Giles Watling (Clacton) (Con) 1. What fiscal steps he is taking to
support creative industries. (902053) The Chancellor of the
Exchequer (Jeremy Hunt) At the spring Budget, the Government
announced a package of tax reliefs for our world-leading creative
industries worth £1 billion over the next five years, including a
40% relief on business rates for eligible film studios in England
and enhanced tax reliefs for visual effects. Giles Watling As we
know, the...Request free trial
(Clacton) (Con)
1. What fiscal steps he is taking to support creative industries.
(902053)
The Chancellor of the Exchequer ()
At the spring Budget, the Government announced a package of tax
reliefs for our world-leading creative industries worth £1
billion over the next five years, including a 40% relief on
business rates for eligible film studios in England and enhanced
tax reliefs for visual effects.
As we know, the UK’s cultural offer is world-beating and,
particularly through the performing arts, the UK projects soft
power across the globe. While welcoming the progressive tax
breaks for our incredible film industry, it would appear that our
far-reaching, high-end television offer has been left behind in
the recent Budget. Does my right hon. Friend have plans to
redress this deficit to ensure that the UK remains first on
screens around the world?
No one knows more about high-end TV than my hon. Friend. Whoever
said that politics is showbusiness for ugly people was absolutely
wrong in his case. I will take away what he says and consider
high-end television as a potential future Budget measure.
(Westmorland and Lonsdale) (LD)
The Chancellor will be aware of the award-winning film “The
Windermere Children”, which talks about the legacy of those
Jewish children who survived the death camps in central Europe
and made a new life for themselves on the banks of Lake
Windermere at Troutbeck Bridge. For the last several years, there
has been an ongoing exhibition on their legacy at Windermere
library, and now we look to build a lasting memorial alongside a
rebuilt Lakes School at Troutbeck Bridge.
Will the Chancellor be interested in meeting the families of the
Windermere children, and those behind the new build and the
provision of a new lasting memorial to their legacy, at
Windermere at some point in the foreseeable future?
That is a very tempting offer, and I will see whether my diary
permits me to visit the hon. Gentleman in his constituency. I
have not seen the film, but I have seen a film on a holocaust
theme called “The Zone of Interest”, which is a remarkable
British-led film that I thoroughly recommend to him.
Strength of the Economy
(Newcastle upon Tyne Central) (Lab)
2. What recent assessment he has made of the strength of the
economy. (902054)
(Norwich South) (Lab)
19. What recent assessment he has made of the strength of the
economy. (902076)
The Chancellor of the Exchequer ()
The economy is beginning to turn a corner after a series of
unprecedented shocks. Inflation has more than halved, GDP grew in
January and the economy is on a path to long-term growth.
The economy has grown at a snail’s pace under the Tories, but
that snail is still 30% faster nationally than in the north-east,
despite our strengths in clean energy, manufacturing, science and
health. On average, my constituents are £11,500 worse off that
they would have been had the economy grown at the same rate that
it grew under Labour. Is it any wonder that the Public Accounts
Committee found no compelling evidence of levelling up? Is a vote
for the Tories not a vote for continued economic failure?
It is not, because we have grown faster than Spain, Portugal,
France, Italy, Germany and multiple other countries since 2010.
With respect to the north-east in particular, the hon. Lady is
absolutely right to say that our vision is to spread growth into
every corner of the country. That is why, in the last three
months alone, both the Prime Minister and I have been to the
Nissan factory in Sunderland to mark its decision to make two
electric car models in the UK. Just last week, we announced the
opening of a massive new film studio in Sunderland that will
bring more than 8,000 jobs to the north-east.
According to the LSE’s Grantham Research Institute, the
Government’s current programme for investment to mitigate the
worst effects of climate change will still see climate change
damage to the UK increase from 1.1% of GDP to 3.3% by 2050 and
7.4% by the end of the century. To put it into context, that is
the United Kingdom’s entire social care budget of around £25
billion. The Climate Change Committee has said that the current
approach to adaptation
“falls far short of what is required.”
Has the Treasury made any attempt to assess the cost to GDP, the
public finances and jobs of failing to invest for climate
adaptation?
We listen very carefully to what the Climate Change Committee
says, and we are absolutely committed to net zero. In fact, a
Conservative Government passed the law requiring Governments to
commit to net zero. The hon. Gentleman will know that we have
just become the first major industrialised country to decarbonise
by more than 50% since 1990. As well as the costs, we are also
mindful of the economic opportunities, which is why we are
investing billions of pounds in our clean energy
transformation.
(North East Hertfordshire)
(Con)
My right hon. Friend will be aware that my constituency, which
has Cambridge to the north, has fantastic new industries such as
Johnson Matthey in Royston, which is at the forefront of
hydrogen. We have pharma companies to the south and some of the
best film studios in the world in Hertfordshire. Is he
consciously trying to back those successful industries of the
future so that our children and grandchildren have fantastic
opportunities for the future?
That is absolutely what we are trying to do. Film and TV is a
good example here, as it has now become an offshoot of the
technology industry. Films such as “Barbie” have been filmed in
Hertfordshire but have the look of the Californian sunshine; they
can withstand the British rain because of the use of high-tech
devices that simulate Californian sunshine, even in my right hon.
and learned Friend’s constituency. What he sets out is our
absolutely our plan and we will stick with it.
(North East Bedfordshire)
(Con)
In response to covid, this Government introduced the furlough
scheme, and delivered and funded the world’s first vaccine. In
response to the energy price spike, this Government introduced
comprehensive support for families. The Office for Budget
Responsibility, so beloved of the shadow Chancellor, had its
long-range forecast for 2025 to 2028 showing GDP increasing every
year, GDP per capita increasing every year, average earnings
increasing every year in real terms and productivity increasing
in real terms. So does the Chancellor agree that when the shadow
Chancellor says that we face a 1979 moment, she is right: a
choice between a Labour party still in hock to its union bosses
and a Conservative party committed to growth?
I have nothing to add to my hon. Friend’s brilliant list of
statistics, except to cite another independent organisation, the
International Monetary Fund, which says that in the next five
years this country, under Conservative leadership, will grow
faster than France, Germany, Italy and Japan.
(Ealing North) (Lab/Co-op)
The British people are paying the price for 14 years of
Conservative economic failure, with lower wages, higher taxes and
public services on their knees. Time and again, the Conservatives
hide behind international factors and take no responsibility for
their failures. Yet figures from the OECD confirm that the UK is
the only G7 advanced economy now in recession and, according to
the IMF, our economy is forecast to have the second slowest
growth in the G7 this year. So can the Chancellor tell us: why is
the UK so far behind other major economies under the
Conservatives?
Well, it is not, because it is actually growing faster than
France, Germany and a bunch of other countries. However, I am
glad that the hon. Gentleman mentioned 14 years, because we can
look at what has happened under 14 years of Labour in Wales,
where unemployment is higher, NHS waiting lists are longer,
school standards are worse and growth is lower. What is Labour’s
reaction to that terrible record? It has just promoted the
Economy Minister to First Minister.
Tax Policies: Impact on Living Standards
(Sheffield Central)
(Lab)
3. What recent assessment he has made of the potential impact of
his tax policies on living standards. (902056)
(Liverpool, Walton) (Lab)
6. What recent assessment he has made of the potential impact of
his tax policies on living standards. (902060)
(Luton South) (Lab)
12. What recent assessment he has made of the potential impact of
his tax policies on living standards. (902068)
The Financial Secretary to the Treasury ()
Thanks to the combined impact of national insurance cuts and
above-inflation increases to thresholds since 2010, an average
worker on £35,400 in 2024-25 will pay over £1,500 less in
personal taxes than they otherwise would have done. These
national insurance contribution cuts were possible due to the
significant progress we have made in combating inflation.
I heard what the Minister has to say but does he not recognise
the OBR’s assessment of the interplay between the Government’s
threshold changes and NICs? The OBR concludes that for every 5p
gain per year there is a 10p loss, particularly for those on
lower wages. Does he accept the OBR assessment?
I am sure that if the hon. Gentleman looks carefully, he will see
that the Government have demonstrated their commitment to
supporting the most vulnerable in society. He will also have
heard my hon. Friend the Member for North East Bedfordshire
() explain the circumstances
as to why we have higher taxes than we would desire. If the hon.
Gentleman is telling me that Labour party policy is to change the
thresholds, perhaps he can have that conversation with the shadow
Chancellor, who can explain how she would pay for that.
The OBR has said that this will be the worst Parliament on record
for living standards and the only one in which they have fallen:
people are poorer after 14 years of this Government. We do not
need fiscal tweaks; this economy needs renewal. It needs to bring
in investment on a major scale, and a new age of education,
training and employment in the real economy. My constituents
cannot afford to wait while the Tory party looks for its polling
fortunes to change. Have we not now reached the point where the
best thing for the economy is a general election?
I completely disagree with the hon. Gentleman’s explanation. Not
only will I repeat that our constituents completely understand
the difficult global circumstances, with the pandemic and the
cost of living challenges following the invasion of Ukraine, but
I can say that we have grown faster since 2010 than many other
major economies, and the IMF forecasts that we will grow faster
than Germany, France, Italy and Japan. In the year to the third
quarter of 2023, real household disposable income per person was
around £1,100 higher than the Office for Budget Responsibility
expected in its spring Budget 2023 forecast. We have turned a
corner, and the best thing to do is to stick with the
Conservatives.
The Minister says that the economy has turned a corner, but
households will be £870 worse off on average under the
Conservatives tax plan, and they will also be seeing their costs
up by £110 a week compared with before the last election. Is the
Minister proud of his record?
We are immensely proud of our record since 2010: living standards
have increased, and growth is now better than that of many other
major economies. Our absolute commitment to protecting the most
vulnerable in society was shown recently when we provided an
average of £3,400 in cost of living support for each household.
We have turned a corner, and the economy is improving. I am just
disappointed that the Opposition constantly talk down the UK
economy and their constituents.
(St Austell and Newquay)
(Con)
Will my hon. Friend confirm that, following the 4p cut in
national insurance that the Chancellor has introduced, the tax
take on workers will be the lowest it has been for 50 years? In
St Austell and Newquay, two people in a household on average
incomes will be paying £1,800 less this coming year than they did
last year.
Yes, absolutely, my hon. Friend has pointed out an important
point on how we have had a laser focus on reducing the personal
tax rates. Furthermore, the measures announced in the autumn
statement and in the spring Budget will significantly add to
economic activity, contributing about 200,000 full-time
equivalent jobs to the economy, and I am sure that the whole
House will welcome that.
(Bosworth) (Con)
Pensioners can often struggle because they have a fixed income,
so I was pleased that the Chancellor stuck with the triple lock
last year, guaranteeing an increase of 10.1%. Will the Minister
explain how the 8.5% rise that people will be getting in a couple
of weeks’ time will make a difference to their living
standards?
My hon. Friend makes an important point. It is the case that not
only have the measures in the autumn statement and the spring
Budget helped workers, but we have also focused on helping
pensioners. Those on the new state pension will benefit to the
tune of about £900 a year, which is significant, and the national
insurance cuts will benefit the average worker —27 million
employees—by £900 a year. Therefore, we have implemented a fair
and balanced Budget and fair and balanced measures.
(Stoke-on-Trent North)
(Con)
Families in Stoke-on-Trent North, Kidsgrove and Talke have been
supported by this national insurance cut, which means that the
average family will be £1,800 a year better off. The freezing of
the fuel duty means that motorists will be able to get around
without being unfairly charged at the pump. Money from this
Government has enabled Stoke-on-Trent to cut bus fares by a
third, so that people can travel around. We have had £56 million
from the levelling-up fund and £17.6 million for the Kidsgrove
town deal, which means that the sports centre will be refurbished
and reopened, improving people’s health chances. The Labour party
closed it because it could not be bothered to pay a single pound
to save it back in 2017. Is it not the reality that we have a
clear plan that will help the families of our great
constituencies, particularly in Stoke-on-Trent North, Kidsgrove
and Talke, while Labour will borrow more, tax us higher and lead
us back into recession, just as it did in 2008-09?
I could not agree more with my hon. Friend. This is fantastic,
and I think it is a recurring pattern, Mr Speaker. We have
positivity, optimism, and confidence in the future of the UK
economy from Conservative Members, but absolute negativity from
Opposition Members, because they have no plan, they have no clue
and they have no hope. We have a plan and it is working.
Mr Speaker
I call the shadow Minister.
(Bristol North West) (Lab)
Why does the Treasury Minister think people feel worse off after
14 years of Conservative Government?
As I said, we are turning a corner and have therefore made
measures to put money back into people’s pockets. I do not think
it would come as a surprise to the hon. Gentleman’s constituents,
or to those of any Labour Member looking at the Labour
Opposition’s recent record, that Labour claimed on the one hand
that it was supportive of tax cuts, but last week failed to
support those tax cuts when it came to it in Parliament.
The Minister did not answer the question about why the public
feel worse off. We on the Labour side of the House know why. He
mentions tax cuts, but he does not talk about the freezing of tax
thresholds, or indeed about the council tax that is about to be
levied on people, not just this year but each year for the next
five years. Why cannot he admit that, for every 10p extra in the
pound taken from people since 2010, the Government are only now
giving back just 5p?
If I am hearing correctly, the Labour Front Benchers are
announcing fundamental changes to policy that they have not yet
costed. They did not object, as far as I am aware, to any of the
measures required to support households and businesses during the
pandemic, which necessitated increases in taxation. We are now
reducing the level of taxation because we have turned a corner.
They did not support that. It is interesting that they say one
thing but then do not take action. I think they need to explain
to their constituents why they failed to support the tax cuts
last week.
Block Grant Funding
(Linlithgow and East Falkirk)
(SNP)
4. What assessment he has made of the potential impact of the
Spring Budget 2024 on levels of block grant funding for
Scotland.(902057)
(Edinburgh North and Leith)
(SNP)
11. What assessment he has made of the potential impact of the
Spring Budget 2024 on levels of block grant funding for
Scotland.(902066)
(Kilmarnock and Loudoun)
(SNP)
17. What assessment he has made of the potential impact of the
Spring Budget 2024 on levels of block grant funding for
Scotland.(902074)
The Chief Secretary to the Treasury ()
As a result of decisions at the spring Budget, the Scottish
Government are receiving around £295 million in additional
funding in 2024-25 through the Barnett formula.
According to the Commons Library, the Government have cut the
Scottish Government’s capital funding by 16% in real terms from
2022-23 to 2024-25. The Institute for Fiscal Studies forecasts
that there will be a further 16% cut by 2029. After 14 years of
austerity, inflation and covid, can the Minister tell me why the
Chancellor is taking a hammer to our Scottish public
services?
The hon. Gentleman is aware that the block grant has been going
up in real terms. He will also be aware that the Scottish
Government can switch resource to capital—unlimited amounts, if
they choose to do so. He will also be aware, I am sure, that the
Scottish Government can borrow up to £400 million of capital each
year if they so wish.
The Tories have failed to invest in our public services and
high-growth industries, dragging the nations of the UK into
recession and increased income inequality. The UK Government
continue to impose hard cuts to public services. The Commons
Library has found that the Scottish block grant will have fallen
in real terms in every year since 2020, yet UK Government
Ministers continue to deny that fact. Does the Minister
understand what “real terms” actually means, and does she see the
devastating impact that this is having on public services?
Just to be absolutely clear, the Scottish Government’s total
departmental expenditure limit is growing in real terms over this
Parliament by over 1% a year on average.
Obviously, the Minister does not understand what “real terms”
means after all. Analysis by the Institution of Civil Engineers
shows a multiplier effect: every £1 spent in the construction
industry brings in an additional £2 of spend. That means that the
real-terms cut to the Scottish Government’s block grant for
capital by £1.6 billion over two years further deprives our
economy of a wider £3 billion. Why do this Government think that
it is okay to decimate infrastructure spend in Scotland?
The Scottish Government are well funded to deliver their devolved
responsibilities, and receive 25% more funding on average per
person than the equivalent UK Government spending in other parts.
That translates to £8.5 billion more a year on average.
Mr Speaker
I call the SNP spokesperson.
(Inverness, Nairn, Badenoch
and Strathspey) (SNP)
Consequentials have consequences. The Chancellor announced in his
Budget £20 billion of cuts for the public sector, including cuts
of 13% in some Departments, and that defies logic. The public
sector is crying out for funding, but his choices, if
implemented, will lay waste to it. Does the Minister agree with
the IFS, which said that it would be genuinely surprising if the
Chancellor’s plans could be carried out, or with the Institute
for Government, which said that
“these spending plans will be impossible to deliver”,
or with the Resolution Foundation, which said that the plans were
fiscal fantasy?
Over the next Parliament, our plans are for spending to go up in
real terms—I want to be absolutely clear about that. Equally,
spending has gone up in real terms over this Parliament too. The
hon. Gentleman will have noticed that at the beginning of my
answers, I explained that Scotland is getting £295 million extra
this year through Barnett consequentials.
It is no wonder that the Institute for Fiscal Studies says that
there is a “conspiracy of silence” from both the Government and
the Labour party over the scale of these cuts. As a percentage of
UK spending, the Scottish block grant is set to fall to its
lowest ever level under devolution, dwarfing its other plans. For
Scotland, House of Commons Library figures show capital funding
falling by 16% over the next two years. The Chancellor has
already confirmed that the Scottish energy sector is the biggest
loser from his Budget, and he is doubling down. Why are this
Government and this Chancellor trying to be the new hammer of
Scots?
The only area in which I agree with the hon. Gentleman is that I
would love to know what the Labour party’s spending plans are for
the next Parliament—perhaps Labour Members will enlighten us this
evening. I will repeat what I said at the beginning about
capital: the Scottish Government have unlimited ability to switch
from resource spending to capital spending. That is a choice that
they have.
Regional Economic Inequalities
(Manchester, Gorton) (Lab)
5. What recent fiscal steps he has taken to help reduce regional
economic inequalities.(902058)
(Liverpool, Riverside)
(Lab)
15. What recent fiscal steps he has taken to help reduce the
level of economic inequality between the north and south of
England.(902072)
The Exchequer Secretary to the Treasury ()
The Government continue to tackle regional economic inequalities
and level up the United Kingdom. The Government are empowering
local leaders through a range of devolution deals, regenerating
places across the country and investing in vital
infrastructure.
In response to this month’s Budget, the director of the Institute
for Public Policy Research North has said that
“This Budget is the government’s admission that it has given up
on levelling up this parliament, despite there being much left to
do.”
Delivering on the Government’s levelling-up commitments would
mean that my constituents would benefit from reduced social
welfare dependency, increased earnings potential, and improved
health and wellbeing. Does the Minister not think that my
constituents and all citizens outside London and the south-east
deserve the benefits that come with economic prosperity?
We are committed to levelling up, and are delivering on it across
the country. Median pay growth has been higher in every region
outside London and the south-east under this Government, and the
hon. Gentleman’s constituency is receiving £19 million from round
1 of the levelling-up fund and £20 million from round 3. We have
announced a Greater Manchester trailblazer devolution deal and a
Greater Manchester investment zone, which will bring more jobs
and prosperity for all of his constituents.
I have heard what Ministers have said this morning, and I must be
living in an alternative universe. Liverpool has some of the most
deprived wards in the country, which have experienced poverty and
destitution over the past 14 years as a result of austerity. Some
300,000 people have accessed the household support fund, and
while we are a resilient city and will continue to support those
households, can the Minister explain what safety net will be put
in place to support those in poverty and destitution when the
household support fund ends in six months’ time?
The hon. Lady is right to highlight the fact that we have
extended the household support fund for the most vulnerable. That
is on the back of £96 billion of support during the energy crisis
and nearly £400 billion of support through the global pandemic. I
would just point out to the hon. Lady that the fundamental
difference between Conservative Members and Labour Members is
that we believe the best route out of poverty is through work,
and our party is increasing employment.
(St Ives) (Con)
Across Cornwall and the Isles of Scilly, most jobs are supplied
by very small businesses, many of which fall below the VAT
threshold. Given the economic inequalities around the region, the
increase of the VAT threshold to £90,000 is very welcome, but the
threshold being that low and the cliff-edge effect of going from
zero to 20% have a chilling impact on growing small businesses
and providing all-year-round jobs. Will the Minister consider
introducing some sort of taper for that £90,000 threshold, and
increasing the VAT threshold further—maybe in the region of
£120,000?
My hon. Friend is right: we increased the VAT threshold for small
businesses, which will benefit 28,000 businesses across the
country. We feel that the £90,000 threshold strikes the right
balance between managing public finances sustainably and
supporting businesses, but as my hon. Friend knows, we keep these
things under review.
(Preseli Pembrokeshire)
(Con)
The port of Milford Haven in my constituency has been right out
in front, taking a lead in investing in decarbonisation and
showing how it can boost the economy of Wales and reduce
inequality. Yesterday, it was told that its bid to the
Government’s floating offshore wind manufacturing investment
scheme—its port funding scheme—had been rejected out of hand.
Will my hon. Friend ask his good friend the Chancellor of the
Exchequer to meet me to talk about the important work being done
at the UK’s leading oil and gas port, and about how the UK
Government can support those efforts financially?
FLOWMIS is an incredibly important scheme in improving and
enhancing our ability to expand floating offshore wind. We are a
huge supporter of my right hon. Friend’s constituents and of the
whole of Wales. If the Chancellor cannot meet him, I would be
very happy to do so.
High-income Child Benefit Charge
Karl MᶜCartney (Lincoln) (Con)
7. What assessment he has made of the impact of raising the
high-income child benefit charge threshold on household
incomes.(902062)
The Financial Secretary to the Treasury ()
The Government will raise the point at which child benefit is
fully withdrawn to £80,000 from £60,000, and we will raise the
high-income child benefit charge threshold to £60,000 from
£50,000 from 6 April 2024, taking 170,000 families out of paying
the charge. Overall, these changes mean that almost half a
million hard-working families will gain an average of £1,260
towards the cost of raising their children.
Karl MᶜCartney
These changes are welcome, and they mean that more Lincoln
families will receive more support from the Government, as I told
the Minister in Lincoln on Friday. Will my hon. Friend confirm
when the formal consultation on basing child benefit on household
income rather than on individual income will commence, if the
civil servants in the Treasury will let him do it?
I thank my hon. Friend. It was a pleasure, as always, to meet him
in his constituency on Friday, where we discussed this matter and
many others. The Government will launch a consultation in due
course on how to end this unfairness by administering the HICBC
on a household rather than an individual basis. Doing so would
require significant reform of the tax system, as our tax
infrastructure does not currently have a mechanism to consider
household income, but the Government plan to end the unfairness
for single-earner families in the child benefit system by
administering the HICBC on a household rather than an individual
basis by April 2026.
(Strangford) (DUP)
I thank the Minister for that. Child benefit income is an
integral part of how families make their money last through the
whole week. If there are any changes that will reduce it in any
way, is it the Minister’s intention to ensure that those who have
questions, difficulties or concerns have their concerns and
wishes taken on board? It is really important that those facing
financial changes can cope with the changes to come.
I thank the hon. Gentleman. It is precisely because of the
complexities involved that we will have the consultation. I am
sure that his views and those of his constituents will be warmly
welcomed in that.
Business Investment
(Clwyd South) (Con)
8. What fiscal steps his Department is taking to help increase
the level of business investment.(902063)
The Exchequer Secretary to the Treasury ()
At the autumn statement in 2023, the Chancellor set out ambitious
growth packages designed to boost business investment, including
making full expensing permanent and a tax cut to companies of
over £10 billion a year to ensure we have one of the most
generous capital allowances in the world. With further
growth-enhancing measures set out in spring Budget 2024, the
Office for Budget Responsibility estimates that Government policy
announced at the past three fiscal events is expected to increase
the size of the economy by 0.7% by 2028-29.
Like my hon. Friend the Member for St Ives (), I was delighted to see the
increase in the VAT threshold from £85,000 to £90,000 in the
Budget. That will help small businesses invest for the future,
such as the Two Doves café and gift shop in Overton, which is
popular with people from both Clwyd South and North Shropshire.
However, given the vital importance to small businesses, will my
hon. Friend prioritise increasing the VAT threshold again in the
next fiscal intervention?
My hon. Friend comes to this House with significant business
experience, so when he talks, we certainly listen, and I am
delighted to hear that he was pleased with the VAT threshold
increase. I can tell him that, in addition to what I said to my
hon. Friend the Member for St Ives () about the £90,000 threshold,
this level is higher than that of any EU member state and is the
joint highest in the OECD. Many of his businesses will be among
the 28,000 that will benefit from the increase, so we have no
plans at this stage to change it.
(Denton and Reddish)
(Lab)
But the actual record of this Government over the past 14 years
is abysmal. It is a fact that business investment has been
consistently among the lowest in both the OECD and the G7, and
now the Office for Budget Responsibility is forecasting a further
5% fall this year. Why?
Announcements in each of our last three fiscal events have
enhanced our business investment environment for international
investors: we have the second highest foreign direct investment
stock in the world; we have some of the best universities in the
world, which are attracting businesses; we have announced full
expensing, which is a £10 billion-a-year tax cut; we have the
lowest corporation tax in the G7; and we are reforming our energy
grid, bringing investment into our net zero ambitions. We are
reforming our systems, reducing our taxes, and encouraging
investment.
Safe Hands Plans
(Blaenau Gwent) (Lab)
9. Whether he has had recent discussions with the Financial
Conduct Authority on the administration of Safe Hands
Plans.(902064)
The Economic Secretary to the Treasury ()
I recognise that this has been a very challenging time for Safe
Hands customers. The hon. Member will be aware that the FCA, as
the independent regulator of the funeral plan sector, is
responsible for dealing with specific cases. However, the
Treasury and the FCA have worked closely throughout the process
of bringing the sector into regulation, as well as during the
implementation of the new regulatory framework.
My experience of the FCA and the Safe Hands funeral plan fiasco
is that it took six months to reply to my freedom of information
request and pleaded commercial confidentiality to key questions,
and that, despite being warned, the Treasury failed to support
consumers moving from an unregulated sector into regulation. It
appears to me that the Treasury missed opportunities to support
consumers and is still shuffling its feet. At least 47,000 people
are out of pocket to the tune of £60 million. They were trying to
protect their loved ones from expensive funerals at the worst of
times. Will the Minister consider an independent review of this
matter? A constructive response is needed to ensure that Safe
Hands victims can have confidence in a system that for too long
has let them down.
I share the hon. Member’s anger at how Safe Hands customers have
been treated. The business is under criminal investigation by the
Serious Fraud Office and its administrators are bringing legal
action against the former owner of the Safe Hands business. In
the Treasury, we do not believe it is right to use taxpayer money
to compensate consumers who lose out due to the conduct of
unregulated firms; Safe Hands was not within the regulatory
perimeter at that time. However, we have worked with the sector
so that the two largest providers of funeral plans have agreed to
provide significantly discounted replacement plans for the
customers who have found themselves so badly treated.
Cost of Living
(Glasgow South West)
(SNP)
10. What assessment he has made of the potential impact of
increases in the cost of living on households in
2024.(902065)
The Chief Secretary to the Treasury ()
The rise in inflation caused by Putin’s illegal war in Ukraine
and the subsequent energy price shock has put enormous pressure
on households. Thanks to work by the Bank of England and the
Government, the rate of inflation is going down, with the Office
for Budget Responsibility expecting it to be back to target next
autumn.
Since the disastrous Tory mini-Budget of 2022, households are
continuing to feel the squeeze at the supermarket, with food
prices continuing to rise and real wages falling for the longest
unbroken run since records began. Food prices have risen by 26%
over the last two years. When will the Government listen to those
who wish to follow the lead of Canada and France by introducing a
price cap on staple food items at the supermarket?
Real wages are now, happily, starting to rise and, as I have
said, the OBR has said that inflation will be back to target next
quarter. What would not help the cost of living is putting
people’s taxes up, as the Scottish Government are doing.
(Hampstead and Kilburn)
(Lab)
The tax burden is at a record high, wages are stagnant, rents and
mortgages are up by hundreds of pounds, and food prices have gone
up by 25%. The Resolution Foundation has confirmed that this is
the only Parliament on record during which living standards have
fallen. Our constituents deserve better. When is the Minister
going to give the British public a chance to vote for change and
call for a general election?
We have talked a lot today about the £400 billion of support that
we put in during the pandemic and the £100 billion of support
that we put in to support people during Putin’s energy price
shock. The Labour party did not disagree with any of those
things, and I think the hon. Lady in her heart of hearts will
know that we have to pay for that—at least, I hope she does. We
have had to take some difficult decisions, but because of that,
the economy is turning a corner. We are able to reduce working
people’s taxes, and I hope that she and her party will find it
within themselves to support us in that endeavour.
Support for Small Businesses
(Vale of Clwyd) (Con)
13. What fiscal steps his Department is taking to support small
businesses.(902069)
(Eastleigh) (Con)
16. What fiscal steps his Department is taking to support small
businesses.(902073)
(Meon Valley) (Con)
18. What fiscal steps his Department is taking to support small
businesses.(902075)
The Exchequer Secretary to the Treasury ()
Small businesses drive our economy and we support them to thrive
using levers across Government, whether that is through our small
business rate relief, by increasing the VAT registration
threshold, by providing reliefs such as the annual investment
allowance or through various programmes offered by the British
Business Bank.
The Welsh Government are increasing the burden on small
businesses by reducing retail, hospitality and leisure business
rates relief from 75% to just 40%, despite the UK Government
rightly extending that relief in England in the Budget. That
means that businesses in my constituency, such as the Little
Cheesemonger, Now to Bed, Presents with a Difference and Tu
Mundo, are all facing unsustainable business rates bills. One
business has to find an extra £35,000 a year for business rates
alone. What advice does the Minister have for small businesses in
north Wales facing these onerous bills?
My hon. Friend is right that at the autumn statement, this
Government extended the retail, hospitality and leisure relief in
England—a tax cut worth £2.5 billion for small businesses. The
Barnett formula applies to allow the Welsh Labour Government to
offer similar relief if they want to. It is disappointing, if not
surprising, that when given the opportunity, Labour decides not
to cut taxes for working people.
Does my hon. Friend agree that one of the best steps that the
Government can take to support small businesses in Eastleigh,
Hedge End and Botley is through a package of business rate
reductions? Will he outline to the House the progress the
Government have made in this regard, which was desperately
needed?
My hon. Friend is right. Business rate relief is a great way to
support small businesses in Eastleigh and across the country. Our
small business rate relief means that one third of all properties
in England already pay no business rates at all. We have frozen
the small business multiplier, protecting more than 1 million
properties from a multiplier increase. As I was just saying, we
are supporting high streets with our retail, hospitality and
leisure relief.
Mrs Drummond
Just after the Budget, I met some of the small businesses in my
constituency at the Flower Pots in Cheriton. While they were
pleased with some of the Budget, they talked about improving
productivity and growth by raising the VAT threshold far beyond
£90,000, and possibly to £250,000. They felt that that would
incentivise sole traders and small businesses to expand and work
longer hours. They feel at present that growth is restricted
because of the level of the VAT threshold. Has the Chancellor
given any thought to increasing the threshold to improve
productivity?
My hon. Friend is right to engage in the way that she is with her
small businesses. We believe that the £90,000 threshold, which
has just been increased, strikes the right balance between
managing the public finances and supporting small businesses. I
encourage her to look at the wider package of support that the
Government are providing for small businesses, not least the
business rate relief that I was just talking about.
Mr (East Londonderry)
(DUP)
Will the Minister have discussions with his counterparts in the
devolved institutions to ensure that the likes of sole traders
and small businesses see a reduction in bureaucracy to make them
more profitable, offering more business opportunities to more
people across the United Kingdom?
I can assure the hon. Gentleman that the Government engage
frequently with our counterparts in the Northern Ireland
Administration, and that will continue to be the case.
(Weaver Vale) (Lab)
According to the Federation of Small Businesses, two in three
small businesses are suffering from late payments. We are now 14
years into a Tory Government. Why do the Government not follow
Labour’s lead and strengthen the law on this?
We are acutely aware of this issue, and I have had meetings with
the FSB. That is why the Chancellor has announced plans to
improve the situation for small businesses. I am happy to outline
that in writing to the hon. Gentleman.
(Glasgow Central)
(SNP)
One of the requests from female-led businesses in my
constituency, including Cùrlach and Rock’n Rollers, was for a VAT
cut for hairdressing businesses. Can the Minister tell me why
that was not considered in the Budget? These businesses are an
important part of our high streets and they are often led by
women, who have missed out significantly in the Chancellor’s
Budget.
We of course support hairdressers, our high streets and women-run
businesses, which is why we have extended the retail, hospitality
and leisure relief to 75%. Cutting taxes for hard-working people
is what the Conservative Government do.
Income Tax Policies: Pensioners
(North Shropshire) (LD)
14. What recent assessment he has made of the impact of his
income tax policies on pensioners. (902071)
The Financial Secretary to the Treasury ()
The Government have nearly doubled the personal allowance since
2010, and in 2024-25 it will be more than 20% higher in real
terms than if it had been uprated by inflation since 2010-11. The
personal allowance is currently set at a high enough level to
ensure that pensioners whose sole income is the full rate of the
new state pension, or the basic-rate pension, do not pay any
income tax.
I have been contacted by pensioners in my constituency who get a
full state pension plus protected payments from the old scheme.
The increase in their pensions in line with inflation has put
them over the personal allowance threshold for paying income tax,
which has eaten away at that increase. Was it the Minister’s
intention in the Budget to drag pensioners into paying income
tax?
As I have outlined, and as the Resolution Foundation and others
have pointed out, pensioners have gained about £1,000 on average
as a result of the Government’s decisions since 2010 to increase
thresholds. Some pensioners rely solely on the state for their
incomes, and we are supporting pensioners through a variety of
other measures: not only the triple lock but pension credit and
cost of living support. Pensioners across the country will
benefit from the 8.5% increase coming in April.
Dame (Morley and Outwood)
(Con)
I welcome the recent tax cuts. We need to ensure that those who
work hard and do the right thing are rewarded in their old age.
Can the Treasury please stop allocating funds to France, which is
clearly not stopping the boats, stop extortionate amounts being
spent on hotels for illegal migrants, and reduce the foreign aid
budget? Maybe then we can give even more to our pensioners.
My hon. Friend will be well aware that Government Members are
implementing measures to tackle the very problems she outlines
while turning the corner in the economy and doing everything we
can to put more money back in people’s pockets, whether workers
or pensioners.
Tax-free Shopping
(Cities of London and
Westminster) (Con)
20. What assessment he has made of the potential merits of
reintroducing tax-free shopping for international visitors.
(902077)
The Financial Secretary to the Treasury ()
As set out at the spring Budget, we are considering the findings
of the Office for Budget Responsibility’s review of the original
costing of the withdrawal of tax-free shopping, alongside
industry representations and broader data. The Government welcome
further submissions from stakeholders in response to the OBR’s
findings as we keep all taxes under review.
Last week, the OBR informed the Treasury Committee that it has
not assessed the Treasury’s forecast that it would cost £900
million to extend tax-free shopping to EU visitors. The OBR has
also failed to support the Treasury’s assumption that EU visitor
behaviour and costs can be extrapolated from assessed non-EU
data. The UK retail industry firmly believes that it will cost as
little as £50 million to reintroduce tax-free shopping for
tourists. As we mark English Tourism Week, is it not time that we
had a full, independent review of the Treasury’s data on tax-free
shopping?
I thank my hon. Friend for her consistent championing of tourism,
particularly during English Tourism Week. It is not in the OBR’s
remit to consider the effect of alternative policies and, as
expanding tax-free shopping to EU visitors is not current
Government policy, it has not considered that. However, the
findings of the review will be useful in giving insights on the
overall behavioural incentives of the policy, which will be
relevant for both EU and non-EU populations. It is therefore
right that the Government take time to consider the OBR’s
findings along with other representations and within the context
of broader data, as announced in the Budget.
Topical Questions
(North West Leicestershire)
(Ind)
T1. If he will make a statement on his departmental
responsibilities.(902078)
The Chancellor of the Exchequer ()
With your permission, Mr Speaker, I would like to update the
House on living standards in the UK. The most recent data suggest
that despite a tough couple of years caused by the pandemic and
the energy crisis, living standards will return to their
pre-covid peak next year: a full two years earlier than
originally predicted by the OBR. They have risen by £1,700 a
household in real terms since 2010, and this year’s cut in
national insurance will increase living standards by 1%. In other
words, to coin a phrase, now is not the time to go back to square
one.
Given that the Prime Minister has been forced to abandon his
plans for an election on 2 May and could soon be facing a
leadership challenge, does the Chancellor of the Exchequer
believe that his Budget landed well with the public or even his
colleagues on the Government Benches?
I say very simply to the hon. Gentleman, who used to be an hon.
Friend, that the Budget will mean that the UK economy will grow
faster than that of France, Germany, Italy or Japan in the next
five years. That is doing the right thing for the country.
(Southend West) (Con)
T3. I would like to thank the Minister for the opportunity to
meet UK Finance yesterday, which told me and other MPs that the
industry plans to roll out 225 banking hubs in the next 18
months. Given that my constituency has lost every single bank
branch over the last few years, will the Minister help me to make
sure that Leigh-on-Sea, which has 250 retailers, will get one of
those 225 banking hubs?(902080)
The Economic Secretary to the Treasury ()
I thank my hon. Friend for her question. First, it is important
to note her consistent championing of this issue for her
constituents, for which she deserves huge commendation. To her
precise question, it is important that industry, not the
Government, makes decisions about bank branches or banking hubs,
but she has made her case very ably. I urge her to work with Cash
Access UK and LINK to ensure that she has the best chance of
securing one of those new 225 banking hubs, as outlined by the
industry, in her constituency.
Mr Speaker
We come to the shadow Chancellor of the Exchequer.
(Leeds West) (Lab)
After the Budget, the Chancellor wrote to Conservative party
members telling them that the Government planned to abolish
national insurance. The Economic Secretary said that “national
insurance will vanish”, and the Prime Minister said it was his
“ambition” to abolish it. Will the Chancellor confirm whether he
asked the Office for Budget Responsibility to cost the
Government’s unfunded plan to abolish national insurance
contributions?
I am very glad that the right hon. Lady asks about national
insurance cuts, because first she supported them, then she
abstained in the Lobby, and now she appears to be against
them—like the bankers’ bonus tax, which she was strongly in
favour of and then strongly against; like £28 billion of
borrowing, which she was strongly in favour of and then strongly
against. Is not the actual truth that, where Labour should have
an economic policy, there is just a black hole filled with
platitudes?
The Chancellor did not even attempt to answer the question. The
chair of the OBR told the Treasury Committee the week after the
Budget:
“It was not a measure given to us to cost”.
Even the Chancellor’s predecessor, the right hon. Member for
Spelthorne (), who was sacked for his own
kamikaze Budget, said, “If you’re going to reduce taxes, you have
to show at least partially where the money’s going to come from.”
So I ask the Chancellor: where will the money come from? Will it
come from cuts to the NHS, the state pension and public services?
Will it come from increasing taxes, including for pensioners? Or
will it come from increasing borrowing? Which one,
Chancellor?
Even Torsten Bell from the left-leaning Resolution Foundation
said that the right hon. Lady’s argument that this was a mini
Budget-style black hole was nonsense, because we specifically
said that we would not fund national insurance cuts from
increasing borrowing or cutting spending on public services. I
gently ask her, if she wants to put on the mantle of fiscal
rectitude, where is Labour going to find literally billions of
pounds to fund unfunded spending pledges, from grid
decarbon-isation to NHS waiting lists? We all know what that will
lead to: higher taxes, like under every Labour Government in
history.
Nickie Aiken (Cities of London and Westminster) (Con)
T4. St Mary’s in Paddington is a much-loved, much-used hospital
in my constituency. Although it was taken off the list of 40 new
hospitals to be redeveloped, I am delighted to be working with my
hon. Friend the Member for Kensington () and the Minister in the
Lords responsible for hospitals to make a case with the trust to
ensure that it is redeveloped. Could the Chief Secretary to the
Treasury please update the House on the timeframe for making
available Government funding so that we can submit the planning
business case for the redevelopment?(902082)
The Chief Secretary to the Treasury ()
I commend my hon. Friend and my hon. Friend the Member for
Kensington () on their great work on
this project. There appears to be a compelling case, and I know
that the programme team at the Department of Health and Social
Care is looking closely at the proposal.
(North East Fife)
(LD)
T2. The Fife whisky festival took place in Cupar earlier this
month, and was a great success. The industry welcomes the freeze
in alcohol duty, but notes that it is only for six months. When
will the Government provide the longer term consistency that the
industry needs?(902079)
The Exchequer Secretary to the Treasury ()
Our support for the Scotch Whisky Association is long-standing,
and it was a pleasure to meet its representatives recently. We
have frozen or cut duty for Scottish whisky in fiscal events
going back many years. We are representing the Scotch Whisky
Association in trade agreements, and that support will endure
long into the future.
(Hartlepool) (Con)
T5. In response to the spring Budget, I have heard from
constituents who feel that they may have been forgotten. Under
the Conservatives, the number of pensioners living in absolute
poverty has been slashed by 200,000 across the country, and we
have protected the triple lock, but could my right hon. Friend
please remind me of all the steps that his Department is taking
to support Hartlepool’s pensioners, so that I can tell them on
the doorsteps this weekend?(902083)
I would be delighted to do that. The independent Resolution
Foundation said that, because of measures that this Government
have taken, pensioners are £1,000 better off in real terms than
in 2010. We did two things specifically in the Budget: we put £6
billion into the NHS, which is used more by pensioners than
anyone else; and we backed workers’ tax cuts to support growth in
the economy, which means that we can continue to fund the triple
lock for many years to come.
(Sheffield Central)
(Lab)
T6. One of my constituents wrote to me last week about her son
Fred. He has Down’s syndrome and severe learning disabilities, is
profoundly deaf and has an autism diagnosis. His parents and
grandparents did the right thing and put money into a child trust
fund for him. Fred will be 18 next month, but he lacks the
capacity to access his money and there is no easy way for his
parents to do so. Will the Chancellor work with colleagues in the
Department for Work and Pensions and the Ministry of Justice to
unlock the money for Fred and an estimated 80,000 disabled young
people?(902084)
I am happy to meet the hon. Member to discuss the precise
circumstances of his constituent’s case. In general terms, it is
a priority for us to ensure that people get access to that money
if it is due to them.
Mr Speaker
I call the Chair of the Treasury Committee.
(West Worcestershire)
(Con)
Did the Chancellor see an article yesterday in which the
independent director of the Institute for Fiscal Studies
confirmed that the average earner in the UK now has the lowest
effective personal tax rate since 1975—lower than in America,
France, Germany or any G7 country? Someone on £35,000—the average
earnings for those working full time—faces an income tax and
national insurance bill of nearly £2,000 less than they would
have done on the same real earnings back in 2010. Does the
Chancellor agree that now he has changed the rules on residence
and domicile, the Opposition’s unfunded spending plans could lead
to higher taxes—
Mr Speaker
Order. These are topical questions, and I want to get to the
Members who have not yet been called.
I thank my hon. Friend for her excellent question. She is right
that it is not just the lowest effective tax rate for someone on
average earnings since 1975, but the lowest headline tax rate and
the lowest tax rate in the G7. That is the fundamental divide in
British politics: taxes have gone up, and on the Government
Benches we do not think that we have to accept the status quo; on
the Opposition Benches they do. Why is that? Because lower taxes
mean higher growth.
Dame (Llanelli) (Lab)
T7. A recent survey from the Debt Justice campaign has shown that
13% of adults have missed three or more bill or credit payments
in the past six months, and 6.7 million people are now in
financial difficulty. Does the Chancellor accept that for
millions of people, getting from one end of the month to the next
under the Tories is a nightmarish struggle, and that people feel
worse off because they are worse off?(902085)
May I gently correct the hon. Lady? As I said, living standards
have risen by £1,700 per household since 2010, and the number of
people in absolute poverty is down by 1.7 million. She is right
to talk about the debt pressures that people face, which is why
in the Budget we abolished the £90 fee for debt relief orders,
having talked to Citizens Advice.
(Colchester) (Con)
The proposed changes to wine duty will add huge costs and
complexity to business. Further to my Westminster Hall debate,
will my hon. Friend meet me and representatives of wine
businesses to hear their concerns, and make permanent the
easement that is due to end on 1 February next year?
My hon. Friend is talking about the largest and most significant
reform of our alcohol duty system in 140 years. We are making it
more simple by saying: the stronger the alcohol by volume, the
more duty paid. We introduced the wine easement to give the wine
industry two years to prepare for the changes. I continue to
engage with the industry, and I will continue to engage with
him.
(Luton North) (Lab)
T8. Two years ago, P&O Ferries sacked 786 workers and
replaced them with agency staff paid less than the minimum wage.
After that fiasco, the Government promised to review all
contracts with the company. Why is it that, since then, the
Government have spent £900,000 directly with P&O Ferries? Why
are the Conservatives so comfortable spending taxpayers’ money on
rewarding the appalling treatment of working people?(902086)
Let me say to the hon. Lady, who I very much enjoyed working with
on the Select Committee, that our record is 800 more people in
work for every single day of Conservative government since 2010.
What will wreck that is Labour’s new deal for workers, which the
president of the CBI says will destroy the job-creating machine
that the UK has become.
(Bracknell) (Con)
I commend the Treasury for good fiscal policies that have
resulted in inflation falling significantly since the pandemic.
When might we see a commensurate fall in interest rates?
I am very sorry to disappoint my hon. Friend, but Chancellors
never comment on decisions made by the Bank of England on
interest rates. What I can say is that the Office for Budget
Responsibility predicted at the Budget that inflation would fall
to around target in the next few months. That gives the best
possible prospect of interest rates starting to fall.
(Na h-Eileanan an
Iar) (Ind)
Last night on BBC’s “Newsnight”, it was clear that the needs of
Wales, in particular on health, are not met in the UK. When has
the UK Government ever given England Barnett consequentials based
on needs in Wales, Scotland or Northern Ireland? Surely the model
of spending under which the Government in England decides for
England, and everyone else gets a consequential of that, must
end. Nordic countries do not calculate spend as a percentage of
their neighbours’ spend. Why is the spending of Scotland, Wales
and Northern Ireland dependent on what England decides to
spend?
The Barnett consequentials formula is long established. It gives
a clear framework, through which we can understand spending in
the devolved nations. The hon. Gentleman will know that it means
higher per-person funding in each of the devolved nations than in
England.
(North East Hampshire)
(Con)
I am delighted that my right hon. Friend the Chancellor is
seeking to make the tax system more family friendly, including by
collecting household data in the years ahead, but being family
friendly includes looking after the family home. Sweden abolished
inheritance tax in 2004. The result was a boom in
entrepreneurship, economic growth and higher tax revenues. Will
he, or one of the excellent ministerial team, meet me to discuss
that further?
The Financial Secretary to the Treasury ()
I thank my right hon. Friend for his advocacy in support of
families. We have had conversations, and I know that he very much
welcomes the changes to the high-income child benefit charge and
child benefit. We always keep taxes under review, and I am always
delighted to meet him.
(Kingston upon Hull North)
(Lab)
Does the Chancellor accept that he has caused a great deal of
anxiety and further distrust among those who have been infected
and affected by the contaminated blood scandal by not making any
provision in his Budget for compensation, although the
recommendations for compensation were made to the Government last
April?
I gently say to the right hon. Lady that I stand by every word I
said when I gave evidence, twice, to the infected blood inquiry.
The Government have an absolute moral responsibility, not just to
pay the compensation owed, but to pay it as speedily as
possible.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I would like to join the Economic Secretary to the Treasury and
my hon. Friend the Member for Southend West () in discussing the closure of
banks. Barclays bank, in particular, is both shameful and
shameless in this regard. Does my hon. Friend agree that we need
full transparency on the decisions made by Link and the Financial
Conduct Authority? Something we learned yesterday that may be of
interest to those in Chorley, Mr Speaker, is that the criteria
take into consideration only the town plus areas within a 1 km
circumference. That is not how the rural economy works. Will the
Economic Secretary work with me to ensure that the criteria take
into account the wider economy?
My right hon. Friend is another good example of a Member who is
an excellent champion for her constituents, on this issue and so
many others. As for her specific point, it is right for the
industry to work out how it will increase provision and adapt the
criteria for rural areas, but I will work with her to ensure that
the banking hubs are rolled out in an equitable way, to rural as
well as more urban areas.
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