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Cost of Living: Fiscal Approach — [Derek Twigg in the Chair]
25 May 2022
Lead MP
Dan Jarvis
Barnsley North
Lab
Responding Minister
Lucy Frazer
Tags
NHSTaxationEmploymentEnergyBenefits & WelfareLocal Government
Word Count: 12872
Other Contributors: 13
At a Glance
Dan Jarvis raised concerns about cost of living: fiscal approach — [derek twigg in the chair] in Westminster Hall. A government minister responded.
Key Requests to Government:
The Minister should provide an assurance today that the Treasury will conduct an immediate review of mileage rates and encourage National Joint Council (NJC) and NHS to update them as well. Additionally, she must meet with ministerial colleagues in DHSC to find a way to scrap all car parking charges for NHS staff.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The cost-of-living crisis is severe and impacting public sector workers disproportionately. Two in five health workers have had to ask family or friends for financial support, nearly every member of school support staff is worried about managing the rising cost of living, and many are taking on additional jobs. NHS workers who received a meagre pay rise saw most of it go back into Treasury coffers due to universal credit adjustments. A recent survey found that three out of four health workers who use their cars for work say current mileage rates do not cover prices at the pump.
Erith and Thamesmead
Abena Oppong-Asare highlighted the cost of living crisis, noting that inflation has reached a record high of 9%. She discussed rising energy costs, food prices, and national insurance increases. The MP raised concerns about public sector workers facing financial difficulties and emphasized the impact on small businesses and overall economic growth. She called for immediate action including a windfall tax to cut home energy bills and VAT removal on domestic energy.
Paid tribute to the hon. Member for Barnsley Central (Dan Jarvis) and discussed the long-standing nature of the cost of living crisis exacerbated by austerity policies. Criticised the Government's approach to wages, benefits, and pensions. Suggested a windfall tax on supermarkets and Amazon, increasing benefits in line with inflation, and reinstating the £20-a-week uplift to universal credit.
Emma Hardy
Lab
Kingston upon Hull West and Haltemprice
The rising cost of living is pushing many households into destitution, with more than 1.5 million families set to face food and energy bill increases that outstrip their disposable income. The poverty premium exacerbates this issue, as low-income individuals pay more for essential services due to factors such as prepayment meters, unreliable incomes, or residing in deprived areas. A study by Fair By Design found some Hull households face a £490 poverty premium, which is increasing with inflation. Before the Minister sits down, I want to push her a little further on financial inclusion. Will she meet me and the campaign group Fair By Design to look at the FCA's remit with regard to financial inclusion and how we can reduce the poverty premium for people with the least money?
Gerald Jones
Lab
Merthyr Tydfil and Aberdare
My hon. Friend suggested that the Government should look at measures taken by the Welsh Labour Government, such as scrapping car parking charges at NHS hospitals in Wales. Mr Jones highlighted the severe hardships caused by the cost of living crisis in Merthyr Tydfil, citing a doubling of client numbers at local advice bureaus due to increased debt and food bank voucher requests. He urged for an emergency budget with a windfall tax on energy companies.
Grahame Morris
Lab
Easington
He highlighted the unfairness of the current council tax system and proposed replacing it with a proportional property tax, which would benefit 77% of households by an average of £556 annually. He noted that regional economies outside London could see an overall reduction in property taxes of £6.5 billion, benefiting communities needing support for levelling up. Morris suggested that the policy should be pursued for cross-party consensus and to address the cost of living crisis.
Jamie Stone
Lib Dem
Caithness, Sutherland and Easter Ross
The hon. Member highlighted the challenges faced by public sector workers in remote constituencies due to higher living costs caused by distance. Called for urgent reconsideration of payments for carers and the taxation regime on mileage for health workers in remote areas like his constituency.
Jim Shannon
DUP
Strangford
Mr Shannon described the difficult choices facing his constituents, including deciding between heating their homes or feeding their children. He highlighted significant increases in gas and electricity prices and called for the Government to delay increased national insurance contributions.
Matt Rodda
Lab
Reading Central
Matt Rodda highlighted the cost of living crisis in Reading and Woodley, where many residents struggle with high energy bills despite a buoyant local economy. He cited cases of constituents who are struggling financially, including a teaching assistant earning £1,600 monthly and a single man whose monthly expenses exceed his earnings due to rising costs.
Peter Grant
Con
Dartford
Mr Grant highlighted the 'apocalyptic' food price rises predicted by the Bank of England Governor and warned that schools might have to cut meal sizes. He pointed out that poorer individuals face higher inflation rates as they spend more on essentials, while billionaires in the UK saw a 10% increase in their personal fortunes last year. Has the Minister bothered to work out how much of that £1,600 has disappeared in increased food and fuel bills since the announcement was made?
Rachael Maskell
Lab Co-op
York Central
Rachael Maskell highlighted the struggles of her constituents who are making hard choices between bills and income, such as skipping meals or social activities to save money. She cited an example where a constituent's £3.45 shortfall on utilities led to significant distress, illustrating the mental health impacts of financial hardship. The MP also addressed the wage crisis, noting that pay increases have not reached those at the bottom of the scale and criticised high housing costs in York, with rent controls needed to alleviate pressure.
Richard Burgon
Lab
Leeds East
Richard Burgon proposed raising £10 billion via a windfall tax on North sea oil and gas companies, arguing that the excess profits of these companies are not due to innovation but rather the spike in oil and gas prices caused by the war in Ukraine. He estimated that post-tax profits for North sea oil and gas companies will be around £15 billion in 2021-22 and 2022-23, making it reasonable for £10 billion to go to taxpayers.
Tim Farron
Lib Dem
Westmorland and Lonsdale
Described a tide of poverty affecting rural communities, with low unemployment but low wages failing to keep pace with the cost of living. Highlighted housing affordability issues, noting that average house prices are far beyond what local incomes can afford. Cited an example where a family was evicted and had to move away due to lack of affordable rental options, leading to job loss and children being moved schools. Emphasized the impact on the workforce with 103 vacancies in Sedbergh due to unaffordable housing, and noted fuel costs for those off the mains grid are prohibitive. Also mentioned the fiscal policies affecting farming incomes.
Yasmin Qureshi
Lab
Bolton South and Walkden
Yasmin Qureshi detailed the multiple crises facing her constituency, including wage, job, housing, and now a cost of living crisis. She cited survey data indicating that 80% of constituents faced higher bills and petrol prices, with some losing income due to universal credit cuts. Qureshi called for measures such as increasing universal credit, cancelling national insurance rises, and implementing a windfall tax to support households. Additionally, she emphasised the need for long-term investments in renewables, nuclear energy, and infrastructure.
Government Response
Lucy Frazer
Government Response
The Government recognises the cost of living challenge with £22 billion in direct support including £1,000 to those on universal credit and the national living wage. £9 billion is allocated for energy support with fuel duty cuts, council tax rebates of £150 for band A-D payers, expanded warm home discount, and £1 billion household support through local authorities. The minister also highlighted measures for public sector workers including pay rises and benefits from the national living wage increase. She acknowledged concerns about mileage allowances and NHS car parking charges, promising to look into them further.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.