Support for SMEs
(Basildon and Billericay)
(Con)
1. What fiscal steps he is taking to support small and
medium-sized enterprises.(901544)
(Blyth Valley) (Con)
2. What fiscal steps he is taking to support small and
medium-sized enterprises.(901545)
Karl MᶜCartney (Lincoln) (Con)
10. What fiscal steps he is taking to support small and
medium-sized enterprises.(901553)
The Chancellor of the Exchequer ()
My hon. Friend will know that the growth plan really was a very
strong package for business and for small and medium-sized
enterprises, and I am sure that many of his constituents will
appreciate the strong measures that we introduced.
Mr Baron
I refer Members to my entry in the Register of Members’ Financial
Interests.
I welcome the Government’s growth agenda, notwithstanding the
lack of reassurance to the markets, but will the Chancellor
seriously consider lowering taxation on smaller businesses,
despite the package that has already been announced? They are the
engine room of the economy and employ most people in the private
sector, and if cost savings are necessary, High Speed 2 and the
streamlining of myriad quangos could be the first option.
I am very pleased to tell my hon. Friend that we are going to
introduce the medium-term fiscal plan in three weeks’ time, but
let us consider the measures that we have already introduced.
National insurance hikes have been reversed, the corporation tax
rise has been scrapped and the annual investment allowance
remains at £1 million. These are measures that small businesses
up and down the land have been very appreciative of.
As my right hon. Friend will be aware, small businesses are the
backbone of our local economy—none more than Catling Bakery in
Cramlington, which has expanded from running a bakery to running
a café and now a dessert bar. Would my right hon. Friend please
assure me that this Government will do all they can to help these
businesses thrive?
Absolutely right. Of course, we have also supported Catling
Bakery which my hon. Friend mentions through an energy
package—£60 billion for households and businesses for six
months—which we absolutely felt it necessary to do.
Mr Speaker
I call Karl MᶜCartney.
Karl MᶜCartney
Thank you, Mr Speaker; it is like I never went away. I refer
Members to my entry in the Register of Members’ Financial
Interests.
Supporting businesses will always be a key pillar for growing our
economy and, by association, our small and medium-sized
businesses, of which there are many in Lincoln and more across
our county of Lincolnshire. They should be at the forefront of
the Government’s growth agenda. Devolved areas such as Teesside
and the West Midlands have continually been successful in
delivering for their areas. Greater Lincolnshire stands ready
right now for a maximum devolution deal. Therefore, will the
Treasury support any such deal for Greater Lincolnshire?
My hon. Friend knows that devolution is at the heart of the
Government’s plans to level up and strengthen communities, and in
the levelling-up White Paper the Government have fully committed
to offering a devolution deal to every area that wants one by
2030.
(Huddersfield)
(Lab/Co-op)
Can I declare an interest to the Chancellor? I have actually
worked in a small or medium-sized business. Unlike many people on
these Benches, I have actually worked in manufacturing industry,
and the manufacturing SMEs in my constituency are absolutely up
against it with the cost of energy. What is he going to do to
relieve them right now?
I think the hon. Gentleman makes a very good point and represents
his constituency ably. In respect of small businesses, we have
introduced a package —an energy price guarantee not only for
households but for businesses—to the tune of £30 billion in the
first six months. This is something that was absolutely
necessary, and I am very proud of the fact that we acted very
swiftly to protect businesses such as those in his
constituency.
(Richmond Park) (LD)
The Government’s failed mini-Budget sent interest rates soaring,
which is already causing mortgage pain for millions, but rising
borrowing costs are now threatening our high streets too. Small
businesses in Richmond Park and across the UK are seeing their
loan repayments spiral and their financing options dry up. We
have already seen the highest number of company insolvencies
since the financial crisis—more than 5,600 businesses closed in
the second quarter of this year—and SME debt is now at a
staggering £204 billion. Most of those businesses will not see a
penny from the cut to corporation tax. What is the
Chancellor—
Mr Speaker
Order. Come on—we cannot do that.
As I have stated a number of times already, the energy support
package will help every single one of the businesses in the hon.
Member’s constituency. I would be very pleased to see the Lib Dem
growth plan. The anti-growth coalition carps from the side lines
but it has nothing to say about growth.
(Rhondda) (Lab)
The one thing businesses always want is security, and an
understanding of what is going to happen for them next year. They
are worrying about their borrowing costs for next year, and the
Chancellor has already made that more difficult for them. He says
he has a package for energy costs, but that lasts for only six
months. Yesterday I spoke to a man who owns a leisure company. He
said that his bill next year will go from £100,000 to £475,000,
and that he will be closing. Why does the Chancellor not bring in
a proper measure that will last more than six months?
The hon. Gentleman makes a fair point in respect of energy costs,
and that is precisely why we intervened in the way that my right
hon. Friend the Prime Minister announced only a couple of weeks
ago. The package is £60 billion for households and businesses
across the next six months. That is a generous package, and we
are listening.
Mr Speaker
I call the SNP spokesperson, .
(Glasgow Central)
(SNP)
Businesses of all sizes are struggling with Brexit, import costs,
material costs, the weak pound against the dollar and the euro
and increased wage and energy costs, and they still do not know
what will happen when the Chancellor’s temporary reprieve ends in
March. The clock is ticking. Calder Millerfield, a food
manufacturing business in my constituency, has come back to me
with its latest quote, with the relief applied. It is £944,000
per year, up from £160,000 last year. What will the Chancellor do
to support manufacturing businesses now, because they will not
survive those increases?
As I have stated, the energy price guarantee does help businesses
in a large measure. Also, I am not going to take lectures from
the SNP about growth. In Scotland, for every year from 2010 to
2019, growth was lower than in the rest of the United Kingdom. I
will not take any lessons about supporting business from the hon.
Lady.
Mortgage Rates and the Bank of England
(Tewkesbury) (Con)
3. What recent discussions he has had with the Governor of the
Bank of England on rising mortgage rates. (901546)
The Financial Secretary to the Treasury ()
The Chancellor speaks regularly to the Governor of the Bank of
England on a wide range of matters. As my hon. Friend knows, the
Bank of England sets monetary policy, including interest rates,
independently of Government.
Mr Robertson
I thank the Minister for that response. Obviously, the world
situation is the biggest cause of the rise in interest rates, but
that rise is having a detrimental effect on mortgage payers and
risks negativising the welcome help that the Government have
provided through energy costs and tax cuts. Will the Chancellor
and Ministers meet more regularly with the Bank of England to
co-ordinate policy a little more closely?
I thank my hon. Friend for his question. He is a passionate
advocate in this place for his constituents. The Chancellor and I
regularly meet the Bank of England and all the individual lending
banks in the UK. My hon. Friend knows that interest rates have
increased in every major economy, despite what the Opposition may
claim. That is why it is so important that we provide help with
energy costs and cutting taxes.
Dame (Wallasey) (Lab)
Surely Ministers must now apologise for the chaos that their
mini-Budget, with its £45 billion of unfunded spending
commitments and tax cuts, caused to the bond markets. Is it not
now a fact that there is a Tory premium on every interest rate
rise for every borrower in this country? They are not going to
forget that when the election comes.
I think we all understand that there is a clear divide in this
House. The Government are supporting growth, providing support
for energy bills, giving the economy the confidence and certainty
that it needs this winter, and bringing forward supply-side
measures that will boost the economy, not being on the side of
striking workers who are bringing this economy to a halt.
Mr Speaker
I call the shadow Minister, .
Mr (Wolverhampton South East) (Lab)
With your permission, Mr Speaker, I wish to send my condolences
to the families of all those killed in the tragic accident in
Creeslough, County Donegal, last week. My parents came from quite
nearby. It is a beautiful place with a close community, and they
are very much in our prayers right now.
I welcome the Minister to his place. I am sure that he and the
Chancellor’s team wanted their first Budget to be remembered,
perhaps even studied in years to come. Well, they have certainly
achieved that ambition. Two-year fixed mortgage rates are above
6% for the first time since 2008, and they have risen sharply
since the Chancellor’s mini-Budget. Everyone coming off such a
rate will face much higher payments over the coming year,
possibly hundreds of pounds a month more. Why should people who
have worked hard to buy their own home pay the price for the
Government’s mistakes?
I add my comments and thoughts to those on the incident in County
Donegal last week.
We have already talked about our comprehensive energy support
package, which will help not just every household this winter and
prevent the uncertainty of energy bills that were forecast
potentially to reach £6,500 per home, but help businesses. The
Government are on the side of businesses and keen to improve the
supply side of our economy, so that we can grow to create the tax
revenues for our high-quality public services.
Mr McFadden
This morning, the Bank of England made a further intervention in
the markets, warning of
“a material risk to UK financial stability”.
That risk comes directly from the Chancellor’s mini-Budget two
and a half weeks ago. How much more will Government borrowing
cost next year as a result of the rising gilt yields since the
Chancellor’s statement on 23 September?
As I have already observed, we are seeing interest rates rising
in every major western economy. When Opposition Front Benchers
are finished with their British exceptionalism, perhaps they will
lift their eyes and notice that. What is more important is that
we are protecting consumers and households through the difficult
winter months ahead, and cutting taxes. Those are measures that
Government Members support and Opposition Members oppose.
Mr Speaker
I call the SNP spokesperson.
(Glasgow Central)
(SNP)
Today, the International Monetary Fund observed that the
Chancellor’s unfunded tax cuts have complicated the fight against
inflation. As a result, the Bank of England is expected to
increase the base rate to levels not seen since 2008. Families
have already struggled with increasing energy prices, Kantar says
that grocery inflation stands at 13.9%, and Santander is
preparing for increased mortgage defaults. What is the Minister
and his Treasury team doing to tackle the absolute chaos that
they have created?
I understand that the nationalist party likes to talk the country
down at every opportunity, but the reality is that we are taking
the action that we need, tackling the supply side, tackling the
strikes that are grinding down the economy and building the
energy supply that we need to help strengthen our economy and our
currency. The hon. Member’s party opposes nuclear and opposes
more oil and gas exploration.
Investment in Infrastructure
(Milton Keynes North)
(Con)
4. What fiscal steps he is taking to support investment in
infrastructure projects. (901547)
(Carlisle) (Con)
11. What fiscal steps he is taking to support investment in
infrastructure projects. (901554)
The Chief Secretary to the Treasury ()
A critical part of the Government’s growth plan is road, rail and
energy infrastructure. We will be introducing legislation shortly
to ensure that the delivery of that critical infrastructure is
massively sped up.
I am grateful for the investment in physical infrastructure, but
those on the Treasury Front Bench will know that we need the
skills for the future to deliver the jobs for the future to make
that infrastructure investment sustainable. Will the Minister
meet me to discuss the idea of MKU: a brand-new university in
Milton Keynes? Every single Minister and Secretary of State I
have spoken to about it thinks that it is a good idea. Will my
right hon. Friend meet me to get it off paper and get boots on
the ground?
I thank my hon. Friend, who is a tireless champion for the great
city of Milton Keynes. I would be delighted to meet him to
discuss the idea along with colleagues from, perhaps, the
Department for Education. I note that Milton Keynes has already
received £23 million through the towns fund, but I am happy to
meet him to discuss the idea.
Growing the economy is about improving people’s lives as well as
improving the success of places such as Carlisle. To achieve
that, we need both public and private investment, and, in the
case of public investment, it is infrastructure that will make
the real difference. Given the rise in the cost of infrastructure
projects, will the Minister confirm that where such projects have
a shortfall in funding but are ready to go, the Government will
step in and give additional funding to support them?
It is very much our intention to speed up projects where they are
ready to go. The growth plan announced a few weeks ago made clear
our commitment to doing that. The last spending review provided,
I think, about £100 billion of funding towards critical economic
infrastructure. Where we can speed up projects, we will certainly
be doing that. One project that we have in mind for exactly that
is the A66 northern trans-Pennine route, which I believe goes not
far from my hon. Friend’s constituency.
(Blaenau Gwent) (Lab)
In 2017, former Conservative energy Minister conducted a review of the
Swansea Bay tidal lagoon. He gave it the thumbs up, but since
then successive Governments have not pursued it. Given the energy
crisis we are in, will the Minister consider reopening the
business case? It could be a fantastic source of green energy for
our country.
The Government are extremely interested in all forms of new
energy generation. We are determined to make sure that the United
Kingdom is electricity-independent. We are looking at all kinds
of projects, including of course marine projects. I understand
that when the Swansea scheme was investigated there were
questions about value for money, but I am sure that we would be
very happy to take a careful look at any proposition that is put
forward, if the hon. Gentleman wants to do so.
(Aberdeen South) (SNP)
When it comes to the delivery of projects, I cannot help but
admire the speed at which the Government managed to transform
Downing Street from a nightclub into a casino. I have one ask
that is not a gamble. When are the Government going to deliver
the Acorn project in the north-east of Scotland?
My right hon. Friend the Chancellor says that that is something
we are examining carefully. The hon. Gentleman’s characterisation
of the growth plan is extremely unfair. The real risk is in not
having a growth plan. The real risk is in having taxes that are
too high. The real risk is not investing in infrastructure. It is
clear that this Government have a growth plan and the Opposition
have no plan.
(Thirsk and Malton)
(Con)
Of course it is always right to look for efficiencies and try to
get better value for money for the taxpayer. As we look for
spending cuts, could my right hon. Friend confirm that they will
not come at the expense of reductions in vital infrastructure
spending in our regions, not least in the north of England?
I am pleased to say, as my right hon. Friend the Chancellor said
when he introduced the growth plan, that expediting critical
infrastructure was an important part of that plan. Without
critical infrastructure, we are not going to see the growth in
jobs or wages and the prosperity that we all want. The Government
will do everything that they can to speed up the delivery of
those projects.
(Sheffield South East)
(Lab)
We do not know much yet about the Government’s new investment
zones, but in order to achieve success for the primary investment
in them, will the Government have specifically targeted funds for
infrastructure projects in those zones? If so, will this be a
further unfunded expenditure commitment?
I think the Chancellor set out the investment zone concept very
clearly. There will be, by agreement with local authorities,
planning freedoms and very significant tax cuts. Infrastructure
investments are being handled separately to that, but it would be
reasonable to expect a degree of co-ordination between the
Department for Levelling Up, Housing and Communities and the
Department for Transport, as they consider the way investment
zones interact with transport projects.
Bankers’ Bonuses
(Battersea) (Lab)
5. What assessment he has made of the potential effect of
removing the cap on banker’s bonuses on the distribution of
wealth. (901548)
The Financial Secretary to the Treasury ()
Reforming the EU’s directive on the bonus cap is not about paying
people more. All it ever did was increase base pay, regardless of
performance. It was never a cap on total remuneration, and no one
should pretend that it was.
(Battersea) (Lab)
That was total nonsense. As some families in Battersea struggle
to keep up with the rising cost of living, the Government have
chosen to help bankers by removing the cap on their bonuses,
while maintaining the cap on household social security. Despite
soaring bills and growing inflation, the cap has remained
stagnant since 2016, plunging hundreds of thousands of families
into deep poverty. The cap on social security is cruel. How can
the Chancellor seriously justify removing the cap on bankers’
bonuses but not the social security cap? Will the Minister have a
word with his colleagues at the Department for Work and Pensions
and change that?
The hon. Lady has fully booked her place as a member of the
anti-growth coalition. The Government are not afraid to be on the
side of the people who create the wealth that funds our public
services. In 1979 the top 1% of earners paid about 10% of income
tax; they now pay 29.1%. That is three times as much.
(North West Leicestershire)
(Con)
Does my hon. Friend agree that scrapping the cap on bankers’
bonuses will increase not only competitiveness, but tax
receipts?
Yes.
Mr Speaker
I call the shadow Minister.
(Hampstead and Kilburn)
(Lab)
At a time when my constituents are struggling to make ends meet,
struggling to put food on the table and struggling to put the
heating on, the Government have decided that the way to increase
growth in the economy is to lift the cap on bankers’ bonuses. Not
a single person or a single bank that I spoke to in the City as
shadow City Minister said that this was the right policy to drive
growth in the economy. Does the Minister really think that the
policy will drive growth in the economy, or will we see yet
another U-turn from his Government?
I can assure the hon. Lady that this Government are going to grow
the economy. We will grow the economy by releasing the burden, or
the yoke, of taxation, whether that is on ordinary people by
cutting the basic rate of tax from 20p to 19p, or by today
reversing the increase in national insurance, or by cutting the
taxes on the businesses that she has been meeting—I welcome
that—by reversing the increase in corporation tax next year.
First-time Buyers: Mortgages
(Totnes) (Con)
6. If he will take steps to help ensure mortgage products are
available for first-time buyers in the context of the reduction
in stamp duty announced in the growth plan 2022. (901549)
The Financial Secretary to the Treasury ()
This Government will back first-time buyers by increasing the
level at which they start paying stamp duty. A young couple can
now purchase a property for up to £425,000 without paying
tax.
A core tenet of our belief is to help everyone on to the housing
ladder, so what assessment has the Minister made since the growth
plan about helping people and areas to build houses for those who
need and want them?
My right hon. Friend the Secretary of State for Levelling Up,
Housing and Communities will make a statement to the House in the
coming weeks.
(Vauxhall)
(Lab/Co-op)
A constituent wrote to me and said, “What world do the Tories
live in? I guess one where you protect the rich and wealthy. The
suggestion that the Treasury thinks that a person on £30k a year
can buy a home in London is frankly laughable and salt in the
wound.” How does the Minister expect my constituents in Vauxhall
who are already struggling to pay their rent to save to buy a new
home on a salary of £30k?
I will be very happy to write to the hon. Lady and to talk to her
constituents about the unprecedented intervention that we have
made to protect them this winter from their energy bills, putting
valuable certainty and confidence not just into every household,
but into every business and the economy. That is why the
International Monetary Fund has today increased its growth
forecast for the United Kingdom.
Growth Plan: OBR Assessment
(Caithness, Sutherland and
Easter Ross) (LD)
7. If he will publish an assessment by the Office for Budget
Responsibility of the growth plan 2022 before 23 November 2022.
(901550)
The Chancellor of the Exchequer ()
The hon. Gentleman will have seen that I have brought forward the
publication of the medium-term fiscal plan to 31 October.
I think the House will agree that the uncertainty over the date
has not exactly helped forward planning on benefits. Any real cut
in benefits will mean people not having enough money to buy food
and clothing for their children, so does the Chancellor agree
that increasing benefits in line with inflation is the only fair
way forward? Indeed, it would be immoral to do otherwise. As the
chief executive of Inverness citizens advice bureau pointed out
to me, such benefit money is spent in the local economy and is a
boost to what the Chancellor has talked about many times: growing
the economy.
I am delighted to see that one member of the anti-growth
coalition is focusing on growth. However, on the hon. Gentleman’s
specific question, he will understand that the medium-term fiscal
plan is coming out on 31 October, and I will not prejudge any
measures in it.
(Harlow) (Con)
Does my right hon. Friend agree that the levelling-up fund is an
important part of the plan for growth, and has he seen Harlow
Council’s levelling-up fund bid, which I wholeheartedly support?
It would transform a derelict area of our town centre into a
thriving cultural quarter with jobs and investment, tackling
antisocial behaviour. Those abandoned buildings have blighted the
heart of our town for far too long.
My right hon. Friend is a redoubtable and highly persuasive
representative of his constituents. I would be happy to talk to
him about what we can do together to help his great
constituency.
(Cardiff South and Penarth)
(Lab/Co-op)
The Bank of England has had to intervene not once, not twice, but
three times now. The impact on pension funds is very significant,
and many of my constituents will be deeply worried. What
assessment has the Chancellor made of the impact of potential
additional pressures on the economy on public sector pensions and
the damage to pension funds for pensioners up and down this
country? Is that another reason why he did not want to publish
the OBR’s forecast at the time of his mini-Budget?
The OBR will be fully scoring and giving a forecast ahead of the
medium-term fiscal plan. I speak very frequently to the Governor
of the Bank of England, who is absolutely independent and is very
effectively managing what is a global situation.
Mr Speaker
I call the Chair of the Treasury Committee.
(Central Devon) (Con)
I very much welcome my right hon. Friend’s decision to bring
forward the medium-term plan and the OBR forecast; he has
listened, and he is right. However, may I caution him to reach
out as much as he can across both sides of the House, to be
certain that he can get through this House the measures he puts
forward to underpin that forecast? Any failure to do so will
unsettle the markets.
My right hon. Friend is absolutely right. He does a brilliant job
of chairing his Committee and is full of wise counsel; he is
absolutely right that we will and should canvass opinion widely
ahead of the publication of the plan.
(Wirral South) (Lab)
The OBR was the creation of a Conservative Government and was
designed to curtail wishful thinking in economic policy, so does
the Chancellor agree that it is unfortunate, to say the least,
that we seem to have Cabinet Ministers briefing against the
economic expertise of that independent institution?
As far as I am concerned—I speak to investors regularly about
this—the OBR is an institution that commands wide respect, not
only in the UK but across the world. Its independence, to me, is
absolutely sacrosanct.
(Hexham) (Con)
The energy price guarantee is an outstanding part of the growth
plan. It is key, but far too few businesses and households know
about it. May I urge the Chancellor to have a nationwide mail-out
campaign, coupled with the Government taking the lead on the
reduction of energy in all public buildings, as Germany and other
countries are doing? That would have the twin benefits of saving
consumers money and reducing taxpayer subsidies.
My hon. Friend makes an excellent suggestion. Obviously I am very
careful not to make unfunded spending commitments on the Floor of
the House, but his suggestion is very well made and we should
look into it.
Mr Speaker
I call the shadow Minister.
(Ealing North) (Lab/Co-op)
The Chancellor’s refusal to publish OBR forecasts just over two
weeks ago played a key role in falling confidence in the pound,
rising borrowing costs and market panic. His woeful decision to
avoid scrutiny by gagging the OBR helped to increase mortgage
costs for working people, who are now paying the price for
Conservative failure.
The Chancellor’s behaviour has been described by the former Bank
of England Governor Mark Carney as “undercutting” economic
institutions. Jonathan Haskel, a member of the Monetary Policy
Committee, has made it clear that a
“sidelined OBR generates more uncertainty”.
Does the Chancellor accept that they are right?
As I have repeatedly said today, the OBR will have a fully
forecasted and scored response to the medium-term fiscal plan in
less than three weeks.
Research and Development
(Mid Norfolk) (Con)
8. What fiscal steps he is taking to support research and
development. (901551)
The Economic Secretary to the Treasury ()
At the 2021 spending review, the Government announced an increase
in public expenditure on R&D to £20 billion a year by
2024-25, including funding for association to EU programmes.
I thank the Chancellor and his team for making the Treasury a
growth Department. Do they agree that innovation-led growth is
particularly important if we want to drive up productivity,
competitiveness and inward investment, and that our high-growth
sectors such as space, agritech and fusion have a big role to
play? Will the Economic Secretary specifically reassure those in
the R&D community that he will not be tempted to reduce the
allocation for Horizon or for science and research in the
comprehensive spending review? That would reassure the
markets.
Very few Members can look back on a track record of commitment to
R&D as significant as that of my hon. Friend, both as a
Minister and as a Back Bencher. I am happy to confirm to him that
we will abide by the spending review 2021 decisions, and that
that includes funding for core Innovate UK programmes, for
association to Horizon Europe and for the Advanced Research and
Invention Agency.
(Walsall South) (Lab)
The Minister needs to be much more specific about the Horizon
Europe programme. Is he aware that the Nobel laureate Sir Andre
Geim has said that top academics are leaving the country in
despair because the Government are not negotiating on Horizon
Europe? When will the Government do something—now?
The right hon. Lady is right about the importance of this issue.
The United Kingdom absolutely wishes to move forward, and we
would hope that the European Union would move forward apace with
us to reach an agreement.
Loan Charge
(Weaver Vale) (Lab)
9. What estimate he has made of the revenue that will be raised
by the loan charge. (901552)
The Economic Secretary to the Treasury ()
The loan charge was announced in the 2016 Budget as part of a
package of measures to tackle disguised remuneration tax
avoidance. In the 2022 spring statement, it was estimated that
the package would produce an overall Exchequer yield of £3.4
billion. The changes resulting from the 2019 independent review
of the loan charge have reduced the Exchequer yield by an
estimated £620 million.
Too many ordinary people are facing huge bills, untold distress
and, in some cases, personal harm and indeed suicide because of
the loan charge scandal. Can the Minister and the Government now
commit themselves to finally commissioning a truly independent
review to deal with this mess?
I do not think that any Member who has met constituents who have
been affected by the loan charge can have failed to be moved by
the emotional and psychological impact that it has had on many of
them. It is therefore right for me, as a Minister, to look at the
issue carefully, and I can say to the hon. Member that I will
engage all interested parties.
Levelling-up Agenda
(Barnsley Central) (Lab)
12. What fiscal steps his Department is taking to fund the
Government’s levelling-up agenda in the north of England.
(901556)
(Bradford South) (Lab)
17. What fiscal steps his Department is taking to support
levelling up. (901562)
The Exchequer Secretary to the Treasury ()
It is a pleasure to answer my first question at the Dispatch Box,
and to reply to the hon. Member for Barnsley Central (), who responded to my maiden speech.
The White Paper “Levelling Up the United Kingdom” set out a clear
plan to level up every corner of the UK by 2030. We are also
driving growth and unlocking housing across the UK with our new
investment zones, and we are continuing to invest billions in
regional infrastructure. That includes £1.7 billion allocated
under the levelling-up fund, of which £500 million went to the
north.
It is a pleasure to see the Minister at the Dispatch Box, and I
congratulate her on her appointment.
Previous Chancellors have not delivered the level of
transformative resource required for levelling up. I know that
the present Chancellor understands the huge potential that exists
throughout the north of England, but it seems to many of us that
the levelling-up agenda is sipping in the last chance saloon. Can
the Minister say what will be done differently under this new
Chancellor?
We are absolutely committed to the levelling-up agenda. South
Yorkshire received £570 million through the regional cities
transport scheme, £95 million through the levelling-up fund and
£46 million through the shared prosperity fund, and our ambitions
for levelling up continue.
Building on Bradford’s city of culture win and in a momentous
year for Rugby League, I am supporting the plan for the
transformation and regeneration of the home of the Bradford
Bulls, the iconic Odsal stadium, to become a world-class sports,
music and culture arena. This plan would be an incubator for the
ambitions of the entire Bradford district, delivering more than
£1 billion of socioeconomic benefits. Following the Bank of
England’s repeated interventions, can the Minister confirm that
round 2 of the levelling-up fund will still be going ahead in
full, and will she and the Chancellor demonstrate that by meeting
me, Bradford Council, the Bradford Bulls and the Rugby Football
League to discuss our catalyst for growth?
I can confirm that we will be going ahead with the second round
of the levelling-up fund. There should be decisions by the end of
the year, and I wish the hon. Lady well with her bid. An
independent assessment of the bids is going on at the moment, but
if that meeting is possible, we will do it. Clearly we would need
to decide if that was appropriate. I congratulate her on her
success in the first round of the levelling-up bids, where she
got £20 million for the Squire Lane leisure centre.
(Cleethorpes) (Con)
The renewable energy sector is vital to my constituency and the
neighbouring area, and it has done a great deal to level up the
local economy. Can the Minister give me an assurance that support
for the sector will continue?
We are very much committed to the sector, and I would be
delighted to sit down with my hon. Friend to discuss this
further.
(Rugby) (Con)
A key part of levelling up is the creation of investment zones,
and the Chancellor will be aware of the proposals for a
gigafactory at Coventry airport to support UK automotive
manufacturing. Does the Minister agree that the joint application
by the Labour Coventry City Council and the Conservative
Warwickshire County Council for an investment zone at Coventry
airport should be encouraged?
We are encouraging all higher and local authorities to look at
the investment zones and to apply. I think they are a great tool
for development, so I would absolutely encourage that
application.
(Perth and North Perthshire)
(SNP)
“Never has so much chaos been inflicted on so many by so few”
will be the motto that will reverberate down the eons from this
Government. Do they actually still believe in this fairy tale of
levelling up? Is it not now just a matter of how far they are
going to level us all down?
Everything we are doing is being driven by a growth agenda so
that we can level up all the way across the United Kingdom.
(Morecambe and Lunesdale)
(Con)
The Eden Project North is, as far as I am aware, the only project
in the second phase of the levelling-up round that has planning
permission and land allocated. I would like to know when the
decisions will be made so that we can get this shovel-ready
scheme going. Eden has £50 million to put on the table, and we
are asking for £50 million as match funding, in effect.
Decisions on the second phase of the levelling-up round will be
made by the end of the year, and I wish my hon. Friend well.
Inflation
(Glasgow East) (SNP)
13. What recent discussions he has had with the Secretary of
State for Work and Pensions on the potential effect of inflation
on that Department’s budget. (901557)
The Chief Secretary to the Treasury ()
I have regular discussions with my right hon. Friend the
Secretary of State for Work and Pensions. If the hon. Member’s
question relates to the operating budget of the DWP, we expect
Departments to live within their existing CSR21 allocations. If
his question relates to the level of benefits more generally, a
statutory process is undertaken every year and no decisions have
yet been made. They will be made in due course in the normal
way.
I thank the Minister for his answer, if not for his recent
tweets. Has he had any representations from the Secretary of
State for Work and Pensions to increase social security payments
in line with inflation? Far too often, this Government talk about
their agenda for growth, but failure to increase in line with
inflation will result only in a growth in food banks in
Easterhouse, in fuel poverty in Carmyle and in child poverty in
Baillieston. When is the Minister going to do the right thing and
commit to raising social security in line with inflation and not
with earnings?
I am obviously not going to offer any kind of running commentary
on the ongoing internal discussions. I have said that the normal
ordinary statutory process is ongoing, but the Government are
mindful of the cost of living pressures that people are facing. I
would draw the hon. Member’s attention to the large increase in
the national minimum wage—I think about 7%—that took place last
April or May, and there are now more vacancies in the economy
than there are people on unemployment benefits.
(Skipton and Ripon) (Con)
Can the Minister confirm that the Government will not balance the
forthcoming tax cuts on the backs of the poorest people in our
country?
The Government’s first objective is to ensure that the economy is
growing. That will help to lift wages and to create new jobs and
a sustainable tax base for our public services, but as we make
the decisions that my right hon. Friend refers to, we are going
to balance considerations of fairness and the cost of living
pressures that people suffer with the interests of the taxpayers
who are working hard to pay tax.
Mr Speaker
I call the Chair of the Public Accounts Committee, Dame .
Dame (Hackney South and Shoreditch) (Lab/Co-op)
The Minister talks about vacancies in the job market. There are
vacancies, of course, but many of my constituents earn under
£12,000 a year. They will not benefit from the tax cut, so they
rely on universal credit to make up the gap. They cannot afford
to work because of the high cost of childcare. They are already
on the poverty line. What is his advice to them? Will he give us
some comfort that the Government will make the right decision on
uprating benefits?
I have already explained that the normal statutory process is
under way. When it comes to helping people on lower incomes, I
mentioned the very significant increase in the minimum wage just
a few months ago. We made an unprecedented intervention this
year, amounting to £37 billion, which is disproportionately
directed towards people on lower incomes. The one third of
households on lower incomes are receiving an extra £1,200 this
year.
The hon. Lady also referred to the fact that people earning
£12,570 or less pay not a penny of national insurance and not a
penny of income tax, which is thanks to the action of this
Conservative Government.
Business Innovation
(Ruislip, Northwood and
Pinner) (Con)
14. What fiscal steps his Department is taking to encourage
business innovation. (901558)
The Economic Secretary to the Treasury ()
The Government are encouraging business innovation in many ways,
of which I will enumerate four. As I mentioned to my hon. Friend
the Member for Mid Norfolk (), there is a significant
uplift in R&D expenditure, with £150 million of innovation
loans over the spending period, research and development tax
relief, long-term investment in technology and science—a
competition is providing up to £500 million in Government
support—and the British Business Bank is supporting innovative
businesses, including through the future fund.
Owners and entrepreneurs behind small businesses such as Code
Ninjas in Bridge Street in my constituency are a key part of the
Government’s growth agenda. What steps does my hon. Friend have
in mind to enable such small and medium-sized enterprises to
create further jobs and growth?
I am not sure if I got the name quite correct. Was it Comms
Ninjas?
Code Ninjas.
Oh, right. Perhaps I can visit my hon. Friend’s constituency to
learn what the company does.
More generally, the growth plan focuses on important measures to
support small businesses that wish to grow, including by making
the £1 million annual investment allowance permanent, by looking
to expand the amount of money that can be given through the seed
enterprise investment scheme to help small businesses to grow
and, most importantly, through the Government’s energy price
support this winter.
Topical Questions
(Barnsley East) (Lab)
T1. If he will make a statement on his departmental
responsibilities.(901569)
The Chancellor of the Exchequer ()
This Government are relentlessly focused on growing the economy.
Putin’s barbaric war in Ukraine continues to put pressure on gas
prices so, with predictions of typical bills reaching between
£4,000 and £6,500 a year, people needed immediate support to get
them through this winter.
Last month we set out the growth plan, which will focus on
breaking out of the high-tax, low-growth cycle in which we are
currently trapped. This will put more money into people’s pockets
and raise living standards for all our people. This week I wrote
to my right hon. Friend the Member for Central Devon () to inform him that I will set out the medium-term
fiscal plan on 31 October, and I wish to remind the House that it
will be accompanied by a full economic and fiscal forecast
published by the Office for Budget Responsibility.
The Chancellor sat in a Cabinet that committed to increasing
social security payments in line with inflation. Why will he not
honour that promise?
As my right hon. Friend the Chief Secretary to the Treasury and I
have repeatedly said, no decisions have been made. The usual
statutory process is being undertaken, and we will have more
detail at the time of the medium-term fiscal plan.
(Witham) (Con)
The Chancellor will know that Essex is a pro-growth county and a
hub of economic growth. To support job creation and more economic
growth, will he commit to funding the dualling of the A120
between Braintree and Marks Tey and, importantly, along the route
that the county council, businesses and the local community have
specified?
I pay tribute to my right hon. Friend for her role in the Cabinet
and the Government. She is a fantastic colleague. I wish to
confirm that the A120 between Braintree and the A12 remains under
active consideration, alongside the rest of the third road
investment strategy pipeline.
Mr Speaker
I call the shadow Chancellor, .
(Leeds West) (Lab)
Since the Chancellor’s disastrous mini-Budget just 18 days ago,
we have seen wild swings in the value of the pound, gilt yields
up 100 basis points in a single day and the Bank of England
stepping in because of, in its words,
“a material risk to UK financial stability”.
The International Monetary Fund has now said that UK growth is to
slow further next year. This is a British crisis, made in Downing
Street; no Government are sabotaging their own country’s economic
credibility as this Government are. Are the Chancellor and the
Prime Minister the last people left on Earth who think their plan
is working?
To pick up on a point, the IMF said today that the plan—the
mini-Budget—has increased the forecast for growth. That is
precisely the opposite of what the hon. Lady has said. It is very
clear where we stand on this. We have pro-growth, pro-enterprise,
pro-business Conservatives on one side and the anti-growth
coalition on the other—they want to tax more and commit us to low
growth.
The Chancellor is in a dangerous state of denial, but the costs
of these mistakes are all too real for everyone else: borrowing
costs up; growth down; and mortgage payments set to increase by
£500 a month. Now the Government scrabble around looking for
cuts, hitting the most vulnerable and our public services. It
does not need to be this way. Will the Chancellor put aside his
pride, do the right thing for our country, end this trickle-down
nonsense and reverse the Budget?
Which of the tax cuts do the Opposition want to stop? Do they
want to stop the cut in the basic rate? Are they committed to
having a high tax economy? The other thing I suggest is that the
hon. Lady should get her facts right; the IMF today has said that
our growth is going up, not down.
(Eastbourne) (Con)
T4. Early results from my local business survey strongly suggest
that a lower VAT rate would increase investment, which would
boost recovery and growth in the hospitality sector in my
beautiful constituency. Will my right hon. Friend be reviewing
the case for a lower rate, to bring us back into line with some
of our international competitors?(901572)
The Economic Secretary to the Treasury ()
Eastbourne is indeed beautiful, as are North East Bedfordshire
and many other parts of the country. My hon. Friend is right to
talk about the importance of VAT to the hospitality industry,
particularly as we moved through the period of covid recovery. As
we now move towards the growth plan, we need to look at the level
of taxes on small businesses in general. That is a key part of
the work I will be looking at as part of the tax simplification
plan.
(East Renfrewshire)
(SNP)
T2. Push payment fraud losses increased by 71% in the first half
of 2021, surpassing card fraud losses for the first time. What
steps is the Chancellor taking to tackle this huge surge in
fraud, and importantly, to ensure that victims, including my
constituents, are reimbursed for their losses, instead of being
unfairly penalised for falling victim to these increasingly
sophisticated scams?(901570)
The Financial Secretary to the Treasury ()
Push payment fraud is a growing problem, which the Government
take very seriously. That is why we will be taking powers in the
Financial Services and Markets Bill that will mandate
reimbursement to consumers.
(Chipping Barnet)
(Con)
T7. It is a massive relief that the nightmare scenario of energy
bills of £4,000, £5,000 or even £6,000 has been prevented by the
energy price cap. Will the Government explain how they are
reducing the cost to taxpayers of that scheme and stabilising the
energy market for the future?(901575)
My right hon. Friend was 100% right to notice that the energy
intervention was exactly the right thing. We are going to have a
commitment to fiscal responsibility, which will stabilise the
economic situation and picture, and I am sure that her
constituents will fully understand what the growth plan is all
about: putting more money into their pockets so that we can have
a growing and dynamic economy.
(Ayr, Carrick and Cumnock)
(SNP)
T5. The Scottish Government announced yesterday that they will be
doubling the December bridging payment granted to low-income
families, to £260. The Child Poverty Action Group noted that this
will make “a real difference” to households struggling with the
cost of living crisis. What plans do the UK Government have to
follow suit and bring in targeted measures for low-income
households?(901573)
As my right hon. Friend the Chief Secretary said earlier, most of
the measures that constitute the £37 billion intervention were
targeted directly at the vulnerable constituents of all of us in
this House. The energy price guarantee will also be greatly
beneficial to people across our country who are suffering because
of the cost of living. The Government are committed to a huge
amount of intervention, and our top priority is making sure that
everyone gets through challenging times as best they can.
(Sevenoaks) (Con)
T8. The Chancellor has provided families across Sevenoaks and
Swanley with vital support for their energy bills. However, in
the past year the price of heating oil has more than doubled for
my more rural constituents who are off the mains gas grid. The
£100 support is welcome, but will the Chancellor and the Business
Secretary review the support in the light of those severe price
rises?(901576)
Absolutely. I am in frequent contact with my right hon. Friend
the Business Secretary, and we have sequestered and dedicated a
pot to help people who are off the gas grid. We are happy to help
my hon. Friend and her constituents in this challenging time.
(York Central)
(Lab/Co-op)
T6. Given that the Bank of England is having to go even further
to refinance the UK Government bond market, what discussions has
the Chancellor had with the Pensions Regulator about the
viability of defined benefit schemes and the devaluation of
defined contribution schemes and annuities—or will workers have
to pay for this?(901574)
My hon. Friend the Financial Secretary to the Treasury and I are
engaged with all the regulators, particularly the Prudential
Regulation Authority, and we will be absolutely committed to
getting to the bottom of what has happened, particularly in the
long-dated gilt market, which has been over-levered in the past
few weeks.
(Forest of Dean) (Con)
T9. The Chancellor has said that he will set out a fully costed
plan to get debt falling as a proportion of GDP, and he has
confirmed at the Dispatch Box that that will be done in just
under three weeks’ time. This morning’s Institute for Fiscal
Studies report suggested that in order to do so, there will need
to be fiscal tightening of around £62 billion over the next four
years. Does the Chancellor agree with that analysis? If, as I
suspect is the case, he does not, will he set out why
not?(901577)
As I have said repeatedly, I am not going to prejudge what is in
the medium-term fiscal plan, which will be fully scrutinised not
only by the OBR but, I am sure, by my right hon. Friend. I do not
think that it is right for me to prejudge or anticipate those
measures today.
(Edinburgh West) (LD)
Despite the Chancellor’s confident words, the IMF is predicting
that inflation will last longer in this country than in other
similar economies. In my constituency of Edinburgh West, which
has half the national average rate of unemployment and claimants,
people are so concerned that more than half of them are talking
about cutting their essential budgets, and, according to recent
reports, 20% are concerned that they might have to turn to food
banks for the first time. When will the Chancellor reassess the
potential impact of this growth plan and accept that maybe he has
got it wrong?
The IMF specifically said this morning that the 2023 forecast for
growth in this country has gone up as a direct consequence of the
mini-Budget. In respect of helping constituents up and down the
land, we have already committed £37 billion of energy support
this year and a further £60 billion to houses and businesses over
the next six months, and we are committed to making sure that
every one of our constituents gets through this winter as best
they can.
(Hyndburn) (Con)
Numerous residents such as those at Harwood Bar caravan park have
been in touch with me about the £400 energy support scheme. The
previous Chancellor confirmed that there was an equivalent scheme
for those in caravan parks and park homes. Could the Chancellor
please provide an update for my constituents in Hyndburn and
Haslingden?
As I said in relation to heating oil, a pot of money is going to
be reserved to help people who are off the grid. We have already
made announcements about that, but I would be very happy to speak
with my hon. Friend and my right hon. Friend the Business
Secretary.
(City of Chester)
(Lab)
The upkeep of the Chester city walls costs about £600,000 a year,
but that money has to come out of the local authority’s highways
budget. Can the Government set aside a small amount of money to
help local authorities with the stewardship of internationally
important heritage assets?
The Exchequer Secretary to the Treasury ()
The Government continue to support the heritage and cultural
sector. There are several sources of funding from Government
arm’s length bodies such as the National Lottery Heritage Fund
and Historic England’s repair grants, so I encourage the hon.
Gentleman to look into those.
(Eastleigh) (Con)
Since the 1970s, residents in Eastleigh have long been expecting,
and have been promised at times, funding for the Chickenhall Lane
bypass, including being allocated funding in the 2015 Red Book.
Will the Minister agree to meet me and Hampshire County Council
to discuss getting this sorted for people who have simply waited
far too long?
The Chief Secretary to the Treasury ()
My hon. Friend is a tireless advocate for that and other projects
in his constituency. I and perhaps colleagues from the Department
for Transport would be delighted to meet him and his county
council colleagues to discuss that important project.
(Bethnal Green and Bow)
(Lab)
The Chancellor was warned that unfunded tax cuts would force the
Bank of England to increase rates and that is exactly what has
happened. The Bank of England has said today that, in effect, the
mini-Budget has caused a material risk to Britain’s financial
stability. Can the Chancellor explain how people are supposed to
pay their mortgages, which have gone up by £500 on average and
£900 in London? What is he going to do about it, because it is
not acceptable that his incompetence is risking people’s
livelihoods?
I have two points to make on that. First, the Bank of England
certainly did not say that the mini-Budget increased risk.
Secondly, as rates are rising throughout the world, there is
exposure. That is precisely why we thought that it was absolutely
right to have the energy intervention, which is for two years—let
us not forget that the Labour plan was for only six months —and
to reduce the burden on people by reducing taxes.
(Winchester) (Con)
Talking to people working in the housing industry in Winchester,
I have found that they are not convinced that the stamp duty
reduction will help first-time buyers while inflation and
particularly mortgage rates are creeping up. Lenders are coming
back with some good rates, and the Chancellor will know that, but
when he delivers his statement on 31 October, will he ensure that
it has confidence at its heart and that it is—knowing him, it
will be—a relentlessly positive statement, so that we can push
confidence right the way through the market?
It will be relentlessly upbeat. These are challenging times, but
we have to live within our means and there will be an absolute
iron commitment to fiscal responsibility.
(Birmingham, Selly Oak)
(Lab)
Will the Minister admit that, if the Government do not increase
the guarantee credit component of pension credit in line with
inflation this year, they are effectively cutting the incomes of
our poorest pensioners when they need help most?
We are absolutely committed to fairness and to helping the most
vulnerable in our society—we are always committed to that—and I
will not prejudge or anticipate measures in the medium-term
fiscal plan this afternoon.
(Runnymede and Weybridge)
(Con)
Will my right hon. Friend confirm that the cuts to national
insurance will help not only working households, but businesses
and the public sector, such as schools?
My hon. Friend and constituency neighbour is absolutely right.
The reversal of the planned increase in national insurance will
help businesses, individuals and the institutions to which he
refers.
(Kingston upon Hull West and
Hessle) (Lab)
Can the Chancellor state how much the investment zones are worth
and how they will be funded?
There will be more detail about investment zones. My right hon.
Friend the Secretary of State for Levelling Up, Housing and
Communities will be updating the House on the specifics of the
zones.
Mr Speaker
I call Mr Hollinrake for the final question.
(Thirsk and Malton)
(Con)
Thank you, Mr Speaker. The UK has rightly frozen around £30
billion of Russian foreign currency reserves. A number of
countries are moving from freezing those assets to seizing them
to pay reparations to Ukraine. Will my right hon. Friend look at
similar measures from the UK?
Those measures have been discussed in the past; I think my right
hon. Friend the Member for Surrey Heath () talked about that earlier in
the year. Those schemes are always being looked at in the light
of what is an increasingly bleak and volatile situation in Russia
and Ukraine.
