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Forbes presses UK Government for action over ‘astronomical’ energy price rises
27 June 2022, 18:04
The Scottish Finance Secretary told MPs that ‘a lot more is needed and a lot more is needed very quickly’.
Scottish Finance Secretary Kate Forbes has challenged the Treasury to do more to help families with “astronomical” rises in energy bills – claiming the action announced so far by Westminster only “slightly offsets” the extra costs for households.
Ms Forbes issued the plea as she appeared before the House of Commons Scottish Affairs Committee, telling MPs that the Scottish Government was “extremely constrained” in the action it could take.
She highlighted some measures that have been introduced to help hard-pressed families, such as the Scottish Child Payment, a £20 a week payment to low income families.
It is being increased to £25 a week by the end of this year, as well being rolled out to older children, Ms Forbes said.
And while she said Holyrood had opted to increase benefits which have been devolved to Scotland by 6% – the rate inflation was at when the Scottish budget was set – she complained that Westminster had voted against a similar increase for the welfare payments it controls.
Ms Forbes insisted the Scottish Government was “pushing our budget as far as we possibly can”, adding that almost £3 billion had been allocated in 2023-24 to “try to mitigate the impact of the increase cost of living on households”
This will “include funding which is just mitigating some of the policy decisions that have been taken by the UK Government,” she added.
The Scottish Finance Secretary, who was giving evidence via video link, went on to state: “We chose to uprate eight Scottish benefits by the rate of inflation in April when the budget was passed, which was about 6%.
“I understand that during a Westminster vote to do the same for UK benefits – of course, there are people in Scotland that are dependent on UK benefits – neither, as I understand it, the Tories or Labour supported that uprating.”
Her comments came as she called on the UK Government to do more to help those struggling most with the impact of increasing prices.
Ms Forbes said: “One of the criticisms I have right now is the fact that the funding to date will only slightly offset the increase in energy prices to date.
“We know that the energy price cap for example is going to be increasing over the next months, which means on average families are seeing their energy prices increase over the space of a year by an astronomical amount, and the most recent support only slightly offsets the increase families are already seeing.”
The Scottish Government is “extremely constrained” in what it can do because its fixed budget means it can not spend more than it receives.
Ms Forbes added that Holyrood ministers were also “extremely constrained in the fact we don’t have regulatory powers over some of the areas which are having the biggest detrimental impact on families”.
This, she said, included powers over the energy market and also over imports and exports, “because we know Brexit has driven up the cost of food”.
She said: “We will continue to engage but I think a lot more is needed and a lot more is needed very quickly.”
Her comments came after Prime Minister Boris Johnson said he would not “rule out” cutting VAT on energy bills as families continue to come under financial pressure.
But he was non-committal when asked if he would slash fuel duty further, following the cut of 5p per litre to help cash-strapped motorists in March.
Speaking in Kigali, Rwanda, where he has been attending a Commonwealth leaders summit, Mr Johnson insisted the Government is doing “a huge amount” to support people “with the fiscal firepower we have”.
Asked why he had not yet cut VAT on energy bills, he told BBC Radio 4’s Today programme: “I don’t rule out that we will do it.”
He said the Government had “already cut fuel duty by record amounts”, but acknowledged this would be “swallowed up” and added: “There may be more that we have to do.”
A UK Government spokesperson said: “We know that people are struggling with rising prices and worried about the months ahead. That’s why we’ve stepped in to ease the burden, helping eight million of the most vulnerable British families through at least £1,200 of direct payments this year – and giving every household £400 to help pay their energy bills.
“As part of our £37bn support package we’re also saving the typical employee over £330 a year through the imminent national insurance tax cut, allowing Universal Credit claimants to keep £1,000 more of what they earn and have made the biggest cut to all fuel duty rates ever.
“The Scottish Government has significant tax and welfare powers, including the ability to create new benefits.”