Extract from Commons
debate on Fishing Industry
(Strangford) (DUP):...We know that areas where
fishing and energy production co-exist successfully are the
exception rather than the rule. In most instances, such
co-existence is impossible. Overlapping fishing with
environmentally protected areas can be problematic, and that is a
shame. Research commissioned by the Northern Ireland Fishermen’s
Federation shows that our Northern Irish wild-caught prawns have
a carbon footprint one third the size of that of the farmed,
south-east Asian prawns favoured by UK supermarkets
so we should buy the home-produced ones and reduce the net carbon
impact. I am not saying that we should not buy from the rest of
the world, but if we want to do the right thing for our fishermen
while also reducing carbon emissions, we should buy local—buy
from Portavogie, buy from Ardglass, buy from Kilkeel, and yes,
buy from the whole of this great United Kingdom of Great Britain
and Northern Ireland collectively. According to one scientist
from the Agri-Food and Biosciences Institute, the harmful
emissions from harvesting Northern Ireland prawns are an order of
magnitude below those from other UK animal proteins...
Oral answer (Lords):
Corporate Profits: Inflation
Asked by
To ask His Majesty’s Government what assessment they have made of
the extent to which increases in corporate profits have
contributed to inflation.
The Parliamentary Secretary, HM Treasury () (Con)
My Lords, UK inflation has been affected by global factors,
including Russia’s invasion of Ukraine which has affected energy
and food prices. The UK is not alone in facing these challenges:
advanced economies across the world are feeling the impact of
inflation. That is why halving inflation is one of the Prime
Minister’s top five priorities, as a staging post to returning
inflation to the 2% target. Evidence that corporate profits play
a role is inconclusive.
(Lab)
My Lords, the Minister is in total denial of reality here. The
pandemic of profiteering is driving inflation. The IMF and the
ECB have said so, but the Government are in denial. Look at the
accounts of banks, oil and gas companies, supermarkets
food, internet and mobile phone companies, and others, and you
will see that their profits have doubled within the last couple
of years. The Government have a whole array of policy options,
including price controls, windfall taxes, prosecution of
profiteers, and breaking up oligopolies to encourage more
competition to curb profiteering, but they choose to do
absolutely nothing. Can the Minister explain what assessment the
Government have made of the corrosive impact of profiteering on
people’s standard of living and what they will do about it?
(Con)
My Lords, I note that the noble Lord referred to the recent IMF
analysis, which looked at the euro area. The Governor of the Bank
of England recently said that it does not see a higher trend in
non-North Sea corporate profits. Of course, we have the energy
price levy in place with respect to North Sea corporate profits,
but we keep it under close scrutiny. I am sure the noble Lord
will be pleased to know that, yesterday, the Chancellor of the
Exchequer met with the main regulators and agreed a new action
plan to ensure that consumers are being treated fairly and to
help those struggling to meet their bills.
(Con)
My Lords, does my noble friend accept that, contrary to what the
noble Lord suggests, inflation is entirely a monetary phenomenon;
that since 1997 the Bank of England has been responsible for the
control of inflation; and that the cause of our present
difficulties is the reckless creation of money in recent
years?
(Con)
My noble friend is right that, when we think about tackling
inflation, the number one area is remaining steadfast in our
support of the independent Bank of England as it takes action to
return inflation to the target of 2% through monetary policy.
However, government does have a role to play. We must make
difficult but responsible decisions on tax and spending so that
we are not adding fuel to the fire. We also need to take
longer-term action to bring down prices, whether that is
investing in our future energy security or looking at the
tightness of our labour market and taking action to get people
back to work—for example, through our ground-breaking reforms to
childcare.
of Childs Hill (LD)
My Lords, I hear what the Minister says, but a new word has
appeared: “greedflation”. Everyone knows that the idea of a
business is to make a profit; no one is saying that they should
not make a profit. However, there is now greedflation, which is
the padding of profits. We see people struggling while companies
are making surplus profits above what is reasonable. Have the
Government any real answer to this?
(Con)
My Lords, the answer is twofold. We are looking closely at the
data and will continue to do so, but we do not see the pattern
that the noble Lord refers to so far. We will also work with the
regulators in the main areas—the FCA when it comes to the banking
sector and the passing on of higher interest rates to savers, as
well as mortgage holders—and look at the work of
the supermarkets to
ensure that their profits are fair and reasonable and driven by
fair competition in the sector. We will keep all of that under
review. We have agreed a series of steps with the regulators to
make sure that action is taken if competition is not working as
it should.
(Lab)
My Lords, does the Minister agree with the IMF that the main
cause of inflation is excessive corporate profits, and the fat
cat salaries that go with them, rather than the wage claims such
as those from people in the National Health Service?
(Con)
As I have explained to noble Lords, the IMF analysis applied to
the euro area.
(CB)
My Lords, there has been a large increase in the price of food
for our consumers. What measures have His Majesty’s Government
taken to ensure that the primary producers—in many cases our
farmers, whose input costs have risen dramatically—are receiving
an appropriate uplift in the prices they receive from wholesalers
and retailers?
(Con)
I believe that Defra has regular discussions with both food
retailers and food producers to ensure that the market is
functioning fairly for all those involved. At the moment, the
higher food prices we are seeing in supermarkets appear
to be down to the passing on of higher costs, but of course we
keep that closely under review.
(Con)
My Lords, does my noble friend the Minister not agree that the
problem has been caused by the money supply increase,
quantitative easing over the years and, in particular, most
recently, the coronavirus nonsense, when lockdowns cost this
country billions and contributed to the parlous state of the
economy and inflation? Noble Lords on the other side are
complaining now, yet in the past they wanted even further
restrictions which would have cost this country money and,
indeed, contributed to inflation.
(Con)
My noble friend is right that we are still feeling the effects of
the Covid pandemic in a number of ways. This Government put in
place unprecedented economic support to get people and families
through that pandemic, and we have had to take difficult
decisions about the public finances since. Another way in which
we are still feeling the effects of the pandemic is in the
unwinding of the measures put in place to control it. We have
seen heightened pressure on global supply chains; that has been
part of the driver of the increased inflation and higher prices
that we are seeing.
(Lab)
Does the Minister agree that many of those factors affect the
rest of the world, including other countries in Europe, yet this
country is performing poorly in relative terms compared with
them? Our inflation is higher and our productivity is lower—why
is that so? Is this not to do with some of the points pressed
about Brexit by people on the Tory Back Benches opposite and the
4% loss to our economy as a result of us coming out of
Europe?
(Con)
My Lords, I have to disagree with the noble Lord. The higher
rates of inflation that we see are seen in countries across the
world. I believe there are nine EU countries with higher headline
rates of inflation than the UK, and more than half of EU
countries have higher rates of core inflation than the UK. The
noble Lord talked about the importance of productivity to our
future economic well-being; I could not agree more. We need
greater investment to drive greater productivity, and we would
not see that with the kind of policies advocated by the noble
Lord, , such as windfall taxes and
other measures that would deter investment from our country.
(Lab)
My Lords, to follow up on the Minister’s answer to my noble
friend, as she said the IMF has described so-called greedflation
as a Europe-wide phenomenon, yet despite the Prime Minister
promising to halve inflation, Britain continues to be an outlier.
The UK has the highest inflation in the G7. Last month, core
inflation increased to 7.1% in the UK—a 31-year high—while in
other advanced economies, including in the eurozone and the US,
it has started to fall. The Government often argue, as the
Minister has this morning, that responsibility for the UK’s
persistently high inflation lies in global factors, but do these
figures not tell us that it actually lies much closer to
home?
(Con)
I am afraid I am going to have to disagree with the noble Lord. I
will not cite again the figures I gave to the House a moment ago.
We have heard about the IMF in this Question today. Despite the
challenges we face after the pandemic and Russia’s invasion of
Ukraine, the IMF has noted that the UK has taken decisive and
responsible steps to tackle inflation, and all major forecasters
expect inflation to fall this year. We cannot be complacent about
that, and that is why this Government’s number one priority is to
bring down inflation.
(GP)
My Lords, the fact is that the majority of people in Britain are
suffering from the cost of living crisis and this Government are
doing nothing to make it better. The noble Lord, , has come up with some things
that would generate income for us that would help the majority of
people. Why are the Government not at least thinking about some
of these ideas?
(Con)
I would say three things to the noble Baroness. First, this
Government are not doing nothing to support people with the cost
of living crisis; that could not be further from the truth. Over
last year and this year, we are providing £94 billion of support
to people to cope with the crisis, which is targeted at those on
the lowest incomes who are least able to afford the increase in
their bills. Secondly, the noble Baroness talks about revenue
raising. Where we see windfall profits, we have taken action. The
energy profits levy is going to raise billions of pounds in
additional revenue in tax to support that action. Thirdly, at the
end of last week, on Friday, the Chancellor announced new action
to help people who are struggling with higher interest rates to
afford their mortgage payments or to go on to new terms to cope
with those payments—but, crucially, without adding fuel to the
fire of inflation. I could not disagree with the noble Baroness
more.
