Pensions Triple Lock Richard Foord (Tiverton and Honiton) (LD) 1.
What assessment he has made of the potential impact of maintaining
the pensions triple lock on the economy.(900035) The Chief
Secretary to the Treasury (Laura Trott) As a result of the
Government’s triple lock, the basic state pension is now more than
50% higher in cash terms than it was in 2011. The Secretary of
State for Work and Pensions is undertaking his review at the
moment, and I cannot...Request free
trial
Pensions Triple Lock
(Tiverton and Honiton)
(LD)
1. What assessment he has made of the potential impact of
maintaining the pensions triple lock on the economy.(900035)
The Chief Secretary to the Treasury ()
As a result of the Government’s triple lock, the basic state
pension is now more than 50% higher in cash terms than it was in
2011. The Secretary of State for Work and Pensions is undertaking
his review at the moment, and I cannot pre-empt that.
Now that has returned to the Cabinet,
it is probably a good time for us to remember that the pensions
triple lock was a Liberal Democrat initiative. The 2010 Liberal
Democrat manifesto said:
“We will uprate the state pension annually by whichever is the
higher of growth in earnings, growth in prices or 2.5 per
cent.”
Given that the triple lock has now been operational for more than
a decade, will the Chancellor and his team commit to putting the
triple lock in the next manifesto?
Nice try. The triple lock was a Conservative invention, delivered
by the Conservatives, and it is something to which we remain
committed.
(North East Hampshire)
(Con)
I welcome my hon. Friend to her new role. Given that it is right
that we look after our pensioners and ensure that people are well
looked after in later life, it is important that we have the
right tax base to fund our pensions. Will she meet me to consider
ways in which we can make our taxation system more family
friendly, to encourage more people to have more children and to
ensure that we can pay for our pensions in the years ahead?
My right hon. Friend is a brilliant advocate on these issues, and
of course I would be delighted to meet him.
Food Inflation
(Glasgow Central)
(SNP)
3. What recent assessment he has made of the implications for his
policies of trends in the level of food inflation.(900037)
(Edinburgh North and Leith)
(SNP)
4. What recent assessment he has made of the implications for his
policies of trends in the level of food inflation.(900038)
(Glasgow North) (SNP)
20. What recent assessment he has made of the implications for
his policies of trends in the level of food
inflation.(900054)
The Chancellor of the Exchequer ()
UK food inflation has been driven largely by global factors and
has already fallen from 19.6% to 12.3%, and external forecasts
expect it to continue to fall.
Between March 2021 and April 2023, the cost of first infant
formula increased by 24%, on average, with the cheapest formula
on the market increasing by 45%. That is an absolute catastrophe
for families who rely on infant formula, but a bonanza for the
formula companies, which are making significant profits out of
this. Can the Chancellor tell me why he believes it is right for
companies to profit while families struggle to feed their
babies?
The hon. Lady is absolutely right to draw attention to the
pressures on families caused by very high food inflation in a
number of areas, but I can tell her that the Competition and
Markets Authority, which undertook a review of the groceries
sector earlier this year, has not yet found evidence that high
food price inflation is being driven by weak competition. But it
is continuing its review and looking at the supply chain, and we
will wait to hear what it says.
Recent research showed that the most significant decline in UK
children’s height in the global ranking came after the UK
coalition Government launched their austerity programme in 2010.
An expert in child growth rates at the Great Ormond Street
Institute of Child Health said of that 30-place drop in ranking
that austerity
“has clobbered the height of children in the UK.”
What lessons has the Chancellor learned from the UK Government’s
previous disastrous errors of judgment in this area, and how will
he be supporting vulnerable groups in the future?
The lesson I have learned is straightforward: if we had not
reduced the deficit by 80% between 2010 and the start of the
pandemic, we would not have been able to help families across the
United Kingdom with payments of more than £3,000, on average,
including 700,000 households in Scotland and more than 1 million
pensioners.
Even if the inflation rate is falling, food prices are still
going up considerably. The Joseph Rowntree Foundation reckons
that they have gone up at least twice as fast as the value of
benefits since September 2021. At the very least, can the
Chancellor commit to ensuring that the Department for Work and
Pensions has enough resource to raise benefits at least in line
with September’s inflation rate?
The Secretary of State for Work and Pensions is doing his review
at the moment to decide the correct amount by which to uprate
benefits. If the hon. Gentleman looks at this Government’s
record, he will see that we took the decision a year ago to
uprate benefits by inflation, and we committed to £94 billion of
measures to help families get through the cost of living
crisis.
(Buckingham) (Con)
Food inflation will only get worse if our self-sufficiency in
food production drops. Will my right hon. Friend consider fiscal
measures to discourage the transfer of food-producing land to
other uses such as solar industrial installations?
My hon. Friend is right to say that our food industry is very
important to food security. We need to keep the priorities
constantly under review. Nature is a very important part of that,
but so too is food production.
Mr Speaker
I call the SNP spokesperson.
(Inverness, Nairn, Badenoch
and Strathspey) (SNP)
It is good to be addressing an elected Minister this morning. The
consumer organisation Which? has described Tesco and Sainsbury’s
as committing “dodgy” practices over food prices and loyalty
schemes, and Marks & Spencer has just posted record profits
on food sales, yet people up and down the nations of the UK are
struggling to pay their food bills. Will the Chancellor tell us
which supermarkets he has held to account over rising food
prices?
I can tell the hon. Gentleman that we had the supermarkets in
over the summer to make sure that they were doing everything they
could to bear down on food price inflation. However, the correct
way for politicians to look at this is at arm’s length. We have
the independent Competition and Markets Authority, which does a
rigorous job and often does things that politicians disagree
with, and it is looking at the issue right now.
In Canada, Ministers met the five largest grocery chains to get
commitments on stabilising food prices. Other Governments are
doing similar things. France’s Finance Minister held extensive
talks with the food industry to get it to commit to freezing or
cutting prices on 5,000 everyday products. Is it not the case
that, for people facing crushing food bills in Scotland and
across the nations of the UK, this Westminster Government are
doing absolutely nothing?
I think £94 billion of support to help families up and down the
country, including with food prices and energy prices, is a
rather different answer from saying that we are doing
nothing.
Energy Sector
(Banff and Buchan) (Con)
5. What fiscal steps his Department is taking to support the
growth of the energy sector.(900039)
The Exchequer Secretary to the Treasury ()
Since March 2021, the Government have committed a total of £30
billion in public investment for the green industrial revolution.
Since then, the Chancellor has announced £6 billion for clean
heat and improving energy efficiency, and £20 billion for carbon
capture, usage and storage. Alongside the launch of Great British
Nuclear and the small modular reactor competition, the Government
have also invested £1 billion in Sizewell C.
According to a recent survey, 90% of North sea oil and gas
operators have reduced spending since the energy profits levy was
introduced. I therefore welcome recent announcements on new North
sea licences and the announcement before the summer of the energy
security investment mechanism, by which the EPL will be removed
when appropriate. Can my hon. Friend tell me when we can expect a
response to the consultation on the ESIM and what plans this
Government have to legislate for the mechanism? Will he meet me
to discuss how investor confidence in our home-grown industry can
be assured further?
Introducing the price floor for the oil and gas industry comes
from the principle that, while it is right that oil and gas
companies pay a higher share of tax during exceptional times, it
is also right that when prices fall to normal levels, so do their
tax rates. That is why we introduced the price floor in June and
we have extensively engaged with the industry since then. I know
that legislating will provide some certainty; we are looking
carefully at that and will respond soon. I will always be happy
to meet with my hon. Friend.
(Oldham West and Royton)
(Lab/Co-op)
The Labour party and the Co-operative party have set out a shared
ambition for more community-owned energy. That is not new: in
Denmark, 52% of wind energy is community owned, and in Germany
half of all onshore wind is community owned. Will the Government
do far more to join that ambition of community-owned energy here
in Britain?
We have ambitious plans for energy generation and our energy
security. We want to bring communities with us, and we look at
all options as we do so.
Wealth Tax
(York Central)
(Lab/Co-op)
6. What recent assessment he has made of the potential merits of
introducing a wealth tax.(900040)
The Financial Secretary to the Treasury ()
Of course, the UK does not have a single wealth tax, but it does
have several taxes on wealth and assets, and those generate
substantial revenues. The Government are committed to keeping
taxes low so that working people keep more of what they earn. The
Government’s approach to delivering fiscal sustainability is
underpinned by fairness, with those on the highest incomes paying
a larger share.
But the burden of tax is increasingly falling on working people’s
incomes, while the richest 50 families in the UK have alone
accumulated a combined wealth equivalent to that of half the
population. Research from the University of Greenwich shows that
a wealth tax could generate £70 billion for much-needed public
services, so will the Government at least put forward a
commission to investigate the matter and introduce a fair
taxation policy?
I am not sure whether the hon. Lady is lobbying me or Opposition
Front Benchers with her comments, but she will be well aware that
we do have a progressive tax system in the UK. It is important to
remember that the top 5% of taxpayers are projected to pay nearly
half of all income tax in 2023-24; and the top 1% as much as 28%.
Compared with what we inherited from Labour in 2010, when the top
1% of income tax payers paid 25% and the top 5% paid 43%, the tax
system is fairer and more progressive under the
Conservatives.
(Chelmsford) (Con)
Those who live in homes with driveways pay just 5% VAT when they
charge their cars from their home electricity, but those who live
in terraced houses have to pay 20% VAT to charge commercially.
Given that those who live in terraced houses are often less
wealthy, will the Minister, whom I congratulate on his new role,
meet me and other members of the Conservative Environment Network
to look at how we might level out that anomaly?
My right hon. Friend is a great champion of such issues in her
constituency and beyond. I am aware that she has already spoken
to the Chancellor about this issue, but I would be delighted, as
always, to meet her and discuss it further.
Mr (East Londonderry)
(DUP)
The Government have done a lot to raise personal allowances, for
which our party has advocated for many years. However, given that
that is an improvement for people at the bottom end of the income
scale, will the Treasury now turn its view towards hard-working,
middle-income families, who also want a reduction in their tax
burden?
We appreciate the support for taking 3 million of the lowest-paid
people out of paying income tax altogether since 2010—an
important and significant change. I understand the hon.
Gentleman’s comments, but I cannot comment further, especially
this close to a fiscal event.
(North East Bedfordshire)
(Con)
I welcome my hon. Friend to his new post. Does he share with me
the humour that Opposition Back Benchers have proposals for new
taxation that the Opposition Front Benchers are trying to bat
away, while those of us on the Government Back Benches are
telling the Government to cut taxes, and our Front Benchers keep
batting that away?
I thank my hon. Friend for his comments. I am afraid that what we
are probably seeing is “same old Labour”—we have heard this all
before. What they are proposing did not work in the ’70s and it
will not work now. We are very proud of our tax record,
particularly taking the lowest paid out of income tax.
Mr Speaker
I call the shadow Minister.
(Slough) (Lab)
I welcome the Minister to his place. The Government have the
opportunity next week to right an historical wrong by abolishing
non-dom tax status. The Chancellor could use that money to get
our NHS back on its feet and to provide free breakfast clubs for
all primary-age children, just as Labour has called for. Is the
abolition of non-dom tax status under consideration, or has the
Prime Minister ruled it out again, for personal reasons?
The hon. Gentleman is well aware that there are real dangers that
what he is proposing would make the UK a less attractive
destination—that is a very important issue. The City pays for a
huge amount of our NHS, for example, and non-dom taxpayers were
liable to pay £8.5 billion in UK income tax in 2021-22 and
invested more than £7 billion in the UK.
Benefits Uprating
(North East Fife)
(LD)
7. If he will have discussions with the Secretary of State for
Work and Pensions on the potential merits of uprating benefits in
line with inflation.(900041)
The Chief Secretary to the Treasury ()
The Government are committed to supporting households with the
cost of living, delivering over £94 billion of support, including
uprating benefits by 10.1% this year. As I have said, the
Secretary of State for Work and Pensions is undertaking his
review, and I cannot pre-empt that.
Figures from the Trussell Trust show that food bank usage is at
its highest ever level, and over the summer months a record
41,878 parcels of food were provided to 21,000 children in
Scotland alone. Meanwhile, child poverty costs the Government £39
billion per year in poor health and educational outcomes. In
order to tackle child poverty properly, will the Government
commit to keeping benefits in line with inflation and lifting the
two-child cap?
We understand that things are really tough at the moment, which
is why we have put in place £900 of cost of living support this
year, but we also all need to work on bearing down on inflation.
We are seeing it start to come down, but we know it is still too
high, and we hope we will reach the Prime Minister’s pledge of
halving inflation, because that is the biggest help we can give
to households this year.
Defence Sector Investment
(Rother Valley)
(Con)
8. What steps his Department is taking to help mitigate the
potential impact of environmental, social and governance
practices of financial institutions on levels of investment in
the defence sector.(900042)
The Economic Secretary to the Treasury ()
The Secretary of State for Defence and my predecessor, my hon.
Friend the Member for Arundel and South Downs (), recently set out that
the values within ESG practices of financial institutions should
never undermine capabilities developed to help us preserve peace
and security. The Treasury recently consulted on a potential
regulatory framework for ESG ratings providers, which aims to
improve transparency and promote good conduct. I hope this will
address some of the issues that defence companies have
raised.
ESG is so vital when it comes to investing in all our services,
including defence. We were promised that the “Greening Finance”
road map would come out at the end of 2022. Then we were told
that the consultation would come out by autumn this year. It is
still just about autumn, and it is yet to come out. Why are the
Government kicking ESG down the road? Why have they stopped
caring about ESG, and when will we have the consultation to get a
UK green taxonomy sorted?
I thank my hon. Friend for his question. [Interruption.] I do; I
know how much he cares about these issues and campaigns on them
frequently in the House, and I commend him for it. The Government
are committed to delivering on a UK green taxonomy to provide
investors with clarity on which economic activity should be
labelled as green. We expect to consult this autumn. The green
taxonomy will provide an important tool for enabling the supply
of relevant and reliable sustainability information for the
market, and information will come in due course.
(Strangford) (DUP)
One of the things that concern Northern Ireland MPs is the fact
that when it comes to defence jobs and getting contracts,
Northern Ireland falls behind. The Minister will be aware that
Thales, on the border of my constituency, was recently able to
secure its workforce. What steps can he take to ensure that each
region of the United Kingdom, but especially Northern Ireland,
can benefit from defence spending for the workforce? We can do
the job the same as everywhere else; we just need the
opportunity.
I thank the hon. Member for his question, which is incredibly
important. As he knows, this Government are absolutely committed
to ensuring that jobs in the defence sector, within an ESG
framework, are protected. I am happy to meet him to discuss
further the issues relating to his constituency and Northern
Ireland.
Student Loan Repayments: Inflation
(Tewkesbury) (Con)
9. What assessment he has made of the potential impact of
inflation on the ability of graduates to repay student
loans.(900043)
The Chief Secretary to the Treasury ()
Tuition fees have been frozen for 2023-24 and 2024-25, which will
help affordability for future graduates. For new graduates,
interest rates will move with the retail prices index but will
have nothing added.
Mr Robertson
I thank the Minister for that response but, of course, interest
rates have made matters much more difficult for graduates, who
cannot afford to both pay off their student loan and buy their
own property. Is there anything further that the Government can
do to help graduates, who are struggling to do both? One of the
things we could do is raise the threshold at which they start to
pay back the loans.
I thank my hon. Friend for his question. The most important thing
we can do is bear down on inflation, because that will bear down
on interest rates, which affect us all. I would also point to the
cost of living support that the Department for Education is
providing for students. I would be happy to discuss the matter
with him further.
Economic Growth
(Ogmore) (Lab)
10. What recent assessment he has made of the implications for
his policies of the economic growth rate. (900044)
The Chancellor of the Exchequer ()
Our policies are increasing economic growth, as the Office for
Budget Responsibility confirmed following last year’s autumn
statement and the spring Budget, but the only way to secure
higher, sustainable, long-term growth is to bring down
inflation.
The OBR judged the Chancellor’s last Budget to have no overall
long-term impact on the level of potential productivity. Does he
expect the OBR to make a similar judgment of his next Budget?
I remind the hon. Gentleman of what the OBR actually said about
the spring Budget:
“the overall impact on GDP is around 0.2 per cent in 2027-28.
This is the largest upward revision we have made to potential
output within our five-year forecast as a result of fiscal policy
decisions taken by a Government”.
(Cleethorpes) (Con)
Economic growth in northern Lincolnshire will be severely
impacted if changes go ahead at British Steel’s Scunthorpe works,
which will result in redundancies and a massive impact on the
supply chain. Will my right hon. Friend give an assurance that
the Government will not proceed with any support for those
changes until a full economic assessment of the impact on the
local area has been carried out?
I thank my hon. Friend and, indeed, my hon. Friend the Member for
Scunthorpe () for their extensive
lobbying on this very important issue. I have had meetings with
him and her, and with many others, to discuss it. I reassure him
that we are absolutely committed to steel production in the
United Kingdom, and to making sure that any changes that are
necessary support the local communities that depend on steel
production.
Mr Speaker
I call the shadow Minister.
(Bristol North West) (Lab)
I welcome the Chief Secretary to the Treasury, the hon. Member
for Sevenoaks () to her place. I look forward
to holding her to account.
Last month, the Chancellor’s National Infrastructure Commission
said that in order to unlock the billions of pounds of private
investment that is available to get our economy growing, we need
a Government who can “make good decisions, fast.” Why does the
Chancellor think his Government have been making bad decisions
slowly for quite so long?
It might help the hon. Gentleman if I tell him some of the facts
on infrastructure. Since we made some reforms to the asset
pooling framework in 2015, UK and global infrastructure
investment by pension funds has grown from £1 billion to around
£27 billion, and the Solvency 2 reforms could potentially unlock
a further £100 billion-worth of investment.
That, Mr Speaker, was a list of very slow decisions still being
badly taken. The Labour party has a raft of plans available to
help drive economic growth and investment in every corner of our
country, from speeding up the grid to accelerating planning for
critically important infrastructure. Today, I am making them
available to the Chancellor for free. Would he like them, or
would he rather call a general election?
Unfortunately, nothing is free from the Labour party. Funding
plans by increasing borrowing by £28 billion a year leads to
higher bills for families, higher energy prices and higher
mortgages.
Pension Scheme Investment
(Ruislip, Northwood and
Pinner) (Con)
11. What steps his Department is taking to encourage pension
schemes to invest in the UK. (900045)
(Stratford-on-Avon) (Con)
13. What steps his Department is taking to encourage pension
schemes to invest in the UK. (900047)
Mr Speaker
While we are basking in those questions, would somebody like to
answer them?
The Chancellor of the Exchequer ()
In my speech at Mansion House in July, I announced reforms to
boost pensions, increase investment in UK businesses, and improve
UK capital market competitiveness. Those reforms could result in
over £1,000 a year of additional retirement income and unlock £75
billion-worth of investment in high-growth businesses.
Many local authorities have given the investment managers for
their pension funds a mandate to invest in infrastructure. What
plans does my right hon. Friend have to encourage greater
infrastructure investment by UK public sector pension funds?
I thank my hon. Friend for his interest in this issue—of course,
he has great experience of local government. Working with the
former Economic Secretary to the Treasury, my hon. Friend the
Member for Arundel and South Downs (), who I see is in the
Chamber, we announced major reforms in July to help local
government pension funds lead the way in the transformation we
are looking for, in particular by sending a direction that they
should invest in pools worth more than £50 billion. That will
make it easier for them to have the expertise necessary to invest
in infrastructure.
I welcome the proposals that my right hon. Friend the Chancellor
made in his Mansion House speech, which will increase investment
in the United Kingdom. In his upcoming autumn statement, I
implore him to build on his Budget announcement with a policy
that was originally advocated for in a paper by the Institute, a think-tank I am
proud to be patron of, as is set out in my entry in the Register
of Members’ Financial Interests. I implore him to make full
expensing permanent and to scrap the hated factory tax.
I have a very small bone to pick with my right hon. Friend,
because when I became Chancellor I was hoping to say that I was
the first Chancellor who was once an entrepreneur, but he pipped
me to the post. However, he is absolutely right to say how
important it is to have competitive business investment taxes. I
was very proud in the spring Budget to introduce full expensing
for three years, which gives us some of the most competitive
business taxes in the OECD. Only five other countries do that,
and I will of course keep under review any possibility to extend
that tax break.
(Na h-Eileanan an
Iar) (Ind)
Is investment not needed in the UK given that 13 years of Tory
rule have resulted in a £137 billion UK deficit? Meanwhile
independent Ireland has a €10 billion surplus from its economic
growth and investment. That is an Ireland without the oil or
natural resources of Scotland, which is now about to start a
sovereign wealth fund. Where did the failing crisis-hit UK go
wrong and independent Ireland go right? The clue, by the way, is
in the question.
I find that a very curious question. If the hon. Member is proud
of Scotland’s natural resources, why does he want to cancel North
sea oil and gas exploration, which is the very thing that can
give families across the United Kingdom security from the energy
shocks we have seen from things such as the invasion of
Ukraine?
(Westmorland and Lonsdale) (LD)
There is encouraging news in that the Pension Insurance
Corporation has recently announced that it is going to invest in
helping to support the building of 1,200 new affordable homes in
this city. Does the Chancellor agree that pension funds could be
a very important source of capital for developing social rented
housing around the country—Eden Housing Association, South Lakes
Housing, and Westmorland and Furness Council, for example? Will
he look at the rules and bring in greater incentives for pension
investment funds to invest in affordable housing across the
country?
We are already working on proposals in that very area. Broadly
speaking, we have one of the most robust and resilient pension
fund sectors in the world, but we are doing a lot of work to
remove the barriers to investing back into the UK. Things such as
affordable housing, infrastructure and our growth businesses are
areas of great potential.
Public Sector Productivity and Public Spending
(Dudley North) (Con)
12. What steps his Department is taking to increase public sector
productivity.(900046)
(Stockton North) (Lab)
15. What steps he is taking to help ensure value for money in
public spending.(900049)
The Chief Secretary to the Treasury ()
My hon. Friend is rightly very focused on making sure that every
single pound of taxpayers’ money is spent wisely, and I can
assure him that the Government share that goal. In June, the
previous Chief Secretary to the Treasury launched the public
sector productivity programme, and we will provide an update at
the autumn statement.
Estimates show that the public sector today is 7.5% less
productive than in the environment just before covid. Does the
Minister agree that this could possibly be down to a continued
more liberal working from home ethic? How much is this costing
the taxpayer?
My hon. Friend is right that public sector productivity must be
improved. That is exactly what the review is looking at and what
we will address. I look forward to talking to him more about it
in due course.
I welcome the fact that the taxpayer has spent hundreds of
millions of pounds on remediation work at the Teesworks site in
Redcar. I do not welcome the fact that the assets, including 90%
of the operating company and tens of millions of pounds of scrap,
have been handed over by the Tees Valley Mayor to two private
companies, whose owners are laughing all the way to the bank. Is
that really good value for taxpayers’ money?
I think these claims have been addressed by the Mayor, and I will
not have anything further to say about them.
Fuel Poverty
(Orkney and Shetland)
(LD)
14. What fiscal steps he is taking with Cabinet colleagues to
help support households in fuel poverty.(900048)
The Exchequer Secretary to the Treasury ()
The Government have taken significant action to help households
with rising energy prices and the costs of living by providing
one of the largest packages of support in Europe, totalling £94
billion.
Mr Carmichael
Orkney and Shetland have the worst rates of fuel poverty of
anywhere in the country. Provisional figures show that, for last
winter, both Orkney and Shetland recorded record levels of winter
mortality. In his new office, will the Minister bring his
colleagues together from across Government to hear from agencies
such as THAW—Tackling Household Affordable Warmth —in Orkney that
are working to tackle fuel poverty, because if we can tackle fuel
poverty in Orkney and Shetland, we can tackle fuel poverty?
We are incredibly sympathetic to the right hon. Gentleman’s
constituents, who have suffered a very difficult time. That is
why we introduced the energy price guarantee, which will remain
in place until March 2024 as a safety net. We continue to engage
with lots of stakeholders and we are very happy to include the
ones he suggests.
Mortgage Support
(Don Valley) (Con)
16. What steps his Department is taking to support homeowners
with their mortgages. (900050)
(Birmingham, Selly Oak)
(Lab)
21. What recent assessment he has made of the potential impact of
changes in mortgage interest rates over the course of this
Parliament on household incomes. (900055)
The Economic Secretary to the Treasury ()
The path to lower mortgage rates, as everybody in this House
knows, is through lower inflation, which is why the Prime
Minister and the Chancellor made halving inflation one of our
five priorities for this year. The latest Bank of England
forecast shows that we are on track for that. In June, lenders
representing more than 90% of the mortgage market agreed to our
new mortgage charter, which includes new flexibilities to help
customers manage their repayments, backed up by UK Finance’s
advertising campaign encouraging anyone worried about their
repayments to contact their lender.
Does the Minister agree that the best way we can help the next
generation of homeowners is to increase the supply of homes,
bring back the help to buy ISA and stop the 35-year mortgage
shared-ownership models, which only increase house prices?
I thank my hon. Friend for his question. On his first point, we
are increasing the number of homes and we are optimistic that we
will reach our target of delivering 1 million new homes over this
Parliament. Secondly, the help to buy ISA was closed to new
accounts in 2019, but existing holders can continue to save into
their accounts. On his third point about stopping 35-year
mortgages, it is important to have choice in the market and for
people to make those choices for themselves. As a Government we
are committed to supporting people doing just that.
According to the Centre for Economics and Business Research,
mortgage increases are expected to cost UK households £9 billion
this year and next. How on earth do the Government defend
that?
As the hon. Member knows, the reason why we are in this position
is that there is a global phenomenon. We are doing what we can.
We are working closely with the Bank of England and, over time,
due to the policies of the Chancellor, the Prime Minister and
this Government, interest rates will come down.
(Ealing North) (Lab/Co-op)
I welcome the hon. Member for Mid Worcestershire () to his post as Financial
Secretary.
It has been a year since the Conservatives crashed the economy.
In 2023 so far, 1.5 million fixed-term mortgages have expired,
leaving working people facing sky-high increases in their
mortgage costs. For people living in Wellingborough, for example,
this Tory mortgage penalty means that households are paying
another £190 a month on top of everything else in a cost of
living crisis. The truth is that working people are paying the
price for the Conservatives crashing the economy last autumn.
Does the Economic Secretary think that is fair?
I thank the shadow Minister for his kind words, at least in
relation to me.
It is important to recognise that in the eurozone, the United
States and the UK there have been broadly similar increases in
inflation and interest rates. We as a Government are confident
that our policies will bring those down in due course.
Cost of Living: Scotland
(Rutherglen and Hamilton
West) (Lab)
17. Whether he has had recent discussions with the Secretary of
State for Scotland on the impact of increases in the cost of
living on the Scottish economy. (900051)
The Chief Secretary to the Treasury ()
We have announced UK-wide support for households, including cost
of living payments, the energy price guarantee and the energy
bills support scheme. Taken together, support for households is
worth £94 billion and is among the largest packages in
Europe.
The Institute for Fiscal Studies recently reported that wages in
Scotland have risen by 1.5% since 2015, compared with 5% in
England. In the face of a cost of living crisis brought about by
the Conservative party’s disastrous mini-Budget, wages simply are
not keeping up with the cost of living. What can the Minister
commit the Government to doing next to help make work pay? Will
she, for example, support Labour’s new deal for working
people?
I was pleased to see this morning’s figures, which show that
wages are going ahead of inflation. This is very good news and I
hope it spreads to Scotland.
Non-domiciled Residents: Tax Status
(Plymouth, Sutton and
Devonport) (Lab/Co-op)
18. Whether he plans to change the tax status of non-domiciled
residents in the UK. (900052)
The Financial Secretary to the Treasury ()
The Government want the UK to have a fair and internationally
competitive tax system, designed to bring in talented individuals
and investment that contributes to the growth of the UK economy.
Non-domiciled individuals play an important role in funding our
public services through their taxation contributions, and they
pay UK tax on their UK source income and gains in the same way as
everybody else.
The non-dom tax status allows people to dodge millions in taxes.
Germany, France and Canada have closed their non-dom tax
loopholes. Can the Minister explain to taxpayers in Plymouth and
across the country why he thinks it is fair that people who live
here do not pay their taxes here?
As I said in the answer I gave some moments ago, non-dom
taxpayers make a significant contribution to UK tax, worth £8.5
billion in 2021-22, with £7 billion more invested. The City, for
example, pays half the cost of the NHS.
Mortgage Interest Rates
John Mc Nally (Falkirk) (SNP)
19. What recent assessment he has made of the implications for
his policies of trends in the level of mortgage interest rates.
(900053)
The Economic Secretary to the Treasury ()
The Government’s mortgage charter is providing support to
vulnerable households, and arrears and repossessions remain at
historic lows. Government support has helped real household
incomes rise by 2.7% year on year in the latest data.
John Mc Nally
With the economy flatlining and interest rates remaining at 5.25%
and more than likely to remain above 5% next year, it simply
follows that households’ disposable incomes will continue to be
squeezed throughout 2024. Surely the Chancellor agrees that
mortgage interest tax relief must be reintroduced to support
households facing high interest rates alongside inflation.
As the hon. Member has already heard from the Chancellor, the
economy is still growing. The latest labour market data shows
that incomes are going up at a higher rate than inflation, so I
do not recognise the picture that he paints.
Household Finances
(Ceredigion) (PC)
22. What assessment he has made of the financial position of
households during winter 2023-24. (900056)
The Exchequer Secretary to the Treasury ()
The Government continue to stand by households with one of
Europe’s largest support packages, amounting to some £3,300 a
household on average across 2022-23 and 2023-24.
The Minister will be aware that a big concern for rural
constituencies is the cost of fuel. The RAC has found that the
margin enjoyed by the big supermarkets on fuel sales in October
was double the figure for the year to date at 14p per litre. That
reflects concerns raised by the Competition and Markets Authority
that although wholesale fuel prices fell in September and
October, retail prices did not. What is the Treasury’s assessment
of the impact that these higher margins will have on households
in the coming winter?
Fuel duty is a major cost for households and businesses. We
recognise that. That is why in the spring Budget 2023, the
Chancellor extended the 5p temporary duty cut. That was a £5
billion saving for motorists, worth £100 for the average
motorist, but we always keep these things under review.
Economic Growth: Essex
(Witham) (Con)
23. What steps he is taking to support economic growth in Essex.
(900057)
The Economic Secretary to the Treasury ()
As my right hon. Friend knows, the Government are committed to
supporting economic growth all over the country, but particularly
in the wonderful county of Essex. The recently announced £1.1
billion long-term plan for towns will, for example, provide £20
million of flexible funding over 10 years to Clacton, and there
are many other measures.
I welcome my hon. Friend to his new role. I hope that he will
know not only that the only way is Essex, but that Essex is a net
contributor to the Treasury. We want more economic growth in
Essex. In a week’s time, we will have the autumn statement, so
may I give a message to those on the Treasury Front Bench? May I
appeal to the Chancellor in particular to look at lowering the
rates of personal and business taxation, particularly the areas
of business rates, corporation tax and all aspects to do with
enabling people to keep more of the money they earn?
My right hon. Friend tempts me to make tax policy. What I will
say to her is that she will know that the Chancellor always keeps
these things under review, as do the Government. Indeed, we have
a fiscal event shortly.
(Kilmarnock and Loudoun)
(SNP)
Can I ask the Minister why he said he wants particularly to
support investment and growth in Sussex? [Interruption.] Is that
the Tories reverting to type in terms of the blue wall?
Mr Speaker
Order. I think it was Essex, not Sussex.
They are all the same to me.
Mr Speaker
Have you got a question? I do not think an answer is needed.
Life Sciences Sector
(York Outer) (Con)
24. What fiscal steps he is taking to support the growth of the
life sciences sector. (900058)
The Exchequer Secretary to the Treasury ()
Life sciences are one of the Chancellor’s key growth priority
areas. In May, he announced a significant new policy package,
backed by more than £650 million of funding, reaffirming the
Government’s commitment to supporting a thriving life sciences
industry.
I thank my hon. Friend for that answer. Life sciences are
incredibly important, so will he focus investment on them in
projects such as BioYorkshire on the edge of my constituency,
which brings together private, public and academic institutions
for huge benefits right across the board?
My hon. Friend is absolutely right to highlight the benefits and
importance of life sciences to the country. We are genuinely a
world leader: I was out in Boston in the United States seeing the
other world-leading area for life sciences, and it is not a patch
on ours. That is why, as an example, we are looking to support
life sciences through the investment zone programme, but, as I
said, they are a key priority for the Chancellor as part of his
growth agenda.
Topical Questions
(Dudley North) (Con)
T1. If he will make a statement on his departmental
responsibilities.(900060)
The Chancellor of the Exchequer ()
As we have a debate this afternoon, I will limit my comments to
welcoming my outstanding new colleagues. The new Chief Secretary
to the Treasury, my hon. Friend the Member for Sevenoaks (), will brilliantly solve the
problem of how we stop the state expanding, building on the work
of her wonderful predecessor, my right hon. Friend the Member for
Salisbury (). The new Economic Secretary to
the Treasury, my hon. Friend the Member for Hitchin and Harpenden
(), will single-handedly ensure
that the City and stock market remain competitive, building on
the superb foundations laid by his predecessor, my hon. Friend
the Member for Arundel and South Downs (). The job of the new
Financial Secretary to the Treasury, my hon. Friend the Member
for Mid Worcestershire (), will be to work out how
to bring taxes down, following in the footsteps of his excellent
predecessor, my hon. Friend the Member for Louth and Horncastle
(), who as Health Secretary
will no doubt be trying to push them up.
There is widespread consensus that growth is essential to the
economy. With 800,000 fewer self-employed in the economy post
covid and post IR35, does the Chancellor agree that increasing
the VAT threshold to £250,000 for new registrations would boost
growth and be a net gain in revenue terms in the long run?
I thank my hon. Friend for raising the support we give to small
businesses. As he will know, supporting small businesses,
particularly by rolling over the retail, hospitality and leisure
business rates discount of 75%, was a major feature of the autumn
statement. We will continue to keep under review anything that we
can do to help our small businesses.
Mr Speaker
I call the shadow Chancellor.
(Leeds West) (Lab)
I welcome all the new Ministers to their roles and wish them well
in them. The covid inquiry is uncovering unsavoury examples of
Government mismanagement. We already know that Ministers ignored
warnings that their business loan schemes were vulnerable to
organised crime, yet the Prime Minister left the vaults open to
fraudsters. Will the Chancellor update the House on the latest
estimates of taxpayers’ money lost to fraud from the covid
support schemes?
I am happy to tell the shadow Chancellor that as of September
2023, HMRC’s compliance effort on covid-19 support schemes, which
started when the schemes were set up in spring 2020, had
prevented the payment of or recovered the overpayment of more
than £1.6 billion of grants.
I thank the right hon. Gentleman for that answer, but according
to the House of Commons Library’s most recent numbers, covid
fraud losses total a staggering £7.2 billion—that is bigger than
the fiscal headroom that he had in his spring Budget. More
stories are coming to light about companies with undeclared
interests and personal protective equipment contracts not
delivering to the standards required. Ahead of the autumn
statement, will he confirm that the Government have also had to
write off more than £8.7 billion from pandemic PPE contracts?
Let me say two things. First, we have no quarter with any
incidence of fraud. We have commenced 51 criminal investigations
into suspected fraud cases and there have been a total of 80
arrests so far. Let me also say that during the pandemic we
introduced £400 billion of support to businesses and families up
and down the country and, according to the latest figures from
the Office for National Statistics, the result is that our
economy is nearly 2% bigger than pre-pandemic, while Germany’s,
for example, is only 0.3% bigger.
(South West Bedfordshire)
(Con)
T3. Primary care capital allocation has pulled the short straw
for decades. May I encourage Treasury Ministers to look across
Government and with developers —retrospectively if necessary—to
ensure that when we build huge new housing estates, the primary
care promised in the planning permissions is actually
provided?(900062)
I will take this question as well because my hon. Friend has
lobbied me personally on this issue. Literally no one in this
House has worked harder on it than he has. I have an example of
the very problem he is talking about in my own constituency. He
is right that it takes too long for housing development capital
to reach NHS primary care projects. We will look into the issue
carefully.
(Batley and Spen) (Lab)
T2. In my constituency we are faced with the potential closure of
vital public services such as Cleckheaton town hall, Claremont
House dementia care home and Batley sports and tennis centre.
Ultimately, that comes down to cuts imposed on Kirklees Council
of more than £1 billion since 2010. Ahead of next week’s autumn
statement, what conversations has the Chancellor had with his
colleagues in the Department for Levelling Up, Housing and
Communities to ensure that our local authorities are properly
funded and the future of our vital public services is
protected?(900061)
I am answering a lot of the topical questions today because I
have a new team. I want to reassure the hon. Lady that we are
very aware of the financial pressures that local authorities are
under. I am having extensive discussions with the Communities
Secretary.
Mr Speaker
I call the Chair of the Treasury Committee.
(West Worcestershire)
(Con)
On the Conservative Benches we all agree that the way to
sustainable economic growth without inflation is through business
investment. It is early days, but I wonder whether we have
indications of how well full expensing is working for encouraging
business investment in this country. Is the Chancellor
considering making that full expensing permanent next week at the
autumn statement?
I welcome my hon. Friend’s interest in the topic. One of the
reasons why our productivity is 15% lower than Germany’s, for
example, is that it invests 2% more as a proportion of its GDP
than we do in the UK. Improving the rate of business investment
is one of the most effective ways to boost productivity and
people’s real disposable income. We are proud of what we
introduced in the spring Budget, and we will continue to see
whether it is possible to extend it further.
Mr Virendra Sharma (Ealing, Southall) (Lab)
T4. London’s homelessness challenge is at crisis point. More than
1 in 50 Londoners is in temporary accommodation. That equates to
one child in every classroom. Given that in some boroughs, only
around 2% of properties are affordable for rent on local housing
allowance, what assessment has the Chancellor made of the
adequacy of local housing allowance rates?(900063)
With the Work and Pensions Secretary I continue to keep under
review all the things that have an impact on poverty rates. We
are proud to have made progress in reducing the number of people
living in absolute poverty after housing costs by 1.7 million
since 2010. When it comes to homelessness, we are investing £2
billion over the next three years. Rough sleeping is down 35%
since its peak.
(Basildon and Billericay)
(Con)
I refer Members to my entry in the Register of Member’s Financial
Interests. The Chancellor has acknowledged that investment
trusts, which make up one third of all FTSE 250 companies, are
being plagued by misguided cost disclosure legislation, which is
making them appear unduly expensive. That is restricting
investment and does not happen in any other country. In addition
to the positive dialogue between us and with the Financial
Conduct Authority, will he consider supporting the First Reading
of Baroness Altman’s private Member’s Bill in the other place
next week, which helps to address this issue? Will he also
address it in his autumn statement?
I welcome my hon. Friend’s expertise in this area, which is of
great benefit to the House and to me as I consider fiscal
measures. As we are so close to the autumn statement, I would say
that the way that we treat costs in our investment and pension
funds industries is not optimal, and we need to reform it.
(Stockton North) (Lab)
T5. A short time after the former Chief Secretary to the
Treasury, the right hon. Member for Salisbury (), said he was “alarmed” by the
amount of tax people are paying, he was out of a job. Was he
sacked for highlighting the Government’s tax burden, the highest
for 70 years?(900064)
My right hon. Friend the Member for Salisbury () did an excellent job and we all
salute his brilliant work. If he were here now, he would remind
the hon. Gentleman that we have the lowest tax burden of any
European country in the G7.
(Dumfriesshire, Clydesdale
and Tweeddale) (Con)
I know that the Chancellor is aware of just how important the
whisky industry is to the economy of rural Scotland. It was very
disappointing that the policy of a duty freeze was not continued
in the Budget. Can he offer any reassurance that we will return
to the policy of duty freeze in the autumn statement, and in next
year’s Budget?
The Exchequer Secretary to the Treasury ()
We are incredibly supportive of the Scotch whisky industry. In
fact, the Scotch Whisky Association was my first meeting in post.
In nine out of 10 previous fiscal events we either cut or froze
duty on whisky, and we have acted to remove punitive tariffs on
Scotch whisky in the US market. It will not be a surprise to my
right hon. Friend that all taxes remain under review and he will
not have long to wait until the next fiscal event.
(Leeds East) (Lab)
T6. Banks are taking advantage of higher interest rates to make
bumper profits. A new poll shows that people have had enough,
with big support for a one-off windfall tax on bank profits, yet
the Government have chosen to slash the surcharge on bank
profits. Is it not time for a windfall tax on excess bank profits
to help people who are hit hard by this crisis?(900065)
The Economic Secretary to the Treasury ()
There are two things I would say in response to that. First, it
is important, when we talk about banks, that we have a globally
broadly competitive tax regime, and we do not apologise for that
in the Treasury. Secondly, the hon. Gentleman should bear in mind
that the reduction he talks about in terms of the levy on banks
was offset by rising corporation tax.
(Darlington) (Con)
I thank the Exchequer Secretary to the Treasury, my hon. Friend
the Member for Grantham and Stamford () for his recent visit to
Darlington, where he opened a new branch of Darlington Building
Society. He will know from that visit the impact that Treasury
jobs are having locally, including an additional £80 million of
spending in our local economy. Does he agree with me that
Darlington Economic Campus is a fantastic levelling-up project,
ensuring that people can stay local but go far?
It was a great pleasure to visit my hon. Friend and open the
Darlington Building Society in his town, a very prominent
business that is important for in-service banking facilities. The
Darlington campus is an important part of our Treasury
levelling-up agenda and long may that continue.
(Barnsley East) (Lab)
T8. More than 3 million households in the UK owe an estimated
£2.7 billion in the unregulated buy now, pay later sector. The
Labour party has set out plans for urgent regulation of the
sector. Can the Minister confirm when the Government will do the
same?(900067)
This is a complicated area of regulation and we are looking at it
very closely. The consultation closed in April and we are working
on it because it is very important we get it right, but I hear
the hon. Lady’s concerns and will update the House in due
course.
(Stoke-on-Trent North)
(Con)
While the shadow Chancellor was busy scrolling through Wikipedia
to copy and paste, the actual Chancellor has to look no further
than the New Conservatives tax plan, which outlines scrapping the
IR35 reforms, increasing the VAT registration threshold to
£250,000, and delivering on the Prime Minister’s pledge when he
was Chancellor to bring a 1p cut in income tax in 2024.
I thank my hon. Friend for adding to the litany of options I have
in front of me for the autumn statement. What I can say to him is
what I said in my party conference speech: we are committed to
lowering the tax burden and will do so as soon as it is
responsible to do so.
(City of Chester) (Lab)
T9. Some 28% of people in Chester have a mortgage and they are
still bearing the burden of the Government’s disastrous
mini-budget. They deserve peace of mind that mortgage rates will
come down soon, so what is the Chancellor going to do about
it?(900068)
Can I say gently to the hon. Lady that interest rates have gone
up by 3% in the UK since then? That is just above the United
States and just below the eurozone, so this is a global
phenomenon. There is no short cut to bringing down interest
rates. We have to support the Bank of England as it bears down on
inflation and then we can bring mortgage rates down.
(Bosworth) (Con)
Will the Chancellor look at the red tape around the
apprenticeship levy? Many businesses in my area, such as Asda,
Amazon and DPD, all say that they want to take on more
apprenticeships but that the red tape around how they spend the
money is very difficult. This is something that he could change
overnight, and really help to grow and boost our economy.
I thank my hon. Friend for drawing attention to the
apprenticeship levy, which has been a tremendous success in
bringing a rigour to technical qualifications that was not there
before. We are very open to reforms to the apprenticeship levy,
providing they stick to the fundamental principle that any
investment is not in in-house training that would otherwise have
happened, but in transferrable, passport-able training that
someone can take with them if they move to another business.
(York Central)
(Lab/Co-op)
T10. The NHS dental plan has been stuck in the Treasury for
months, while my constituents are waiting years to see an NHS
dentist. When the Chancellor makes his autumn statement, will he
also release the dental plan with the funding that is required so
that we can get dental treatment back on track for our
constituents?(900069)
I will not pre-empt what I am going to say next week, but I will
say to the hon. Lady that, as a former Health Secretary, I am
well aware of the pressures on NHS dentistry and its importance
to all our constituents.
(North East Hampshire)
(Con)
Given that inheritance tax is the least popular of all taxes at
every income decile and that scrapping it would not be
inflationary, will my right hon. Friend consider doing so?
That was a very nice try, but my hon. Friend will have to wait
for a week.
(Harrow West) (Lab/Co-op)
Opt-out savings are a little like auto-enrolment in pensions.
They help those on lower incomes to save for a crisis—for the
proverbial rainy day. Given that more than 9 million people in
this country are in work with no savings at all, will the
Chancellor note the impressive results of a small trial of the
opt-out savings system in Manchester, and encourage its
expansion?
I would be happy to do that. The hon. Gentleman is right: if we
are to grow faster as an economy, the other side of the coin is
we that need to save more, and we should be encouraging everyone
in all income groups to do so.
(Buckingham) (Con)
Will my right hon. Friend seek to fix the anomaly that sees
man-made fully synthetic fuels taxed at the same rate as their
fossil equivalents?
I shall be happy to look into that issue in detail and get back
to my hon. Friend.
(Wirral South) (Lab)
Yesterday in the House, in the context of Labour’s plan for a
health service, the Secretary of State for Work and Pensions
referred to the “poor old non-doms”. Does the Chancellor agree
with his colleague that people who live in this country but do
not pay their taxes here can be accurately described as poor?
Because we attract wealth creators from all over the world—and
this may be uncomfortable for those on the Opposition Benches—we
generate huge amounts of tax revenue. Financial services pay for
half the cost of running the NHS. I am in favour of getting
everyone to pay their fair share of tax, but I will not make
reforms that mean less tax revenue for the NHS.
Mr Speaker
I call to ask the final
question.
(Glasgow East) (SNP)
The Westminster-made cost of living crisis is having a
devastating impact on household incomes, particularly in
Broomhouse, where many young homeowners are seeing mortgage
prices soaring. Will the Chancellor use the autumn statement to
introduce mortgage interest tax relief to help people across
Glasgow to deal with the cost of living crisis?
As the hon. Gentleman knows, we have taken enormous steps over
the past year to help families throughout Scotland to deal with
cost of living pressures. If he really thinks that people in
Scotland believe that this was a “made in Westminster” problem,
when we have experienced an invasion of Ukraine and a global
pandemic, I simply say to him in return that after 16 years of
SNP rule, GDP per head in Scotland is lower, productivity is
falling, employment is lower, and inactivity is
higher—[Interruption.]
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