The Chancellor of the Exchequer was asked— Cost of Living Alex
Cunningham (Stockton North) (Lab) 1. What fiscal steps he plans to
take to help reduce the impact on households of the rise in the
cost of living. (905371) Ian Byrne (Liverpool, West Derby) (Lab) 5.
What recent assessment he has made of the impact of inflation on
trends in the levels of living standards. (905375) Paul Blomfield
(Sheffield Central) (Lab) 8. What fiscal steps he plans to...Request free trial
The Chancellor of the Exchequer was asked—
Cost of Living
(Stockton North) (Lab)
1. What fiscal steps he plans to take to help reduce the impact
on households of the rise in the cost of living. (905371)
(Liverpool, West Derby)
(Lab)
5. What recent assessment he has made of the impact of inflation
on trends in the levels of living standards. (905375)
(Sheffield Central)
(Lab)
8. What fiscal steps he plans to take to help reduce the impact
on households of the rise in the cost of living. (905378)
(St Ives) (Con)
17. What steps he is taking to help people with the increasing
cost of living. (905387)
(Brighton, Kemptown)
(Lab/Co-op)
18. What fiscal steps he plans to take to help reduce the impact
on households of the rise in the cost of living. (905388)
(East Renfrewshire)
(SNP)
20. What recent assessment he has made of the effect of his
fiscal policies on the cost of living. (905391)
(Wansbeck) (Lab)
21. If he will offer further support to people struggling with
the rise in the cost of living. (905392)
The Chancellor of the Exchequer ()
To help people with the cost of living, the Government are
providing support worth around £12 billion in this financial year
and next. That includes: cutting the universal credit taper rate
to make sure that work pays; freezing duties to keep costs down;
and providing support to households with the cost of essentials.
In addition, the Government’s plan for jobs is helping people
into work and giving them the skills they need to succeed—the
best approach to managing the cost of living in the long
term.
The Chancellor will have plenty of opportunities to get the
answer right this morning. Data from the Office for National
Statistics show that on average people aged 65 or over spend
twice as much on energy compared with those under 30, so they
will be hit twice as hard by escalating bills. Meanwhile, Energy
UK tells us that without Government action there will soon be 6
million people, many of them pensioners, living in fuel poverty.
Will the Chancellor persuade himself to really get into this and
take up our pledge to remove VAT from energy bills and extend the
warm homes discount? If he will not, what will he do,
particularly for our most vulnerable pensioners who are suffering
from this cost of living crisis?
I am proud of this Government’s track record in supporting
pensioners. Thanks to the triple lock, in place since 2010,
pensions are, relative to earnings, the highest they have been in
more than three decades. However, I recognise the anxiety that
many pensioners will feel about rising energy bills, and we are
always looking at the best way to support people. To help with
exactly that phenomenon, the winter fuel payment provides up to
£300 for everyone over the state pension age.
With the cost of living crisis upon us, millions across our
country must choose between heating their home or putting a meal
on the table. Hunger is a political choice made by this
Government and the buck stops with the Chancellor. Last week, he
wrote off £4.3 billion of covid fraud. If he has the will, he can
end the crisis of food insecurity for millions across our nation.
Will he use his spring statement to implement a right to food,
including universal free school meals and setting social security
payments and the living wage at rates calculated to take account
of the rising cost of food?
On providing food for those who most need it, I am pleased that
the recent spending review confirmed £200 million of extra
funding for the holiday activity and food programme to provide
support to families and children outside term time. The national
living wage, which the hon. Gentleman mentioned, is going up by
6.6% to £9.50 in April, putting an extra £1,000 in the pockets of
hard-working people up and down the country.
A constituent wrote to me recently; she is 57 and works four days
a week on the minimum wage. Her energy bill is rising from £95 to
£220 a month, eating up an extra 11% of her take-home pay.
Weekend reports suggest that Treasury action on the cost of
living crisis has stalled due to the paralysis engulfing No. 10.
Those struggling to heat their homes should not pay the price for
the Prime Minister’s conduct, so will the Chancellor agree to
extend eligibility for the warm homes discount further and
increase it beyond the pitiful £10 that is planned?
Although I do not know the specific circumstances of the hon.
Gentleman’s constituent, it sounds like she will benefit from two
measures that we have already announced: the significant increase
in the national living wage by 6.6% in April; and the cut in the
universal credit taper rate, which will mean that a single mother
working full time on the national living wage will be an extra
£1,200 better off. That will help significantly with energy and
other bills, and of course the warm home discount provides a £140
rebate to those who need it.
I have met a number of pensioners in my constituency who are on
the state pension, but who also worked hard and saved for a
private pension; not a huge pension, but a pension that they
believed would help them meet the cost of living. Unfortunately,
years of low interest rates and now the rising cost of energy,
food and other things have made them begin to worry and they are
very concerned about the year ahead. Can the Chancellor provide
more information on how he will monitor the situation, and
support the families and pensioners whom we encouraged to get
private pensions but now find that they cannot meet the cost of
living?
My hon. Friend is absolutely right to highlight pensioners and
their needs. As I said, I am proud of the Government’s track
record in supporting them. I can also provide him with the
reassurance that we continue to look at the best way to provide
support to all those in need, as we have done over the last year
of two. In the meantime, he will be reassured to know that we
have protected pensioners this coming year with the double lock
and, as I said, the winter fuel payments providing up to
£300.
Energy prices are rocketing but the price of producing energy has
not, meaning that energy companies are experiencing record
bonanza profits this year if they are producers. The Chancellor
is, of course, worth more than a billion pounds. Could he tell
constituents struggling to pay their energy bills what should be
taking the cut? Should it be the profits of the energy companies
or the lifting of the energy cap that he proposes, costing
constituents £1,800 on average a year?
The energy price cap has already protected millions of people
against rising energy bills. On the taxation of companies, it is
probably worth bearing in mind that one thing that the last few
months have shown is that there is an opportunity to invest more
in providing natural gas as a transition fuel as we make our way
to net zero in a measured manner. To that end, we should be
encouraging investment in exporting our natural resources, not
disincentivising it.
While Ministers travel the globe in private jets, more and more
families across the UK go hungry. Last year, the Trussell Trust
delivered 2.5 million food packages through its food banks, which
is 100 times more than in 2008-09. Now families face further cuts
in benefits, increasing taxes and the cost of living crisis. Does
the Chancellor not think that addressing that perfect storm of
poverty drivers would be a better use of his time than plotting
leadership bids as he waits for the downfall of his lame duck
Prime Minister?
The hon. Lady talks about poverty, but the track record of this
Government and the Governments since 2010 shows very clearly that
more than 8 million fewer people are living in poverty as a
result of the actions of those Conservative Governments. Income
inequality today is lower than it was in 2010.
It is not good enough to simply say that work lifts people out of
poverty when we know that millions of people up and down this
country with one job, two jobs or three jobs are still not even
making ends meet. The universal credit cut is having a
devastating impact, combined with growing food prices and the
rise in rents—not to mention the huge hike in national insurance
contributions.
I know it is difficult, Chancellor, for someone with financial
privilege to really understand what is facing people in
communities like mine, but I must say that when I have got
elderly people freezing in their homes and more people than ever
before using food banks, we need some help from the Government.
Poverty is a political choice.
Anyone who has questions about my values can just look at my
track record over the last year or two. I am proud of this
Government’s achievements in supporting those who most needed our
help at a time of anxiety for our country. I respectfully
disagree wholeheartedly with the hon. Gentleman: I do believe
that work is a route out of poverty. All the evidence shows that
children who grow up in workless households are five times more
likely to be in poverty than those who do not, which is why I am
proud that there are almost a million fewer workless households
today as a result of the actions of this Conservative
Government.
(Thirsk and Malton)
(Con)
The most effective sanctions that we could impose on Russia would
be to block Russian banks’ access to UK and international
markets. Will my right hon. Friend consider that and consider
cushioning the inevitable blow to our banks, businesses and
households from the financial impacts, including to the cost of
living?
My hon. Friend makes an excellent point. With regard to
sanctions, absolutely nothing is off the table. We are working
extremely closely with our international allies to make sure that
we can send a robust signal to deter Russian aggression, and we
continue to explore diplomatic solutions at the same time. He
should rest assured that nothing is off the table.
(West Worcestershire)
(Con)
I visited the citizens advice bureau in Malvern and people there
were sharing with me the fact that they still have tens of
thousands of pounds in household support grants that they can
give away between now and the end of March. Will the Chancellor
join me in encouraging families who are struggling with the cost
of living to apply for the help available?
My hon. Friend, as always, makes an excellent point. I join her
in encouraging all those local authorities and others to get
those funds out to people who need them as quickly as possible.
That is why we have created the household support fund: half a
billion pounds to provide £100 or £150 to millions of our most
vulnerable families. It is there to help, and I hope we can get
the rest of the money out as quickly as possible.
(Preseli Pembrokeshire)
(Con)
The Chancellor of the Exchequer is exactly right in all the
measures that he describes the Government taking to protect
families’ incomes. He has always shown a powerful instinct for
protecting those on the very lowest incomes, but may I say
respectfully to him that we must do something about energy costs?
On Friday, I met a couple in my constituency who showed me their
fixed tariff agreement with their energy company, which is coming
to an end, and the new one coming on stream, which is more than
double. They will really struggle to pay their energy costs this
year, so may I ask the Chancellor of the Exchequer to look at the
issue? The warm home discount scheme is not perfect, but it is a
useful vehicle for doing something to help those on the lowest
incomes.
My right hon. Friend speaks with compassion and authority on
these topics, and I join him in making sure that we are aware of
the issue. I am, of course, aware of people’s anxiety about what
is coming; he can rest assured that we continue to look at all
the policies we have in place to make sure that we are supporting
people in the best way possible through the months ahead.
(West Suffolk) (Con)
With the risk of inflation becoming entrenched, we need fiscal
discipline while the Bank of England undertakes the tricky task
of monetary tightening. What does the Chancellor think of
proposals that would break down that fiscal discipline and
therefore risk increasing inflation and being completely
counterproductive?
My right hon. Friend is absolutely right; given his career before
he was in this place, he, too, speaks with authority on these
matters. He is right to highlight that many of the proposals that
people suggest would involve a significant fiscal loosening,
which would be inflationary and counterproductive at this time.
It is right that fiscal policy is supportive of people, but also
mindful of the risks of rising inflation, not least because of
the risks for the costs of servicing our debt.
Mr (Wolverhampton South East) (Lab)
The Chancellor will be aware that voters are being hit by a
triple whammy on the cost of living: soaring energy bills, the
Chancellor’s own tax rises and falling real wages. Next week, the
energy price cap could rise by as much as £600. Labour has set
out a fully costed plan to cut these bills, funded by a windfall
levy on the oil and gas companies making the most money from the
current spike in prices. Where is the Government’s plan for those
energy costs? What has distracted them from producing one?
I would probably slightly disagree with the idea that Labour’s
plans are fully costed, but it would not be the first time that
its numbers do not add up. With regard to the responsible way
forward, the right hon. Gentleman has talked about funding the
NHS—a good example of something that is funded, because
Government Members know that the NHS is the people’s No. 1
priority. It is right that we tackle the backlogs and reform
social care, as the Prime Minister has set out, but it is also
right that we fund that sustainably and responsibly, which is
what this Government are committed to doing.
Mr McFadden
On Sunday, the Prime Minister and the Chancellor nailed
themselves to the mast of the national insurance rise coming in
this April—like Thelma and Louise, they have held hands and are
going to drive off the cliff. The Chancellor says that it is all
about public services, but we know that the real reason he is so
desperate to stick to the timetable is so that he can implement
planned tax cuts before the next election. Why should the cost of
living crisis be made much worse for families this year just to
fit in with the Tory party’s planning grid for the next
election?
With regard to the cost of living, the Government have, as we
have already discussed, put a range of measures in place to help
people, not least the increase in the national living wage by
£1,000 a year, the cut to the universal credit taper rate and the
freezing of fuel duty. The Government will not shirk from funding
the NHS sustainably and responsibly. It is the people’s No. 1
priority; the backlogs are rising at an unprecedented rate, and I
think people would like to see them addressed, which can be done
only with a sustainable funding stream. That is what we have
created, and this is a progressive way to do it. Although these
decisions are difficult, a responsible Government do not shirk
from them.
(Glasgow Central)
(SNP)
Inflation is running at 5.4%, the highest level in nearly 30
years. It is already having a real and painful impact on people
and businesses, with worrying reports today that increased bills
are pushing businesses to lay off staff. The upcoming national
insurance hike is a tax on jobs as well as on individuals. This
is a cost of living crisis, yet today is the first time that the
Chancellor has been to this House since the start of December,
and we still do not hear a plan from him—he is too distracted by
plotting for the Prime Minister’s job to help those affected by
this crisis. People are struggling, so what additional practical
financial support can they expect from this Chancellor, and
when?
The hon. Lady talked about inflation; she is right and I am very
cognisant of the anxiety that people are feeling about rising
inflation. It is also right to put that in context. She said it
is the highest tier since the early 1990s, and that is right. We
are also seeing this as a global phenomenon—inflation in the US
is running at its highest since the 1980s, and the highest since
the eurozone was created—so we are not alone in facing those
challenges. The Government have already set out a plan, but it is
a plan that is working. In contrast to what she said about people
losing their jobs, what we have seen is 11 months of falling
unemployment, which is now back to the almost record pre-pandemic
lows, and record numbers of people in work. That is the best way
to tackle the cost of living—get people into work and make sure
those jobs are well paid.
Business Investment
(Winchester) (Con)
3. What steps his Department is taking to encourage businesses to
invest. (905373)
(Dudley North) (Con)
13. What steps his Department is taking to encourage businesses
to invest. (905383)
The Financial Secretary to the Treasury ()
The Chancellor has brought forward a number of measures to
encourage business investment, and I shall mention just two.
Under the super deduction, from April 2021 until the end of March
2023, companies can claim a 130% capital allowance on qualifying
plant and machinery investments. That is the biggest two-year
business tax cut in modern British history. We have also extended
the temporary £1 million annual investment allowance level until
the end of March 2023.
That was an interesting answer. There is a business in my
constituency, Cytronex, which has developed a green solution to
increase cycling rates by converting existing bicycles into
e-bikes—I recommend it. Last year, its product won the e-bike of
the year award; as a result, international demand has far
outstripped its ability to support it. Cytronex is passionate
about manufacturing its product in Britain and even assembles its
own lithium battery packs in Winchester. What more can we do to
help small businesses such as Cytronex make the leap into mass
production, and will one of the excellent Treasury Front-Bench
team meet us to discuss how we can explore that?
Cytronex sounds like a fantastic company, and it is great to see
it in Winchester. It is precisely the type of company that we
want to support. As I mentioned, it could benefit from the super
deduction that we have brought in. Under the super deduction, for
every £1 a company invests, its taxes are cut by up to 25p. That
type of investment will help manufacturing and the manufacturing
sector.
Jobs and job security clearly depend on economic growth. The
International Monetary Fund’s forecast putting the UK at the top
of the G7 is an endorsement of this Chancellor’s and this Prime
Minister’s approach to economic policy throughout covid. Will the
Minister assure me and my Dudley constituents that we will
increasingly return to revenue from growth as soon as possible,
and continue investing in skills for jobs for the future,
building on, for example, the successful delivery of Dudley’s
institute of technology?
My hon. Friend is absolutely right to focus on skills, and that
is exactly what the Chancellor did in the spending review, with
an investment, over the Parliament, of £3.8 billion. My hon.
Friend mentions the Marches institute of technology, and we are
investing in a total of 21 of those innovative institutions
across England. Employer-led training is key to growth, and that
is why we are quadrupling the scale of skills boot camps in
England, including digital skills boot camps, which are available
in Dudley and funded by the Government.
(Harrow West) (Lab/Co-op)
Businesses in financial services are more likely to invest here
as opposed to European markets if an agreement is reached with
the EU on financial services regulation. Last March, the Economic
Secretary to the Treasury, the hon. Member for Salisbury (), said that he expected such an
agreement to be signed expeditiously. It still has not been. When
does the Minister think the memorandum of understanding on
financial services regulation will finally be signed?
The hon. Member makes an important point. Financial services are
very important to the UK. We are ready to make a deal and we look
forward to hearing from the EU.
(Kingston upon Hull West and
Hessle) (Lab)
A local businessman in my constituency would love to be able to
invest, but he is facing business ruin because he made an order
to China for some fireplace tiles worth £15,000 and, because of
anti-dumping duty, customs duty and various other taxes, he is
going to be charged £43,000 of costs for a £15,000 order. He is a
sole business person and he is facing bankruptcy. I have
contacted HMRC about this, but I seem to be hitting a dead end,
so will the Minister please look into this matter and see if
anything can be done to help him?
If the hon. Member wants to give me the details of her
constituent’s case, I would be very happy to look into it.
Glasgow Climate Pact: Fossil Fuel Taxation
(Brighton, Pavilion)
(Green)
4. What assessment he has made of the compatibility of his
policies on the taxation of fossil fuels with the Glasgow climate
pact. (905374)
The Financial Secretary to the Treasury ()
I am pleased to have an opportunity to underline the Government’s
commitment to reducing carbon emissions through taxation and the
UK’s success in limiting global emissions at COP26. The
Government have reduced carbon emissions through their carbon
pricing policies, including through the UK emissions trading
scheme. We are committed to delivering on our carbon targets, and
our net zero strategy sets out a roadmap for reaching net zero by
2050.
I thank the Minister for her answer, but she will know that the
UK has one of the most lax tax regimes in the world for the oil
and gas sector. In 2019, companies got away with paying 12.5
times less tax for a barrel of oil produced here compared with in
Norway, for example. In 2020, Shell paid absolutely no tax in the
UK, the only country in the world where it operates where that
was the case. For 2021, HMRC expects that the industry will
pocket £910 million-worth of tax reliefs for decommissioning.
Given our commitments under the Glasgow climate pact, and given
the fact that the oil and gas industry is currently making
near-record profits while UK households are struggling with a
real cost of living crisis, will the Minister address the
imbalance and commit to a review of the tax regime?
The hon. Member will know that the oil and gas sector does pay
significant taxes. Indeed, it pays additional taxes, and to date
it has paid more than £375 billion in production taxes.
Insurance Industry Regulation
(Birmingham, Ladywood)
(Lab)
6. What recent discussions he has had with the Financial Conduct
Authority on the regulation of the insurance industry.
(905376)
The Economic Secretary to the Treasury ()
I hold regular discussions, usually on a six-weekly basis, with
the chief executive of the Financial Conduct Authority on a range
of issues regarding the regulation of financial markets,
including the insurance market.
Insurance companies are exploiting the cladding scandal by
charging leaseholders extortionate, punitive and unethical prices
for their buildings insurance. The Treasury and the FCA have
frankly done nothing while people are forced to find eye-watering
sums of money because of a scandal that they did not cause, and
there is no transparency as to how their premiums are being
calculated. After many years, a Government Minister has finally
written to the FCA, but will the Treasury now step up and ensure
that the FCA not only looks into this matter but provides redress
for my constituents and the thousands of people across this
country who are experiencing severe financial distress?
The FCA has been looking at this matter, and last week my
colleague the Secretary of State for Levelling Up, Housing and
Communities wrote to the FCA to ask it to look at whether there
is a market failure. Since then, it has written back, with the
Competition and Markets Authority, to say that they are engaging
with the industry and will produce a statement on the matter in
due course. I recognise the concerns that the hon. Member has
raised and the dysfunctionality that may exist in the market, and
it is important that that is looked at carefully.
(Chipping Barnet)
(Con)
Reform of Solvency II could unlock billions to create jobs,
enhance prosperity and help to raise living standards. May I ask
the Government to make some progress on this?
We are making progress. We are in deep conversations with the
Prudential Regulation Authority and its actuaries on the way that
the risk margin and the matching adjustments should be altered to
release that additional capital. We are confident that progress
will be made and we are also working closely with the insurance
industry to see that that comes to pass.
National Infrastructure Projects
(East Lothian) (Alba)
7. What recent estimate he has made of the value of
infrastructure projects to be delivered through the national
infrastructure and construction pipeline. (905377)
The Exchequer Secretary to the Treasury ()
The 2021 national infrastructure and construction pipeline set
out nearly £650 billion of planned and projected public and
private investment in infrastructure over the next 10 years. Last
year’s Budget and spending review set out how we will deliver on
commitments in the national infrastructure strategy, and go
further in providing more investment to every part of the UK.
The first great energy revolution of oil and gas saw Scottish
communities largely miss out, other than in Shetland. The
offshore renewables revolution is occurring off East Lothian’s
coast and landing on its shores, largely then to be cabled south.
Where are the jobs and benefits for the county, or the revenue
that accrued to Shetland? Will the Minister agree to meet me and
representatives of East Lothian Council to ensure that the
offshore renewables revolution benefits the communities where it
actually lands?
The Government are committed to ensuring that the whole of the
United Kingdom benefits from our investment in renewables and our
transition to net zero and the growth that that affords us, and I
am happy to look into the matter that the hon. Gentleman
raised.
Support for Lowest-income Households
(Ipswich) (Con)
9. What steps his Department is taking to increase wages and
support the lowest-income households. (905379)
The Chief Secretary to the Treasury ( )
As my right hon. Friend the Chancellor has announced, we are
increasing the national living wage to £9.50 an hour for workers
aged 23 and over from this April. That means a pay increase of
£1,000 a year for a full-time worker earning the national living
wage, and keeps us on track to meet our target to end low pay by
the financial year 2024-25. As we have heard, we have taken
further decisive action by cutting the universal credit taper
rate and increasing the universal credit work allowances.
When it comes to high-paid jobs in the Ipswich area, Freeport
East has generated great interest. However, my constituents are
keen to see meat on the bones, and for that exciting principle to
become a reality. Currently, the plan is to put in the full
business case this April. Clearly, that is a most exciting
prospect, being near to Ipswich. Will my right hon. Friend give
me a firm guarantee that rocket boosters will be put under the
plans, to ensure that the benefits of Brexit and the benefits of
the freeport can be realised for my constituents as soon as
possible?
Mr Clarke
I thank my hon. Friend for his question. In the week that we
announced the Brexit freedoms Bill, that is a really good example
of why our decision on the Government Benches to honour the
people’s decision to leave the European Union was the right one,
and why the Labour party was so wrong to oppose it. The Prime
Minister was at Tilbury only yesterday to identify the benefits
of freeports, and I can reassure my hon. Friend that we are
putting rocket boosters under this policy, for the benefit of
places like Ipswich.
(East Antrim) (DUP)
Does the Minister agree that some of the ways in which low-income
families could be helped would be to drop the national insurance
increase, which is wiping out part of the increase in the
national living wage anyhow, and to drop many of the green
levies, which have a massive impact on electricity bills—up to
20%?
Mr Clarke
I thank the right hon. Gentleman for his question. He knows the
high regard that I have for him. I do, however, respectfully
disagree with him on these points. There is no other responsible
way for us to finance the 9 million more checks, scans and
operations that the health and social care levy will unlock than
through a broad-based tax increase, which is highly designed to
ensure that we protect vulnerable families, so that the 6 million
lowest-paid will pay no extra tax at all as a result of the
levy.
When it comes to the green levies, it is worth noting that we
have reduced our reliance on natural gas, as a country, by 26%
since 2010. That is saving taxpayers now, in an era of ultra-high
gas prices. It is also worth noting that clean technologies are
now the cheapest form of new energy to procure—cheaper than new
gas.
(North West Durham)
(Con)
Lower-paid, and especially young part-time workers, do not
currently benefit from tax relief or employers’ contributions
towards pensions under the auto-enrolment scheme. Will the
Minister speak to colleagues across Government to look at
extending auto-enrolment to lower-paid workers, to ensure that
they get the long-term benefits?
Mr Clarke
My hon. Friend has campaigned consistently on this theme. I would
certainly be very happy to have further discussions with him
about it. It is worth noting, and celebrating, the fact that the
proportion of people who are in low-paid work is actually at its
lowest since records began in 1997.
(Swansea West)
(Lab/Co-op)
The Trussell Trust finds that three out of four referrals are
disabled people, and the Office for National Statistics finds
that people who work online at home are more likely to work
longer and not retire early, particularly if they are disabled.
So will the Chancellor, the Treasury and the Minister look at the
idea of promoting working from home after the pandemic, to help
enable people with disabilities and other people to be more
productive, and at the same time target more support for those in
greatest need, as we have found from the Trussell Trust?
Mr Clarke
I thank the hon. Gentleman for his question, and for the spirit
in which he asks it. Over the course of the spending review we
are investing £1 billion in disability-related programmes, and
that is an aspect that I am happy to look at further. More
broadly, the Government as a whole spend £58 billion a year on
wider disability support, so we certainly take that area very
seriously.
(Kettering) (Con)
Some of the lowest-income households are made up of pensioners,
and important extra help for the most vulnerable is already
available and budgeted for through pension credit, yet up to 1
million people—including, potentially, 4,500 pensioners in north
Northamptonshire—are failing to claim up to £1.8 billion in
pension credit. Please will the Government do more to promote the
take-up of pension credit?
Mr Clarke
My hon. Friend raises an important point. The state pension and
pension credit are rising by 3.1%, which is helping to protect
more than 12 million pensioners from cost of living increases. It
is vital that people get the help to which they are entitled. If
any Member has any practical suggestions to bring to our
attention, we will happily look at those, and I will task
officials to make sure that we are doing all we can.
Council Tax: Second Homes
(Westmorland and Lonsdale) (LD)
10. What discussions he has had with Cabinet colleagues on the
potential merits of increasing council tax on second homes.
(905380)
The Financial Secretary to the Treasury ()
I am aware that the hon. Gentleman raised a similar question with
the Chancellor when the Chancellor was a Local Government junior
Minister. The hon. Gentleman will know that we announced in the
middle of last month that we are closing a tax loophole that
allowed owners of second homes who claimed that their often-empty
properties were holiday lets to receive small business rates
relief instead of paying council tax. We are also committed to
ensuring that first-time buyers are able to get on and move up
the housing ladder.
Rural Britain’s housing crisis has become a catastrophe over the
last two years of the pandemic. The Chancellor will know all
about that, given the kind of constituency he represents. Some
80% of all house sales in the lakes and dales in Cumbria have
been to the second home market, and in some rural communities
there has been a reduction in the private-rented affordable
market of 70%. Local families are being forced out of our
communities. The need for drastic and immediate action is
obvious, well over and above what has been said. Will the
Minister agree—or will she agree to persuade her right hon.
Friend the Chancellor—to meet me, as the Chancellor’s
constituency neighbour, to sit down and look at seven steps for
saving our rural communities, so that we can prevent our towns
and villages being emptied of their full-time populations? That
will surely include giving councils the freedom to double council
tax on second homes.
I am happy to meet the hon. Member to discuss the points he
raises. We have taken a number of steps to ensure that people pay
the full rate of council tax on second homes—96% of second home
owners pay the full rate of council tax. He will know that the
Government introduced the higher rate of stamp duty land tax for
those purchasing additional properties, and only last year
introduced a new SDLT surcharge of 2%, to ensure that houses are
available for local people at reasonable prices. I am happy to
discuss this further with him.
Kickstart Scheme
(Gedling) (Con)
11. What assessment he has made of the progress of the kickstart
scheme. (905381)
(Devizes) (Con)
16. What assessment he has made of the progress of the kickstart
scheme. (905386)
The Chief Secretary to the Treasury ( )
We know that young people have been disproportionately affected
by the pandemic. I am delighted that, to date, more than 122,000
kickstart jobs have been started by young people across Great
Britain, including in the constituency of my hon. Friend the
Member for Gedling (). Youth unemployment fell by
11.1% in the three months to November 2021 and is lower than it
was prior to the pandemic, and in December there were half a
million more employees aged under 25 than in December 2020.
I recently visited Severn Trent Water in Gedling, and staff told
me how impressed they were with the kickstarters that the company
had taken on. Can my right hon. Friend assure me that he is
working hard to encourage more companies and organisations to get
involved in the kickstart scheme, to get even more people back
into work?
Mr Clarke
I completely agree with my hon. Friend. Kickstart is delivering
valuable jobs and work experience to young jobseekers at risk of
long-term unemployment. Although kickstart closed to new
applications on 17 December, we are genuinely delighted at the
response from employers. As I noted, more than 122,000 kickstart
jobs have been started so far, and we expect more between now and
the end of March. Employers should continue to engage with
Department for Work and Pensions jobcentres and support the new
way to work campaign to get more people into work.
In my constituency, 130 new jobs for young people have been
created. A group of young people started this week at Ball
Aerocan in my constituency. The company is very pleased with the
scheme and the young people it found but said it took a little
while to get through the system. What can the Government do to
encourage businesses to make use of the scheme before it ends in
March?
Mr Clarke
My hon. Friend is absolutely right that we want to encourage
maximum uptake. Kickstart is only one part of the comprehensive
package of support available to young people and, following the
closure of this scheme, young jobseekers will still be able to
benefit from the DWP’s wider youth offer, while work coaches
across the country are working to support young people into
jobs.
(Warwick and Leamington)
(Lab)
Young people who lost jobs during the pandemic have returned to
less secure jobs, typically gig economy roles. The Resolution
Foundation report published yesterday showed that one third of 18
to 34-year-olds who have returned to work have returned to
atypical, insecure jobs. Almost 18 months ago, the Chancellor
launched his kickstart programme, setting a target of 250,000.
The Minister has said how many have found jobs, but, on the
evidence of the Resolution Foundation report, those jobs just are
not there and they are typically insecure.
Mr Clarke
I am afraid the hon. Gentleman confuses what he is talking about.
The fact that we have not hit the target is precisely a
reflection of the fact that the wider economic recovery has been
so strong. It is a measure of the success of the wider recovery
that we simply do not need to offer those opportunities and that
the regular economy is generating them.
(Huddersfield)
(Lab/Co-op)
I have heard from so many on the Government Benches how good the
kickstart scheme is. It has huge potential, but I keep telling
the Treasury Bench to get their finger out and get on with it. It
needs to be bigger and better; it must be linked to green skills
and real opportunities for getting young people to roll up their
sleeves and work in the community. It could be backed by a
windfall profit tax on supermarkets and others, or on the
gambling industry. Get on with it!
Mr Clarke
We are getting on with it. I remind the hon. Gentleman that when
we compare the scheme to the last Labour Government’s future jobs
fund, we see that we have already comfortably exceeded the number
of young people it supported into work. Those are good,
well-paying jobs in sectors that, he rightly highlights, are some
of those of the future.
Public Spending: Value for Money
(Blackburn) (Lab)
12. What recent steps he has taken to help ensure value for money
in public spending. (905382)
The Chief Secretary to the Treasury ( )
I will comment specifically on some of the fraud relating to
Government economic support schemes put in place during the
pandemic. My colleagues and I share the anger and frustration of
hon. Members across this House and of people across this country
that schemes designed to help businesses to get through an
unprecedented crisis were exploited by a minority. We rightly
placed an emphasis on speed when introducing those schemes, but
we will robustly pursue anyone who has taken advantage of the
Exchequer.
I welcome the Minister’s response, but does he realise that
people in Blackburn are really concerned about our cost-of-living
crisis? They have a right to expect this Government to be prudent
with the public purse, but what they find is that this Government
simply do not operate under normal rules. They have hit working
people and ordinary businesses with tax rises, yet wasted
billions of pounds on contracts, fraud and outsourcing. Does the
Minister accept that people should not have to pay for a
Conservative tax rise when billions in taxpayers’ money has been
leaked due to fraud and mistakes—or, as said last week, “schoolboy
errors”?
Mr Clarke
I thank the hon. Lady for her question, and I completely agree
that we want to pursue fraud whenever it has occurred. That is
why, at the March 2021 Budget, we established a £100 million
taskforce with more than 1,000 employees, designed precisely to
go after every penny that has been taken by people not entitled
to it. Her Majesty’s Revenue and Customs has already recovered
and prevented £743 million-worth of loss; the taskforce is
expected to recover £800 million to £1 billion from fraudulent or
incorrect payments over the two years of its existence, and HMRC
reserves the right to carry on for as long as it takes.
(Forest of Dean) (Con)
I welcome the Chancellor’s clear confirmation last week that, far
from writing off any of that money, the Government are going
after everyone who has claimed it fraudulently. However, it is
important to remember the context. The businesses in my
constituency know the jobs that were saved by the rapid roll-out
of bounce back loans and furlough and know that the Chancellor
had to balance those constraints: while it is right to go after
criminals, it was also right to make fast, smart decisions to
protect thousands of jobs across our nation.
Mr Clarke
My right hon. Friend puts it extremely well. We must remember the
context: the economy was going through a heart attack at that
time, owing to the necessary steps we took to support wider
public health. I would remind the Opposition Benches that the
shadow Chancellor wrote to the Chancellor at the time, describing
the loan scheme application process as “cumbersome” and calling
for access to be made easier. We were operating in that context
of needing to ensure that businesses could access the support to
which they were legitimately entitled.
(Erith and Thamesmead)
(Lab)
What does the Minister think would happen to an employee in the
private sector who lost more than £4 billion of someone else’s
money to fraud, having ignored numerous warnings? Would they
really be eyeing up a possible promotion, or is it more likely
that they would be sacked on the spot?
Mr Clarke
We are running the Government of the United Kingdom, and we
needed to respond at speed to an unprecedented public health
emergency. If we had failed to provide the £400 billion of
support that we gave, we would have seen the worst fears, with
millions of people unemployed and thousands of companies closing.
We struck the right balance in getting that support out to firms
and then building in the protections needed to protect the
taxpayer interest, and we are, as I have said, going to go after
anybody who has defrauded the Exchequer.
Topical Questions
(East Renfrewshire)
(SNP)
T1. If he will make a statement on his departmental
responsibilities.(905362)
The Chancellor of the Exchequer ()
Thanks to our vaccine booster roll-out, we now have one of the
most open economies in Europe, and thanks to our economic plan,
we are set to have one of the highest growth rates in the G7 this
year and last. We continue to deliver on our plan for jobs,
doubling down with a new target to move half a million more
people off welfare and into work by the end of June. Unemployment
is falling and is now down to almost record lows. Youth
unemployment is already at record lows. All of this shows that
our plan for jobs is working.
People in Ukraine are living in dread at the prospect of Russian
invasion. While the UK Government talk tough about sanctions, US
think-tanks warn that the UK is such a haven for money laundering
that such sanctions would not be meaningful. Will the Chancellor
take heed of Lord Agnew’s powerful resignation speech and bring
his powerful economic crime Bill before the House as soon as
possible?
With regard to sanctions, as I said to my hon. Friend the Member
for Thirsk and Malton (), nothing is off the
table. It is right that we work with our international partners
to develop the most robust sanctions package that we can. The
hon. Lady can rest assured that I and my team are doing that.
With regard to the economic crime Bill, which contains important
measures to strengthen our ability to tackle money laundering,
obviously it would not be right for me to pre-empt the Queen’s
Speech, but the hon. Lady can be assured that I, the Home
Secretary and others fully support the Bill.
(Burton) (Con)
T2. Will my right hon. Friend urgently review the Government’s
pothole fund and consider whether the level is sufficient to
adequately maintain the road networks, given the current rising
cost of materials and labour? Will he also consider setting the
budgets for three or more years ahead, to allow councils to plan
more effectively, rather than it being an annual
allocation?(905363)
My hon. Friend makes an excellent point about giving local
councils that certainty to plan budgets years at a time. That is
why I am pleased that last year’s spending review was a
multi-year spending review—the first we have had in some time—so
there are now three-year budgets in place to enable that
planning. In terms of the overall quantum, it is £2.7 billion,
which represents a 10% increase on the amount we spent on local
maintenance in the last Parliament. Hopefully that is reassuring
to her and her local council.
(Leeds West) (Lab)
Mr Speaker:
“Schoolboy errors… a combination of arrogance, indolence and
ignorance… nothing less than woeful.”—[Official Report, House of
Lords, 24 January 2022; Vol. 818, c. 20-21.]
Those are not my words, but those of former Treasury Minister,
. Some £4.3 billion of
taxpayers’ money has been written off as a result of the
Chancellor’s fraud failures; a thousand loans were made to
companies that were not even trading at the start of the
pandemic; and £50,000 was awarded to a person with 48 criminal
convictions, and £25,000 to a drugs gang. Is the Chancellor
really saying that such examples strike the right balance between
getting money to the businesses that need it and looking after
the public finances? Will he inform the House of the total amount
lost to fraud underwritten by the Treasury and the amount
recovered to date?
First, I take this opportunity to pay tribute to for all his work. I am very
grateful to him for everything that he did, and of course we will
listen to what he has to say. With regard to the hon. Lady’s
questions, she talked about fraud estimates. It is important to
be clear, as my right hon. Friend the Chief Secretary to the
Treasury said, that nothing has been written off in that
regard—we are going after each and every person we suspect of
defrauding the taxpayer. I am pleased to tell her that the
original estimate of £4.9 billion of fraud—it was an estimate,
independently provided—has already been revised down by a third
since it was first published, thanks to the actions that we are
taking. She asked how much has been paid out already, and I can
confirm that the sum total to date is £13 million.
It is in black and white on the Government’s own website still
today, and in the Government accounts—£4.3 billion written off.
Despite the Chancellor’s words, “written off” means giving up on
that money. This is just the tip of the iceberg. [Interruption.]
It is on the Government’s website and in the Government’s
accounts. Can he tell us how many of the covid fraud cases have
gone to court? Given his failure, will he ask the National Crime
Agency to conduct a full investigation into all cases of covid
fraud and ensure that those responsible are held to account? It
is not the Chancellor’s money to write off; it is the public’s
money, and the public want their money back.
It is great that the Labour party has realised that it is the
taxpayer’s money and not the Government’s money. I am glad that
it has joined us in recognising that. I can say categorically
that no one has written this off; we are going after it, as the
Chief Secretary said. We invested £100 million last March in
creating a taxpayer protection taskforce staffed with over 1,200
people to recover hopefully up to £1 billion. That is just one of
the many things we are doing, as well as taking more powers to go
after rogue directors, enabling Companies House to do exactly
that. The hon. Lady asked about the National Crime Agency. I am
pleased to tell her that it has already helped in investigations
that have led to 13 arrests with regard to bounce back fraud, so
that work is already under way.
(Amber Valley) (Con)
T4. Does the Chancellor agree that one of the key lessons from
the pandemic was about helping people to improve their own
financial resilience by saving? Will he now finally support
measures to extend auto-enrolment down to the first pound of
earnings and down to those aged 18, so that we can help everyone
start saving for a pension for their retirement?(905365)
The Economic Secretary to the Treasury ()
My hon. Friend, who has great expertise in this area, makes a
reasonable point. The Government’s Help to Save scheme is under
way, but the Government continue to work very closely with the
Money and Pensions Service to look at new ways of increasing
financial resilience and getting young people to understand the
opportunities of saving earlier.
(Glasgow Central)
(SNP)
resigned because he could no
longer defend the level of fraud in the bounce back loan scheme
and the lack of action to tackle it. Much of that has been
facilitated by the absolute shambles of the Companies House
register. I do not want Ministers to fob this off to the
Department for Business, Energy and Industrial Strategy, because
that is exactly the disconnected approach that criticised. If there is an
economic crime Bill, will Ministers take action to give Companies
House anti-money laundering responsibility, rather than watching
as fraudsters using UK shell companies waltz off with billions of
pounds of public money?
I am grateful to be able to confirm to the hon. Lady, as I have
on numerous occasions in Committees over the last two or three
years, that this is a key priority for us in the Treasury.
Obviously, as the Chancellor said, we cannot comment on future
legislative agendas, but the measures she mentions, picking up on
the Financial Action Task Force report from 2018 with respect to
Companies House, are something we agree with.
(North Devon) (Con)
T5. Does my hon. Friend have plans to help high streets such as
that in Barnstaple in North Devon, which has many large vacant
units with several storage floors above them, with measures such
as business rates reform or a redevelopment fund, to enable those
empty buildings to be repurposed and become smaller units
combined with much-needed housing, so that town centres can
bounce back after covid?(905366)
The Exchequer Secretary to the Treasury ()
Like my hon. Friend, I am keen to support high streets in towns
such as Barnstaple. At the autumn Budget, we announced business
rates relief for thousands of retail, hospitality and leisure
businesses to help them get through the pandemic and adapt to
wider economic changes. I would also point my hon. Friend to the
£4.8 billion levelling-up fund and encourage Barnstaple to apply
for round 2, which will be opening this spring.
(Ealing North) (Lab/Co-op)
Last month, the Government came out against Labour’s plan to help
people on modest incomes pay their energy bills using a one-off
£1.2 billion windfall tax on the profits of oil and gas
producers. The Education Secretary complained that oil and gas
companies are “already struggling”. The truth is that pensioners
and people on modest incomes are the ones who are struggling. Oil
and gas companies are expected to report near-record income this
year. Will Ministers now admit that the Government have got it
wrong and commit to looking again at our plan?
The Financial Secretary to the Treasury ()
The hon. Member will know that the oil and gas industry pays a
significant amount in taxation—I mentioned the figure earlier. In
terms of helping people who are struggling with their bills, he
will know that we already have the energy price cap, the winter
fuel payment, the warm home discount and the cold weather
payment. We are looking out for and supporting those on the
lowest income to enable them to get through this difficult
period.
(East Devon) (Con)
T7. Pubs, restaurants, cafés and hotels were brought to their
knees again over the festive period as people simply stayed at
home. Will the Financial Secretary consider extending the reduced
rate of VAT on hospitality and tourism to help those hard-hit
businesses?(905368)
My hon. Friend will know that we have already made a significant
input to support those in the hospitality and tourism industries.
He will know that we extended the 5% reduced rate of VAT for
those sectors to the end of September. On 1 October, we reduced
the rate to 12.5%. That relief has cost the Government and the
taxpayer more than £8 billion. Although all taxes are kept under
review, there are no plans to extend the 12.5% reduced VAT
rate.
(Manchester, Gorton) (Lab)
T3. Threats to Putin’s regime would be stronger if the Government
had implemented the recommendations of the 2020 Russia report.
The lack of progress in the registration of overseas entities
Bill and the economic crime Bill rings alarm bells here and with
our allies. Will the Chancellor explain his failure to take
action in our national interest and name a date for that to be
remedied?(905364)
The hon. Gentleman is right to point out the measures that we can
take to strengthen the powers against money laundering and
illicit crime. Those measures require legislation, as he knows.
Although I cannot pre-empt the Queen’s Speech, he should know
that I, the Home Secretary and others strongly support the
inclusion of the economic crime Bill, which contains those
measures.
(Ruislip, Northwood and
Pinner) (Con)
T8. I have heard a great deal from the local authorities that
serve my constituency about the benefits of early intervention,
especially when it comes to tackling poverty and disadvantage.
What assessment is the Treasury planning to undertake to
establish the benefits to taxpayers of that investment in vital
services?(905370)
The Chief Secretary to the Treasury ( )
My hon. Friend raises an important point. My right hon. Friend
the Chancellor worked closely with him in his previous post as a
local government Minister. The supporting families programme
provides funding for local authorities to deliver early
intervention in children’s services. The programme was the
subject of a robust national evaluation between 2015 and 2020,
which demonstrated that in addition to improved outcomes for
children and families, it delivered a return on investment of
£2.28 of economic benefits for every £1 spent.
(Rochdale) (Lab)
T6. Government Ministers will know that bus manufacture is an
important skilled employment base in the north of England,
Scotland and Northern Ireland. The zero-emission bus regional
areas programme, which is due to bring in innovation in engine
technology, is supposed to be technologically neutral, even
though we know that hydrogen buses almost certainly create more
jobs in the UK. In that context, can the Chancellor tell us why
every scheme so far has been for electric vehicles and not
hydrogen technology? Is that a Treasury bias or a bias in the
Department for Business, Energy and Industrial
Strategy?(905367)
I am happy to look at the point that the hon. Gentleman raises. I
do not think there is a bias against that. The spending review
contained billions of pounds for new bus transformation deals
across the country and thousands more zero-emission buses. I know
that the Prime Minister is passionate about hydrogen buses, so we
will look into it and get back to the hon. Gentleman.
(Harrow East) (Con)
I have no argument against compensation being paid to the victims
of the London Capital & Finance scandal, but I am concerned
that they were paid 80% of the losses, yet the 800,000 victims of
Equitable Life received only 22%. Does the Minister agree that it
is a principle of fairness and of ensuring that people who save
for their retirement are properly compensated?
I thank my hon. Friend for his question. He has a long-standing
interest in the issue. The difference between the two is that
people received compensation from Equitable Life on the basis of
relative losses, which is the gap between what they received from
their policy and what they could have expected from investing in
a similar product. With LCF, the bondholders were expected to
lose the majority of their principal investment and stood to get
less back than they put in. The schemes were looked at in the
context of their respective instruments and appropriate support
was given. There are no plans to open up compensation for
Equitable Life again.
(Barnsley Central) (Lab)
The Budget confirmed that total funding through the UK shared
prosperity fund will, at a minimum, match the size of EU funds in
each nation, and in Cornwall. If the Treasury were to do the same
with all the other less-developed regions, as it should, South
Yorkshire would be on course to receive £900 million of
investment over the next seven years. Will the Chief Secretary to
the Treasury give an assurance that we will get our fair
share?
I have the highest regard for the hon. Gentleman, and he is a
doughty champion for the people of South Yorkshire. The levelling
up White Paper will be a key moment in setting out our plans in
that space, and my right hon. Friend the Secretary of State for
Levelling Up, Housing and Communities will be coming to the House
shortly to set out our plans in that regard.
(Aberconwy) (Con)
I welcome the Government’s intent that levelling up should be
measured by more than simply spending money. Indeed, the data
that is collected across the UK to measure its effect varies.
What is my right hon. Friend doing to address that, and will he
reassure Aberconwy residents of an effective UK-wide levelling
up?
Absolutely. My hon. Friend makes an important point, and we
should indeed measure success in outcomes, not just inputs. The
Department’s delivery of levelling up ambitions will be
monitored, and it will of course be held to account. I point my
hon. Friend towards the levelling up White Paper, which will be
published shortly.
(Walsall South) (Lab)
Going after money means that the Chancellor is recovering a debt,
so there is a hole in the finances. Will the Chancellor tell the
House this: why did resign?
, obviously, has spoken for
himself, and I do nothing but thank him for his service. We look
forward to continue working on all the areas he has mentioned, in
most of which we are already undertaking work. We are relentless
in our aim to tackle those who have defrauded the taxpayer, and
we will not stop until we have got as much back as we can.
(Wrexham) (Con)
The Wrexham Gateway levelling-up fund bid attracts around £35
million of private finance. However, that investment in Wrexham
will depend on a successful levelling-up fund bid the next time
round. Will the Minister explain what considerations are made for
bids with substantial private investment?
My hon. Friend is a fantastic advocate for Wrexham, and for wider
pride in north Wales, which is incredibly important. I am happy
to meet her to discuss any aspect of the bid process that it
would be helpful to discuss further.
(Inverclyde) (SNP)
Will the Chancellor confirm or deny that millions of pounds of
taxpayers’ funds have been sunk into an online gambling company
with the Government’s start-up scheme? If so, is this the right
time to invest in a private gambling firm, since a review of the
Gambling Act 2005 is already being undertaken?
Mr Clarke
I thank the hon. Gentleman for his question. This relates to the
future fund, a rules-based scheme that means that any firm is
eligible for funding, providing it meets the required eligibility
criteria for the scheme and passes the necessary checks. Neither
the Government nor the British Business Bank chose specific
investments; it is about helping innovative equity-backed
companies to weather the economic disruption caused by covid and
continue their long-term growth projection.
(Darlington) (Con)
I commend my right hon. Friend for the steps he has taken to
level up in Darlington, with the establishment of the Darlington
economic campus. Will he update the House on the progress to
bring high-quality, well-paid jobs to my constituency?
I am delighted to update the House on the progress the Treasury
is making with our Darlington economic campus. We have already
recruited more than 100 Treasury employees to be based in
Darlington, and we are on track for our ambition of 300 employees
based there.
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