Meeting of the Parliament (Hybrid)

Meeting date: Wednesday, April 20, 2022

Official Report 1169KB pdf

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Cost of Living

The next item of business is a debate on motion S6M-04050, in the name of Alex Cole-Hamilton, on the cost of living crisis.

15:30  

I am very pleased to bring this motion before the chamber on behalf of the Scottish Liberal Democrats in our parliamentary time.

What began as a struggle to get by during the pandemic is quickly turning into a cost of living catastrophe for thousands of people across Scotland, and it is not clear that there is any end in sight. The 54 per cent rise in energy costs has left millions of people across the United Kingdom unable to pay their bills, and if we think that things are bad now, they look likely to get even worse by the time next winter rolls around. In October, families could face a further £145 a month price hike, which has led to warnings that one in four adults in the UK will be unable to afford gas or electricity at all.

On top of that, there is the rising cost of food. The price of pretty much everything is ballooning, while taxes rise and inflation causes the amount of money in people’s bank accounts to shrink. Many people who have donated to food banks for years are now relying on them instead. This is Scotland. It is 2022. Many people cannot afford to eat or to put their heating on in one of the wealthiest countries in the world. Enough is enough.

Both the Scottish and UK Governments are sitting on their hands while people’s bills skyrocket. The meagre support that has been announced so far will barely make a dent in those eye-watering increases.

Last week, the First Minister urged people to vote for her party in the upcoming elections, pledging that Scottish National Party councillors would

“help ease the cost of living squeeze”.

Putting aside that lack of detail for a moment, I note that Nicola Sturgeon neglected to admit that her Government is exposing people to the crisis by hiking rail fares, by forcing up council tax and by leaving disability benefits up to 6 per cent behind inflation. Those are all devolved powers. Those are the choices that the SNP-Green coalition Government has made. It is hard to see how endlessly slashing council budgets helps to provide people with the support that they so desperately need.

Unlike Scotland’s current Governments, the Scottish Liberal Democrats have a plan to tackle the crisis. Unlike the pitiful action that has been taken so far, our plan would make a meaningful difference. My party’s cost of living rescue package includes proposals to cut VAT to 17.5 per cent. That alone would be worth £600 to the average Scottish household.

For clarity, I note that VAT policy is reserved.

I am grateful to the member for that intervention, but, as I said, action is required from both our Governments—the UK Government and the Scottish Government.

The cut to VAT would kill two birds with one stone. It would give businesses a boost by encouraging spending, and it would lower prices for consumers. That would be at the heart of the response to the crisis. We could and should also increase and expand the winter fuel payment and the warm home discount.

The recent 6 per cent increase to several Scottish social security benefits was necessary and welcome, but the Government is not going far enough when it comes to disability benefits, which are being raised by just 3.1 per cent. That is almost 4 per cent less than the figure for inflation that was announced last month, and it could be 5 per cent less than the figure that experts are predicting. That is simply not good enough for many Scottish households.

The latest figures predict that, this year, the country faces a £10.9 billion tax hit due to the Conservatives choosing to increase national insurance. The very last thing that struggling families need right now is more tax to pay.

The Scottish Government must also announce protection for households that are experiencing council tax rises due to the cuts that it has made to council budgets—cuts that should never have happened and which my party has opposed since the start.

Some energy companies stand to benefit from the crisis; they are profiting while people literally cannot afford to buy food. Now is the moment to impose a Robin Hood tax on those energy companies that make superprofits, in order to help fund the support that people need.

While we are at it, why do we not take the opportunity to finally crack down on the tax avoidance schemes that have been going on for far too long? Sadly, one does not have to look far to find people with exorbitant amounts of wealth who go out of their way to bend the rules and avoid paying their fair share. That simply has to stop—I am sure that members of the Scottish Conservative Party will agree whole-heartedly.

The Scottish Government must also reverse its recent 3.8 per cent rail fare hike. The SNP and the Greens should be making train tickets cheaper, not increasing their cost. The Government has known for two years that it would run ScotRail, and the Scottish Green Party had a specific manifesto promise to bring down rail costs. Instead, together, they have driven up those costs, which have risen by 4 per cent. They promise a review—more talk—while they put up the prices, which is a betrayal of everyone who is struggling right now. Make no mistake: a vote for the Government’s amendment is a vote against cheaper rail fares.

The Scottish Government could also activate an emergency nationwide home insulation programme to increase energy efficiency. We can help protect the environment and save people cash in the process. That would be an obvious step to take, and we should be able to agree on it across the chamber today.

I finish with the words of the American philosopher Ralph Waldo Emerson, who once wrote that

“to know that one life has breathed easier because you lived here. This is to have succeeded.”

Thousands of our neighbours, friends and, indeed, constituents are being strangled and suffocated by this crisis; they have not breathed easy for a very long time. We in Parliament are in the immensely privileged position of being able to take action that would lighten their burden in some way, and it is our duty to do so.

I move,

That the Parliament considers that both the Scottish and UK governments must immediately do much more to tackle the worst cost of living crisis for generations, and that without additional help this will have a devastating impact on household incomes and poverty; believes that every household could benefit from a cost of living rescue package; urges the UK Government to act through a cut to VAT to 17.5%, worth £600 to the average household, the reversal of the National Insurance rise, the doubling and expansion of the Winter Fuel Payment and Warm Home Discount, and a “Robin Hood” tax on the energy companies that are making super profits from the current crisis; urges the Scottish Government to use its wholly devolved powers to reverse the recent 3.8% rail fare hike and, instead, to expand the system of railcards so that everyone is eligible to get the benefit of rail discounts of at least one third off, based on the model that already exists throughout London and the south east of England; further urges the Scottish Government to increase the value of disability benefits, announce protection for households experiencing council tax rises due to the Scottish Government’s cuts to council budgets, and activate an emergency nationwide home insulation programme with reports provided monthly to Parliament on the impact of its interventions to increase household energy efficiency, and considers that together these steps would help insulate households from the cost of living crisis, where recent government decisions have added to their exposure.

I call Shona Robison to speak to and move amendment S6M-04050.3 for up to six minutes.

15:36  

I thank Alex Cole-Hamilton for bringing a debate on this important topic to the chamber. We are indeed facing the worst cost of living crisis for generations. Rising inflation caused by the effects of the pandemic, Brexit and events in Ukraine is placing increasing pressure on household incomes and means that households could be set to experience the biggest fall in living standards for 50 years, with a disproportionate impact on lower-income households.

The cost of living pressures that households face are undoubtedly immediate and acute, and the Scottish Government is taking a range of actions, within the powers that we have, to help people with the cost of rising bills.

Our budget contains a range of measures that are available to help people face the very real impact of the crisis, but that action needs to be matched by the UK Government, and we have repeatedly called for it to take further action.

This past month, my colleague the Cabinet Secretary for Finance and the Economy wrote to the Chancellor of the Exchequer ahead of his spring statement, calling for urgent action to support households with spiralling costs. His statement was disappointing, to say the least.

The letter included a set of suggested policy actions that fall within the gift of the UK Government. Although some of the spring statement announcements were welcome, other asks were not met—notably, the removal of VAT from household energy bills; the reinstatement of the £20 universal credit uplift; an increase to benefits by 6 per cent, in line with our Scottish Government approach; and a windfall tax on those making huge profits from the pandemic or the current global situation. That failure follows the devastating impact of successive UK Government welfare reforms that have been imposed since 2015, as a Scottish Government analysis that was published last week highlights.

Were key welfare reforms reversed—including the two-child limit, the removal of the £20 uplift to UC and the benefit freeze—an additional £780 million would be put into the pockets of Scottish households in 2023-24 and 70,000 people, including 30,000 children, could be lifted out of poverty.

Will the cabinet secretary give way?

Just a second.

The chancellor did not take the opportunity to help those who were hardest hit and has not only failed to mitigate rising costs but actually increased them with a rise in national insurance and a below-inflation rise in benefits and pensions.

The cabinet secretary is right to point out the failings of the Tory Government. However, does she also accept that the Scottish Government is failing by taking £5 million out of the pockets of children across Scotland by not rolling out the child payment fast enough to all those who need it, and by not doubling the bridging payments?

The member must have anticipated that I was just about to talk about our second tackling child poverty delivery plan, which was published last month and was widely welcomed by stakeholders across Scotland who have a deep interest in tackling child poverty.

The plan sets out ambitious actions to provide immediate support to families who have been impacted by the crisis and to drive sustainable progress towards the child poverty targets that the Parliament has set, backed up by £113 million of additional investment this year. It includes delivering a new parental employability offer to help parents to access and make progress in employment, a new parental transition fund to tackle the financial barriers that parents face in accessing the labour market, and immediate steps to mitigate the UK Government’s benefit cap, thereby supporting up to 4,000 low-income households each year. That benefit cap was, of course, introduced by the Tories in coalition with the Liberal Democrats back in 2013.

We have already doubled our unique Scottish child payment to £20 per week from the start of this month, which immediately benefits around 104,000 children under the age of 6, and will now go even further. By the end of 2022, we will increase the payment to £25, at which point it will be made available to eligible children under the age of 16, providing £1,300 per child per year with support that is not available anywhere else in the UK.

That is not all. We are also taking wide-ranging action to support households and tackle the crisis. From this month, we have uprated eight social security payments by 6 per cent, which is double the rate that has been offered by the UK Government. As Alex Cole-Hamilton knows, disability benefits are administered by the Department for Work and Pensions on our behalf under agency agreements, so we were constrained by having to apply the same rate as the DWP, or 3.1 per cent.

Will the minister take an intervention?

Very briefly.

I know that those benefits are controlled in London but that is only because the SNP has chosen not to take full control of the powers, which it has had the ability to do for several years.

That is not the case. Disability benefits are hugely complex and, as Alex Cole-Hamilton knows, work is well under way on transferring them. While they are administered in Scotland, progressive changes are being made to them.

Will the minister take an intervention?

I want to make some progress.

More than 450,000 low-income households are protected from council tax bills through our council tax reduction scheme, with almost 400,000 households paying no council tax at all. We have also increased the water charges reduction scheme discount to 35 per cent, making the average water bill for 2022-23 less than the average charge in England and Wales.

Our recent cost of living package means that 1.85 million of Scotland’s households will receive extra help, via their local authority, by the end of April. In addition, we have committed a further £10 million for our fuel insecurity fund for 2022-23, to help households that are at risk of self-disconnection because of their energy use.

I want to talk very briefly about rail fares. For the past 10 years, we have taken action to keep rail fares down, and ScotRail fares are still, on average, 20 per cent cheaper than those across the rest of the UK. To encourage passengers back to Scotland’s railway, ScotRail will launch a 50 per cent reduction in off-peak tickets for travel between stations across Scotland in May. That is hot off the presses and I hope that members across the chamber will welcome the announcement.

Cabinet secretary, could you bring your remarks to a close, please?

Taken together, all that means that we are investing more than £770 million in tackling the cost of living crisis next year. That is a substantial package of support for low-income households in Scotland.

I move amendment S6M-04050.3, to leave out from “considers that both” to end and insert:

“recognises the increasing pressures facing households during the current cost of living crisis; welcomes the significant actions taken by the Scottish Government to mitigate those pressures within the scope of devolved powers and budgets, and that these include doubling the Scottish Child Payment to £20 per week, with a further increase later in 2022, uprating eight Scottish benefits by 6%, mitigating where possible the impact of the UK Government’s so-called bedroom tax and benefit cap, substantially increasing free childcare, introducing free bus travel for under-22s, committing to a Fair Fares review, including the pricing of public transport and the availability of concessions and discounts, a £1.8 billion programme of heating and home energy efficiency in the current parliamentary session, an extension of eligibility for Warmer Homes Scotland, the expansion of Home Energy Scotland advice services, and increased grants for area-based schemes; recognises that, after these actions, considerable challenges to cost-of-living pressures remain, resulting from a combination of the impacts of the COVID-19 pandemic, Brexit and the UK Government’s failures to tackle spiralling energy costs, its removal of the £20 Universal Credit top-up, its failure to uprate benefits and pensions in line with current inflation, and its introduction of increased taxes on working people; calls on the UK Government to use its powers to reverse the National Insurance increase, increase benefits, increase all bands of the minimum wage to at least the real living wage, and tackle energy prices and increase UK-wide energy efficiency schemes, and further calls on the UK Government to put in place a windfall tax on excess profits made by large companies, including fossil fuel producers, to provide immediate financial help for families impacted by the cost of living crisis, or to transfer the powers to do so to the Scottish Parliament so that it can fully address the cost of living crisis and meet the needs of the people of Scotland.”

15:44  

I begin by fully acknowledging that the current cost of living situation is a serious issue for many families across the country, who see their household bills going in one direction, particularly utility bills, fuel and many items of food. I also acknowledge that their anxiety has been heightened by concerns over the direction of some UK and some Scottish Government policies, all of which have come at the same time as increasing political tension between Russia and Ukraine.

As the International Monetary Fund set out so clearly on Monday when analysing the threats to world economic recovery, this is not an easy time for anyone, especially the most vulnerable families, who it is clear are having to face very tough choices. It may be true that the living wage has increased and tax rates have fallen for those on universal credit, but that does not go nearly far enough to help lower earners, who spend 38 per cent of their income on groceries, heating and electricity, compared with the 18 per cent that higher earners pay. For many of the items that are at the sharp end of increasing costs and, therefore, increasing prices, lower income groups are disproportionately affected, and we should be concerned about that. I will say more about that in a minute.

Seldom are economists united in their approach to economic analysis, but they are when it comes to the reasons for the current high level of global inflation, as are producers and suppliers who are involved in international trade, who confirm that much of the current level of inflation is a direct result of sharply rising shipping and transportation costs—that is one of the main reasons behind the chancellor’s cut in fuel duty—the increases in wholesale gas costs and the disruption to many supply chains.

The Organisation for Economic Co-operation and Development inflation statistics are grim, as are yesterday’s G7 statistics, but there is another important issue, which relates to shortages in labour markets. I have argued previously in the chamber that I would like the UK Government to do much more to ensure that there is greater flexibility in labour markets. In Fife and Perthshire, for example, unnecessary constraints have restricted the supply of seasonal workers for fruit and vegetable farming.

The other factor is that there is demand-led inflation, because there are pent-up levels of demand, which are rising as the Covid pandemic diminishes in scope. Businesses desperately need that demand; so, too, does the country when it comes to addressing weaker economic growth and investment. However, we all know that the policies to deal with demand-led inflation do not always sit easily with those to control cost-push inflation.

We know, too, that the cost of the pandemic is well over £400 billion and that 6 million people are on NHS waiting lists. Whether we like it or not, it was generally agreed when it was first announced that the national insurance increase needed to be gone ahead with.

I have heard the claims that VAT on fuel bills should be scrapped, but economic history tells us that that is not the best way of assisting those who are most in need, as it is not a progressive measure. Indeed, while it might reduce bills by 5 per cent, it would cost the Treasury billions of pounds, thereby necessitating much more stringent measures across the economy, which, of course, we can ill afford.

Therefore, the UK Government has decided to look at other ways to mitigate the effects of the current situation, whether through a UK Government loan to the energy companies of £5 billion to £6 billion, which would reduce household bills by around £200, an increase in the warm home discount or additional loans through which families can get immediate help and more substantial assistance, which is exactly what consumer groups have demanded.

We recently debated replacements for European Union structural funds, but I remain rather surprised by the tone of the reaction in the Parliament to the levelling up fund and the shared prosperity fund, given the direct support that they will provide to local communities—

Will Liz Smith give way on that point?

I will not, if Ms Robison does not mind.

Local authorities have warmly welcomed that extra support.

As the Scottish Fiscal Commission has stated many times, it is vitally important to focus on where there is economic imbalance and on helping weaker areas to thrive, and I ask the Scottish Government to consider whether it should not be warmly welcoming the shared prosperity fund, as many—

Will the member give way?

Have I got time, Presiding Officer?

If the intervention is very brief.

Obviously, any funds are welcome, but does Liz Smith not recognise that the new arrangements will involve £32 million being allocated to Scotland for 2022-23, which is £151 million short of the £183 million that is estimated to be an appropriate replacement for EU structural funds? [Interruption.] If Finlay Carson has something to say, why does he not intervene instead of speaking from a sedentary position?

I am the one who does the refereeing here. I invite Ms Smith to respond to the cabinet secretary’s intervention.

I am sorry, but I gave way to the cabinet secretary. I was simply asking about time.

Let me say clearly that one of the reasons regarding the EU fund is that there is still money coming into Scotland from the EU. The taper effect is not reflected by the statistics that the cabinet secretary has just quoted.

I will also say to the cabinet secretary that many people in local councils, including in SNP-run ones, very much welcome the figure.

I move amendment S6M-04050.1, to leave out from “considers that both” to end and insert:

“recognises the significant economic challenges being faced by households and businesses as a result of the intense pressures from rising global inflation and increased costs of production; believes that the UK and Scottish governments need to work together to address these challenges, most especially for vulnerable groups and those on lower incomes, and welcomes the emphasis being placed by the UK Government on Levelling Up, Shared Prosperity and Community Renewal funds to assist those areas with weak economic growth, weak investment and lower employment levels.”

15:50  

People in every neighbourhood across Scotland are struggling to make ends meet. Middle-income households are squeezed, and people on low incomes and those who cannot work are being pushed further into poverty. This cost of living crisis is an emergency, it is set to get even worse and both of Scotland’s Governments are letting us down. Their failures and inaction mean that choosing between heating and eating is now a reality for thousands of people in Scotland. Neither Government is doing enough and, in some cases, they are actively making things worse.

The spring statement package from the Chancellor of the Exchequer was frankly insulting. On the same day that the independent Office for Budget Responsibility confirmed the biggest hit to household incomes on record, Rishi Sunak announced measures that will barely scratch the surface, failing to heed Labour’s calls on the necessary steps to ease the cost of living crisis.

Instead of siding with Labour and introducing a windfall tax on big energy companies, Rishi Sunak and the SNP refused to target energy giants that are raking in profits of £44,000 a minute. The Tory response was pathetic, but the SNP is not doing enough either. Its motion today passes the blame to Westminster yet, when it came down to it, its flagship cost of living action plan was simply to tweak the Tories’ offering, handing households a pitiful £4 a week off their bills.

Meanwhile, the Scottish Labour Party and our colleagues in Westminster have been doing the jobs of both the SNP and Tory Governments for them. Here in Scotland we presented a fully costed plan, which would provide more than £1,000 of support to those who need it the most. By using the powers of this Parliament, we can reduce costs for everyone and we can put money in the pockets of the people who need it most. We can cap bus fares and we can use the powers of the newly nationalised ScotRail to cut rail fares by a third over the next three months. We can reverse the rise in water charges and give every household a £100 rebate. Crucially, we can target a £400 payment to households who are hardest hit, using data that the Government already holds to ensure that families with a disabled person in them, older people, unpaid carers and people on a low income receive the help that they desperately need now—as well as increasing the Scottish welfare fund, so that local authorities have the resources to lift up those who might fall through the cracks.

Instead, the SNP copied the Tories. In doing so, it has, in some cases, lined the pockets of the most well-off people in the country by using the same scattergun approach based on the unfair and outdated council tax that the SNP promised to scrap when it first took office. Fifteen years later, there is no sign of a new system. The one thing that the SNP has a good record on is breaking promises. It did the same when it came to a publicly owned energy firm, right when we needed it the most.

Fuel poverty is higher in Scotland than in the rest of the UK, and it is a looming reality for many more. It is high time that the SNP took real, tangible action to tackle it. Instead, it is on track to miss its targets by seven years. The SNP should now stick to its word: it should deliver on the promise to replace the council tax with a system that is actually based on property value and ability to pay, and it should urgently create a publicly owned energy company that protects us for the future against unfair fuel rises and an overreliance on big, private energy corporations.

Rather than coming here today and asking for more powers, the SNP should be properly using the ones that it has. That starts by addressing the failures with the Scottish child payment. In the absence of a full roll-out, the SNP Government is short-changing children by £5 million a week. It also includes addressing the eligibility and adequacy of newly devolved benefits. Instead, however, the Scottish Government is again copying the Tories.

Changing where a benefit is paid from is not an improvement in itself. It is not enough. We have an opportunity to create a whole new system, and that is what devolution is for. We should use it. We need real radical action now to tackle the rising costs that are raining down on households today—energy price hikes, food price rises, increased water charges and higher public transport costs.

That can be done, by this Parliament and by this Government, and Scottish Labour’s plan is clear on how to do it. We have even identified the money to pay for it. Our policies would help people to make ends meet today and would also tackle long-term structural poverty and inequality, which, for so many, has meant that this crisis has not just caused a tightening of the purse strings but has left them not a stone’s throw away from destitution.

This is an emergency. We need more action now.

I move amendment S6M-04050.2, to insert at end:

“; further calls for the Scottish Government to support households struggling to pay their bills with a targeted fuel costs payment and a top up to the Welfare Fund; believes that the cash surplus stored up by Scottish Water should be utilised to give every household a £100 rebate on their water charges, and calls on the Scottish Government to cut ScotRail fares for three months to help address the cost of living crisis.”

We move to the open debate.

15:54  

I welcome this short debate and acknowledge the concerns and anxieties of households that face energy costs and costs of living that are skyrocketing. I will not repeat all the mitigations that the cabinet secretary outlined in her opening speech, but I will say that they are required solely because of the oppressive policies of this Tory Government, which knows—and, by its actions, demonstrates that it could care less—about the poverty that it is inflicting on the most vulnerable in society.

This economic disaster can be traced right back to the days of the Liberal-Tory coalition of 2010 to 2015, when austerity was seen as a solution to the banks’ collapse. Billions were taken from health and local government budgets, attacking the standard of living of ordinary decent folk, while the rich got richer and the economy was encouraged to function on consumerism that was fuelled by low interest rates and credit, both commercial and individual.

It was a house of cards primed for collapse. Brexit was pursued in the middle of a pandemic, and an oven-ready deal turned out to be a pig’s breakfast, which has now been compounded by an energy crisis.

This economic house of cards is collapsing after nearly 12 years of Tory rule. Who will suffer? Not the chancellor and his tax-avoiding wife—who declared, as a non-domestic taxpayer, that she did not intend to permanently reside in the UK, which saved her millions in UK tax while the rest of us are paying hikes in national insurance and some are losing universal credit. Not Boris Johnson, who apparently does not know what a party is—although he did have £50 to pay that fine. Not heartless Priti Patel, who is paying to export miserable desperate souls to a country with dubious human rights. They are so removed from what is decent and the reality of ordinary lives that I despair.

It will, as always, be the pensioners, those on low pay, the disabled, the disadvantaged and the single-parent families who pay the price for the Tories’ selfishness and incompetence.

The solution offered by the Opposition parties here is to raid public funds from our health and education budgets to, once again, try to ease poverty that has come about entirely as a result of the actions of the UK Government. Much has been done by the Scottish Government, but mitigation has its limits. Already, £600 million a year is being spent on just that.

Do our people deserve this? Did they vote for this? Consider this: at the most recent UK election, in 2019, Labour returned one MP, the Liberals returned one MP, and the UK party of Government, the Tories, returned 6. The SNP has 45 MPs. In the 2021 Scottish Parliament election, the Tories returned 31 MSPs to the SNP’s 64. Throw in the 62 per cent vote to remain in the EU, and we can see that the people have spoken in election after election.

Independence would end the mitigation of the actions of Governments and consequences of policies that we did not vote for. For the first time in generations, we could run our own economy with the competence that is so lacking among the Tories, with the goal of a socially just society that protects the vulnerable, not the privileged.

It is time for mitigation to end. Surely, even the remnants of the Labour Party and the Liberals in here can see that, or will they keep propping up this failed UK Government, which has been rejected time and time again by the Scottish electorate?

15:58  

We are, without question, facing one of the worst cost of living crises for generations. Keeping costs in check is becoming increasingly difficult, with many families now forced to make decisions that nobody should have to face in this day and age.

Energy bills, in particular, have gone through the roof for a number of reasons, not least as a direct consequence of Putin’s invasion of Ukraine. We know that the energy price cap changed this month, which means that 18 million households are having to pay inflated prices, with predictions of even higher costs looming large. Yesterday, the chief executive of Scottish Power, Keith Anderson, warned that another steep rise is expected in October and revealed that his company had received over 8,000 calls last week alone from customers who are worried about their ability to pay.

Higher energy costs have a serious knock-on effect on food prices. Many distributors face uncapped energy costs and are now having to pass on increased costs to consumers.

It is imperative that both the Scottish and UK Governments do considerably more to tackle this crisis. This is not the time to be political point scoring. We should be working together to help the millions affected—particularly the most vulnerable—during this time.

Right across the country, people are worrying about the cost of living, but it is worth pointing out that those who are living in rural and remote communities such as my constituency of Galloway and West Dumfries are facing more dramatic circumstances than urban areas. Many households have no access to on-grid energy supplies and instead have to rely on solid fuels and having gas and kerosene delivered to tanks at their homes. Those fuel costs are uncapped and unregulated.

One of my retired constituents lives in a 200-year-old house where heating oil is his only option. He goes through around 3,400 litres per year. In October 2020, he paid 31.5p per litre; last month he paid £1.20 per litre, which means that his annual bill of £1,200 will rise to over £4,500. His electricity has increased from around £1,000 a year to over £2,000. In total, his annual bill for fuel has risen from £2,500 to over £7,000, which is an increase of nearly £4,500 per year. Energy bills are now taking up almost 80 per cent of his pension.

Coupled with a serious lack of affordable housing in many rural communities, there is now a serious danger that the crisis will lead to many families quitting rural life simply because they cannot afford to exist there any longer. Rural dwellers also face damaging health inequalities, which force them to travel great distances in order to access health services. That results in increased travel costs, because public transport is simply not fit for purpose.

The SNP-Green coalition may well point to free buses for many, which would be fine if people could actually find a bus. Public transport services in many rural areas have been cut during the pandemic, and they have still not been restored to pre-Covid levels despite commitments to do so. The same applies to rail services. We have urged the Scottish Government to reduce rail fares now that it has taken over ScotRail, and to increase services. We have already seen that the price of some rail tickets is being reduced south of the border as the UK Government encourages more people to get back on trains. I am pleased that ScotRail has now followed suit.

The time for action is now, before a growing number of struggling families slip further into poverty. We know that Scotland’s block grant has been increased by more than 10 per cent, which is the largest rise in the history of devolution. The finance secretary, Kate Forbes, has already announced a £150 council tax rebate, which is similar to the one announced by the UK Government, but that is just a drop in the ocean compared with what is needed. The SNP has not yet matched the income tax cuts that have been awarded to taxpayers south of the border. That means that millions of taxpayers here are set to pay more than their counterparts in the south. We want to see the SNP agree to identical cuts as a matter of urgency instead of damaging hard-working people’s livelihoods.

We also want to introduce a help to renovate scheme to make houses more energy efficient in order to reduce heating costs and to help achieve net zero in the long term. However, more help is needed now. The UK Government’s levelling up fund will provide nearly £1.5 billion in city and growth deals in every part of Scotland. That can and should be used to improve local infrastructure, public transport and services. I hope that all local authorities, whatever their political colour, will take full advantage of that.

Finally, instead of the SNP-Green Government continually bleating on about the powers that it wants, maybe now is the time for it to start using the powers and additional funding that it already has.

16:03  

The rising cost of living affects all our constituents. We have talked time and again about the risk of putting people in the position of having to choose between heating and eating. For a large number of our constituents, that has, or very shortly will, become the stark reality. One in seven UK adults are already behind on at least one household bill. Rising energy costs and the spiralling cost of food are pushing more people to have to make the decision: do I heat or do I eat?

Our Scottish Government can go only so far with the limited powers and the funds that it has while fighting against the tide of disgraceful decisions at Westminster that continue to have devastating effects on thousands of people across Scotland. The spare room subsidy, which the Liberal Democrats supported the Tories to push through Westminster in 2013, is one of them. That alone costs tenants who are affected by the bedroom tax between £14 and £25 a week. The removal of the £20 uplift in universal credit, reducing household incomes by £1,040 a year, is another. Over the past six months, food insecurity levels have risen to their highest yet, affecting 5.7 million adults. One in six people who receive universal credit needed to visit a food bank at least once since the start of December, and almost 2 million people currently go without food.

However, the UK Government has rejected calls to uplift benefits, providing no security to people who are struggling to buy the bare essentials. Food insecurity in households in receipt of universal credit was 37 per cent lower when the uplift was in place compared with before the pandemic. That points to the critical role that the £20 uplift had in protecting families from food insecurity.

The UK Government should have used its spring statement to follow Scotland’s lead by matching the 6 per cent uprate of social security and increased all bands of the minimum wage to match the real living wage to ensure that we protect the people on the lowest incomes throughout the country. However, once again, no support was forthcoming from the chancellor. There was also the devastating 54 per cent rise in the energy cap, but the UK Government failed to make changes to VAT on household energy bills, which would at least have provided some short-term relief to households.

Where it can, the Scottish Government has taken significant actions to mitigate the pressures of the cost of living crisis. It has doubled the Scottish child payment to £20, with a further increase to come in 2022. It has uprated Scottish benefits by 6 per cent, which puts money in the pockets of people who are most in need. There have also been other interventions: the introduction of 1,140 hours of free childcare, the eligibility for which has been extended; free bus travel for under-22s; and £1.8 billion being committed to accelerate the deployment of heat and energy efficiency measures. We continue to have free prescription charges, free eye examinations, free tuition and increases to school clothing grants. Almost £6 billion has been invested to support low-income households in Scotland over the past three years.

As we rebuild from the pandemic and face the cost of living crisis, we have an opportunity to make Scotland a more equal and inclusive society. However, Scotland does not hold all the powers that it requires to achieve that. It will come only with independence. The UK Government has shown time and again that it is unwilling to support the poorest in our society and does not have the same priorities as the Scottish Government in relation to supporting all our citizens. That only reaffirms the need for Scotland’s future to be in Scotland’s hands.

16:07  

In politics, it is often easy to give something a title and forget about the magnitude and the reality of what lies behind those words. We have already heard today about austerity, but that really means falling standards of living for the poorest in our society through Government cuts. The Government speaks of a budget of choices, but what it really means is cuts to the moneys that are available to local government to educate our children, lift the bins and fill the potholes.

I fear that the expression “cost of living crisis” is becoming another one over which there is much hand wringing by Scotland’s Government but little real action. We know the reality of the crisis: sleepless nights for thousands of people about how they will pay their bills, ensure that their children have enough to eat and get to work as the cost of petrol and public transport goes up and up.

We cannot allow the cost of living crisis to become another phrase that is timeworn by the inaction of the UK and Scottish Governments. As we emerge from the pandemic, during which many Scots experienced a collapse in their earnings, thousands of people who were just getting by are being propelled into poverty and precarity. The crisis continues to devastate family finances and the UK and Scottish Governments are simply not doing enough and are not focused on the real needs.

Despite promising cheaper energy bills during the 2016 Brexit referendum, the Tories have alternated between being completely silent on the crisis and being completely tone deaf. Despite the crisis, they have hiked up taxes for working people and dished out temporary loans—a heat-now, pay-later measure that only exacerbates the issues in the long term.

Let us not forget that the SNP Government has presided over the crisis in Scotland. It recently nodded through increases in water charges and increased rail fares at a time when families are least able to afford them. In response to urgent calls for support, the SNP and Green Government has failed to use the extent of the powers that it has and instead has offered one-off payments equating to less than £4 a week. That is the equivalent of one single off-peak ticket from Paisley to Glasgow and, with current fares, it is hardly a measure that will soften the blow.

While Scottish families are choosing between heating and eating, Government-owned Scottish Water and its subsidiaries are sitting on a cash mountain of more than £500 million. Scottish Labour’s amendment demands that that cash mountain is used to deliver a rebate of £100 to every household on their water charges.

As I come to the end of a decade as a local councillor, I have been reflecting on the importance of local government in delivering targeted support to those who would otherwise remain in crisis. Our local councils are quickly becoming the last line of defence in the cost of living emergency. The amazing people I have had the privilege of working with in local government are being starved of cash and forced to make unpalatable decisions. We need more money, advice and rights services, more funding for Citizens Advice, more community resilience groups and more support to help people pay their bills.

Copying the Tories by giving people a £150 council tax rebate will not cut it. If the Government is serious about tackling the cost of living, it must properly fund local government to deliver the services that people rely on, and give people real financial help that they can spend in their local communities to build up local economies. I point to the innovative work that is being done in Labour councils across Scotland, such as the community wealth-building agenda in North Ayrshire in my region, and the club 365 holiday hunger programme in North Lanarkshire—once again, councils being the last line of defence.

It is clear that, as my colleague Pam Duncan-Glancy articulated, Scottish Labour has a plan at every level of government to tackle the crisis and help people through it. It is also clear that the situation is grave for people across Scotland, and it will take more than warm words to heat homes and put food on the table.

Maggie Chapman, who will be the last speaker in the open debate, joins us remotely.

16:11  

This is an emergency, but it is not an accident. The cost of living crisis is not unpredictable or unplanned; it is not an act of God or nature that has fallen from the sky equally upon us all. It is not the result of Covid or the invasion of Ukraine, although both those tragedies have exacerbated its effects and will continue to do so. No, it is the result of deliberate policies of the UK Government that are specifically, if not explicitly, designed to widen the gulf between the poor and the rich; between those who suffer from the misery of cold, damp and hunger, and those who profit by it.

We are, to our great sadness and collective shame, acutely familiar with the concept of the hostile environment—that malevolent invention of Theresa May’s Home Office. Those toxic seeds are now bearing their poisoned fruit in the UK Nationality and Borders Bill and in the proposal to outsource our obligations to the most vulnerable of refugees to Rwanda, which is itself a victim of European colonialism.

More hostile environments are lovingly nurtured by the right, egged on by those who should know better. Hostile environments surround the rule of law, the concept of public integrity and the wellbeing of climate-scarred generations. Let us not forget that David Cameron’s “cut the green crap” approach has added £2.5 billion to UK energy bills, or that 90 per cent of energy cost rises in the past year has been down to gas price volatility. Had we moved away from fossil fuels years ago, as we could have, we might not be in this predicament.

Most acute of all, a relentlessly hostile environment has been deliberately constructed around the poor. That environment comprises deliberately cruel and humiliating policies such as the bedroom tax, the benefits cap and the rape clause, and it has been built by their equally cruel and humiliating implementation. It is decorated by the dehumanising and brutal language with which they are described by politicians and the media. It is vital that we acknowledge that reality and understand who is bearing all the burden and who is reaping the rewards. Vague language about “every household” does not do that; it only obscures the shocking scale of this scandal.

It is vital that we respond to the full extent of our capability with integrity, solidarity, effectiveness and justice. There are three ways we can do that. First, we can resist, on behalf of the Scottish people, the most egregious effects of Westminster cruelty. Our Scottish Green manifesto commitment to mitigate the benefit cap was an example of such resistance, and I am pleased that, through constructive dialogue and co-operative working, it was incorporated into the tackling child poverty delivery plan to support the families who are most crushed by the cap.

Secondly, we can use our devolved powers to address the practical needs of the most vulnerable. The doubling of the Scottish child payment is part of that work, as is the uprating of benefits that Social Security Scotland has delivered and the very welcome announcement that rail fares are being cut by half next month. New Zealand—another small country making its mark on the world—is leading by example on that.

Thirdly, we can work to change the narrative: the worse-than-Victorian fiction of wealth creators and the undeserving poor. We can do better than approaching a workhouse supervisor with our empty bowl, begging, “Please sir, can I have some more?” We can point out, and go on pointing out, that the workhouse is built on common land, and that what is so grudgingly dropped from the gruel pot was stolen in the first place.

There is a consensus among many of the parties in the chamber that the UK Government should impose a windfall tax on companies that have profited obscenely from our overlapping crises. That is entirely appropriate. However, their windfalls are not the fortunate harvests of hard-working orchard keepers—they have been gained by enclosure, and kept through subsidy, secretive lobbying and systems that stockpile privilege and punish the poor. Until that reality is acknowledged and the story changes, we will still be firefighting this emergency that is no accident.

16:16  

People are facing a crisis that is happening right now. Members may stand here and put forward the idea that independence is going to help people, but it is not—not right now. We can look at Brexit as an example—how many years did it take for the Tories to decouple the UK from Europe? Whether we are for or against independence, we all need to be honest about that.

A lot of what Christine Grahame said about the policies that have been pursued over not just the past couple of years but the past decade by a Tory Government that has brought about some of the worst attacks on the poorest is absolutely right. We should never give up on saying that, and we should make it clear that those people should take responsibility. There seems to be agreement in the chamber today that, regarding the cost of living crisis, there are things that we can do and that we should be urging the UK Government to do. Removing VAT, reinstating the benefits uplift and stopping the attacks on the poorest in our society and implementing a windfall tax are all actions that could be taken right now.

I welcome the child payment—it should be welcomed, as it is a game changer. Let us stop all the politics, where we are simply attacking each other. The child payment is to be welcomed, as it is a step in the right direction. Looking at the medium term, however, there are issues that could be tackled. For example, what about a public energy company for Scotland? The renewables sector in Scotland is growing, with no state intervention and no state ownership; that all points to disaster for the future. We do not need new powers to be able to do those things—the Government in Scotland has those powers right now and can use them. That applies likewise to the charges on water. There are things that the Government in Scotland can do right now to help.

Nonetheless, I agree with Christine Grahame that we cannot continue to mitigate the effects of every cut that the Westminster Government makes against the poorest people in Scotland. We have to unite to be able to fight that. The cost of living crisis is hitting people right now, but anyone who listened yesterday to the very bleak warnings from the chief executive of Scottish Power will know that the situation is going to get a lot worse before it gets better.

I make an appeal to members. Instead of coming to the chamber for this type of debate and trying to play politics, let us sit down and start talking about the practical things that this Parliament can do and the powers that we can use. For example, the lowest-paid carers in the country work in the private sector—they are being paid with Government money for delivering a public service, yet their terms and conditions and their pay are appalling. That can be tackled right now by this Government in this Parliament, so let us work together. Let us recognise that while we, on our salaries, are probably not going to suffer that much through the crisis, there are people out there who cannot heat their homes, buy food or put clothes on their children’s backs. We have a duty and a responsibility as a Parliament to address that and to work together where we can to do so.

16:20  

It is clear that we are facing one of the worst cost of living crises in living memory. Inflation is increasing, bills are going up and energy costs are causing a lot of fear and distress in our communities. We all know the challenges that our constituents are facing and we all understand the concern and worry that they are causing many families across Scotland.

When it comes to a national crisis, Governments must step up. In Scotland, we have two Governments, and they must work together and implement a raft of measures to mitigate the crisis as much as possible. The motion from the Liberal Democrats echoes the belief that Governments have to step up. The UK Government has stepped up and introduced a raft of measures that will help households across the UK. I am sure that it can do more, and I am sure that the chancellor will do more throughout the year. There is a range of initiatives that will help hard-pressed households, although it is not a magic bullet—they simply do not exist.

We will all face increased bills and challenges because of what is happening elsewhere in the world. Maggie Chapman seems to think that the situation exists only in the UK, but it is a global problem. It is not a case of fixing the problem but a case of dealing with it as best we can. I believe that the policies that have been introduced by the UK Government will go some way to tackle the issues and help families to cope better over the coming months.

Where the UK Government is allowed to help while protecting the devolution settlement, it has done so. The cut to fuel duty by 5p per litre helps us all to fill our tanks, but it is of particular importance to people in rural areas, where car travel is essential.

Levelling up funds and city growth deals, which Finlay Carson mentioned, bring huge investment and could transform many areas of Scotland. Freeports will also provide an economic boost to Scotland. The £150 rebate on council tax bills for the coming year, which was thankfully passed on by the Scottish Government, will mean that most properties in bands A to D will pay less council tax next year than they did this year. That is welcome, and I thank the UK Treasury for making it possible. There is also the doubling of the household support fund.

That is all in stark contrast to the increased costs that the Scottish Government is burdening hard-working Scots with, which add to the cost of living crisis. SNP rail fares are going up. As Alex Cole-Hamilton pointed out, the Scottish Government could cut the fares rather than the services. Water charges are up. We have a higher tax bill than people in the rest of the UK. With the car park tax, the SNP and Greens want to tax people for going to work. They could stop that right now if they wanted to. The SNP has now announced that it wants a congestion charge in Edinburgh, meaning more tax and more costs for citizens who are just trying to get to work to pay the bills.

This year, the Scottish Government core block grant has increased by more than 10 per cent, which is the largest increase in the history of devolution. It gives the Scottish Government the means to help households directly, but instead the money might be used to cover the waste that we expect from this Government, such as £250 million on unfinished, rusting ferries; £147 million on a delayed sick kids hospital; and £40 million on the malicious prosecution of the Rangers administrators. That is all money that could have been directed to the cost of living crisis, but instead the people of Scotland are having to pay for the SNP’s mismanagement.

The SNP-Green Government could choose to do so much more, but it does not, because it has one goal and one goal only—to pursue independence. We heard it from Jackie Dunbar and we heard it from Christine Grahame. They do not care—[Interruption.] They do not care about people’s priorities; they care only about their own. It is a disgrace.

The Liberal Democrat motion is correct: Governments need to step up. The UK Government has done so—it is time that the SNP-Green coalition did so too. I support the Conservative amendment.

16:24  

I will try to lower the temperature just a little. I believe that every member in the chamber, regardless of their political party or our differences, understands the importance of this topic, and it deserves a serious response. It does not deserve members angrily calling for things that we are already doing or downplaying the actions that we are taking. It does not deserve members angrily calling for actions where they know that our hands are tied and the powers are held at the UK level. Neither does this topic deserve simply refusing to acknowledge the actions that the UK Government has taken, whether that is the national insurance hike, which was not universally welcomed, its long-standing regressive tax system or keeping the minimum wage well below the real living wage. It does not deserve a failure to acknowledge the long-term systemic, structural nature of the crisis that we are facing.

Will the member give way?

I will in a moment.

Furthermore, the debate does not deserve defensiveness from this Government. I want to reassure the small number of members who chose to use their time in the debate to put forward positive, constructive ideas instead of simply downplaying what we are doing that we are constantly looking to see, and we will continue to look at, what more we can do beyond the actions that we have taken and that any positive ideas that have been put forward in the debate will be taken seriously.

I agree that there should be constructive debate. What constructive suggestions does Mr Harvie have in relation to the principle of economic growth? What policies are the Scottish Greens looking to that would benefit the economy? I have heard several times that the Greens do not approve of economic growth. That is a very serious issue when it comes to the cost of living.

Perhaps if the Conservatives want to bring to the chamber another debate on the meaning of economic growth we can get into that in great detail and I will lay out the reasons why Greens around the world recognise that, on a planet of finite resources, economic growth cannot go on forever and that everlasting economic growth does not meet the needs of the majority of people.

I want to keep the debate on the issues that are before us. Let us look at the reality of the contrasts between Scotland’s two Governments, which many members have described. I contrast a UK Government that introduced the benefit cap with a Scottish Government that is mitigating that cap, even though that should not have to come from within a devolved budget. I contrast a UK Government that has cut universal credit with a Scottish Government that has introduced the game-changing Scottish child payment, doubled it and then committed to increasing it further. I contrast a UK Government that has uprated benefits by significantly less than inflation with a Scottish Government that has uprated them, where we could, by six per cent.

The UK Government has, apparently, put all its eggs in one basket by expanding the oil and gas industry in the middle of a climate emergency and by expanding nuclear power, which is one of the most expensive ways to meet the country’s energy needs. I compare and contrast that with a Scottish Government that invests in energy efficiency and renewables.

There is, of course, much more that we can and will do, and we will continue to seek to do better. However, let us look at the roll-out of free bus travel for the under-22s. I say again—I mentioned this to Finlay Carson—that the policy will help to make services, including those in rural areas, more viable than they have been. Making services more viable is one of the best consequences and side effects of the free bus travel policy. I note that the fair fares review will be taken forward as part of the Bute house agreement to look at the uneven nature of transport costs.

On energy, there is an extraordinary gap between a UK Government that published a UK energy security strategy that did not say one word about demand reduction or about energy efficiency and a Scottish Government that is expanding eligibility for the warmer homes Scotland scheme, increasing grants in area-based schemes and extending home energy efficiency advice. This Government is doing all of that in the context of a £1.8 billion heat in buildings programme and a commitment to establish a public energy agency, which will play a critical role in decarbonising heat and doing so fairly.

On housing costs, the Scottish Government has made commitments on rent controls; we are undertaking our on-going mitigation of the bedroom tax; and we are carrying out the largest affordable house programme in the UK, which is the biggest since the 1970s. On council tax, only two councils have set increases that are above 3 per cent, and all the increases are significantly below inflation.

Please conclude, minister. Thank you.

This Government has a strong track record of addressing the cost of living crisis where we can. We want to do more, we will continue to commit to do more and we look forward to engaging with any members who have positive, workable and constructive proposals to bring.

I call Liam McArthur to close the debate—for up to six minutes, please.

16:30  

This short debate has been timely and important, and it is precisely the sort of topic that our constituents would expect to see us debating.

As everybody has acknowledged, Scotland is facing the biggest fall in living standards in generations as household bills skyrocket. At every turn—whether due to rising energy bills or the price of the weekly shop—it is getting harder and harder for so many people in Scotland, across the UK and more widely to make ends meet. That is compounded by soaring inflation, which is driving the worst squeeze on incomes since records began.

There will not be a single member in the chamber whose inbox and mailbag are not overflowing with countless desperate examples of the impacts that those eye-watering increases are having on so many. In my Orkney constituency, average fuel bills are set to go up by a staggering £1,300. In a community that is already suffering the highest levels of fuel poverty and extreme poverty, it is no wonder that islanders are at their wits’ end. For many, being in this position is a new and profoundly unsettling experience.

Therefore, it is incumbent on all of us to respond in a manner befitting the scale of the challenge that is faced by those whom we represent, and to use all of the powers and resources at our disposal to the fullest extent, as Alex Rowley demanded. We must also demand the same of colleagues at Westminster and, indeed, in local government. That might still not be enough to do everything that we would wish, but it is the very least that people across Scotland have a right to expect and demand.

I am certainly not arguing that either of Scotland’s Governments has done nothing; the cabinet secretary, Patrick Harvie, and Liz Smith have set out their cases. Rather, I would argue that what has been done to date still falls short of what is needed. Liz Smith fairly acknowledged that in what I thought was a characteristically measured contribution. In all honesty, I am pretty sure that Liz Smith and many of her colleagues on the Conservative benches will have seen the chancellor’s spring statement as deeply disappointing.

I welcome the tone of the member’s closing remarks, which is unlike the tone of Mr Cole-Hamilton’s speech. Does he acknowledge, though, that there is an immense gap between what the UK Government has been doing, which has made the problems worse, and the actions that the Scottish Government is taking to address the problems? Does he acknowledge that there is that difference and that we are not sitting on our hands in the way that Mr Cole-Hamilton suggested?

I think that the people we represent are less interested in who is doing less and who is doing worse. What they want to know is that, in both Governments and at the local government level, all the powers and all the resources are being deployed to their fullest extent.

The Conservatives have chosen to break their promise, though, by hiking national insurance and handing UK taxpayers a £10.9 billion tax hike. In the current circumstances, that is, frankly, reckless. Yet the Scottish Government is scarcely blameless. As Paul O’Kane highlighted, the SNP Government has been hollowing out local authorities for years. It comes as no surprise, therefore, that many councils, including Orkney Islands Council, have been forced to raise the level of council tax after being handed, in effect, a £250 million cut to their budget by the SNP-Green coalition.

As Pam Duncan-Glancy reminded us, abolishing the unfair council tax altogether was once an SNP flagship policy. That flagship appears to have gone the way of the SNP ferries over recent years. The SNP and Greens have also chosen this moment to use the powers at their disposal to hike rail fares while failing to increase disability benefit in line with inflation. Both of Scotland’s Governments are failing to rise to the challenge of this emergency.

Will the member give way?

No. I do not have time, I am afraid.

What, then, should they be doing? Not—as Christine Grahame and Jackie Dunbar urged us to do—blasting a black hole in the country’s finances and supercharging austerity through separation. As Alex Rowley reminded us, that would provide no immediate benefit and much medium to longer-term disbenefit. Rather, as the motion proposes, they should be taking steps to make a meaningful difference to those who are worst affected. At the heart of our proposals, Scottish Liberal Democrats believe that VAT should be cut to 17.5 per cent. That alone would be worth £600 to the average Scottish household, and it would boost consumer spending and therefore business prospects.

A windfall tax on the inflated superprofits of oil and gas companies would allow us to extend the criteria for the winter fuel payment and the warm homes discount and to double them. We would use the levers at our disposal to reverse the hike in rail fares and would activate an emergency insulation programme this summer to improve the energy efficiency of the households who are most in need.

The grim truth is that this crisis is far from over. Predictions suggest that a difficult 18 or so months lie ahead, as my colleague Alex Cole-Hamilton reminded us. With a further wave of increases in energy costs looming later this year, there is also the prospect of things getting worse before they get better.

The crisis is already taking a heavy toll on individuals, households and businesses across Scotland. They need to see more from both of their Governments. I have set out some of the ways in which Scottish Liberal Democrats believe that more can be done. Those are tangible, meaningful, deliverable steps that would offer those whom we represent the help and hope that they desperately need to breathe a little easier.

I urge Parliament to support the amendment in the name of Pam Duncan-Glancy and the motion in the name of Alex Cole-Hamilton.

That concludes the debate on the cost of living crisis.