I declare an interest as an honorary vice-president of Energy Action Scotland.
Today, the Office of Gas and Electricity Markets lifted the cap on energy prices again. The previous increase added £139 to bills; there will now be an extra £700 to pay. Energy bills have, in effect, doubled in the space of a few months. People who are on fixed incomes, people in insecure jobs, people on low pay and elderly people have plunged into debt or face a choice between heating or eating.
Currently, 613,000 households are in fuel poverty. That figure could rise threefold, to 1.8 million households in Scotland alone. If that is not serious enough, Scots face increases across a range of other household bills, all at a time when incomes are stagnant and simply not keeping pace with those increases. That will devastate family finances, as people stare down the barrel of a cost of living crisis caused by inflation, which is running at a 30-year high, rises in interest rates, rising national insurance contributions, which are increasing by 10 per cent in April, rising council tax, inflation-busting rises in water rates, and massive rises in food bills, which everybody sees on their supermarket shelves. There is no doubt about the scale of the crisis and the real struggle that Scots will face.
Faced with the prospect of increasing poverty and warnings from organisations such as Energy Action Scotland that some people will die as a consequence, it is incumbent on Governments to act. Let me be clear: I expect both the Scottish Government and the United Kingdom Government to set aside their customary differences and work together to protect people from the crisis.
The Scottish Government has the power to help, whether that is through putting more income in people’s pockets or reviewing some of the charges that it is responsible for. Doing nothing is not an option. The Scottish National Party’s amendment is therefore genuinely disappointing. Simply saying how much it is already doing is breathtakingly complacent. People are facing a doubling of their energy bills and a huge cost of living crisis.
I will give the Government one example of how it can help. Water bills are set for an inflation-busting rise of almost 10 per cent and households will be paying hundreds of pounds more. That comes at a time when Scottish Water is sitting on at least £400 million in reserves, and possibly as much as £700 million in reserves when one considers its subsidiary companies. Those reserves are taxpayers’ money. We should not forget that the SNP tried, until it was rumbled, to remove the single person’s discount from water bills a couple of years ago. The SNP was warned about the impact of the latest rises but, given the chance to do things differently and actually help people and be on their side, SNP members stick their fingers in their ears and do nothing.
Aside from reviewing the increased charges for which it is responsible, the Scottish Government can increase the amount that it gives to help with heating. It has all the powers that it needs to do so; it simply requires political will. Yesterday, I, like many others, watched in disbelief as the SNP suggested that we could cut the bottoms off school doors to help with ventilation. I kid you not—that Alice in Wonderland approach is what passes for policy thinking from the SNP. Next, perhaps, it will suggest that we burn the cut-offs from those doors to heat our homes. To be frank, the people of Scotland deserve better than that. They deserve a Government that is on their side; that does not use the constitution as an excuse for inaction; and that protects their interest when times are tough.
I turn to the Conservatives. I point out as gently as I can that the Tory amendment is not factually correct, because Rishi Sunak has actually frozen some personal allowances. That aside, let me be the first to welcome anything that puts money in people’s pockets. To be frank, however, the Tories’ approach is wholly inadequate. Giving energy companies loans simply lands bill payers with the cost at a later date, and with prices set to rise again in six months’ time, it will do nothing to resolve the crisis. The council tax rebate is worth about £150 per household, which is less than a quarter of what is required.
The big difference between Labour and the Tories and the SNP, which are joined at the hip on this issue, is that Labour would raise the money now through a windfall tax on North Sea oil and gas profits and on the higher-than-expected VAT receipts and oil and gas revenues.
For the SNP to join the Tories to reject that approach and deny the Scottish people immediate help and support on the scale that is required is, to be frank, shameful. SNP members should hang their heads in shame. The SNP and the Tories have demonstrated whose side they are on. They are on the side of multinational oil companies that are making profits of £27,000 a minute—that is right: £27,000 a minute, which is more than some people earn in a year—rather than being on the side of hard-pressed Scots who are staring down the barrel of a cost of living crisis that is the worst in my memory.
Under Labour’s fully costed plans, every single Scottish household would get £200 towards the cost of their spiralling energy bills. For the 800,000 households that are hardest hit, the support would be £600, and it would apply to those both on and off the grid.
Every single penny of the £290 million in funding consequentials for the Scottish Government from the United Kingdom Government must go into the pockets of people who need urgent help. Will the SNP bring proposals to the chamber next week to outline how it will distribute the money? That cannot wait.
That the Parliament recognises the pressure being placed on household finances across Scotland due to rising inflation, increasing food and fuel prices, and high energy bills; considers that this will be exacerbated by the increase to National Insurance, the likely hike to the energy price cap in April 2022, and the rises in Scotland to rail fares and water charges, which it calls on the Scottish Government to review and defer; supports the calls for the UK Government to cut VAT on home energy bills for 12 months; endorses proposals to save most households around £200 on bills using that VAT cut and smoothing the costs of supplier failure, as well as to provide extra targeted support to those who need it most, including pensioners and low earners, by expanding and increasing the Warm Home Discount, giving those households an additional £400 off energy bills, and agrees that this should be paid for by a one-off windfall tax on increased oil and gas profits.
This is an important and timely debate, as hundreds of thousands of families and households across Scotland are facing very challenging financial circumstances as a result of rising costs and high inflation. As we have seen reported in today’s news, the Bank of England has said that UK households must now prepare for the biggest fall in living standards since records on the subject began three decades ago, and for the worst pay erosion since 1990.
We have also had Ofgem’s announcement today that households face an eye-watering 54 per cent increase in their energy bills. That is a real hammer blow to customers in Scotland and throughout the UK. Analysis estimates that that price cap increase could move around 200,000 further households in Scotland alone into fuel poverty and around 235,000 households that were already fuel poor could move into extreme fuel poverty. That sits within a wider context of increasing pressures on household costs. We are in a cost of living crisis that calls for immediate action.
From April, workers and businesses throughout the country will have the added pressure of a rise in national insurance contributions—a policy that was announced without prior notice or consultation with the devolved Administrations. Of course, we are told that that hike is to pay for the national health service, despite the fact that we were told that Brexit would deliver £350 million a week towards the NHS. We recognise the added need for health and social care funding, but the UK’s decision to raise that by taxing workers rather than wealth is a missed opportunity.
On top of that, the Bank of England has announced that interest rates will be raised by 0.5 per cent, inflation will surpass 7 per cent and gross domestic product forecasts will be slashed, leaving Scottish taxpayers to experience the worst living standard decline of the past few decades.
Powers relating to the energy markets remain reserved to the UK Government—I wish that Jackie Baillie had borne that in mind when she made her attack on the SNP and Green Government. Therefore, the UK Government must act urgently to address the crisis. The Cabinet Secretary for Net Zero, Energy and Transport and the Cabinet Secretary for Social Justice, Housing and Local Government have written more than once to the UK Government to reiterate the need for urgent action and has offered a series of proposals to support energy consumers, including targeted direct support. We await a response from the UK Government over and above what it has said today.
The tax levers to help hard-pressed households are also reserved to the UK Government. They include the power to vary VAT rates on consumer bills in the short term. I am sorry to hear that the UK Government appears to have ruled that out today as well, despite the fact that Boris Johnson said that Brexit would give him the opportunity to cut VAT rates. The rates that apply to the provision of energy-efficient materials and the retrofitting of buildings could also be cut, which would contribute to long-term bills being reduced. The Scottish Government has called for action on that and continues to do so, including urging the UK Government to reconsider the decision not to reduce VAT on energy bills.
For our part, the Scottish Government is very committed to supporting people in Scotland, especially those who are on low incomes. We are already using all powers and resources available to us to support people in Scotland, including through energy efficiency investment, Home Energy Scotland advice, support on housing costs, welfare, debt advice services, the child winter heating assistance, the money talk team service, which is now up and running, and support to address food insecurity.
The minister says that the Scottish Government is doing what it can, but a number of issues have been raised, including by Citizens Advice Scotland, on the Government’s proposed fuel poverty strategy. CAS has said that the strategy does not go far enough and does not put enough money in people’s pockets. Support such as the child winter heating assistance is available only to some families with disabled children and not others. Will the Government address the poverty that those families experience by addressing the eligibility for that assistance?
On fuel poverty, in November, we put in place a £41 million winter support fund to ease the strain on low-income households. That includes £10 million of funding that is available to help people who are struggling with heating costs this winter. Our council tax reduction scheme currently supports more than 470,000 households. In addition, by doubling the Scottish child payment to £20 per week, we anticipate lifting 40,000 children out of poverty from the 430,000 who are eligible for support.
We are carefully assessing the mitigation measures that the UK Government announced today and how they will be applied in Scotland. However, the £200 rebate that has been announced is to be paid back—it is just a loan—and will not address the medium to long-term issues, never mind the short-term issues. It comes in the context of an increase in bills of nearly £700, so £200 goes nowhere near far enough.
As I draw to a close, we should all take a moment to consider what it means to be forced to choose between heat and food in this day and age in this country. We are in the middle of a cost of living crisis. We are seeing hikes in tax, the cost of Brexit and a UK Government cut to universal credit recipients’ income; the list goes on and on. It is important that we work together to address the very real cost of living crisis that the people of Scotland face at the moment.
I move amendment S6M-03042.2, to leave out from “the rises” to end and insert:
“notes these are related to reserved powers; supports the Scottish Government’s calls for the UK Government to take urgent action on a package of measures to address home energy bills; welcomes the significant action that the Scottish Government has taken to reduce the cost of living through measures including the introduction of free bus travel to under-22s, the increased water charges reduction scheme discount, the introduction, extension and doubling of the Scottish Child Payment, the more than £2.5 billion invested in support for low-income households, and the increase in free childcare, and agrees that further power in the hands of the Parliament would enable it to address the cost of living, energy prices, and minimum wage levels.”
I acknowledge that this is a very serious issue for many families who see their household bills going in only one direction, at the same time as they try to cope with all the other challenges of the pandemic, which is far from over. Today, that anxiety has been heightened with the news of the increase in the energy price cap.
I also acknowledge concerns about the national insurance rise, which I will come back to in a minute. In addition, I acknowledge anxieties about world markets and increasing political tensions between Russia and the Ukraine, which have potentially serious implications for energy costs and supply chains.
When we drill down into the detail of the inflation statistics, it is clear that producers and suppliers that are involved in international trade are telling us that much of the current level of inflation is a direct result of rising shipping and wholesale gas costs. Those involved in UK business tell us that it is also a result of shortages in labour markets. There are inflation issues in other countries: in Germany, inflation is up to 4.9 per cent; in America, it is up to 7 per cent; in France, it is up to 3.3 per cent; and there is underlying energy inflation in the eurozone, which is now averaging out at 28 per cent.
We know that the cost of the pandemic is well over £400 billion. We know that 6 million people are on NHS waiting lists and, whether we like it or not, we need to go ahead with the national insurance increase to pay directly into health and social care budgets. It is never popular to raise tax and I am not going to argue that the national insurance increase will not be painful but, when the decision was made some time ago, there was a reluctant acceptance that, in order to deal with the waiting lists and NHS crisis, that rise was necessary.
I understand that those who instinctively like low-tax policies sometimes have to make an effort to come to terms with the need for such a rise. Why were the Conservatives able to come to terms with the need for an NI hike, which will be regressive, but were not able to come to terms with the need for more progressive income tax, which we have already implemented in Scotland—the five-band system that places the expectation on those with the broadest shoulders?
I thank Mr Harvie for that intervention, but it is all about economic growth, which his party is not terribly keen on. Scottish Fiscal Commission statistics show that there is a huge issue in relation to Scotland’s income tax revenues, which is one of the key issues around income tax policy—hence the Conservative Party’s view on that.
I also hear that VAT on fuel bills should be scrapped, but that is not the best way of assisting those who are most in need, because it is not a progressive measure. It would reduce bills by just 5 per cent and would cost the Treasury billions of pounds. I have also heard claims, including from Jackie Baillie this afternoon, that there should be windfall taxes on oil and gas profits, similar to the Gordon Brown windfall tax on privatised utilities in 1997. However, if we look abroad to other countries such as Spain, those taxes have had only very limited success. The companies in question are owned by us all through pension funds—
I will just finish this point, Ms Baillie.
The companies in question are owned by us all through pension funds and insurance firms, and they have to be attractive to new investment.
Windfall taxes risk a reduction in output and therefore an increase in prices for consumers. We should not forget that £100 billion of investment is needed to secure future power generation. In short, the energy experts are telling us that we need to increase energy supply and reduce the demand, and a windfall tax would do the opposite.
I can very much acknowledge Gordon Brown’s failure on a windfall tax. On that point, I am happy to conclude my remarks.
I move amendment S6M-03042.1, to leave out from “and defer” to end and insert:
“; believes that the Scottish Government should deliver a fair settlement to local government to avoid households being hit with council tax increases in April; welcomes UK Government action to increase the Living Wage, raise the Personal Allowance, reduce unemployment and freeze Fuel Duty, and calls on both of Scotland’s governments to take further action to support individuals and families at this difficult time.”
I am very pleased to rise for my party to speak in favour of the incredibly important motion on a matter that is impacting families up and down the country. I thank Jackie Baillie for using time from the Labour Party’s parliamentary debating time to bring it before us.
Presiding Officer, you would be hard pressed at the moment to go more than a day or so without hearing about the rising cost of food and soaring fuel and energy prices. As we have heard many times this afternoon, we are already living through a cost of living crisis that is hitting families and individuals hard, and from all directions.
The consumer price index shows that the cost of food and drink has been climbing every year, and is up significantly from January 2020. The UK’s biggest supermarket chain, Tesco, has already said that its prices could be set to rise by 5 per cent, and poverty campaigners have highlighted finding that foods such as rice and pasta—which are staples—have risen by as much as 340 per cent in some locations.
That is against a backdrop of skyrocketing energy costs. Just today, as we have also heard several times, the energy regulator Ofgem has announced that the price cap will rise by £693 on average, which will cause the bill of the average customer to rise to up to £1,971. It will be worse for pre-paying customers. That is not to mention the rising cost of fuel, rent and taxes, as all the while wages stagnate. Inflation will this year reach its highest level in 30 years. The painful reality is that the people who are on the lowest incomes are feeling the impact most acutely.
All that has taken its toll. Citizens Advice Scotland has found that a third of Scots—I repeat, a third—are worried about being able to pay for food and other essentials. That means that parents will be facing the anxiety of not being able to provide for their children, and that some pensioners will be anxious about not being able to heat their homes.
In this Parliament, we have a sacred duty to recognise the challenges that our constituents are facing and to act on their behalf to mitigate them. Therefore, I am pleased to support the spirit and the proposals that are contained in Jackie Baillie’s motion, including the proposal on the warm homes discount; my party has been calling for it to be doubled and to be extended to all those who are in receipt of universal credit.
Liberal Democrats also want the national insurance tax hike to be scrapped, which would save families hundreds of pounds a year. Our plans also include forcing broadband providers to offer vulnerable customers cheaper deals through social tariffs, which would benefit up to 8 million households and save them up to £270 each, every year.
The Scottish Government often talks a good game when it comes to tackling those issues, but when push comes to shove, it has been found wanting. With its latest budget, it will heap on more misery with yet more cuts to local authorities, which will force council tax increases and cuts to the services that people rely on most, just when Scots are at their lowest financial ebb.
My party recognises that the impacts of poverty and hunger can be wide reaching. Studies have shown that they can be major factors in preventing children from achieving their potential.
We also support an enhanced carers allowance in Scotland and are calling for an immediate UK-wide uplift of £1,000 for a year.
In recounting her own story, the journalist and anti-poverty campaigner Jack Monroe paints a very bleak picture of the choices that far too many people in our society face:
“After you’ve cut back everything else, food is the last to go. I didn’t mind putting an extra jumper on if I had food in the fridge. It was the point where I had an extra jumper on and no food in the fridge that I realised things had gone” terribly “badly wrong.”
In this day and age, no one in this country should have to make such a choice, but with the cost of living crisis, we find that all too many will.
It is great privilege to be able to contribute to the debate on the cost of living crisis, which is undoubtedly the single most important issue that millions of families across the country face.
With Ofgem’s announcement today that the energy price cap is set to rise by 54 per cent—meaning that families could be hammered with an extra £700 on top of their existing energy bills—we have to consider that this is actually an emergency debate, because people are desperately worried. They are worried about their income, their job security and their ever-increasing bills that will suffocate and snuff out what little disposable income they have left. They are concerned about putting the heating on, putting food on the table and ensuring that they can keep a roof over their families’ heads. Frankly, they are baffled by just how little people in positions of power are doing to help them through what is likely to be the worst cost of living crisis in living memory.
Although the lack of action from Government at all levels is unforgivable, it is nothing when compared with deliberate and calculated actions such as cutting the universal credit uplift at this time, and placing on unemployed people ridiculous four-week deadlines to secure a job. That callousness will push millions into more poverty and destitution. In Glasgow alone, more than 80,000 people are in receipt of universal credit. To put that into context, that number could have filled Celtic park last night with 20,000 people still left outside it. We should be in no doubt that families will suffer tremendous hardship because of that single decision.
As someone with lived experience of being on universal credit, I find it sickening and cowardly that the richest man ever to have sat in the House of Commons—the Chancellor of the Exchequer, Rishi Sunak—thinks that the decision is in some way acceptable. Already one in four children in Scotland lives in poverty. Are we really going to stand here and tell ourselves that those decisions will not make that intolerable situation worse?
We know that the price of energy is skyrocketing, but so, too, are the costs of other necessities. Just last week, the
Daily Record reported an increase of nearly 20 per cent on the price of a weekly food shop from the price in January last year. Nationally, food and drink prices were 4.2 per cent higher in the year to December 2021.
How do we fix the situation? I have no doubt that we will hear the usual musings from Conservative members about a strong economy and low taxation stimulating growth, and about how getting people into work is their best route out of poverty. However, when we look at the reality, rather than listen to the rhetoric, we see that what they say would be outrageous, were it not so risible.
We saw that yesterday, in the debate on the Scottish rate resolution. We continually heard Conservative MSPs talking about how Scotland is the highest-taxed part of the UK, while the Conservatives are simultaneously hiking national insurance and putting more pressure on hard-working families. That hike in national insurance will raise an estimated £12 billion. Is not it ironic that that will not even cover the £10 billion that has been wasted on personal protective equipment and the £4 billion-worth of fraudulent applications for public funds that have been written off by the Treasury in recent weeks?
Fundamentally, we need to ask what we can do to help people right now. Labour’s motion outlines what we believe would alleviate some of the pressures on families. On energy costs, we would cut VAT for 12 months and we would implement a windfall tax on companies that are seeing increased oil and gas profits. That would offset virtually all the increase in energy prices that it is speculated will come this year, and it would help 9 million families across the UK. The chancellor has offered just £150 in October and a £200 loan, which will not help at all because it will have to be paid back. Today, Shell reported its highest quarterly profits in eight years, so a windfall tax seems to be a small price for it to pay. That windfall tax would allow the Government to save families around £200 on their energy costs alone.
We need to go much further. I like to think that our approach is something that all members in the chamber could support as a baseline. I am confident that we all agree that we need to help people now. We cannot continue along the same track, pushing people further into poverty because the Government is simply too scared to put its money where its mouth is.
One issue that is not listed in the motion is the failure of successive UK Governments in management of the economy. That is of fundamental relevance in a debate about the cost of living crisis and the people who will bear the brunt of it, many of whom are pensioners.
As for oil and gas, the UK Government sold it off cheap to international companies and only Shetland negotiated benefits for itself. Norway launched its own national company and now also leads in green energy. The oil off Scotland’s shores was squandered by successive UK Governments. In 2020, Norway’s sovereign wealth fund was worth £923 billion—£170,000 for every Norwegian—and in that same year it gained £8 billion in value. That is some rainy-day fund.
The UK has no oil fund. Zilch. The banks’ collapse in 2008 led to the creature called quantitative easing—otherwise known as printing money. That cash was supposed to trickle down to us, but instead it flooded to those who have substantial assets—the people who are already wealthy.
Then, Covid came along. The UK Government has had to write off more than £9 billion that was spent on useless personal protective equipment contracts, which were often divvied out to Tory pals.
The UK Government was already borrowing; now it has to borrow more. The UK national debt now stands at more than 100 per cent of GDP—in other words, we are up to our ears in debt and, with interest charges, the debt is increasing hourly. Norway is the polar opposite. It does not have to borrow. It was able to ride out the banks’ collapse, Covid and even spiralling energy costs by introducing a universal scheme to help consumers. Norway had the cash—unlike the Tory Government, which is simply deferring some costs that we will pay for later.
That is the context: squandering our assets and embedding inequalities in our society, in which for decades the rich have got richer and the poor have got poorer. That matters. Pensioner poverty is not new. Women whose working lives have often been interrupted by motherhood and caring responsibilities do not even receive the measly basic pension.
I have only a very short time.
In my time in the Scottish Parliament—more than 20 years—the pension credit system has failed constantly, with 40 per cent of the people who are entitled to it not claiming it because of the system’s complexities. However, that pension credit opens the door to other benefits, including a free TV licence for people over 75—but only if they are on pension credit. What a tawdry act it was to remove universal pensioner access to the free licence during the pandemic, when pensioners were isolated in their homes.
The hiking of energy costs impacts on those who are less mobile and confined indoors, many of whom are pensioners. Food prices are rising, which is a nightmare for pensioners on fixed incomes for whom food is often more costly because they are purchasing for one.
The Scottish Government is trying to mitigate that, but I am often disappointed by Labour because they seem to just go along with mitigating Tory policies. I want those policies to be radically reformed, which cannot be done in London. It must be done here in Edinburgh, where we have the skills, experience and social democratic values to run the economy—not ruin it—to invest in our natural resources and to distribute them through a fair tax system that recognises that we judge a nation by how it treats its more vulnerable and elderly people. To Paul Sweeney, I say this. That means one thing only: independence, with straightforward competence over Scotland’s economy and just distribution of our wealth.
It might be worth noting that Norway’s national debt is forecast to be more than $200 billion in 2026.
I appreciate Labour’s use of its time today to debate a significant issue that should be at the top of the agenda of every member in the chamber. The cost of living touches households across Scotland—I am sure that we have all been looking at it with concern over recent months.
We are all emerging from a pandemic that was unprecedented in its scope and reach. We know all too well that our society is more fragile and less resilient than it once was. Although should recognise the role that the UK furlough scheme has played—by providing a level of stability for hundreds of thousands of families across Scotland—in preventing some of the worst possible outcomes in terms of jobs and the economy, for many households, budgets are already strained.
It remains a particularly worrying time for families to be faced with surging energy bills, and rises in other areas, too—all while public services are being stretched as never before. As other members have mentioned, the most pronounced element of that has been the jolt in the cost of wholesale gas globally. We should not underestimate the reliance that we still have on gas: it heats the vast majority of British homes and it continues to provide a very significant proportion of our electricity, although we have moved away from more polluting alternatives, such as coal.
We often speak of energy security, but the reality is that we are a net gas importer and remain at the whim of fluctuations in the global market. Sensible predictions suggest that wholesale costs might remain high for the next two years.
Those are undoubtedly major challenges, and although we can identify the problems, the solutions are less clear. The question of cutting VAT on home energy bills is finely balanced, compared with other interventions. As Liz Smith highlighted, last month the Institute for Fiscal Studies noted that that policy would give average households back less than a fifth of the annual increase in costs and could bring with it unintended consequences.
I do. I am just coming to that, actually.
That is, of course, not a conclusive argument against the policy. The chancellor has today announced proposals to smooth price fluctuations over longer periods. I note that approaches such as that are addressed in the Labour motion.
On a wider scale, little progress has been made, sadly, towards diversifying domestic heat supplies. We are still scratching the surface of moving homes from fossil fuel dependence to renewable heat. My region, the Highlands and Islands, has long faced issues around high fuel costs. We have a considerably higher than average number of properties that are not connected to mains gas and are reliant on oil and liquefied petroleum gas tanks, or electricity, at higher cost.
Households that are already spending a larger proportion of their incomes on energy, whether through low income or higher energy costs, will be hardest hit by the cost increase. For people in that position, particularly many people in the northern isles, where fuel poverty rates are higher, it is particularly galling to be surrounded by wind turbines but to see no benefit in their bills.
Although we must consider the people who will be hardest hit by energy costs, we should also look at other areas. The Scottish Government’s budget for next year is currently going through Parliament. Earlier today, I questioned the Minister for Public Finance, Planning and Community Wealth on the Government’s approach to the local government financial settlement. While ministers have, yet again, been busy patting themselves on the back for reducing the levels of their cuts to already stretched council finances, there is still the likelihood that many local authorities will address the cuts with council tax rises in order to keep services running.
Higher costs have hit transport at all levels. That is another area in which the Highlands and Islands, like many remote and rural parts of Scotland, will feel the pinch. When local public transport options such as bus routes are lost, people are forced to drive, with all the additional costs that that incurs.
On an issue that is of particular relevance to my region, I note that at the end of last year the Scottish Government decided that interisland ferries would not be covered by the young persons travel scheme.
That means that, although a young person on the mainland can travel from Berwickshire to Caithness for free, a young person in Orkney or Shetland, whether travelling for education or work, will still be liable for any ferry fares that made up part of their journey.
I thank the Labour Party for securing the debate. It is worth reminding members and the people of Scotland of the comments of the former Labour chancellor, Alistair Darling, who said that his cuts would have been “deeper and tougher” than Thatcher’s. We cannot let the population forget that austerity started under Labour, but it has been turbocharged by the Tories since they have been in power, particularly when they were in power with the Liberal Democrats in the Cameron-Clegg coalition.
The debate is timely given the announcement of the energy price cap increasing by £693 for direct debit customers and by £708 for pre-paid meter customers. Many people on pre-paid meters have them for a reason and many of those customers are among the lowest paid in society.
Joseph Rowntree Foundation analysis warns that the energy price cap rise will “devastate” the UK’s poorest families, who will spend
“on average 18 per cent of their income after housing costs on energy bills after April”, and the UK charity National Energy Action estimates that 6 million UK households will be living in fuel poverty by April, which is a 50 per cent increase from 2021.
At first glance, today’s announcement by the Tory Government of a £200 loan and £150 for some council tax payers in England does not go anywhere near enough to help the many people who are already struggling and having to choose between heating and eating. Energy costs are going up, fuel costs are going up, food prices are going up, clothing costs are going up and national insurance is going up. While the Tories in Westminster are busy getting bevvied on their suitcases of booze in Boris’s gaff and Liz Truss spends half a million pounds on a flight to Australia, many people across the UK are struggling to survive.
Following the announcement this morning that there are likely to be Barnett consequentials, where does the member think that those consequentials should be spent by the Scottish Government?
We first have to see the details of the consequentials. We have heard what the First Minister said. I do not know whether Jamie Halcro Johnston was listening during First Minister’s question time, but she answered that question.
The people of England also have to pay prescription charges at £9.35 a time and they pay for their tuition fees. Clearly, the out-of-touch Tories care little about the cost of living crisis and more about saving their own skins at the next UK election.
Inflation is sitting at 5.4 per cent, which is the highest that it has been for 30 years, and some economists expect it to hit 7 per cent this year. The UK already has the worst levels of poverty and inequality in north-west Europe and the highest levels of in-work poverty this century.
A report by the Joseph Rowntree Foundation shows that around two thirds, or 68 per cent, of working-age adults in poverty in the UK live in a household where at least one adult is in work. That figure has never been higher. I believe that work is a route out of poverty, but when someone is in work and on poverty pay, how can they get themselves out of poverty? That is something that the Tories really do not understand. Organisation for Economic Co-operation and Development data shows that, in nearly every year of the 21st century, poverty rates in the UK have been worse than those in nearly every country neighbouring the UK in north-west Europe.
The pandemic has played a part in rising costs, but so, too, has Brexit. The chaos and confusion caused by Boris and his Brexiteers at the expense of the normal person in our communities are there for all to see.
Scottish households are facing profound financial challenges. We must address those directly, demanding accountability from where decision-making power on energy lies and seeking to tackle the foundational causes of inequality, while acknowledging why we are in this position.
The crisis is a product of several factors. We have a UK Government that is taking more and giving less, as we have seen in its decisions on national insurance and universal credit. That pushes many into fuel and food poverty and stifles our businesses.
Westminster has failed oil and gas workers and energy customers, and further destabilised our climate with its refusal to support shifts away from volatile fossil fuel markets. In the process, it has also wasted our money, as can be seen in the £400 million that it spent on the abandoned green deal scheme, which supported only 1 per cent of households and delivered significantly fewer measures than any previous scheme. Its withdrawal of support for renewables, especially onshore wind, and comprehensive insulation schemes should be a cause of shame.
We must do everything in our power to minimise the impacts of the crisis on Scottish homes and livelihoods by disinvesting scarce public money from unsustainable industries and greenwashing initiatives. We must not prolong the extraction of fossil fuels while ignoring the fact that big oil and gas companies shift the detriments of market volatility on to workers. Instead, we have the potential to demonstrate how the just transition to local energy systems as part of a green new deal can reduce poverty and inequality.
Those innovations would see significant revenue generation that we could use to support households and businesses while reducing the cost of domestic energy use, but unfortunately they are still restricted by the UK Government’s socially and environmentally regressive policy regime.
We also need to make sure that the support that is available, such as the Scottish welfare fund, is as accessible as possible, as Citizens Advice Scotland and others have highlighted.
It is clear that Scotland is moving towards a more distributive fiscal policy, as we see in our decision to make bus travel free for young people, the doubling of the child payment and so on. The actions that we see from Westminster will only allow the gap between rich and poor to grow.
South of the border, where big decisions about Scotland’s energy system are made, home insulation schemes are failing without consequence. In the past year, 90 per cent of energy bill increases have been due to the rising price of gas. The only way to cut the cost of energy is to end our dependence on gas and break the relationship between gas prices and fuel bills, but Westminster refuses to do that. That reflects the general failures of Westminster to protect vulnerable homes and livelihoods from predatory and exploitative business practices, and from its own defective fiscal policy. All this happens as Covid-19 and its impacts continue to weigh heavy on many Scots who lost income and loved ones.
The Scottish Government’s resource spending review must mitigate the crisis rather than exacerbating it in any way. It will, of course, involve trade-offs—Scotland’s fiscal constraints demand such trade-offs—but the very least that the most vulnerable in our society deserve is for public money to be spent in a way that delivers sustainable and affordable outcomes for them.
There has been consistent denial from Westminster when we demand accountability for the crippling cost of living crisis. Let us not forget David Cameron’s desire to
“get rid of all the green crap”.
That has added £2.5 billion—yes, £2.5 billion—to UK energy bills. It seems that those in the Government at Westminster care only about things that make massive profits for their pals.
Denials and disinterest will not help anyone. We need a concerted and palpable intervention. If the UK Government is incapable of meeting, or unwilling to meet, the urgent needs of households and businesses in Scotland, it must give us the powers that we need to deliver the necessary interventions ourselves.
I speak in support of the motion in Jackie Baillie’s name.
All across Scotland, people are feeling the growing strain of the cost of living going up. People are facing unthinkable choices, and it is clear that people’s physical and mental health is deteriorating as a result. That is a consequence of a perfect storm of different factors, from the rises in taxation to the increase in food prices. The sad reality is that the situation is only set to worsen, with some analysts pointing to inflation reaching beyond 6 per cent. Furthermore, we know that the true cost of inflation will be even higher for those who already have the least.
In response, what people in Scotland need is their two Governments standing up for people, but what they have is their Governments letting them down. Although I accept that the growing cost of gas is a global issue, in Scotland we are experiencing the consequences of more than 10 years of the Conservatives’ failed energy policy, which has left us uniquely exposed. The Tories failed to properly regulate our energy market, which led to dozens of energy companies going bust, with all of us having to foot the bill. The dithering and the incompetence have created an energy price crisis that is being felt by everyone.
However, the blame for the rise in energy costs does not lie solely at the feet of the Tories. The SNP’s record on energy is also one of U-turns and a failure to deliver. It has failed on the delivery of a public energy company and it has failed to harness Scotland’s renewables potential. Now, it has sold off, on the cheap, the right to profit from Scotland’s energy transition to multinational corporations with dubious human rights records. The people of Scotland should know that the current crisis happened on the watch of both Governments, with the Tories and the SNP having failed to meet the vast potential of Scottish and British renewables and other forms of energy.
I would like to make some progress.
The SNP has also presided over the development of a low-wage economy in Scotland, which means that Scottish households are more exposed to the cost of living crisis. Many of the factors that are driving Scotland’s labour shortages and low growth in wages predated the pandemic and have gone unaddressed by the SNP for years.
As if to add insult to injury, the rise in prices can also be seen in the growing cost of public transport, with the increase in the cost of ScotRail tickets. That is just another example of the continued mismanagement of our country’s transport, which is adding to the cost of living for hard-working people.
All of that undoubtedly paints an incredibly bleak picture for Scots all over the country, with failures across both Governments. However, it does not have to be that way. There are solutions to alleviate the pain of the crisis. Both here in this place and at the UK level, Labour has a plan to make life easier for people. To address the immediate crisis, Labour would bring in fully funded measures now to reduce the expected price rise in April, which would save most households around £200 or more. Labour has also called for VAT on domestic energy bills to be cut for 12 months from April 2022, which would save an average household around £89. That could be achieved through our proposed one-off windfall tax on the increased profits of oil and gas companies.
I am in my final minute.
Labour members would use the power of the Parliament to top up winter fuel payments. That is a choice that we would make.
The situation is stark. Charities, advice and rights organisations and now our churches and religious groups are pointing out the devastating impact of hikes in energy prices and the cost of living on the poorest in our society. Indeed, just today, the Catholic Parliamentary Office said:
“These aren’t luxuries, they are the basics.”
We are talking about decent things that people should expect to have.
It is clear that the Tories and the SNP have failed people across the country and that it is Labour that offers a real alternative and which has the ideas to address the crisis.
Like everyone in the chamber, I know only too well that growing numbers of people are feeling the financial pinch as household bills continue to rise. As we have already heard, food prices and energy costs are rising fast. Today’s announcement by Ofgem that the energy price cap will increase from 1 April for approximately 22 million customers, resulting in an increase to bills of around £700, is very concerning.
The chancellor has today announced a £9 billion package of support that will ease the pain. Around £290 million of that support will be available in Scotland. I urge the Scottish Government to use every single penny to address this crisis.
To compound the situation, many households also fear huge hikes in their council tax bills as a direct result of insufficient funding by the Scottish Government in its budget.
Although cost of living hikes affect everyone, I want to highlight the plight of those living in rural communities such as those in my constituency of Galloway and West Dumfries. People in rural and remote communities are among the hardest hit, through no fault of their own but often as a result of Scottish Government policies that fail to address, or even to appreciate, the challenges of living in a rural area.
Many Scottish households, including many in Dumfries and Galloway, experience the low-wage economy. Many are employed in agriculture, forestry or the hospitality sector and a growing number work in food and drink or retail—sectors that have not, historically, attracted good wages.
Set against that, food prices in village and community shops are considerably higher than those paid for the same items in supermarkets in towns and cities. I stress that that is not a criticism of those running small rural retail businesses, who provide a lifeline service in often difficult circumstances. They are trying to make a living for themselves and strive to keep their shelves well stocked with the widest range of goods. More often than not, elderly residents and young families have no choice and must rely on rural stores, inevitably paying higher prices than their urban cousins have to pay.
Some rural shops, including one in Palnackie in my constituency, were told by one national wholesaler that they would have to spend £1,000 to have stock delivered. That is a worrying move that could force many out of business. The wholesaler said that it had to enforce the policy because of higher fuel costs, smaller margins on many retail goods and the fear that it would lose money on deliveries. It is a vicious circle.
I am afraid that I must carry on.
Rural communities are penalised by poor public transport links, something that the SNP has failed to address in its 15 years in power. In Galloway, we are seeing fare hikes and cuts to railway services. Many rely on public buses to go to the shops or to get to work in nearby towns. As we emerge from the pandemic, we are still seeing inadequate services. Many under-22s in my region will look on in envy as their urban cousins enjoy free bus travel—the youngest in my constituency would simply like to see a bus. That policy widens the gap between rural and urban. Where was the rural proofing in that policy?
Even those fortunate enough to have a car are hard hit at the pumps, despite the welcome freeze on fuel duty, as prices in rural garages are considerably higher than those on town and city forecourts.
People living in rural and remote communities are paying a hefty price—whether for food or fuel—just to keep going. Many do not have broadband services because of the disastrous R100 roll-out; even those who do often have to look at more expensive packages just to get a consistent connection.
Rural fuel poverty is one of the biggest problems. Energy Action Scotland has already highlighted the particular difficulties faced by people in rural areas. They experience higher fuel costs, lack of access to the mains gas grid, higher prices for delivered heating oil and gas and challenging housing stock. There is also a difficulty—
Presiding Officer, it is scandalous that consumers in rural areas often pay higher prices than others pay for the same product in urban areas.
Energy efficiency support must be delivered—
What we got from that is that the Tories are clearly opposed to free bus passes for people under the age of 22.
The cost of living crisis is happening against a backdrop of supply chain disruption during the pandemic, and it is compounded by UK policies such as Brexit and the short-sighted closure of gas storage facilities—which, of course, began under the last Labour Government—making the UK more vulnerable to volatile gas price rises.
It is a bit of a jump to go from the utter failure of the Conservative Government to have enough storage facilities for gas to talking about the future of the nuclear industry, to be honest. If we went along with the costs of Hinkley Point, energy prices would increase dramatically compared with what people are paying just now. Mr Kerr may shake his head, but his inability to accept and face up to the facts says more about him than it does about the issue that we are debating.
The energy price cap, we now know from a decision that was rushed out this morning to further deflect from the Prime Minister’s myriad travails, will rise from an average of £1,277 to £1,970, which is a 54 per cent rise. Taking into account the £135 rise from £1,142 in the autumn, that represents a 72.5 per cent jump in a single year. Huge numbers of people will find themselves plunged into fuel poverty as household incomes fail to keep up with inflation through wage rises, and the Tory decision to abandon its manifesto commitment to the triple lock will cause severe hardship to our pensioners, who are already among the poorest in Europe relative to earnings.
It is very disheartening that many families now face the problem of increasing debt. Demand for credit card lending jumped by 41.5 per cent in the last few months of 2021, while demand for other unsecured credit and buy-now-pay-later products rose by 37.5 per cent, highlighting the desperate situation that many families are in.
When Christine Grahame talked about Norway, I seemed to recall Jamie Halcro Johnston talking about Norway’s debt, so I had a wee look at that. The figures are 42 per cent of GDP in Norway and 105 per cent of GDP in the UK, so I do not think that he wants to go down that road.
The Joseph Rowntree Foundation said that the forthcoming national insurance hike “adds insult to injury” for low-income households, including the 2 million that are already reeling from the £1,040-a-year ending of the universal credit uplift. Meanwhile, inflation continues to rise and it has now climbed higher than in the eurozone that the Tories were so desperate to abandon.
Over the past eight years, the Scottish Government has spent more than £1 billion tackling fuel poverty. However, for as long as energy pricing and obligations are reserved to the UK Government, Scotland will continue to have to allocate substantial amounts of already restricted budgets to mitigate the effects of harsh Tory policies, having to introduce things such as the £41 million winter support fund and implement progressive policies to benefit low-paid families.
“We don’t want to be seen, and we’re not, the party to represent those who are out of work”.
The SNP believes that everyone should be represented. We believe that we should have the powers in this Parliament to be able to assist everyone.
On oil windfall taxes, what happened last time there was a windfall tax? There was a 10-year drop in investment that cost myriad jobs to the Scottish and indeed UK economies. Labour sees such taxes as a cash cow. Of course, the matter was debated just last week. Why not look at excessive profits of all companies, as the First Minister suggested? Why just oil and gas? We should actually—
I remind members of my entry in the register of members’ interests, which shows that I am still a councillor at Aberdeen City Council.
It has been an interesting debate. I note that a similar debate happened in the House of Commons this week on a similar motion from Labour. I want to focus initially on the proposal in Labour’s motion that a windfall tax be imposed on the oil and gas industry. It is sad to see Labour now being so disconnected from the north-east. It has a significant history in the city of Aberdeen, but it seems to have turned its back on the region, just like the SNP has. It is now completely disconnected from the energy industry and its workers. A windfall tax on the industry would impact those workers most severely.
We cannot simply change a tax regime with a flick of the pen—that is unfair on our industries and causes instability and uncertainty in the marketplace. When investment is under threat, those companies fail to create jobs and invest in the north-east. It is my constituents who will suffer; it is the 100,000 Scots who are directly employed by the energy sector who will suffer; and it is their cost of living that will be affected when they have uncertainty about their employment. The SNP-Green coalition is threatening their jobs in the north-east, and now the Labour Party has joined in and is doing the same.
This week, my colleague Andrew Bowie made the point in the House of Commons that
“oil and gas prices fluctuate wildly. Gas may be sitting at near record prices today and oil may be sitting at $88 a barrel right now ... but tomorrow that might all change. It is grossly incompetent, naive, inept ... and totally ignorant to base a policy around the price of oil and gas.”—[
House of Commons
, 1 February 2022; Vol 708, c225.]
He is absolutely correct.
To turn to other matters, the cost of living crisis that we face is probably the biggest issue that we have to deal with as we recover from the pandemic. The SNP-Green amendment is nothing if not predictable. It takes no responsibility and offers nothing new. “Give us more powers,” it says. The SNP and Greens do not need more powers in order to fund local government correctly; they just need to value it and treat it as a partner. As Finlay Carson pointed out, there is a huge risk of increased council tax bills, due to the real-terms cut of £251 million to local government. That will be a real burden to families across Scotland, and that is entirely the fault of the devolved Government. I hope that the devolved Government will pass on in full to our local authorities all the consequentials from the UK Government’s announcement today of a reduction in council tax bills in England. They do not need more powers in order to invest in our future workforce and give the people in it the skills to have a well-paid job and improve our economy’s productivity.
More and increased taxes are not going to solve the cost of living crisis. Increases to the living wage, raising the personal allowance, reducing unemployment and creating well-paid jobs will do that. We have heard today that the UK Government is taking action. The Scottish Government needs to do that, too, as Jackie Baillie pointed out in her contribution.
We have heard other interesting contributions. We heard from Christine Grahame, who said that there was no debt in Norway; that has since been corrected by Kenny Gibson. Once again, the SNP has somehow moved a debate on the cost of living back to the topic of independence. I have news for Christine Grahame: if she thinks that things are bad now, independence would bring austerity max, which would affect the poorest in our society.
We also heard from Stuart McMillan, who brought up the issue of spending being wasted. The £700,000 that is being spent on civil service planning for an independence referendum is money that is wasted. What about the rusting ferries with painted-on windows? Surely that is another huge waste of money.
In conclusion, Presiding Officer, I support the amendment that has been lodged by Liz Smith—to build our economy, increase employment, support the north-east, and recover from the pandemic.
Clearly, members disagree on a wide range of issues, but I hope that we can agree that Labour colleagues are right to bring the topic to the chamber in some of their debating time. As many members of all parties have recognised, it is the crisis of our age. The cost of living crisis will be profound. It is already growing and is likely to continue to grow, and it will impact on people in critically important ways and on a huge scale.
Jackie Baillie opened the debate by saying that she seeks action from both Governments. We agree. She said that she does not want a Government that uses the constitution as an excuse not to act. I support independence, but I agree: I would not want to be part of a Government that uses that as an excuse not to act. She said that blaming the UK Government is not enough, while acknowledging that it has responsibility for a wide range of issues. We agree. However, she then seemed to object to the fact that the Government amendment sets out the wide range of actions that we are taking using devolved powers.
The cost of living crisis relates to energy, of course, and that is particularly sharp at the moment. However, it is about far more than energy. The Scottish Government is not only investing but giving the clear confidence that we will be regulating to ensure greater investment in energy efficiency and reducing demand for energy. Given that the spike in wholesale gas prices is the dominant factor now, it is clear that reducing our energy consumption has to be a critical part.
I have spoken to many workers in the north-east of Scotland who recognise that fossil fuels are not the future of their communities, our economy or our planet, and they want a Government that will invest in the just transition, which is what we are doing.
If we are going to achieve the reduction in people’s energy costs, energy efficiency, demand reduction and zero-emissions heating have to be part of it.
The issue is about far more than energy. We have the Scottish child payment, which was introduced, then expanded, then doubled, in contrast to the UK cut to universal credit. We have invested in free school meals; in tuition for higher education, so as to not burden young people with the cost; in free prescriptions; in other measures to cut the costs of the school day; and in increased funded childcare. Council tax is lower in Scotland than it is elsewhere in the UK, and we have a council tax reduction scheme. We spend significant amounts of money from the Scottish Government budget to mitigate the deeply harmful impact of UK social security policies.
The amendment from the SNP Government will provide very cold comfort for people who are struggling now. The minister is in danger of missing the point. The issue is not what the Government has done before; it is what extra it will do now, because people are in a worse position, and they are looking to both Governments to help them out.
We have a great deal more to come. As well as the introduction of free bus travel for under-22s, which has only just come in and which will protect routes in rural areas that are vulnerable to cuts by private market operators, we will be implementing the fair fares review, to look at rebalancing the cost of getting about.
We will be introducing rent controls, as well as protection against evictions during the costly winter months. We are committed to the progressive taxation system that we have in Scotland, in contrast with calls from Conservative colleagues—which were made again only yesterday—for tax cuts for higher earners.
There is also a great deal that we need the UK Government to do. We have a clear focus on taking every action that we can with devolved powers. The just transition away from fossil fuels has to be critical in achieving that. This Government is committed to taking that action with every lever that we have at our disposal.
I will try to address much of what I have heard today.
The cost of living crisis is not just a concept; it is a reality for too many people who are becoming increasingly unable to make ends meet and who are not able to afford rent, travel, food, energy or clothes—the basic components of a decent standard of living. As my colleague Paul Sweeney noted, this is an emergency.
We have known for some time that without further action—and fast—the Government will fall short of the child poverty targets that the Parliament set in law. We must acknowledge that, although the overarching levels of poverty among children are far too high in general, they are even higher among the six priority groups that the Scottish Government identified: lone-parent families; families with someone who is disabled; families that have three or more children; families that have a child under one; families with young mothers; and black and minority ethnic families.
It is not just poverty among children that we must look at. I could fill a day talking about the poverty and inequality faced by unpaid carers and the disproportionate impact that unpaid work, the pandemic and the gender pay gap have on the ability of women and their families to escape poverty and the cost of living crisis, but, given my limited time today, I refer members to the previous speeches that I have made in the chamber.
The poverty and inequality that are being exacerbated by the cost of fuel and food continue to rise, meaning that bills that people were already struggling to pay are increasing even further. No one should be facing having to choose between heating their home or putting food on the table. On that point, I agree with my colleague Stuart McMillan, but I gently suggest that, if he is committed to ending in-work poverty, the SNP should start by using the powers of the Parliament to address the fact that 61 per cent of children in poverty are living in working households.
Our motion asks the Scottish Government to support the measures that have been announced by the Labour Party, which would offer protection from the energy hikes that have been announced today. That would save most households £200. We would also target extra support to squeezed middle and low-income families, including pensioners, to take £600 off their bills.
We asked SNP MPs to support our policy proposals through a one-off windfall tax, but they refused. This morning, the First Minister said that she supported windfall tax calls. Therefore, I wonder why her MPs refused to vote for a windfall tax. Richard Lochhead noted that some of the powers are reserved. He is right. I look to the SNP and Green members and ask why people in Scotland are sending their colleagues to Westminster only for them not to vote on such a significant issue, to improve the lives of people in Scotland. No matter what members’ views on the Westminster Parliament are, the reality is that, right now, the SNP is sending MPs to the House of Commons on behalf of the people of Scotland, and people expect them to make decisions in their best interests. SNP MPs across the country have failed to do that duty this week.
In every general election, the SNP stands on a platform that says that it is stronger for Scotland. This week, the SNP refused to vote for a policy that, today, the First Minister said that she would support. We cannot afford to let the Tory Government off the hook in that way. We must use every vote that we have in the House of Commons and all the people power in that room to hold the Tory Government to account.
We want to give families security in the short term by keeping bills down, not for luxuries but for essentials, as my colleague Paul O’Kane has said. We also want to offer security in the long term. People are falling from one crisis to the next in Scotland. We see that in the repeat applications to the Scottish welfare fund.
The SNP’s solution to the cost of living crisis has been to offer stopgaps, one-off handouts and little bits of support. When it comes to long-term systemic change, the SNP is simply not willing to take the action that is needed. It says that today’s crisis can be solved with yesterday’s policies. However, the situation has moved on.
The Tories’ response, of course, has been to end essential universal credit, so we cannot trust them either. Tackling the cost of living crisis must go hand in hand with action to address structural inequality and poverty. The UK Government cannot be trusted on that or much else right now. It protects its own time and again.
The Scottish Government is not doing nearly enough either. It has the means and the power, but it lacks the motivation. I ask the Government to have some humility, to recognise its own failings and to challenge.
I am afraid that I must challenge Christine Grahame on two things that she said. On the notion of economic competence, I urge her to look at the black hole in the Scottish Fiscal Commission’s forecasts on social security and its downward revision of the tax take due to the Scottish Government’s failure to create jobs and the building of a low-wage economy in Scotland. On the suggestion about Scottish Labour mitigating Tory policy, I make no apologies for wanting to use all the powers of the Scottish Parliament to protect people in Scotland. However, we do not simply have aspirations to mitigate bad Tory decisions; we aspire to replace them and make better ones.
This week, the Poverty and Inequality Commission, which is a body that is governed by the Scottish Government, the Joseph Rowntree Foundation and anti-poverty organisations have warned that the Government needs to do more. It cannot go on ignoring them. The Government must take action now to reduce housing costs by controlling rents, insulating homes and saving families on-going heating costs. It must regulate bus companies to ensure that fares are affordable and freeze rail fares. It could ensure that work pays by using all the powers of procurement and end zero-hours contracts.