With 45% of Welsh households facing fuel poverty – the Chancellor’s inaction is inexcusable

Ben Lake MP writes for The National Wales

Article first published in The National Wales, 22 May, 2022

45% of Welsh households are facing fuel poverty following the price cap increase in April. Yet, the UK Government sit on their hands while huge oil and gas companies continue to benefit from circumstances not of their own making to the tune of billions of pounds. The Chancellor’s failure to act is simply inexcusable.

This dithering on much needed support for families amid a growing cost-of-crisis is in keeping with the UK Government’s record. Since the banking crisis, it has imposed austerity, created a damaging hard Brexit, and dramatically cut support for working people.

It is no exaggeration to say that the UK Government policy agenda since 2010 has aggravated the current cost of living crisis.

This week marked the culmination of debate on the Queen’s Speech, which detailed Mr Johnson’s legislative priorities for the coming year. Set against the backdrop of the highest inflation in generations, the Speech was disappointing for its lack of empathy and proposed action, while the lack of ideas on how to alleviate the painful impact that rising inflation is inflicting on household budgets was staggering. Instead, Government ministers are squabbling amongst themselves about whether a package of emergency measures to tackle energy bills underlined by a windfall tax on energy majors aligns with Conservative doctrine.

While Government Ministers obsess about ideological purity, Plaid Cymru is unequivocable – we need an emergency Budget.

The collapse in living standards goes hand in hand with the collapse in international trade. By pursuing the hardest possible form of Brexit, which the UK Government now disown at the peril of a trade war, the Conservatives have made it unnecessarily difficult – and costly - for Welsh companies to trade with their nearest neighbours.

Sadly, this is the result of the dangerous combination of an ideas-exhausted governing party driven by ideology rather than pragmatism. It is particularly dangerous for Wales, given our chronically high levels of poverty and vulnerability to higher energy prices due to inefficient housing and low grid capacity.

Indeed, given the cost-of-living and climate crises, the Queen’s Speech was yet another missed opportunity to reset the ‘levelling up’ agenda by reinvigorating the economic and welfare arrangements between the UK nations and regions. After all, page 15 of the Welsh Conservative manifesto promised “that no part of the UK loses out from the withdrawal of EU funding” while page 29 stated that “Wales will not lose any powers or funding because of our exit from the EU.”

Instead, the Government’s ‘levelling up’ programme has resulted in a £772 million shortfall of investment for Wales, and was described by a Welsh Government Minister as “an assault on Welsh devolution”.

It is little wonder that the opening of the ‘Elizabeth line’ this week – also known as Crossrail – a London-only infrastructure project that cost over £18 billion, has not received a warm welcome in Wales. After all, the Conservative Government has consistently refused to transfer the £5 billion in Barnett consequentials that Wales should receive due to its spending on HS2 in England.

‘Levelling up’ is rapidly descending into farce.

The Queen’s Speech included little relief or comfort for hard-pressed households and small businesses. As Chair of the All-Party Parliamentary Group on Fuel Poverty, I was particularly disappointed by the Government’s inaction on energy bills.

Rising energy bills are causing unprecedented economic pain for households and businesses alike, particularly in rural areas such as Ceredigion where 35 per cent of my constituents - cut off from the grid – rely on heating oil for fuel. Before the Speech, I urged the Government to consider proposals including ECO4 – the energy company obligation – and a New Social Tariff to enhance protection for vulnerable customers, increase the visibility and generosity of schemes like the Discretionary Assistance Fund and to extend schemes like the Rural Fuel Duty Relief to Wales.

Small businesses also need support, and the Queen’s Speech was a missed opportunity to announce the extension of the price cap to small and medium-sized businesses. One hospitality business in Gwynedd has seen its energy bills increase by 450 per cent, putting its future in danger. It is my view that good businesses should not be allowed to go out of business because of energy bills, and especially not because of UK Government dithering.

While we can enjoy the summer now, a painful autumn is coming. The UK Government must therefore introduce an emergency Budget now to get ahead of the crisis, and to protect households and businesses from its worst impacts.

Given the scale and pain of the crisis, the UK Government’s inaction is simply not a price that Wales can afford to pay.

[1]  New statistics highlight up to 45% of households in Wales now in fuel poverty - National Energy Action (NEA)