Investment Zones
(Darlington) (Con)
1. What assessment he has made of the potential impact of
investment zones on the performance of the economy. (904814)
(Carlisle) (Con)
25. What assessment he has made of the potential impact of
investment zones on the performance of the economy. (904838)
The Chief Secretary to the Treasury ()
I would like to inform the House that the Chancellor is not with
us today because he is at the G7 in Japan.
The refocused investment zones programme will grow the UK economy
and bring investment to areas that have traditionally
underperformed economically. The programme will catalyse 12
high-potential, knowledge-intensive growth clusters across the
UK, including four across Scotland, Wales and Northern Ireland,
in our key future sectors.
I warmly welcome the Government’s announcement that the Tees
valley will be the location of one of their new investment zones,
and this £80 million investment will unlock new opportunities for
my region. Does my right hon. Friend agree that this is further
evidence of levelling up for Darlington and the Tees valley? Can
he outline a timescale for when we will see things start to
happen?
The Tees Valley investment zone will boost productivity and drive
sectoral growth while providing benefits for the local
communities that my hon. Friend represents. The Government want
to make rapid progress on delivering investment zones. We are
engaging with partners to ensure that we can support those with
the ambition to move at speed, and we intend to have all
proposals agreed by the end of the financial year, and sooner if
at all possible.
Business investment and wealth creation will clearly be central
if we are to rebalance the economy and close the gap between less
successful and more prosperous areas. Would the Minister
therefore agree that prioritising investment zones in areas that
need a helping hand is the right course of action? And does he
envisage an investment zone in the borderlands area in the near
future?
My hon. Friend is tireless in his advocacy for his constituents.
The areas of England that are eligible to host an investment zone
were identified through a rigorous analytical assessment that
reviewed every place in England and shortlisted based on their
strengths in innovation, productivity, potential and levelling up
need, as well as the strength of local leadership, knowledge
assets and sectoral strengths.
The borderlands area is already benefiting from the £452 million
borderlands growth deal, which was signed just two years ago and
aims to create 5,500 jobs. My hon. Friend is also familiar with
the recent £134 million investment signed off through the housing
infrastructure fund, leading to 10,325 homes in St Cuthbert’s
garden village.
(Strangford) (DUP)
The Minister mentioned the four investment zones, including one
for Northern Ireland, in his opening answer. Of course I make a
plea for my constituency, as everyone will. What discussions has
he had with the Department of Finance back home about a potential
investment zone in Strangford, to ensure that people in my
constituency can have the same opportunities as people across the
United Kingdom?
I think the whole House will agree that the hon. Gentleman must
be the most effective advocate for his constituents. We will see
what happens. There will be a rigorous process, including wide
consultation, and we expect to have an outcome that benefits his
constituents and people across Northern Ireland.
Mr Speaker
I call the SNP spokesperson.
(Dundee East) (SNP)
The incentives offered by investment zones include 100% business
rates relief and enhanced capital allowances. With the exception
of reduced national insurance contributions, it is hard to see
the difference between an investment zone and an enterprise zone.
What additional fiscal support are the Government providing to
differentiate these investment zones from enterprise zones?
The key distinction is that we have identified areas that have
clusters, often relating to a university, and that have potential
in a key sector. The investment zones will be worth £80 million
over five years, and we are obviously working very closely with
partners. It is difficult to be precise about the numbers,
because there will be bespoke collaborations depending on which
sectors are involved.
I thank the Minister for his answer but, of course, enterprise
zones and, indeed, their near cousin, the freeport, also spoke
about clusters in the same kind of language. What steps are the
Government taking to ensure that investment zones do not suffer
from the same problem as enterprise zones and freeports, which
was a woeful failure to deliver the number of permanent,
good-quality jobs that was initially promised?
That is a legitimate concern to raise and it is why we have
followed the analytical approach to which I referred. We will be
working closely with the Department for Levelling Up, Housing and
Communities to look at each proposal by the end of the year. We
will be having that certainty on the tax incentives over those
five years and making local authorities an accountable body for
the delivery of this. The right hon. Gentleman’s whole political
doctrine is about the distinctions that exist in different
communities around the United Kingdom, and that is why we have a
variety of interventions designed to make an effective impact in
different places across the UK.
School Meals: Impact of Inflation
(Twickenham) (LD)
2. What recent discussions he has had with the Secretary of State
for Education on the potential impact of inflation on the
provision of school meals. (904815)
The Chief Secretary to the Treasury ()
The Chancellor has regular discussions with Cabinet colleagues on
a range of issues. The autumn statement 2022 provided an
additional £2.3 billion in funding for schools this year and
next, over and above the totals announced at the spending review
in 2021. That means that school funding next year will be £58.8
billion, exceeding 2010 levels of per pupil funding in real
terms. That will help schools to manage costs, including those of
school meals.
Since Liberal Democrats in government rolled out universal infant
free school meals in 2014, funding for them has increased by just
11p. Given the soaring food costs, that is resulting in a real
shortfall in meeting schools’ costs, which is having to be
subsidised by cutting teaching budgets. The shortfalls range from
11p per meal in my local authority area of Richmond upon Thames
to as much as 39p per meal in Hampshire. Will the Treasury
provide the extra cash so that free school meal funding reflects
the true costs that schools face or will the Minister continue to
leave our schools and children short-changed?
I do not agree with that analysis. The free school meals funding
for 2023-24 was set in line with precedent every year, using
inflation forecasts in the autumn prior. About 1.9 million pupils
are claiming a free school meal at lunchtime, which equates to
22.5% of pupils in state-funded schools; together with the 1.25
million infants supported through the universal infant free
school meal policy, this is having an impact. However, I
recognise the pressures across the whole economy, which is why,
as I said, the Government gave those additional funds in the
autumn statement last year.
Financial Services Sector: Regulatory Framework
(Harrow East) (Con)
3. What steps his Department is taking to improve the regulatory
framework of the financial services sector. (904816)
The Economic Secretary to the Treasury ()
The Edinburgh reforms take forward the Government’s ambition to
maintain the UK’s position as a world-leading global financial
centre, while ensuring that our financial sector remains robust
in the face of market shocks. In particular, they introduce a new
secondary duty of facilitating growth and international
competitiveness, which is a first for UK regulators.
I thank my hon. Friend for that answer. Clearly, the culture and
performance of regulators is one key consideration for firms when
they choose to invest in the UK. What steps is he going to take
to introduce key performance indicators for financial regulators
to report on their delivery against the new growth and
competitiveness objective in the Financial Services and Markets
Bill? Is he considering adding any measures to the Bill that
would strengthen the independent scrutiny of regulators?
My hon. Friend does great service as chair of the all-party group
on personal banking and fairer financial services, so he knows of
what he speaks. Today, the Government published a call for
proposals on the metrics that regulators should publish to
support scrutiny of their work; as every business leader knows,
what gets measured gets managed. That responds to the significant
interest shown by industry and Parliament in ensuring that
appropriate and transparent public measures are in place to
support scrutiny of the regulators’ performance. The Government
are clear that with great power must come greater
accountability.
(Harrow West) (Lab/Co-op)
One measure that would improve the regulatory framework for
mutuals in the financial services sector, such as Royal London or
Liverpool Victoria, would be the introduction of permanent mutual
shares. Given that such a reform would allow a new safe route to
access the capital that such financial mutuals need to expand—and
without having to demutualise—will the Minister explain why the
Treasury is still dragging its feet on the introduction of such a
significant reform?
The hon. Gentleman and I have talked a number of times about
this. I do not think it is fair to say that the Treasury is
dragging its feet. We have supported reform of the mutuals
sector. We welcome a diversity of provision, which involves a
greater expansion of and more commercial freedom for the mutuals
sector. With the Law Commission, we are looking to take its work
forward to see whether we can help, and I am always happy to sit
down with him, or with any representatives from the sector, as
part of my widespread programme of engagement.
Energy Costs: Support for Businesses
(Edinburgh West) (LD)
4. What fiscal steps he is taking to support businesses with
energy costs. (904817)
The Exchequer Secretary to the Treasury ()
The energy bills discount scheme will provide all eligible
businesses and other non-domestic energy users with a discount on
high energy bills for 12 months from 1 April 2023 to 31 March
2024. It will also provide businesses in sectors with
particularly high levels of energy use and trade intensity with a
high level of support. The scheme will help those locked into
contracts signed before recent significant falls in the wholesale
price manage their costs and provide others with reassurance
against the risk of prices rising again.
Speaking to businesses in my constituency of Edinburgh West over
the past week, I have been hearing that they are not finding the
help that they need. The combination of the cost of living
crisis, energy costs and business rates is pushing them towards a
crisis. The Federation of Small Businesses estimates that 93,000
small businesses could go out of business this year because of
high energy costs. Do the Government accept that more will have
to be done, particularly to help small companies renegotiate
tariffs, and will they tell me what they intend to do about
that?
The hon. Lady raises an incredibly important point, and this
Government are very alive to the issues that businesses face
across the country. She will be aware that, last year, the energy
bill relief scheme was unprecedented in its nature and scale, and
that the Government were always clear that that would be time
limited and intended as a bridge for businesses as wholesale gas
prices come down. Those prices have now come down quite
significantly, but we do have the energy bills discount scheme,
which strikes the right balance between supporting businesses for
another year, but also limiting the taxpayers’ exposure to
volatile energy prices.
(Aberconwy) (Con)
The Treasury was quick to act during the pandemic when hoteliers
in Aberconwy told me that banks were directing them to their
premium lending products instead of the Government’s coronavirus
business interruption loan scheme. Now those same hoteliers are
telling me that the energy supply market seems to have failed.
They are seeing their bills tripling just as market rates drop
below Government support levels. They fear that the supplier’s
thumb is on their side of the scales. None of this will be new to
the Minister, so can he please tell me what he is doing and can
he meet me and sector representatives to make sure that some
common sense is brought back to energy supply contracts?
My hon. Friend is a great champion of businesses in his
constituency. In the first instance, I advise businesses always
to contact suppliers to discuss their contracts. We are alive to
the fact that some businesses are having difficulties securing
the benefit of falling wholesale prices from their energy
suppliers. In January, the Chancellor wrote to Ofgem, which
oversees the energy market for consumers, and Ofgem has now
launched an investigation into the non-domestic energy market. We
await its conclusions, and, at that point, I would be very happy
to meet my hon. Friend.
Inflation
(Kettering) (Con)
5. What recent steps he has taken to reduce the rate of
inflation. (904818)
Mr (Old Bexley and Sidcup)
(Con)
9. What progress he has made on reducing the rate of inflation.
(904822)
(Fylde) (Con)
11. What progress he has made on reducing the rate of inflation.
(904824)
The Economic Secretary to the Treasury ()
The Government’s three economic priorities this year are to halve
inflation, grow the economy, and get debt falling. This will
require patience and discipline. Countries around the world are
facing rising prices and we will not be able to make that go away
overnight, but by sticking to our plan, we will halve inflation
this year and help to ease the pressures that people are
facing.
Mr Hollobone
Food price inflation is increasing far faster than the overall
average increase in prices. This is affecting the poorest the
hardest in Kettering and across the country. Is there any good
news at all from His Majesty’s Treasury about the prospects for
food price inflation over the next 12 months?
My hon. Friend is a doughty champion for his constituents. The
Office for Budget Responsibility this year does expect food,
tobacco and alcohol inflation to fall significantly, and that is
not all. The Government recognise the challenges facing
households due to the elevated cost of living in general,
including food, so we took action at the spring statement to
support struggling families. Taken together with previous action,
support to households to help with bills is worth an average of
£3,300 a year across this year and next.
Mr French
The Government are absolutely right to prioritise reducing
inflation given the significant impact it is having on families
and businesses across the country. I welcome the support that the
Minister has just outlined for families in my constituency of Old
Bexley and Sidcup. Can he confirm what assessment has been made
by the Treasury of the impact of more than a decade of abnormal
monetary policy following the global financial crisis?
As my hon. Friend knows, monetary policy is the responsibility of
the independent Monetary Policy Committee and the Bank of
England. We will continue to work closely with them to ensure
that monetary and fiscal policy are well co-ordinated. The
Chancellor reconfirmed the inflation target of 2% at the autumn
statement and confirmed that this Government will not change the
target.
While inflation is now heading in the right direction, the effect
of the price rises is still being felt by Fylde’s older people.
What steps is my hon. Friend taking and what conversations has he
had with the Department for Work and Pensions to ensure that
Fylde’s retired residents are well protected?
I and my colleagues work closely with colleagues in the DWP, as
my hon. Friend knows, on behalf of pensioners in Fylde. More than
8 million pensioner households will receive a cost of living
payment of £300 this winter, but more than 12 million pensioners
have benefited from a 10.1% increase to their state pension. That
is the biggest percentage rise in the state pension for more than
30 years and its biggest-ever cash increase.
(Wirral South) (Lab)
As the Minister rightly said, monetary policy is made
independently by the Monetary Policy Committee in this country.
However, the Government are responsible for economic stability,
and for that we need investment. What policies of the past couple
of years does the Minister believe have got us into this position
with inflation, and how are the Government going to make sure
that we have better economic stability, given their recent
record?
The hon. Lady omits to mention both the headwinds from the global
pandemic and Russia’s aggression in Ukraine. Any financially
literate conversation on this subject has to acknowledge that we
see very similar rates of increase in inflation and rising
interest rates across the developed world. In that context, this
Government are focusing on stability, ensuring that we continue
to pay down debt over the cycle and do not do as the previous
Labour Government did and leave a note behind for their
successors saying that there is no money left.
(Glasgow Central)
(SNP)
Food price inflation stood at 19.2% in March, up from February.
That is causing severe problems for many in my constituency,
particularly those who have no recourse to public funds status,
meaning that they are not entitled to any support from the
Government whatsoever. What will the Minister do to help those
people, who are struggling and heading for the food banks because
they cannot afford to make ends meet?
In the interest of time, I will not repeat for the hon. Lady the
support for households, which averages £3,500 across the United
Kingdom. If she has constituents with particular needs, the
Government have recently extended the £1 billion household
support fund and I suggests she works with her local authority to
try to meet their needs through that.
(Oxford West and Abingdon)
(LD)
Inflation is hitting not just individuals and families, but
councils and potentially infrastructure projects. Lodge Hill
junction on the A34 in Abingdon is one such key piece of local
infrastructure, and when completed, will support jobs and housing
across Oxfordshire and Science Vale and the economy as a whole.
Homes England and the Department for Levelling Up, Housing and
Communities say that the final piece of that funding now sits
with the Treasury in the brownfield, infrastructure and land
fund. Will the Minister meet me so that I can explain why this is
such an important piece of funding to be released, and please can
the Government supply the last piece of this puzzle so that we
can deliver Lodge Hill junction once and—
Mr Speaker
Order. That has absolutely nothing to do with the question. It is
a bit of a struggle, is it not? Do you think you can answer it,
Minister? No. Okay.
Hair and Beauty Sector: Disguised Employment Practices
(Mid Derbyshire) (Con)
6. What assessment he has made of the potential impact of
disguised employment practices in the hair and beauty sector on
tax revenues. (904819)
The Financial Secretary to the Treasury ()
As the Minister responsible for His Majesty’s Revenue and
Customs, may I wish His Majesty the King and Her Majesty the
Queen a very long and successful reign and say that its 63,000
members of staff will be proud to try to help His Majesty’s
Revenue and Customs, as they are bound to do? The Government are
aware of concerns about employment practices in the hair and
beauty sector. The concerns are largely focused on the so-called
rented chair model, which is a long-standing practice and a
legitimate alternative to employing stylists, provided that the
parties involved follow the relevant rules. The Government are
committed to tackling disguised employment and HMRC will consider
any evidence suggesting that businesses have misclassified
individuals for tax purposes.
Mrs Latham
It is estimated that 70% of the hairdressing industry is
currently operating under a self-employed model to avoid
pay-as-you-earn, national insurance and VAT. According to His
Majesty’s Revenue and Customs guidelines, those salons often
amount to disguised employment. The problem is that all
apprentices—and 90% of hairdressers learn through
apprenticeships—must be trained in salons that pay their tax, an
increasingly unattractive model. Will the Minister consider how
we can taper VAT rates or enforce disguised employment rules more
stringently to ensure that we have appropriately trained
hairdressers in future?
I am sure that I am joined by all Members of the House in
thanking my hon. Friend for her interest in ensuring that we have
hairdressers in 15 years’ time. We recognise the important role
that hairdressing salons play in the education and training of
apprenticeships. Indeed, funding for employer-led apprenticeships
will grow to £2.7 billion in 2024-25, which will help to pay for
the cost of training and assessment. However, she is quite right
to pinpoint the need for those participating in the hairdressing
industry to ensure that they are following the rules correctly.
It is not their choice; there are very strict criteria, and they
must make sure that they follow them. I very much look forward to
discussing this in further detail with my hon. Friend later this
week or next week.
(Rutherglen and Hamilton
West) (Ind)
The hair and beauty industry is characterised by a high
percentage of female entrepreneurs and young people. However,
that workforce continues to be at risk of disguised employment.
What steps are Ministers taking to ensure that self-employed
individuals are aware of their tax expectations so that women and
young people can continue to thrive in that sector?
Is it not wonderful that we have so many women setting up their
own businesses and taking that step into entrepreneurship?
[Interruption.] Oh, there is chuntering from those on the Labour
Benches; they seem to disagree. The hon. Lady is right that we
should ensure that we help entrepreneurs, whether male or female,
to understand the rules when it comes to tax. That is why we
provide guidance and support for customers to help them
understand employment status, and we have agreed guidelines
specifically with the National Federation of Hairdressers to help
it communicate with its industry about which rules apply to which
hairdressers.
People on Lower Incomes: Financial Support
(Rother Valley)
(Con)
7. What steps he is taking to support financially people on lower
incomes. (904820)
(Ruislip, Northwood and
Pinner) (Con)
15. What steps he is taking to support financially people on
lower incomes. (904828)
The Chief Secretary to the Treasury ()
The Government are taking action to protect struggling families
by providing support, worth £3,300 per household on average over
this year and last, to help with higher bills. That includes
targeted support for the most vulnerable in our society through
additional cost of living payments and the uprating of benefits
by 10.1% this year. The Government have also increased the
national living wage by 9.7%, representing an increase of more
than £1,600 in the annual earnings of a full-time worker on the
national living wage.
Does my right hon. Friend agree that the best support in the cost
of living crisis, beyond the £94 billion that the Government have
already spent, is the cutting of inflation to ease
pressures—especially on food, fuel and energy—for families in
Rother Valley and up and down the country?
I absolutely agree. The Government are doing three things to
reduce inflation: we are remaining steadfast in supporting the
independent Monetary Policy Committee at the Bank of England as
it continues to take action to return inflation to target; we are
making responsible decisions on tax and spending, so that we are
not adding fuel to the fire; and we are tackling high energy
prices by holding down energy bills for households and
businesses, alongside investing in long-term energy security.
Lowest-income households in my constituency are the biggest
beneficiaries of a strong economy. Does my right hon. Friend
agree that reducing debt, reducing inflation and balancing the
books are the most effective Government interventions to support
low-income households?
Absolutely. It is right that we continue support for the cost of
living challenges. I have mentioned the energy price guarantee;
we are also sticking to that plan to avoid unnecessary
inflationary pressure. [Interruption.] On average this year, as a
result of Government decisions made from—[Interruption.]
Mr Speaker
Order. Members will have to continue their conversations at
another time. Carry on, Minister.
As a result of Government decisions made from autumn statement
2022 onwards, households in the bottom half of the income
distribution will see, in cash terms, twice as much benefit from
Government support as households in the top half of the income
distribution.
(Rotherham) (Lab)
I listened with interest to the answer that the Minister gave
about support for households, but it does not match the reality
in Rotherham, where constituents have had increases in rent,
mortgages, fuel and food, as well as cuts to public services.
What is he going to do to deliver the support that we need to
make ends meet, because the offers on the table are not cutting
it?
Everyone can see that the Government have made a range of
interventions over the past two years, which means support for
all of those on means-tested benefits—8 million people. Eight
million pensioner households will benefit from the
non-discretionary payments, effectively. The household support
fund, which we repeated, provides another £1 billion to give
local authorities discretion in individual circumstances to offer
supplementary support. Of course, I recognise that this is an
incredibly challenging time for the most vulnerable, but we have
tried to target those interventions on them, listening to the Low
Pay Commission and increasing the national living wage to £10.42.
We recognise that these are difficult times, but we will get
through them.
Tax System: Fairness
(Cambridge) (Lab)
8. What recent steps he has taken to ensure fairness in the
application of the tax system. (904821)
(Leeds East) (Lab)
20. What recent steps he has taken to ensure fairness in the
application of the tax system. (904833)
The Financial Secretary to the Treasury ()
It is right that everyone contributes to sustainable public
finances, and the Government are ensuring that those with the
broadest shoulders pay their fair share. The spring Budget took
steps to tackle avoidance and to improve the ability of His
Majesty’s Revenue and Customs to collect tax debts. That is
alongside taking millions out of tax altogether by consistently
raising personal tax allowances. An average of more than £3,300
of assistance per household in the UK has been provided for help
with the cost of living over this year and last.
Last week, energy companies announced record profits—some £60
million a day from North sea oil and gas. Today, the Daily Mirror
reports that last month 2 million people were unable to pay a
bill, so why on earth do the Government not close those huge,
huge holes in the levy on North sea oil and gas profits, and get
that money to the people who need it?
I do not think that the hon. Gentleman is being quite fair, as he
neglects to tell the House the rate of levy for those companies.
He will understand why we have said to businesses that want to
invest to improve energy security in the United Kingdom that we
will support such investment. That is in our interests, as we
have heard today concerns raised by Members of Parliament on
behalf of their constituents about the cost of living and the
impact particularly of energy prices.
The Government recently announced a huge tax giveaway to the very
wealthiest, allowing them to stash vast sums in their pensions
tax-free. The £1 billion annual cost of that handout would cover
the cost of free school meals. Food banks gave out a million food
parcels for children last year, so why do the Government think
that this tax cut for the super-rich is a priority?
I gently remind the hon. Gentleman of the conversation that
happened at the Budget—I hope he recalls it—about the need to get
doctors, consultants and those in the public sector back into the
NHS. We heard from doctors themselves—the British Medical
Association and others—that there were barriers in the pension
tax rules which stopped them continuing to serve. I am delighted
if those rules help more doctors to serve our NHS and help our
constituents who are patients—helping doctors to continue to
serve in that vital public service. The difference between
Conservatives in government and Opposition Members is that we
listen to people, and we deliver what we need to keep the economy
going and help our NHS.
(Stoke-on-Trent North)
(Con)
One of the best ways to ensure fairness in the tax system is to
let people keep more of their hard-earned money. Last summer, the
Prime Minister outlined a plan that would cut the basic rate of
income tax to 15p in the pound by the end of the decade. Can the
Minister let me know when that plan will be outlined in more
detail?
I hope my hon. Friend has been listening to what the Chancellor
said at spring Budget and in speeches since then about the need
for fiscal responsibility. We have to be fiscally responsible; we
have acknowledged that. We have had to make some very difficult
decisions along the way, but we are clear that halving inflation,
tackling our debt and growing the economy will enable us to make
the sorts of tax cuts that he and I both want to see so much.
Mr Speaker
I call the shadow Minister.
(Ealing North) (Lab/Co-op)
Tens of thousands of people have been affected by the loan
charge, with some having faced well-documented distress and harm
as a result of HMRC’s approach. At the same time, HMRC has been
issuing fewer than two fines a year against the architects and
enablers of failed tax avoidance schemes. It is absolutely right
that disguised remuneration schemes are tackled fairly and
effectively, so how on earth can the Conservative Government
justify such a light-touch approach for the promoters of such
schemes, while many of those caught up in them face such a
nightmare?
I draw the hon. Gentleman’s attention to the strengthening of
HMRC’s powers to tackle promoters of tax avoidance in the Finance
Acts of 2021 and 2022, with a further tough new package of
measures to ensure that promoters face stronger sanctions much
more quickly. These measures will raise £130 million over the
next five years and are already being used. We have already
published the details of promoters and tax avoidance schemes in
order to help consumers, and we have also published HMRC stop
notices, because we want to help taxpayers who want to do the
right thing to understand which promoters should be avoided.
Inflation and Economic Growth Forecasts: G7 Countries
(Stockton North) (Lab)
10. What comparative assessment he has made of forecasts for the
UK’s rates of (a) inflation and (b) economic growth with those
for G7 countries in 2023. (904823)
The Economic Secretary to the Treasury ()
Compared with the G7, the UK had the highest rate of growth in
each of the past two years. The International Monetary Fund UK
growth forecast for 2023 has been upgraded by more than that for
any other G7 country, and the IMF has said that the UK is “on the
right track” for economic growth.
The Minister paints a pretty picture. The British people want
hope for the future, but all they see is Britain continually
lagging behind on the global stage and prospects for their
families getting worse. The IMF says that Britain will have a
smaller economy by the end of the year and the poorest growth of
the G7 over this year and next. In March, UK inflation was the
highest in western Europe, and projections show that it will be
the highest in the G7 this year, while food prices are rising 50%
faster than in the G7. Whose fault is it?
It is certainly the hon. Gentleman’s fault if, having asked that
we assess performance across the G7 and we do precisely that, he
does not like the answer. The reality is that across the G7,
growth has fallen and inflation has risen, but we know the
sources of that—it is not this Government; it is the fault of
Putin and the global covid pandemic, whether the Opposition like
it or not.
(Preseli Pembrokeshire)
(Con)
My hon. Friend is right to ignore the gloom and negativity coming
from the Opposition Benches. They will always find a reason to
talk down the British economy. Is it not the case that today,
with more people in our country going out to work than ever
before, our economy is demonstrating a dynamism and resilience
that few other economies around the world can emulate and a
dynamism that we do not get with a Labour Government?
My right hon. Friend is absolutely right. Resilience is a strong
word, and thanks to the actions that this Government have taken
over the past six months, the Office for Budget Responsibility
has confirmed that the UK is now expected to avoid a recession
this year.
Withdrawal from the EU: Economic Impact
(East Renfrewshire)
(SNP)
12. What recent assessment his Department has made of the
potential impact of the UK’s withdrawal from the EU on the
economy. (904825)
(Glasgow North) (SNP)
17. What recent assessment his Department has made of the
potential impact of the UK’s withdrawal from the EU on the
economy. (904830)
The Financial Secretary to the Treasury ()
The UK has grown faster than France and at a similar rate to
Germany since leaving the single market. It remains challenging
to separate the effects of Brexit and wider global trends on the
UK economy, such as the invasion of Ukraine by Russia, adding
pressures to trade, prices and the wider economy. We continue to
support businesses trading with the EU and help them to seize new
opportunities with fast-growing economies around the world,
including through our free trade agreement negotiations.
Happy Europe Day, Mr Speaker. In recent months, we have seen tech
companies attack Brexit. The world-leading chip company Arm opted
to float stock only in the US because of how bad a place the UK
is to do business, so we have culture, tourism, the NHS and now
tech all suffering because of Brexit. How grateful does the
Minister feel that the Leader of the Opposition has dropped his
and his party’s principles and are supporting this costly
Brexit?
Crikey, I am going to leave it to the Leader of the Opposition to
flip-flop his way through that particular policy. What I can tell
the hon. Lady is that we are the best place in Europe to invest
in tech. We are only the third economy in the world with a $1
trillion tech sector; we are ranked as the world’s fourth most
innovative economy; and we have created more unicorns than France
and Germany combined.
Unicorns and fantasies are largely what we hear from Members on
the Government Benches these days. The reality is that the Music
Venue Trust reckons that grassroots venues are closing at a rate
of one per week, bands from Europe find it increasingly difficult
to travel here, and our hospitality sector more generally is
experiencing catastrophic staff shortages. Is not right when he says that
Brexit has been
“a classic mistake, a terrible”
horrible miscalculation, and the
“elephant in the room of our present economic difficulties”?
I am interested that the hon. Gentleman dismisses these
incredibly successful unicorn start-ups in the UK economy. I hope
that he will not dismiss their continuing success as we continue
to support them through the various tax reliefs we are offering
them and investment, including our most recent research and
development tax reliefs. I would also point out to him that of
course Scotland will benefit from some 73 trade deals secured
with non-EU countries—benefits that include control of our
fishing waters, something that I know is a matter of great
concern to Scottish residents.
Mr Speaker
We now come to the shadow Minister.
Mr (Wolverhampton South East) (Lab)
I am never quite clear why, if we do not like trade barriers, the
answer is to erect even more of them. The Government said that
through the Retained EU Law (Revocation and Reform) Bill, they
would get rid of 4,000 laws built up during our time in the EU.
The Prime Minister even got his shredder out to show us what this
would look like, and the Government said there would be a sunset
clause to make sure all this happened by the end of the year.
Voices from both business and the trade unions have said that
this could cause even more chaos and uncertainty and undermine
workers’ rights, in breach of the promises made by Ministers at
the time of the referendum. Can the Minister confirm whether,
after marching their troops up to the top of the hill and getting
the Back Benchers very excited, the Government are keeping the
sunset clause to have all this done by the end of the year?
I do not know whether I can speak on behalf of the Secretary of
State for Business and Trade, who is the portfolio holder for
that piece of legislation. What I do know is that the Bill is
currently before the House of Lords, and will no doubt be
scrutinised very carefully by their lordships. I can also
reassure the House that we are taking a careful and considered
approach to the benefits—the regulations, the laws—that Brexit
presents to us, and we know from our discussions with businesses
that business certainty is something that we all want to strive
for and achieve. I am sure that once this Bill has been
scrutinised by the House of Lords—[Interruption.]
Mr Speaker
Order. I have got another question to come. The Minister should
not worry; there will be another chance.
Mr McFadden
I think business certainty might be improved by an answer to the
question.
Inflation is at 10%, the highest in the G7, and food inflation is
at 19%. The former Prime Minister—the right hon. Member for
Uxbridge and South Ruislip (), to avoid confusion, because
there are a few former Prime Ministers—promised us that
“there will be no non-tariff barriers to trade”,
but we already know that many small businesses are giving up
exporting to the EU altogether because of costs and delays. With
inflation already at those levels, the Government have picked
this moment to impose a new system for checks on EU goods that is
estimated to add £400 million a year to the cost of goods coming
into the UK. Can the Minister tell us why the Government are
picking this of all moments to add these new costs and price
rises to UK consumers who are already struggling to make ends
meet because of the biggest cost of living crisis in decades?
Just to clarify, I was being respectful of not just this House,
but the right of the other House to scrutinise legislation. I
hope the right hon. Member would agree with that, as the fine
parliamentarian that I know he is. On business certainty, through
this legislation, and also importantly through the measures we
are setting out through the Windsor framework and the
arrangements at borders, we are seeking to give businesses
exactly the certainty they need after Brexit. We all accept that
leaving the European Union and the single market was a
generational change—a seismic change in how we wish to do
business—but unlike the Opposition, we believe in Brexit and the
opportunities it can provide our businesses, and that is why we
are taking these measures through carefully and considerately
with businesses.
Public Spending: Value for Money
(Manchester, Gorton) (Lab)
13. What steps he is taking to ensure value for money in public
spending. (904826)
(Blaenau Gwent) (Lab)
24. What steps he is taking to ensure value for money in public
spending. (904837)
The Chief Secretary to the Treasury ()
As the Minister for public spending, I oversee the Government’s
budgeting system, and a key element of that is incentivising
Departments to manage spending effectively so that value for
taxpayers’ money is maximised. That is why the Government
launched an efficiency and savings review at the autumn statement
2022. Through the review, Departments re-prioritised and
identified further efficiencies, building on the 5% efficiency
challenge set out in the spending review 2021, to better deliver
value for money for the taxpayer.
The then Chancellor, now Prime Minister, spent £1.3 million of
public money on focus groups, which included asking what the
public thought of him. Following the public’s resounding
rejection of the Tories in last week’s elections, we now know
what the public think of him. Will the Government stop wasting
taxpayers’ money to boost the Prime Minister’s ego, do the right
thing and call a general election?
No.
Some £7.9 billion was wasted on useless and overpriced personal
protective equipment; meanwhile, opportunists who saw the Tories
coming are now profiteering on the back of the public purse. Does
the Minister regret that this money was not spent wisely? Nearly
£8 billion could buy us 20 new hospitals.
Our priority was clear throughout the covid crisis, and that was
to get PPE to the frontline as quickly as possible. Due diligence
was carried out on all companies that were referred to the
Department. Despite all those steps being taken, some instances
of fraud did occur with unscrupulous suppliers taking advantage
of the situation. This Government take that fraud seriously, and
the Department of Health and Social Care is exploring every
available option to bring those who commit fraud to account. We
have also made a number of other interventions, including
investment in the taxpayer protection taskforce to normalise
higher compliance activity in HMRC, alongside other measures to
deal with fraud elsewhere in some of the emergency schemes that
we set up to help this economy and this country get through
covid.
Mr Speaker
I call the shadow Minister.
(Hampstead and Kilburn)
(Lab)
Last week, the Public Accounts Committee revealed that our
country lost £9 billion-worth of tax revenue during the pandemic
because HMRC redeployed 4,000 staff members whose jobs were to
chase down tax avoiders. The Prime Minister was Chancellor at the
time and presumably signed off that decision. Can the Minister
tell me whether the Prime Minister did that as a deliberate act
to give the green light to tax avoiders, or is it just another
example of Tory incompetence?
I think that is a ridiculous suggestion, to be honest. HMRC
received £863 million to modernise the tax system, and that
included £136 million invested over the spending period to
deliver improvements in terms of a single customer record and
account. On what happened over covid, I have already set out the
investment we made, including the £100 million in the taxpayer
protection taskforce. We take fraud very seriously. Now it is
about HMRC looking at financial records of excessive trading to
come to terms with those businesses that used some of those
schemes fraudulently. We will continue to work on that.
Topical Questions
Mr Speaker
I call . She is not here.
(West Lancashire) (Lab)
T2. If he will make a statement on his departmental
responsibilities.(904840)
The Chief Secretary to the Treasury ()
Three of the Prime Minister’s five priorities are economic
priorities: to halve inflation this year, to grow the economy and
to reduce debt. We are on track to halve inflation this year to
ease the cost of living. We have taken the difficult, but
responsible decision needed to get net debt falling and secure
the future of public services, and we have a clear plan to grow
the economy to create better paid jobs and opportunity right
across the country.
The consumer voice organisation Which? has recently found that 2
million UK households missed a key payment for their mortgage,
rent, loan or credit card. Last month alone, 700,000 of these
related to housing, so when will the Tory Government wake up to
the fact that the cost of living crisis is far from over and what
do they intend to do about it?
In previous answers, I have set out a number of the interventions
the Government have taken to help the most vulnerable. I have
mentioned the household support fund, the benefits that accrue to
all those who are on means-tested benefits, particularly
pensioner households, and those who are eligible for disability
benefit. As I have also said, the money that the Government have
made available is designed to focus on those who are most in
need, and we will continue to look out for the most vulnerable
through this difficult time.
(Orpington) (Con)
T3. Does my right hon. Friend agree that fiscal responsibility
is vital if we are to cut inflation and grow the economy? Does he
also agree that the Labour party’s £90 billion of unfunded
spending commitments would put all of that at risk, with higher
taxes and more borrowing the inevitable result?(904841)
I could not agree more. Responsible public spending is at the
core of getting our economy into a state where it can grow, and
the £90 billion of unfunded spending pledges made by Opposition
Members will be scrutinised very carefully, I am sure, by many in
the months ahead.
Mr Speaker
I call the shadow Chancellor.
(Leeds West) (Lab)
The Conservatives have now had 13 years in office—wages lower,
the weekly food shop astronomical, energy bills unprecedented, 24
Tory tax rises and the national debt has ballooned —so can I ask:
after 13 years of Conservative Government, does the Minister
think that people feel better off, or worse off?
What I can tell the right hon. Lady is that, since 2010, there
has been a 25% increase in real take-home pay for workers on the
national living wage and, recently, the national living wage
increased to £10.42 an hour—a 9.7% increase—for those over the
age of 23. In 2009-10, there was a deficit of £158 billion.
Before we got into covid, it was down to £38 billion. We have
gone through the most tremendous challenges that this country has
seen for about 100 years. I think most people in this country
understand that this Government have acted on the challenges we
have faced in office.
The Government have had 13 years, and the answer to the question
“Do people feel better off?” is a resounding no. This morning, I
met 22 newly elected council leaders from the Labour party, who
are creating emergency plans to help to tackle the cost of living
crisis in their communities. Why will the Conservative Government
not play their part, do the right thing, close the loopholes in
their oil and gas tax and help working people in Britain, as a
Labour Government would do?
I congratulate those successful across the country in last week’s
elections, but what business leaders want and what the country
wants is steady policy making, delivering growth in the economy,
dealing with the biggest scourge on the economy, which is
inflation—[Interruption.] The right hon. Lady says from a
sedentary position that we have had 13 years. We spent £400
billion when we had a global pandemic, where we had to shut down
the economy. When we came out of it, we had high inflation
consequential on a war that we have not had in Europe for over 70
years. Those are the realities and that is what this Government
have responded to.
(Torbay) (Con)
T6. Regenerating our town centres was a key part of the local
election campaign in Torbay. Would my right hon. Friend meet me,
my hon. Friend the Member for Totnes () and the new leadership
of Torbay Council to discuss what further fiscal steps can be
taken to support those aims?(904844)
I am always happy to meet my hon. Friend. I congratulate him on
his leadership of his council candidates last week and the
excellent result that he secured. Of course, we have invested in
many coastal communities across the country, and we are keen to
discuss the specifics of how the Government can support him as he
drives that local constituency and economy forward.
(Newcastle upon Tyne Central) (Lab)
T4. Today, manufacturing body Make UK warned the Government that,
to tackle regional inequalities and compete on a national stage,
we need a national industrial strategy as a matter of urgency. Do
Ministers recognise that the reason wages in the north-east are
falling under the Tories is their lack of an industrial strategy
and their failure to follow Labour’s example and commit to a
modern industrial strategy that invests in the industries of the
future and delivers good-quality jobs across our
country?(904842)
No, I do not recognise that characterisation. What I recognise is
that the Government are determined to see the economy grow. I see
investment in investment zones focused in the hon. Lady’s region,
working with the excellent universities that she is familiar
with. I see a Government who are putting £100 million into the
foundation model taskforce, £900 million to invest in a
supercomputer to fund AI, a quantum strategy that is generally
seen as world leading, as well as £160 million of investment in
the tech sector. So this is a Government who are committed to the
growth industries of the future.
(Loughborough) (Con)
T8. University Hospitals of Leicester NHS Trust was pleased to
hear that it is to receive £400 million for a new hospital, but I
understand that the money is still with the Treasury. Can my
right hon. Friend please confirm when UHL will receive the £400
million, and whether that might be increased to account for
construction cost rises?(904846)
Delivery of new hospital infrastructure and prioritisation within
health budgets is a matter for the Department of Health and
Social Care, but I know from frequent conversations with the
Secretary of State that he is working tirelessly to ensure as
many new hospitals as possible, and that wider improvements to
the health estate can occur. I shall make representations to him
after these questions.
(Denton and Reddish)
(Lab)
T7. It has been reported in the press today that, prior to any
investment, BP and Equinor sought written guarantees that assets
at the Teesworks site had not been acquired as a result of an
“unacceptable act”, and that directors“will not hide or
dissimulate the nature, origin, location, disposition or
ownership of assets, rights or values.”It is just extraordinary.
Given the importance of that freeport to investment and jobs in
Teesside, can the Treasury confirm whether it too has made any
similar checks?(904845)
I am sorry, I cannot answer that question. But I am happy to meet
the hon. Gentleman to look at the serious matter he has raised
and get an answer for him.
(North East Bedfordshire)
(Con)
The Chief Secretary to the Treasury knows that the long hidden
business case for East West Rail represents a bad deal for
taxpayers, and that MPs from across Parliament have written about
greener, better alternatives for growth in the Ox-Cam arc. He
will know that on Thursday the Conservatives won the mayoralty in
Bedford for the first time because the Conservative candidate,
Tom Wootton, called for a review of Bedford Council’s working and
its support for East West Rail. Will my right hon. Friend meet me
to discuss that further urgently?
I would be happy to meet my hon. Friend, and congratulate the
Mayor of his home town of Bedford for the success he had last
week.
(Ilford South) (Lab)
We are clearly falling pretty short of where we need to be if we
are to tackle net zero. Recent research by E3G and the World Wide
Fund for Nature into clean investment showed that the gap is
currently between £81 billion and £111 billion between now and
2030. That is equivalent to a quarter of the investment required
in that crucial economic sector and every other sector of the
economy. Public investment clearly needs to be a key driver in
reaching net zero, so I wonder whether Ministers would consider
increasing the capacity of the UK Infrastructure Bank on
that.
The Economic Secretary to the Treasury ()
The Government are leading the way with the recently published
green finance strategy, but that stands as part of a broader
piece of work, unleashing productive finance into all parts of
the economy and in particular funding the transition, which is
capital intensive.
(Bosworth) (Con)
I thank the Chancellor for two weeks ago meeting Leicestershire
MPs and the senior leadership of the county council to discuss
funding there. Of particular concern is the core funding of
special educational needs and disabilities, social care and
transport such as buses. What more can the Minister do to address
the problems with county council funding that we have in
Leicestershire?
I know my right hon. Friend the Chancellor welcomed that meeting
on 25 April. The Government remain committed to improving the
local government finance landscape, and in doing so they will
work closely with local partners, including Leicestershire, and
take stock of the challenges and opportunities across the sector.
I thank my hon. Friend for his deep thinking into how
improvements can be made.
(Weaver Vale) (Lab)
Why are the Prime Minister and Government Ministers so keen to
protect non-dom status while not investing sufficiently in our
NHS, as Labour would do?
The Financial Secretary to the Treasury ()
I hope the hon. Gentleman knows that we are spending record
amounts on the NHS. We are also mindful that non-doms pay some
£7.9 billion in UK taxes on their UK earnings and have invested
some £6 billion since 2012. So we are mindful of the very real
impact that they make on our revenues, but we have managed to
tighten the rules around non-dom status, and that is why—
Mr Speaker
Order. I call .
(Stoke-on-Trent North)
(Con)
Day one on the job and Labour in Stoke-on-Trent talk about
cancelling the £56 million of levelling-up funding, which is
UK-leading, going to the great city of Stoke-on-Trent. Will the
Chief Secretary to the Treasury confirm that the Conservative
Government will have the backs of the people of Stoke-on-Trent
and deliver this important levelling up?
We are very committed to the people of Stoke-on-Trent and
recognise that enormous investment, thanks to my hon. Friend’s
work in campaigning for investment through the levelling-up fund.
It is down to the council to deliver on that significant
investment and make a difference on the ground.
(Angus) (SNP)
The transition to net zero should be the overarching priority for
all of us. With that in mind, when will the Treasury finally get
its act together with the Acorn project in the north-east of
Scotland and accelerate its funding to ensure that the people of
the north-east of Scotland do not just have to listen to warm
words about the just transition, but can get a job in the just
transition?
I think that we have made commitments on the first phase. The
Chancellor is considering the next steps further and will update
the House in due course.
(Kingston upon Hull North)
(Lab)
The Financial Times is reporting today that there have been
meetings between the Treasury and the Department of Health and
Social Care about compensation for victims following the infected
blood inquiry. Will the Minister confirm that those meetings have
taken place and who was present, and offer reassurance to those
who were infected and affected that compensation will be
implemented in full, as Sir Brian Langstaff has recommended?
I believe that the Minister for the Cabinet Office updated the
House on this matter a couple of weeks ago, and I am sure that he
will be keen to do so again when those conversations have taken
place.
(Livingston) (SNP)
This morning, before I left my constituency, I attended a rally
organised by “Hands off Howden Park” and “Save our Pools”, which
are two incredible campaigns in my constituency trying to protect
our arts venues and pools from closing. Unfortunately, they have
been mismanaged by the Labour and Conservative administration,
and those results are the reality to be faced after a decade and
a half of austerity has decimated public funding. When will the
Government stop wasting money on things like Brexit and nuclear
weapons and properly fund our pools and arts venues?
We do not typically make specific decisions on local authorities
from Whitehall, but we have committed to significant additional
funds for local authorities and funding for the Scottish
Government through the Barnett formula. I will leave the hon.
Member to continue to lobby and campaign with her constituents to
get those decisions made on the ground.
