Financial Ombudsman Service Decisions: Cost of Implementation Jim
Shannon (Strangford) (DUP) 1. Whether he has held discussions with
banks on the costs of implementation of Financial Ombudsman Service
decisions.(905496) The Economic Secretary to the Treasury (Andrew
Griffith) The Financial Ombudsman Service offers a proportionate
and informal resolution of disputes that is cost-free for
consumers. Where it upholds a complaint against a firm, it can
award redress...Request free trial
Financial Ombudsman Service Decisions: Cost of Implementation
(Strangford) (DUP)
1. Whether he has held discussions with banks on the costs of
implementation of Financial Ombudsman Service
decisions.(905496)
The Economic Secretary to the Treasury ()
The Financial Ombudsman Service offers a proportionate and
informal resolution of disputes that is cost-free for consumers.
Where it upholds a complaint against a firm, it can award redress
for that concern to that consumer. I work very closely with my
officials and with the Financial Ombudsman Service to make sure
consumers have the justice they require.
I thank the Minister for that that response. This has been an
ongoing issue in the House for some time, and I spoke to some of
the Minister’s colleagues beforehand. The Chancellor and the
Minister will know that the parliamentary ombudsman found that 1
million Equitable Life savers lost money as a direct result of
Government decisions. Why, then, are the Government holding
themselves to a different standard and ignoring the wishes of the
parliamentary ombudsman, having paid victims of the Equitable
Life scandal only 22% of the money they lost from their pension
funds? I say that with great respect, but I do think we need an
answer.
I respect the hon. Member for raising this issue. It has however,
been raised many times before in this House, and answered from
this Dispatch Box as well.
Cost of Living
(Liverpool, West Derby)
(Lab)
2. What fiscal steps he plans to take to help reduce the impact
of recent increases in the cost of living on
households.(905497)
(North Ayrshire and Arran)
(SNP)
5. What recent assessment he has made of the potential effects of
his policies on inflation on the cost of living.(905500)
(Gordon) (SNP)
12. What recent assessment he has made of the potential effects
of his policies on inflation on the cost of living.(905509)
The Chancellor of the Exchequer ()
We know the pain that households up and down the country are
going through as a result of the cost of living pressures at the
moment, and have announced one of the largest support packages in
Europe, worth around £3,300 per household this year and last.
The latest report from Which? highlights that even supermarkets’
own budget brands of food have increased in price by 26.6%. There
are security locks on baby formula milk, at the same time as
corporations are making vast profits. The Government have signed
up to the United Nations’ sustainable development goal of
eradicating poverty by 2030. Surely, in the light of those
commitments, now is the time for the Chancellor to act. Will he
cap essential food prices and tackle the grotesque profiteering
in the food industry that is driving many of my constituents in
Liverpool, West Derby into poverty?
I totally respect the hon. Gentleman for raising the concerns of
his constituents in the way that he has done. I do not believe
that capping prices is the right long-term solution, but we are
doing a lot, including payments of £900 per household for people
on means-tested benefits, £150 for households with someone
disabled living in them and £300 for households with pensioners
living in them, precisely because we want to help the people that
the hon. Gentleman is talking about. I will be meeting the
regulators next week to talk further about what needs to be done
with respect to supermarkets.
Over the weekend, the former Governor of the Bank of England,
Mark Carney, spoke about how before the Brexit referendum, the
Bank of England had set out that the likely consequences of
Brexit were
“a weaker pound, higher inflation and weaker growth”.
Does the Chancellor think it is fair that the UK Government’s
decision to ignore the stark warnings from the Bank of England
are now being paid for by the households who can least afford
it?
I am afraid that I do not buy this Brexit narrative from the SNP.
Food price inflation has been around 20% in Germany, Sweden,
Portugal and Poland in recent times, so this is not a UK-specific
issue. We are all dealing with the consequences of Putin’s
invasion of Ukraine and the aftermath of the pandemic, and we are
all tackling it with one central focus, which is to bring down
inflation as our overriding priority.
The former US Treasury chief said earlier this month that Brexit
was a “historic economic error”, and described the UK
Government’s economic policy as having been
“substantially flawed for some years”.
Will the Chancellor finally face up to what the rest of the world
can see, and admit that leaving the world’s largest single market
has not only had a significant impact on inflation, but a
deleterious impact on household finances across the country?
The issue with that argument is that the UK has actually grown
faster than France or Italy since we left the single market, and
according to the managing director of the International Monetary
Fund, the UK economy is “on the right track”.
Sir (Rossendale and Darwen)
(Con)
I thank my right hon. Friend for all he has done for people in
Rossendale and Darwen to help them through this cost of living
crisis, but people are very concerned about what is being
described as the mortgage bomb about to go off. Is now the time
for him to look at reintroducing the bold Conservative idea of
mortgage interest relief at source? If we do not help families
now, all the other money that we spent to help them will have
been wasted if they lose their home.
No one in Rossendale and Darwen could have a more doughty
champion than my right hon. Friend, and I listen to what he says
carefully, but I think he will understand that those schemes that
involve injecting large amounts of cash into the economy right
now would be inflationary. So much as we sympathise with the
difficulties and will do everything we can to help people seeing
their mortgage costs go up, we will not do anything that would
mean we prolonged inflation.
Mr Speaker
I call the SNP spokesperson.
(Dundee East) (SNP)
The cost of a two-year fixed mortgage in March 2021 was 2.57%;
this week, it reached 6%. The Chancellor and the Economic
Secretary have said there are no plans to change the Bank of
England inflation target, meaning that the base rate that drives
the mortgage rate will continue to rise as inflation stays
stubbornly high, and mortgages will go up. In the absence of such
a change, what do the Government plan to do to actually tackle
the mortgage pain people are suffering?
First, I would say to the right hon. Member that he is talking
about something that is being experienced across the world. In
fact, interest rates have risen faster in the United States and
Canada than they have here. The answer is that we will look at
doing everything we can to help people under pressure, but we
will not do things that would prolong the inflationary agony that
people are going through. We have to be very careful, because a
lot of the schemes that are being proposed would actually make
inflation worse, not better.
On the issue of inflation, the Office for Budget Responsibility
said in March that inflation was due to peak at 2.9% at the end
of this year. By May, the Bank of England had forecast that it
would be 5% at the end of this year, so it had almost doubled in
the space of two months. Given that headline inflation is still
8.7% and food inflation is 16.5%, will the Chancellor guarantee
today that inflation will be halved to 5%, as promised by the
Prime Minister in January of this year?
The IMF, the OBR and the Bank of England all predict that we will
hit our target to halve inflation, and I give the right hon.
Member this guarantee: we will stick to the plan to do so.
Growth Plan of 23 September 2022 and Cost of Mortgages
(Merthyr Tydfil and Rhymney)
(Lab)
3. What recent assessment he has made of the potential impact of
the growth plan of 23 September 2022 on mortgage
rates.(905498)
(Lewisham East) (Lab)
9. What recent assessment he has made of the potential impact of
the growth plan of 23 September 2022 on mortgage
rates.(905504)
(Edinburgh West) (LD)
10. If he will make an assessment of the implications for his
Department’s policies of the cost of mortgage
products.(905506)
The Economic Secretary to the Treasury ()
We recognise that this is a concerning time for homeowners and
mortgage holders, but we cannot ignore the fact, much as some may
wish to, that interest rates have risen across western economies
as a result of the covid pandemic and the impact of the war in
Ukraine. The Bank of England sets the base rate, which can have
an effect on mortgage pricing, and the Bank has been independent
since the decision of the then Labour Government in 1997. We
remain committed to responsible management to bring inflation
under control, which is the only sustainable way to lower
interest rates and lower mortgage rates.
The former Prime Minister has apologised for the mistakes in her
so-called growth plan and the damage it caused. Families across
the UK will soon start paying thousands more in mortgage interest
payments. Given the Prime Minister’s comments yesterday, it
appears that there is little or no further support coming. Will
the Minister join the former Prime Minister and apologise to the
nation for the impact of the Conservative party’s misguided
economic experiment?
Much as the Opposition would prefer this not to be the case, it
is a fact that this is impacting across western economies.
Although market-to-market comparisons are not always easy, in the
United States of America the average 30-year mortgage has now
increased to above 6%. As I have said, this Government will do
what we can sustainably to lower interest rates, and thereby ease
the burden on mortgage holders.
This is the second time I am putting it to the Government that
the Conservatives are no longer the party of home ownership, and
I do not think it will be the last time either. I say this
because the average interest rate on a new two-year fixed
mortgage is now above 6%. The Chancellor has already said that
they will do everything they can, but what does that actually
mean, because the public would like to know?
I thank the hon. Lady for her question. Not only are we taking
action and taking the tough decisions to sustainably improve the
nation’s finances, but we are working with lenders—the Chancellor
and I regularly meet the mortgage industry—on the support they
can provide to mortgage holders if they do get into financial
difficulties. There is a range of measures, which includes term
extensions and switches to interest-only payment holidays. The
Financial Conduct Authority guidance is very clear that any
repossessions—and they are currently running at a historical
low—should be an absolute last resort.
As a result of the 6% rate that we have heard about, more than 1
million households on flexible-rate mortgages have already faced
increases this year, and 1.8 million more will see their
fixed-rate deals come to an end and face increases in this year.
It is not just homeowners. The knock-on effect has meant that in
my constituency in Edinburgh, we have had the highest rental
inflation anywhere in the country at 13.7% in the last financial
year, because landlords are facing increases in their mortgages.
The Government have said that they are willing to support people,
so would they be willing to consider the Liberal Democrat idea of
a mortgage protection fund to protect those on the lowest
incomes, and support those who are struggling?
I thank the hon. Member for her question, but regrettably the
proposal that she and her party put forward would not only delay
the point at which we are able to bear down on inflation and
deliver the nation’s mortgage holders the lower interest they
need but, as I understand, it would do nothing for the plight of
private renters.
Mr Speaker
I call the Chair of the Treasury Committee.
(West Worcestershire)
(Con)
The growth plan in September obviously had an impact on the
mortgage market, but is the Economic Secretary to the Treasury
aware that by November, the Governor of the Bank of England said,
when he gave evidence to our Committee, that the increases in
mortgages henceforth were down to the Bank of England’s own
increases, because that temporary effect from the growth plan had
dissipated? Increases since then have been largely due to the
fact that inflation has been worse than the Bank was forecasting.
Did the Economic Secretary note that this week I received a
letter from the Chair of the Court of the Bank of England, saying
that they are going to undertake the request that I sent for them
to look at their inflation modelling and at why it has been
incorrect?
Not for the first time, the Chair of the Treasury Committee is on
the money in her understanding of what is driving the markets,
and in her advocacy and championing of the fact that our lending
banks need to do a good job not just for mortgage holders, but
also for savers. I am happy to meet her to talk about how we can
ensure that they do the best job they can.
(North East Bedfordshire)
(Con)
In his earlier reply the Minister talked about mortgages in the
United States. He will know that in the United States it is
common to fix a mortgage for 15 or 30 years, which gives
certainty about monthly repayments and can of course be
refinanced if mortgage rates go down over the term of the
mortgage. I understand that the UK Treasury looked at the UK
mortgage markets and at introducing long-term fixed rates, and
found that at that time there was not much potential. Will he
consider looking at that again?
As ever, my hon. Friend’s question is apposite when it comes to
Treasury matters. There are indeed long-term fixed-rate mortgages
on the market, and I have taken advice from officials on that.
The constraining factor is consumer demand, and that is not a
pattern of behaviour we have seen. Clearly for some mortgage
holders such mortgages do offer long-term certainty, and it is
certainly my objective for us to see the broadest range of
choices for householders and for their own individual patterns in
the market.
(Stoke-on-Trent North)
(Con)
Mortgage payers in Stoke-on-Trent North, Kidsgrove and Talke are
rightly worried at this moment in time, with the impending
re-brokering that they are facing. To support what my right hon.
Friend the Member for Rossendale and Darwen (Sir ) said earlier, is it time to
return to a Conservative principle of introducing a mortgage
interest relief at source-type scheme, which allows borrowers tax
relief for interest payments on their mortgages?
I always listen enormously carefully to my hon. Friend’s powerful
advocacy for Stoke-on-Trent, and his constituents put their trust
in this Government. One thing they put their trust in, is that
this Government would not come forward with the sort of unfunded
spending commitments that we see on the Labour Benches. That
would be disastrous for my hon. Friend’s constituents because it
would see inflation remain higher for longer.
Mr Speaker
I call the shadow Minister.
Mr (Wolverhampton South East) (Lab)
The only thing that grew as a result of what the Government did
last September was people’s mortgage payments. Two-year fixed
rates are now more than 6%, and payments for householders are up
£2,900 over the next year. Have the Government learned the lesson
from the previous Prime Minister’s decision—I stress that word;
it is nothing to do with international events—to use the country
as a giant economic experiment that hurt homeowners, pushed up
interest rates and shook international confidence in the United
Kingdom? If they have, will the Minister now apologise to the
householders who are paying the price for that mistake?
As ever, I listened carefully to the right hon. Gentleman’s
rhetoric. I ask him whether he has learned the lesson from what
we saw with the last Labour Government, who spent their way
through the nation’s finances and whose most lasting contribution
to the economy was a note that we inherited from the then Chief
Secretary to the Treasury saying there was no money left.
Mr McFadden
Back to 2023. This is a real crisis, affecting real people as a
result of the real decisions of the Minister’s Government.
Figures out today show that the average UK tenant is spending
more than 28% of their income on rent, and rents have gone up by
more than 10% in the past year. Rents are being forced up because
the landlords who people rent from are seeing their mortgages go
up, too, and sometimes even faster than mortgages in general. The
Chancellor and the Prime Minister were supposed to be the team
that would come in and sort everything out. Can the Minister tell
us what went wrong?
What went right is the fact that we on the Government Benches not
only always focus on the stability of the nation’s finances to
get inflation and interest rates falling further and faster than
the Opposition would, but even within that envelope, we found
£3,300 on average to support households over last winter and the
upcoming winter. That will have a significant impact on the
difficulties that mortgage holders and renters are facing because
of the higher interest rates that are a feature across the
western world.
Financial Sanctions Regime
(Luton South) (Lab)
4. What recent assessment he has made of the effectiveness of the
financial sanctions regime.(905499)
The Chief Secretary to the Treasury ()
The Government undertake extensive assessment of the
effectiveness of the sanction regimes, which are eroding Russia’s
financial base. We have sanctioned 28 Russian banks, covering 80%
of Russia’s banking sector, and frozen more than £18 billion of
Russian assets, and we have implemented unprecedented trade
sanctions in addition.
Constituents in Luton South have raised concerns about the
financial sanctions regime with me. Can the Government confirm
whether it is still the case that Russian account holders in the
UK can hold £50,000 or more in their accounts? What is to prevent
individuals of concern simply parcelling up assets through
proxies into a large network of accounts below the permitted
level?
The Office of Financial Sanctions Implementation works closely
with our allies across the G7 to ensure that we have co-ordinated
action among our international partners on this unprecedented
package of sanctions. We have frozen the assets of 1,600
individuals and entities. We have implemented 35 different
sanction regimes across government. I would be happy to take away
the specific question that she has asked, because it is
technical, and respond.
(Dumfriesshire, Clydesdale
and Tweeddale) (Con)
A multimillion-pound start-up project that could be
transformational in my constituency is now at risk because the
Office of Financial Sanctions Implementation is yet to process an
asset freeze licence application in respect of just 0.002% of the
company’s capital, which was submitted in April. What steps is
the Minister taking to ensure that such applications are dealt
with swiftly? If I provide him with details of the company, will
he ensure that the application’s progress is expedited?
I am happy to take up my right hon. Friend’s case. We have
expanded the OFSI resources. We have a monthly monitoring and
efficiency dashboard. I accept how frustrating it can be for
constituents’ businesses when such situations arise, and I am
happy to take the matter away and get back to him swiftly.
Mr Speaker
I call the shadow Minister.
(Ealing North) (Lab/Co-op)
As the war in Ukraine continues, we must not let up for a second
on efforts to tighten the net on the accomplices and
beneficiaries of Putin’s regime. We welcome the direction of the
measures announced yesterday. Can the Minister confirm whether
those measures will close all the loopholes and specifically the
ownership thresholds, which Russian oligarchs and their enablers
have been able to exploit to evade the bite of sanctions?
The Government will be relentless in their pursuit of illicit
assets. As I said, we have sanctioned 24 banks with global assets
of over £940 billion and 120 elites with a combined worth of £140
billion. Working closely with our allies, we have incrementally
and sequentially tightened that net and immobilised more than 60%
of Putin’s war chest of foreign reserves worth £275 billion. We
continue to work closely with our allies to intensify those
measures as opportunities arise.
(Poole) (Con)
I have one or two constituents in Poole who lost their jobs
because they were in companies owned by Russians who were
sanctioned, and they have found it difficult to have an orderly
wind-up because banks run a mile from loaning those businesses a
reasonable amount of money to sort them out. I know of one
situation where people have not been able to get P60s as the
business cannot get money from any of the banks—they do not want
to be involved in anything to do with sanctions—so it cannot pay
the accountants who would produce them. May I have a word with
the Minister about that? In some cases, we are going over the
top, and it is affecting our constituents.
Those points demonstrate how serious and extensive the
Government’s actions are, but I recognise that sometimes
unfortunate situations arise and I am happy to look at that case
and take it back to the Office of Financial Sanctions
Implementation.
(Leyton and Wanstead) (Lab)
To pursue the issue of proxies raised by my hon. Friend the
Member for Luton South (), am I right in thinking
that the Minister said a few minutes ago that he was prepared to
examine the possibility of taking action against proxies and
those persons of interest who use proxies?
What I would say is that the Government are committed to an
ever-tighter grip on illicit finance and those individuals close
to Putin who make a material contribution to his regime.
Obviously, I will not commit on the Floor of the House to
individual extensions to what we have already done, but I have
set out the range of sanctions regimes that exist across multiple
Departments of Government and I am happy to receive
representations on whatever case the hon. Member wishes to bring
to me.
Consumers of Financial Services: Compensation
(Harrow East) (Con)
6. What steps he is taking to support consumers of financial
services who have not received compensation in cases where action
by a third party has led to financial loss.(905501)
The Economic Secretary to the Treasury ()
My hon. Friend is a strong champion of consumers who have
suffered financial loss, particularly through his chairmanship of
the all-party parliamentary group on personal banking and fairer
financial services. He understands that the UK does not operate a
zero-loss regime where consumers of financial services are
automatically compensated, but it is important that regulators
make very clear where the scope of protection lies and who is
eligible for compensation.
I thank my hon. Friend for that answer. It is clearly important
that where the ombudsman recommends that compensation be paid,
banks pay it. Equally, the Government should pay compensation,
such as when the parliamentary ombudsman found against them on
Equitable Life policyholders, as was mentioned by the hon. Member
for Strangford (). I understand that the budget to pay compensation to
those policyholders has been underspent by some £300 million, so
rather than return the money to the Treasury, will my hon. Friend
use it to compensate the Equitable Life policyholders who have
suffered in the long term?
We set out the terms of that settlement in 2010 and there is
nothing to update the House on today.
(Blaenau Gwent) (Lab)
For over five years, I have campaigned on behalf of steelworkers
who were part of the British Steel pension scheme. Many were
ripped off by sharks posing as financial advisers. While a
redress scheme is now in place, legal advisers for steelworkers
report claim processing delays of six months at the Financial
Conduct Authority, 12 months at the Financial Services
Compensation Scheme and two years at the Financial Ombudsman
Service, which suggests that all is not right. Delays to cases
can have a big impact on possible payouts, so will the Minister
please look into the performance of those organisations?
Steelworkers and other financial consumers deserve much better
than this.
Yes, I will. I have had conversations with the hon. Member about
that, and I will take up the case of any unwarranted delays.
Technology Sector
(Rother Valley)
(Con)
8. What fiscal steps he is taking to support the technology
sector.(905503)
(Newbury) (Con)
15. What fiscal steps he is taking to support the technology
sector.(905513)
The Chancellor of the Exchequer ()
I have set out our national ambition to be the world’s next
silicon valley. We are making good progress; last year we were
ranked the world’s third largest technology market after the
United States and China.
Ultimate Battery in Thurcroft in Rother Valley is developing
groundbreaking battery technologies and is on track to create 500
new jobs by 2025. What help can the Department give me and my
constituents to help burgeoning businesses such as Ultimate
Battery, to make Rother Valley and other places across the north
technology hubs?
I thank my hon. Friend for his support for this really important
sector in Rother Valley. We have a number of schemes, including
£541 million of funding available in the Faraday battery
challenge. We also have the £1 billion automotive transformation
fund. As a result of the efforts that he and many others have
made, we now get 40% of our electricity from renewable
sources—the second highest in Europe—and much more progress is to
come.
I recently convened a roundtable in my constituency with the
Minister for Science, Research and Innovation, my hon. Friend the
Member for Mid Norfolk () and a number of science and
tech businesses. Their No. 1 question was what fiscal support was
available for their sector. I am aware that there are numerous
schemes, grants and tax relief, but it was notable that they were
not well understood by the businesses, and I could not find them
published anywhere on the new Department’s website. Could my
right hon. Friend put together and publish a package of all the
support available to investors and innovators, and how it can be
applied for, to maximise the potential of this vital new frontier
in west Berkshire and beyond?
That is a fair point. I thank my hon. Friend for the fact that
Newbury is a hotbed of technology businesses, with Roc
Technologies, Stryker, Edwards Lifesciences and a range of other
businesses that she gives a lot of support to. I will write to
her listing all those things and I will make sure that it is
available on the website of the Department for Science,
Innovation and Technology.
(Westmorland and Lonsdale) (LD)
The tech sector in rural Cumbria depends on reliable broadband.
Communities in Warcop, Sandford, Coupland Beck, Blea Tarn and
Ormside in Westmorland have signed up to the community interest
company and volunteer group B4RN to provide a gigabit connection
for just £33 a month, but the communities have been suddenly
designated a low priority area, which means that their vouchers
have been removed, putting the whole project at risk. Will the
Chancellor commit to supporting those communities, residents and
businesses to ensure that they get the vouchers that they were
initially promised?
I will happily look into what has happened. We strongly support
all rural areas having access to gigabyte broadband, as an
important part of our policy. We have made a lot of progress on
that. I will look into detail of what is happening in the hon.
Gentleman’s area and get back to him.
Hospitality Businesses
(Ceredigion) (PC)
11. What fiscal steps he is taking to support hospitality
businesses.(905507)
The Financial Secretary to the Treasury ()
Hospitality businesses play an important role in local
communities and the UK economy. They will benefit from business
rates support worth £13.6 billion over the next five years, which
includes increased generosity from the retail, hospitality and
leisure relief scheme from 50% to 75% in 2023-24. There is also
our Brexit pub guarantee, which means that the duty on a draught
pint in a pub will always be lower than its equivalent in the
supermarket.
The Minister will be aware of long-standing calls from the sector
to reduce VAT to bring it into line with European equivalents.
Will the Treasury undertake an assessment of the economic
benefits of doing so? Will it consider that as part of a package,
alongside increasing the threshold for VAT registration from
£85,000 to £100,000 to support smaller businesses?
The hon. Gentleman poses many questions for me, some of which are
very complicated. VAT relief for the hospitality sector was
important in the aftermath of the pandemic, but it cost us a
great deal of money and we have had to raise it back up to 20%.
We keep the other VAT matters under review, and I would be
delighted to meet him to discuss the complexities behind
them.
(Preseli Pembrokeshire)
(Con)
A great many of the new job opportunities and career paths being
created in Pembrokeshire are in the tourism and hospitality
sector. Does my hon. Friend agree that the very last thing that
business people who are creating those growth opportunities need
right now is a tourism tax of the kind being brought forward by
the Welsh Labour Government in Cardiff, which will hit businesses
with new burdens and raise the cost of going on holiday in
Wales?
The sun always shines in my right hon. Friend’s corner of
Pembrokeshire when he speaks up for it. He is quite right to
identify how the Conservatives in Government are trying to help
businesses through our business rates relief in England, through
our energy support scheme over recent months and, of course,
through the Brexit pub guarantee. Welsh Labour, on the other
hand, wants to call last orders and have higher taxes for the
businesses he is so keen to support.
Mr Speaker
I call the shadow Minister.
(Erith and Thamesmead)
(Lab)
The 2019 Conservative manifesto, some three Prime Ministers and
four Chancellors ago, promised a fundamental reform of business
rates. This is another broken Tory promise. Will the Minister
admit that only a Labour Government will end the chaos, scrap
business rates and replace them with a fairer system, so that our
amazing hospitality sector can thrive and grow faster?
I have a great deal of respect for the hon. Lady, but I must
point out to her gently that we have, in fact, conducted that
review. In the autumn statement, we were able to announce a £13.6
billion package of help over the next five years, including a
multiplier freeze for all ratepayers, large and small; a
transitional relief cap funded by the Exchequer; retail,
hospitality and leisure relief; and a small business support
scheme, which will help to cap bill increases at £600 per year
for any business losing eligibility for some or all small
business rate relief or rural rate relief at the 2023
revaluation. We have done that review and are supporting
businesses that need help.
Cost of Living: Energy Prices
(Kilmarnock and Loudoun)
(SNP)
13. What recent assessment he has made with Cabinet colleagues of
the potential effects of energy prices on the cost of
living.(905510)
(Banff and Buchan) (Con)
22. What fiscal steps he is taking to support households with
their energy bills.(905520)
The Exchequer Secretary to the Treasury ()
Advanced economies around the world share the challenge of high
inflation from the energy shock, and the UK has been affected by
those global factors. The Government have taken significant
action to help households with rising energy prices and the cost
of living by providing a significant support package totalling
£94 billion. That includes supporting households with energy
bills by extending the energy price guarantee and removing the
premium paid by 4 million households using prepayment meters.
Overall, the Government have paid about half of a typical
household bill since October 2022.
Many people in the highlands and islands of Scotland will have
had their taxes used to help pay for the construction of the gas
grid, despite the fact that they are off the gas grid themselves
and do not get the benefits of being connected to it. Their area
supplies the oil and gas, and now the cheap renewable energy,
that is facilitating lower energy bills across Great Britain, yet
they are more likely to be fuel poor. To rub salt in the wounds,
many pay a surcharge on their electricity bills. When will the UK
Government address those inequities?
I would simply point out that across the United Kingdom we have
provided extensive support, as I said in my answer to the
substantive question. I am very happy to write to the hon.
Gentleman with details on his specific point.
When the energy profits levy was introduced to help the
Government’s support of household energy bills, I welcomed the
investment tax allowance that was introduced along with it on new
oil and gas for energy security. In recent weeks, I also welcomed
the Exchequer Secretary’s announcement in Aberdeen of a price
floor in the form of an energy security investment mechanism, at
which the EPL will be removed. The devil, of course, will be in
the detail. I welcome the Treasury’s ongoing engagement and
dialogue with the oil and gas industry, but will the Minister
commit to a regular, perhaps quarterly, fiscal forum with the
industry, as used to happen prior to covid? Does he agree that
Labour’s plans to ban all new oil and gas is based on ideology
and not a pragmatic approach to this country’s energy security
and net zero?
Mr Speaker
Order. The hon. Gentleman ought to put in for an Adjournment
debate. It would be easier for all of us.
I can think of few better advocates for the oil and gas industry
than my hon. Friend. I was very pleased to meet industry leaders
and the chair of the oil and gas forum in Aberdeen recently. We
had a very good discussion and I am grateful to the industry for
its ongoing engagement with Ministers and officials. I can assure
him that the Government are very committed to engaging with the
oil and gas sector, as we have been doing for a long time.
Leaving the EU: Economic Impact
(Glasgow North) (SNP)
14. What recent assessment his Department has made of the
potential impact of withdrawal from the EU on the
economy.(905512)
The Financial Secretary to the Treasury ()
As per my previous response to the same question by the hon.
Gentleman in the last Treasury oral questions, I note that the UK
has grown at a similar rate to comparable European economies
since 2016, and that it still remains challenging to separate out
the effects of Brexit and wider global trends on the UK economy.
We remain absolutely committed to seizing the opportunities we
now have, free from the EU.
That is very convenient. Only the UK has to deal with Brexit.
Everyone has had to deal with covid and everyone has had to deal
with Ukraine, but only the UK has had to deal with Brexit. That
is why, according to the London School of Economics, customers
have collectively paid nearly £7 billion extra in their food
bills as a direct result of all the checks and frustrations that
have come with Brexit. Is the Minister honestly saying that it
was a good idea, and that it has not hurt the UK economy?
Let me again gently remind the hon. Gentleman to look at what is
happening in the rest of the EU. For example, the eurozone is
suffering from the effects of mild recession. All this is due to
the global headwinds that we are all facing. However, I know that
the hon. Gentleman will be delighted by the recent growth
upgrades from the Office for Budget Responsibility, the Bank of
England and the OECD. We do face challenges, and of course we
have to work with our global counterparts to try to deal with
those global headwinds, but we are focusing very much on the
Prime Minister’s priority of halving inflation, because that is
what will make a real difference to our constituents.
(Basildon and Billericay)
(Con)
Does the Minister agree that, despite “Project Fear” forecasts,
we have record employment, very low unemployment, good inward
investment and trade deals in abundance? Perhaps the Scottish
National party should focus on its poor record on the economy
and, indeed, on financial transparency, and get over the fact
that we have left the EU.
May I take this opportunity to congratulate my hon. Friend on his
recent honour, which is extremely well deserved? He has made his
point very succinctly. We have an exciting future ahead of us—we
are already signing trade deals with non-EU countries, and we
have a fantastic deal with the EU—and it is now up to us to make
a real success of it.
People on Lower Incomes: Financial Support
(Waveney) (Con)
16. What steps he is taking to provide financial support to
people on lower incomes.(905514)
The Financial Secretary to the Treasury ()
The Government recognise the challenges facing households as a
result of the elevated cost of living, and we took further action
in this year’s spring Budget to provide targeted support to
protect the most vulnerable. That included the new cost of living
payments this year, help with the cost of essentials through a
further extension of the household support fund in England, and
the uprating of benefits in line with inflation in April this
year.
One of the best ways of supporting those on lower incomes is to
remove the barriers that prevent them from acquiring the new
skills that are necessary for better-paid jobs. Will my hon.
Friend confirm that the Treasury is working closely with the
Department for Education and the Department for Work and Pensions
to ensure that the Lifelong Learning (Higher Education Fee
Limits) Bill gets rid of those obstacles, and can she provide an
update on the progress of the Barber review?
I know that you like Ministers to answer briefly, Mr Speaker, so,
if I may, I will answer my hon. Friend’s first question now and
respond in writing to his question about the Barber review.
My right hon. Friend the Chancellor made employment one of the
four Es in his drive for growth in the spring Budget, and we are
working closely with the Department for Education to invest in
exactly the way that my hon. Friend describes. That includes
investment in free courses for jobs, which enable people to study
high-value level 3 subjects and gain free qualifications, and
employer-led skills bootcamps in high-growth areas—a phrase that
I never thought I would find myself uttering—which, apparently,
involve sectors such as digital, and are available to those who
are either unemployed or in work and wanting to retrain.
(Ealing Central and Acton)
(Lab)
Food banks, playgroups and warm spaces are among the services
provided by mosques, temples, synagogues and churches for all our
constituents to help them cope with the cost of living crisis,
but many of the buildings are creaking and falling apart. Will
Ministers consider extending Gordon Brown’s policy of VAT relief
on building works for listed places of worship to all such
places, to recognise their role in providing social good and to
alleviate the pressure on multiple systems?
I thank the hon. Lady for raising an important point. There has
been an incredible outpouring of support across communities—not
just in religious communities, but at village and town halls
around the United Kingdom—in an effort to help people with the
cost of living pressures that we face in the winter. The picture
is quite complicated, but perhaps I can write to the hon. Lady
with a fuller response to her question, because I want to do it
justice and I know I will get in trouble with you, Mr Speaker, if
I do so now.
Inflation
(Leeds East) (Lab)
17. What recent steps he has taken to reduce
inflation.(905515)
The Chief Secretary to the Treasury ()
The Government are doing three things to reduce inflation. First,
we remain steadfast in our support for the independent Monetary
Policy Committee of the Bank of England as it takes action to
return inflation to its 2% target. Secondly, we are making
difficult but responsible decisions on tax and spending so that
we do not add fuel to the fire. Thirdly, we are tackling high
energy prices by holding down energy bills for households and
businesses, alongside investing in long-term energy security.
The rich and powerful have repeatedly sought to blame workers for
high inflation, even though workers’ real wages have been falling
as inflation soars. Many leading economists now say that
profiteering by certain corporations, not wages, is driving price
rises. The French Government have taken action to limit food
prices, and Spain has introduced rent controls. When will this
Government start targeting the profiteering that is helping to
drive inflation?
We continue to have constructive dialogue with industry and
different sectors. I met supermarket representatives a few weeks
ago, and the Chancellor and others in the Treasury will continue
to have these conversations. I think most people recognise that
we face common global challenges and that different economies
will respond in different ways.
Topical Questions
(Basildon and Billericay)
(Con)
T1. If he will make a statement on his departmental
responsibilities.(905521)
The Chancellor of the Exchequer ()
We will not hesitate in our resolve to support the Bank of
England as it seeks to strangle inflation in the economy, and the
best policy is to stick to our plan to halve inflation. I also
want to make sure that we do everything possible to help families
paying higher mortgage rates in ways that do not themselves feed
inflation, so later this week I will be meeting the principal
mortgage lenders to ask what help they can give to people who are
struggling to pay more expensive mortgages and what flexibilities
might be possible for families in arrears.
Mr Baron
Despite being the gateway to most financial services in the City,
I suggest that the London stock exchange is ailing, with CRH and
Arm being the latest canaries in the coalmine. While welcoming
the Edinburgh reforms, what further consideration has the
Chancellor given to my suggestion that tax incentives be
introduced to encourage our British pension funds—the big
beasts—to invest more in UK equities, given that, since the
financial crisis of 2008-09, they have reduced their exposure to
equities by 90%, unlike in most other developed economies?
My hon. Friend always speaks extremely wisely on financial
matters, and he is absolutely on the money when he talks about
the opportunity that would present itself by unlocking £3
trillion of pension fund assets, many of which would get a better
return for pensioners if they were invested more in our
high-growth businesses, as well as that being a good outcome for
the London stock market. All I will say is: watch this space.
Mr Speaker
I call the shadow Chancellor.
(Leeds West) (Lab)
While the Government squabble over parties and peerages, mortgage
products are being withdrawn and replaced by mortgages with much
higher interest rates. This is a consequence of last year’s
Conservative mini-Budget and 13 years of economic failure, with
inflation higher here than in similar countries. Average mortgage
payments will be going up by a crippling £2,900 this year, so
where does the Chancellor think families will get the money to
pay the Tory mortgage penalty?
At the autumn statement, we announced £94 billion of support to
help families going through very difficult times. That is more
support than was ever proposed by Labour. The answer to these
pressures is not borrowing an extra £28 billion a year, as people
like Paul Johnson are saying that more borrowing means higher
inflation, higher interest rates and higher mortgage rates.
Is the Chancellor for real? These are the real-life consequences
of what is happening under the Conservative Government today, so
do not try to pass the buck.
Let me bring this home. In Selby and Ainsty, 12,000 households
will be paying, on average, £2,700 more on their mortgage. In
Uxbridge and South Ruislip, 10,000 households will be paying, on
average, £5,200 more. Each and every family know who is
responsible for trashing the economy: the Conservative party.
Will the Chancellor apologise for the harm that his Government
have caused with the Tory mortgage penalty?
I am proud of our economic record, which has seen our economy
grow faster than those of France and Japan since 2010, and at the
same rate as Germany. Those mortgage holders in Selby, Uxbridge
or Mid Bedfordshire will be paying even more for their mortgages
if a Labour Government borrow £100 billion more in the next
Parliament, and we will not let that happen.
(North Warwickshire)
(Con)
T3. As the Minister knows, having a strong insurance and
financial services sector is vital to the growth of our economy,
which is one of the Prime Minister’s pledges. So will the
Minister confirm that he is doing everything in his power to make
that happen, particularly with a view to our international
competitiveness in those key sectors?(905524)
The Economic Secretary to the Treasury ()
I can give my hon. Friend the assurance he seeks. He will know
from his significant contribution to the Financial Services and
Markets Bill as it has gone through this House that it introduces
a new duty on our financial regulators to promote the growth and
international competitiveness of the United Kingdom. Thanks to
him, the Bill also contains specific reporting measures as to how
they are going to achieve that important objective.
(Liverpool, West Derby)
(Lab)
T2. I recently met the Minister for Schools to present him with a
costed proposal for piloting universal free school meals in
Liverpool. He said that he was not ideologically opposed to that
but all roads lead to the Treasury, so here we are. Will the
Chancellor work with me and that Minister to enable this pilot,
which would transform the education, health and wellbeing of
thousands of children across my great city?(905523)
I will be happy to write to the hon. Gentleman to talk to him
about that initiative. We are making great progress in our
schools—we have risen to fourth in the global league table for
reading—but we can always do more.
(Bexleyheath and Crayford)
(Con)
T6. I welcome my right hon .Friend’s commitment to making
inflation and the cost of living his top priority, as it is also
a top priority of my constituents. Does he agree that the
Institute for Fiscal Studies is entirely correct to say that
Labour’s plans for £28 billion of borrowing in its green
prosperity plan would simply lead to higher rates of interest and
higher inflation?(905528)
My right hon. Friend is absolutely right; the answer to inflation
is to tackle it, not to make it worse.
(Wansbeck) (Lab)
T4. Real-terms wages are lower now than they were in 2008, which
is a disgrace. The north-east has been hit harder than other
regions, worst of all on child poverty. The rates of child
poverty have shot up, with the result that we have 67% of
children in working families living in poverty. Is the
Chancellor’s deliberate, brutal policy of wage suppression
working? If so, who for?(905525)
We understand the pressures that families are going through up
and down the country, but we have responded with generous support
this year and last of more than £3,000 for the average household.
Not only that, but since 2010 the number of children in absolute
poverty has fallen by 400,000.
(Chipping Barnet)
(Con)
T7. Paying around half the cost of people’s energy bills and
freezing fuel duty has been crucial in helping people with the
cost of living, but is there further action the Government can
take to get inflation down? Are we on track to halve it by the
end of the year?(905529)
The Chief Secretary to the Treasury ()
Controlling public spending and ensuring that the interventions
we are making prioritise growth enablement is a relentless
activity. The household support fund of £2.5 billion continues to
be an additional source of support for households, but there are
no quick fixes; there is a relentless pursuit of the goals that
we have set out at the start of this year.
(Ogmore) (Lab)
T5. How on earth can the Chancellor begin to understand the
worries of ordinary homeowners when it would seem that in 2018 it
slipped his mind to declare that he had spent £3.5 million buying
seven luxury flats in Southampton as an investment opportunity?
Is the reality not that he and the Treasury Front-Bench team are
completely out of touch with what homeowners are
facing?(905526)
With respect to the hon. Gentleman, he should get his facts right
before making that kind of suggestion. He got them wrong.
(Southend West) (Con)
In-person banking facilities are vital to everyone in Southend
West, yet in recent years we have lost all but one of our bank
branches. A new community-based post office banking hub model is
being rolled out, so will the Minister support my efforts to get
one of those into Leigh-on-Sea?
I thank my hon. Friend for her question. She will be aware of
what is in our Financial Services and Markets Bill, and I can
update the House by saying that the Government have tabled an
amendment to protect free access to cash withdrawal and deposit
facilities. I would be happy to meet her to discuss her
constituency’s needs.
(Orkney and Shetland)
(LD)
T8. I remind the House of my entry in the Register of Members’
Financial Interests. Recent Government pronouncements relating to
food security have been welcome, but if they are to be meaningful
then farmers and crofters need certainty about the future of
Government support and, critically, the amount of money that will
be available to fund that. Will the Chancellor tell us when he
will engage with the Department for Environment, Food and Rural
Affairs and the devolved Administrations about the size of the
budget that will be available? In the meantime, will he meet with
me and the National Farmers Union Scotland?(905530)
As the right hon. Gentleman knows, the farming support payment is
ported to Scotland and operates on a different basis because it
is devolved. We have committed to the sum of £2.4 billion for the
duration of this Parliament and there are a number of schemes
where the uptake is now increasing. I will continue to engage
with my colleagues at DEFRA as those schemes develop further.
(Cheadle) (Con)
The last bank in the entire constituency of Cheadle is about to
close, so I was delighted when, following my interventions and
direct conversations with LINK and appeals from the community,
Bramhall was chosen to be LINK’s 100th banking hub
recommendation. It will be invaluable for residents, but they
will be left without banking services until it is open. Will the
Minister look into bridging options in the interim, between the
bank closing and the hub opening, or consider imposing
requirements on banks to remain open until a hub is
implemented?
I would be happy to meet my hon. Friend to talk about the range
of options. I am delighted about the solution proposed for
Bramhall, in her constituency. Last week, I visited the new
banking hub in the constituency of the hon. Member for Ealing
Central and Acton (Dr Huq). I hope the whole House will wish the
operator, Vip Varsani, well in that new endeavour.
Sir (Rhondda) (Lab)
For the first time in my 20 years as an MP we have a real housing
crisis in the Rhondda. Two thirds of people own their own homes,
but lots of people who have relied on the commercial rented
sector are finding that landlords are selling their properties
because of decisions made about taxation and, because there is a
cap on housing benefit, they do not want to continue in that
market. Dozens of people are being evicted week in, week out.
Will the Government look closely at what is happening to protect
people in constituencies such as mine, so that they can keep
their own homes?
I am happy to meet the hon. Gentleman to discuss what is
happening in his constituency. Obviously, there have been a
series of changes since the section 24 change in the Finance Act
2015 and there are particular pressures in the housing economy at
the moment, but I am happy to meet him to discuss that
further.
(West Suffolk) (Ind)
I welcome the work that the Chancellor and the Prime Minister
have done to promote work on artificial intelligence done here,
and in developing an ecosystem for that. It is clear that the UK
has an opportunity to lead on this, especially on regulation, if
we get it right, but only if we seize that opportunity now. What
is the Chancellor doing to make that happen?
My right hon. Friend is right to say this is a big opportunity.
We are home to a third of Europe’s AI start-ups, but we are very
aware of the risks of AI. The Government are hosting a global AI
summit, with the support of President Biden, this autumn, to
ensure we get that regulation absolutely right.
(East Antrim) (DUP)
Quite rightly, this Question Time has been dominated by questions
about inflation and the cost of living. One policy that has not
been mentioned is the Government’s net zero policy and the
inflationary costs included in it, from green levies of £12
billion to the cost of strengthening the infrastructure and the
favourable treatment given to renewable energy firms. While the
Minister may condemn the Labour party for its £29 billion green
policy spending plan, what is the cost of the Government’s net
zero policies to consumers? Are they not picking their pockets
dry?
The Exchequer Secretary to the Treasury ()
We have a world-leading track record on net zero, but we must
balance that correctly with who bears the cost. Critical to the
nature of the right hon. Gentleman’s question is mobilising more
private capital, and we are making great strides on that
front.
(Darlington) (Con)
Can my hon. Friend update the House as to when we will see spades
in the ground on the Brunswick site in Darlington for the
Darlington economic campus?
My hon. Friend is a great champion of Darlington, and
Darlington’s economic campus is a critical part of levelling up.
The Government Property Agency has been working hard to finalise
commercial negotiations. I would be happy to write to my hon.
Friend when I have a more substantive update.
(Kingston upon Hull West and
Hessle) (Lab)
Ever-increasing food prices mean that some families are having to
cut down on the amount they eat. Will the Minister support
Labour’s plan to negotiate a new veterinary agreement for
agriculture products to reduce the cost for food producers and
bring down those crippling food prices?
We will always look at Labour policies, but they are normally not
right.
(Vale of Glamorgan) (Con)
Clear policy direction and a strong regulatory framework have led
to the UK being the world’s leading centre in financial
technology. Does my hon. Friend agree that the crypto industry
offers the same opportunity for the UK to exploit?
My right hon. Friend is absolutely right. I was pleased to join
him in a Westminster Hall debate about the regulation of the
cryptoassets sector. I commend the work done in this House by the
crypto and digital assets all-party parliamentary group. He might
join me in welcoming the decision by Andreessen Horowitz, one of
the world’s largest technology companies, to locate its only
international office outside of San Francisco here in the UK and
to run its 2024 cryptoassets school here.
(Eltham) (Lab)
In 2016, Exercise Cygnus tested the country’s preparedness for a
pandemic. Was the Government’s response at that time adequate,
and what can the Chancellor do in his current role to make sure
that we are properly prepared in the future?
I am looking forward to answering questions about that tomorrow
afternoon at the covid inquiry. We did what was recommended
following Exercise Cygnus. Certainly, Ministers did what they
were advised to do, but the operation was focused on pandemic
flu. The question that we must ask ourselves is why we did not
have a broader focus on the different types of pandemic that
could have happened, such as covid.
(St Albans) (LD)
The Government’s business rates review last autumn was anything
but fundamental, because it did not even look at the calculations
for fair and maintainable trade, which are hammering the
viability of pubs in St Albans. If the Chancellor has in fact
abandoned his commitment for a fundamental review of business
rates, which he himself called for last summer, will he at least
look at the calculations for fair and maintainable trade before
any more of our valuable pubs have to close?
The Financial Secretary to the Treasury ()
We conducted a review and put in place the £13.6 billion package
of support to help businesses on our high streets. If the hon.
Lady is able to look at, for example, the multiplier freeze, she
will see that that has had a significant impact on those rates,
as has the retail, hospitality and leisure business rates relief,
which will help raise the rate of relief from 50% to 75%. We have
targeted this very carefully at exactly the businesses that she
mentions.
(Glasgow North) (SNP)
The Chancellor was shaking his head during my question earlier
on, so will he say whether he accepts the findings from the
Centre for Economic Performance at the London School of Economics
that shows that Brexit is responsible for a third of UK price
inflation since 2019? Regulatory sanitary checks and other border
checks added almost £7 billion to total domestic grocery bills
over the period from December 2019 to March 2023. Does he accept
that?
No.
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