Cost of Living

Mick Whitley Excerpts

Tuesday 25th January 2022 Westminster Hall

[Mick Whitley (Birkenhead) (Lab)]

It is a pleasure to serve under your chairship, Mrs Cummins. I thank the hon. Member for North Ayrshire and Arran (Patricia Gibson) for securing this important debate. She made an excellent contribution, setting the scene. I also refer to my entry in the Register of Members’ Financial Interests.

I will talk first about just one of my thousands of constituents who are suffering so terribly as a result of the Tory cost-of-living crisis. In 1944, he fought to defeat fascism on the beaches of Normandy. At the end of the war, he returned home to the promise of a land fit for heroes. But now, in his late 90s and living alone, he is terrified by the prospect that one day very soon his modest pension will not stretch to cover the costs of soaring energy bills and food prices. He is not alone: all across the country, millions of people are living in freezing houses, too afraid to turn the heating on, while others are going hungry so that their kids get a half decent meal.

Meanwhile, with energy prices set to soar by a further 45% by spring, and households bracing themselves for a national insurance tax bombshell, this Government seem far more concerned with their own internal turmoil than with finally getting to grips with this crisis. I put one very simple question to the Minister today: how on earth can he justify letting a man who risked his life to defend our freedoms worry about the cost of turning his heating on in the middle of winter?

Last autumn, I warned Ministers that the impact of rising energy costs and the cut to universal credit risked plunging thousands of people on the Wirral into poverty. At the time, Ministers lazily dismissed my concerns out of hand, and the Prime Minister himself called fears about inflation “unfounded”. My God! Even now, when confronted with the reality of the situation, this Government refuse to act.

My party has set out a credible plan to address the scourge of rising energy costs. I urge Ministers to finally put the interests of our country above those of the Conservative party, and to set about removing VAT from domestic energy bills and implementing a windfall tax on North sea gas and oil to support those most in need. But we must go further still. We must bring the energy sector back into public hands, so we can begin to slash bills for UK consumers and build a greener energy sector that is less dependent on foreign energy supplies. We must also acknowledge that energy is only one part of a much wider problem. For more than a decade, UK workers have seen their wages stagnate as prices have soared. Even our healthcare heroes, who have done so much to save lives and stop the spread of the terrible virus over the last two years, have not been spared, with last year’s measly 3% pay rise amounting to a pay cut in real terms.

The Government must act now. That means abandoning their plan for a national insurance hike, which threatens to hit low-income workers and small businesses hardest of all, and committing themselves to a £15 minimum wage, as called for by my hon. Friend the Member for Middlesbrough (Andy McDonald).

--- Later in debate ---

[David Rutley]

I know where the hon. Lady is coming from. The issue is that younger people typically and often do not face the same cost challenges as other older people, because they are able to share accommodation costs with others. I do not regard it as discrimination, but I acknowledge the different costs that people face.

Further support for working parents has been put in place, doubling free childcare for working parents to 30 hours and increasing the value of healthy start vouchers by over a third, to boost the long-term health of young children. We are investing over £200 million a year from this year to continue the holiday activities and food programme, which provides enriching activities and healthy meals to children in all English local authorities.

I have noted discussion, not just today but yesterday, on concerns about the cost of living. We recognise that those exist, particularly in the case of energy costs. However, let me remind hon. Members of the measures we have in place to combat the adverse effects of the increase in worldwide oil and gas prices, which is a reaction to demand surging after the pandemic and the effect that has had on the global economy and our own economy. The energy price cap will remain in place at least until the end of 2022, to protect millions of customers and ensure they pay a fair price for their energy. Despite the rising costs for said energy, Ofgem has confirmed that the cap will stay at the current level this winter.

Secondly, winter fuel payments will be made to over 11 million pensioners this winter, ensuring that older people have the security and dignity they deserve. Households with someone of state pension age will receive £200, and households with someone over 80 will receive £300. Thirdly, cold weather payments help vulnerable people in receipt of certain income-related benefits to meet the additional costs of heating during periods of unseasonably severe cold weather. That includes older people receiving pension credit and those receiving an income-based benefit with a disability component or where the household includes a child under five. In 2020-21, just over 4 million payments were made, at a cost of just over £100 million.

Finally, this Government are supporting 2.2 million low-income households by issuing a £140 rebate on their energy bills through the warm home discount, which is worth £354 million. From this year, proposed changes will increase the scheme by £121 million, to be worth £475 million a year, with nearly 3 million households receiving a £150 rebate. As I said at the start, we are working across Government—I reiterated this yesterday, as did my right hon. Friend the Chief Secretary to the Treasury—to determine the appropriate response to assist vulnerable people facing rising energy costs. We recognise that people will be facing unexpected challenges with essential household costs. That is why in October we introduced a £500 million support fund to assist vulnerable households across the country this winter. The £421 million household support fund in England has enabled local authorities to provide targeted support to households in need of help with the cost of food, utilities and wider essentials; and the devolved Administrations received a total of almost £80 million through the Barnett formula, with Scotland receiving £41 million of that. I am pleased to see that they have all used the money to help households this winter.

Beyond this package of support, some people are struggling with debt pressures. The Government work closely with the Money and Pensions Service, and the wider free-to-client debt advice sector, to provide access to high-quality debt advice. The service remains the biggest funder of free debt advice in England. The DWP also uses appropriate touchpoints to ensure that those in receipt of benefits are signposted quickly and directly to expert financial help. To help those people, the debt respite scheme, also known as Breathing Space, came into effect in England and Wales on 4 May 2021. That gives someone in problem debt the right to legal protections from creditor action.

It is important to place the cost of living challenges in context. Prices are rising in countries around the world. As the global economy recovers from the pandemic, consumer demand is surging at the same time as global supply chains are being disrupted. We recognise and understand the pressures that this is exerting on people’s wallets, and their worries as they see the cost of food, energy and other essentials increase. My right hon. Friends the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Work and Pensions—indeed, all of us in government—are listening to those concerns and watching what is happening in the markets. As has been shown during the pandemic, this Government will do what it takes to support those most in need. I can assure hon. Members that we are continuing to actively work across Government to build on the existing support, already available, and to determine the appropriate response to assist vulnerable people facing rising energy costs.

[Mick Whitley]

Could the Minister tell me how it is that 27 energy firms have gone bankrupt? There is something wrong. Could he explain to the Chamber why?

[David Rutley]

The hon. Gentleman got in quickly there; I was about to end my remarks. This is a complex challenge. We know that there has been a real surge, and the Department for Business, Energy and Industrial Strategy is working actively to address these challenges. As I have said here, we are not concerned only about what has happened at the customer-facing end of the supply chain and the challenges that that has given to customers. The issue is the rising prices as well, and that is what we are focusing on.