Her Majesty’s Treasury analysis published alongside Budget ’21 has shown that policy interventions in response to covid-19 have, on average, supported the poorest working households most as a proportion of pre-pandemic income.
The Government’s plan to increase national insurance will clearly unfairly impact the living standards of young people and the low paid. That is in stark contrast to the Scottish Government’s free education, bus travel for under-25s and the Scottish child payment. Will the right hon. Gentleman confirm how many Ministers spoke against this move at Cabinet today and whether this included the Scottish Secretary?
I would have thought that, having sought additional powers, the hon. Gentleman would be more interested in reminding the House how his own Government are using the powers that they have. The key issue is that in many areas they are choosing not to use their tax powers—for example, to top up universal credit. He should focus on the alliance that his party has formed with the Greens, which is bad for business, bad for the economy, bad for the oil and gas industry, and counterproductive to growth.
In 2016, the Tories promised that fuel bills would be lower for everyone on leaving the EU. The reality is that fuel bills are increasing while they make the heartless cut to universal credit. In order to tackle fuel poverty, will the Minister use the net zero review to cut VAT on energy efficiency products, keep new nuclear off electricity bills, provide direct funding for heat decarbonisation and sort out the unfair grid charges on Scottish renewables?
Well, I think we should look at what my right hon. Friend the Chancellor has done. I touched a moment ago on how the covid measures have protected the poorest working households the most. Alongside that, the Budget measures on tax, welfare and spending decisions made since 2019 have, on average, benefited all households this year, with the poorest gaining the most as a percentage of net income. That is the approach that my right hon. Friend the Chancellor has taken and it is one that the Scottish Government should follow.
According to Save the Children, more than 3 million children living in low-income households across the United Kingdom are likely to be affected by the £20 universal credit cut, with half of claimants saying that they will face significant financial impacts as a result and one in seven worrying about affording food. The Joseph Rowntree Foundation says that the cut will push 500,000 people below the poverty line. Will the Minister explain how this squares with the Government’s so-called levelling-up agenda?
A key way to tackle poverty is to get people into work and then skill them up in their jobs. That is what we have set out through the plan for jobs, and that plan is working. Ultimately, if that is the priority of the Scottish Government, why are they not using the powers they have to prioritise it?
Does my right hon. Friend agree that it is difficult to justify raising national insurance to fund social care for the predominantly elderly, when the impact of that tax rise would fall mainly on young people and those who are earning little in the workforce? Does he also recognise that those two groups are the very groups that have been most impacted by the economic consequences of the pandemic?
As my right hon. Friend knows, the Prime Minister will make a statement on this matter shortly, but what he and I would agree on is that the best way is to grow the economy, drive productivity, get people into work and skill them up through work. That is what the plan for jobs is doing, alongside the £600 billion investment in infrastructure over the course of this Parliament as part of levelling up and our commitment to net zero. We need to grow the economy, skill up the workforce and get those who have been impacted by the pandemic back into work as quickly as possible.
My hon. Friend is absolutely right. The package of measures that my right hon. Friend the Chancellor took improved on the economic scoring that was forecast for the pandemic, including the figure for unemployment, which will now be 2 million lower at its peak than was estimated. That package of measures has helped to prevent many of the worst outcomes that were forecast by the Office for Budget Responsibility as we went into the pandemic.
One group whose living standards have been impacted during the pandemic has been low-income individuals who have used buy now, pay later credit products to buy online. I very much welcome the Government’s announcement in the spring of regulation of this sector. Will the Minister update me on the progress being made in regulating the sector given that it is become of increasing importance, as Citizens Advice reported just last week?
I think that £400 billion of support in response to the covid pandemic across our public services and individual businesses shows the scale of measures that the Chancellor has put in place. On the specific issue of universal credit, we were always clear that the uplift was going to be temporary. As it was, my right hon. Friend the Chancellor extended it for a further six months. But ultimately what divides the two sides of the House is that we believe the best approach is to have a plan for jobs, to get people into work, and to upskill them in those jobs. The Opposition simply do not have a plan at all.