Sat, 2 July 2022

Newsletter sign-up

Subscribe now
The House Live All
By Dods Impact
Environment
National recognition for Sellafield's apprentice scheme Partner content
Economy
Why the Catapult Network is a trailblazer for a new energy future Partner content
Economy
Communities
Economy
Press releases

The government is not doing enough to target cost of living support to struggling households who need it most

The government is not doing enough to target cost of living support to struggling households who need it most
3 min read

Every Friday at my weekly advice surgery I meet yet another working family struggling to make ends meet.

Whether it is watching their monthly pay get gobbled up by astronomical private rents, being priced out of work by unaffordable childcare, or, in far too many cases, relying on food banks to feed their kids.

For them, the soaring cost of living really does mean choosing between heating and eating.

After finally agreeing that Labour’s long called for windfall tax was in fact a good idea, the Chancellor appeared before the Treasury Committee last week to dissect his cost of living announcements. Because, as always, the devil is in the detail.

That’s why I was so furious to learn that when it comes to the energy bill support scheme, anyone who owns multiple homes will take home multiple payments! The more houses they own, the more support they will receive!

Are our public finances really strong enough to be handing out hundreds of millions of pounds to the wealthiest?

Given the challenges facing public finances, it’s vital that all taxpayer funded support is targeted to reach those households genuinely struggling with the soaring cost of living. But when asked directly, the Chancellor couldn’t tell me how much those second and third homeowners would receive. People who, I would argue, probably don’t need that help.

And so, I put the figures to him.

Seven-hundred-and-seventy-two thousand second homeowners will take home a £620 million windfall. And 61,000 third homeowners will scoop up £1,200 for a collective £73 million windfall.

The Chancellor’s defence? This is the consequence of policy in practical terms – conveniently ignoring the practical ways to avoid taxpayer funded handouts accumulating in the pockets of the wealthiest. For example, instructing local authorities to share information of which homes belong to second homeowners to restrict such owners from receiving multiple payments. Or paying back through a self-assessment tax return as we have with the child benefit system.

It’s not that cost of living support couldn’t be better targeted to those who need it. It’s that the government has chosen not to do so.

The Chancellor tells us he is giving the money he will receive to charity. That’s all very philanthropic. But isn’t it being philanthropic with other people’s money? Are our public finances really strong enough to be handing out hundreds of millions of pounds to the wealthiest in the hope that they will distribute to charities of their choosing? At a time when the total tax burden has risen to its highest live since the 1940s, is it really good use of taxpayer money for somebody on the Sunday Times Rich List – or indeed any MP or government minister – to be receiving second home support when others are choosing between heating and eating?

Some people argue that this is a consequence of quickly implemented policy at a time of need. But Labour have been calling for it for months. And every single day of the government’s dither and delay has added £53 million to Britain’s household bills!

The pattern is now clear with public spending announcements always conveniently timed for whenever the government is in crisis – the day after Sue Gray’s partygate report coincidentally presenting itself as the right day to announce cost of living support.

But ultimately this is as much about fairness as fiscal responsibility. And as my Mum would have said, isn’t it just another example of “much gets more”?

 

Siobhain McDonagh is the Labour MP for Mitcham and Morden.

PoliticsHome Newsletters

Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.

Categories

Economy Energy
Podcast
Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now