I have had many of my constituents contact me to express their concern about the current
economic situation, and their worries for the upcoming months. I am acutely aware that this is
a very difficult time for most people.
It is correct that the economic situation we are facing is not promising. Record energy prices
have driven inflation up globally. High inflation is affecting consumers and businesses.
Households are seeing real incomes fall, while firms struggle with rising costs.
These massive rise in energy prices have been caused predominantly by the Russian Invasion
of Ukraine and is driving inflation not just in energy bills but also transportation costs. It is
this crisis which has seen the dollar, which is the currency used to price oil, strengthen against
the pound and the Euro – which unfortunately also means increased inflationary pressures.
The world recovery from the pandemic, together with continuing lockdowns in China and the
far east, is also adding to pressures on the global supply chain which in turn push prices
higher.
It is right that the Government has stepped in with a comprehensive and effective intervention
package, to help everyone in this country, especially the most vulnerable, with the financial
challenges they face.
However, it would be irresponsible for this Government to provide these
record levels of intervention, without working to fix the root causes of the issues we are
facing, and prioritising building a stronger and more competitive economy that is able to
withstand such global economic shocks both in the short-term but also importantly, in the
long-term.
Cost of Living Support, helping households and businesses with rising costs
The Government is committed to helping households and businesses through the challenges
that high inflation and rising energy costs have brought about.
The Energy Price Gurantee for households and Energy Bill Relief Scheme for businesses and
non-domestic energy users including public sector organisations will cancel the forecasted
increase to £3,549 per year on October 1st. This will take out the uncertainty for consumers,
ensuring that households will not be paying over £2,500 per year for the energy bills, saving
an around £1000 pe per year. Businesses will also be protected from rising energy bills, with
the Government providing a discount on wholesale gas and electricity prices.
A wide and comprehensive package of support was announced earlier this year to ensure that
every household will receive a minimum of £400 in financial support to help with the increase
in energy bills. The most vulnerable households will be entitled to £1200 in support through
various different payments including a £650 payment to households on Universal Credit, Tax
Credits, Pension Credit and legacy benefits, a £300 payment to pensioner households and a
£150 payment to individuals receiving disability benefits. Additional Government support
announced under the last Prime Minister to help with cost-of-living pressures also included
raising the National Insurance threshold, cutting the Universal Credit taper rate, and raising
the National Living Wage.
These interventions will ensure that more money is staying in the pockets of hardworking
people, allowing them to better face the current economic situation. Cutting energy costs for
small and medium businesses will help keep them going over the winter ahead.
The Growth Plan, working to build a stronger more resilient economy
This Government’s approach is that in addition to the help given to assist with the cost of
living, it is important that, as we recover from the global economic shock of covid, we aim
for growth of our economy. The Growth Plan, which was announced last week by the
Chancellor, sets out action to unlock private investment across the whole of the UK, cut red
tape to make it quicker to deliver the UK’s critical infrastructure, get more people into work
and make work pay, and support people to get onto the property ladder.
The Growth Plan makes good the government’s commitment to cut taxes for people and
businesses. Tax cuts means more money in the pockets of hardworking people and
businesses. I share the Government’s view that we should leave people with more of the
money they earn rather than take if off them and let them have it back in dribs and drabs by
the way of grants.
The Growth Plan brings forward the planned cut to the basic rate of income tax to April 2023,
and abolishes the additional rate of income tax completely, simplifying the tax system and
making the UK more competitive. These tax cuts will ensure individuals keep more of what
they earn, and make the UK a more attractive place to live and work. Taken together,
reforming the supply side of the economy, cutting and simplifying tax, and maintaining fiscal
discipline will drive efficiency, enhance UK competitiveness, and help to boost growth
sustainably in the long term.
The package will ultimately lead to additional borrowing, but by cushioning real incomes and
protecting viable businesses it will support GDP growth and reduce the risk of the UK
economy entering a long-term and damaging recession.
Going Forward
It is right that we do not just fight the symptoms of these economic issues, but also work to
fight the cause. The Growth Plan, and other government policies such as the Energy Security
Strategies which will make us more self-sufficient, will ensure that we can do this.
I know that this winter is looking bleak for many, and the coming months will propose many
challenges. I will continue to make it known to the Government that we must put in the
necessary measures to help those who need it. I know that we will get through this, just like
we got through the pandemic.
