Meeting of the Parliament (Hybrid) 20 April 2022
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.