Cost of Living Crisis

– in the Scottish Parliament at on 8 September 2022.

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Photo of Anas Sarwar Anas Sarwar Labour

2. The cost of living crisis is a national emergency. Therefore, I welcome that we have finally seen action from the United Kingdom Government, but I do not believe that it goes far enough. Let us be clear: this is not a freeze. Energy prices will still be going up for households across the country, there is not enough support for businesses and charities, and there is no meaningful windfall tax, which means that households and businesses—not companies that are making record profits—will pay in the long term.

Moving to the action that the Scottish Government can take, I welcome the commitment to a rent freeze and a winter eviction ban. That is long overdue, but the Government needs to go further, so I ask the First Minister the following questions. When will the legislation be brought to Parliament? Given that the majority of social rents will rise on 1 April, will she extend the freeze to cover that period? Will she commit to a review towards the end of the freeze period, with an option to extend if necessary? Finally, to avoid a sharp hike when the freeze is lifted, will she commit to putting in place a rent regulator in order to cap any future rises?

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

First, the emergency legislation will be introduced very soon. We have not yet determined the date for that, but we need to introduce it soon, because Parliament needs to act at pace to pass it. We want that legislation to be passed within three months so that the freeze that I announced is effective from that date. That work will happen at pace, and I encourage all members to engage constructively with the detail of it. As all members will be aware, it is important that we get legislation right to ensure that, if there are any legal challenges to it, it has the best possible chance of withstanding those.

Secondly, I will commit to an on-going review of the emergency legislation. We have said very clearly that we intend the two proposals that I announced on Tuesday—the rent freeze and the moratorium on evictions—to be in place until at least the end of March. We will review that regularly, and we will, of course, keep open the option of extending the period further, depending on the wider situation.

Lastly, as I said on Tuesday, the emergency measures are, by definition, temporary. How temporary they prove to be will depend on the reviews that I have just spoken about, but they are intended to pave the way for longer-term reforms that bring greater affordability to the rented sector, particularly the private rented sector, and that give greater protections to tenants. The wider issues that Anas Sarwar has raised today will be fully taken into account in that longer-term work.

Photo of Anas Sarwar Anas Sarwar Labour

I welcome that response from the First Minister. We will engage proactively with the legislation, and the sooner we can do that, taking into account the legal complexities, the better. We will continue to push for the freeze to cover 1 April, because that will give people certainty. We welcome the agreement to a review, with an option to extend, and I again push the First Minister on creating a rent regulator so that we can make sure that there are not excessive increases when the freeze is finally lifted.

However, rents are not the only costs that are rising. We have been calling for a rent freeze since June, but we have also been calling for a reduction in rail fares since April. In the summer, the Scottish National Party published a document outlining what actions European countries were taking in the face of the cost of living crisis. That document included examples from Germany, Spain and Ireland, which have all cut rail fares. ScotRail is now in public ownership. The decision on rail fares is for this Government, so will the First Minister commit to Labour’s plan to halve rail fares, which could save commuters up to £130 a month?

The First Minister:

Again, I will address two aspects of that issue. In what I am about to say, I intend to be constructive, and I invite Labour to engage constructively on these points.

As I announced on Tuesday, we have confirmed a freeze on ScotRail fares until the end of March, and, yesterday, the Deputy First Minister said that, in the context of our emergency budget review, we will consider extending that further. We will also consider a range of other areas where we can go further to help people with the cost of living crisis. However, it is important—not just important, but inevitable and essential—that that is done in the context of that budget review. I set out starkly—as did the Deputy First Minister yesterday—the realities of our position, saying that our budget is worth £1.7 billion less than it was when we published it. We also face increasing pressures from issues such as public sector pay and the costs of housing Ukrainians, which none of us grudge at all. We cannot raise taxes within a financial year, we cannot borrow for day-to-day spending, and all of our reserves are already allocated. If we want to spend more on anything, we have to find other places in our budget to take the money from. That process started yesterday.

I say in all sincerity to Anas Sarwar that we will consider in good faith any suggestion that is made, but any suggestion that involves more spending in this financial year has to come with a saving from elsewhere. I encourage and ask Anas Sarwar to engage with that part as well.

Photo of Anas Sarwar Anas Sarwar Labour

We need to go further than a freeze. Let me be clear: getting more passengers on our railways potentially makes money for our railways, and changing people’s pattern of behaviour by getting them out of private vehicles and on to our railways helps us to confront not only the cost of living crisis but the climate crisis. I push the First Minister to be bolder and more ambitious, because this is not a time for timidity or delay. Our “Emergency Cost of Living Act” included a rent freeze and a winter eviction ban—we welcome the Scottish Government’s action in that regard—but it also included halving rail fares, capping bus fares, a £100 water bill rebate, writing off school meal debts, topping up the Scottish welfare fund and establishing a business hardship fund to keep small businesses going.

I know that the First Minister will say that the Scottish Government has to find the money. That is why I welcome an emergency budget review, but it has to be an open, genuine and transparent one. Therefore, in recognition of the national emergency, the Scottish Government should open up the books to all parties so that we can have a team Scotland approach to actually using the powers of this Parliament to confront the cost of living crisis and help people here, in Scotland.

The First Minister:

We will engage on that basis, and I am sure that the Deputy First Minister will be happy to have open discussions with any party about how we meet that challenge, as long as the starting point for any discussion is an acceptance of the reality that, if we want to spend more on anything this year—as, I think, all of us do—that money must be found elsewhere in our budget.

With regard to Anas Sarwar’s suggestions, we will consider everything in good faith. However, taking bus fares as an example, I point out that about half of the Scottish population—nobody under 22 or over 60—already do not pay for bus travel. That is a sign of how we are using the powers of this Parliament. On increasing money, I know that Labour called for an increase in the tenant hardship fund, but we have doubled the fuel insecurity fund and have committed to increasing the budget for discretionary housing payments. Further, we are extending free school meals beyond the limits set by any other Government in the United Kingdom, and, once the extensions that were announced earlier this week take effect, the Scottish child payment will deliver £1,300 in support for every eligible child under the age of 16. Again, that does not exist anywhere else in the UK. We are using our powers and we will continue to do so.

I will share some reflections by someone who is well known to Anas Sarwar:

“this week’s programme for government, announced by the First Minister, was a creative and coherent response to the poverty pandemic we are all facing ... Credit where it’s due. The SNP have been upfront in explaining what’s happening to the public finances and the principles underpinning their decisions.”

Those are comments by Kezia Dugdale, one of Anas Sarwar’s predecessors as Scottish Labour leader.

The Presiding Officer:

We move to constituency and general supplementary questions.