UK Government cost-of-living response ‘insulting’, says Ken Skates MS

The UK Government response to the cost-of-living crisis has been branded ‘insulting’.

Former Economy Minister Ken Skates said the measures announced so far by Chancellor Rishi Sunak are not enough – and barely cover the £1,000-a-year Universal Credit cut thousands of households in his Clwyd South constituency suffered in the autumn.

Mr Skates said only the Westminster Government had the ‘fiscal firepower’ to deliver what is needed, with experts predicting the biggest fall in living standards since the 1950s.

The Senedd was told that more could have been done if the Tories hadn’t squandered billions of pounds of public money – and heard claims that UK Government loans had been used to purchase pornography and even fund terrorism.

During First Minister’s Questions on Tuesday (June 14), the Clwyd South MS asked Mark Drakeford: “Would you agree that the Chancellor’s offer to households facing the cost-of-living crisis is simply not enough and, indeed, insulting given it’s to be paid from the cut to Universal Credit last year?

“So much more could have been offered to hard-pressed households had the Chancellor not lost £11bn in failing to insure against interest rate rises, or by losing £6bn in fraudulent loans.”

The First Minister responded: “Ken Skates makes a very important point. As a former Minister responsible for the economy, I can see why he has wanted to highlight the fact that while this government fails to provide help for people faced with a cost-of-living crisis at the same time they are losing money hand over fist.

“The £11bn to which Ken Skates referred was highlighted only last week. The Chancellor was warned, time after time, that rising interest rates would have an impact upon his ability to service the £900bn of reserves created by quantitative easing. He failed to take out those insurance measures and, as a result, he is spending £11bn more than he would have otherwise have needed

to. Now, imagine what the £11bn could have done in the lives of the people we have been talking about this afternoon.

“And when it comes to fraud from the bounce-back loan scheme, fraud is only a third of the loss that the UK Government itself say they now expect to make through that scheme. Five billion pounds lost directly in fraud, but £17bn which the government now does not expect to recover from those loans.

“There are court cases going through at the moment that show that those bounce-back loans, those fraudulent loans, were being used to pay for the purchase of private cars, for flying lessons, for pornography websites and, in a case which is to be in front of the courts next month, a case where someone who obtained a bounce-back loan is alleged to have used it to fund terrorist activity by Islamic State terrorists in Syria.

“Five billion pounds which, as we know, the National Audit Office says the government has failed to take the necessary action to recover. Government Minister, Lord Agnew, the anti-fraud Minister, resigned in January describing his own Government’s efforts to control that fraud as ‘woeful’.”

Mr Drakeford added: “The point that Ken Skates makes is this, isn’t it? We have a government who say that, in the fifth-richest country in the world, it’s not possible to provide enough money for people to stay warm and to be fed during this coming winter, but have managed to contrive the loss of tens of billions of pounds in just two schemes that I’ve highlighted this afternoon.”

Mr Skates was an outspoken critic of the cut to Universal Credit, which was pushed through last year leaving more than 6,000 households in Clwyd South £1,040 a year worse off.

Welsh Government Ministers set out a £380m package of support in the spring which included £150 council tax rebates and a new £200 Winter Fuel Support Scheme to be launched in autumn. At least 4,583 unpaid carers in Wrexham and Denbighshire will also receive a £500 support payment from the Welsh Government.

Mr Skates said that In April alone more than 2,200 payments were made from the Welsh Government’s discretionary assistance fund to people in Wrexham and Denbighshire – with more than 90% cash help for emergency food and fuel.

Mr Skates added: “The Welsh Government is doing what it can, but the UK Government must step up. They should be helping people – not simply replacing what they’ve already taken away from those struggling the most and then telling them they should be grateful.”