Reducing Costs for Businesses

Debate between Richard Holden and Jonathan Reynolds

Tuesday 11th January 2022 Commons Chamber

[Jonathan Reynolds]

My hon. Friend is right. There is already a cost of living crisis gripping the country, and it has been brought on by the frightening increases in energy costs and inflation following a decade of poor Government decisions.

It is obvious that this requires a response from the Government. Surely they cannot be considering allowing the average energy bill to hit £2,000. Surely they cannot be willing to see industry halt production or to have inflation hit double-digit figures. Frankly, it has all gone a bit Ted Heath. Where are the Government?

In contrast, we have made it very clear how Labour would act. We would take VAT off fuel bills. We would take off the supplier of last resort costs, too, and we would increase both the amount and the eligibility for the warm homes discount. I regret that Conservative Members have said they cannot vote for that, because Labour’s plan would have saved the average household £200 and the worst-hit households £600. The Government have already rejected that plan today, so please let us hear the alternative. It feels like the Government are asleep at the wheel, or perhaps they are just too bogged down in constant crisis and scandal to get the grip our economy needs.

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

The hon. Gentleman is setting out a case, but the crucial thing is that the Government have a plan and he has not set out an alternative. So far the alternative sounds to me like extra borrowing. If it is not extra borrowing, where will he get the money to do everything he proposes today?

[Jonathan Reynolds]

The hon. Gentleman is more astute than that. He will have seen the plan to take revenue from the Exchequer windfall and the VAT receipts the Government have already received. We will increase money coming from the North sea oilfield with a windfall tax. He will know the North sea is one of the world’s most profitable jurisdictions in which to extract oil and gas.

There is something else the hon. Gentleman is not telling the House. If the Government allow the national insurance rise to go ahead, that alone is estimated to put two additional percentage points on inflation. He knows that will trigger a range of further Government expenditure, as well as causing major pain to households. With respect, I do not think he has a case.

The businesses I have spoken to this week are understandably worried that a squeeze on households of this scale will adversely affect consumer spending. In addition, as we have heard, businesses are directly affected.