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Cost of Living in Scotland

Volume 743: debated on Tuesday 9 January 2024

I call David Linden to move the motion. As is the convention for 30-minute debates, there will not be an opportunity for him to wind up.

I beg to move,

That this House has considered the cost of living in Scotland.

My ability to wind up the Minister is never going to be in question, Ms Vaz, but in all seriousness I am grateful for the opportunity to serve under your chairmanship. I would like to open by reminding everyone that this debate takes place against the backdrop of a truly dire situation—one characterised by emergency food parcels, poor mental and physical health, parents and children having to cut back on meals, households putting the heating on less, and people relying on insecure pay-day lenders just to make ends meet. The situation I am referring to is one that we as MPs, with much regret, have become all too familiar with: the cost of living crisis.

The crisis as we know it today has shown no sign of abating, and as a result people continue to suffer. The reality is that our social security system, as it stands and at its most fundamental level, no longer prevents hunger and destitution. The British Government show no sign of taking the drastic action needed to reform it. We are witnessing a deafening silence and a lack of action that speaks louder than any words could. From social tenants, those in and out of work, parents, carers, students and disabled people, to the over-50s, the cost of living crisis knows no bounds. It will continue to run rampant through our communities unless tangible policy is put in place immediately.

As the eyes of the electorate narrow on Westminster as we creep closer to a general election, the policy and spending decisions made by the British Government are all the more pertinent. From eye-watering energy bills and excessive food costs to soaring mortgage bills, we must be in no doubt that we face a cost of living crisis made right here in Westminster.

I commend the hon. Gentleman for bringing this debate forward. It is an incredible subject matter that applies not just to Scotland but all the United Kingdom, in particular Northern Ireland. I spoke to the hon. Gentleman beforehand about property prices, which have increased again this year. Does he agree that what we and the Government need to do as we go into 2024 is all we can to address the housing crisis, which I know he is deeply concerned about, so that the first-time buyers have a real chance to get a mortgage at an affordable rate and have a property, as we all do?

I agree with the hon. Gentleman. Indeed, I was referring to that particular issue with my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes) earlier on, who was outlining some thoughts about how the economy has suffered as a result, frankly, of the UK Government’s rather reckless approach during last year’s mini Budget.

I congratulate my hon. Friend on getting this debate. To the critical point about the cost of living crisis in Scotland, I wonder whether he agrees that the Minister, when they rise to their feet, will undoubtedly try and devolve their Government’s catastrophic economic policy to the devolved Administrations, whether in Edinburgh, Cardiff or, if it were sitting, in Belfast. I am sure that my hon. Friend agrees that responsibility for the impact on my constituents in West Dunbartonshire, in his own constituency and across Scotland lies fairly and squarely at the door of Westminster, with the UK Government.

Absolutely. My hon. Friend is absolutely spot on, and that is the reason, I believe, why when the general election comes the best opportunity to make Scotland Tory-free is to vote SNP. That includes in his constituency in West Dunbartonshire, because his constituents, who are paying higher mortgage prices, will know that the cost of living crisis that they face at the moment has been made in Westminster.

I see that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) is seeking to catch my eye as well.

On the subject of reserved matters, energy policy is entirely reserved. The current cost of energy and electricity is particularly painful for people in the highlands. It is exceptionally galling in an area that produces six times more electricity than it needs to use. Highlanders pay a higher unit price, we have to use more electricity to heat our homes, because of the climate, and we have the highest level of fuel poverty. This Government should have taken the opportunity to do something to help people in the highlands and yet they did not.

I absolutely agree. As somebody who represents the highlands—I think the constituency he is seeking to contest at the next election is even more rural than the one that he represents at the moment—my hon. Friend is right to make reference to the challenges in relation to energy, particularly for constituents who are off-grid. Fundamentally, he is right to highlight the fact that Scotland is an energy-rich nation but that far too many of our constituents are living in fuel poverty, particularly those in his constituency and that of the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), to whom I am happy to give way.

I know from personal experience that the hon. Gentleman is speaking from the heart and that he means what he says. Further to my colleague’s intervention, is it not terrible that people are faced with making the invidious choice of keeping the heating on and running into debt or putting it off and risking ill health or something far worse? That should not happen at a time when we think of ourselves as being civilised.

Absolutely. The hon. Gentleman is spot on. Of course, he previously served in the devolved Parliament in Scotland, where there is responsibility for health policy. One thing that he and I would share a concern about is that, as a result of some of those decisions around poverty, we find that there is a knock-on effect for many of our constituents. If someone is living in fuel poverty, that has an impact on their health, which in turn has an impact on other aspects such as employment; all of these decisions are linked up. That is a pressure that our colleagues in Scotland face.

My hon. Friend is making a powerful speech. Does he feel, as I do, that the Tory Government here in Westminster have absolutely forgotten disabled people? They announced a social energy tariff consultation, which has not happened. Many people across these isles, and especially those with disabilities, cannot afford to heat their homes.

Absolutely. I pay tribute to my hon. Friend, who I know does a power of work on this issue and is an active member of the Lanarkshire forum on poverty. She is right. We know that there is evidence suggesting that people with a disability experience £950 a month more living costs, not to mention the fact that the UK Government so cruelly overlooked the 2.5 million legacy benefit claimants during the pandemic, who did not get their £20 uplift.

I know that my hon. Friend did not see my speech in advance, but she touched on a point that I want to come to next, which is about the impact on physical and mental health. That is an issue that impacts people across all of these islands. Indeed, the Mental Health Foundation found that almost one third of Scottish adults reported feeling anxious about their financial situation in the last month, with one in 10 feeling hopeless about it. I guess that that goes back to the point made by the hon. Member for Caithness, Sutherland and Easter Ross: in one of the richest economies in the world, people feeling hopeless due to financial precarity is simply unacceptable.

These statistics are only reinforced by the findings of the charity Pregnant Then Screwed, who revealed in their recent survey that over half of parents reported experiencing high levels of anxiety relating to money. That is in addition to the almost two thirds of mothers with a child under 12 months who reported that they either have cut short or will cut short their maternity leave due to cost of living pressures. From the Scottish Women’s Budget Group, we know that women are the shock absorbers of poverty; during a cost of living crisis, I am afraid that that problem is only exacerbated.

If we take a look at the impact across demographics in Scotland, we also know, from Age Scotland, that 43% of over-50s identified as living in fuel poverty, with 9% of over-50s skipping meals. The very fact that so many people are living in fuel poverty and that that has an impact on many constituents in the Easterhouse area of my constituency is, I know, a huge area of concern for my hon. Friend the Member for Glasgow North East (Anne McLaughlin), who I think was seeking to catch my eye to make an intervention on this point.

I was waiting for the appropriate moment. I thank my hon. Friend for securing this debate, but also for allowing me to make a couple of points. I wonder whether my hon. Friend shares my absolute horror at the yesterday’s news that Ofgem has said that Scottish Power are fit and proper persons to force-fit prepayment meters once again. We know that there was a consultation and that Ofgem said, “Well, okay, you can all do it if you meet these criteria and follow these rules”—one of the rules being that you cannot do it to somebody over the age of 75. My hon. Friend and I both represent the east end of Glasgow, where in some areas the life expectancy is considerably lower than that, so that is a real concern. Does my hon. Friend agree that there is never a reason to force somebody onto a prepayment meter simply because they are poor?

Absolutely, and I pay tribute to my hon. Friend for her work on this particular issue. She and I have the privilege of representing the community of Carntyne, both north and south. It will be bittersweet for me, but after the boundary changes, I very much hope that she will be able to take on the south Carntyne part of the constituency. We should be aware that it is an area with a lot of older residents. The forced fitting of prepayment meters was in the news yesterday, which I know is an issue of huge concern for constituents there. The only thing I would say is that they should take heart that in my hon. Friend they will have a doughty champion to continue campaigning on that.

It cannot be the case that so many people are affected to the point of hunger, anxiety and destitution, when the Government hold the power to shield people from those very things. The most recent report from the Scottish Federation of Housing Associations, titled, “It’s Your Life’s Opportunities”, makes a number of recommendations. It talks about how this cost of living crisis is impacting social tenants in Scotland, who are amongst the very hardest hit by this crisis. Due to the nature of the social housing sector, people on the lowest incomes, with varying needs—for example, refugees or those who were previously homeless—came into the cost of living crisis already struggling. I regularly seek to make the point to Ministers that for many of my constituents the cost of living crisis is not necessarily a new thing. It is a continuation of an already challenging circumstance that they found themselves in.

As of September last year, less than one in 10 social tenants felt as though the cost of living crisis was easing, as we headed into the winter period. Looking particularly at West of Scotland Housing Association tenants, some of whom are my own constituents, 44% reported missing meals because of the crisis, with 65% stating that the price of food limits the extent to which they can buy healthy foods for their households.

I will give way first to my hon. Friend the Member for Glasgow North West (Carol Monaghan), because she is a Glaswegian, and then I will come to spare Glasgow, my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands).

I thank my hon. Friend for bringing forward this debate. He represents the east end of Glasgow, but many of the issues he is talking about could equally apply to my constituency in the north west of Glasgow. One of the things often thrown at people in poverty is, “They just need to get a job,” but my hon. Friend will know, like me, that 61% of people experiencing poverty are in households where at least one adult is working. These are working people, and in-work poverty has become far more acute as a result of the actions of this Government.

Absolutely. My hon. Friend is spot on to draw the comparison on an issue that impacts both my constituents and hers. I think that probably the two places in Glasgow that are most often twinned are Easterhouse and Drumchapel. She is spot on to refer to the fact that in-work poverty continues to be a massive blight on our communities. She actually raises this at just the right point, as I approach talking about universal credit, which is an in-work benefit.

Ending the five-week wait for universal credit, scrapping the two-child cap and lifting the benefit cap are all measures that can be taken to reduce the significant long-term effects that the cost of living crisis is having on people. That is why we need action now. Before I come to that action, I will give way to the Member for spare Glasgow, my hon. Friend the Member for Paisley and Renfrewshire North.

My hon. Friend forgot about spare Glasgow, even though my new constituency will have 10,000 voters in Glasgow at the next general election. When I sought to intervene earlier, he was talking about food, and he is absolutely right that food inflation over the last few years has been horrendous, particularly for staples: pasta is up 31%, bread is up 33%, and even beans are up 66%. Even if someone is skint and making beans on toast, it is up more than 50% from three years ago. We have seen cost controls proposed by Governments throughout Europe, and yet we have seen this Government have a cosy fireside chat with supermarkets, and no action. Does my hon. Friend think that is acceptable?

My hon. Friend is spot on. We hear this far too often. I know that great work is being done in local food banks and the pantry network as well, but food poverty continues to be a massive concern. There are a number of things that can be done there. We in the SNP have been consistent in our calls to the Government to introduce practical measures to alleviate the financial pressure facing households. Mortgage interest tax relief should be introduced, the £400 energy bill guarantee scheme should be reintroduced, and action should be taken to tackle soaring food prices, referred to by my hon. Friend the Member for Paisley and Renfrewshire North. However, I will not hold my breath over the last call. Only a few days ago we saw the amusing spectacle of a Conservative Member, the right hon. Member for Rossendale and Darwen (Sir Jake Berry), frothing with outrage, filming a video outside Tesco, complaining of Easter eggs on the shelf. Bear in mind the context that, when the SNO called for action on food prices, we were accused of perpetuating communism in the House of Commons.

The reality for many of my constituents is that they are struggling to put food, let alone hot food, on their kitchen tables. I strongly urge Members to muster a modicum of empathy before complaining about trivial matters, such as supermarkets displaying Easter chocolate. As always, I am left wondering how things might be different in an independent Scotland, where politicians would understand and empathise with the reality that households face, rather than out-of-touch Westminster Governments.

While the Scottish Government and local authorities take action with one hand tied behind their backs, we see the direct impact of an inadequate social security system from Westminster, and an inadequate energy policy during this crisis, over both of which the British Government have control. Instead, the British Government sit firmly on their hands, ignoring SNP calls to tackle the cost of living crisis, which continues to plague all our constituents’ bank balances.

The UK social security system, once hailed as a safety net for those who needed it, now resembles nothing more than a frayed rope, unable to bear the weight of the individuals who rely on it as a lifeline. Despite that, I remain hopeful for the future, because in November the Scottish Government published a paper on social security in an independent Scotland, outlining bold and ambitious plans to build a fairer, more just system that places fairness and equality at its heart. That includes scrapping the two-child cap and bedroom tax, removing the benefit cap, ending the cruel sanctions regime and deductions scheme, ending the young parent penalty in universal credit, and doing more to encourage uptake of full entitlement. Those are all outlined in the prospectus, which offers hope to the most vulnerable in our communities.

Unfortunately, for as long as the majority of decisions about Scotland are made in this royal palace by a Government we did not elect, we are at the mercy of a Westminster establishment, which at best can be described only as asleep at the wheel, failing families when they need the Government most.

It is a pleasure to serve with you in the Chair, Ms Vaz. I begin by congratulating the hon. Member for Glasgow East (David Linden) on securing this important debate on the cost of living in Scotland. The United Kingdom Government fully recognise the challenges and pressures facing households due to the higher cost of living. We are have taken decisive action to protect struggling families, with the largest support package in Europe.

In total, Government support across the UK to help households with higher bills has been worth £104 billion, an average of £3,700 per household, including households in Glasgow and across Scotland. The UK Government reacted quickly to protect energy consumers, maintain continuity of supply and stabilise the markets, when unprecedented increases in wholesale energy costs from mid-2021 caused significant volatility in energy retail markets. The energy price guarantee and the energy bill support scheme covered around half of a typical household energy bill over winter 2022, and by the end of June 2023, had saved a typical household around £1,500. Businesses across the UK have also received support through the energy bill relief scheme and the energy bills discount scheme.

Wholesale energy prices have now significantly fallen, with the average annualised household energy bill in quarter four of 2023 falling from EPG level of £2,500 in 2022, to £1,834 in 2023, under the Ofgem price cap. The price cap will increase by 5% to £1,928 in the first quarter of 2024, and is expected to fall back to around £1,800 for the rest of 2024.

Hon. Members will be aware that tackling high inflation remains a core priority for the Prime Minister and the UK Government. At its peak, inflation was 11.1%, and that hit families and businesses alike. We remain committed to the challenge, and the latest Office for National Statistics data shows that we have reduced inflation to 3.9%, which is good news for everyone in Scotland and across the UK. When inflation is low, it helps people and businesses to better plan their spending and investments. In turn, that helps the economy to grow by creating jobs and prosperity, which is a key priority for the Government.

So many of my constituents are concerned about the cost of living and how they are going to afford it. Age Scotland says that 50% of people over 50 in Scotland have seen their standard of living decrease. Does the Minister agree that the answer is not constitutional change, but a change of Government?

The hon. Member will have heard about the measures that the UK Government have put in place to support all households with the rising cost of living, including the older groups that she identifies. As Members of Parliament, we all recognise the challenges that our constituents face with rising bills, but what they do not need is the reopening of the constitutional debate in Scotland. They do not need independence for Scotland; they want both of Scotland’s Governments to focus on the challenges that households face not just in her constituency in Edinburgh or in my constituency in the borders, but across Scotland.

This Government passionately believe that the best way to improve living standards in the long term is to get more people into higher-paid jobs, which is why it is so encouraging to see the employment rates in Scotland. The number of payrolled employees in Scotland hit a record high of 2.45 million in November 2023, and the unemployment rate remains below the UK average. This includes the area represented by the hon. Member for Glasgow East, Glasgow city, where the number of people in employment has increased by nearly 18,000 pay-rolled employees since the start of the pandemic to a new record high of over 275,000.

It is not just about getting people into work, but about ensuring that it pays to work. That is why the Government will increase the national living wage by 9.8% to £11.44 an hour and increase the national minimum wage by 14.8% to £8.60 an hour, benefiting around 200,000 people in Scotland. However, we recognise that short-term cost of living pressures remain and particularly impact on vulnerable groups. In addition to UK-wide support for all households, the Government have deployed specific, targeted financial support and tailored interventions to help those most in need. For example, around 680,000 low-income and vulnerable households in Scotland have received additional support through the cost of living payment scheme, with millions more households also benefiting in other parts of the country.

As you have already pointed out, Ms Vaz, we are expecting votes shortly. I am keen to cover the key points in response to the points already made during the debate, so I am not going to give way.

In the constituency of the hon. Member for Glasgow East, around 21,200 means-tested cost of living payments have been made to date, with about 18,200 individuals already eligible for disability payments. Nearly 12 million pensioners across the UK have received additional financial support of up to £600 to heat their homes over the winter. We are also supporting pensioners by maintaining the triple lock. The basic state pension, new state pension and pension credit standard minimum guarantee will be uprated in April 2024 by 8.5%, in line with the average earnings growth between May and June 2023[Official Report, 15 January 2024, Vol. 743, c. 8MC.]. We have also introduced new local housing allowance rates, which will come into force in April this year. That will help to boost those who are most in need, with more than 92,000 households in Scotland £800 better off per year as a result.

Overcoming the cost of living pressures facing our communities requires collective action from us all in Government, which is why we have provided the Scottish Government with the necessary levers to play their part. The UK Government have topped up the record block grant from the previous spending review with an additional £2.4 billion as a result of the decisions taken across three fiscal events. The Scottish Government receive about 25% more per person than equivalent UK Government spending in other parts of the United Kingdom, and that translates into about £8.5 billion more per year on average. The renewed Scottish fiscal framework, as agreed by both Governments, provides the Scottish Government with greater certainty and enhanced budget management flexibility to meet the expectations of devolved public services and local communities.

It is also important for us to remember the tools the Scottish Government have at their disposal under the devolution settlement. As well as control over local taxes and most rates and thresholds of income tax, the Scottish Government have responsibility for stamp duty land tax and landfill tax. About a third of their budget is self-funded, so they have significant control over their income generation and spending. Although this is a matter for the Scottish Government, I encourage them to use the tools and levers at their disposal to complement the existing cost of living support delivered by this United Kingdom Government.

I am confident that the measures that the UK Government have put in place have helped millions of people across the length and breadth of this country, including in Scotland, to deal with the cost of living pressures—[Interruption.] I have no idea why SNP Members find this so funny. My constituents are feeling the cost of living crisis, and yet SNP Members come here, barrack Government Members and laugh at a subject that is very difficult for many households in the Scottish Borders and, indeed, across Scotland.

We cannot be complacent, which is why this Government remain vigilant to any future challenges that risk diminishing household budgets. As the Prime Minister said, inflation is the real cause behind the increasing living costs, and our responsible plan for controlling inflation and reducing debt is working.

Question put and agreed to.

Sitting suspended.