Cost of Living Increases — House of Commons, 2022-01-24
Topic: Macroeconomics
Duncan Charles Baker (Conservative, Centre-right): It was only a couple of weeks ago that I stood here and spoke in the Labour Opposition day debate. On that day, Labour Members were concerned about the cost of living but, two weeks later, it is not quite so important to them today We all agree that there is an issue with the cost of living. Office for National Statistics data shows that in December the consumer prices index and retail prices index showed average price increases of 5.4% and 7.5% respectively. Most economists predict that those rates will run higher still. Inflation at a 30-year high is obviously worrying, as it is for many families, but, as the Chief Secretary to the Treasury said when he was at the Dispatch Box, inflation is expected to come back to reasonable levels in the not-too-distant future. We have to analyse why that is the case High inflation is not a factor unique to the United Kingdom: the US is in a similar position and Germany is experiencing the same problems in the EU. There are inevitable consequences from our waking up from a global pandemic, with supply chains readjusting and struggling to meet the demand after we have been released from restrictions—restrictions that this Government have handled far better than the Governments of most other countries around the entire world. We also have to deal with the spiking of energy prices However as Conservative Members said in interventions at the beginning of the debate, it is fair to say that, since March 2020, the Government and the Chancellor’s response to the pandemic has been one of the best in the world, with help and support for millions and millions of people. It is widely expected that our recovery will be the best in the G7. We have unemployment back to pre-pandemic levels, and we have multiple job vacancies—last time I looked there were 1.25 million of them. The SNP must realise that we cannot spend £400 billion and be some £2.2 trillion in debt without needing some degree of responsible management of the public finances going forward, especially when we will have rising interest rates in the future What the Government are doing is sensible. Indeed, when I spoke in the Opposition’s debate only a fortnight ago, I said that targeted support was needed, and it is clear from reports that that is being looked at. The problem is that we cannot shield the entire country from rising food costs, or from rising energy costs—it is not feasible or practical. Anybody with a degree of understanding of economic policy will recognise that The Chief Secretary to the Treasury was very honest when he said that, as we emerge from the pandemic, the reality is that there will be difficult times. We have been in a coronavirus pandemic and had an economic shock the likes of which we have not seen pretty much since the second world war, and the Government are targeting support at families whose need is greatest. As we heard from my hon. Friend the Member for Broadland (Jerome Mayhew), there is the 6.6% rise in the national living wage, which is the highest ever—it is the highest rate of pay that the United Kingdom has ever had—and the universal credit taper will help some 2 million families. However, what does not grab the headlines or really get picked up in the House is the other support that the Government give, including half a billion pounds through the household support fund and £200 million for the holiday activities programme, which is still being run. That support is there specifically for local councils to roll out on the ground, because often they know the people—we have talked about them all afternoon—who need it the very most There are short-term issues that we must deal with and longer-term ones. However, getting the economy moving is clearly by far and away the right approach. Ever more reliance on the state and increasing public debt is wholly irresponsible and the sort of mismanagement that the Opposition would use. Thank goodness they are not in power.