Tories fail cost of living test

A report from Patricia Gibson, MP for North Ayrshire and Arran, on the recent statement by the Chancellor at Westminster:

True to form, the UK Tory Government has abandoned any pretence of helping hard pressed families through the cost-of-living crisis.

Last week’s Spring Statement by Chancellor of the Exchequer Rishi Sunak MP was an opportunity missed.

With inflation at 6.2% the highest in 30 years, and rising, the Chancellor’s statement only adds further pressures to stretched household budgets.

Ironically, Mr Sunak had plenty of room to manoeuvre, with Treasury coffers bursting with £70 billion more in revenue than anticipated last November, due to inflation increasing VAT and other tax receipts.

Yet only £14 billion was allocated to tackling the cost of living crisis and he failed to reverse Friday’s increase in National Insurance payments. Households now face the biggest drop in living standards in decades as a direct result of damaging Tory policies.

Raising National Insurance contributions, cutting Universal Credit by £1,040 a year and breaking a Manifesto pledge to maintain the triple-lock on state pensions will see 1.3 million people, including pensioners, disabled people and children, pushed into absolute poverty.

The UK already has the worst poverty and inequality in northwest Europe, and the highest in-work poverty this century.

The three interest rate increases this year have already added to the strain on households as mortgages and the cost of credit rises.

As much of the cost-of-living crisis is yet to hit and inflation is still rising, the UK Government should have taken urgent action to reduce household energy bills, not least by turning its £200 loan into a grant.

At Westminster I have repeatedly called for both action on domestic energy bills and a cut to VAT levied on petrol and diesel.

The reduction of 5p a litre on fuel duty is welcome but petrol and diesel are still 40p more expensive than this time last year. So the record-breaking prices we saw on our forecourts last week – prices that directly impact haulage costs and therefore the cost of goods and food in our shops – will simply drop to the record-breaking level of the week before.

More effective would be removing the 12p VAT charged on fuel duty – the tax on a tax. The Chancellor should have acted to help households, businesses, NHS and local authorities with the rising costs of energy. Instead, he’s raising VAT on hospitality and tourism and promising jam tomorrow with the suggestion of a pre-election income tax cut two years from now.

In Scotland the SNP Government is doubling the Scottish Child Payment to £20 a week – £25 at the end of this year – and uprating Scottish benefits by 6%, the Chancellor has not only failed to match that, which would have provided lifeline support to thousands of households, he is cancelling out this progress.

The UK Government has again failed to deliver the support and help households and businesses need. This pitiful Spring Statement underlines why Scotland must become an independent country, so we can build a more prosperous and equal country.