK Government, who have shown no sign of taking the kind of action needed to improve the lot of millions of households in poverty. In fact, rather than take that action, the UK Government simply changed the definition of fuel poverty to something more amenable to them—surely the ultimate in evading responsibility.
There is no dodging the carnage that is coming this year when the full effect of price rises is felt. I fear for the numbers of people who will find themselves in fuel poverty, whether the UK chooses to count them or not, and in particular when I look at what the UK Government think is an acceptable amount to live on for people who have to claim social security benefits. Does the Minister really think that a £2.30 a week increase in jobseeker’s allowance in April will be enough to meet the rising costs? I would be delighted to hear him answer that. The poor, sick and disabled again face the brunt of excessive inflation, because of the Chancellor’s refusal to maintain universal credit at its previous level or even to uprate legacy benefits to match.
As always, the Government will expect communities and charities—organisations such as Renfrewshire food bank and the Darkwood Crew in my constituency—or already hard-pressed local authorities to pick up the pieces. Scotland’s citizens and their household bills are bearing the brunt of the UK Governments’ systemic mismanagement over decades and the short-termism that has been the hallmark of successive Administrations. We are subject to policy made for London and the south-east that is simply unfit for purpose when applied to Scotland. Every resident in Scotland is literally paying the price.
The plain fact is that the UK Government have sat back over the years—indeed, decades—and allowed this crisis to build up as they repeat the mantra that the market will solve everything. The market cannot solve everything. Following that path has been a complete failure and now the chickens are coming home to roost. The Government allied that approach with a kamikaze Brexit that, as they were told umpteen times throughout the process, is destroying livelihoods and driving up the costs of trade and therefore the cost to the consumer.
The UK Government have unleashed a perfect storm on the country, forcing households to choose between heating their homes or eating. The choices made by this Government that have led to the present crisis are not the choices that Scotland made. There is a different road that supports our people instead of punishing them. These choices are not in my name. Scotland will choose its own future soon and I hope—indeed, I know—that it will choose a future that places a greater value on people’s day-to-day lives than the current set-up and the current management.
It was only a couple of weeks ago that I stood here and spoke in the Labour Opposition day debate. On that day, Labour Members were concerned about the cost of living but, two weeks later, it is not quite so important to them today.
We all agree that there is an issue with the cost of living. Office for National Statistics data shows that in December the consumer prices index and retail prices index showed average price increases of 5.4% and 7.5% respectively. Most economists predict that those rates will run higher still. Inflation at a 30-year high is obviously worrying, as it is for many families, but, as the Chief Secretary to the Treasury said when he was at the Dispatch Box, inflation is expected to come back to reasonable levels in the not-too-distant future. We have to analyse why that is the case.
High inflation is not a factor unique to the United Kingdom: the US is in a similar position and Germany is experiencing the same problems in the EU. There are inevitable consequences from our waking up from a global pandemic, with supply chains readjusting and struggling to meet the demand after we have been released from restrictions—restrictions that this Government have handled far better than the Governments of most other countries around the entire world. We also have to deal with the spiking of energy prices.
However as Conservative Members said in interventions at the beginning of the debate, it is fair to say that, since March 2020, the Government and the Chancellor’s response to the pandemic has been one of the best in the world, with help and support for millions and millions of people. It is widely expected that our recovery will be the best in the G7. We have unemployment back to pre-pandemic levels, and we have multiple job vacancies—last time I looked there were 1.25 million of them. The SNP must realise that we cannot spend £400 billion and be some £2.2 trillion in debt without needing some degree of responsible management of the public finances going forward, especially when we will have rising interest rates in the future.
What the Government are doing is sensible. Indeed, when I spoke in the Opposition’s debate only a fortnight ago, I said that targeted support was needed, and it is clear from reports that that is being looked at. The problem is that we cannot shield the entire country from rising food costs, or from rising energy costs—it is not feasible or practical. Anybody with a degree of understanding of economic policy will recognise that.
The Chief Secretary to the Treasury was very honest when he said that, as we emerge from the pandemic, the reality is that there will be difficult times. We have been in a coronavirus pandemic and had an economic shock the likes of which we have not seen pretty much since the second world war, and the Government are targeting support at families whose need is greatest. As we heard from my hon. Friend Jerome Mayhew, there is the 6.6% rise in the national living wage, which is the highest ever—it is the highest rate of pay that the United Kingdom has ever had—and the universal credit taper will help some 2 million families. However, what does not grab the headlines or really get picked up in the House is the other support that the Government give, including half a billion pounds through the household support fund and £200 million for the holiday activities programme, which is still being run. That support is there specifically for local councils to roll out on the ground, because often they know the people—we have talked about them all afternoon—who need it the very most.
There are short-term issues that we must deal with and longer-term ones. However, getting the economy moving is clearly by far and away the right approach. Ever more reliance on the state and increasing public debt is wholly irresponsible and the sort of mismanagement that the Opposition would use. Thank goodness they are not in power.
It is interesting to see the contrast in how much attention the UK Government are giving to their ever-increasing self-inflicted chaos while it goes completely unremarked by Government Members that the UK has the worst levels of poverty and inequality in north-west Europe and the highest levels of in-work poverty this century. It is all about choices, and while the Tory UK Government are choosing to look in on themselves just as the cost of living crisis really bites, the SNP Scottish Government, with their limited powers, are seeking to support those who need it most, whether through doubling the Scottish child payment, baby boxes or free prescriptions—I could go on.
It is not some random accident that has led us here; the Tory Government’s choices have propelled us down this road. It was their choice to cut the universal credit uplift, which has been so devastating. What might not be a large amount of money for those in the market for fancy gold wallpaper, for instance, is actually a whole lot of money for someone who is short of funds to feed their family or heat their home. So much for the sunny Brexit uplands that we were promised, and so much for the utter lies written on the side of that Brexit bus or the extraordinary nonsense spouted by Mr Rees-Mogg, who told us that
“the price of food…will go down”.
In reality, pursuing Brexit—against the will of the Scottish electorate, let us remember—has caused substantial damage to families and businesses, and will continue to do so.
The Government have chosen to remove the pensions triple lock, and their decision to write off the £4.3 billion in fraudulently claimed covid business funding, which has today caused Lord Agnew to resign at the Dispatch Box, is a very different approach from that taken by the DWP when it makes mistakes resulting in overpayments, which causes huge hardship to those affected. Whichever way we look at it, the choices that this Tory Government are making are pressing hard on household finances, but they are just closing their eyes to it, looking the other way while they prop up a Prime Minister who is so remote from the cost of living crisis that he would not know it if it arrived in his own garden dressed up as a work event.
The headline facts are bad enough. Consumer prices were 5.4% higher in December 2021 than the year before. It is the highest inflation rate recorded since 1992, and it is forecast to carry on rising. Energy prices are an enormous worry for many. Domestic gas prices increased by 28% between January and November last year, and electricity by 19%. We need serious action on that now.
We also need to drill below the headline figure. Low-income households will always take a bigger hit because they need to spend a bigger proportion of what comes in on energy and food. The cost of living crisis presses them so much harder. Those of us who work here in this Westminster bubble could do with reflecting on some of the points that Jack Monroe has made over recent days. Headline figures say that food prices increased by 4.2% in the year to December, but she looked further. Since this time last year, the cheapest pasta in her local supermarket went up by 141%. Similarly, rice is up by 344%. Those increases disproportionately hit those who, by necessity, have to shop for the cheapest items. How are people meant to make ends meet with those kinds of price increases for basic food supplies when their income is being reduced thanks to the UK Government’s universal credit cuts, fuel price crisis, regressive NI increases to come, and two child limit? I could go on.
All those UK Government policies are actively pushing people into hardship—and they know that full well. The Resolution Foundation recently reported that the UK welfare system no longer does what it is meant to do—protect the poorest. It no longer provides a safety net. The UK Government know that but choose to ignore it. Ask yourself why that is: why do they not choose to follow the lead of the Scottish Government, who use their limited powers to support wellbeing with free prescriptions and dental care, free higher education and increased free childcare? Why do they not match the Scottish child payment and make it available for families across the UK? Why not introduce a real living wage of at least £10 an hour, or an energy payment for low-income households?
The UK Government know all of this. They know that, as the cost of living rises, propelled by their policy choices, many more people are in significant hardship. Their choices and their priorities have consequences, and it is absolutely clear to me that, as long as Scotland is under Westminster control, we will always be vulnerable, and it is time to make a fairer, better choice.
It is important that we have heard contributions from the hon. Members for North Norfolk (Duncan Baker), for Bury North (James Daly), for Ceredigion (Ben Lake) and for Broadland (Jerome Mayhew), because they emphasised that this is an issue that affects households not just in Scotland but in every single corner of the United Kingdom. I suggest to David Linden that there are people in the home counties who are suffering just as much as households across the rest of the UK. They will suffer as a result of the Government’s hike in national insurance, and they are suffering from the record inflation rate and the stealth tax introduced as a result of the Government not increasing the tax threshold. All those things are affecting households who are also facing a massive increase in energy prices, which for a lot of them will mean a choice between heating their home and feeding their family this winter.
It is important that the Scottish National party take into account that this is an issue on which we all agree. The Labour party agrees; Ian Murray made many of the same arguments that we have heard from the SNP Benches, and that people will hear from the Liberal Democrats. We want to see a doubling of the warm homes discount and the winter fuel allowance. We want to see a new 10-year home insulation scheme, support for energy-intensive businesses and a windfall tax on those who have benefited.
However, every single time SNP Members come to this House, they make it about independence and breaking up the United Kingdom, rather than sticking to the issue, which we all agree is important and which we all agree that our constituents across the United Kingdom face—yes, they face the same issue in Edinburgh South as they do in North Norfolk. That is something we have in common. It is a common problem and it will need all our attention and efforts in the United Kingdom to address it.
We have seen our cost of living degenerate over the course of the pandemic. Now we see it under more stress, and we have a Government whose attention—let us all be honest—is not entirely where it should be, but on their own internal problems, such as partygates and internal rows. Those should have no place here at a time when we face such a serious problem. I appeal to the Government to put all that aside, to fix it and to sort it; the Prime Minister should consider his position, and they should get on with dealing with the issue we all face.
To the Scottish National party I would say: we support you in fighting the cost of living crisis we all face, but we could fight it together. We could beat it together. We could help our constituents together, if we stopped having narrow identity arguments that simply divide us and make it more difficult for everybody.
The rise in the consumer prices index will disproportionately affect those already facing pressure on disposable income. The rise will affect low-income families, including the disabled, the long-term sick, the unemployed and those on a low fixed income with no prospect of overtime or salary increases, who on average spend a larger proportion of their income on energy costs and food and will therefore be more affected by the price increases.
I make specific mention of the 3.8 million women born in the 1950s who were cruelly robbed of their pensions by the Government, who are still being unfairly denied full restitution for their loss and who continue to suffer an appalling injustice. I also mention the 3 million people, mainly self-employed and directors of small limited companies, whom the Chancellor callously excluded from any financial support during a pandemic.
There is sadly another, perhaps less reported consequence of inflation: an increase in crime. In 2014 Professor Richard Rosenfeld, an American criminologist, concluded:
“Inflation is the most powerful economic predictor of crime.”
I have several examples from research data to prove that case, but time prevents me from explaining them. I am not suggesting that everybody in financial difficulties, poverty or debt will resort to theft or other crime to make ends meet, pay their bills or feed their families, but unfortunately we too often hear anecdotal stories of parents arrested for shoplifting essential items such as baby formula, nappies and food that will enable their families to survive.
While it is impossible to predict how much crime will increase, history tells us that if inflation continues to increase, crime will also inevitably do so. Therefore, to mitigate the effects of a predicted increase in all crime, which will put pressure on our already overworked police, courts, prison, probation, social work, women’s aid and other support services in the criminal justice system, it is essential that the Government provide further immediate financial support for those services. Not to do so now would be negligent in the extreme. I also urge the Government to take steps to reduce those levels of poverty and spiralling debt in the rest of the United Kingdom by introducing measures such as we have in Scotland, including the game-changing £20 child payment, the 1,140 hours of free childcare a year for eligible children, free prescriptions, free sanitary products for women and girls, free bus travel across the country for everyone over 60 and the disabled—briefly expanded to include young people between the ages of five and 21— and free university tuition in our world-class universities for our young people.
I suggest that savings could be made by not renewing weapons of mass destruction on the Clyde, currently estimated at £205 billion. Spending could be stopped on vanity projects, including the new royal yacht, or on the refurbishment of Buckingham Palace, estimated at £360 million. There was also the shambolic process that resulted in the loss of £4.3 billion to fraud during the pandemic being written off by the Chancellor.
With independence, we could keep crime levels at least where they are, if not further reduce them, by gathering revenue from the massive energy production soon to power all the UK’s 30 million or so homes. More importantly, as an independent country in the European Union, we would have full control of our economic levers, which would help to control inflation and deliver a more equal, progressive and prosperous—
It is incredible that in this cost of living crisis the UK Government have done nothing and that the Chief Secretary earlier did not give us one new Treasury policy. Even when there is a chance for Tory Back Benchers to vote for a VAT holiday on energy bills, the Brexiteers dutifully voted it down.
In only a couple of weeks’ time, Ofgem will undertake its review of the energy price cap and is likely to confirm the April increase of about £600, a 50% increase. There is limited time for action. Tinkering at the edges, such as delaying the impact of the £2 billion administration costs of 28 energy companies going bust, is not enough. Direct Government action is needed to prevent the cap rising or to support those affected by it. In UK Government policy, the Tories have already made matters worse for those who are struggling—a cut in pensions of more than £500 per year, the removal of the £20 a week universal credit uplift—and that in the midst of the cost of living crisis, with inflation at a 30-year high and household incomes dropping in real terms by up to £1,200.
National Energy Action estimates that the cap rising to £2,000 will lead to 6 million households in fuel poverty, a shocking 33% increase in only a six-month period. Worse, and shamefully, it also estimates that approximately 10,000 premature deaths a year arise from fuel poverty. How many more premature deaths will occur if the Government do not do something?
To date, the only direct Government intervention on energy has been the allocation of £1.7 billion for the development of Sizewell C. Not content with Hinkley Point C being the most expensive power station in the world, the Tories are determined to create another one. In their own impact assessment, they estimated costs of as much as £63 billion being added to our energy bills.
If people live in the Scottish highlands, they are more likely to be off the gas grid, so energy costs them more. Worse, many customers are on what are called restricted meters, so they pay about £400 more per annum for their energy, due to a 4p surcharge per unit of electricity. How is that fair? People in the highlands who export energy to the rest of the UK pay a surcharge for the privilege. It is time that the Scottish Tories stood up for their constituents on that.
To return to direct intervention, that can be paid for by levying a windfall tax on the Treasury. As our energy bills have increased, so has its VAT returns on them. As fuel prices have increased, the Treasury has raked in more money in fuel duty and VAT. As for the North sea, the November Budget confirmed that this year alone the Treasury would receive an extra £1.1 billion in oil and gas revenues, or £6 billion over the lifetime of the Parliament. The Treasury should release that money now. It is astounding that the Chief Secretary to the Treasury does not seem to understand that 5% of £2,000 is twice the value to the Treasury as 5% of £1,000.
By contrast, in Scotland, the Scottish Government are doing their best while operating on a fixed budget with limited borrowing powers. The Scottish Government’s child winter heating assistance supports 14,000 families with disabled children through automatic payments of £200 a year. The low income winter heating assistance will help 400,000 low-income households with £50 every winter, instead of complicated cold weather payments of £25. For families there is a game-changing £20 per week child payment; compare this with the hapless £20 a week universal credit cut.
It is absurd that Scotland has paid £375 billion of oil and gas revenues to the Treasury, and that this has been squandered, with no legacy. We only need to look at Norway to see what a small independent country that is in charge of its own resources can do, and I look forward to Scotland’s joining it.
I thank the SNP for bringing forward this important debate, and I commend David Linden for his opening remarks.
The front page of today’s Daily Record newspaper brings this shameful situation into sharp relief. While inflated Tory egos jockey for position in a power struggle for the worst of possible reasons, the cost of real-world inflation is being felt across these islands as millions struggle to fund the power they need to heat their homes. What a dismal situation it is where more than one in three Scots are already in crisis with energy costs soaring by up to 28%, but there are more price hikes and more pain still to come. This underscores the need for my Cold Climate Allowance Bill, and I hope the Government will give that due consideration in the course of this Parliament.
This debate is on the cost of living crisis, but for Scotland it could easily be cast as the cost of the Union crisis. Since 2014, the cost of the Union has been to rip Scotland from Europe against our democratic will, damaging our freedoms, impacting our economy and driving European friends away from their homes. It has seen the opportunities of our vast renewable resources realised abroad, while Scottish jobs have failed to materialise. We have suffered the bedroom tax, the benefit cap, the rape clause, universal credit cuts, and Ministers acting unlawfully, while obscene billions of pounds have been lost or written off on covid contracts and schemes. All the while, the Government have pursued a tax and cut agenda, punishing the poorest and the most vulnerable, yet it seems today that the anticipated rise in national insurance may be abandoned. If the Government know it is wrong now, then they knew it was wrong when they pushed it through.
All of this is intrinsically linked to Scotland’s continuing position in the UK, yet nothing is more emblematic of the cost of the Union than the current Prime Minister, who stands rejected by his own Scottish party and its leadership. I have found that politicians generally fall into two groups: people who want to do important things and people who want to feel important. The Prime Minister takes self-importance to stratospheric levels of self-indulgence. If he had just one ounce of humility, he would surely die of embarrassment.
It was the Tories’ return in 2010 that brought me into frontline politics, because I knew it would be bad and that our communities would suffer, our economy would suffer, poverty and greed would rise, and compassion would fade into the shadows. I knew this because I remember when Thatcherism stalked the streets of Scotland, decimated industry, fractured communities, broke people and robbed them of hope. Toryism is the engine room of despair and the champion of injustice.
Of course the Prime Minister should resign, but what would this achieve? A Tory power struggle will not change the very real power and poverty struggle in Scotland one iota. Each and every one of us in Scotland should prosper from our vast natural resources, but instead those assets are handed on a plate to profiteering corporate interests, while our people are cold and hungry, and people turn to the oblivion of drink and drugs because hopelessness has replaced opportunity. I urge Scottish colleagues across the House to join my calls for the Scottish Government to begin a constitutional convention to consider Scotland’s future. This is the cost of the Union, and from my perspective there is only one clear remedy—the aspiration and hope of an independent Scotland.
It is a real pleasure to follow my hon. Friend Neale Hanvey, and I entirely support his views on Scottish independence. I also support the call for a constitutional convention, which was the idea of our First Minister and was first called for by her just prior to the start of the covid crisis.
I just gently say to Christine Jardine that those of us who are returned to this House on an SNP ticket will continue to talk about independence for so long as we are returned in the very significant numbers that we are. If she has been looking at the opinion polls over the weekend, she will see that support for independence in Scotland is at 50%—considerably more than support for her own party—so I am afraid that her calls on us to stop talking about independence will very much fall on deaf ears. We believe that we could tackle these matters better in a social democratic, independent Scotland.
The real focus of this debate is how the weight of the cost of living crisis will fall hardest on low-income households, who on average spend a much higher percentage of their income on energy and food and will therefore be most affected. A number of hon. Members have referred to Jack Monroe’s work. Jack Monroe has shown in a blog and in an excellent article in The Guardian at the weekend how the rise in food costs in particular falls on the poorest people in our society.
As for the rise in energy costs, I will give one example, from the many that I could give, of a constituent of mine in Edinburgh South West. She contacted me in despair after receiving her renewal quotation from Octopus Energy:
“I am really shocked. I currently have a fixed 12 month tariff and pay £86.55 a month but from end of Jan 2022, they”—
“have proposed the following deals between £116 and £240 per month. I expected prices to rise and expected £200-300 more a year however based on their new tariffs I am looking at an extra £1000 to £2000 per year.”
That is just one example of the sort of difficulty that my constituents have been put into by this crisis.
The constituents who will suffer the most are those who are already in considerable difficulty because of the misery heaped upon them by unfair Conservative and Unionist party policies. The Government have it within their power to help these low-income families and the most hard-hit. The Government can always find money when they want to, and they have written off a pretty extraordinary amount of money, squandered during the covid crisis because of what their own resigning Minister has called a “woeful” lack of oversight.
This is about priorities. When my constituents suffering on low incomes go to the supermarket to shop, they do not go with a suitcase to fill with wine and spirits for illegal parties; they go with a wee basket, which they fill sparsely, taking things out as they realise that their meagre budget will be exceeded. The low-income families in my constituency do not have money for cheese and wine parties in the garden. Most of them do not have a garden, and if they did, they would not have the leisure time to spend in it because they are working all hours in low-paid jobs and the gig economy to feed their children.
In households not just in my Edinburgh South West constituency but across this country—across all the nations of the United Kingdom, on the Tories’ watch—parents go hungry to feed their children. The walls of those low-income families are not papered with expensive designer wallpaper; often, they are damp and poorly insulated, so they need to spend even more on extortionately priced energy to heat them than they should. The Tories have the power and the money to solve this. Do something.
A survey last year by 38 Degrees found that 36% of people asked in my constituency of Stockport had seen their energy bills rise. Since then we have heard from the Office for National Statistics that two thirds of adults in the UK have seen their cost of living increase. Meanwhile, half of Britons say that they could not afford an additional £50 a month or £12 a week on their cost of living.
What are the Government doing about it? While the Prime Minister jostles to protect his own future, he seems to have forgotten the job that he is in No. 10 to do. Wages have fallen in the face of inflation at a 10-year high, while rents have risen at their fastest pace in 13 years. All the while, the safety net of the furlough scheme and the £20 universal credit uplift have been swept from under people’s feet. In 2019, the public were promised a national living wage by the Conservative party, ahead of the general election, but even back then it was a wage that most could not live on. Now, while people struggle to make ends meet, the Government are in a crisis of their own making.
I believe it was Jerome Mayhew who made a point about the minimum wage. What we need is an end to poverty wages. I am a supporter of the Living Wage Foundation, which sets the rate of pay per hour independently in London and outside. Surely what we should push for is better jobs—unionised, well-paid jobs—in communities such as mine.
If the meetings we hear about were truly work meetings, the Government and the Minister will have done enough work to explain to the people of Stockport how they will make tenancies more affordable or how their petrol and fuel bills will go down. In my constituency, the average rent for a two-bedroom property is an unaffordable £800 a month. Despite a recent review of the local housing allowance and a subsequent rise, the calculated rate is only £650 a month, so many people fall short. If people on low incomes have to find an extra £150 a month for a home, how can they be expected to cover the cost of the basics when prices are rising?
The Government do not seem to have a plan in place to boost skills and jobs for workers. As a result, we face a labour shortage, gaps on the shelves and rising prices. If the Government had a proper industrial strategy, we could deliver the green, well-paid jobs of the future but, sadly, we are missing that.
I shall keep my contribution brief and end with this point: as families face a calamitous drop in their standard of living, the Government need to get their house in order and sort out their act. My constituents, like many others across the country, need to know how they are going to pay those bills.
We have heard in this debate heartbreaking stories of constituents who are facing real and enduring hardship; of the choices that people are already making in the face of the poverty that they endure; and of the impact of the cost of living crisis on those we represent. The crisis is the direct result of political choices made by the UK Tory Government and their predecessors over the past decade. Many of our constituents face grinding poverty, whether in or out of work. The Covid Realities report that came out today states:
“Our social security system is currently ill-suited to protect people from poverty”.
That should be the system’s very function.
The Tories have cut the £20-a-week uplift to universal credit and to working tax credits, which made such a difference to low-income families during the pandemic, and shamefully they completely forgot about the 2.5 million people on legacy benefits, including many people with disabilities, who depend on their heating so much more. To make matters worse, we have the upcoming Tory tax on jobs—the national insurance hike, which is coming in April. Laden on top of that, we have Brexit chaos, spiralling fuel prices and inflation seemingly running out of control at a 30-year high.
This is a perfect storm for the poorest in society. Already buffeted by the ill wind of austerity, a growing number of people have no savings, and debt which is becoming increasingly unmanageable. Last week’s Joseph Rowntree Foundation report on poverty in 2022 highlights the two-child limit, which I have fought since 2015 but which remains on the Government’s statute book, driving up child poverty with every passing day; the benefit cap—in Scotland, 67.8% of capped households are single-parent households; the five-week wait for the first universal credit payment; unaffordable debt deductions from benefits; and the freezing of local housing allowance rates since April 2020. All those things have increased the levels of poverty in the UK.
People are increasingly trapped in situations that are not their fault, unable to take on more hours, and unable to change their circumstances. Many of them, as my hon. Friend Allan Dorans mentioned, are WASPI women, whose pension plans were cut short by the Government. I want to pay particular tribute to June Miller, part of the WASPI Glasgow and Lanarkshire group, who was buried today. She was 64 and never saw her pension—shame on this Government.
The impact on those facing the hostile environment is even sharper. Asylum seekers and people with no recourse to public funds are regularly left destitute, dependent on charitable support and help from local churches, gurdwaras and mosques to survive. If we know this, if people out there know this, then Tory ministers must know all this, and it makes it all the more utterly despicable that they have chosen not to act.
Ministers, of course, will talk up the changes to the taper rate, which are welcome, but they only help those lucky enough to be in work. The Office for Budget Responsibility has said that real wages will be lower in 2026 than they were in 2008. What kind of future is that for people in work? Ministers will laud their pretendy living wage, which is not even set at the real living wage rate, and has age discrimination baked in. They will praise food banks, calling them “rather uplifting”, instead of their proliferation being a mark of shame. My former caseworker, Ellenor Hutson, has reflected that food banks were a rarity when she began advice work in 2005. Yet in 2020-21, the Trussell Trust distributed over 2.5 million food parcels across the UK, which is up 128% in the past five years.
On food banks, does my hon. Friend agree it is disgusting that there are now more food banks in the UK than McDonald’s restaurants, that almost 25% of folk in the UK are in poverty and that the Office for National Statistics calculated that the richest 10% of households hold 44% of the wealth while the poorest 50% own 9%—all under this Government’s watch?
I absolutely agree with my hon. Friend. While we know that those who work in food banks and support them do incredible work, they should not have to.
Away from the realm of boozy lockdown parties at No. 10 and birthday dumps for the Prime Minister while the rest of us were locked down, in the real world, people are experiencing a shocking rise in the price of the most basic necessities, as highlighted so powerfully by Jack Monroe. Average prices do not take into account the distribution of those prices across product lines. Increasing prices and the reduction in what is on offer is far more concentrated at the lower end, the cheaper end, of the food market, disproportionately impacting on those low-income families who depend on them. The reality of inflation is that it is much more than points on a chart to families who are already struggling. For many, it will be the difference between putting food on the table or not.
Energy prices mean that families cannot afford to heat or even light their homes, making them more vulnerable to health issues, particularly those who already experience health conditions and disabilities. Macmillan points out that about one in six people with cancer see their household fuel bills rise because of their diagnosis, with the average cost for those affected reaching £100 a month. The UK Government must act now on energy prices. Instead of a rising price cap, the UK Government must introduce an emergency financial package to support the most vulnerable and help families to cope with this growing Tory cost of living crisis.
The New Economics Foundation found that lone parents, pensioners and families caring for disabled relatives will be hit the hardest by increasing bills, and that the poorest will lose the largest proportion of their incomes to fuel bills. National Energy Action estimates that 6 million—6 million—UK households will be living in fuel poverty by April, a 50% increase from 2021. Resolution Foundation research shows that on average families will be £1,200 worse off in April and that fuel stress will dramatically increase from April due the higher energy price cap. New Joseph Rowntree Foundation analysis also warns that the energy price cap will have a harsher impact on the poorest families, who will spend on average 18% of their income after housing costs on energy bills after April. Minister, people cannot cope with those increases. The Government must act.
The reality is that poverty kills people: quickly and slowly, painfully and miserably. It stunts life chances and its effects endure. It is clearer every day that this UK Government, this Prime Minister, this Chancellor and this Minister in front of us today have the powers to tackle this, but not the will. They have the resources and the wealth, should they choose to use them. We can only conclude by their inaction that they have no interest in ending poverty—none whatsoever. Lord Agnew showed some courage—more courage than anybody on the Government Benches here—by resigning over the fraudulent misuse of bounce back loans: further billions to the amount they have allowed fraudsters to walk out the door with, including £4.3 billion from the covid support schemes alone, while so many were completely excluded from UK Government support. That incompetence is not new. According to Best for Britain, a total of £19.3 billion has been wasted by the Prime Minister since he came to power—all that while the Tories play their political games, shifting the blame for tax rises, filling suitcases full of booze, and ducking questions about lies and parties.
People are freezing and people are starving, not in some Dickensian dystopia but right now, on these islands. Tackling the Tory cost of living crisis is a matter of urgency and lives depend on it. The UK already has the worst levels of poverty of any polity in north-west Europe and the highest levels of in-work poverty this century. Only independence will allow us to recalibrate our economy to support and invest in those who have the least, rather than to reward those who already have the most. I urge all Members with sense and compassion to support our motion today.
Alison Thewliss speaks with conviction —I know that from having listened to many of her debates in the past—but it will be no surprise that I will come to a very different conclusion in my arguments today. Let me begin by thanking all hon. Members who have taken part in this important and sometimes lively debate. The pandemic has been a very challenging time for many. We acted quickly to put in place unprecedented levels of support. Since the start of the pandemic, we have spent more than £400 billion protecting people’s jobs and livelihoods, supporting businesses and public services and providing unprecedented welfare support. That is not inactivity, as alleged by the SNP, and it has been conveniently overlooked by hon. Members, including Neale Hanvey.
Universal credit has stood up to the challenge of covid-19, providing a vital safety net for 6 million people, thanks to the hardworking staff in DWP across the nation, including in Scotland. Thousands of work coaches worked tirelessly to ensure that the benefits system did its job. Our successful vaccine programme is providing us with the protection to fight the virus in all its forms.
The latest labour market statistics prove that time and again we have made positive decisions during the pandemic. As has been highlighted during the debate, it is important to put the rising cost of living in context. Prices are rising in countries around the world. I know that Members such as the hon. Members for Ceredigion (Ben Lake), for Glasgow East (David Linden) and for Edinburgh East (Tommy Sheppard) have raised concerns, but we need to look at the issue in context. As the global economy recovers from the pandemic, consumer demand is surging at a time when global supply chains are disrupted. We recognise and understand the pressures that is causing for people’s wallets, and their worries as they see the cost of food, energy and other essentials increase.
The Prime Minister, the Chancellor and the Secretary of State for Work and Pensions—and, indeed, the Chief Secretary sitting next to me—are listening to those concerns. As shown during the pandemic, the Government will do what it takes to support those most in need, and we are looking at the best way to build on the support that is already available. With the economy moving into a higher gear, it is time to focus our attention on getting people into work and progressing in employment. That was ably highlighted by my hon. Friends the Members for Broadland (Jerome Mayhew) and for Moray (Douglas Ross).
The Minister said that the Government will do everything it takes to resolve the cost of living crisis. What will they do to mitigate the energy price cap rise in April?
We have shown what we can do when faced with challenge. We are monitoring the situation and looking at all the solutions—we will come forward—as, I understand, the Scottish Government are monitoring the situation to see what more they can do.
I will not give way just yet: I will make further progress.
The latest job figures tell a very positive story. There is now a record number of people in payroll employment in the UK, with 23,000 people added to payrolls in Scotland in December alone. With around 1.25 million vacancies across the UK, up 33,000, or 2.7% in a month, and by 467,000, or 58.9% since the start of the pandemic, there are many further opportunities for people to move into and, importantly, progress in work and increase their earnings.[This section has been corrected on
Current estimates also show that the number of online job adverts in Scotland has risen by 13% since the start of the pandemic. We know the importance of employment, particularly full-time work, in substantially reducing the risks of poverty, especially in households with children. That is why the focus of the Secretary of State and the whole DWP ministerial team is on matching people looking for work with those opportunities, which will also boost key sectors and the economy as a whole. As well as getting people into jobs, we are taking action to boost the take-home pay of low-income working households by giving 2 million families an extra £1,000 a year through our cut to the universal credit taper rates and increasing work allowances. Raising the national living wage by 6.6% to £9.50 from April will mean an extra £1,000 a year for full-time workers.
To help people to take advantage of the record number of vacancies, our plan for jobs is helping people at any age and any stage of their career, as the Under-Secretary of State for Work and Pensions, my hon. Friend Mims Davies, is fully aware. Since the start of the pandemic, we have recruited 13,500 new work coaches to ensure that claimants, no matter where they live across the country, can access support and opportunities to get a job, progress in work and realise their potential. It is good to know that there are 1,200 extra work coaches in Scotland alone. In addition, the flexible support fund is available to remove barriers for anyone looking to access the labour market and is administered by work coaches on a discretionary basis, so it is a great tool to help people overcome their own personal barriers to work. For those who have been unemployed for between three and six months, the job entry targeted support programme provides intensive support to help them bounce back as quickly as possible, and for individuals requiring upskilling to take advantage of a vacancy in a certain sector—Members have discussed particular concerns in specific sectors—sector-based work academy programmes, or SWAPs, provide claimants with those key skills and a guaranteed job interview at the end of the placement.
For young people, who are of course most at risk of long-term unemployment and have been hit particularly hard by the pandemic, we have the £2 billion kickstart scheme, which has seen over 122,000 young people start a six-month work placement across many different kinds of jobs and sectors, with 10,000 starts in Scotland alone. There are youth hubs in every jobcentre to support young people—150 youth hubs have been opened, 19 of them in Scotland—and extra support is available for those aged over 50 as well, to help them find the work they need and help them progress with their career aspirations.
We recognise the pressure people are facing with their household finances and are providing extra support for those who need it in this period of cost pressures. We must of course highlight the household support fund, which has provided £500 million of support across the United Kingdom, with £41 million going to Scotland and the Scottish Government.
We have provided extra support as well over the years, recently by increasing the local housing allowance in cash terms, with an extra £600 on average to 1.5 million households. As we look at the rising energy prices, we are working with Ofgem and the Department for Business, Energy and Industrial Strategy to ensure that we have the correct response to the recent pressures and make the appropriate changes where needed to increase our resilience to future price fluctuations. There is the energy price cap, and the winter fuel payments, cold weather payments, and the warm home discount, all of them making a real difference to people facing energy cost challenges across the country, including in Scotland.
So, we have done a lot. We will continue to do more. We are committed to working with the Scottish Government to help them achieve their devolution aspirations. We look forward to hearing more about them so we can help them in this task, and we are absolutely committed to help those—
The House divided: Ayes 57, Noes 0.
Question accordingly agreed to.
That this House notes there is a cost of living crisis hitting homes across the UK; regrets the UK Government’s current plan of reductions in certain benefits and tax rises coupled with rising costs of the UK leaving the EU; is concerned that the UK has the worst levels of poverty and inequality in north west Europe and the highest levels of in-work poverty this century; and calls on the Government to take immediate action with a package of measures to boost incomes and reverse rising poverty, including reinstating the £20 universal credit uplift, introducing a Real Living Wage of at least £10 an hour, introducing an energy payment for low income households, and matching the Scottish Government’s Scottish Child Payment for families across the UK.
On a point of order, Madam Deputy Speaker. During the Brexit campaign, we were all told that Parliament would be taking back control. Given that the House has just voted by a clear majority for a motion calling for the Government to reinstate the £20 universal credit uplift, introduce a real living wage of at least £10 an hour and an energy payment for low-income households, and roll out a child payment similar to that in Scotland—given that the Parliament that has been given all this control has just voted for that—can you inform me when the Government will introduce such measures to help people with the cost of living crisis?
I thank the hon. Gentleman for his very reasonable point of order. I am looking at the motion which the House has indeed just passed, and I note that the crucial point is that the House
“calls on the Government to take immediate action”.
Well, the House has called, and I am sure that the Government have heard.