We are pleased to support this motion.
As figures today show, soaring food costs and the energy bill crisis are driving consumer prices up at their fastest rate in 30 years, with UK Consumer Price Inflation at 5.4% last year.
Of course, this is not restricted to the UK and inflation has risen in economies across the world, for example hitting 6.2% in the US last October.
As the Bank of England Chief Economist stated three months, ago “Inflation has been increasing rapidly for much of 2021 because of the strong economic recovery from the coronavirus crisis, surging energy prices and global supply chain disruption”.
Those of us who remember inflation and its consequences in the 1970s and 80s know that it is an economy and jobs killer, with devastating impacts on household budgets – and understand:
- that this must be tackled,
- that massive liquidity injections to power us through choppy waters will therefore no longer be available
- and that tighter fiscal policy normally follows, including further Central Bank interest hikes although this will also need both local and global responses to supply pressures.
Although UK inflation is expected to fall back later this year, it is not expected to drop to the Bank of England’s 2% target until 2023.
I note that the UK Chancellor had stated today that he understands the pressures people are facing and will continue to listen to people’s concerns, as he has done throughout the Pandemic, adding that the UK Government was already providing support worth £12 Billion this financial year and the next to help families cope.
He has already delivered over £407 billion of economic support since the pandemic began – now backed by a further £1 billion package for key sectors to mitigate the impacts of Omicron – and, is also delivering £4.2 billion of support to help with the cost of living:
- keeping the Energy Price Cap in place
- to protect consumers from the global spike in gas prices. delivering a £1,000 tax cut for working families by cutting the Universal Credit taper rate, worth £2.2 Billion in 2023,
- increasing the National Living Wage to £9.50 an hour,
- freezing duty rates on fuel and alcohol to help with the cost of living
- he enabled the Welsh Government to launch its Household Support Fund by contributing £25 million towards this from its half Billion pound fund to help Households in need to buy essential items.
Regrettably, people in Wales are particularly exposed.
In 4 months’ time, Labour will have been running Wales for a quarter of a century.
The December 2018 Joseph Rowntree report on UK poverty stated that ‘of the four countries of the UK, Wales has consistently had the highest poverty rate for the past 20 years’.
Last November’s Joseph Rowntree Foundation ‘Poverty in Wales’ stated that ‘Wales has lower pay for people in every sector than the rest of the UK’ and that ‘even before Coronavirus almost a quarter of people in Wales were in Poverty’.
Research carried out for the UK End Child Poverty Coalition published last May found that Wales had the worst child poverty rate of all the UK nations.
AND Official statistics show that successive Labour Welsh Governments have failed to close the gap between the richest and poorest parts of Wales – and between Wales and the rest of the UK – despite having spent billions entrusted to them to tackle this on top-down programmes which did not do so.
Had they done so, of course, they would have disqualified themselves from further funding.
Even yesterday, they were talking as if this funding was not only ever intended to be temporary.
Despite criticising other Bodies which invest temporary funding in ongoing revenue costs, they have done the same.
As the UK Chancellor has also said “The best way to help people to get on in life, and raise living standards across the UK, is to help people into work and to progress once in work”.
But the Welsh Government’s ongoing, reactionary and regressive rhetoric conceals the fact that the equality and social aspects of cost-of-living pressures are inextricably linked to the economy.
A Welsh Government action plan should not only include steps to help vulnerable households facing higher costs, especially when the Energy Price Cap is lifted, but also detail how it will at last work hand in hand with business, to create the conditions for a high wage, high skilled economy, and how it will at last develop a systemic, community-led strategy for tackling deprivation and promoting social justice.
