Meeting of the Parliament (Hybrid) 03 February 2022
It might be worth noting that Norway’s national debt is forecast to be more than $200 billion in 2026.
I appreciate Labour’s use of its time today to debate a significant issue that should be at the top of the agenda of every member in the chamber. The cost of living touches households across Scotland—I am sure that we have all been looking at it with concern over recent months.
We are all emerging from a pandemic that was unprecedented in its scope and reach. We know all too well that our society is more fragile and less resilient than it once was. Although should recognise the role that the UK furlough scheme has played—by providing a level of stability for hundreds of thousands of families across Scotland—in preventing some of the worst possible outcomes in terms of jobs and the economy, for many households, budgets are already strained.
It remains a particularly worrying time for families to be faced with surging energy bills, and rises in other areas, too—all while public services are being stretched as never before. As other members have mentioned, the most pronounced element of that has been the jolt in the cost of wholesale gas globally. We should not underestimate the reliance that we still have on gas: it heats the vast majority of British homes and it continues to provide a very significant proportion of our electricity, although we have moved away from more polluting alternatives, such as coal.
We often speak of energy security, but the reality is that we are a net gas importer and remain at the whim of fluctuations in the global market. Sensible predictions suggest that wholesale costs might remain high for the next two years.
Those are undoubtedly major challenges, and although we can identify the problems, the solutions are less clear. The question of cutting VAT on home energy bills is finely balanced, compared with other interventions. As Liz Smith highlighted, last month the Institute for Fiscal Studies noted that that policy would give average households back less than a fifth of the annual increase in costs and could bring with it unintended consequences.