Cost of Living Allan Dorans (Ayr, Carrick and Cumnock) (SNP) 1.
What assessment he has made of the potential impact of increases in
the cost of living on households in 2024. (902662) Marion Fellows
(Motherwell and Wishaw) (SNP) 19. What assessment he has made of
the potential impact of increases in the cost of living on
households in 2024. (902683) Patricia Gibson (North Ayrshire and
Arran) (SNP) 21. What assessment he has made of the
potential...Request free trial
Cost of Living
(Ayr, Carrick and Cumnock)
(SNP)
1. What assessment he has made of the potential impact of
increases in the cost of living on households in 2024.
(902662)
(Motherwell and Wishaw)
(SNP)
19. What assessment he has made of the potential impact of
increases in the cost of living on households in 2024.
(902683)
(North Ayrshire and Arran)
(SNP)
21. What assessment he has made of the potential impact of
increases in the cost of living on households in 2024.
(902686)
The Chief Secretary to the Treasury ()
The Office for Budget Responsibility expects UK living standards
to grow in all years of the forecast period.
The Building Societies Association described the housing market
as “broken”, with first-time homebuyers facing the toughest
housing market conditions in 70 years. With the International
Monetary Fund projecting interest rates to be around 5% for the
remainder of the year and the Government rejecting the Scottish
National party's calls to reinstate mortgage interest relief,
does the Chancellor anticipate any relief for first-time buyers
in the near future?
The hon. Gentleman will know that the Bank of England is
independent. The good news is that the OBR expects inflation
rates to fall to near target in the very near future.
The Warm this Winter campaign has found that households will have
to pay an additional £1.3 billion to help energy companies to
cover bad energy debt. What assurance can the Minister give that
the extra charge will be passed on to indebted customers to
alleviate their debt burden, rather than it being allowed to just
alleviate debt for energy companies?
It is good news that energy prices are set to fall. The hon. Lady
will know that the Chancellor abolished the surcharge in one of
his first Budgets.
The UK is set to have the highest level of inflation in the G7
and the lowest rate of growth in the entire OECD in 2025.
Bizarrely, the Chancellor claimed ludicrously that the Tories are
winning the war on inflation. With GDP per capita continuing to
fall as part of the longest unbroken decline since records began,
who does the Minister think in the real world really believes
that this plan is working, and that the cost of living crisis is
easing?
It is important to note that inflation has more than halved since
the Prime Minister took office, and is now at 3.2%. That will
have a material impact on the cost of living pressures on
households. In addition, support this year includes cutting
national insurance rates across the UK and raising the local
housing allowance. Benefits are up by 6.7%, the national living
wage is up by 9.8%, and pensions are up by 8.5%. We are on the
side of the British people.
Dame (Gosport) (Con)
As you know, Mr Speaker, it is not solely households who face
increased cost pressures: businesses across our communities do as
well, particularly small music venues, which are shutting at the
rate of two a week. Ahead of the Culture, Media and Sport
Committee's inquiry into that issue, what thought has the
Minister given to a VAT cut for grassroots music venues across
our constituencies?
I know my hon. Friend cares deeply about this matter. I know she
has a report coming out in a few weeks, and I look forward to
reading it.
(Chipping Barnet)
(Con)
It is crucial to bring down inflation and ensure that we create
the right climate for reductions in interest rates and further
tax cuts. Does the Minister agree that is the best way to tackle
the cost of living pressures?
As ever, my right hon. Friend is absolutely right.
(Buckingham) (Con)
In the past financial year, Buckinghamshire Council supported
4,186 people struggling with the cost of living through the £4.8
million of funding from the household support fund. The council's
Helping Hand scheme continues, with £2.4 million of funding
through to this September. Does my right hon. Friend agree that
Buckinghamshire households who are struggling with the cost of
living should get in touch with Buckinghamshire Council to get
the help and support that they need from the Helping Hand scheme,
which is funded by this Government?
My hon. Friend is completely correct. The household support fund
has done so much to help people struggling with the cost of
living. I commend the way that Buckinghamshire Council has handed
out the money, and, indeed, will continue to do so throughout the
year.
Mr Speaker
I call the SNP spokesperson.
(Inverness, Nairn, Badenoch
and Strathspey) (SNP)
Westminster's cost of living crisis disproportionately affects
those on low incomes, young people, and people living in rural
areas with limited travel options. One example is the soaring
cost of car insurance, which is inexplicably higher in Scotland
than in most other parts of the UK. A 22-year-old with five
years' driving experience might expect their premiums to go down,
yet they pay on average £667 more than they did when they passed
their test at the age of 17. Why are the UK Government doing
absolutely nothing to hold insurance companies to account?
I cannot comment on the specifics of car insurance companies, but
what I can say is that for people struggling with the cost of
living, whatever form that struggle takes, working-age benefits
are going up by 6.7% this year.
Clearly, the Minister has paid no attention to this matter at
all. This issue is exceptional to the UK. While prices for car
insurance have more than doubled in the UK, they have gone up by
only 18% across the EU over the same period, and car insurance
has gone down by 20% in an independent Ireland. What are the
reasons? Is it Brexit, or shameless profiteering? Or, as we
suspect, has Westminster just given up on people in the cost of
living crisis?
I think that we have heard enough from the Brexit zombies on the
other side of the Chamber.
Answer the question.
I am, if the hon. Gentleman would just like to listen. The
national living wage is up by 9.8% this year, which helps with
exactly the type of costs that he is talking about.
Co-operative Sector
(Oldham West and Royton)
(Lab/Co-op)
2. What assessment he has made of the contribution of the
co-operative sector to the economy. (902663)
The Economic Secretary to the Treasury ()
The Government acknowledge the vital contribution that
co-operatives make to the economy. The “Co-operative and Mutual
Economy 2023” report found that co-operatives generated a
combined annual turnover of £41 billion, a 3.7% increase from
2022 levels.
As the Minister outlines, co-operatives are worth £41 billion to
the UK economy; moreover, they are, on average, 10% more
productive than other businesses, twice as likely to survive the
first five years of trading, and have higher rates of investment
than other private businesses. What more can the Government do to
encourage more co-operatives to thrive? Does he believe, as I do,
that the creation of co-operative development agencies in every
region has to be part of that?
I thank the hon. Gentleman for his point. I note his long-held
interest in the co-operative sector, and the work that he does on
it. So, what are the Government doing? They are doing two things
specifically. First, they recently took the further step of
backing the Co-operatives, Mutuals and Friendly Societies Act
2023; they also commissioned the Law Commission to review the
Co-operative and Community Benefit Societies Act 2014 to make
sure that co-operatives can do as much as possible to benefit the
wider economy.
(Rother Valley)
(Con)
Over the past two years, Rotherham Council has spent £240,000
promoting co-operatives and employee ownership. Does the Minister
agree that this huge amount of money would be better spent on
fixing potholes and opening youth clubs, rather than on an
ideological viewpoint, with no measurable outcome for the people
of Rotherham?
I do not wish to comment specifically on Rotherham, but the best
way of promoting co-operatives in general is to allow them to
thrive as best they can, and to support their members in doing
what they do best, which is to help their local economies—not
necessarily through huge amounts of public subsidy, but through
doing what the co-operative movement was founded to do, which is,
as I have said, to support local economies and local people.
Taxation: Living Standards
(Bristol East) (Lab)
4. What recent assessment he has made of the potential impact of
his tax policies on living standards. (902666)
(Sheffield Central)
(Lab)
17. What recent assessment he has made of the potential impact of
his tax policies on living standards. (902681)
The Financial Secretary to the Treasury ()
Thanks to a combination of national insurance cuts and
above-inflation increases to thresholds since 2010, the average
worker on £35,400 will pay more than £1,500 less in personal
taxes this year. In addition, maintaining fuel duty rates at
their current levels represents a further £13 billion benefit to
households over the three years since the introduction of the
freeze.
The Minister will know that people are still really struggling
with the cost of living crisis. One way that the Government could
help is by seeking a bespoke veterinary agreement with the EU.
That would not only cut costs for businesses but stop food prices
rising even more. A future Labour Government would do that, so
why will the Government not commit to it?
The hon. Lady's first comment was correct: everyone in this House
recognises the extreme cost of living challenges over the past
few years, and that is precisely why the Government have adopted
the strategy of a laser focus on inflation, combined with tax
cuts and, recently, national insurance cuts. We have a very
constructive and positive relationship with the EU, and are
always engaging with it on a variety of matters.
In the run-up to last week's elections, the Prime Minister never
stopped talking about national insurance cuts, and the Minister
talked about them again today, but the Government have been
giving with one hand and taking away with the other. Does the
Minister recognise that according to the Resolution Foundation,
the combined impact of all the Government's tax changes leaves
workers who earn less than £26,000 a year worse off? Will he
apologise to workers in South Yorkshire, whose average earnings
are close to that level, for misrepresenting the position?
Of course we recognise the challenges for those on the lowest
incomes, which is precisely why we have adopted a whole bunch of
other measures, including on housing allowance. If the hon.
Gentleman is so opposed to the national insurance cuts that we
introduced, why did the Leader of the Opposition support
them?
Mr Speaker
Congratulations, Mr Chishti, on your engagement at the weekend.
You are not crossing the Floor, I understand.
(Gillingham and Rainham)
(Con)
Most definitely not!
It has just been said that there is a real cost of living
challenge, and that is absolutely correct. A key part of that
relates to the war in Ukraine, which poses real challenges for
energy supplies to the United Kingdom. As a former Minister who
applied sanctions to Russia and looked at the oil price cap, I
know that we need to ensure that what happens in Ukraine is
offset by actions that hold Russia to account and address the
cost of living. The US has seized Russian assets to pay for the
reconstruction of Ukraine; the UK should do the same. That would
help ease the burden on the UK economy and the taxpayer.
It is always a pleasure to see my hon. Friend in his place. He
raises a variety of really important issues that show precisely
why we work across Government—there are multiple Departments
involved—on matters relating to sanctions. The invasion of
Ukraine has had an incredible impact around the world, not just
in the UK. Everybody in this House should welcome the fact that,
because of action taken by this Government and the Bank of
England, and other measures, inflation is now falling and will
soon hit target.
Mr Speaker
I call the Opposition spokesman.
(Ealing North) (Lab/Co-op)
The Conservatives' decisions in this Parliament mean that the
average family will face a tax bill that is £870 a year higher,
and pensioner taxpayers will pay £960 a year more. The director
of the Institute for Fiscal Studies said:
“This remains a Parliament of record tax rises.”
Higher taxes, squeezed living standards and weaker public
services—that is the Conservatives' legacy. Does the Minister
understand why the country has lost confidence in them?
Many people in this country remember the abysmal economic
performance of the last Labour Government. The tax-free allowance
was £6,475; it is now £12,570. More than 1.5 million people have
been taken out of paying income tax altogether. The Government
have a focus: now that the economy is turning, we want to put
more money into people's pockets. That is exactly what we are
doing with the national insurance cuts and other measures, and I
am surprised that the hon. Gentleman does not welcome that.
Public Sector Productivity Programme
(Weston-super-Mare) (Con)
5. If he will use outcome evaluations to assess the effectiveness
of the Public Sector Productivity Programme. (902667)
The Chancellor of the Exchequer ()
Improving public sector productivity is a major focus for this
Government, which is why I announced £4.2 billion of funding to
make our public services more efficient in the Budget.
As a former Health Secretary, my right hon. Friend will know that
evidence-based medicine transformed health productivity,
systematically cutting out ineffectual treatments and replacing
them with ones that worked better. Using the evaluation task
force and the What Works centres to do the same for other public
services, including back to work programmes, prisoner
rehabilitation and early interventions for supported families,
could be the productivity-improving silver bullet that he needs,
so can I urge him to beat a path to their door?
My hon. Friend is right to talk about the What Works programme,
which has delivered more than 500 trials and is recognised
internationally. There are some very good example in the NHS of
what is working, including the NHS app. That is now used by 75%
of NHS patients—including 17,000 over-90s, so let no one assume
that older people are not internet savvy.
(Eltham) (Lab)
Some £8.7 billion was wasted on defective personal protective
equipment during the covid crisis, much of it paid to people
associated with the Conservative party. People did not have to be
Conservative party members to benefit from the fast track, but it
did not half help. What is the Chancellor doing to get public
money back from those people who sold that defective equipment to
the NHS, and does it not just show that we cannot trust the
Tories with public money?
What it shows is that we took very difficult decisions in the
pandemic to speed up access to PPE for frontline workers, who
were literally dying at the time—but there should be no hiding
place whatsoever for anyone who commits fraud on taxpayers, which
is why there have been over 100 arrests.
Mr Speaker
I call the shadow Minister.
(Bristol North West) (Lab)
The only productivity improvement we have seen from this
Government is the awarding of wasteful contracts. On top of all
the PPE waste that my hon. Friend the Member for Eltham () referred to, there are still
£1 billion-worth of unresolved PPE contracts that this Government
awarded, but that have not been delivered on. Only one company,
PPE Medpro, is facing legal action. Why are the Government not
taking legal action against the other companies that have not
delivered on their contract with members of the public?
Let me be clear: there is absolutely no hiding place for anyone,
whether they are connected to the Conservative party, the Labour
Party or any other party. If they have defrauded the taxpayer, we
will go after them.
The Chancellor says that he is making progress, and that there is
no hiding place, but that money belongs to our public services.
The Government know that the contracts have not been delivered
on, but they will not reveal the names of the companies and the
contracts that have not been delivered on. If there is no hiding
place, why would the Chancellor not name them today?
Because we are taking legal action, and as the hon. Gentleman
knows full well, when we take legal action, that information
belongs to the police.
Tax Reduction
(Erewash) (Con)
6. What steps his Department is taking to reduce taxes.
(902668)
The Chancellor of the Exchequer ()
The spring Budget delivered personal tax cuts, including cuts to
national insurance, for 29 million workers. That means that
someone on the average salary has the lowest effective personal
tax rate since 1975, and that is the lowest effective tax rate of
any G7 country.
While responsible tax cuts, such as the £900 cut to national
insurance contributions, are welcome, can my right hon. Friend
update the House on when we can expect VAT to be abolished on
high-factor sunscreen? That would not only help to protect more
people from one of the leading causes of preventable cancer, but
could save the NHS approximately £55 billion.
My hon. Friend and I have talked about this issue on many
occasions. She will know that high-factor sunscreen is on NHS
prescription for certain conditions and is VAT-free when
dispensed by a chemist. With my Chancellor hat on, I should say
that we have had £50 billion of requests for VAT relief since
Brexit. It is great to have the freedom to make those changes,
but we have to be honest about the trade-offs. In particular, we
must ensure that if we do apply reliefs, the benefits are fed
through to consumers.
(East Antrim) (DUP)
This weekend, I spoke to a constituent who has invested heavily
in a restaurant in my constituency over the last 15 years. He was
in desperation because his business, like two other businesses
that have already closed in the town, is being crushed by VAT,
business rates and increases in corporate taxes. He finds that he
can no longer sustain a business that has become the love of his
life. Does the Chancellor realise that the tax burden he is
imposing on small and medium-sized businesses is crushing this
economy?
We are doing everything we can to support small businesses.
Businesses like the one that the right hon. Gentleman mentions
have received, for two years in a row, a 75% discount on their
business rates. That is a massive leg up for businesses
recovering from the pandemic. We have also made sure that any
increases in corporation tax apply only to larger businesses.
There is only one major party in British politics that wants to
bring down the tax burden for businesses, and it is the
Conservative party.
Green Book
(West Dorset) (Con)
7. Whether his Department has made a recent assessment of the
adequacy of its guidance entitled “The Green Book.”(902669)
The Chief Secretary to the Treasury ()
In 2020, the Treasury undertook a comprehensive review of the
Green Book and how it is used in practice, and we have made
several changes as a result. We regularly update the Green Book
to ensure that it remains fit for purpose, and we published a
further technical update in 2022.
I represent a rural constituency in Dorset in the south-west of
England. My right hon. Friend will know that it is important to
me and my colleagues in the region that the Government give due
consideration to the south-west when it comes to allocating funds
and investment opportunities to it. Typically, the Green Book has
not adequately allocated funds in favour of Dorset and
neighbouring counties. What steps will she take to correct
that?
My hon. Friend is, as ever, a brilliant advocate for his local
area. I note that West Dorset is getting £4.4 million from the UK
shared prosperity fund, and the wider Dorset area is benefiting
from a range of other significant investments, including £9.7
million from the future high streets fund, but I am happy to meet
him to discuss the matter further.
(Strangford) (DUP)
Like the hon. Member for West Dorset (), I represent a rural
constituency. Strangford is the reason I am here, and I want to
represent it well. What steps will the Minister take to ensure
that all updates to and volumes of the Green Book apply to
Northern Ireland as well as to other areas across this great
nation?
The hon. Gentleman raises an excellent point—one that I will be
discussing with the Northern Ireland Finance Minister in a couple
of weeks.
Small Businesses: Fiscal Support
(Preseli Pembrokeshire)
(Con)
8. What fiscal steps his Department is taking to support small
businesses.(902670)
The Exchequer Secretary to the Treasury ()
Small businesses drive our economy, and we support them to thrive
using levers across Government, whether through our small
business rates relief, by increasing the VAT registration
threshold, or providing reliefs such as the annual investment
allowance.
In England, many small businesses receive a 75% reduction in
business rates thanks to action by this Conservative Government.
In Wales, the Labour Administration have cut that level of
support to 40%, meaning that excellent hospitality businesses
such as Martha's Vineyard in my constituency must find thousands
of pounds more in tax. Does the Minister agree that that is not
the way to support the tourism and hospitality sector at a
challenging time, and that it is an example of the Labour party
saying one thing here at Westminster and doing another where they
are in government?
My right hon. Friend is right that in the autumn statement the
Government extended retail, hospitality and leisure relief in
England, essentially to cut tax for 230,000 businesses—a tax cut
worth £2.5 billion. The Barnett formula allows the Welsh Labour
Government to offer similar relief to Welsh businesses, and it is
disappointing, if not surprising, that they have chosen not
to.
(North Shropshire) (LD)
On Friday, I visited the K C Jones Motor Repairs garage, a
medium-sized business of very long standing in Oswestry in North
Shropshire. One of the many challenges that it faces, alongside
astronomical energy bills and a shortage of skilled labour, is
the business rates that it needs to pay because it must have a
high street presence in order for people to take their cars
there. Will the Minister consider fundamental reform of business
rates so that businesses that need a high street presence can
continue to exist? At the moment, they are under huge
pressure.
As I was saying, we have a 75% relief for most high street
businesses. I encourage the hon. Lady to look at the package as a
whole. We have increased the VAT threshold, bringing 28,000
businesses like the one she describes out of paying any VAT at
all, on top of a range of other measures.
Dame (Morley and Outwood)
(Con)
The cherished independent shops and restaurants that line the
streets of Morley serve the lifeblood of our community. In order
to safeguard the very heart of our local economy, what bold
measures is the Department taking to counter the oppressive
weight of skyrocketing business rates imposed by the financially
reckless Labour-led Leeds City Council?
I know that my hon. Friend is a great champion of all businesses
in Morley and across Leeds because I have seen it at first hand.
I point out to her as well that the Government have reduced
taxation on small businesses, we have increased the VAT
threshold, and we have a 75% rate relief for retail, hospitality
and leisure businesses, which she alluded to. It is this
Conservative Government who are on the side of hard-working
people and businesses across Morley and around the country.
(Bath) (LD)
In the last decade, more than one music venue closed every week,
including Moles in Bath. That has resulted in the loss of 4,000
jobs, 14,250 events, over 190,000 performance opportunities, £9
million of income for musicians and £59 million in lost direct
economic activity. What are the Government doing to support small
music venues?
We are doing a lot. We are increasing the VAT threshold, and we
have a rates relief package. The recent spring Budget was one of
the biggest packages supporting our cultural industries that this
country has ever seen, and I encourage the hon. Lady to look at
it.
Mr Speaker
I call the shadow Minister.
(Hampstead and Kilburn)
(Lab)
Since 2022, almost 400 communities have lost their local bank
branch, which has had a devastating impact on local and small
businesses. Despite witnessing the decline of the British high
street, the Government have been dragging their feet on rolling
out banking hubs, which would help local and small businesses.
Will the Minister finally back the Labour party's plans to
provide a banking hub in every community that needs one?
Banking hubs are driven by commercial organisations. Any area
that loses bank branches is entitled to get a banking hub. Of
course, we want to see more across the country, but we also have
to recognise that banking has changed and the ways in which
people bank have moved more towards digital, so it is right that
commercial organisations take commercial decisions.
Regional Economic Inequality
(Blaydon) (Lab)
10. What recent fiscal steps he has taken to help reduce regional
economic inequalities. (902672)
The Exchequer Secretary to the Treasury ()
At the spring Budget, we built on the £15 billion of levelling-up
commitments made since 2019. We announced a trailblazer
devolution deal for the north-east mayoral combined authority and
a £400 million extension to the long-term plan for towns.
The cross-party Public Accounts Committee has revealed that the
Government's levelling-up funds were subject to a “worrying lack
of transparency”, with rules for accessing funding changing while
bids were still being assessed. Will the Minister therefore
apologise to the 55 local authorities rejected for funding that
were not told in advance that their applications had no chance of
success?
This is the Government who implemented £15 billion of support for
communities outside of London and the south-east, which is one of
the reasons why median pay growth is higher in every region
outside of London and the south-east. Of course, there is a
robust methodology and criteria for selecting places for funding,
and I encourage the hon. Lady to look at those criteria.
(Darlington) (Con)
With the Darlington economic campus now having passed 750
employees and being well on its way to providing over 1,500 roles
in my constituency, what assessment has my hon. Friend made of
its contribution to the local economy, to reducing inequalities
and to our levelling-up agenda?
The Darlington economic campus is an important part of this
Government's operations and of our Government estate, but it is
also important to the people of Darlington, and not just in terms
of the jobs it has created. Of course, it builds on the back of
significant funding on my hon. Friend's watch: the £22 million
town deal and the £6 million as part of the shared prosperity
fund. That is one of the reasons why the people voted to elect
just the other day.
(Kingston upon Hull West and
Hessle) (Lab)
Regional inequality may be made worse by my constituents facing
having to pay again for funeral plans after they were sold fake
funeral plans by Legacy funeral directors. Many simply cannot
afford to pay for those plans again and, instead of having the
funeral that their families wanted for them, they will only be
able to have the free service offered by the council. Does the
Minister agree that banks should offer more discretion when
looking at victims of fraud, and will he meet with me to discuss
this specific case further?
I am very sorry to hear of the circumstances that the hon. Lady
has described. My hon. Friend the Economic Secretary, in whose
portfolio this issue sits, will meet with her.
(Cleethorpes) (Con)
For many years, coastal communities have suffered economic
inequalities, and we all know that the best way of changing that
is to create the conditions for investment and the jobs that go
with them. Despite the good work that the Government have done,
we still need more funding in areas such as Cleethorpes. Could
the Minister outline what plans the Government may have for
bringing forward further schemes in the near future?
It is right to acknowledge that funding has gone in. I completely
appreciate the specific challenges that coastal communities face,
but it is important to look at the package of measures to level
up—not just funding such as the shared prosperity fund,
levelling-up fund and towns fund, but the 13 devolution deals, 13
investment zones and 12 freeports. These are all packages and
measures that will help areas such as my hon. Friend's, but I
will always keep his area in mind.
Cost of Living
Mrs (Meon Valley) (Con)
11. What fiscal steps he is taking to support households with the
cost of living.(902673)
(Nottingham East) (Lab)
18. What fiscal steps he is taking to support households with
increases in the cost of living.(902682)
The Chancellor of the Exchequer ()
Over the last two years, cost of living support has totalled £96
billion, or an average of £3,400 per household. As a result,
living standards, which were predicted to fall 2% last year, rose
by nearly 1%, and we are on track to reach pre-pandemic living
standards two years early.
Mrs Drummond
I welcome the support that the Government have provided
throughout covid and the recent energy crisis for my constituents
in Meon Valley—I thank the Government. It has made a huge
difference to people's domestic budgets, but now inflation is
falling and the economy is improving, can we look forward to the
Government's continued support with a range of fiscal steps,
including cutting taxes?
We can absolutely do that. I thank my hon. Friend for pointing
out that the biggest single thing we can do to help people with
cost of living pressures is to bring down inflation. That seems
to be something that escaped the shadow Chancellor this morning,
when she said it was not a big deal to get inflation down to its
target. It is a very big deal for families facing a cost of
living crisis, and she needs to know that inflation falls by
design, not by accident.
The Chancellor can talk all he wants about inflation falling, but
this is little comfort to my constituents who are still
struggling to make ends meet. Even with the national insurance
cut, annual post-tax earnings for the average family remain on
course to be £380 lower at the start of 2025 than they were in
2021—a gap not predicted to close until 2029. This means yet more
years of lost wage growth, so when will the Government get
serious about tackling the low-wage, insecure work that they have
allowed to become the norm in this country?
Could I suggest, if the hon. Member really thinks that inflation
falling from 11% to 3.2% is little comfort to her constituents,
that she might want to talk to a few more of them, because
actually it is the biggest single thing that we can do to deal
with cost of living pressures. If she says, “What are we doing to
tackle the scourge of low pay?” we have abolished it by raising
the national living wage to £11.44 this year alone. For someone
working full-time, that will mean an increase in their pay of
£1,800.
Child Trust Fund: Recipients with Disabilities
(Lewisham, Deptford)
(Lab)
13. Whether he has taken recent steps with Cabinet colleagues to
ensure that people with disabilities can access their child trust
fund when they turn 18.(902675)
The Economic Secretary to the Treasury ()
On 9 June 2023, the Ministry of Justice launched a programme to
raise awareness of the Mental Capacity Act 2005 in relation to
how and when to access child trust funds. The first part of this
programme is a new toolkit. The Ministry of Justice will continue
that programme of work to raise awareness of how to obtain legal
authority to access a child trust fund, for which a court fee
waiver is available.
The only way for parents of young people without capacity to
access their child trust fund is through a deputyship order.
After consulting on the introduction of a mental capacity small
payment scheme, which would allow a suitable person temporary
access to release the funds, Ministers opted not to legislate,
and instead introduced a toolkit, as has been said. Over 80,000
young people in England and Wales remain locked out of their
child trust fund, so would the Minister agree to look at this
again?
I thank the hon. Lady for her question, and I know how avidly she
campaigns in this area. The House should know—and you should
know, Mr Speaker—that I recently met my right hon. Friend the
Member for Horsham (Sir ) and the hon. Member for
Sheffield Central () to discuss this very issue.
I am very happy to meet the hon. Lady as well to discuss it and
to see if we can get a solution, because we do want to get this
problem fixed.
Sir (Horsham) (Con)
I am grateful to the Minister for the meeting to which he
referred. Will he compliment financial institutions that are
doing their utmost to make it easier for their disabled customers
to access their child trust funds and, if his ministerial
colleagues can find a way of making that easier across the board,
would that have his support and that of his colleagues in the
Treasury?
I thank my right hon. Friend for his question. Indeed, working
with not just the Ministry of Justice, but the Department for
Work and Pensions is key to deliver this, as is working with the
Financial Conduct Authority to ensure that any financial
institution that does the right thing does not lose out or face
any regulatory issues. That is indeed something that has my
support and that of the Treasury, and we will work across
Government to get this right.
VAT Exemption for International Visitors
(Romford) (Con)
14. Whether he plans to reintroduce VAT-free shopping for
international visitors. (902676)
The Financial Secretary to the Treasury ()
As stated in the spring Budget, the Government are considering
the findings of the review by the Office for Budget
Responsibility of VAT-free shopping, alongside industry
representations and broader data. We continue to welcome further
submissions and representations in response to those
findings.
Data from Heathrow, the United Kingdom's largest and busiest
airport, shows that despite a near-full recovery in passenger
volumes post lockdown, retail spend on affected goods is 32%
below pre-pandemic levels. That figure is shocking. Heathrow
airport joins hundreds of businesses in calling on the Government
to reintroduce VAT-free shopping for tourists, or similar
incentives. Will the Minister acknowledge the figures, listen to
the industry and reinstate that popular policy, as British
businesses are demanding?
My hon. Friend will be pleased to know that I will not only
listen to the industry, but I met Heathrow just last week to hear
its representations. The challenge is the way that modelling, and
forecast and behavioural changes can be confidently assessed.
Government estimates suggest that a worldwide scheme could cost
as much as £2.5 billion. The challenge is the so-called
deadweight cost that could happen by subsidising spending that
otherwise would exist anyway, versus the incremental benefit that
we could get from new visitors coming to the UK. Of course that
is a behavioural change based on a tax change. It is based on a
variety of assumptions, and therefore the modelling and
assumptions underlying it vary, but I am listening to all
representations.
High income Child Benefit Charge
Mrs (South Derbyshire)
(Con)
16. What assessment he has made of the impact of raising the high
income child benefit charge threshold on household incomes.
(902678)
The Financial Secretary to the Treasury ()
The high income child benefit charge threshold was raised to
£60,000 on 6 April 2024. The point at which child benefit is
fully withdrawn was also increased to £80,000, and the Government
estimate that that will take 170,000 families out of paying the
charge in 2024-25. The Government also plan to administer HICBC
on a household rather than an individual basis by April 2026.
Mrs Wheeler
I have been contacted by many South Derbyshire parents who are
caught in this unfair situation. Can the Minister be even more
precise about the savings that this will now mean for my affected
constituents?
I thank my hon. Friend for her comments and continual interest in
this area. The changes to the high income child benefit charge
mean that almost half a million hard-working families will gain
an average of £1,260 towards the cost of raising their children
in 2024-25. She will recognise that that is a meaningful
difference for her constituents, and for those across the
country.
Topical Questions
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
T1. If he will make a statement on his departmental
responsibilities.(902687)
The Chancellor of the Exchequer ()
The shadow Chancellor often likes to ask what has improved over
the past 14 years, so I thought I would update the House on some
of the latest statistics about the British economy. According to
UN conference data, we have now overtaken France, the Netherlands
and Japan to become the world's fourth largest exporter. The
International Monetary Fund says that we will grow faster over
the next six years than France, Italy, Germany or Japan, and
there are 200,000 more people in work compared with a year ago,
which means that, for every single day Conservative Governments
have been in office since 2010, there are 800 more people in
work, many of whom will be very pleased that we are sticking to
our plan.
We should add to the Chancellor's statistics that we have the
widest economic inequalities in Europe. Last week, Professor Sir
Michael Marmot published new analysis showing significant
increases in health inequalities—how long we live, and how long
we live in good health—and that is particularly the case between
the north and south-east England. That is of course driven by the
economic inequalities that I have just referred to. What
assessment has the Chancellor undertaken on the loss in
productivity directly as a result of that increase in health
inequalities?
If the hon. Lady is concerned about economic inequalities, she
will be horrified to know that they were even worse under the
last Labour Government. They have been reduced under this
Government. When it comes to health inequalities, it is this
Government who are phasing out smoking for everyone under the age
of 14—one of the biggest single things in a generation that will
reduce health inequalities and mean that poorer people live
longer.
(Weston-super-Mare) (Con)
T6. The Government's plans for a carbon border adjustment
mechanism will create a level playing field for British
manufacturers facing un-green, high-carbon competition from
abroad, but to comply with free trade rules, the CBAM must be an
environmental measure, rather than revenue-raising trade
protectionism. Will Ministers confirm that it will be fiscally
neutral and that any net receipts will be returned to taxpayers,
perhaps even by cutting fuel duty or green levies on energy
bills?(902692)
I can confirm that we are very alive to cost of living pressures
caused by fuel duty. In fact, we spent £6.4 billion freezing the
duties on fuel, which will save the average motorist £50 over the
coming year.
Mr Speaker
I call the shadow Chancellor.
(Leeds West) (Lab)
At the Budget, the Chancellor set out his intention to abolish
national insurance—a £46 billion annual commitment with no clear
plan as to how it would be paid for. One way to do it would be to
merge income tax and national insurance. Does the Chancellor
agree with analysis from the House of Commons Library that shows
that merging those two would increase income tax by 8p in the
pound?
Which is why it is not our policy.
That is strange, because the day after the Budget, the Chancellor
told Sky News that
“you can end that unfairness of taxing work: you can merge income
tax and national insurance.”
The late Chancellor, Nigel Lawson—the Prime Minister's
hero—warned that merging them would
“destroy the contributory principle and create many losers,
especially among the elderly.”
In fact, a retired pensioner with an average occupational pension
income of £198 a week would pay an additional £738 a year in tax.
Is the reason that the Conservatives will not come clean not that
they are planning to pick pensioners' pockets to fund the
abolition of national insurance?
If the right hon. Lady listened to my comments carefully, and I
do not always give her credit for that, she would know that our
policy is to abolish employees' national insurance, and that
means we want to bring it down to zero. If Labour's strategy is
to win the election by frightening pensioners with fake news
stories, I would just say that Britain deserves better.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
T8. The taskforce on nature-related financial disclosures came
out with its framework last year. I would like an update on where
we are with the International Sustainability Standards Board
approach, because just as it has been a huge success for
companies and for UK plc to switch to the recommendations of the
taskforce on climate-related financial disclosure, it is vital
for our planet that we also start to have the TNFD framework as
standard right across the board.(902694)
The Economic Secretary to the Treasury ()
My right hon. Friend is right that this issue is critical. I am
pleased that the ISSB recently announced its intention to
commence a research project on a nature thematic standard,
carefully considering the TNFD's recommendations. His Majesty's
Government have established a formal mechanism to assess the ISSB
standards for suitability for the UK to ensure that with a
general sustainability standard, and more specifically with a
climate sustainability standard, we are doing the right thing for
the UK. The Government will publish an implementation update on
sustainability disclosure requirements shortly to provide further
information for industry—watch this space.
Richard Burgon (Leeds East) (Lab)
T2. We have all seen it: the richest Prime Minister in history
has spent the weekend telling the public that his plan is
working. Well, it is not working for people in Leeds East, whose
taxes are going through the roof while our public services are on
their knees. Would a better plan not be to go after the tax
dodgers, rather than making ordinary people pay the price for
this Government's abject failures?(902688)
The Financial Secretary to the Treasury ()
I have to say that I find this hypocrisy astounding. First, if
the Opposition objected to the national insurance cuts, why did
the Leader of the Opposition say that he supported them? If the
Opposition are so keen on abolishing tax dodging, why did they
not support our Finance Bill, which had measures in place to do
just that? They did not support it; they abstained on it.
Sir (North East Somerset)
(Con)
The Bank of England has said that quantitative tightening is not
an official part of its monetary policy targeting, yet it is at
risk of costing, fiscally, £179 billion in losses underwritten by
the Treasury. That is having a major effect on the fiscal
situation of the country. Will His Majesty's Government encourage
the Bank of England to hold these bonds to maturity, taking the
carry cost rather than taking the hit from selling them in the
market and crystallising an enormous loss?
In relation to the asset purchase facility and how that has
worked over recent years, it is not His Majesty's Government's—or
indeed the Treasury's—intention to change the way in which that
works with the Bank of England, but as with all measures, the
Chancellor keeps everything under close review.
Kerry McCarthy (Bristol East) (Lab)
T3. According to the Bank of England, a typical family
remortgaging this year will pay £240 a year more in mortgage
payments. Does the Chancellor accept that even if the Bank cuts
rates, those homeowners will still be paying a penalty because
the Government crashed the economy?(902689)
What I would say to those families is that the most damaging
thing of all is to have inflation at 11%. Now we have reduced it
to 3.2%, and indeed we expect it to go lower. Interest rates are
also starting to fall. If the hon. Member is worried about
families in her constituency, she might be extremely worried by
the shadow Chancellor saying that if interest rates fall, it is
somehow not a big deal. It really is.
(Dumfriesshire, Clydesdale
and Tweeddale) (Con)
May I encourage my right hon. Friend the Chancellor to revisit
his decision to change the tax arrangements of furnished holiday
lets in rural constituencies such as my own? Those businesses
make an important contribution to the local economy, provide jobs
and enhance the tourism offering. Indeed, they stop depopulation
rather than adding to it. His decision is creating much concern
among those who operate such businesses.
We recognise the important role that FHLs play in the tourism
ecosystem right across the country. The problem was that there
was not a level playing field with long-term lets. We are making
sure that there will continue to be tax incentives and benefits
from such letting, but they need to be on par with short-term and
long-term lets.
(Upper Bann) (DUP)
T5. The consistently high price of fuel is making drivers dig
deep just to go about their daily business. With a rise of 10p
reported since the start of the year and the average cost of
filling a family car now £82.50, what efforts will the Government
make to help those people in my rural constituency and across the
United Kingdom who have little or no access to public transport
and are dependent on their vehicles for work and family
life?(902691)
The Exchequer Secretary to the Treasury ()
The hon. Member is entirely right. That is why we froze fuel duty
at the last fiscal event: a measure that costs £6.5 billion and
will save the average driver £50.
Mr (Bournemouth East) (Con)
May I place on record my thanks to the Chancellor, who in his
Budget devoted funds to Bournemouth for a police violence
reduction unit? Does he agree that these units have a track
record up and down the country of tackling knife crime by not
just seeing extra police on the frontline, but engaging with
schools to ensure that youths and students understand the folly
of carrying a knife in the first place?
My right hon. Friend is absolutely right: violence reduction
units reduce crime and save lives. I want to thank him, because
he was one of the first colleagues who, ahead of the Budget,
brought to my attention how impressive the results are. As a
result, I was able to make it a national policy in the
Budget.
(Denton and Reddish)
(Lab)
T7. Many of those campaigning for justice in the contaminated
blood scandal will have been encouraged by the reporting in The
Sunday Times over the weekend. Given that time is of the essence,
will the Chancellor please indicate by which date the promises
will be fulfilled?(902693)
The hon. Gentleman is absolutely right to say that the Government
are taking this issue very seriously, and we completely
understand that speed is of the essence. It is now only a matter
of days before the report will be published; we have always said
that we want to publish our response very quickly after that and
I assure the hon. Gentleman that we will not hang around.
(Don Valley) (Con)
The best way for a business to thrive and for customers to
receive a great service is for companies to employ individuals on
merit. Does the Chancellor agree that the recent overreach by the
Financial Conduct Authority and the Prudential Regulation
Authority regarding their equality, diversity and inclusion
policies is a step too far, and that it is inevitable that those
policies will have a negative effect on us all?
My hon. Friend makes an important point. It is important that the
FCA bears in mind that it should not be distracted from its core
focus on conduct and regulation by things that are more marginal
for the people and businesses it oversees. I urge the FCA to take
into account the representations made by my hon. Friend and by
industry in that regard and many others.
(Manchester, Withington)
(Lab)
T10. The Chancellor recently claimed that £100,000 a year is not
a huge salary. Does he realise how out of touch that sounds to
families in my constituency who are working hard, earning much
less than that and really struggling because they are paying 25%
more for their weekly shop than they were two years ago, and
whose mortgages soared after the Tories crashed the
economy?(902696)
The hon. Gentleman knows perfectly well that he has taken my
comments out of context. I will tell him what is really out of
touch: the shadow Chancellor saying it is not a big deal if
inflation falls.
(Blyth Valley) (Con)
Cramlington has a world-leading pharmaceutical company, Organon,
which employs 700 people and produces medicine for the UK market
as well as abroad, with a particular focus on women's health.
Will my right hon. Friend the Chancellor please meet me to
discuss the impact on pharmaceutical investment?
My hon. Friend is absolutely right. The pharmaceutical industry
is worth some £14 billion to our economy. I am pleased to tell
him that the industry has seen a twelvefold increase in equity
financing in just the past decade, and I would be pleased to meet
him to discuss that further.
(Bath) (LD)
Soaring rent costs are the biggest reason why my constituents in
Bath are struggling. The average monthly rent in Bath and
north-east Somerset has risen by more than £200 in the past three
years. What support will the Government give to people who rent
in the private sector?
That is why we need to build more houses. The hon. Lady will be
reassured to know that we are building record numbers of
houses—in fact, more in the last year than in any single year
under the previous Labour Government.
(Romford) (Con)
I would like the Chancellor of the Exchequer to know that high
business rates are having a devastating effect on small and
medium-sized businesses in historic market towns, such as
Romford, that are large retail centres. As the Government are
business friendly, will he please look at ways to reduce the
burden of business rates on local businesses in constituencies
like mine?
May I say what a pleasure it is to be asked a question by my hon.
Friend? I think this is the first time it has happened since he
has been back. There is no more formidable a champion for
Romford. He speaks about business rates, and we have indeed been
doing what we can to bring them down at every fiscal event.
(Strangford) (DUP)
What steps have been taken to support pensioners to know what
benefits they are possibly entitled to? I understand that 1.4
million people access pension credit, but a great many more are
entitled to it.
The Chief Secretary to the Treasury ()
The hon. Gentleman will know that this is an issue that is close
to my heart, as a former Pensions Minister. We did a huge amount
of work to increase the uptake of pension credit. I know that
this matters a lot to Members, and work is being done in
everyone's constituency, including the hon. Gentleman's.
Sir (Horsham) (Con)
The lifetime ISA is a positive instrument, but I understand that
under its terms there are circumstances under which savers lose
not only the benefits of the ISA but also part of their capital
investment. That does not seem right; will the Minister please
meet me to discuss it?
I am happy to meet my right hon. Friend to discuss the lifetime
ISA, which is a fantastic product brought in by this Government
to help young people to get on the housing ladder. I am happy to
meet him to discuss ways in which we can make it more accessible
for more people in more circumstances.
(Hampstead and Kilburn)
(Lab)
On a point of order, Mr Speaker.
Mr Speaker
Is it related to Treasury questions?
Yes. In his response to me, the Exchequer Secretary said, “Any
area that loses bank branches is entitled to get a banking hub”,
but I have numerous examples of towns that lost bank branches,
applied for a banking hub and then had their application
rejected. Please could you advise me, Mr Speaker, on how I can
get some clarity on this matter and what the Minister said about
“any area that loses bank branches”?
Mr Speaker
Obviously, we cannot continue the debate. The hon. Lady has
certainly put her point on the record. I do not think this will
be the end of it; she knows how to carry it on through the usual
channels, which I expect she will use, no doubt starting with the
Table Office.
On a point of order, Mr Speaker. The Chancellor, in answer to my
question, said that economic inequalities actually increased
under the previous Labour Administration. A House of Commons
Library publication released last month shows that that is
categorically not the case. Would he like to take this
opportunity to correct the record?
Mr Speaker
I believe the Chancellor would.
Further to that point of order, Mr Speaker. The hon. Lady may
have misunderstood me. What I said was that economic inequality
had fallen since the last Labour Government.
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