Household Energy Bills: VAT

Richard Holden Excerpts

Tuesday 11th January 2022 Commons Chamber

[Mr Clarke]

I do not think anyone is saying that we are going through an easy time. We have just emerged from the teeth of an international pandemic, which is still causing major challenges. We have now got to a situation where, despite all the dire predictions, we are back at almost pre-crisis levels of economic activity, and unemployment is fully 2 million fewer than was forecast at the height of the crisis in 2020. That is thanks to the co-ordinated policy decisions of this Government and it is certainly why this situation has not been much, much worse in millions of homes across the country.

[Mr Richard Holden (North West Durham) (Con)]

Does the Minister agree that it is really interesting to hear what is happening from the Opposition today? If we had followed what they wanted to do, we would still be in lockdown and would have millions more people out of work or not working, and incomes reduced because there would still be people sat at home not working. It is the Government who have taken the bold decisions necessary to get the country moving again, opposed at every step of the way by the Opposition.

[Mr Clarke]

My hon. Friend is absolutely right. I think one of the Prime Minister’s bravest decisions was in July last year, when he took the decision to move to step 4 of the roadmap. The right hon. and learned Member for Holborn and St Pancras (Keir Starmer) was all over the airwaves saying that that would lead to disaster, and of course it led to us being able to unlock our society and restore economic activity and our social life, which is obviously so important to people’s mental and physical health. These changes would not have been made without that very clear example of leadership, in the face of, frankly, a complete absence of it from the Opposition.

The activity that we have undertaken includes doubling free childcare, worth around £5,000 per child per year, introducing tax-free childcare, and helping working parents with 20% of childcare costs up to £10,000. These are practical interventions of the kind that make a real difference to working homes. They are the sort of thing that bears down on the cost of living and makes sure that many people are weathering the storm.

As a Government, we want to help people into work and to gain the skills they need. We are investing £900 million in each year of the spending review on work coaches, who will provide effective support to help jobseekers on universal credit move into work and, for the first time ever, help people progress once they are in work. We have also invested over £200 million in the JETS—job entry targeted support—scheme, for those unemployed for over three months. Applicants are supported with CV writing, interview skills and job search advice, worth £1,000 per person. We also know that young people were disproportionately affected by the pandemic, which is why we invested in kickstart to fully fund and create hundreds of thousands of jobs for young people. So far, over 112,000 young people have started a kickstart job. To help those affected by long-term unemployment, we launched the restart scheme, which provides up to 12 months of intensive, tailored employment support.

We are giving employers £3,000 for every apprentice of any age they hire before the 31st of this month. That is a significant 35% wage subsidy for an apprentice on the national living wage and is in addition to the Government paying 95% of the training costs for smaller employers, who do not pay the apprenticeship levy. These are the kinds of things that this Conservative Government are doing to boost work and jobs and keep the economy moving forward, and our plan for jobs is working spectacularly.

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[Fay Jones (Brecon and Radnorshire) (Con)]

It is a pleasure to be called in this debate on household energy. I have a number of problems with today’s motion, which is not a rational debate on how to manage the spiralling cost of living while recovering from the pandemic and meeting our climate change goals. This motion is designed to do nothing more than construct a misleading trope for social media. The Opposition are bringing it forward this afternoon in an attempt to wrestle control of the Order Paper, which they have no business doing, in order to deliver a blunt instrument that will not benefit those on low incomes. They ignore their own role in the spiralling cost of living in Wales.

I notice that what is missing from the motion is anything about the rural cost of living—something that I am desperately concerned about. We understand that we pay a high price for the beautiful landscape in which we live, but that price is becoming unreasonable. Looking at energy, around 12.5% of those living in rural areas across the country are in fuel poverty. The Energy Saving Trust estimates that this is slightly higher than in urban areas. We invariably have antiquated heating systems and poor insulation, and around two thirds of my constituents live off the gas grid, myself included.

[Mr Holden]

I have a similar situation in my North West Durham constituency. Does my hon. Friend agree that some of the other issues, particularly around the cost of transport, also need to be addressed? I take her point wholly that this debate today is very much about playing politics with the situation. Obviously the Government are thinking about important measures for the future, but that is not about handing everything over to the right hon. Member for Doncaster North (Edward Miliband) and his pals, who failed to win general elections themselves.

[Fay Jones]

I agree with my hon. Friend, and I find it somewhat ironic that the last time the Opposition tried to take control of the Order Paper was during the Brexit debate. They had no mandate for that, and they have no mandate for this.

This also means that we in Brecon and Radnorshire will find it harder to play our part in the fight against climate change. Many of my constituents are deeply worried about how to replace their boilers at the end of their useful lives, so I was deeply reassured to hear the Business Secretary restate during Business, Energy and Industrial Strategy questions today that the UK Government are determined to support residents in Wales as well as those in the rest of the United Kingdom. BEIS is making £450 million available for upgrades, as well as £1.1 billion for lower income households. This is the type of action that my constituents very much welcome.

Having spoken to my right hon. Friend the Chancellor, I am reassured by the way in which he is focusing on the issue of rising household costs. He is approaching it in a sensible and measured way, not with social media clickbait but with targeted interventions that will make a meaningful difference to those who need it most. As a result of investment in the kickstart scheme of around £2 billion, peak unemployment is now forecast to be 2 million fewer than previously feared. Keeping to the energy price plan and increasing the warm home discount and the winter fuel payment are all steps that will curb the rising cost of living, and the increase in the universal credit taper is a tax cut for 2 million low-income families. I and many other colleagues on this side of the House will be meeting the Chancellor again later this evening to discuss this in greater detail. I am extremely grateful to the Treasury and BEIS teams for the listening mode that they are so clearly in.

There are many in this House and beyond who often mistake rural areas such as mine for extremely wealthy areas, but this is simply not the case. The cost of living is hitting hard in Brecon and Radnorshire, but that is on top of other pressures that are ignored by the Labour Government in Cardiff. We have next to no public transport, so we are forced to drive everywhere in cars powered by ever more expensive fuel. I commend my hon. Friend the Member for North West Durham (Mr Holden) for the work that he has done to draw attention to this. Our broadband is slow on a good day, because funding is targeted at densely populated and, curiously, Labour-voting areas. Our schools have to close and our council tax is higher because our local authority has been given one of the lowest budget allocations in Wales for the last 10 years. If only we could have the level of investment and support that has been directed at the cities and the south Wales valleys, household bills in rural areas such as Brecon and Radnorshire would be lower.

I will not support the Opposition motion today. I want the House to have a meaningful debate on household costs that is not motivated by knocking lumps out of the Government, but puts the rural poor at its centre. I commend the Government for their mature and grown-up efforts to tackle the cost-of-living crisis.