The Chancellor of the Exchequer was asked—
VAT: Domestic Fuel
(Kirkcaldy and Cowdenbeath)
(Alba)
1. What recent discussions he has had with (a) Cabinet colleagues
and (b) stakeholders on the potential merits of zero-rating VAT
on domestic fuel. (900757)
The Financial Secretary to the Treasury ()
The hon. Member’s question is about the Government’s support for
those who are struggling with the cost of living. The Government
recently announced an additional £15 billion-worth of additional
support, targeted particularly on those with the greatest need.
Government support for the cost of living now totals £37 billion
this year.
VAT on domestic fuel continues to be levied on rising fuel bills
while one in three Scots households live in fuel poverty. With 8%
of the UK population, Scotland has 96% of the UK’s crude oil
reserves, 63% of the UK’s natural gas reserves, 90% of the UK’s
hydropower and 25% of Europe’s offshore wind and tidal resources.
Scotland’s vast energy potential far exceeds the needs of our
people yet we receive no revenue. Can the Minister tell me the
true value of Scotland’s energy to the UK Treasury, and set out
how the Government will service their massive debts when they can
no longer fleece Scotland of its energy resources following a
vote for independence in 2023?
We of course recognise Scotland’s contribution to energy across
the country and the fantastic industry that we have in Scotland,
but the hon. Member will know that Scotland has a record sum this
year in terms of money that comes through the Treasury, through
the Budget and through the Barnett formula.
Karl MᶜCartney (Lincoln) (Con)
The original question was about heating fuel, and I wonder if the
Minister could let us know the proportion of people in London who
use heating oil compared with those out in rural areas such as
Lincolnshire or even in Scotland?
My hon. Friend is right: more people use heating oil in rural
areas, and the Treasury and the Department for Business, Energy
and Industrial Strategy are looking at energy across the board to
ensure that all people are protected.
Alcohol Exporters: Customs Requirements
Dame (Llanelli) (Lab)
2. Whether his Department is taking steps to reduce Her Majesty’s
Revenue and Customs paperwork for alcohol exporters. (900758)
The Financial Secretary to the Treasury ()
The 2025 UK border strategy sets out the Government’s vision for
the UK border to be the most effective in the world. We are
investing £180 million to build a UK single trade window, which
will streamline how traders share information with the
Government, making it as straightforward as possible for business
to comply with customs requirements.
Dame
We all understand the need to protect revenue and to prevent
fraud, but some alcohol exporting companies find that their
exports are being hindered by HMRC’s refusal to accept standard
invoicing as proof of tax paid. HMRC, in requiring additional
letters of confirmation, is therefore causing companies
considerable hindrance to their exports. Will the Minister agree
to meet me to find a way forward that can both protect revenue
and facilitate exports?
I would be very happy to meet the hon. Member and look at the
specific issues that she has raised, but I reassure her that HMRC
is currently in a programme to ensure that traders have to fill
in fewer forms and that forms are prepopulated, so that customs
can be streamlined for the trader.
(North West Leicestershire)
(Con)
Does the Minister agree that a trade agreement with India would
be a huge boost to our exporters, including our alcohol
exporters?
The Government are very much committed to trade agreements across
the globe and would welcome a trade agreement with India.
Cost of Living: Northern Ireland
(North Down) (Alliance)
3. What fiscal steps he is taking to help reduce the impact of
rises in the cost of living in Northern Ireland. (900759)
The Chancellor of the Exchequer ()
The UK Government are providing £37 billion-worth of support to
help families with the cost of living, and most of that support
is being provided directly to households across the United
Kingdom. Indeed, we are legislating to ensure that our one-off
payments to those on welfare that are worth up to £650 can be
paid directly to households and families in Northern Ireland.
As the Chancellor will be aware, the energy bill support scheme
cannot currently be extended to Northern Ireland due to the
absence of the Northern Ireland Executive, so can he update the
House on what steps he is taking to put in place measures to
ensure that the people of Northern Ireland can avail themselves
of that support? I appreciate that it is not due until October,
but there is a long lead-in time required in that respect.
I can assure the hon. Gentleman that we want to ensure that
equivalent support is provided to all Northern Irish families,
and that it will be of the same value. We are currently in
discussions with a variety of organisations to see how best to
deliver that support, but I can give him the reassurance that it
will be there in the same quantity, in the same value and at the
same time.
(Chipping Barnet)
(Con)
The combined impacts of the £37 billion package that my right
hon. Friend has referred to, plus tax reductions such as the cut
in fuel duty, are providing really significant support to people
in Northern Ireland. Does he agree that that is an illustration
of why people in Northern Ireland are better off as a result of
the Union and of the fact that we are stronger together as a
group of four nations?
My right hon. Friend speaks with authority and experience on this
topic, and of course she is absolutely right: the UK Government
are ensuring that families across the United Kingdom are
benefiting from the support we are putting in place. More
broadly, we will do everything we can in government to protect
and support the United Kingdom.
(East Antrim) (DUP)
Many of the fiscal levers the Government could use to support
Northern Ireland are not available, because we are under the EU
VAT regime and still subject to EU state aid rules, which would
rule out many of the measures the Government would take. Is that
not a reason why the Northern Ireland Protocol Bill that is going
through the House of Commons is essential, in order to enable the
Government to use fiscal levers across the whole UK to benefit
all of the people, be they Unionists, nationalists or any others
in Northern Ireland?
The right hon. Gentleman makes an excellent point. As I said from
this Dispatch Box at the time of the spring statement, we were
unable to extend our VAT cut on energy-saving materials to
Northern Ireland because of some of the provisions in the
protocol. He will know that the legislation we have put before
this House, which I am glad received support last night, will
address exactly those issues.
SMEs
(Meriden) (Con)
4. What fiscal steps his Department is taking to support small
and medium-sized enterprises. (900760)
Mr (South West Hertfordshire)
(Con)
12. What fiscal steps his Department is taking to support small
and medium-sized enterprises. (900768)
The Exchequer Secretary to the Treasury ()
Small and medium-sized businesses are at the heart of our
economy, creating jobs and prosperity across the UK. We continue
to give substantial support to SMEs by raising the employment
allowance; extending the £1 million annual investment allowance;
providing business rates relief for retail, hospitality and
leisure businesses; and with the Help to Grow programme.
A couple of weeks ago, I met people from a number of hospitality
businesses at Nailcote Hall. They expressed not only their
gratitude for the support the Treasury gave during the pandemic,
but their concerns about the cost of living and about
supply-chain costs, which they cannot necessarily pass on to
consumers. What assurances can my hon. Friend give the businesses
in my constituency, especially those in the hospitality sector,
that the Government will keep them in mind in terms of future
support?
It is good to hear that my hon. Friend has been speaking to the
hospitality sector in his constituency, no doubt drawing on his
expertise in those conversations. As he said, we provided
substantial support to that sector during the pandemic. We
recognise the ongoing challenges for businesses as we recover,
which is why we are giving thousands of hospitality, leisure and
retail businesses a 50% cut in business rates this financial
year—worth up to £110,000 per business.
There are more than 7,000 businesses in my constituency,
producing excellent products and services in a range of
industries. I have held several informative high street
walkarounds in towns across my constituency, hearing at first
hand from local entrepreneurs, many of whom are worried about
competition from online businesses. Will my hon. Friend explain
what steps the Department is taking to support our high street
businesses in the face of online competition?
I commend my hon. Friend for his campaign in his local high
streets and for the work he is doing with local businesses. I
agree with him on the importance of high streets and the
businesses on them, which is why we are supporting high street
businesses with our 50% business rate cut for thousands of
retail, hospitality and leisure businesses; our freeze to the
business rates multiplier; and funding through the community
renewal fund, towns fund and levelling-up fund.
(Westmorland and Lonsdale) (LD)
I hope the Minister is aware that one problem facing small and
medium-sized employers in Cumbria and elsewhere, certainly in
rural Britain, is a serious lack of workforce. Cumbria Tourism
reported that 63% of its members last year had to operate below
capacity because they could not find sufficient staff to keep
going and so they missed out on vital demand. Does she agree that
the two key areas are a lack of affordable housing so that people
can live close to the place where they need to work in rural
communities, and the fact that the Government have yet to come up
with adequate visa provisions to allow employers to supplement a
local workforce with an overseas one? What action will she take
to support small and medium-sized businesses, especially in
hospitality, in Cumbria and elsewhere?
There was a great deal in that question, but broadly it was about
access to the workforce for businesses. We have a really
successful story on jobs, with record numbers of people in
payroll employment, but I also hear about the work that
businesses are doing to fill vacancies. We are supporting
businesses, for instance, with our successful Way to Work scheme
and the investment we are making in people’s skills to ensure
that they align to the vacancies that employers are looking to
fill.
(Glenrothes) (SNP)
A big concern for small businesses in my constituency, especially
those in construction and engineering contract work, is that they
finish the job, the main contractor gets paid, but the people who
did the work sometimes wait months to get paid. If the main
contractor fails during that time, the money disappears with it.
Will the Minister agree to meet me to discuss the possibility of
making sure that those moneys are kept in a protective bond, so
that if we cannot prevent the main contractor from going bust, we
can at least stop it dragging down hundreds of small businesses
with it?
I do have conversations with the construction sector and more
widely about infrastructure investment in this country. I am
happy to meet the hon. Gentleman to talk about the specific
suggestion he has to help the construction sector.
(Erith and Thamesmead)
(Lab)
If the Chancellor really wanted to help British businesses, he
would back Labour’s plan to scrap business rates and replace them
with a fairer system. He could reverse his tax on jobs and scrap
the national insurance hike, and he could use public procurement
and other tools to buy, make and sell more in Britain. He has
imitated Labour’s policies before: why not follow Labour’s lead
again and help struggling businesses?
Business rates and national insurance are an important
contribution to paying for public services, which I am sure the
hon. Lady’s constituents, like mine, feel very strongly about. I
remind her of the scale of support that we are providing to
businesses, including a business rates cut worth £1.7 billion
this year.
(Tatton) (Con)
I appreciate that the Chancellor cut fuel duty by 5p per litre,
but that did not really touch the sides. I urge him to be bolder
and cut fuel duty by at least 20p per litre, as requested by
FairFuelUK, which would make a huge difference to individuals and
businesses in my patch, not least hauliers for whom the cost of
running a single truck has increased by 17% in the past year.
I hear my right hon. Friend’s request. The combination of the
freeze on fuel duty in the Budget and the cut in the spring
statement is essentially a £5 billion tax cut. That is
substantial support with the cost of fuel for businesses. As I
have also said, we are taking further steps to support businesses
with business rate cuts. I also remind her of our cut to national
insurance, increasing the employment allowance by £1,000,
supporting around 500,000 smaller businesses.
Mr Speaker
I call .
We have a slight problem. Can the Chancellor answer the question
as if it has been asked?
Inflation
(Eltham) (Lab)
6. What recent assessment he has made of the effect of trends in
the level of inflation on the UK economy. (900762)
The Chancellor of the Exchequer ()
We are not immune to the global inflationary shocks that many
countries are experiencing. Indeed, eurozone inflation is north
of 8%, and inflation in the United States is closer to 9%. We
have the determination we need to combat inflation and reduce
prices, and we have the tools at our disposal, namely strong and
forceful monetary policy, responsible fiscal policy and
supply-side reforms.
(Forest of Dean) (Con)
One of the really insidious effects of inflation is that it
imposes more costs on the poorest in society. What steps will the
Chancellor take to make sure not just that we protect people
today, but that inflation expectations are not locked in, locking
in high inflation for the future, which would be the worst thing
we could do for the poorest in our society?
As ever, my right hon. Friend makes an excellent and thoughtful
point. He is right about the regressive nature of inflation,
which is why our recent announcements have been specifically
targeted at those on the lowest incomes—the most vulnerable in
our society—to help them manage through the challenging months
ahead. He is also right that inflation expectations are critical,
and I know that the Bank of England will act forcefully, in its
words, to restrain inflation and inflation expectations, because
the quicker we get through this the better for everyone,
particularly the most vulnerable.
Mr Speaker
We now come to the Labour Front Bencher, .
Mr (Wolverhampton South East) (Lab)
It is true that inflation is affecting a number of countries, but
why does the Chancellor think that the UK has the highest
inflation in the G7, and why is UK economic growth forecast to be
lower than in any country in the G20 next year, with the sole
exception of Russia?
When it comes to inflation, there is a variety of reasons.
[Interruption.] I was very clear with the House at the time of
the recent announcement that we are experiencing not only the
energy shock that Europe is experiencing, but the tight labour
market that the United States is experiencing. The fact that we
have very many people in work and low unemployment is something
to celebrate, but, obviously, that contributes to inflationary
forces. Beyond that, there are smaller technical things, such as
the timing of how the price cap works here and the degree of
interventions in energy being upstream or downstream. When it
comes to growth—we have had this debate multiple times—the
Opposition seem to cherry-pick the figure that they like. Let us
look at the period since the pandemic and at our growth
performance. Indeed, on the OECD’s most recent figures, which the
right hon. Gentleman cherry-picked, where were we in that table?
We were the second highest in the G7.
Mr McFadden
The Chancellor said “celebrate”. I am not sure that there is much
to celebrate in the figures that I quoted to him. Does he accept
that the weakness of the pound, which increases the prices of our
imports, is a major contributory factor to the inflation being
experienced by our constituents, along with a continuation of the
trade frictions caused by the Government’s Brexit deal? Does he
have any plans to address that? I am not talking about rerunning
the Brexit argument. He could take one step, which is to reach an
agrifood agreement with the EU, as New Zealand has. That would
reduce costs and bureaucracy for our farmers, for our businesses
and, most of all, for our constituents.
What the right hon. Gentleman said was very telling. We on the
Conservative Benches do celebrate people being in work. It is
critically the most important thing that we can do to help manage
the cost of living, so every week in this place, we will champion
those who are working and we will get others into work and
support them. When it comes to the EU and our trading
relationship—it is nice to hear from the Labour party that it
does not want to rerun the Brexit arguments—it is very clear that
there is now a growing faction on the Labour Benches that wants
to do one thing and one thing only, which is to take us back into
the single market.
Mr Speaker
We now come to the SNP spokesperson.
(Glasgow Central)
(SNP)
Both Labour and the Tories are Brexit parties now—a Brexit that
Scotland did not vote for and wants nothing of. This year, the
Scottish Government have faced more than a 5% real-terms cut in
resource funding compared with last year’s Budget, and the
spending review took place when inflation was at only 3.1%. It
has now tripled and continues to rise. That increase will impact
on Scotland’s recovery from the pandemic and place severe
pressures on public services and public sector wages. Will the
Chancellor increase funding to the devolved Governments in
recognition of this record inflation over which he presides?
I am so pleased to have a chance to answer Treasury orals for the
first time since we saw the Scottish Government’s spending
review, which was a couple weeks ago. It was interesting to read
through that, because in spite of the largest increase in public
spending in the United Kingdom for some decades—record increases
in public spending—it is clear that the Scottish Government are
now imposing austerity in local government, in education, in
justice, and in the environment. All budgets are growing slower
than inflation, and that is not happening elsewhere in the United
Kingdom. The health budget, the people’s No. 1 priority, is now
growing in England two or three times faster than it is in
Scotland. Scotland is not passing on the income tax cut. We might
ask: why is this? Why are these choices being made? It is
because, in Scotland, the welfare budget is being increased by
50%. That is why.
The Chancellor knows fine well that the Scottish Parliament,
along with the other devolved Administrations, operates on a
fixed budget. We do not have the levers that he has to increase
budgets, yet we operate on that incredibly well. [Interruption.]
We have a balanced budget in Scotland every year, which says a
lot about the Scottish Government than his Government.
Inflation is a global problem, but individual Governments can
make it easier for people to make ends meet. Ireland, for
example, has cut public transport fares to allow people to save
money on ticket and petrol prices, while those have soared under
this Chancellor’s Administration. That is an independent country
using its powers to ease the burden on commuters. The Scottish
Government have already made bus travel free for under-22s, but
we are at the limits of what we can do, because of that fixed
budget and because of those real-term cuts to the block grant. If
the Chancellor will not provide more money to the Scottish
Government, will he give us the full powers so that we can do
that?
We all have to operate with fixed budgets—that is news to the
hon. Lady—but there have been record Barnett settlements for
Scotland of £4.5 billion a year. Beneath that, however, are the
choices that Governments make. On the Conservative side of the
House, we choose to support the NHS and public services; in
Scotland, they are choosing to impose austerity on public
services. That is the difference between us and the SNP.
(South Norfolk) (Con)
Following the welcome launch of Help to Build yesterday,
fulfilling a commitment that the Chancellor made to me when he
was still Chief Secretary to the Treasury in the early part of
2020, does he agree that making it easier for more people to
commission their own houses will result in more, better, greener
and cheaper houses that cost less to run, thus making a
significant contribution to battling inflation?
My hon. Friend is without doubt the House’s expert on that
matter. I am pleased that the Government have listened to him. I
still have the brochure he first gave me with the marvellous
pictures of the custom self-build—in Switzerland, I think. There
is a £1.8 billion fund, I believe, within the home building
programme, and a good chunk of that will go to support exactly
what he said: more homes, quicker homes and cheaper homes for all
our citizens.
Economic Inequality
(Liverpool, Walton) (Lab)
7. What recent fiscal steps he has taken to help reduce economic
inequality. (900763)
The Economic Secretary to the Treasury ()
The Government understand that millions of households across the
UK are struggling to make their income stretch to cover the
rising cost of living. As part of the £15 billion support package
being provided by the Government, almost all the 8 million most
vulnerable households across the UK will receive support of at
least £1,200 this year, including a new, one-off £650 cost of
living payment.
The Economic Secretary will know that Her Majesty’s Revenue and
Customs payroll data shows that the pay of the top 1% rose
three-and-a-half times faster than the pay of those in the bottom
10%, whose meagre pay increases have already been wiped out by
inflation and price rises. When we look at wealth, during one
year of the pandemic each UK billionaire saw their wealth grow by
£630 million on average. While the rich get richer, the
working-class communities I represent get poorer. When will the
Treasury look at raising taxes on the highest incomes and taxing
the wealth of billionaires in order to invest in communities and
UK infrastructure?
Most mainstream understanding of how the economy works recognises
that we need wealth creators, but we also need a Government who
recognise the strains that the country is facing. That is why
three quarters of the support will go to vulnerable households,
including specific additional top-ups such as the £12 million
going to Liverpool for the household support fund. This
Government will stand by wealth creators and innovators, however,
because we need growth in the economy and a more productive
economy.
(Grantham and Stamford)
(Con)
One way to tackle regional economic inequality is to ensure that
our regional businesses are able to attract investment. Will my
hon. Friend outline what more we can do to ensure that we unlock
more private investment into Britain’s firms of the future?
The Government are constantly looking at new ideas. The regional
angels programme and our reforms to financial services to make
FinTech and banks more accessible to regional businesses are at
the core of this Government’s agenda, and I will bring further
measures to the House in the next few weeks.
Dame (Hackney South and Shoreditch) (Lab/Co-op)
As my hon. Friend the Member for Liverpool, Walton () highlights, the handouts from
the Government to support families are already being wiped out by
the rise in inflation and cost of living. One in two children in
my constituency live in poverty. From what the Minister just
said, he believes in trickle-down from those billionaires to help
those people, but they are on low wages and, for many of those
who are working, universal credit has been cut. That is not doing
enough to support them. What further steps will the Treasury
take?
What I believe in is a Government who make targeted support
available to the most vulnerable. The Chancellor and this
Government have on a number of occasions used fiscal events and
bespoke interventions to support those vulnerable people. We have
always been clear that we will not be able to ameliorate the full
extent of the challenges facing the country, but we will continue
to strive for greater growth and productivity that will bring us
back to where we need to be.
Levelling Up
(Wrexham) (Con)
8. What fiscal steps his Department is taking to encourage
levelling up across the UK. (900764)
The Chief Secretary to the Treasury ( )
The levelling-up White Paper set out a clear plan to level up
every corner of the United Kingdom by 2030. At the spending
review last autumn, the Government showed how we would deliver
our ambitious plan by delivering over £600 billion in gross
public sector investment over this Parliament. That includes £4.8
billion in increased investment in local communities through the
levelling-up fund, £1.6 billion for the next generation of the
British Business Bank’s regional investment fund, and £2.6
billion for the shared prosperity fund.
Wrexham’s levelling-up gateway bid has been supported by a
16,000-signature petition to create the first international
sporting stadium in north Wales. Does my right hon. Friend agree
that people are at the heart of the Government’s levelling-up
agenda, and that the amount of people who have signed that
petition demonstrates the need for such a scheme in places like
Wrexham, which has been ignored by the Welsh Labour Government
for 20 years?
Mr Clarke
My hon. Friend is a fantastic champion for Wrexham. I remember
her coming to see me to talk about the merits of this particular
bid, which obviously has enormous popular support; the number of
people who have signed her petition testifies to precisely
that.
(Kingston upon Hull West and
Hessle) (Lab)
Real levelling up requires money, and that means everybody paying
all the tax they owe. So why did the spring Budget allocate three
times more additional funding to the Department for Work and
Pensions than to HMRC to deal with fraud, when we know that every
£1 spent on fraud in the DWP recovers £6, but every £1 spent on
fraud in HMRC recovers £18? Why are the resources not prioritised
to bring the greatest reward?
Mr Clarke
This is undoubtedly an important issue, and the hon. Lady is
right to raise it. Clearly, we are at a very important moment in
the fight against fraud. Only next month, the new Public Sector
Fraud Authority reporting to this Department and the Cabinet
Office will go live, backed up by an additional £25 million over
the spending review period. This represents increased resources
for further support in terms of active measures on data,
intelligence, risk and enforcement—all the things we need to do
to crack down on fraud and to pursue the perpetrators.
UK Infrastructure
(Bolton West) (Con)
9. What fiscal steps he has taken to support investment in UK
infrastructure. (900765)
The Exchequer Secretary to the Treasury ()
We are driving economic growth through investment in
infrastructure, innovation and skills. The Budget and spending
review confirmed £100 billion of public investment in economic
infrastructure to benefit every part of the UK. We are launching
a UK infrastructure bank with a financial capacity of £22 billion
to crowd in private finance to support more than £40 billion of
investment in infrastructure over the next five years.
It is clear that when done right, the Government’s levelling-up
programme can make a real difference to people’s lives. Does my
hon. Friend share my enthusiasm for the proposed Atherton, Leigh
and Tyldesley cycling upgrades that will connect local people to
job opportunities right across the area, especially because there
is such local support for it and it is not an anti-car
programme?
Yes, I do share my hon. Friend’s enthusiasm for helping his
constituents to access jobs and for cycling as a way of getting
to and from work. At the spending review we announced £710
million of new funding for schemes like the one he described, but
Bolton is also receiving £30 million through the towns fund and
the shared prosperity fund, and work on the electrification of
the Wigan-Bolton line has begun, supporting economic growth for
his constituency and the wide area.
(Newcastle upon Tyne
North) (Lab)
In the integrated rail plan announced just six months ago, the
Government promised to invest in the east coast main line—a vital
route connecting London, Newcastle and Scotland and bringing
high-skill, high-wage jobs to our area. However, Ministers are
already backtracking on some of these investment promises in
other parts of the country, so will the Government make a firm
commitment today to fund the delivery of east coast upgrades to
provide much-needed confidence and resilience in our line?
As the hon. Lady points out, with our investment in
infrastructure—particularly rail, in the £96 billion integrated
rail plan for the midlands and the north—we are showing how the
Government are supporting the growth of the economy, including
through providing the transport infrastructure that we need for
that.
Mr Speaker
I call shadow Minister .
(Ealing North) (Lab/Co-op)
Labour welcomes the principle of a UK infrastructure bank moving
to a statutory footing, but it is crucial to make sure that
public money supports decent jobs that people can raise a family
on. Will the Minister therefore support our proposals for all
projects funded by the infrastructure bank to come with a good
jobs plan and for working people to be given a voice on its
board?
We have many measures in place to support people’s jobs. We know
about the figures for record levels of payroll employment and
also the increase in the national living wage earlier this year.
I am glad to hear the hon. Gentleman’s support for the UK
infrastructure bank that we are currently legislating for, which
is a really important part of our determination to drive regional
and local growth across the UK.
Credit Unions
(Barrow and Furness) (Con)
10. What fiscal steps his Department is taking to support the
credit union sector. (900766)
The Economic Secretary to the Treasury ()
The Government support the credit union sector and recognise the
contribution that they make to our financial services sector more
broadly and to the communities that they serve. The Government
have released £100 million of dormant assets funding to Fair4All
Finance to support the financial wellbeing of people in
vulnerable circumstances.
I should declare an interest as a former chair of a credit union.
Credit unions are some of the largest providers of low-cost
credit and are more important than ever given the cost of living
issues at the moment, but there are significant barriers
hindering their growth, not least legal restrictions on the size
of their common bond area. I know that my hon. Friend the
Economic Secretary is amending the Credit Union Act 1979 soon, so
what plans does he have to look at issues such as this to support
credit union growth and to give as many people as possible an
opportunity to stay away from doorstep lenders and loan
sharks?
I thank my hon. Friend for his question. He is an expert in this
area, given his role in Barrow. We will be amending the Credit
Union Act 1979 shortly, which will allow credit unions to offer
more services such as hire purchase, conditional sale agreements
and so on. With respect to the common bond—that being the link
for all credit union members—we will need to see evidence that it
supports the needs of the sector, but I have been working closely
with the Association of British Credit Unions Limited, the trade
body for 70% of credit unions, on its “Vision 2025” document. I
visited its conference recently, and we will bring measures
forward shortly in the financial services and markets Bill.
(Harrow West) (Lab/Co-op)
Further to the excellent question from the hon. Member for Barrow
and Furness (), I say gently to the Minister
that Ministers have always had warm words for credit unions,
which I welcome, but have been somewhat slow to give them or
other mutuals, such as friendly societies, the Whitehall and
parliamentary support for the legal reforms to drive significant
expansion. Will the Minister now back the private Member’s Bill
of my hon. Friend the Member for Preston ( ) and require all public
bodies to promote credit unions going forward?
Over the years, we have had considerable dialogue on many of
these measures. As I said, the legislation that the sector is
looking for will be introduced in the next few weeks. I am aware
of the Bill of the hon. Member for Preston ( ), and I am seeking to have a
meeting with him imminently—in the next few days or next week—to
discuss it and to see what we can support.
Cost of Living
(Battersea) (Lab)
11. What fiscal steps he is taking to help reduce the impact of
inflation on households’ cost of living. (900767)
(Edinburgh South West)
(SNP)
13. What recent assessment he has made of the potential impact of
his Department’s fiscal policies on the cost of living.
(900769)
(North Tyneside) (Lab)
17. What fiscal steps he is taking to help reduce the impact of
inflation on households' cost of living. (900774)
(Bury South) (Lab)
19. What fiscal steps he is taking to help reduce the impact of
inflation on households' cost of living. (900776)
(Ealing, Southall)
(Lab)
22. What fiscal steps he is taking to help reduce the impact of
inflation on households' cost of living. (900780)
The Chancellor of the Exchequer ()
The Government understand that many families are struggling with
rising prices. That is why we have announced £37 billion-worth of
support, with the bulk of that targeted on the most vulnerable in
our society, and those families receiving around £1,200 of help
this year.
The Government’s failure to increase social security benefits in
line with the current rate of inflation has resulted in a
real-terms cut. Many of my constituents who are in receipt of
social security now face a shortfall of around 6%, based on
today’s inflation rates. The Chancellor could take action now,
for example by reviewing the rate of social security every six
months, rather than annually in September, while we are in this
cost of living emergency. Will he commit to an emergency in-year
uprating in line with the rates of inflation?
I gently point out to the hon. Lady that just a few weeks ago we
announced £15 billion-worth of additional help, particularly for
those on means-tested benefits, who are receiving a one-off
payment of £650. The aggregate amount spent on that proposal is
in fact more generous than simply uprating with inflation as she
suggested, so those families will get more help under our plan
than with her proposal, and that money will arrive first in July,
with the second payment later in the autumn.
The cost of living is affecting individuals and business,
particularly small business, across our society. Many small cafe
owners, who are important for the service sector in Edinburgh
South West, are struggling. One small cafe owner wrote to me
recently to say that over the past few months, every single one
of her suppliers has put their prices up—from bread, to cakes, to
bacon, to coffee, to waste collection and energy. My question for
the Chancellor is this: is it not time that he looked at his
options for further cuts to VAT to help small businesses,
especially small cafes in Edinburgh South West?
We have provided significant support to the hospitality sector
over the past two years, and I am glad that the sector at least
emerges from the crisis in a much stronger shape—in terms of
employment, cash balances and insolvencies—than anyone had
anticipated, which is something to celebrate. With regard to
support at the moment, we have of course put in place a
£1.7-billion business rates holiday—the 50% discount—for cafés
and restaurants in England, and that money is being Barnett-ed to
Scotland to provide similar support to restaurants there.
Public sector workers and care workers in North Tyneside say that
the Chancellor’s package on the cost of living crisis does not
address their daily financial struggles, because under his
Government, their pay has not kept pace with inflation. What
practical steps will he take to address that overriding problem
for my constituents?
As I said, we are providing an enormous amount of support—around
£1,200—which is targeted at those who most need help. Of course,
no Government can make the challenges go away completely, given
the scale of the problem that we are facing, but I am confident
that the support we have put in place is significant and will
make a meaningful difference to those who most need it. The hon.
Lady talks of the practical steps that we can all take to help
with the cost of living. Perhaps her party could start by
opposing the crippling rail strikes of the past week or two,
which are doing nothing to ease the burdens of the cost of living
on public sector workers.
My constituents in Bury South have had inflicted on them tax and
national insurance rises—the inadequate 5p cut to fuel duty
barely touched the sides—by a Chancellor who has clearly run out
of ideas, as we have just heard. With energy costs at record
highs, and an expected further rise of up to 50% in the autumn
that will mean the cap has almost trebled in under a year, what
further assistance can be given to my constituents to ensure that
nobody is cut off?
I gently say to the hon. Gentleman that £37 billion of support is
being targeted at the most vulnerable and will come over the next
few months, from the summer through the autumn and winter, to
help with the price cap. As we said, we do expect the cap to
increase significantly in the autumn, which is why we have put
the support in place. He talked about taxes, so he will be
pleased to tell his constituents that in just a couple of weeks’
time, they will have their taxes cut when the national insurance
threshold rises to £12,500, which will deliver a £330 tax cut to
around 30 million people in work. That will start to put more
money in people’s pay packets in July.
The tax rises that the Chancellor has introduced are making the
cost of living worse for everyone. How can he defend raising
taxes on working people and urging against pay rises for most
people, while his colleagues recommend scrapping the cap on pay
rises for FTSE 100 bosses who earn millions?
Again, 70% of workers in this country will have a net tax cut.
That is what the Government are delivering. In just a couple of
weeks’ time, the first £12,500 that anyone in work earns will be
free of any tax or national insurance. That will deliver a £6
billion tax cut for 30 million people. As I said, for 70% of all
workers, excluding the most wealthy, it represents a net tax cut,
because we are on the side of hard-working people.
(Hitchin and Harpenden)
(Con)
The Chancellor knows that a significant part of inflation is not
within this Government’s control, and indeed not within the
country’s control; it is a result of international energy costs,
particularly oil and gas. That is happening globally because
there is an imbalance between supply and demand across the world.
What is the Treasury’s approach, working with other countries and
major energy companies, to try to bring down those prices overall
in the coming years? Unless we do that, increasing energy costs
will be inimical to the economic growth that everybody in this
House wants to see.
My hon. Friend makes a thoughtful point, and he is right. As the
Bank of England recently pointed out, the bulk of the excess
inflation that we are seeing is being driven by global
inflationary forces. He is also right that in the long term, the
best way to combat that is to increase the supply of energy. In
particular, the Prime Minister’s energy security strategy sets
out a plan to do exactly that, which will have an impact on bills
next year and beyond. Between now and then, we have the support
in place to help people.
(North West Durham)
(Con)
We all know that energy prices, such as oil and gas prices, are
being driven by Russia’s illegal invasion of Ukraine. I welcome
the extra £37 billion of support for households and the cut in
fuel duty. One thing that affects my constituents, particularly
district nurses, is the differential between the terms and
conditions for NHS workers and the normal mileage allowance,
which means that an NHS district nurse in my patch doing 12,000
miles a year gets about £1,400 less than if they were on a normal
mileage allowance. Will the Chancellor make representations to
the Health and Social Care Secretary to try to improve that
position for my district nurses?
My hon. Friend, as always, is right on the point, and he makes a
good observation. He knows from his discussions with me that the
mileage allowance rates are advisory, and organisers and
employers can provide whatever support they think is appropriate
and justified under the circumstances. I would be happy to talk
to the Health Secretary. As my hon. Friend knows, the NHS has
received a record funding settlement. Where we can find
efficiencies to support people, we should do so.
(Shipley) (Con)
Further to the question from my right hon. Friend the Member for
Tatton (), may I urge the Chancellor to
think again about the cut in fuel duty? Although the one he
introduced was welcome, it has not really been noticed by many
people, so will he consider a much more substantial temporary cut
in fuel duty, as has been done in Germany?
I am glad that my hon. Friend is supporting my right hon. Friend
the Member for Tatton (). I will take all his
recommendations under advisement. As my hon. Friend the Exchequer
Secretary pointed out, a cut of £5 billion, together with the
freezing of fuel duty, is significant, but we appreciate that
that is not being felt at the pumps because of the rise in
wholesale prices. I assure him that the Secretary of State for
Business, Energy and Industrial Strategy is in dialogue with the
Competition and Markets Authority to ensure that the fuel duty
cut is being passed on.
Topical Questions
Philip Davies (Shipley) (Con)
T1. If he will make a statement on his departmental
responsibilities.(900747)
The Chancellor of the Exchequer ()
In common with countries around the world, the UK is experiencing
global inflationary forces. We are taking action to support the
country through that, with £37 billion of support targeted at the
most vulnerable, but also focused on the long term in combating
inflation and reducing prices through supply-side reforms,
responsible fiscal policy, and a strong and forceful independent
monetary policy.
Many people are grateful to the Chancellor for all the support he
has given to help people with their energy bills, but many
businesses are also struggling with very high energy bills. Will
he consider giving further support to businesses to help them
through that, preferably through cutting their taxes? It would be
a tragedy if the Chancellor kept all those businesses going, at
huge cost, through the pandemic, only to see them come a cropper
after the pandemic because of the inflationary cost pressures
caused by those lockdowns.
My hon. Friend is a champion of all the small businesses in his
constituency, and rightly so. They have endured the pandemic and
are bouncing back strongly on the other side, and we want to
support that. On tax cuts, I hope he can reassure his small
businesses that this year they are benefiting from two specific
tax cuts—a cut of about £5,000 in business rates for a typical
pub; and with the increase in the employment allowance, a cut of
£1,000 on national insurance contributions—and we will of course
support them in the years to come.
Mr Speaker
I call the shadow Chancellor.
(Leeds West) (Lab)
Consumer confidence is at its lowest level since records began
because working people have less money to spend, but we are not
all in this together. Pay for the top 1% of earners is increasing
at 20 times the rate for the bottom 10%, and all the while the
Prime Minister eyes up luxury tree houses instead of fixing the
broken economy. Does the Chancellor realise that, to avoid a cost
of living calamity, he must address the stagnant wage crisis
created by Tory policies?
On wage policy, this is the Government who introduced the
national living wage and, this year, increased the national
living wage by about £1,000 a year. Combined with the cut to the
universal credit taper rate and the increase in the national
insurance threshold, that is significant support to those on the
lowest earnings. It is right that we increase people’s wages, but
the hon. Lady should start in her own office, where, I heard, she
is perhaps not quite paying her own staff properly.
Some 4.8 million people in Britain are paid less than a real
living wage. That includes cleaners, caterers and security guards
employed by the Government. They work hard, they pay their
taxes—in Britain, Chancellor—and they have been taken for granted
for far too long. Will the Chancellor guarantee that all those
who work for Government, whether directly or through a
contractor, will be paid a real living wage from now on so that
they can afford their bills, put food on the table and support
their families?
We want everyone to be paid the national living wage. That is the
law in this country. I am proud that we have increased it by
£1,000 this year, which, combined with our tax cuts, is putting
more money in the pockets of the lowest paid. I say again that
there are lots of people being paid less than the national living
wage but they should not include people in the hon. Lady’s own
office.
(Cleethorpes) (Con)
T2. The Chancellor is familiar with the opportunities in northern
Lincolnshire and the wider Humber region to advance economic
growth; what plans does he have to develop the infrastructure and
support local authorities to achieve that?(900748)
The Chief Secretary to the Treasury ( )
My hon. Friend is a fantastic champion for his region and his
support for a freeport on the Humber has been noted across
Government. We are of course investing in our levelling-up
programme, which has a direct bearing on areas such as the
Humber. Crucially, we want to advance devolution within England
to allow areas such as his to reap the full rewards and take full
control of this exciting opportunity.
(Liverpool, Walton) (Lab)
T4. Recently, it was revealed that Her Majesty’s Revenue and
Customs is failing to use the third-party data information that
we get through international agreements to investigate how much
tax is being evaded through offshore assets. Given that £850
billion is held offshore, with two thirds of it stashed in known
tax havens, either Ministers are content for the super-rich to
evade paying their fair share in the knowledge that their
offshore wealth is not being systematically checked, or they will
direct HMRC to use this reporting data, as is done in the US and
Denmark, to uncover tax evaders. Which is it?(900750)
The Financial Secretary to the Treasury ()
I am proud that HMRC is a leader in tax transparency, has a
number of double tax treaties and co-operates with a large number
of countries and international organisations to share tax
information to ensure that people pay their fair share.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
T3. The global cost of living crisis is affecting many of our
constituents, so it is welcome that those on means-tested
benefits—one in three households—will receive £1,200 in support
from the Government this year. When will that vital support be
hitting bank accounts?(900749)
My hon. Friend is right to highlight the need to target support
on those who most need it. I am pleased to tell him that the
payments will be made for those on means-tested benefits in July,
with the second of those payments following a few months later,
in the autumn, for those on tax credits, so that deduplication
can be done.
(Cumbernauld, Kilsyth
and Kirkintilloch East) (SNP)
T5. In his answer to my hon. Friend the Member for Glasgow
Central (), the Chancellor seemed
actually to be boasting that unlike the Scottish Government he is
not willing to invest in tackling child poverty or in supporting
carers. May I therefore suggest that instead of boasting about
his poverty-inducing social insecurity system he tries looking at
and replicating the Scottish child payment and the carer’s
allowance supplement?(900751)
My right hon. Friend the Chancellor set out very clearly the
choices the Scottish Government made at their most recent
spending review, on which they can be judged. Let us be very
clear: it is the Scottish Government and the Scottish Government
alone who are wasting millions of pounds of this country’s and
indeed their country’s citizens by pursuing a referendum. That is
the last thing that Scotland or the UK needs, soaking up
resources that should be spent on people who need them.
(South Cambridgeshire)
(Con)
T7. The east of England is the only region in the country without
a dedicated children’s hospital which is why I am delighted that
the Government have committed £100 million to building Cambridge
children’s hospital. It has recently got planning permission and
its exciting designs were shown last week to the Duke and Duchess
of Cambridge, William and Kate. Will my right hon. Friend the
Chancellor or the Chief Secretary to the Treasury commit to
working with me to make sure the hospital is built on
schedule?(900753)
Mr Clarke
This Government are determined to deliver for the people of
Cambridgeshire. My colleagues at the Department of Health and
Social Care will have heard my hon. Friend’s comments about the
importance of this facility, and that is why we are investing
£4.2 billion in new hospitals over the course of this
Parliament.
Patricia Gibson (North Ayrshire and Arran) (SNP)
T10. The recent announcement by the Chancellor on support with
energy bills was welcome as far as it goes; however, I remain
deeply concerned about my constituents in North Ayrshire and
Arran who live in park homes, many of whom are elderly and
vulnerable, who have no clarity as to whether they will receive
the same support for energy bills as every other household in the
UK. Will the Chancellor put an end to this uncertainty and
confirm today that he will make a firm commitment to ensure that
park home residents do not miss out on this vital
support?(900756)
The Exchequer Secretary to the Treasury ()
The hon. Member makes an important point about people living in
park homes—I also have constituents who live in park homes—and we
are determined to ensure that people receive the help that they
need with the increase in energy costs. The Department for
Business, Energy and Industrial Strategy has been consulting on
how we deliver support to people living in places such as park
homes that do not have the same electricity or energy supply as
others.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
T8. Yesterday morning, I had the pleasure of hosting a
roundtable discussion with farmers from my constituency in
collaboration with the National Farmers Union. My constituent
Andy Cornthwaite informed me that he was struggling to employ
extra staff to grow his business due to the current £85,000 VAT
threshold. I am aware that my right hon. and learned Friend
recently responded to a written question from my hon. Friend the
Member for North West Durham (Mr Holden) on the subject, but will
she consider an early review of the VAT threshold due to the
increase in labour and/or materials costs for small and
medium-sized enterprises?(900754)
The Government recognise that accounting for VAT can be a burden
on small businesses. That is why we maintain the highest VAT
registration threshold in the OECD and as compared with EU member
states. At spring Budget 2021, to give businesses certainty, it
was announced that the VAT threshold would be maintained at its
current level until March 2024. Although there are no plans to
change the VAT threshold at this time, we keep all taxes under
constant review.
(Sheffield South East)
(Lab)
Last year, at the spending review, the Government announced that
after years of austerity there would be a small real-terms
increase in local authorities’ spending power—but that was when
inflation was around 2% to 3%. Has the Chancellor seen the recent
assessment from the Local Government Association showing that,
with inflation at a somewhat higher level now, it will cost local
councils £2.4 billion extra this year? What steps will he and the
Levelling Up Secretary take to have talks with the Local
Government Association about extra help for local authorities so
that we do not get another round of austerity imposed on our
constituents?
Of course, we invested £1.6 billion in local authorities in each
year of the spending review precisely to help them with all the
responsibilities that they must discharge. I would say to all
Departments and devolved Administrations that, if we are to live
within the spending review, it is vital that they make
responsible choices about how to deliver services at best value
to the taxpayer. We cannot be in a situation where we chase after
inflationary pressures as that will only worsen and prolong the
crisis that we face.
(Kensington) (Con)
T9. My constituents want to see a low-tax, high-growth economy
where work and productivity are prioritised and incentivised.
Will my right hon. and learned Friend assure me that the next
move in taxes will be downwards and that that will happen at the
first available opportunity?(900755)
The Chancellor set out at the spring statement that he would be
cutting taxes. We have seen that already in the universal credit
taper rate and in the increase in the national insurance
contributions threshold to £12,570, which will come in just a few
weeks. We have also seen the announcement that income taxes will
be cut in 2024.
(Ceredigion) (PC)
Small businesses in Ceredigion have told me how increasing
electricity and fuel costs are having a direct impact on their
operating costs in addition to an indirect impact in reduced
demand for their goods and services. They are concerned that
those costs are being disproportionately felt in rural areas.
Does the Treasury share that assessment? Will it consider
bringing forward bespoke measures to support the rural
economy?
The hon. Member and I met recently to speak about the cost of
fuel in rural areas. As I also represent a rural constituency, I
appreciate his point. As he knows, the cut that we made to fuel
duty is benefiting people in rural areas as well as those across
the whole country. That, combined with the duty freeze, is £5
billion-worth of help for people. As we have discussed today, we
are also providing targeted support to people: in particular,
there is the £1,200 for 8 million households on benefits to help
with the rising cost of living.
Mr Speaker
I call the Chair of the Treasury Committee.
(Central Devon) (Con)
Our country is facing its highest tax burden since the 1950s,
although it should be acknowledged that, more recently, my right
hon. Friend the Chancellor has been bringing taxes down rather
than putting them up. Does he agree that, with the elevated level
of inflation, now is not the time for dramatic cuts, but that
once inflation starts to recede—hopefully at the end of the year
or into next year—that will be the opportunity to come forward
with serious tax cuts to get growth and jobs going and to support
our constituents?
I thank my right hon. Friend, the Chair of the Select Committee,
for his constructive and thoughtful dialogue with me on these
issues. He makes an excellent point, and I direct him to the tax
plan that we published at the spring statement to indicate the
direction of travel on tax. There will be tax cuts in, I think, a
day’s time to help people with the cost of living, tax cuts in
the autumn to drive growth in business investment and innovation,
and further cuts to personal taxation thereafter, once the
situation stabilises.
(Worsley and Eccles South)
(Lab)
Unpaid carers have seen their bills soar during this cost of
living crisis. Many carers find it impossible to reduce their
energy use, because the person for whom they are caring relies on
electricity to power a wheelchair, a hoist or other vital
equipment, yet last month the Government decided to exclude
hundreds of thousands of unpaid carers of state pension age who
are not in receipt of a means-tested benefit from the £650 cost
of living support package by leaving carer’s allowance out of the
qualifying benefits. Will the Chancellor reconsider this unfair
decision, which risks putting even more carers into financial
hardship?
The hon. Lady is right to pay tribute, as we Conservative Members
do, to those who care for others. She should be reassured that of
the 1 million people in receipt of carer’s allowance, 60% or more
will be in a household that receives the £650 or, indeed, the
disability payment. Carer’s allowance itself is not a
means-tested benefit.
(Waveney) (Con)
Investment in clean, low-carbon energy infrastructure will be
crucial to creating long-term, rewarding jobs in coastal
constituencies such as Waveney. Has my right hon. Friend
carefully considered the impact that changes to tax policy on
electricity generators would have on investment in the UK?
The Chancellor is looking very carefully at this industry, and he
engages with industry stakeholders. My hon. Friend the Member for
Waveney () will know that there are a
number of ways in which the tax system supports low-carbon energy
infrastructure, including through the super deduction, research
and development tax relief, our consultation on broadening the
emissions trading scheme, and the £1 billion investment in the
carbon capture and storage fund.
(Na h-Eileanan an
Iar) (SNP)
The rural fuel rebate was introduced 10 years ago at 5p a litre
and remains unchanged. With inflation and the cost of living
crisis, what thought has the Treasury given to increasing the
rural fuel rebate to at least 10p a litre?
The hon. Gentleman is probably talking about the rural fuel
relief scheme, which is specifically targeted at a small number
of locations where fuel prices are much higher than the national
average, perhaps because they are a long distance from the
refinery. In proposing an extension to the scheme, he should
consider the potential unintended consequences. For example,
people might drive out of their way to go to a petrol station in
these rural areas.
(Preseli Pembrokeshire)
(Con)
Thanks to this Government, we have record low unemployment and
more job vacancies than jobseekers, but almost 9 million people
are economically inactive, including many who can work and many
who have worked in the recent past. Does my right hon. Friend
agree that getting more of this group back into work is key to
filling the labour shortages that many Members have spoken about
today, and to strengthening our economy for the longer term?
My right hon. Friend is absolutely right, and he knows about this
from his time as Secretary of State for Work and Pensions. There
is no doubt in my mind that the work we are doing, through the
spending review, to provide more than £1.1 billion of measures to
support disability employment and the effective management of
health in the workplace will be important. The Government’s Way
to Work programme is yielding fantastic results, and is a sign of
our intention in this space.
(Walsall South) (Lab)
Some £11.8 billion was lost to fraud during the pandemic,
according to a plethora of organisations such as the National
Investigation Service and the Insolvency Service. I know the
Chancellor is keeping tabs on public money, but will he publish a
real-time dashboard on the recovery of public money?
Mr Clarke
We provide regular updates on the amount of money lost to fraud
because all Members on both sides of the House want action to
pursue perpetrators. We have shown our intention in this space
with a series of targeted interventions against fraud, the most
recent of which is putting in place the new Public Sector Fraud
Authority, which goes live in July.
(Haltemprice and Howden)
(Con)
The laws around IR35 are loosely defined, and it looks as though
Her Majesty’s Revenue and Customs is using the tribunals and
courts to pin down the case law on it. The effect is that I now
know of a number of people whose legal bills are many times what
their original tax bill might have been. This is impoverishing
them, and in some cases bankrupting them, and obviously it is
terrifying them. Will the Chancellor institute a review of this
procedure? Although it is important that HMRC raises all the
money necessary, it should not do so by destroying lives.
As my right hon. Friend will know, IR35 was brought in to ensure
that people doing the same job paid the same tax. I understand
that he would like to discuss some issues with me, and I look
forward to doing that this afternoon.
(Edinburgh West) (LD)
TaxWatch UK has just published research showing that on a
like-for-like basis, the tax gap—or the money lost every year
through unpaid tax—has gone up for two years in a row. That is
before we include in the figures the estimated amount lost to
error and fraud through the HMRC-administered covid-19 support
schemes. The tax gap resulting from fraud is now 45% and stands
at £14.4 billion. When will the Government do something about
that? They could perhaps create a fraud Minister with the remit
of tackling this growing problem, which takes money from other
parts of the economy.
The Government are taking a number of steps to tackle fraud,
including coronavirus fraud, which the hon. Member mentions. The
taxpayer protection taskforce was set up to do specifically that.
I will have a cross-governmental meeting this afternoon to
understand how we can we work across Departments to tackle fraud.
