F30: Tackling the Cost-of-Living Crisis

Motion as Amended Passed by Conference

Proposed by: 10 members

Mover: Christine Jardine MP (Spokesperson for the Treasury).

Summation: Sarah Olney MP (Spokesperson for Business).

Conference believes that:

1. Households across the UK, and especially working households, are in the midst of a cost-of-living crisis driven by the continuing economic impact of Covid-19, soaring energy bills, stagnating wages, rising inflation and unfair tax rises.
2. The Government must continue to offer targeted support to the most vulnerable households during this crisis.
3. The Conservative Government has betrayed people’s trust by breaking key manifesto commitments and putting a huge economic burden on the shoulders of working families.
4. The public finances must be managed responsibly, but taxes must be fair and not threaten people’s wellbeing.

Conference notes with concern that:

1. 1. Raising National Insurance by 1.25% from April 2022 – breaking its manifesto commitment.
   2. Suspending the Pensions Triple Lock for one year from April 2022 – breaking its manifesto commitment.
   3. Freezing the Income Tax Personal Allowance from April 2022 until April 2026 – effectively raising income tax for millions.
   4. Cutting Universal Credit by £1,000 a year and only partially
   5. offsetting it through the reduction of the taper rate to 55%.
2. Soaring prices – especially energy prices – drove the inflation rate to 5.1% in November 2021 – its highest point in 10 years; and the Bank of England forecasts that inflation will reach 6% in April 2022 – a 30- year high.
3. The energy price cap reached an all-time record £1,277 in October 2021 and is expected to rise by another £600 in April, threatening to leave countless families unable to heat their homes.
4. Households are facing the highest tax burden in 70 years, and the typical family will see a hit of £1,200 a year through a combination of Conservative tax rises and soaring energy prices according to the Resolution Foundation.
5. The typical household will lose £600 a year through a combination of the freeze of income tax thresholds and the National Insurance rise; and for middle-class families in the top 50% of incomes, the NI rise alone will cause a £750 hit on average.
6. The Government’s ‘high wage, high skill’ economy is an empty slogan:
   1. Real pay fell in the second half of 2021 due to inflation.
   2. Real wages are set to be £740 a year lower in 2024 compared to where they would have been under pre-pandemic wage growth levels.
   3. Nearly half the minimum wage rise will be clawed back by the Government through the National Insurance rise.
7. The Government’s decision to uprate pensions by a mere 3.1% – despite inflation being expected to reach 6% – will cost pensioners up to £270 a year.
8. Rising inflation and bank interest rates are pushing up mortgage costs, with the OBR forecasting mortgage interest payments will rise by 14.8% by the middle of 2023 – leading to an estimated £510 a year for the typical mortgage holder.
9. Despite the reduction of the Universal Credit taper rate to 55%, the Government’s £1,000 cut to UC will leave 3.6 million working families worse off.
10. Whilst raising taxes on working families and cutting benefits, the Conservative Government cut taxes on big banks and presided over highly questionable uses of public funds, including:
    1. Lowering the Global Minimum Corporation Tax rate from 21% under Joe Biden’s plans to 15% – depriving the UK exchequer of £6.8 billion a year.
    2. Cutting the Corporation Tax surcharge on big banks from 8% to 3% at a cost of £4 billion over five years.
    3. Wasting £2 billion on unsuitable PPE that couldn’t be used.
    4. Spending £3 billion on un-accounted Covid contracts.
    5. Spending £37 billion over two years on a test-and-trace programme with a number of its professed aims “overstated or not achieved”, according to the Public Accounts Committee.
    6. Spending £100 million on ‘Get Ready for Brexit’ advertisements.

Conference reaffirms Liberal Democrat commitments to:

1. Insulate all Britain’s homes by 2030, cutting emissions and fuel bills, and aim to end fuel poverty by 2025 by providing free energy retrofits for low-income homes.
2. Put 1p on the basic, higher and additional rates of Income Tax, with the proceeds ring-fenced for the NHS and social care.
3. Taxing income from capital more fairly compared to income from work by abolishing the separate Capital Gains Tax-free allowance and instead taxing capital gains and salaries through a single allowance.
4. Backing President Biden’s proposal for a global minimum rate of corporation tax at 21%, and persuade other countries to do the same.
5. Explore the benefits of a Windfall Tax on the super-profits of large corporations that profited from public health restrictions during the pandemic.

Conference further calls on the Government to:

1. Scrap the unfair National Insurance hike which disproportionately impacts low earners.
2. End the unfair freeze of the Income Tax personal allowance, which is a stealth tax falling disproportionately on low earners.
3. Protect pensioners from rising prices, including the 1.5 million lowincome people on pension credit, by uprating pensions in line with the Bank of England’s inflation forecast of 6%.
4. Reinstate the £1,000 boost to Universal Credit, to ensure that the most vulnerable households get proper support.
5. Implement the government’s proposed permanent £10 increase in the Warm Home Discount to £150 and double it to £300 to help people with soaring gas prices this winter – and extended it to everyone on Pension Credit and Universal Credit.
6. Double the Winter Fuel Allowance payment paid to all pensioners for this year.
7. Introduce a year-long windfall tax on the record profits of gas producers and traders, to help fund the doubling of the Warm Home Discount and Winter Fuel Allowance, an emergency home insulation programme, and to support small businesses in energy-intensive industries in order to protect jobs and keep consumer prices low.
8. Support low-income households on Universal Credit with rising mortgage costs by returning the Support for Mortgage Interest scheme to its pre-2018 format – turning it from an interest-bearing loan to a benefit payment; abolish the zero-earnings rule which excludes from the scheme people with income from work; and reduce the wait time for the first payment from 39 weeks to 13 weeks.
9. Reverse the 63% cut of the Corporation Tax Banking Surcharge, so that big banks contribute fairly towards the UK’s economic recovery from the pandemic after a year of record banking profits.

Applicability: Federal; except A. and B. (lines 70–74), which are England only.

Mover: 7 minutes; summation of motion and movers and summation of any amendments: 4 minutes; all other speakers: 3 minutes.

For eligibility and procedure for speaking in this debate, see page 9. To submit a speaker’s card, complete this form.

The deadline for amendments to this motion is 13.00, Monday 28 February; see page 12. Amendments selected for debate will be published in the Conference Extra and Sunday Conference Daily updates to the Conference Agenda.

The deadline for requests for separate votes is 09.00 Saturday 12 March; see page 9.

The FCC has agreed to make the following drafting amendments to the motion:

In IV. (line 11), after ‘The’ insert ‘UK economy and’.

In ii) (line 25), delete ‘6% in April 2022’ and insert ’over 7% by spring 2022’.

In vii) (line 46), delete ‘6%’ and insert ‘7%’.

After vi) (line 37), insert:

vi) The Cold Weather Payment has been frozen at £25 since September 2008.

In 4. (line 91) after ‘Credit’, insert ‘making it permanent, and extend it to all legacy benefits’.

In 5. (line 95), delete ‘extended’ and insert ‘extend’.

In 5. (line 96), after ‘Pension Credit’, delete ‘and’ and insert ’,’; and after ‘Universal Credit’ insert ‘and the income-rated legacy benefits’.

After 6. (line 98), insert:

7. Increase the Cold Weather Payment from £25 to £40.

In 7. (line 99), after ‘gas’, insert ‘and oil’.

In 7. (line 101), after ‘Winter Fuel Allowance,’ insert ‘the Cold Weather Payment,’.

Amendment One - Passed

Proposed by: 10 members

Mover: to be announced.

Summation: to be announced.

After line 68, insert:

xi) The Government increased rail fares by 3.8% on 1 March, further exacerbating the cost-of-living crisis for commuters and other rail passengers.

After line 112, add:

10. Reverse the rise in rail fares and instead freeze fares for five years.

11. Change the inflation rate used to calculate the annual rail fare rise from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI).

Amendment Two - Passed

Proposed by: 11 members

Mover: Daisy Cooper (Spokesperson for Health and Care).

Summation: Baroness Brinton (Lords Spokesperson for Health and Care).

After x) f) (line 68), insert:

xi) The Government is ending free Covid lateral flow testing (LFT) for the general public from the 1st April, a change opposed by many health organisations and experts that could cost more than £600 per year for someone taking just two tests a week.

Conference further believes that:

I. Ending free Covid LFTs is inconsistent with having an NHS free at the point of use and is the wrong course of action.

II. Testing keeps people safe and is key to protecting the vulnerable.

III. The high cost of tests exacerbates the cost of living with Covid crisis, will be unaffordable for regular use, and constitutes a tax on caring and carers.

After 9. (line 112), add:

10. Retain free LFT and PCR tests for the general public for as long as the scientific advice calls for it.

11. The Government to publish the scientific advice underpinning the decision to end free testing.

In the event that the Government does not reverse its decision to end free LFT, Conference calls for:

I. Free testing to be retained, as a bare minimum, for:

a. Unpaid carers.

b. NHS staff.

c. Social care workers.

d. Visitors to care homes.

e. Those who work with the elderly and vulnerable.

f. People who are immuno-suppressed and immuno-compromised, and their households.

g. People in receipt of benefits.

h. People eligible for free prescriptions.

II. The cost of tests to be capped.

Amendment Three - Failed

Proposed by: Kingston

Mover: Kevin Langford.

Summation: Olly Craven.

Delete 2. (lines 86–87).