T1. If he will make a statement on his departmental responsibilities. (132518)
The core purpose of the Treasury is to ensure the stability and prosperity of the economy. I can announce today that Budget 2013 will be on Wednesday 20 March.
I thank the Chancellor for probably the most complete answer he has given today, at a time when every city in our countries has food kitchens feeding the poor and in London people are queuing up to get second-hand reject food from stores and Pret A Manger. I know that the Chancellor borrowed £425 million from the good causes fund of the lottery for the Olympics, and the National Audit Office has said there is an estimated £377 million profit from the Olympics. Could he now return that to the good causes so they can give it to the charities looking after the poor in our country, which he clearly is not?
It is a credit to those who delivered the Olympic games that they came in under budget. The Olympic underspend is money which, if we spent it, would add straight to the deficit. It is not a pot of money sitting in some Government bank account. That would be a difficult decision to take and would have to be balanced alongside other decisions, but I make a broader point: we are trying to sort out the economic problems that this Government inherited. The problems that the hon. Gentleman talks about are problems caused by the deepest recession and the biggest financial crisis of the 21st century, and perhaps one day a Labour MP will get up and apologise for it.
T6. As somebody who has had a long interest in exempting some of the poorest people in this country from tax—incidentally, an idea I held long before the Liberals pinched it from me—I congratulate my right hon. Friend on almost achieving this target in his autumn statement. When economic circumstances allow, could he be even bolder? (132523)
I am proud to be part of a coalition Government of Conservatives and Liberal Democrats who have delivered that policy and are delivering it. A very substantial increase next year will mean that individuals are £229 better off in real terms as a result just of the increase in April, so that is to be welcomed. As for when we get to £10,000, I have just announced the Budget date and we will have to wait for that Budget for tax decisions, but even if the £10,000 allowance were to increase with our current CPI forecasts from the OBR, it would hit £10,000 in 2015.
In the autumn statement, the Chancellor announced a real-terms cut in tax credits and benefits over the next three years and the Government say they will ask the House to vote on that, so can the Chancellor tell the House the answer to two questions? First, what percentage of families hit by these cuts to tax credits and benefit are in work? Secondly, as a result of the autumn statement tax and benefit changes, including the change to the personal allowance, will the average one-earner couple in work with children be better off or worse off?
It is good to see the shadow Chancellor back. Of course tax credits go to some people in work, but we are also helping those people with a personal allowance increase, and working households will be £125 better off. Perhaps he can answer a question, if that is allowed, Mr Speaker: how will Labour vote on the Bill?
It is very important that the public are not misled, however inadvertently, by a member of the Government. This is not an occasion for shadow Ministers to answer questions. In our system, they ask questions and Ministers are expected to answer them. That is the situation.
I will answer, though, Mr Speaker, but before I do it is important that Members on both sides of the House know the answers to the questions I asked the Chancellor. First, 60% of families hit by his tax and benefit changes are in work. Secondly, according to the Institute for Fiscal Studies, as a result of the autumn statement measures a working family—the average one-earner couple—will be £534 a year worse off by 2015. Those are the very families who pull up the blinds and go to work. Every Tory constituency has, on average, over 6,000 of those families who will lose out. In answer to his question, we will look at the legislation, but if he intends—[Interruption.] He asked me a question and I am going to answer it. If he intends to go ahead with such an unfair hit on middle and low-income working families while giving a £3 billion top-rate tax cut, we will oppose it. Why is he making striving working families pay the price for his economic failure?
As I have said, working households will be £125 better off. The right hon. Gentleman quotes the Institute for Fiscal Studies, which has been very clear in its response to the autumn statement that people who are in work and paying the basic rate of tax will do better. The reason we are having to take these difficult decisions on public sector pay, on benefits and the like is because of the mess he created. When will he stand up and say, “I’m sorry we borrowed too much and spent too much. We’ll never do it again”?
T9. Unlike suppliers, who are in a position to judge whether to continue giving goods and services to a company in difficulties, many consumers are not so well informed. Is it not time we amended administration law to make savers and gift voucher holders preferred creditors? (132526)
My hon. Friend makes a good point about the protection of individuals using saving or voucher schemes, and I commend her work on raising awareness about that important issue. I know that she raised the issue recently during business questions and received a response from the relevant Minister. If it would be helpful, I will speak with the Minister and raise her ongoing concerns.
T2. May I welcome the funding in the autumn statement for building future schools, or what we call Building Schools for the Future? May I also welcome the extra allowances for capital investment, or what we call capital allowances? Why did we have to wait two years and have a double-dip recession for those good Labour policies to return to government? (132519)
The hon. Gentleman will recall that the Building Schools for the Future scheme was expensive and inefficient and that we had to scrap it because it was unaffordable. It was one of the many unaffordable promises that he and his colleagues made before the election in order to get people’s hopes up, yet still the former Chief Secretary left a note stating, “There’s no money left.”
Significant progress is being made in that respect. We have seen significant investment in Thames Water, for example, by overseas investment funds. We announced in the autumn statement some funding for junction 30 of the M25, which is part of ensuring a significant investment from people in Dubai in a major port facility near London. No doubt there will be further such announcements to make in future.
In my constituency, the claimant count is just short of 3,000, double what it was five years ago. Does the Treasury accept that it is the rise in long-term unemployment and the failure of the Work programme that has resulted in the benefits bill rising so much this year?
No, I do not accept that. As I said in answer to the hon. Member for Edinburgh East (Sheila Gilmore), who has taken a great interest in these matters, the Work programme is a great success in getting people off benefits and into job starts, but not necessarily through job outcomes. Over 1 million jobs have been created in the past two and a half years, so that there are now a record number of people in employment in this country. He should welcome that, not criticise it.
I thank Ministers for listening to the pleas of MPs explaining the plight of pensioners with self-invested pension plans that were affected by the cap on drawdown. Will the announcement in the autumn statement to lift that cap come into force in time to protect their pension income in this financial year?
I thank my hon. Friend for that question; I remember that he raised this issue last time at oral questions. He has been a great campaigner on it, and I commend him for that. I am pleased that he welcomes the decision to raise the cap to 120%. That will be in the next Finance Bill. We are consulting with stakeholders about the easiest way to bring it in, and we will try to do so as soon as possible.
T4. Thanks to Jobs Growth Wales, an innovative start-up in my constituency called Boulders Climbing Centre, which I recently visited, has taken on a new member of staff. Will Ministers join me in congratulating the Welsh Government on their scheme and explain why they cancelled funding for the future jobs fund? (132521)
The future jobs fund was a massively expensive programme that saw more than half of participants return to benefit after completing it, and it was largely in the public sector. Of course I welcome the scheme that the hon. Gentleman mentioned; if it has created a job in his constituency, that is welcome. The truth is, though, that the biggest problem we have in this country is clearing up the mess that Labour left, and that is why we have to find better, more efficient ways of doing things.
The Treasury has today made a written statement alerting Parliament to a newly discovered error made by Northern Rock—an error made, I hasten to add, under the previous Government, starting in 2008—that could cost the taxpayer hundreds of millions of pounds. Does my right hon. Friend agree that this is yet another example of the previous Government’s total failure to regulate the banking system properly costing this country dearly? Could he—[Interruption.]
Order. May I gently explain to the hon. Gentleman two things? First, topical questions are supposed to be brief, and secondly, they are supposed to relate to the policy of the current Government, not that of the previous one. A short one-sentence reply will, I am sure, suffice—no?
Will you allow me, Mr Speaker, to spend a little time on this? We put down a written statement at half-past 11 today because of an error originating in 2008, when Northern Rock was in public ownership. Some customers with certain types of mainly unsecured loans were not given all the mandatory information in their statements to which they were entitled by law. As a result, interest payments on these loans are not legally enforceable. UK Asset Resolution, which manages Northern Rock—[Interruption.] Can I just make this point? One hundred and fifty—[Interruption.]
Order. I do not require any help from the hon. Gentleman; he should concentrate on the pursuit of his own duties to the best of his ability. I would say to the Chancellor that if the written ministerial statement has been made it is not entirely obvious to me why we need its terms to be repeated before the Chamber. [Interruption.] Order. I will use my discretion. The right hon. Gentleman can have a few seconds more, but then I really must proceed with topical questions, for which allowance will have to be made.
Mr Speaker, 152,000 customers have been affected. These are people with loans of less than £25,000. The cost to UK Asset Resolution is estimated at £270 million. UK Asset Resolution has ordered a full inquiry into what happened in 2008, and we will come to the House with more information when we have it. I wanted to bring this news to the House at the very first opportunity, and I find it pretty extraordinary that the Opposition do not want the public to hear it.
Thank you, Mr Speaker.
New research from Which? reveals that nearly half of front-line bank staff believe that pressure selling still dominates the culture of banking. Will the Minister join me in calling for banking remuneration and incentive structures to be changed to reward ethics and service, rather than aggressive selling targets, in order to help to change the culture of banking?
The hon. Lady is absolutely right that one of the real problems in banking over recent years was that the people who had a trusted relationship with their customers saw them as sales targets rather than as people to be helped. That needs to change. The Financial Conduct Authority is very clear that these kinds of incentives have to go.
I congratulate my right hon. Friend the City Minister on reassuring us that he intends to require the Prudential Regulatory Authority and the FCA to promote new bank competition. Does he agree that full account portability could offer the biggest game changer for bank competition, and that an amendment to the draft Financial Services (Banking Reform) Bill could achieve that?
I am grateful to my hon. Friend for her question and for her campaigning on this issue. My hon. Friend the Economic Secretary and I will meet her to discuss her proposals. The draft Bill responds to the Vickers report. He said that if portability reforms were not adequate we could take further steps, so we have a vehicle to do so.
T8. Perfectly viable businesses up and down the country are going bust while the Government meet the Financial Services Authority and the banks on an ongoing basis to try to come to a conclusion on interest-rate swaps, so I have a suggestion that might focus their minds and make them arrive at a decision more quickly. Why will the right hon. Gentleman not take steps to allow a moratorium on paying back loans that include interest-rate swaps? That would make everybody come to a decision very quickly and help perfectly viable businesses during the recession. (132525)
In answer to an earlier question, I said that I have written to all of the banks and asked them—and they have agreed—to forbear on charging businesses where these matters are in dispute and if the company has financial problems. I am also speeding up the process to resolve these issues once and for all. The matter is rightly of concern to many businesses right across the country and I will do everything I can to help.
The beer duty escalator was brought in by the previous Government in a very different economic situation. Many CAMRA members will come to Parliament tomorrow. The Economic Secretary said that he would reflect on and consider the issue. How is he getting on?
Benefits have increased at twice the rate of earnings since the onset of the financial crisis. Could the Chancellor reassure me that, in spite of criticisms from those on the Opposition Benches, he will not veer from the 1% commitment that he made last week?
My hon. Friend has that reassurance. We have discovered an extraordinary thing today, namely that Labour will vote against yet another measure to deal with the deficit. Labour would have a higher benefits bill as a result of that decision and it will have to explain that to the hard-working people of this country.
I listened carefully to the Chancellor’s answer to the question asked by my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) about food poverty, but he did not actually answer it. Is he ashamed that, under his watch, by the end of this year a quarter of a million people across the country will have accessed emergency food aid?
We are dealing with the economic mess that the previous Government left behind, when unemployment rose, the economy shrank by 6% and people were put into poverty. That is the cause of these problems and Government Members are dealing with them and clearing up the mess that that man—the right hon. Member for Morley and Outwood (Ed Balls)—left behind.
The Government moved swiftly to compensate the victims of the Equitable Life scandal, who were ignored by the Labour Government. The one set of people who were excluded from the legislation were the pre-1992 trapped annuitants. I know that the Minister has been considering this issue. Will he update the House on what consideration will be given to those weak and vulnerable people who just want some safety for the rest of their lives?