It is a pleasure to follow the hon. Member for West Worcestershire (Harriett Baldwin), the Chair of the Treasury Committee, which I have recently joined.
I shall concentrate on the choices the Chancellor and his Government have made. Government is about choices; it is about choosing priorities and who to help, and choosing the future we want to create. Today the Chancellor chose his priorities, and he chose to ignore the millions struggling with the cost of living crisis. The OBR has confirmed this afternoon that the UK is still on course for the largest reduction in living standards since the 1950s. Of all those struggling or who cannot pay their bills or are worried about heating their homes, the decision today was pretty much to ignore them. The
Chancellor is either offering no comfort or cold comfort. The BMJ warned last month that the cost of living crisis “will cut lives short”. The Chancellor’s choices mean the Government are saying to millions of people, “We don’t care.”
The Chancellor could have looked at VAT cuts, especially in tourism and hospitality, to boost spending and lower inflation. He could have taken action to reduce the level of the energy price cap or introduced an energy social tariff; he has not done so. The national insurance measures announced today will not make up for the inflationary price increases in mortgages, rents and food and energy bills, which will still be higher than last year. I misspoke earlier when I said that the UK is still paying the highest tax for seven years; it is paying the highest tax for 70 years. No action today on people’s housing costs, no action on food prices, no action on energy costs, but never mind—at least bankers’ bonuses are now unlimited.
Let us start with food costs. Food prices in the UK are still climbing at an alarming rate and the trend of increasing costs remains. The UK’s food price inflation is double that of Ireland and Estonia, for example. The Centre for Inclusive Trade Policy notes Brexit’s role in increasing UK import prices by 11% and analysis by the London School of Economics earlier this year showed that the UK had the highest food price inflation in the industrialised world. It remains sky-high.
The Chancellor’s inaction on food prices is glaring. As people worry at the checkout, companies such as Marks & Spencer are reporting record profits on food sales. Consumer rights organisation Which? has expressed concerns over dodgy pricing and loyalty card practices, yet the Government remain silent on discussing food bills with supermarkets. There is nothing from Labour either; when Labour goes shopping at Sainsbury’s, it is for millions in donations. The SNP is left to fight for families over food costs.
The Joseph Rowntree Foundation paints a grim picture of the impact of those inflated costs, with many struggling to afford basic food items. The foundation’s chief economist emphasises the severity of the situation for lower-income households, with essential goods unaffordable for millions. That unaffordability is creeping upwards, with those who previously saw themselves as relatively comfortable now also feeling the squeeze.
The Chancellor had a choice. The Government could have heeded the Bank of England’s warnings about skyrocketing food inflation and they did not do so. France got companies to commit to freezing or cutting prices on 5,000 everyday products. In Canada, the five largest grocery chains made an initial commitment to help to stabilise food prices and say that that is just the beginning of their work. For six months, the Greek Government covered 10% of food expenses for households, funded by a windfall tax on two oil refineries.
Here in the UK, we have the Joseph Rowntree Foundation’s stark warning that millions cannot afford basic food items. Food bank use has grown a further 10%, according to the Trussell Trust, and donations to food banks, usually collected at supermarkets, are also dramatically down. We have a situation where not only do more people need food, but fewer people have the spare money to donate food. Unlike the Chancellor, people using food banks do not have choices.
The Chancellor could have made some choices on energy costs this winter. Before his speech today, one in four social housing households had already reduced their heating to save costs. He decided not to reinstate the energy bill rebate. It is not enough. Before his speech today, energy bills still remained double what they were in 2021, and Cornwall Insight predicts that energy prices will remain high until the 2030s. Where does the Chancellor think folk are getting the money from? It is not coming from any long-term measures today—there is no social tariff, he has not decoupled gas prices from renewables, and the SNP’s call for the reinstatement of the £400 energy bill rebate, which would have gone a long way to help in the short term, has been ignored.
The Chancellor could have chosen to act on that and he chose not to. He chose not to help the two thirds of people who live in a household where someone is suffering from a pre-existing health condition or is disabled and worried about being cold this winter. He should have committed to increasing working-age benefits in line with inflation next year as well and legislated for an essentials guarantee, giving basic necessities to those who need them most. Instead, as we heard, he intends to punish the sick. People who are sick and unable to work are already regularly being referred to work coaches. I have had constituents of mine, who were listed as having cancer or indeed as being terminally ill, being told to report to a work coach. This is just another step further to the right for the nasty party.
The Chancellor chose not to help the more than one third of households with children under five, the pregnant, or people over 65 with pre-existing health conditions who think they will not or may not be able to afford to put the heating on at all this winter. He chose not to help the millions of people already struggling with mounting energy debts. Citizens Advice expects that the number of people unable to top up their prepayment meters will be nearly half as high again as it was in 2022. Meanwhile, National Energy Action found that more than one third of adults are expected to struggle to afford to pay their heating bills this winter.
The Chancellor did not even listen to the pleas of charities. Ofgem has reported that energy debt has reached £2.6 billion—its highest level ever. A quarter of people are now behind on at least one bill, and we are not even in the heart of winter. Does anybody think that that figure is going to be lower come January? Energy bills and council tax arrears are the most commonly encountered debts for households.
What does that mean for the Scottish people? According to Ofgem, northern and southern Scotland, which are colder, rural areas, pay two of the four highest standing rates of all the regions of the UK.