Meeting of the Parliament 11 March 2025
In recent days, we have, as a nation, rightly been consumed by the news from Washington—by the utterly unacceptable and bullying rhetoric of the Trump Administration as it tries to undermine the established relationships within the western world and to hamper moves towards peace in Ukraine after three long years of war.
As we watched on, aghast, at what was unfolding on our television screens, the governor of the Bank of England, Andrew Bailey, was giving evidence to the Treasury Select Committee. He was warning of another American attack on the western economies, through trade wars. The impending tariffs that America has placed on Canada, Mexico and China have already triggered retaliatory responses, and the governor was extremely blunt about the detrimental effects on Britain’s economy should those trade wars escalate further, most especially in terms of new global inflationary pressures and on productivity growth. That is exactly what we do not need at the same time as the on-going cost of living pressures and rising energy bills, which—as we know from our constituency mailbags—are probably still what worry people the most.
As the cabinet secretary mentioned, since October the energy price cap has risen three times in a row: it rose by 10 per cent in October and 1 per cent in January, and it is to rise by 6.4 per cent in April. The result is that the annual bill for a household using a typical amount of gas and electricity will go up to £1,849 per year, which is an increase of £111. These are worrying times, and that is even before we come to the politics of it all. I dare say that, for the purposes of the debate, we will have to come to the politics, but I want to look at the bigger picture.
The Labour Government is still promising to cut energy bills by £300 by 2030. That statistic has been widely disputed by economic analysts, and it certainly does not fit well with Labour’s decision to remove the winter fuel payment as a universal benefit to all pensioners. The significant cutback of the winter fuel payment meant that just 130,000 older Scots received the payment this winter, with approximately another 900,000 older Scots losing out during the winter. Labour put that down to the need for a debate about priorities and universalism.
That part is right. There is an important debate to be had about the principle of universal benefits, particularly when there will be no fiscal sustainability in the foreseeable future. Indeed, I have been arguing for such a debate for many months. However, if we are to have that debate, the principles that we must apply must have regard to those who are most in need and to a strong evidence base on which policies are the most effective in mitigating poverty and vulnerability. When it comes to Labour’s winter fuel policy, it falls foul on both of those counts.
Those criteria of examining vulnerability and substantiating evidence should challenge the Parliament. For example, I have said several times in the chamber that I believe that the Scottish Government’s Scottish child payment policy is effective and well received, but there are other aspects in relation to which the evidence on welfare benefits is much less clear and the pressures of the welfare spend are such that they are now way out of reach of the Scottish Government’s budget.