Cost of Living Increases

Debate between Ian Murray and Matt Rodda

Wednesday 16th March 2022 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

I am pleased that we are debating this important topic and I thank the SNP for bringing it to the Chamber again. Opposition parties have held a number of debates on the cost of living, which is critical for every part of the country.

The cost of living crisis really matters because millions of families across the UK face the hardship of not knowing whether they will be able to pay their bills. That worry plagued many when we spoke at the Dispatch Box on the topic in January, but in the interim, the Government have done close to zero to help. Listening to the Minister, everything in the country seems to be okay, but all her words will be no consolation to those who have to make the difficult decision about whether to heat or eat. That is the biggest single indictment of the Government to date.

In the intervening period, we have of course seen the most awful, barbaric and illegal invasion of Ukraine, which has not helped and has led to higher prices in many areas as a consequence. Yesterday, the Office for National Statistics revealed that average earnings fell 1% in the three months to January, which is the biggest fall in earnings in a decade. It is against that backdrop that working people face this crisis.

Although the Government may seek to convince people that the crisis is entirely the result of the war in Europe, the reality is that it long predates the Russian invasion. Let us be crystal clear with the public: the cost of living crisis for my constituents and every constituent across the country was with us in spades before Ukraine. One of my constituents described the crisis as “everything going up” but his wages; energy bills are due to skyrocket next month with the lifting of the energy price cap and there might be much more to come later this year.

[Matt Rodda]

My hon. Friend is making an excellent point that a lot of the pressure on families predates the current crisis by some months. There are an enormous number of food banks across the whole of the UK—in Scotland and England—and my experience of working with constituents and those hard-working charities is that there is an enormous need out there that predates the crisis in Ukraine. I hope that the Government will listen to that point.

[Ian Murray]

My hon. Friend raises a critical point and we have to keep dragging the Government back to their responsibilities as a result of being in power. Much of the crisis in our public services, including the NHS and social care, also predates covid but the Government keep telling us that perhaps that is not the case.

Inflation hit 5.5% in January and is expected to rise even further. Scots are facing the prospect of council tax, water bills and train fares rising while wages, as I have said, are falling in real terms. Perhaps unsurprisingly, the Conservative party failed to back the fully costed plans of the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), to tax the oil and gas companies’ excess profits to reduce people’s energy bills. Instead, the Chancellor’s response to the crisis has been to make matters worse, not better. We have already heard about the buy now, pay later scheme using taxpayers’ money to lend money back to taxpayers via the energy companies that they will have to pay back on future bills. That is not helping; that is deferring the problem.

The Government have refused to exempt VAT on skyrocketing energy bills, which was supposed to be one of the much-vaunted Brexit dividends.

--- Later in debate ---

[Ian Murray]

Yes, if we increase the additional rate on the oil and gas sector from 40% to 50%—10 percentage points extra—that will generate the money towards our fully costed plan for raising energy prices, but very well done for defending the Scottish National party, and both the Conservatives and the SNP knocked back the oil and gas sector’s windfall tax when it was brought to this House.

To go back to the central question of this debate on the cost of living crisis, many families are worried about the email dropping into their inbox telling them that a direct debit will treble, or the bill landing on the mat saying their energy bill will become unaffordable, yet both Governments refuse to ask the companies making the money, directly driven by the energy crisis and the energy prices that are generating those extra direct debits or those extra bills, to put a little bit more into the pot to help. With the SNP’s current policy in the motion, and SNP Members still will not tell us if it includes the oil and gas companies, AG Barr, a successful Scottish business that made more profit last year than pre-pandemic, would pay a windfall tax, but the oil and gas companies would not—taxing ginger, not taxing gas.

[Matt Rodda]

My hon. Friend is making an excellent point because surely the point is that, with the super-profits for these very wealthy companies, senior leaders of a number of them have been quoted as saying that they see their own business as a cash machine. If we contrast that with the day-to-day struggles of people of this country, surely he is putting forward the right policy.

[Ian Murray]

Those with the broadest shoulders should pay the most, but I just say to everyone in the country watching this who is worried about their bills that we have two Governments who could do something about this, but they are defending the profits of the oil and gas companies rather than trying to help them with their bills. We could achieve so much more if all put our shoulders to the wheel and helped with this energy crisis.