Cost of Living Crisis

2. What recent assessment he has made of the potential impact of the cost of living crisis on (a) households and (b) businesses in Wales.

6. What recent discussions he has had with Cabinet colleagues on the impact of the cost of living crisis on households in Wales.

13. What discussions he has had with Cabinet colleagues on the impact of rising costs on (a) businesses and (b) households in Wales.

I understand that people across the UK are worried about the cost of living, which is why we have taken decisive action to support households and businesses across the UK, while remaining fiscally responsible. That support includes a £26 billion package for the next financial year, which will be targeted at protecting the most vulnerable.

Almost half of adults UK-wide say the cost of living crisis is harming their mental health, and that rises to 61% of Welsh adults. Devolved initiatives such as the fuel support scheme in Wales help, but inflation and UK Government cuts put such schemes in jeopardy. How does the Secretary of State justify his Government’s repeated refusal to support devolved Governments in tackling the crisis his party has created?

First, I fully acknowledge that there is a cost of living crisis at the moment. It has come about because the UK Government rightly had to spend hundreds of millions of pounds dealing with the covid pandemic. We then saw inflation increase through the roof as a result of a land war in Ukraine. I recognise that there is a cost of living crisis being faced by countries across the whole of the western world at the moment. The UK Government have certainly not cut funding. We have increased funding for the devolved Administrations. We have increased money for the national health service. It is a shame that in Wales that funding is not being fully passed on to the national health service. Frankly, on the NHS, the Welsh Labour Government are getting more money and delivering a lower service.

My constituent Sarah and her children could not celebrate Christmas this year: they were crippled by the fear of bailiffs and of being made homeless in the minus 2° weather. The toll this has taken on her mental health is unimaginable. She said to me, “My children and I will just break.”

A YouGov poll, out this week, shows that this Tory-made cost of living crisis has had a huge impact on people’s mental health in Wales—significantly more than elsewhere. Thirteen years of Tory Government have crippled this country. Cardiff Council is already £23 million worse off. Is the Welsh Secretary going to push my constituents to breaking point?

There is a cost of living crisis going on all over the world at the moment. This Government have acknowledged that and faced up to it. That is why we have prioritised help for the least well-off. That is why this Government have made sure that the minimum wage has risen in line with inflation, that pensions have risen in line with inflation and that benefits have risen in line with inflation. People on benefits will receive a £900 payment, pensioners are getting a £300 payment and households with a disability are getting a £150 payment. At all times through these crises, which have not been caused by this UK Government, we have targeted our help at the most vulnerable in society.

The Government have announced that support for homes and businesses connected to the mains gas grid will be extended for another year, but it seems that the single round of alternative funding announced for off-grid homes will be expected to last for the full 18 months. Notwithstanding the fact that the first payment to off-grid homes is still to be made, will the Secretary of State push colleagues in the Department for Business, Energy and Industrial Strategy and the Treasury for a second round of alternative funding to provide support for off-grid premises ahead of next winter?

The hon. Gentleman is correct to say that the UK Government have recognised that those who are off grid are facing an increase in costs. It has not been as sharp as the increase for those who are on grid, and I think that the figures reflect that, but I note the hon. Gentleman’s comments about the fact that full details of the payment have not yet been made fully clear. I am sure that my colleagues in BEIS will have noted his question and will be coming forward shortly with more information about the payment.

I call the shadow Secretary of State.

This month has seen dreadful news for steel businesses and steelworkers in Wales. Steel is an energy-intensive industry, and its operating costs during the cost of living crisis have rocketed. Thirteen years of Conservative Governments have seen decline, offshored jobs and damaged communities.

Steel is integral to a modern economy. Labour will put Welsh and UK steel at the heart of our wider industrial policy, building wind turbines, railways and investing in carbon capture and storage and in hydrogen infrastructure. Other than creating a cost of living crisis, what is the Government’s plan for our steel industry and for steelworkers’ jobs?

First of all, the news from Liberty in Newport was very disappointing and is very concerning for many people. That has not come about as a result of actions by the UK Government, as I think the hon. Lady will recognise; there are other issues pertaining there.

The UK Government are completely committed to the steel industry. We demonstrated that with a £30 million loan to Celsa during the covid crisis, and we have demonstrated it with the various schemes that have been brought forward to support industries with high energy use. We are developing a scheme that will enable those in the industry, such as Tata, to decarbonise. We are also in discussions with Tata about how we can support it further over the coming years.

Steelworkers need a Government on their side. The industry needs a partner that can provide stability, not sticking plasters. Floating offshore wind in the Celtic sea is a real opportunity for our steel industry and the wider supply chain in Wales. It would also help to mitigate the impact of the cost of living crisis for many Welsh businesses in the supply chain. If the Government do not provide the necessary stability, we will see platforms being built in France and Spain and floated over to the Welsh coast, which would be absolutely unconscionable. What is the Secretary of State doing to ensure that the Crown Estate leases will use local supply chains in Wales?

I have met the Crown Estate on a number of occasions to discuss the next bidding round for the sites out in the Celtic sea. Obviously we hope to develop the industry. I agree with the brunt of the hon. Lady’s question, which is about the importance of developing a floating offshore wind industry off the coast of Wales. I have been trying to ensure that the supply chain is as local as possible. That is why we have supported the conversations between developers and the Crown Estate; it is also why I have personally visited Pembrokeshire to ensure that the growth deal there supports the new infrastructure at the dock that can allow those projects to be floated out to sea. We are actually doing a great deal to support the floating offshore wind industry in Wales.

For Harlech Foodservice, a key business in my constituency, last week’s news that the UK Government were slashing their energy support for businesses was devastating. The company is already struggling under soaring energy bills and interest rate hikes in coronavirus business interruption loan scheme repayments. Can the Secretary of State clarify the position? Will any support be forthcoming on CBILS repayments, and will any savings made by the Treasury as a result of falling wholesale gas prices be ringfenced for targeted support for small and medium-sized enterprises and vulnerable households?

I hope the right hon. Lady will recognise that over the last year the Government have done an enormous amount to support businesses through the energy price guarantee. They have made it clear that that support package cannot continue at the current level after April, when the next financial year begins, but they have said that they will also make clear, fairly shortly, what the new package will look like. Unfortunately, no Government anywhere in the western world will be in a position to completely underwrite and subsidise energy costs for all businesses for an indefinite period, so we have to confront some realities, but I hope the right hon. Lady will be supportive of the efforts that the Government have made to do more to develop energy security in the United Kingdom. Perhaps she should talk to some of her colleagues in the Scottish National party about their opposition to opening up further oil and gas projects in the North sea.

I would have appreciated an answer about the coronavirus business interruption loan scheme as well.

We all know that extortionate energy costs are part of this Tory winter of discontent, which bookends 13 years of deliberate austerity. Key workers are striking and real incomes are in freefall. Following the last Budget, funding for Welsh public services will be worth £3 billion less over the next three years. Enough is enough, and cutting key workers’ salaries is not the right answer. Will the Secretary of State urge the Treasury to reverse this decline by establishing a truly fair funding system for Wales that recognises our nation’s needs, taking into account age, disability, and poverty levels?