Rachel Reeves: The Conservatives Are The Cause Of The Cost Of Living Crisis

Rishi Sunak should have adopted Labour's plan to remove VAT on fuel bills and impose a windfall tax.
Shadow Chancellor Rachel Reeves
Shadow Chancellor Rachel Reeves
Aaron Chown via PA Wire/PA Images

Now that the dust is settling from the Chancellor’s energy announcement, the uncomfortable truth is that families in Britain will still be worrying about their bills.

Millions of people were already cutting back, bracing themselves for terribly timed National Insurance rise, price rises and soaring bills in spring.

Citizens Advice saw a record number of people in January struggling with fuel debts.

The Bank of England say people are preparing themselves for the biggest drop in living standards in three decades.

As the Chief Executive of Money Buddies debt advice in Leeds warned: “I’ve been involved in debt advice for 26 years. This is the worst I’ve ever seen it.”

But what are the government offering? A buy now, pay later scheme that loads up costs for tomorrow.

High prices as far as the eye can see for years to come.

And most of the plan not even coming in till October.

The Wonga Chancellor is giving with one hand now, to take it all back later. The government had a choice this week.

Only today Shell announced their profits have quadrupled to $20 billion – results they themselves described as ‘momentous’.

Labour’s plan to keep people’s bills low would impose a one-off windfall tax on these excess profits.

It’s a robust package that we set out weeks ago – one that cuts VAT on home energy bills to 0%, saving most households £200, with £400 in extra targeted support for those who need it most.

But instead of putting this plan in place, the Chancellor would rather shield the oil and gas producers, while loading the cost onto working people and pensioners.

The idea his plan reaches who it needs to would be laughable if it wasn’t so concerning.

The best of way of targeting support to those who need it most is an increase to £400 of the Warm Homes Discount, along with an extension to 9 million households, as Labour has proposed.

But instead, the Chancellor is using council tax to target extra help. It’s a crude measure that will mean many of the poorest households get no extra support, while some of the richest do.

And its people living in the North and the Midlands who will lose out.

This hypocrisy, the day after this government’s ‘levelling up’ white paper, beggars belief.

And it’s not just families. The British Chamber of Commerce say businesses will be dismayed at the lack of support for those firms struggling with their energy bills.

In contrast to the Chancellor’s package, Labour’s energy plan has £600 million ringfenced for struggling businesses including in energy intensive industries.

He may say he can’t do anything about that, or the crisis in general – but this isn’t something that’s happened overnight.

Britain is uniquely exposed to the global gas crisis, because of a decade of dither and delay from Conservative governments.

A decade of failure to regulate our energy market.

A decade where they slashed gas storage, leaving us reliant on imports from Russia.

A decade of dragging their feet on solar, tidal and wind energy.

A decade of stalled progress on insulating homes.

They have no plans to tackle our insecure energy market. They don’t want to back Labour’s plan to insulate 19 million homes – saving families £400 a year off their energy bills in the future.

No plans to regulate the market better, or invest in the renewables and nuclear we need.

The fact is that it’s this Tory decade – and now their inability to plan ahead – that’s led to the biggest domestic energy price increase since records began.

One thing that’s clearer than ever after yesterday: the Conservatives aren’t solving the cost of living crisis - because they are the cost of living crisis.

Rachel Reeves is the Labour MP for Leeds West and Shadow Chancellor of the Exchequer

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