Tax System: Fairness Mr Clive Betts (Sheffield South East) (Lab) 1.
What recent steps he has taken to ensure fairness in the
application of the tax system.(901356) The Financial Secretary to
the Treasury (Nigel Huddleston) Regarding fairness, we have a
progressive tax system where the top 5% of income tax payers pay
nearly half of all income tax, while the top 1% pay more than 28%.
In addition, the national insurance reforms announced at the autumn
statement cut...Request free trial
Tax System: Fairness
(Sheffield South East)
(Lab)
1. What recent steps he has taken to ensure fairness in the
application of the tax system.(901356)
The Financial Secretary to the Treasury ()
Regarding fairness, we have a progressive tax system where the
top 5% of income tax payers pay nearly half of all income tax,
while the top 1% pay more than 28%. In addition, the national
insurance reforms announced at the autumn statement cut taxes for
29 million people. That package also strengthens the fiscal
position by helping taxpayers to get their taxes right, while
bearing down on the small minority who seek to avoid paying their
fair share.
Mr Betts
The Minister talks about tax cuts, but in April most households
in this country will receive a 5% increase in their council tax.
That is not because local councils have mismanaged their
finances, but because after 13 years of austerity, the local
government finance system is essentially broken and relies on a
regressive and unfair council tax. Why in the autumn statement
did the Chancellor freeze the budgets of the Department for
Levelling Up, Housing and Communities for the whole of the next
Parliament, leading the Office for Budget Responsibility to
forecast a further £13 billion rise in council tax? Does that not
show that the Chancellor has no regard at all for councils and
the services they provide, or is he simply deferring a problem
that his Government has created for the next Government to sort
out?
I am afraid that is a ridiculous characterisation. We on this
side of the House care, including about our vibrant, important
local councils. That is precisely why they just received an
additional £600 million, and future spending will be a matter for
future fiscal events.
(North Wiltshire) (Con)
I am a strong believer in fairness in taxation. Would my hon.
Friend care to advise the House about who would bear the heaviest
burden of taxation, should His Majesty’s Government choose to
adopt the £28 billion spending commitment that the Labour party
announced on the radio this morning?
My hon. Friend makes an important point. Of course, we never know
from day to day exactly what Labour’s policy is, and I understand
there are even differences among its Front Benchers at the
moment, but we heard a firm commitment, without any promises at
all about where the money would come from. We therefore know
where it would come from: it would come out of taxpayers’ pockets
or further borrowing, which is deferred taxation. Everybody will
pay for it.
Mr Speaker
I call the shadow Minister.
(Bristol North West) (Lab)
The Labour party has set out clear proposals to close tax
loopholes on non-doms, private schools and private equity to give
a much-needed boost to our public services. Will the Treasury
Minister confirm whether the Government have assessed, or plan to
assess, the merits of such a policy?
I am pleased to hear the hon. Gentleman’s enthusiasm for closing
down tax loopholes and going after the abusers. It begs the
question why Labour did not vote in favour of the Finance Bill
last night, which included measures along those lines.
That is a short answer, but the answer to the wrong
question—perhaps the Minister can have a second go. While he is
thinking about the answer, I point out that the Comptroller and
Auditor General has highlighted that the Government are wasting
up to £28 billion a year on mismanaged procurement and governance
of major projects. Does the Minister agree that the Conservative
Chancellor and his predecessors have had to raise taxes so much
partly because they are wasting so many billions of taxpayers’
money each and every year?
The reason we have had to raise taxes is £350 billion of support
during the pandemic, which I did not hear the Opposition oppose,
and an additional £100 billion to help people during the cost of
living crisis, which I did not hear the Opposition oppose. We
therefore had to increase taxes out of necessity, but we reduce
them out of choice, which is exactly what we are doing. Labour
increases taxes out of necessity and then continues to increase
them out of choice.
Economic Growth in Scotland: Tax Policies
(Rutherglen and Hamilton
West) (Lab)
2. If he will make an assessment of the impact of his
Department’s tax policies on economic growth in Scotland during
this Parliament.(901357)
The Financial Secretary to the Treasury ()
The Government remain committed to increasing economic growth in
Scotland and right across the UK. As part of 110 growth measures
in the autumn statement 2023, the Government introduced tax
policies that are projected to stimulate economic growth in
Scotland and across the country. That includes making full
expensing permanent and the largest ever cut to employee and
self-employed national insurance contributions, which means more
people working.
The EY Independent Treasury Economic Model Club forecast
published yesterday found that the UK’s growth forecast of 0.8%
this year is only slightly outperformed by the even more
disappointing 0.7% growth in Scotland. Given this Parliament has
hiked taxes 25 times, and the Scottish National party now think
that those on modest incomes in Scotland should pay even more
tax, does the Minister agree that the people of Scotland are
simply paying the price for two Governments with no economic
credibility?
No, I do not agree. The hon. Member should be aware that the OECD
suggests that in the coming years we will be growing faster than
France, Italy and Germany. Of course, the Government have a
strong track record against our OECD friends over the last 14
years, and Scotland benefits from this economic growth.
(Ynys Môn) (Con)
As in Scotland, business rates are devolved in Wales. With
business rates relief set to fall from 75% to 40%, businesses in
Wales will pay almost twice as much as in England. Does my hon.
Friend agree that the Welsh Labour Government should be
supporting local businesses such as the Kinmel Arms in Moelfre
and not increasing the number of Senedd Members by a staggering
60%?
My hon. Friend puts it well. Of course, we have seen the
considerable protections and support given in retail, hospitality
and leisure business rates relief in England. That has not been
extended to the same extent in Wales, and Scotland failed to
extend it as well. She makes an important point.
Mr Speaker
We go back to Scotland: I call the SNP spokesperson.
(Inverness, Nairn, Badenoch
and Strathspey) (SNP)
Contrary to what the Minister said, OECD forecasts show that the
UK will have the lowest growth in the G20 and the highest
inflation in the G7. Ministers like to pretend that there is no
real cost of living crisis, but there is one, and it is biting
hard. How long will Ministers—and their Labour
counterparts—continue to peddle the fantasy that Brexit is
somehow good for the Scottish people?
I am afraid that the thing that would most impoverish the people
of Scotland is separation from the UK. After 16 years of SNP
rule—longer than the Conservatives’ in England—GDP per head in
Scotland is lower, productivity is falling, employment is lower
and inactivity is higher. That is not exactly a proud record.
The Minister talks about GDP. The Office for Budget
Responsibility forecast that GDP in the UK will be 4% lower in
the long term due to Brexit. Meanwhile, independent Ireland in
the EU is booming with a giant fiscal surplus. Given that the
Tories, Labour and the Lib Dems are all now champions of Brexit,
is it not the case that the only way for Scotland to rejoin the
EU is through becoming an independent country?
The hon. Gentleman knows that the IMF has forecast us greater
growth than France, Italy and Germany over the next few years. If
he is so enthusiastic about supporting growth, including helping
businesses across the United Kingdom, perhaps Scottish National
party Members could have joined us in the voting Lobby last night
instead of voting against, for example, full expensing and
investment in research and development. They voted against
that—how on earth is that in the interests of their
constituents?
Business Investment: Fiscal Measures
(Meon Valley) (Con)
3. What fiscal steps his Department is taking to help increase
the level of business investment.(901358)
The Chancellor of the Exchequer ()
Mr Speaker, may I add my comments to yours yesterday about His
Majesty the King? I wish him and his family well, as well as
saluting his courage in being so open about his condition.
At the autumn statement last year, I announced an ambitious
growth package, which will boost business investment by about £20
billion a year. We are making full expensing permanent, which the
CBI welcomed as a game changer that will fire up the British
economy.
Mrs Drummond
I also welcome those measures. Business rates are among the
biggest issues for small businesses in Meon Valley, so I welcome
the Chancellor’s £4.6 billion package of support in the autumn
statement. However, following covid, there are a number of empty
offices where landlords are still having to pay business rates.
Does the Chancellor have any measures to support those who are
struggling with a lack of income to pay business rates?
My hon. Friend is absolutely right to highlight the pressures
caused by business rates. That was why in the autumn statement we
introduced the 75% discount for retail, hospitality and leisure.
All I would say is that the reason we were able to introduce
those large cuts in business rates was that we did not embark on
a spending spree of £28 billion a year, which is Labour’s policy
on Mondays, Wednesdays and Fridays, but not apparently on
Tuesdays, Thursdays and Saturdays.
(Huddersfield)
(Lab/Co-op)
I will try to be nice to the Chancellor, but he seems to be
living in a parallel universe. If he came to Huddersfield and
talked to my businesses and manufacturers, he would find them at
the lowest ebb that I can ever remember. It is time that the
stimulus was there to make people invest and create jobs. Get on
with it, Chancellor!
If that was being nice, I am relieved that I have not seen the
other type of questions that the hon. Member asks. I agree that
manufacturing is central to our economic fortunes, which is why
it was good news that last year we overtook France to become the
eighth-largest manufacturer in the world. But we have gone even
further: in the autumn statement, we announced a £4.5 billion
manufacturing strategy to give further support to make our
manufacturers the best in the world.
(Totnes) (Con)
Yesterday, we had the pleasure of discussing the very many
benefits from the autumn statement, including research and
development grants and simplification of the tax code. However, I
wonder whether the Chancellor might go a little further and see
whether cutting VAT for the tourism and hospitality sector,
perhaps by 10% over five years, would be advisable to help the
economy across the United Kingdom.
My hon. Friend is an assiduous supporter of the many pubs,
restaurants and shops in Devon, and I commend him for that
support. We will, of course, keep all those measures under review
ahead of the Budget.
(East Renfrewshire)
(SNP)
Hair salons are a vital mainstay of our high streets, but many
employers are worried about the sustainability of their
businesses; a huge issue is their tax bills, with VAT a
significant concern, making further business investment very
difficult. Cutting VAT to 10% would make an important difference
to local businesses, high streets and apprentice training. Will
the Chancellor look at doing that to support all our local
economies?
I will always look at anything that helps businesses to grow and
expand. I set up and ran my own business for 14 years. Can I
gently say to the hon. Lady that it is slightly incongruous to
argue for lower taxes when the SNP has given Scotland the highest
taxes in the United Kingdom?
Loan Charge: Bankruptcy
(Buckingham) (Con)
4. If he will make an assessment of the potential impact of the
loan charge on levels of bankruptcy.(901359)
The Financial Secretary to the Treasury ()
I have heard the concerns expressed by hon. Members on the impact
of the loan charge, and I have pushed His Majesty’s Revenue and
Customs for firm assurances on the safeguards that it has in
place. No one will be forced by HMRC to sell their main home or
access their pension funds early to pay their loan charge debts,
nor has HMRC petitioned for bankruptcy, which would be only a
last resort and is in nobody’s interest. There is substantial
support in place to help people in debt, including agreeing
time-to-pay arrangements with them.
I am grateful to my hon. Friend for that answer and his
engagement with the loan charge and taxpayer fairness all-party
parliamentary group, including a meeting this evening with its
officers. In an internal document that surfaced as part of the
2019 Morse review, HMRC admitted to around 100 bankruptcies from
the loan charge. Can the Minister tell the House why that figure
has never been given publicly by HMRC, and what the figure is
today?
Again, I thank my hon. Friend for championing this area and his
great concern for the human stories behind the difficult
circumstances resulting from some of these schemes. As I have
said, I am constantly seeking reassurance from HMRC on this
matter, and my understanding is that where bankruptcies have
occurred, it has often been because of requirements outside of
the loan charge, not from HMRC; indeed, some people have declared
bankruptcy of their own volition. However, if my hon. Friend has
evidence to the contrary, I would like to know about it.
(Westmorland and Lonsdale) (LD)
The original Treasury impact statement for the loan charge stated
that it would have no material impact on
“family formation, stability or breakdown”,
yet there have been countless divorces, family break-ups, mental
health breakdowns and bankruptcies, and at least 10 suicides.
That impact statement was grossly wrong, but also surely
negligent. We now need a full investigation, including how and
why Parliament was so misled over the dangerous and unfair loan
charge.
I hear the House’s concern about this issue, on which we had a
debate not so long ago. Of course, the suicides the hon.
Gentleman mentions concern us, and independent reviews have taken
place. However, I want to provide the House and anybody listening
with reassurance that the best thing to do if people have
concerns is to engage with HMRC, because very generous and
long-term plans can be put in place to help people to repay. As I
said, there are fears out there—there is a bit of
scaremongering—that homes are being taken over or people are
having to give up pensions. That is not the case. Engagement with
HMRC to establish reasonable time to pay would therefore be
reassuring for many of the people who fear much worse
consequences. My appeal is to engage with HMRC.
(Ealing North) (Lab/Co-op)
The Government’s approach to the loan charge has become a
nightmare for ordinary people across the country who are the
victims of mis-selling and facing financial ruin. The torment and
devastating reality is the clearest possible proof that the
Government need to think again. Those facing the loan charge
ordeal cannot bear to hear yet again that the Morse review is the
final word on this matter. Will the Minister finally agree today
to commission a new, truly independent review?
We had an independent review in 2019 under . The Government accepted 19 of
its 20 recommendations. The review has taken place, but as I have
said repeatedly, I am challenging HMRC and listening to
colleagues. If action needs to be taken, I will take it, but I do
not believe that there is a case for another review, because we
have already had one, and the Government have already taken
action.
Homeowners with Mortgages: Support
(Tewkesbury) (Con)
5. What steps he is taking to help support homeowners with
mortgages.(901361)
The Economic Secretary to the Treasury ()
As the House knows, the path to lower interest rates is through
lower inflation, which is why the Government are fully committed
to supporting the Bank of England to get inflation back down to
its 2% target. If mortgage borrowers fall into financial
difficulty, our mortgage charter, which covers about 90% of the
market, includes new flexibilities to help customers manage their
repayments, on top of the Financial Conduct Authority’s rules on
how lenders must treat borrowers.
Mr Robertson
Given that a lot of mortgage payers are suffering because of the
rapid hike in interest rates, will the Government continue to
talk to the Bank of England and mortgage lenders to see what can
be done to bring interest rates down? That would help most
people.
I completely agree on the absolute need to drive mortgage rates
down, which is why we are supporting the Bank of England’s
independent remit to bring interest rates down. We are also
ensuring that we do not do things to make inflation worse, such
as adding £28 billion to Government borrowing, which would
increase inflation.
(Motherwell and Wishaw)
(SNP)
The rate for a two-year fixed mortgage remains more than double
the level of December 2021. More than 900,000 borrowers are set
to see their monthly payments rise by £500 or even £1,000 a
month. Government Ministers are having to resign because of
increasing mortgage payments. How does the Chancellor expect
people in Scotland to cope with increased mortgage rates if his
Ministers cannot?
I would say two things in response to the hon. Lady. First, the
best thing we can do is to help people with the cost of living,
not increase their taxes, as the SNP in Scotland proposes, and to
maintain—[Interruption.] I will not get bored of saying this.
Secondly, we maintain our support for the Bank of England driving
inflation down. We have more than halved it. We will continue to
do that, and interest rates will come right down.
Economic Growth Forecasts: 2024 and 2025
(Edinburgh West) (LD)
6. What recent assessment he has made of the implications for his
policies of economic growth forecasts for 2024 and
2025.(901362)
The Chancellor of the Exchequer ()
We announced 110 growth measures in the autumn statement. Taken
together with the measures in the spring Budget, the independent
Office for Budget Responsibility says that they will have the
biggest impact on output that it has ever measured in a fiscal
event, increasing GDP by 0.5% by 2028-29.
The UK economy is set for slower growth than previously thought.
The International Monetary Fund predicts that next year we will
have the second worst growth in the G7. In Scotland, the SNP has
increased taxes, which we have heard about already, and Scots now
face six bands. Stagnation there is even worse, and businesses
and households in my constituency need reassurance. Will the
Chancellor tell us what he will do to give confidence to people
up and down the country that we will soon see economic
growth?
May I gently correct the hon. Lady on the IMF? It said that over
the next four years, UK growth will be higher than in Germany,
France, Italy and Japan. I agree about SNP tax rises, but I point
out that the Liberal Democrats have some tax rises of their own.
They want to increase capital gains tax, which would be
incredibly damaging for Scotland’s financial services industry,
which employs thousands of people.
(Stoke-on-Trent North)
(Con)
Has the Chancellor had the opportunity to look at the New
Conservatives’ budget proposal, a budget for families? It has a
six-point plan, with two points to help unlock growth,
particularly for the many small, family-run businesses in places
such as Stoke-on-Trent North, Kidsgrove and Talke. Those plans to
increase the VAT registration threshold to £250,000 and to
abolish the IR35 reforms would surely help us unlock the growth
of our great nation.
I have been talking with my hon. Friend about these issues
recently. In fact, we were discussing increasing the VAT
threshold only last night—such are the interesting evenings I
have in this job! We will look seriously and carefully at any
measures that help small businesses. They are the lifeblood of
the country.
Cost of Living
(Luton South) (Lab)
7. What recent assessment he has made of the impact of increases
in the cost of living on living standards. (901363)
(North Ayrshire and Arran)
(SNP)
18. What steps his Department is taking to support households
with the cost of living. (901380)
The Chief Secretary to the Treasury ()
The Government stand by households, with one of Europe’s largest
support packages, worth on average £3,700 per UK household, but
we all know that the key to reducing cost of living pressures is
to bring down inflation, which we have more than halved,
delivering on the Prime Minister’s promise.
Families in Luton and Bedfordshire, and indeed the rest of the
country, are worse off because of 14 years of economic chaos and
incompetence under the Conservatives. Does the Minister concede
that, even if the Government’s inflation target is met, families
will still be paying £300 a month more for their household bills
than they were just 18 months ago?
Fourteen years of the Conservatives has halved unemployment and
increased employment by 4 million. Crucially, poverty is down: we
have 1.7 million fewer people in poverty now than in 2010,
including 400,000 children and 200,000 pensioners. That is a
legacy to be proud of.
The Joseph Rowntree Foundation’s report on poverty in the UK in
2024 reiterates that, consistently, the demographic with the
highest poverty rates is children. Although 29% of the children
in my constituency live in poverty, the Scottish Government are
doing what they can with their limited powers via the Scottish
child payment. Will the Chancellor and his team use their powers
to make a concerted and determined effort to tackle the scourge
of poverty, which is so damaging to our children?
I reiterate: we have 400,000 fewer children in poverty now than
in 2010. In addition, the national insurance contributions cut
that we have introduced has been shown to cut child poverty
dramatically. Crucially, the leading indicator of whether a child
is in poverty is whether their parents are in work, and that is
what we have delivered over this Parliament—[Interruption.] Yes
it is—it absolutely is. Getting more people into work will help
to solve child poverty.
(Hampstead and Kilburn)
(Lab)
The British public are still struggling with the Conservative
cost of living crisis, and the Government are now forcing up
council tax. Last week, for the first time in my life, a
Conservative MP spoke for me when he said:
“There’s almost no point chopping £100 off tax bills nationally
if you’re adding on to it with council tax.”
Labour Members agree with the hon. Member for Mansfield (). Does the Chief Secretary
agree with her hon. Friend and colleague?
Council tax is a matter for councils, but we put in place a
limit, which I do not believe existed under the previous Labour
Government. More than that, the most difficult thing for councils
and consumers more broadly is the £28 billion-worth of tax rises
that Labour is planning in government.
Bankers’ Bonuses: Removal of Cap
(Ilford South) (Lab)
8. If he will make an assessment of the potential impact of
removing the cap on bankers’ bonuses on the financial
sector.(901364)
The Chancellor of the Exchequer ()
Removing the bankers’ bonus cap was a decision made by the
independent Prudential Regulation Authority, which has long said
that the cap was completely ineffective; it did not limit pay or
make banks safer.
The cap on bankers’ bonuses might have been a great newspaper
headline, but it did little to tackle the City’s excesses.
Financial institutions quickly changed remuneration packages and
structures so that risk takers still receive substantial
pay-offs, sometimes even taking them through offshore mechanisms.
Does the Chancellor agree that what we need is enhanced
regulation to mitigate excessive risk taking in the square mile?
That could require, beyond merely capping bonuses, a move toward
an alignment of interests focused on the form of bonus payments,
share allocations and deferred amounts, and robust clawback
mechanisms for those who have behaved maliciously, in order to
deter misconduct in the square mile more effectively?
I suspect that when the hon. Gentleman tabled his question, he
was not expecting that the biggest supporter of abolishing the
bankers’ bonus cap was not the Chancellor but the shadow
Chancellor. I hear what he says, and indeed those are some of the
reasons we abolished it, because it was not working. If Labour is
going to change its mind on that policy, may I ask—just to take a
totally random example—when will it change its mind about the
planned £28 billion of additional borrowing?
Non-dom Status: Abolition
(Kilmarnock and Loudoun)
(SNP)
9. Whether he has made a recent assessment of the potential
merits of abolishing non-domiciled tax status.(901365)
The Financial Secretary to the Treasury ()
The Government want the UK to have a fair but internationally
competitive tax system, designed to bring in talented individuals
and investment that contributes to the growth of the economy.
Non-doms play an important role in funding our public services
through their tax contributions. They pay tax on their UK source
income and gains in the same way as everyone else.
The Minister talks of fairness, but the fact is that during the
cost of living crisis nearly a million more struggling pensioners
will start paying income tax, because of the freeze in personal
allowance rates, while the Government protect some of the richest
members of society through non-domicile status. Scrapping that
status could bring the Treasury an extra £3 billion a year. Why
do the Government not do the right thing and bring in that extra
money to protect pensioners and the lowest paid?
Non-doms contributed about £8.5 billion in taxes in 2022, and
have contributed to investment to the tune of £7 billion since
2012. The hon. Gentleman will be well aware that scrapping their
status would not be risk-free in a world in which people can be
quite mobile, and could damage the UK’s competitiveness. As for
the need for other support, that is exactly why we have been
reducing national insurance rates, for example.
Mortgage Interest Rates: Impact on Disposable Income
(Bethnal Green and Bow)
(Lab)
10. What recent assessment he has made of the potential impact of
changes in mortgage interest rates during this Parliament on
household disposable income.(901366)
The Economic Secretary to the Treasury ()
Mortgage interest rates have fallen by more than 100 basis points
from their peak in the summer. None the less, the Government have
prioritised support for households that are vulnerable to cost of
living pressures. We have introduced one of Europe’s largest
support packages, and it is partly thanks to those measures that
real incomes have proved more resilient than was anticipated. In
the third quarter of 2023, real household disposable income per
person was just 0.5% lower than in Q4 2019, versus the Office for
Budget Responsibility’s autumn statement 2023 forecast that it
would be almost 3% lower.
I thank the Minister for his answer, but since his party’s
disastrous mini-Budget fiasco under the previous Prime Minister,
food prices have soared, extreme damage has been done to the
economy and mortgages have skyrocketed. Every month 200,000
people are having to remortgage, the average monthly rate has
risen by £240, and 1.6 million people will have to remortgage
this year. Overall, after 14 years of a Conservative Government,
people are more than £10,000 less well off than they were on
pre-2010 trends. Is it not time that the Chancellor and his
ministerial team looked again at the possibility of additional
support for those who are facing mortgage and other financial
distress? The Chancellor is frowning, but it is time that he took
further action to support people in distress.
This Government have introduced one of Europe’s largest support
packages, worth more than £100 billion during 2022 to 2025. That
is an average of £3,700 per household. The point about mortgage
rates is that they went up everywhere across the world, to a
higher level than ours in many jurisdictions such as the United
States. I have already mentioned the work that we have done on
the mortgage charter, helping hundreds of thousands of people to
manage their mortgages, but the critical thing that we need to do
is bring inflation down. She needs to talk to her shadow
Chancellor and the shadow Treasury team about their plans, which
would make inflation higher.
Mr Speaker
Order. I am not sure that “she” is a good word to use to other
Members.
Infected Blood Compensation: Funding
(South Antrim) (DUP)
11. Whether he has had recent discussions with Cabinet colleagues
on funding for a UK-wide infected blood compensation
scheme.(901369)
(Eltham) (Lab)
13. Whether he has had discussions with Cabinet colleagues on the
potential cost to the Exchequer of compensation for people
infected and affected by contaminated blood and blood
products.(901372)
The Chief Secretary to the Treasury ()
This is an appalling tragedy, and my thoughts remain with all
those affected. We understand the strength of feeling, and the
need for action. The Government have accepted the moral case for
compensation, and have acknowledged that justice needs to be
delivered for victims. As such, the Government intend to respond
in full to Sir Brian Langstaff’s recommendations for wider
compensation following the publication of the inquiry’s final
report in May this year.
The Minister’s answering that question has brought forth another
question. The Chancellor was previously Secretary of State in the
Department of Health, and three of his former colleagues all gave
a commitment to address the issue. Now that the Chancellor is in
a position to do something about that, how long is it going to
take? As this Government’s days are numbered, the difficulty I
have is whether this will be in place before we have an election.
Will they ensure that the commitment is there?
I know that the hon. Gentleman has a lifelong friend who has
suffered from this terrible tragedy, and I can reassure him that
we are determined to do right by the victims and those who have
tragically lost their loved ones. The victims of the infected
blood scandal deserve justice and recognition. On his question on
timing, Governments of all colours have failed to sort this out,
but I am pleased that the interim payments at least have been
paid. As I have said, the Government are committed to the moral
case for compensation and we are expecting the final report very
soon. We will move as quickly as possible afterwards.
We have had Sir Brian Langstaff’s recommendations since April
2023. Mrs Dorricott, the wife of the Chancellor’s constituent
Mike, told the inquiry that the Chancellor, when he was Health
Secretary, told Mr Dorricott:
“Don’t worry about this, we’ll sort it.”
He is now the Chancellor, with his hands on the purse strings, so
will he now—through his colleague the Chief Secretary to the
Treasury—confirm that the Government have identified the
contingencies to pay the compensation to the people hit by the
infected blood scandal?
I can confirm that we are working with the Cabinet Office and the
Department of Health and Social Care to ensure that we can
respond as quickly as possible once the inquiry reports.
Small Businesses: Support
(North Devon) (Con)
12. What fiscal steps his Department is taking to support small
businesses.(901370)
(Gainsborough) (Con)
15. What fiscal steps his Department is taking to support small
businesses.(901375)
The Financial Secretary to the Treasury ()
Small businesses are the engines that drive our economy and we
support them to thrive using levers right across Government. Our
small business rates relief means that one third of business
properties in England already pay no business rates. We provide
tax reliefs benefiting small and medium-sized enterprises, such
as the annual investment allowance and employment allowance, and
we support investment in SMEs through British Business Bank
programmes and a variety of other support measures.
What consideration has been given to reducing employer national
insurance contributions to help small businesses to sustain
employment following the record increase in the national living
wage from April, particularly in the tourism and hospitality
industries?
My hon. Friend and I have spoken about these policy areas on a
number of occasions. In terms of supporting small businesses, the
employment allowance enables businesses with employer national
insurance contributions bills of £100,000 or less to claim up to
£5,000 off those bills. That was increased in April 2022 from
£4,000 to £5,000, so the smallest 40% of businesses have already
been taken out of paying employer national insurance
contributions, and many of those are in the hospitality and
leisure sector. We always keep policies under review, and I know
that my hon. Friend will always be lobbying on this issue.
Becoming an entrepreneur in this country has become increasingly
purgatorial over the past 25 years. Does the Minister agree that
what small businessmen want is not more handouts and allowances
from the Government but lower, simpler and flatter taxes, and
less regulation not more? They want the Government to get off
their backs and shove off.
That was very interestingly put by my right hon. Friend. I
completely agree with his instincts, though, and those instincts
are completely shared on the Conservative Benches. When we are
able to reduce tax and release the entrepreneurial spirit,
independence and innovation that exist right across the UK, the
country thrives and all of us thrive.
Sir (East Ham) (Lab)
In 2020, the former Chancellor set a public sector net investment
target of 3% of GDP, but that was abandoned after the 2022
debacle and today we have the second lowest business investment
among advanced economies, partly because of that failure on
public sector net investment. Can the Minister offer us any
reassurance on the future trajectory of public sector net
investment?
Of course, Labour left us in pretty terrible financial
circumstances back in 2010. Instead its figure is up £28 billion
in real terms at the start of the next Parliament, an increase of
40% in real terms or 7% annually—the biggest ever published.
(Oldham East and
Saddleworth) (Lab)
Small businesses are the backbone of our economy, but they have a
constant problem with late payments, which increased by 7% last
year, and that is driving many of them into insolvency. Given
that the Government are a major contractor, what are they doing
through project bank accounts to reduce the impact of late
payments?
The hon. Lady makes an important point, and I know there is
agreement on this issue across the Chamber. We made statements
last year along those lines, putting particular pressure on the
public sector. I am sure there will be continuing pressure on the
private sector, too.
Financial Services: Growth Support
(Harrow East) (Con)
14. What steps his Department is taking to support growth in the
financial services sector.(901373)
The Economic Secretary to the Treasury ()
The Government are taking ambitious steps to grow the UK’s
world-leading financial services sector, with widespread industry
support. To take one example, reforms to Solvency II will help to
spur a vibrant, innovative and internationally competitive
insurance sector. The reforms will unlock £100 billion-worth of
productive investment to grow the economy in every constituency
over the next 10 years.
I thank my hon. Friend for his answer but, clearly, to grow the
financial services industry, investors must have confidence that
their money is safe. I have written to him about the Woodford
equity scandal, of which there are many thousands of victims
across the country. The Financial Conduct Authority refused to
intervene, so will he now intervene and take action to ensure
that the investors get at least a large part of their money
back?
I thank my hon. Friend for his question, for writing to me and
for standing up for the rights of his constituents. It is
important the House knows that over 90% of investors voted to
accept the scheme of arrangement. It is now up to the court to
decide whether to approve it, and I therefore will not comment on
it any further. I am happy to be in constant dialogue with him on
this matter, as on many others.
(Strangford) (DUP)
As the Minister knows, the Northern Ireland Assembly sits for the
first time today to make a change for Northern Ireland. We would
very much like to be part of the financial services sector, so
what can he and the Government do to support the Northern Ireland
Assembly in relation to the financial services sector, and to
ensure that we in Northern Ireland can be part of this great
country of the United Kingdom of Great Britain and Northern
Ireland? Always better together.
I strongly echo the hon. Gentleman’s sentiments. I am very happy
to engage with him and his colleagues from Northern Ireland to
see what more I can do in the Treasury to work with him and,
indeed, the Northern Ireland Executive, particularly to encourage
our financial services institutions to invest more in Northern
Ireland. I am very happy to discuss ways in which we can do
that.
Regional Economic Inequalities: Fiscal Steps
(Cambridge) (Lab)
16. What recent fiscal steps he has taken to help tackle regional
economic inequalities.(901377)
The Exchequer Secretary to the Treasury ()
This Government are committed to supporting all parts of the
United Kingdom. In October we announced the £1.1 billion
long-term plan for towns, which gives 55 towns up to £20 million
of endowment-style funding. We are delivering an ambitious
programme of investment zones and devolution deals, we ae
continuing to support local growth through the UK shared
prosperity fund and we are investing billions to improve local
transport connections in our regions outside London.
By their own measures, the Government are failing on almost half
of their levelling-up missions in the east of England. Meanwhile,
the Cambridge sub-region, which is a net contributor to the
Exchequer, has vital transport projects on hold or awaiting
finance. When will the Treasury stop stalling growth and give
power back to the regions, which know best what needs to be done
in their area?
This Government are committed to levelling up by boosting growth,
raising living standards and spreading opportunity throughout the
country in several different ways. The hon. Gentleman talks about
giving more power to local areas, and he will know that the
Cambridgeshire and Peterborough Combined Authority is getting a
£97 million devolution deal. He will also know that Cambridge
received some £14 million as part of the shared prosperity fund
to spend on local projects. I reject his assertion; the people of
Cambridge are benefiting from this Government.
(Devizes) (Con)
The way to reduce regional inequality is to ensure that growth
happens everywhere across the country. One way to do that is to
support small and medium-sized enterprises and community
enterprises, which are particularly located in under-served
regions. I commend the Government for the recovery loan scheme,
which has been a lifeline to many small businesses and community
enterprises. Can the Minister tell us whether that scheme is
likely to be renewed? Hundreds of millions of pounds of private
investment is waiting on the Government to make a decision.
My hon. Friend has a long history as a great champion for
community organisations. I will write to him on his specific
question.
National Living Wage
(Bosworth) (Con)
17. What recent progress he has made on raising the level of the
national living wage.(901378)
The Chief Secretary to the Treasury ()
The Government are committed to ending low pay. From 1 April
2024, the national living wage will increase by 9.8%, to £11.44.
That represents an increase of more than £1,800 to the annual
earnings of a full-time national living wage worker and it is
expected to benefit about 2.7 million workers.
I congratulate the Government on increasing the national living
wage, because that will make a huge difference. However, after
speaking to not only those in the public sector, at the likes of
my local Leicestershire County Council and Hinckley and Bosworth
Borough Council, but small businesses in the private sector, I
know that there is a trade-off, because they have to foot that
wage bill. What steps can the Government take to make sure that
those businesses and the public sector have the money to pass on
to those who are earning so well?
I thank my hon. Friend for his question, and I will take the two
parts of it in turn. The Government continue to support
businesses with the higher costs through a generous package of
support. At the autumn statement, we showed our commitment to
supporting small businesses by extending the 75% retail,
hospitality and leisure relief, and by freezing the small
business multiplier, which will protect more than 1 million
properties from the multiplier increase. Yesterday, we announced
a wide-ranging package of support worth £600 million for local
councils, including £500 million of new funding for social
care.
Mr (East Londonderry)
(DUP)
I understand that concerns were expressed some years ago about
how a significant increase in the minimum wage may well have a
knock-on effect, particularly on the hospitality sector. Given
that that did not come about with previous living wage increases,
will the Chief Secretary commit her Government to ensuring that
future increases will be monitored closely to enable and assist
small businesses to increase wage levels systematically and
sustainably over the longer term?
I can commit to the hon. Gentleman that we are absolutely
monitoring the effects, but, as I said, a good package of support
is in place for businesses.
Topical Questions
(Chipping Barnet)
(Con)
T1. If he will make a statement on his departmental
responsibilities.(901382)
The Chancellor of the Exchequer ()
I would like to update the House on a couple of data releases
published since our last oral questions. Total greenfield foreign
direct investment since 2010 has not just been higher than that
of France, Germany and Italy, but in the past two years has
overtaken that of China to be the second highest in the world.
Yesterday’s labour force survey said that unemployment fell to a
quarterly average of 3.9%, meaning that unemployment has halved
and Conservative Governments have overseen the creation of more
than 800 jobs every day since 2010.
Can the Treasury find funds for an increased pay offer for junior
doctors? I completely agree that we must safeguard the public
finances and have regard to affordability, but if ever a group
deserved a pay rise, it is junior doctors, and we need to get the
dispute settled.
As my right hon. Friend knows, as Health Secretary I campaigned
for extra money for the NHS to make sure that we could pay NHS
staff fairly, but I do believe that junior doctors have had a
very fair offer—one that is higher than was recommended by the
independent pay review body and is about double the rate of this
year’s predicted inflation. I know that the Health Secretary is
willing to talk about anything else that could help make their
working conditions better.
Mr Speaker
I call the shadow Chancellor.
(Leeds West) (Lab)
Last week, at Prime Minister’s questions, when asked about the
Tory mortgage penalty, the Prime Minister boasted that someone
coming off a fixed-rate mortgage
“will be able to save hundreds of pounds.”[—[Official Report, 31
January 2024; Vol. 744, c.
857.]](/search/column?VolumeNumber=744&ColumnNumber=857&House=1)
But the small print was that they had to add many years to their
mortgage. Three million people have been coming off fixed-rate
mortgage deals this year and last, so does the Chancellor agree
with the Prime Minister that British homeowners have never had it
so good?
The way we are helping families with mortgages is not just
through the mortgage charter, which is a lifeline to many
families, but by bringing down inflation. We have been having a
few pops about Labour’s confusion about its £28 billion policy,
but the real reason we are against it is that going on a
borrowing splurge pushes up inflation, pushes up interest rates
and makes mortgages more expensive.
It is under a Conservative Government that interest rates,
inflation and mortgage costs have gone up. The Government need to
take responsibility because, after 14 years, this out-of-touch
Government are making it harder for ordinary people to get on. If
the Chancellor decides to campaign in next week’s by-elections,
what will he say to the 3,100 people in Wellingborough who are
remortgaging and paying £210 more on their mortgages every month,
and to the 2,800 people in Kingswood paying £270 more a month
because of the Conservative mortgage penalty?
What I will say to them is that responsible, difficult decisions,
the vast majority of which the shadow Chancellor opposed, have
seen the inflation rate more than halve and interest rates likely
to have peaked. Last year, we built more houses in one year than
in any single year under the previous Labour Government. We are
doing everything we can to help bring down mortgage rates, but a
£28 billion borrowing spree will make them worse not better.
(Harrow East) (Con)
T4. In 2011, the Government quite rightly set up the fund to
compensate victims of the Equitable Life scandal. Notwithstanding
the fact that the Government did not give them enough money, we
know that the fund will not be fully spent on the people being
compensated. Will my right hon. Friend ensure the fund is used
for the benefit of the people who suffered in the scandal, rather
than being returned to the Treasury?(901385)
The Economic Secretary to the Treasury ()
I thank my hon. Friend for his question and I will write to him
with the specifics of the answer.
(Salford and Eccles)
(Lab)
T2. Many of my constituents whose lives have been destroyed by
the loan charge scandal feel the central injustice is that the
Government are focused on pursuing the victims rather than the
companies responsible. They were dismayed to read recent
allegations that individuals linked to such companies have
donated hundreds of thousands of pounds to the Conservative
party. Will the Chancellor confirm why exactly the Government are
ignoring the providers and operators of the schemes? How many
have been prosecuted specifically for their involvement in
disguised remuneration, and not for other
misdemeanours?(901383)
The Financial Secretary to the Treasury ()
Eighty-five per cent of the funds recovered from the loan charge
so far—about £3.9 billion in total—have come from the employees,
therefore those who were running those schemes, so the hon. Lady
is mischaracterising where we have gone so far. There has been
one criminal conviction so far; others are in place. I repeat
what I said to the Opposition spokesman, the hon. Member for
Ealing North (), earlier: if they were that
concerned about ensuring we go after the wrongdoers, they would
have voted with us last night in the Finance Bill.
Sir Desmond Swayne (New Forest West) (Con)
T9. At the meeting this evening, will the Financial Secretary
review the injustice that prevents loan charge victims who have
engaged with His Majesty’s Revenue and Customs, but who cannot
agree with their assessment, having any access to a
tribunal?(901390)
I know my right hon. Friend has been campaigning on the issue. I
respect and appreciate the information he has provided, and his
contributions to the debate. I assure him that I am in listening
mode and looking forward to the meeting this evening, because I
want to ensure that I hold HMRC to account to make sure everyone
involved is treated fairly and respectfully.
(Brighton, Pavilion)
(Green)
T3. Last week, the International Monetary Fund joined many others
in urging the Chancellor to prioritise public spending and
investment above tax cuts. Rather than seeking to appease his
Back Benchers with tax cuts in the next Budget, will he finally
deliver the level of public investment this country is crying out
for, including in a nationwide energy efficiency programme that
would shield households from volatile gas prices, get their fuel
bills down for the long term and create jobs? Or is he yet
another one who is running scared of green
investment?(901384)
I am sure the hon. Lady understands that I cannot talk about what
will be in the Budget ahead of the Budget because no decisions
have been made. I celebrate with her that the UK recently became
the first major economy in the world to decarbonise by more than
50%, ahead of France, Germany, Japan and the United States.
Mr Speaker
I call the Chair of the Treasury Committee.
(West Worcestershire)
(Con)
If the Chancellor had an ambition to spend an additional £28
billion a year on something, will he explain to the House what
level of tax that would impose on ordinary households?
I thank my hon. Friend for asking that question. I am curious to
know where that figure of £28 billion has come from, but as she
has asked the question, I will tell her that, if we were to stick
to the fiscal rules, as the Labour party claims it will do, to
increase spending by £28 billion would mean increasing income tax
by 4% or increasing corporation tax, which Labour says it will
cap, by 8%.
(East Lothian) (Alba)
T5. With winter still upon us and fuel bills still rising, Ofgem
is advising that the level of domestic energy debt is approaching
£3 billion. When people cannot meet their current bills, how can
they possibly be expected to meet that level of arrears? Is it
not time to fund a debt write-off scheme, as proposed by National
Energy Action and other fuel poverty campaigners, before
hypothermia and misery worsen?(901386)
The Exchequer Secretary to the Treasury ()
The Government continue to work with Ofgem. In fact, I met the
chief executive officer very recently. Ofgem continues to monitor
the levels of energy debt to ensure that consumers are protected.
The hon. Gentleman will know that, last year, the Chancellor
announced measures to ensure that households with prepayment
meters paid no more than those with standard meters, and that is
on the back of the energy price guarantee, which effectively paid
50% of people’s household energy bills.
Sir (Bromsgrove) (Con)
The Chancellor will be aware of a proposal from the World War
Muslim Memorial Trust to establish a memorial at the National
Memorial Arboretum, honouring an estimated 750,000 Muslims who
have fought for the British armed forces, with tens of thousands
of them paying the ultimate sacrifice. Previous Budgets have
supported memorials that honour those who have given us the
freedoms that we enjoy. May I ask the Chancellor to personally
consider this proposal and help make it a reality?
My right hon. Friend is absolutely right: we must remember and
honour the sacrifices made by those of all nationalities and
religions who fought for our freedom, including, I believe,
nearly 150,000 Muslims who died in the second world war. My
officials would be happy to engage with him to identify how best
the Government can help make this vision a reality.
(North Shropshire) (LD)
T6. Business owners and high street businesses in Oswestry told
me that their biggest challenge is business rates. In his
upcoming Budget, will the Chancellor consider a radical reform of
business rates that puts the high street on an even keel and on a
level playing field with the online retailers?(901387)
Over the past few years, we have helped to support our high
streets by freezing multipliers and, importantly, targeting
further relief at the retail, hospitality and leisure sector.
Frequent revaluations are now par for the course, because of the
recent changes we have made.
(North East Bedfordshire)
(Con)
Last July, following a debanking scandal, I wrote to the Economic
Secretary to the Treasury about the risks of implementing
so-called diversity, equity and inclusion policies. Far from
being inclusive, their implementation has often been divisive,
yet Labour put such policies at the heart of its financing and
growth strategy just last week. Will my hon. Friend assure us
that he will give clear direction to the Prudential Regulation
Authority and the Financial Conduct Authority to avoid all the
risks of so-called DEI policies?
I thank my hon. Friend for his question. I am studying those
policies carefully. I am concerned about certain aspects of what
is proposed, and I will be discussing the matter with the PRA and
the FCA to make sure that we have sensible policies on this
matter.
(Bootle) (Lab)
T7. At the autumn statement, the Chancellor announced that he
would explore selling off the Government’s remaining stake in
NatWest this year. As it stands, does he anticipate that this
will result in a better or worse return for taxpayers, compared
with the previous sales?(901388)
I thank the hon. Gentleman for his question. Indeed, the
Chancellor announced at the autumn statement last year that, over
the next 12 months, the Government will consider selling shares
in NatWest. That is all subject to value-for-money concerns and
other matters, as he will appreciate, and it is market sensitive.
Of course value for money will be at the heart of any
consideration of the sale of shares, and the House will be kept
fully informed over the coming weeks and months.
(Cleethorpes) (Con)
My right hon. Friend and his colleagues will be aware of the
challenges that businesses and households face in coastal
communities. As the Budget approaches, may I urge him to be ever
mindful of how we maintain the vitality of the economies in our
coastal areas?
I absolutely will; that is a core part of the levelling-up
agenda, and my hon. Friend will be pleased to know that, since we
started on that agenda, two thirds of all new jobs created have
been outside London and the south-east. We will continue to look
at any proposals he may have in that respect.
(Sheffield Central)
(Lab)
T8. The Government have deliberately created a funding model for
universities in which they are dependent on income from
international students. Does the Chancellor share my concern
about ensuring that nothing is done to undermine that
income?(901389)
The Chief Secretary to the Treasury ()
The university sector is one of the jewels of this country and I
am proud that we have four of the world’s top 20 universities. I
am happy to look at any individual proposals from the hon.
Gentleman.
(Banff and Buchan) (Con)
Last June the Exchequer Secretary announced the energy security
investment mechanism, and I welcomed the announcement in last
November’s autumn statement that the floor price would rise with
inflation from April. How and when will that be legislated for,
and will he look at alternative ways of setting that floor price,
other than the 20-year reference period that is already used?
The energy security investment mechanism was designed, as my hon.
Friend points out, to give more certainty not only to the oil and
gas sector, but to investors, ensuring that the energy profits
levy is disapplied when prices return to historically normal
levels. To provide additional certainty, on the back of urging
from him and the industry, we have agreed to legislate for ESIM
and will be announcing that shortly.
(Bradford East) (Lab)
Regardless of what the Chancellor tells us, the reality remains
that people in Bradford are worse off after 14 years of this
Government. Healthcare, GPs and dentists are less accessible,
homes are more expensive, colder and riddled with mould, jobs are
less secure and badly paid, with stagnating wages, and household
savings have been wiped out by rising food, water, energy and
fuel bills. Ahead of the last Budget he will deliver before the
general election, will the Chancellor apologise for 14 years of
disaster that have devastated our communities?
Let me tell the hon. Gentleman some positive messages he can take
home to his constituents in Bradford: violent crime and
burglaries have been halved, school standards are up, the NHS has
more doctors and nurses than ever in history and real after-tax
income for people on the minimum wage or national living wage is
up by 30% if they are working full time.
(Darlington) (Con)
Can my hon. Friend tell me how many staff are now employed across
the eight Departments based at the Darlington Economic Campus?
What progress is being made on naming the new building “William
McMullen House”?
I can tell my hon. Friend that 750 staff are employed across all
Departments at the Darlington Economic Campus. The Treasury’s aim
is to reach 355 full-time staff by March 2025, and we are on
track to meet that target. The official name of the campus will
be decided closer to the 2025-26 delivery date and will be
consulted on by the Government Property Agency, but we have heard
very clearly his suggestion of William McMullen House, and we
will consider that in due course.
(Kingston upon Hull North)
(Lab)
The Chancellor knows jolly well that in April 2023 Sir Brian
Langstaff made his final recommendations on compensation for
those infected and affected by the contaminated blood scandal.
The Chancellor also gave evidence in July to Sir Brian and said
that work was under way. In December, this House voted for a
compensation body to be set up. I would like the Chancellor to
answer my question, please, not a junior Minister, and explain
exactly what is going on in the Treasury, what work is being
undertaken and whether there will be an announcement in the
Budget.
With great respect to the right hon. Lady, who has campaigned
formidably on this issue, I do not think she is giving a fair
representation of what the Government have done. I stand by every
word I said as a Back Bencher, and as Chancellor I have tried to
do everything I can to speed the process up. She has not
mentioned that the Government have already given £100,000 to the
families affected. We have accepted the moral importance of the
duty to give compensation, and we will now work with colleagues
in the other place to make her amendment workable.
|
