Cost of Living Increase: Impact on Households Kim Johnson
(Liverpool, Riverside) (Lab) 1. What recent assessment he has made
of the impact of inflation on living standards. (906058) Gerald
Jones (Merthyr Tydfil and Rhymney) (Lab) 6. What fiscal steps he
plans to take to help reduce the impact on households of the rise
in the cost of living. (906063) Ms Marie Rimmer (St Helens South
and Whiston) (Lab) 16. What fiscal steps he plans to take to help
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Cost of Living Increase: Impact on Households
(Liverpool, Riverside)
(Lab)
1. What recent assessment he has made of the impact of inflation
on living standards. (906058)
(Merthyr Tydfil and Rhymney)
(Lab)
6. What fiscal steps he plans to take to help reduce the impact
on households of the rise in the cost of living. (906063)
(St Helens South and Whiston)
(Lab)
16. What fiscal steps he plans to take to help reduce the impact
on households of the rise in the cost of living. (906075)
(Birmingham, Selly Oak)
(Lab)
18. What fiscal steps he plans to take to help reduce the impact
on households of the rise in the cost of living. (906077)
The Chancellor of the Exchequer ()
The Government, of course, recognise that inflation is rising and
are closely monitoring the situation together with the Bank of
England. We are also putting in place policies to help families
meet the rising cost of living, such as freezing duties, cutting
the tax rate in universal credit and increasing the national
living wage. Last month I announced to this House a £9 billion
package of support to help households with rising energy
bills.
The question was about what assessment has been made. The
Resolution Foundation predicts that inflation will rise above 8%
but benefits will increase by only 3%. Liverpool has some of the
most deprived communities in this country, with 33% of children
in my Riverside constituency suffering poverty. Does the
Chancellor believe that now is not the time to increase national
insurance contributions while the cost of living is increasing,
forcing people into poverty at the highest level since the 1970s?
Will he commit to putting measures in place in the spring
statement?
The hon. Lady talks about children in poverty, and I am pleased
that there are now 300,000 fewer children in poverty than in 2010
thanks to the actions of Conservative-led Governments. We all
know that the best way to ensure the children do not grow up in
poverty is to ensure that they grow up in a house where people
work, and that is why I was delighted this morning to learn that
there are record numbers of people on payroll.
Citizens Advice has told me that one in six people in my
constituency of Merthyr Tydfil and Rhymney are unable to pay
their energy bills right now, and that is before they spike next
month and before the Chancellor’s national insurance hike. Some
86% of people said that they did not think that the October
energy loan scheme would make a difference in helping to pay
their bills. The conflict in Ukraine will inevitably lead to a
further surge in energy prices, so if he will not accept Labour’s
suggestion of a windfall tax on oil and gas producers, what
exactly will the Chancellor do now to relieve the pressures on
people in my constituency and across the country?
We are putting in place support to help households meet the
rising cost of energy bills, and £9 billion of support will help
to ensure that four out of five households in England will
receive £150 starting this April, with a further £200 of support
towards the autumn. Of course, councils have been given extra
money for discretionary funding to help households in need as
well.
Ms Rimmer
Since the Chancellor announced his household loan scheme in
response to the energy crisis as well as a huge rise in national
insurance, the world has changed. Other Departments have adapted
to the Russian invasion of Ukraine. When will the Treasury?
With regard to the Russian invasion of Ukraine, the Treasury has
been hard at work with our international partners to put in place
the most comprehensive set of economic sanctions that this
country has ever had and that Russia has ever experienced. I am
very proud of the job we have done.
If the Chancellor had appreciated last autumn the extent to which
energy costs and other household bills would rise, would he still
have advocated a national insurance rise?
We have reacted to rising energy bills by putting in place £9
billion of support, which will get to households far faster than
the proposals put forward by the Opposition, with the £150
reaching four out of five households just this April when the
price cap goes up. It is also worth bearing it in mind that,
because of the price cap, households will be protected from
further increases all the way through to the autumn.
(Rossendale and Darwen)
(Con)
The cost of fuel is now an eye-watering £2 a litre in some areas,
which has led to a huge VAT windfall for the Treasury. When the
Chancellor thinks about his spring statement, will he look not
just at cutting fuel duty but at mileage recovery rates? They
have been at 45p a mile for more than a decade. Now is the time
to put them up to 60p at least.
I am grateful to my right hon. Friend for his suggestions, and of
course I will bear them in mind. He is right about the rising
cost of fuel at the pumps, although I am pleased to see that over
the last few days, the price of Brent has fallen by about 25%,
illustrating the volatility of the situation.
(Brecon and Radnorshire)
(Con)
The cost of living is biting hard in Brecon and Radnorshire.
Heating oil is eye-wateringly expensive and extremely hard to
come by, while a local haulage firm in Llandrindod Wells is
coughing up an extra £60,000 per month on diesel. It is wrong to
assume that those who live in rural areas are wealthy enough to
withstand these pressures, so can my right hon. Friend reassure
my constituents that he has them in mind as he considers all the
options available to him?
I can give my hon. Friend that reassurance. Representing as I do
a rural constituency like hers, I know the difficulty that our
constituents are facing. That is why our £9 billion package of
support for energy that I announced earlier is done by
electricity meter, ensuring that those who are off the gas grid
also benefit.
(Forest of Dean) (Con)
The impact on energy prices of the Russian invasion of Ukraine
and the sanctions will inevitably mean that Britain is poorer.
There is nothing that we can do about that overall, but we can
help to smooth the impact. I welcome the announcement this
morning that there are 275,000 extra people on payroll. What more
can the Chancellor do to improve companies’ ability to hire
workers and to enable people to keep more of their own money; for
example, through the reduction in the taper rate on universal
credit?
I am grateful to my right hon. Friend for his typically
thoughtful question. He is absolutely right about the
circumstances we face. The data this morning shows record numbers
of people on payroll, and that is to be welcomed. Indeed, the
unemployment rate is now back to the levels we saw before the
pandemic, thanks to our plan for jobs. There are record
vacancies, and we want to get people into work. The best way to
do that is to give them the skills they need and cut taxes to
increase incentives. That is exactly what this Government are
doing, and I expect us to make more progress in the months
ahead.
(West Worcestershire)
(Con)
With council tax being one of the biggest items in household
budgets, could the Chancellor remind the House which party tends
to be the best, in a local council, for setting council tax?
My hon. Friend makes an excellent and timely point. She knows
that I know that, in this country, if people want good local
services delivered for the lowest possible council tax, they need
to vote Conservative.
Mr Speaker
You should not make the Chancellor blush.
I call the shadow Minister, .
Mr (Wolverhampton South East) (Lab)
The package on energy announced by the Chancellor last month has
already been rendered obsolete by Russia’s invasion of Ukraine.
Some estimates of average annual household energy bills suggest
that there will be rises to £3,000 or even more from October.
That is a ruinous figure for many of our constituents. Will the
Chancellor revisit this support package in next week’s spring
statement, and will he reconsider his refusal to fund help for
hard-pressed households through a windfall tax on the enormous
profits that oil and gas companies are making?
It is worth bearing it in mind that, because of the price cap,
households will be protected all the way through the autumn. We
do not know what the price cap will be at that point. If the
right hon. Gentleman knows, he is probably in the wrong line of
business, and it would be good if he could tell the rest of us.
Regarding a windfall tax, Conservative Members believe in getting
more investment into the North sea and exploiting our domestic
resources. The roundtable that my right hon. Friends the Chief
Secretary to the Treasury, the Prime Minister and the Business
Secretary hosted yesterday showed that there is enormous appetite
to invest more in the UK. A windfall tax would put off that
investment.
Mr McFadden
Of course, there are global factors driving up energy prices and
inflation in many countries, but what singles out the UK is this
Government’s decision to impose a tax rise on working people
right when the impact of rising energy bills is hitting people
the hardest. Why are the Government so determined to make the
cost of living crisis worse now with these tax rises,
particularly when the Treasury is briefing anyone—including the
Government’s own Back Benchers—who will listen that the Tory
party is planning pre-election tax cuts?
The right hon. Gentleman talks about exceptionalism with regard
to policy. Part of the reason we are in this situation with
energy prices is the decisions made by the previous Labour
Government, in particular on nuclear energy, which we are now
rapidly having to make up for. We are also committed to tackling
the unprecedented backlogs in the NHS, getting the waiting lists
down, and recovering from covid. Every single penny of the health
and social care levy will go to the people’s No. 1 priority and,
although things are difficult, I know that is what people want to
happen.
(St Ives) (Con)
I represent an area in Cornwall where a large number of people
are on the state pension. I know, from conversations that I have
had with the Chancellor, that he is particularly concerned about
that demographic. Given the critical rise in the cost of living,
I wonder whether one of the easier routes to address it would be
to reinstate the triple lock for next year.
My hon. Friend is right to highlight pensioners and to support
them in the way that he does. He will know that we made a
decision temporarily to move to a double lock this year because
of the anomaly in the reported earnings, which would have meant a
very large rise statistically that would not have been justified
or fair in the circumstances. That said, I am pleased to say that
pensions are now at their highest level relative to earnings in
over three decades because of the Government’s policy on the
triple lock, and we continue to be the party that will support
those who need our help.
Mr Speaker
I call the SNP spokesperson, .
(Glasgow Central)
(SNP)
Sanctions against Putin’s regime are absolutely necessary, but
they will add an extra layer of economic harm on top of the
existing Tory cost of living crisis. The Chancellor must use the
upcoming spring statement to deliver an emergency package of
support to householders and businesses, whose costs have
spiralled out of control. Will he turn his buy now, pay later
energy loan into a grant, reinstate the universal credit uplift,
increase other benefits with inflation and scrap the VAT and
national insurance hike that will damage so many people?
What we are doing is tackling the cost of energy. Unlike the hon.
Lady’s party, we believe in the future of the North sea and we
are investing in it. We want to make sure that we promote the
jobs that are there. On upcoming support for energy costs, the
Scottish Government have plenty of powers on welfare and tax, and
if they think that they can make a difference, they should use
them.
Kickstart Scheme
(Warrington South) (Con)
2. What assessment he has made of the progress of the kickstart
Scheme. (906059)
(Truro and Falmouth)
(Con)
3. What assessment he has made of the progress of the kickstart
Scheme. (906060)
(Crawley) (Con)
10. What assessment he has made of the progress of the kickstart
Scheme. (906067)
(Vale of Clwyd) (Con)
19. What assessment he has made of the progress of the kickstart
Scheme. (906078)
The Chief Secretary to the Treasury ( )
Some 130,000 young people across Great Britain have benefited
from the kickstart scheme so far, including in my hon. Friends’
constituencies. That is lower than the 250,000 jobs that the
scheme could have funded, but the scheme was designed at a time
when unemployment was expected to peak at 12%. The reality is
that, thanks to the intervention by my right hon. Friend the
Chancellor, the economy has recovered better than expected and
unemployment peaked at 5.2% in 2020.
I am grateful for that response. Last week, I went to visit
Sigma, a great local business in Warrington South, which has
employed nine people under kickstart, and that has made a massive
difference. Can my right hon. Friend tell me what steps the
Government are taking to help businesses retain young people as
we approach the end of the six-month kickstart programme?
Mr Clarke
It is great to hear about my hon. Friend’s visit to Sigma, and I
know that 180 kickstart jobs have been created in his
constituency as of December. For those on universal credit who do
not immediately continue into full-time unsubsidised work,
support will continue to be available from the young person’s
work coach to help them use their newly gained skills, and
support will also be available from the wider DWP youth
offer.
Last week I visited the jobcentre in Truro where they told me
that kickstart has been a huge success. We have had around 620
kickstarters across Cornwall, providing urgently needed jobs for
our young people. Given that the scheme will end this month, can
my right hon. Friend expand on what the Department will do to
support skills and apprenticeships, particularly for young people
across Cornwall, so that we can be at the heart of the
levelling-up agenda?
Mr Clarke
Spreading opportunity by levelling up our skills base is at the
heart of our wider levelling-up White Paper—it is one of the core
missions that it sets out. The Government will invest £3.8
billion in skills by 2024-25, which is equivalent to a cash
increase of 42% compared with 2019-20. On apprenticeships, I am
happy to say that last year more than 3,000 people started
apprenticeships in my hon. Friend’s county of Cornwall. We want
to see that work continue.
Over recent months, many young people in Crawley have benefited
from the kickstart scheme. In contrast to every Labour
Government, which have all left office with unemployment higher
than when they started, does my right hon. Friend agree that the
way to recovery for our economy and the cost of living is the
multi-billion pound plan for jobs that the Government are
delivering?
Mr Clarke
My hon. Friend is right about the Government’s record on
employment, just as he is right about the Labour party’s record
on unemployment. To continue to boost employment, wages and
living standards, he rightly references our plan for jobs, which
is proving to be an enormous success. In total, the Department
for Work and Pensions spend on labour market support will be more
than £6 billion over the next three years.
Dr Davies
I recently visited the Dyserth Falls holiday park in my
constituency, which is under renovation, to speak with some of
the 40 members of the public who have been employed there under
the kickstart scheme. Will my right hon. Friend join me in
congratulating all those who have taken part in the scheme,
especially those who have been given permanent jobs, and set out
what ongoing support there will be for those who have completed
their placements?
Mr Clarke
As my hon. Friend knows, I know Dyserth very well. In fact, I
will be there the weekend after next. I join him in
congratulating all those who have taken part in the kickstart
scheme, especially those who have secured full-time jobs.
Kickstart is, of course, only one part of the wider package of
support for young people that is under way. The DWP’s youth
offer, which runs until 2025 and is worth £60 million, includes a
13-week youth employment programme, supported youth hubs and,
crucially, specialised youth employability coaches.
(Wirral South) (Lab)
Just in case colleagues in the House did not quite hear the Chief
Secretary, he admitted that kickstart has failed. It promised
young people 250,000 jobs and got barely half of that. But it is
worse than that. The National Audit Office said about kickstart
that there was
“limited assurance over the quality of the work placements
created by the scheme, or whether jobs created by employers would
have existed anyway”.
So in relation to the failed kickstart scheme, what does the
Chief Secretary make of the following economic expression: “dead
weight loss”?
Mr Clarke
With respect to the hon. Lady, of whom I am a great admirer, that
is an unfair characterisation of the success of the scheme. It
clearly needs to be situated in the wider context. In fact, the
British economy has performed much better than anyone expected
when the scheme was set up. There are robust processes in place
that make sure that we genuinely are adding additional value. So
work coaches have to certify that the people on the scheme are
eligible for it and would have been unlikely to find work without
it. Employers need to demonstrate how the jobs created are
additional. Finally, it is important to contrast this scheme with
the last Labour Government’s future jobs fund, which reached its
total far more slowly and was far less effective. This scheme has
got 130,000 and rising young people into work. It has been a
great success.
(Glenrothes) (SNP)
It is interesting that the Minister can call kickstart such a
resounding success, given that last month the Public Accounts
Committee said that the Department that runs the scheme does not
know what success looks like because it launched the scheme
without any idea as to what the success criteria would be. It
also has no way of knowing whether the young people who are
referred to kickstart jobs are the right young people and it is
not properly evaluating the longer term support that employers
give to those young people. Does the Minister agree with the PAC
report, which was endorsed by a Committee consisting of a
majority of Conservative MPs?
Mr Clarke
No, I do not agree with that report. It is an unfair
characterisation of a response that was put in place at pace to
meet an unprecedented crisis in our employment market. The wider
success of our policy on youth employment is best measured by the
fact that in January there were 500,000 more employees aged under
25 than there were in January 2021. The kickstart programme has
played its full part in helping to make that possible.
(Harrow West) (Lab/Co-op)
Businesses in the steel industry are more likely to be able to
support the kickstart scheme if the Government manage to get
Donald Trump’s unfair tariffs of 25% on British steel exports
lifted, as the Japanese and the EU have already achieved. Has the
Chancellor spoken to the Chief Secretary about this issue, and if
not why not?
Mr Clarke
The hon. Gentleman makes a very good point about tariffs.
Obviously, the Government believe in free trade and it is
something that we want to see happen too. As a Member of
Parliament who represents a steel-making constituency, I am
keenly aware of this as an issue. The Department for
International Trade leads on the issue, and I know that the
Secretary of State and her predecessor have had long and ongoing
conversations with their American counterparts about getting
those tariffs lifted.
(Rutherglen and Hamilton
West) (Ind)
With the scheme failing to attract the numbers that were
predicted by over 80,000, will the Minister outline what
structure is in place to attract those who have lost out, to
ensure that those young people have opportunities to find a life
career? Will the new scheme be UK-wide?
Mr Clarke
Youth unemployment is lower today than it was pre-pandemic, and
the wider success of the scheme has to be judged in the context
that the worst-case scenario that we were looking to offset never
came to pass because of the interventions that we made. If a
scheme does not achieve the headline numbers that were
anticipated at the time it was established because the wider
economic performance of the country was so much better than
anticipated, that is a success, not something to bemoan.
Gambling Industry Reform
(Swansea East) (Lab)
4. What assessment he has made of the potential merits for the
Exchequer of reforming the gambling industry. (906061)
The Exchequer Secretary to the Treasury ()
Gambling contributes over £3 billion per annum to the Exchequer.
The Government keep gambling duties under regular review to
ensure that the sector continues to pay its fair share. The
Department for Digital, Culture, Media and Sport is reviewing the
Gambling Act 2005, after which the Government will assess the
impact of any reforms on the Exchequer.
Analysis carried out by both NERA Economic Consulting and Landman
Economics concluded that, given that online gambling is “labour
intensive” and predominantly based offshore in avoidance of UK
corporation tax, its net impact on the British economy is
negative, particularly once the direct cost to Government,
estimated by Public Health England to be £647 million, is
factored in. Will the Government support the upcoming reviews of
gambling regulation—the Minister said it is under active
consideration—and welcome any moves to reduce gambling harm and
the associated cost to society and the economy?
I know that the hon. Lady is a committed campaigner on gambling
as chair of the all-party parliamentary group on gambling related
harm. Specific to her point about offshore gambling operators, I
am sure that she knows that since 2014 gambling duties have been
taxed on a “place of consumption” basis, so offshore operators
pay taxes on profits related to UK gambling.
To the broader point of the gambling review, I spoke to the
Under-Secretary of State for Digital, Culture, Media and Sport,
my hon. Friend the Member for Croydon South (), who is leading DCMS’s work on
gambling, just yesterday, and I assure the hon. Lady that the
Government stand ready to take action where there is evidence
that vulnerable people, such as those suffering from gambling
addictions, are being exploited by gambling operators.
(North West Leicestershire)
(Con)
The term “gambling” covers a broad spectrum of activities. Does
the Minister share my concerns that over-zealous regulation of
the gambling industry as a whole could lead to some damaging
unintended consequences, such as driving vulnerable individuals
to the black market, which is completely unregulated, loss of
revenue to the Exchequer and damage to the greyhound and
horse-racing industries, which employ lots of people?
My hon. Friend makes an important point. There is the basic
principle that people should in general be free to spend their
money as they see fit. There are about 100,000 jobs in the
gambling industry in this country. It is important to ensure that
we protect people who are most vulnerable from exploitation, and
I know that the gambling review I mentioned is looking carefully
at the best way to do that.
Cost of Living Increase: Universal Credit
(North Down) (Alliance)
5. What discussions he has had with Cabinet colleagues on the
potential merits of reviewing the inflationary uplift in
universal credit in response to the increase in the cost of
living. (906062)
The Financial Secretary to the Treasury ()
Details of ministerial discussions are not normally disclosed.
Treasury Ministers have meetings with a wide variety of
organisations in the public and private sectors as part of the
process of policy development. From April, universal credit and
many other benefits will be uprated by 3.1%, the rate of the
consumer prices index in September 2021. In addition, the
Government are providing support worth over £20 billion across
this financial year and next to help families with the cost of
living.
Millions of families across the UK, both in and out of work,
depend on universal credit and other benefits. As the Minister
knows, the 3.1% uprate was set in September. We are now seeing
inflation of over 7%. The Joseph Rowntree Foundation, the
Trussell Trust and many other organisations highlight the real
jeopardy that families are now facing. They have no plan B.
Indeed, families are facing cuts in real terms of over £500 over
the course of the year. Surely that decision has to be reassessed
in the light of changing circumstances.
CPI has been the default inflation measure for the Government’s
statutory annual review of benefits since 2011, as the hon.
Gentleman knows, but we are fully aware of the impact on
households of the cost of living. That is why we are providing
£20 billion of support, whether that is through £9 billion of
support to help with rising energy bills or through universal
credit. As he also knows, we have cut the taper rate so that
families can keep an additional £1,000 annually in their
pockets.
(Amber Valley) (Con)
Does the Minister think that the uplift coming next month will be
enough to get people all the way through next winter? If she
recognises that there is a problem, will the Government consider
bringing forward next April’s increase to this autumn, to give
people a bit more money to help with their heating and food bills
next winter?
As my hon. Friend knows, we have introduced a range of measures
to support families, both working and not working. The price of
energy is now set until the autumn, and a significant amount of
money is going in now and in the autumn.
Reducing Economic Inequality
(Sefton Central) (Lab)
7. What recent steps he has taken to help reduce economic
inequality. (906064)
The Financial Secretary to the Treasury ()
Work is the best route out of poverty. We are investing more than
£6 billion in labour market support over the next three years to
help people to move into and progress in work. In addition,
analysis published at the last autumn Budget shows that in
2024-25, tax, welfare and spending decision since the 2019
spending review will have benefited the poorest households the
most as a percentage of income.
But real wages are falling by the largest amount since 2014,
inflation is set to hit 8% and the energy price cap is going up.
In the cause of fairness and sound economics, when will the
Financial Secretary and her colleagues admit that it makes sense
to use the record profits of North sea oil and gas to help
ordinary people, who face a cost of living crisis?
The hon. Gentleman knows from the statistics announced this
morning that wages are up in real terms compared with
pre-pandemic levels. In fact, unemployment is now almost back to
pre-pandemic levels, and is lower than in Canada, France, Italy,
Spain and Australia. On his specific question, the North sea oil
industry already contributes additional taxes through a 40% rate,
which is double the amount that other corporations pay.
(Ynys Môn) (Con)
My constituency has one of the lowest rates of gross value added
in the UK and is desperately in need of jobs and investment. The
island is known as “energy island” because we have wind, waves,
solar, tidal and—hopefully—nuclear. I was delighted to hear the
Chancellor mention nuclear and the fact that he has committed to
the £120 million future nuclear enabling fund, but will he also
commit to publishing the criteria and bidding process, so we can
move at pace in this vital sector?
It is great to see the good work going on in my hon. Friend’s
constituency. Of course, her question is for our right hon.
Friend the Secretary of State for Business, Energy and Industrial
Strategy, who I am sure is considering it carefully.
Managing the Public Finances
(Llanelli) (Lab)
8. What recent steps he has taken to help ensure value for money
in public spending. (906065)
(Telford) (Con)
13. What steps his Department is taking to manage the public
finances effectively. (906071)
The Chief Secretary to the Treasury ( )
People are rightly angry that fraudsters stole from covid support
schemes, as am I. When the schemes were launched, there was
cross-party consensus that we needed speed to protect jobs, and
because of our action unemployment peaked at 5.2%, not the 12%
predicted at the start of the pandemic. We designed the schemes
to prevent as much fraud as possible, and lenders stopped nearly
£2.2 billion of potential fraud from the bounce back loan
schemes. We continue to take action on multiple fronts to recover
money that was claimed fraudulently.
It is not just a matter of fraud; it is a matter of incompetence
as well. The National Audit Office has been scathing about the
UK’s wasteful spending of £37 billion on private contractors to
deliver the test and trace system in England, while we in Wales
had a more efficient system through partnership with the Welsh
Government and local councils. What guidance is the Chief
Secretary giving Departments on how to avoid giving such wasteful
contracts in the future? Does the guidance include considering,
wherever practicable, the delivery of service contracts through
public authorities, where any profit remains in the public
purse?
Mr Clarke
We always continue to encourage best value, and this is at the
heart of all Treasury documents on the use of public money. On
the hon. Lady’s point about test and trace, it is very important
to reaffirm that the great majority of the costs associated with
this scheme were about testing as opposed to tracing, and it was
only that scheme that allowed us to come through the enormous
challenges of the period, particularly prior to the availability
of the vaccine, in a way that allowed our society and our wider
economy to keep going to the extent that they could.
My right hon. Friend the Chancellor has been incredibly agile in
responding to exceptional crises. As he tackles the impact of
Putin’s war on our economy, will the Minister take every measure
to accelerate growth, including reducing taxes on fuel and
energy?
Mr Clarke
As has been discussed earlier in this session, as my hon. Friend
rightly highlights, the Government recognise that households do
need support with the rising cost of energy. Indeed, the
Chancellor has already provided support worth some £9.1 billion
for the financial year 2022-23. On her wider point about boosting
growth, the Chancellor outlined in his Mais lecture the
importance of the Government investing in capital, people and
ideas, so that we can strengthen the economy and make sure that
the UK is best placed to succeed in what is a challenging set of
circumstances.
Mr Speaker
I call the shadow Minister.
(Ealing North) (Lab/Co-op)
Just in the last seven days, we have learned that 7 billion items
of personal protective equipment were not fit for purpose, the
Government are burning 500 lorryloads of it a month and former
Treasury Minister admitted that the lack of
anti-fraud measures in the Government’s covid business support
packages meant it was
“happy days if you were a crook”.
When billions of pounds of public money have been lost through
the Chancellor’s incompetence, is the Minister ashamed to be
hiking taxes on working people by billions of pounds next
month?
Mr Clarke
I am afraid the hon. Gentleman misunderstands the situation in
regard to PPE. Over 97% of the stock that was ordered was
suitable for use. Indeed, when it comes to the wider figure
covering the PPE piece, £4.7 billion of that represents PPE that
will be used by the NHS, but which was procured at a greater
price than it carries today owing to the scarcity that prevailed
at that time, and another £3.3 billion represents PPE that can be
used in non-medical settings, and the Department of Health and
Social Care has already sold and donated stock in this
category.
On the wider fraud point, this goes back to my earlier answer
that we had to design these schemes at pace to protect jobs—I
think this was agreed across the House—and we rightly, I think,
made sure that that was the priority. We then built in the
protections that were needed, and the protections have made sure
that we are able to pursue anyone who has defrauded the
taxpayer.
Mr Speaker
I call the SNP spokesperson.
(Glasgow Central)
(SNP)
Lord Agnew’s evidence to the Treasury Committee last week was a
damning indictment of this Tory Government’s “terrible
complacency”—his words—about fraud and protecting public money,
and he does not buy what the Minister says about working at pace
either. anticipates that there will be
an “avalanche of claims” from the banks on the state guarantee of
the bounce back loan scheme arriving at the Treasury in the
coming weeks, so can the Minister tell the House what actions he
is taking to prevent yet further billions of public money from
waltzing out the door in the midst of a cost of living
crisis?
Mr Clarke
On the hon. Lady’s point, the Government set up the £100 million
taxpayer protection taskforce at the Budget back in March 2021,
and that taskforce is expected to recover between £800 million
and £1 billion from fraudulent or incorrect payments over the
next two years. That builds on the work that has already been
done, which saw Her Majesty’s Revenue and Customs recover £536
million in 2020-21. Other agencies of the state are also involved
in this important work. The National Crime Agency has made 17
arrests, 106 directors have been disqualified as of February
2022, there have been 48 bankruptcy restrictions and 13 companies
have been wound up in the public interest in relation to bounce
back loans.
Regional Growth
(Southport) (Con)
9. What steps his Department is taking to encourage regional
growth across the UK.(906066)
The Exchequer Secretary to the Treasury ()
At last autumn’s Budget and spending review, we announced a
comprehensive package of investment to level up the UK and
encourage regional growth. This included the £4.8 billion
levelling-up fund, the £2.6 billion shared prosperity fund and
£1.6 billion of investment in the next generation of the British
Business Bank’s regional investment fund.
Does my hon. Friend agree that town deals are one of the most
progressive ways of supporting regional growth, and that the one
for Southport will kick-start our economy locally?
I congratulate my hon. Friend on his hard work to secure the
£37.5 million town deal for Southport, which will be truly
transformative for his constituents. That funding will bring in
more private investment to his constituency, building on public
funding and providing new jobs and opportunities for his
constituents. It will be levelling up in action.
(Newcastle upon Tyne
North) (Lab)
The stark reality in the north-east is that we have seen rising
child poverty and reliance on food banks in recent years, and the
poorest households lost £1,000 when the Government cut universal
credit in the autumn. Rising prices look set to take away another
£1,000 from households, before the economic impact of what is
happening in Ukraine. Ahead of the spending statement next week,
may I urge the Treasury please to do more to tackle the
destitution that will be inevitable if nothing is done to
intervene to support households in the north-east, who will then
support the local economy to grow?
As other Ministers have outlined, we are supporting households
with the rising cost of living, including a package worth £21
billion of support. In particular we are supporting those on
universal credit by reducing the taper rate to ensure that work
pays. Looking further ahead, through our commitment to levelling
up we are investing across the country in skills and
infrastructure, with the levelling-up fund to improve growth,
boost prosperity, opportunities and pay, and thereby improve
people’s standard of living.
(Hitchin and Harpenden)
(Con)
The Minister will be aware of the positive contribution that
financial services can make to levelling up all over the country.
With that in mind, and with the work of my all-party group on
financial markets and services on levelling up, will she commit
that the Treasury will work with the industry to spread
opportunity within the financial services sector, to help that
sector spread opportunity through all regions of this
country?
My hon. Friend makes an important point, and I know he is
knowledgeable about this sector. It is important to remember that
financial services are to the benefit of the whole country, with
two thirds of jobs in financial services being outside London and
the south-east. Financial services are absolutely an important
part of our ambitions for levelling up.
(Westmorland and Lonsdale) (LD)
In rural communities, especially Cumbria, we are deeply concerned
about the Government’s apparent lack of concern about growth in
the rural parts of this country. Is the Minister aware of the
enormous damage being done to farming in the UK, just at the
moment when we need our farmers the most, by the reduction in
basic payments? That started in December when farmers lost
between 5% and 25% of their basic payment, without any
availability of anything to replace it for years to come. Will
she intervene now to keep basic payments where they currently
are, so that we can keep Britain farming?
I thank the hon. Gentleman for his question. I also represent a
rural constituency with significant agricultural interest, and I
assure him that we have protected agricultural funding through
this Parliament. We are committed to levelling up across all
parts of the UK, in rural as well as urban areas.
(Wycombe) (Con)
What steps is the Minister taking with our right hon. Friend the
Secretary of State for Levelling Up, Housing and Communities to
ensure that areas that need levelling up are able to attract
private sector investment?
That is a very important point. Levelling up is not just about
public sector investment—indeed, the lion’s share of investment
in future growth in our economy will come from the private
sector. One important thing that the British Business Bank is
doing with its regional fund is crowding in private sector
investment, so that we will get more private sector investment on
top of the public sector investment we are putting in.
(Barnsley Central) (Lab)
The shared prosperity fund could be one of the Government’s most
effective means of encouraging regional growth across the UK, but
only if the investment goes where it is most needed. Does the
Minister believe that the Treasury should apply the funding
commitments that were rightly made to Cornwall also to the Tees
Valley as well as to South Yorkshire?
We are making a substantial investment through the shared
prosperity fund and other funds across the country. We have
committed to ensuring that the shared prosperity fund will be at
least as much as parts of the country received before through EU
funding, and I am committed to the hon. Gentleman’s area just as
much as to Cornwall and other parts of the UK.
Levelling-up Fund
(Darlington) (Con)
11. What assessment he has made of the impact of the levelling-up
fund on job opportunities and the economy across the UK.
(906069)
The Exchequer Secretary to the Treasury ()
By investing in local infrastructure, the levelling-up fund will
strengthen local economies, boost job opportunities and improve
the day-to-day lives of people across the UK. So far, we have
committed £1.7 billion to 105 projects, and at the end of the
month the Department for Levelling Up, Housing and Communities
will publish its monitoring and evaluation strategy for the
funding.
With £23.3 million invested through the towns fund, £105 million
for Bank Top station and 1,700 civil service jobs coming to
Darlington, we are a leading example of how the Government’s
levelling-up agenda is benefiting communities in the north-east.
The second round of the levelling-up fund will continue that
work. Will my hon. Friend outline the timescales for the delivery
of that round?
My hon. Friend is a fabulous campaigner for Darlington, as
evidenced in all the funding that his local town has secured. I
am a regular visitor to Darlington, as are my Treasury
colleagues, and have seen those investments already making a
difference. He asks about the second round of the levelling-up
fund. It will open for business this spring, with further details
to be published shortly.
Tackling Illicit Finance
(Exeter) (Lab)
12. What steps he is taking to tackle illicit finance.
(906070)
The Economic Secretary to the Treasury ()
We continue to review and reform our regulatory and enforcement
approach to ensure that, as illicit finance evolves, our
responses do too. We have announced an unprecedented package of
sanctions, including against prominent Russian oligarchs. Last
night, we brought forward the Economic Crime (Transparency and
Enforcement) Act 2022 to crack down further, and we will continue
to do further work on the economic crime Bill in the next
session. We have also brought a new kleptocracy cell into the
National Crime Agency to tackle those explicit threats.
Mr Bradshaw
But it took a group of anarchists to seize Deripaska’s London
mansion yesterday, so when will the Minister do what Europe and
America have already done and seize rather than just freeze
Putin’s cronies’ assets? When will he close the loopholes that
still allow them to escape sanction by putting their assets in
their family members’ names or using shell companies based in
British overseas territories?
The Government have worked closely with the US and the EU on a
whole range of interventions. We have sanctioned 500 individuals
and entities, including 386 members of the Russian state Duma. We
have also worked with the US on the expulsion of banks from the
SWIFT banking system, cut off 3 million Russian companies from
capital markets and seen $250 billion wiped of Russian stocks. We
will continue to work closely with our allies to ensure that our
response continues to be comprehensive.
(Hampstead and Kilburn)
(Lab)
The Government have once again delayed the long-overdue reforms
to Companies House that could have deterred illicit finance,
prevented covid fraud and provided vital information to the
authorities. I will ask the Minister an important question, and I
want him to update the House accurately. How many Russian-linked
individuals and businesses have been wrongly given
Treasury-backed covid-related business support?
We worked to give widespread support to lots of individuals
across the economy. I cannot give the hon. Lady the exact chapter
and verse on individuals who have been supported, but we will
continue to work on Companies House reform, which will be the
most significant reform of the companies register in 170 years,
and later this year we will publish a second economic crime plan
and fraud action plan to address the threats that we continue to
see.
Topical Questions
(Battersea) (Lab)
T1. If he will make a statement on his departmental
responsibilities.(906083)
The Chancellor of the Exchequer ()
In response to Russia’s unprovoked aggression against Ukraine,
the Treasury has helped deliver a world-leading package of
economic sanctions to deliver severe consequences to the Russian
economy. Across insurance, finance, trade, public and private
capital markets, clearing, SWIFT, central bank assets and,
indeed, bank asset freezes, we are ensuring that the Government
play a leading role in making sure that Putin’s aggression does
not go unpunished.
Families in my constituency are facing the cost of living crisis,
and the planned real-terms cut to social security will force more
of them into poverty and into having to make impossible decisions
between eating and heating their home. According to the Trussell
Trust, one in three on universal credit were not able to dress
for the weather last month as they could not afford appropriate
clothing or shoes. That is unacceptable. Will the Chancellor
increase the level of social security support in his spring
statement next week to alleviate some of the worst impacts of the
cost of living crisis?
As is common to all other years, welfare is uprated annually by
September’s CPI. That will be the case next year as well, as my
right hon. and learned Friend the Financial Secretary laid out.
For those on universal credit we have cut the tax rate to ensure
that work pays, delivering a £2 billion tax cut to 2 million on
low incomes—the best route out of poverty.
(Clacton) (Con)
T3. With the cost of fuel reaching record levels, we face a cost
of living rise across the board. Everything we consume has to be
delivered, and in Clacton that can be a long way. France is
offering rebates and Germany a fixed price reduction. Has my
right hon. Friend considered a special reduction, of say 15%, for
vital fuel users, such as haulage companies?(906085)
My hon. Friend is right to point out the importance of fuel as a
cost for both businesses and households. That is why I am proud
that we delivered the eleventh freeze in fuel duty in a row. That
has delivered huge savings for households and businesses over the
past several years.
(Leeds West) (Lab)
Millions of people are worried sick about soaring bills.
Meanwhile, BP says it has more cash than it knows what to do with
and has compared its record profits from inflated prices to a
cash machine. Those profits are not being used to fund new
investment. They are going on dividends and share buybacks, so
why will the Chancellor not make North sea oil and gas companies
pay their fair share of taxes to tackle the enormous cost of
living crisis?
The hon. Lady talks about a fair share. It is worth bearing in
mind that oil and gas companies are already taxed at double the
rate of all other companies: 40% versus 19%, currently. Last year
saw the lowest amount of investment in the North sea on
record—just a few billion pounds. As my right hon. Friends who
were at the roundtable yesterday know, there are billions of
pounds of projects waiting to be unlocked. We want that
investment and those jobs here in the UK.
That is not happening with the share buybacks. The Chancellor is
totally out of touch. He does not seem to understand how the cost
of living crisis is affecting the least well off in society, as
campaigner Jack Monroe highlighted. The Institute for Fiscal
Studies confirmed that the poorest households face an inflation
rate 50% higher than the richest households. The Resolution
Foundation warns that between 2020 and 2022, 700,000 more
children will have fallen into poverty. That is devastating, but
it is not inevitable. The Chancellor can and must do more in the
spring statement to provide people with real help, not just a
loan. Why is he so intent on shielding oil executives, instead of
protecting the poorest in society?
The best way to help people cope with rising energy costs and
bills over time is to make sure we have a diversified and secure
supply of energy, more of which comes from here at home. I share
the hon. Lady’s concern for those on the lowest incomes. I am
proud that all the evidence points to the fact that the decisions
made by this Government over the last few years have benefited
those on the lowest incomes the most. We have protected those who
need our help, and we will continue to do so.
(North West Leicestershire)
(Con)
T5. Further to our recent meeting, has the Minister had an
opportunity to consider my proposals for a traffic light system
to inform the public of the tax approval status of investment
schemes?(906087)
The Financial Secretary to the Treasury ()
It was very interesting to meet my hon. Friend, together with his
colleagues from the all-party parliamentary group on investment
fraud, and to hear his idea. As we discussed, Her Majesty’s
Revenue and Customs is very keen to make clear which schemes do
not work. That is why, in the Finance Act 2022, the Government
legislated to allow HMRC to name promoters and the schemes they
promote at the earliest possible stage, to warn taxpayers of the
risk of entering into those schemes, and to help those already
involved to exit avoidance.
(Lewisham, Deptford)
(Lab)
T2. Research by Scope showed that one third of disabled
households were already living in poverty last year. NatCen’s
recent report on health and disability benefits, which was
commissioned by the Government, further illustrates the
devastating impact of insufficient financial support. What do
Ministers have to say to disabled people who are already
struggling and are now living in fear of worse to
come?(906084)
We are spending record amounts on supporting those who are
disabled. Relative to the OECD, I think we are spending in excess
of the average for other leading countries. My right hon. Friend
the Secretary of State for Work and Pensions has a particular
programme of support in place to help those who are disabled to
move into employment; plans were announced earlier this year.
(Weston-super-Mare) (Con)
T6. In his last Budget, the Chancellor slashed universal credit
withdrawal rates, delivering an 8% tax cut for the least well
off, but as I explained in “Poverty Trapped”, the combined
deductions from income tax and benefits withdrawals often still
top 70% for the lowest-paid. If tax rates above 45% destroy work
incentives for high earners, why should it be any different for
low earners? How much more opportunity, energy and ambition could
we unleash if these regressively high and unfair rates were cut
even further?(906088)
My hon. Friend is right to highlight the effect of a high
effective tax rate on incentives to work. That is why the
Government reduced the universal credit taper rate from 63% to
55% and increased the universal credit work allowance by £500 per
year, which is essentially a tax cut for the lowest-paid, worth
more than £2 billion in 2022-23, and means that 1.9 million
households will keep an extra £1,000 per year on average.
Bill Esterson (Sefton Central) (Lab)
T4. Waste recycling businesses face an increase in tax on red
diesel of thousands of pounds per month from April. I take it
that the Chancellor agrees that waste recycling has important
economic as well as environmental benefits, so what plans has he
to address the sudden rise in costs for businesses that process
and reuse waste materials?(906086)
The Exchequer Secretary to the Treasury ()
The changes to the taxation of red diesel were announced back in
2020, were confirmed in spring 2021 and are coming in this year,
so businesses, including in the sector that the hon. Member
refers to, have had plenty of time to prepare. It is absolutely
right that we tax fuels that are highly polluting; unfortunately,
diesel is one of them.
Jill Mortimer (Hartlepool) (Con)
T7. Hartlepool proudly stands with Ukraine and fully supports
the sanctions imposed on Putin’s regime. How will the post-Brexit
windfall refund of £200 million from the European research fund
for coal and steel be spent on supporting our steel
industries?(906089)
My hon. Friend is an active campaigner for the steel sector in
her constituency. I can assure her that energy-intensive
industries such as steel receive substantial support from the
Government, including free allowances from the emissions trading
scheme and the £315 million industrial energy transformation
fund, to help them to cut energy bills.
(East Antrim) (DUP)
A statutory instrument entitled the Customs (Amendment) (EU Exit)
Regulations 2022 was on yesterday’s Order Paper for approval by
the House. It amends the customs arrangements for the United
Kingdom by excluding Northern Ireland from them, changing the
term “United Kingdom” to “Great Britain”. That runs totally
contrary to the assurances given by the Prime Minister that
Northern Ireland would remain part of the UK customs territory;
it runs contrary to article 4 of the Northern Ireland protocol;
and it now means not only that Northern Ireland is part of the
single market under the European Court of Justice, but that it is
outside the UK customs territory. The motion relating to the
instrument was not moved. Can the Financial Secretary give an
assurance that it will not be brought back to the House until
there has been a meeting to explain why it is necessary, what its
impact on Northern Ireland is and why the Government have brought
it forward?
I am happy to answer that question. I understand completely the
concerns of people in Northern Ireland about the impact of the
protocol; the right hon. Member will know how seriously the
Government take those concerns and how we are negotiating with
the EU to ensure that we get the right arrangement for Northern
Ireland. I can give him assurances here and now about what the
statutory instrument was doing: it was making very minor
technical changes in a number of areas, for example in relation
to the provision of information that might have to be given but
that was never previously enforced. It was actually easing up the
requirements for those who operate trade between Northern Ireland
and Great Britain. These were technical changes, and I am
very—
Mr Speaker
Order.
(Fylde) (Con)
T8. I thank my right hon. Friend the Chancellor for his swift
actions to protect Fylde consumers from rising energy prices.
However, we are all aware that emergency intervention is not
sustainable in the long term, and undermines our need to end our
reliance on foreign fossil fuels. Fracking is not the solution.
What steps will my right hon. Friend take to invest in domestic
renewable and nuclear energy—the fuel for which is manufactured
in Fylde—as well as in improved energy efficiency?(906090)
My hon. Friend has made an extremely good point. Now is the
moment for us to go full steam ahead with our transition away
from fossil fuels. We are investing in nuclear, we are
accelerating our progress on renewables, and we are boosting
energy efficiency in homes across the country. This is how we
will bring bills down, improve our energy security and tackle
climate change.
(South Shields) (Lab)
When the Government set up the coronavirus business interruption
loan scheme, they recklessly failed to agree any guidance on
early repayments. As a result, businesses are now being charged
extortionate fees and are facing bankruptcy. Why is the
Chancellor putting the profits of unscrupulous lenders above the
recovery of our small businesses?
The Economic Secretary to the Treasury ()
He is not doing that. The schemes were set up in various ways,
depending on the size of businesses, and it will be for the
individuals who borrowed money to engage with the lenders to
refinance those loans on a case-by-case basis.
Felicity Buchan (Kensington) (Con)
T9. People in my constituency who live in mansion blocks where
heating is paid for centrally do not currently benefit from the
energy price cap. That is clearly an anomaly. Will my hon. Friend
meet me to discuss ways in which we might ameliorate the
situation?(906091)
My hon. Friend has made an important point. We recognise that
some people living in mansion blocks are part of a heat network
and are not covered by the price cap. I draw my hon. Friend’s
attention to the £144 million in discretional funding that went
to councils as part of the recent £9 billion energy support
package, and to forthcoming legislation in which we will give
Ofgem new powers to regulate prices in the sector as a matter of
priority.
(Rhondda) (Lab)
We really must start seizing assets and not just freezing them.
That is the only way in which we can make sure that the money
goes towards the reconstruction of Ukraine. Would it not also be
a good idea for us not just to look at the really famous people
like Abramovich, but to look at the people who own £750,000
properties in the UK and who may be the cousins, brothers,
sisters, parents or some other proxy of Russian oligarchs in the
UK? Must we not also do far more to tackle the personal finance
of President Putin, much of which, I am told, is in the UK?
As ever, the hon. Gentleman has made a powerful point about a
very important matter. Work with our allies is ongoing to
establish how we can deepen our response in a co-ordinated way in
order to make a real impact on illicit finance.
Sir David Evennett (Bexleyheath and Crayford) (Con)
T10. I regularly visit businesses throughout my constituency,
and have been fortunate enough to meet some very talented
apprentices who are eager to develop their skills and build
careers. Does my hon. Friend agree that apprenticeships will play
a key role in closing the skills gap by helping young people to
gain employment in more highly skilled roles, and can he say what
action the Government are taking to encourage more employers to
take on more apprentices?(906092)
The Chief Secretary to the Treasury ( )
My hon. Friend has made an excellent point. He is right to
champion the value of apprenticeships, in which the Government
keenly believe. I had a great roundtable with apprentices in
Newcastle recently, and heard for myself just what a difference
they are making both to their employer and to the wider
economy.
(Midlothian) (SNP)
It is estimated that the Chancellor’s smash and grab on national
insurance will raise £13 billion. By happy coincidence, at the
end of the financial year the Chancellor will have an extra £13
billion-worth of borrowing, because the Government have not met
the borrowing expectations. Will the Chancellor use that happy
coincidence to scrap the tax on jobs?
The forecast for the public finances will be updated next week.
As for jobs, I am happy to confirm that, according to today’s
figures, there are record numbers of people on payrolls, record
numbers of vacancies, and, indeed, more people in work now than
before the crisis—and the unemployment rate is now lower than, or
at the same level as, it was before coronavirus hit.
(Haltemprice and Howden)
(Con)
The Government have repealed many of the powers in the
Coronavirus Act 2020, but they have not repealed the Act itself.
This means that the Treasury can still order Her Majesty’s
Revenue and Customs to start support schemes such as furlough
without recourse to Parliament. Control of expenditure is
Parliament’s first responsibility, so are the Government going to
repeal the Act in total, or will the Treasury take action to give
the proper powers back to Parliament?
I would be very happy to look into the matter that my right hon.
Friend raises.
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