The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
The Chief Secretary seems to be spending most of his time feathering his own nest in his constituency, but can he take some time out from that important work to confirm that energy bills will go up by more than £50 and that energy companies, who are making fat profits, will not pay one penny to reduce bills?
I can confirm to the House that the action the Government are taking will ensure there is £50 off people’s bills this year. That is as a result of serious-minded work to ensure we reduce the pressure the Government are putting on people’s bills. That includes taking the warm homes discount, which helps 2 million low-income people in this country, on to the Government’s balance sheet. That is the right option, compared with the complete con that unfortunately is still being peddled by the Opposition.
T3. Will the Financial Secretary provide any more detail on last week’s announcement that the Government will later this month provide payment for people who bought pre-September 1992 with-profits annuities from Equitable Life? (901540)
At Budget 2013 the Chancellor announced that the Government would make ex gratia payment to Equitable Life with-profits annuitants who were excluded from the Equitable Life payment scheme because their annuity began before September ’92. Thanks to the legislation this Government have brought forward, we are now ready to make those payments. Today, I can confirm that over 9,000 people will receive lump-sum payments of £5,000 each next week, before Christmas, and a further 450 in receipt of pension credit will receive an additional £5,000 each.
First, may I say what a great pleasure it is for those on this side of the House to see the shadow Chancellor in his place, and may I join him in condemning the unattributable briefing against him from the people behind him—something that never happened in his day?
The whole reason millions of Britons—[Interruption.]
I would like you to be able to hear it as well, Mr Speaker.
The whole reason millions of Britons are under financial pressure is that Labour’s economic mess cost every household in this country £3,000. Because our plan is working, we can cut income tax, we can cut fuel duty, we can put the triple-lock on pensions, we can freeze council tax and we can take money off people’s energy bills. The only way to raise people’s living standards in this country is to have a sustainable economic recovery.
The right hon. Gentleman is as bad as the Chancellor. Why can he not admit the truth: this Government’s economic policy is not working for working people? That is the truth. This is what the IFS said after the autumn statement—[Interruption.] Members on the Government Benches do not want to hear it. People are worse off under the Tories; that is the truth. Here is what the IFS said:
“real median household incomes will be substantially lower in 2015-16 than in 2009-10.”
And where is the Chancellor? He is in Brussels, where the Government are taking legal action to stop a cap on bank bonuses. How out of touch can they get? Let me ask the Chief Secretary: are the Liberal Democrats really right behind the Conservatives on this one, too—on stopping the bank bonus cap?
I know that the shadow Chancellor has made one change since last week. He has appointed a new special adviser on hand gestures: Greg Dyke. [Interruption.] That is the gesture the shadow Chancellor’s colleagues are making every time they hear him in this House of Commons. The fact is that the Liberal Democrats, as part of this coalition Government, are delivering a sustainable economic recovery. We are part of a Government who are delivering £700 for every single working person in this country and who are delivering a proactive approach in the European Union, including by ensuring that the integrity of the European treaties is maintained, and that is what this legal action is all about.
T4. I welcome the Chief Secretary to the Treasury’s ambitious plans for capital investment for a stronger economy that were set out last week. He will have heard me urging the Prime Minister to make up for the previous Government’s failure to rebuild Wiltshire college’s Chippenham campus. Could my right hon. Friend see his way clear to making that investment, so as to equip our young people with the skills that will enable them to get on in life? (901541)
I know how important that project is for the college that my hon. Friend mentions. I can confirm that the Skills Funding Agency has told the college that it is prepared to make grant funding available for the project, subject to some additional assurances being received. Those assurances are being sought this week, and the agency hopes to respond to the college by the end of this week.
T2. Housing costs represent one of the biggest pressures on the cost of living, and a new study by Oxford Economics suggests that, by 2020, house prices will have risen by 35% and rents by 39%. What are the Government going to do about that? (901539)
I know that the hon. Lady takes a close interest in these matters, and she will have seen the Office for Budget Responsibility’s forecasts, which suggest that even by the end of the forecast period, house prices in this country will be below their level at the peak of the financial crisis in real terms. The action we are taking includes the large-scale investment in affordable housing that I described earlier, which will help people with those problems.
We are committed to ensuring that small and medium-sized enterprises have the access to finance that they need, and we were pleased with the recent announcement by the Bank of England and the Treasury on refocusing the funding for lending scheme on to SMEs from next year. My right hon. Friend will also know that, in the autumn statement, we announced further improvements in the lending appeals process and a consultation on requiring banks to share more information on SME lending.
As the hon. Gentleman knows, the Secretary of State for Business, Innovation and Skills has been acting on zero-hours contracts; it is a subject that is currently under review in his Department. I have made a strong assessment of the connection between sustainable economic growth of the kind that this Government are delivering and the availability of jobs in the private sector, 1.4 million of which have been created since 2010.
T7. Given that the autumn statement contained further encouragement for companies to get involved in shale gas production through lower taxes, is there any chance of the Government giving further encouragement to local communities to accept the shale gas industry by offering somewhat more than the 1% that is now on the table? (901544)
My hon. Friend makes an important point. The shale gas industry has the potential to bring jobs and growth to communities across the country. In addition, the industry will give £100,000 to communities in which fracking is taking place, as well as 1% of all production revenues. However, we will of course listen to any suggestions from my hon. Friend about how that regime could be improved.
Does the Chief Secretary to the Treasury accept that, since the financial crash, productivity in the UK has fallen 5% but has gone up 8% in the United States, and that lending to business is down 13% and lending to mortgages is at 2008 levels? What is he doing about this? It is too little, too late.
The hon. Gentleman is right in his description of the fall in productivity in this country. That is related to the fact that this country was hit the hardest of almost any country in the world by the financial crisis, precisely because of the unpreparedness of his party. On the whole, however, the fact that a significant number of jobs have been created in our economy in recent years, even at the cost of falling productivity, represents a preferable balance from a welfare point of view.
T8. Businesses across the country will welcome the news that rate rises are to be capped at 2% and that small businesses will receive a £1,000 discount on their rate bills. Independent retailers in my market towns of Stratford, Henley-in-Arden, Shipston-on-Stour and Studley have been lobbying me on that. How many businesses nationwide will benefit from that, and how much will they save in total? (901545)
We estimate that about 300,000 shops, pubs and restaurants in England will benefit from the £1,000 business rates discount, and that in aggregate the measures announced in the autumn statement will save businesses around £1 billion in business rates, although the amounts will of course vary from business to business.
The Chief Secretary might like to reflect on the very poor answer he gave my right hon. Friend the Member for Wentworth and Dearne (John Healey) earlier, because I have in front of me Office for National Statistics Table 1A, which clearly shows that infrastructure construction output to September 2013 has fallen by 15%. What went wrong, or is he seriously disagreeing with the Office for National Statistics?
What this—[Interruption.] The hon. Member for Islwyn (Chris Evans) should pipe down. What this Government recognise is that infrastructure relies on both public and private sector investment. The Labour party seems to have forgotten that the private sector is involved in delivering infrastructure. Total infrastructure investment in this country is higher in this Parliament than it was in the last.
T9. Individuals, households and businesses in my constituency must live within their means. Does the Chief Secretary agree that that is exactly what Governments need to do and that one of the reasons for our current budget deficit is the fact that the previous Government did not run a surplus in the good years? (901546)
I wholeheartedly agree with my hon. Friend that Governments must live within their means. It is because the previous Labour Government did not do so that we have had to make so many difficult decisions to get this country back on the right track, which is what we are doing.
Her Majesty’s Exchequer and the Republic of Ireland’s Revenue services lose hundreds of millions of pounds every year as a result of fuel fraud. When will the Government, in partnership with the Republic of Ireland, implement a new fuel marker to frustrate the criminals engaged in that theft?
The hon. Gentleman will know that we have been working hard on that. I recently visited Northern Ireland to see for myself the impact that a new fuel marker would have on the illicit trade. The rebate of fuel marker group has completed its analysis and made its recommendations, and the respective revenue authorities expect to make an announcement shortly. I shall ensure that he is kept up to date.
T10. Trojans sports club in my constituency is a brilliant example of a multi-sports club that encourages participation in a wide range of sports. What steps is my hon. Friend taking to help multi-sports clubs, which sometimes feel disadvantaged compared with single-sports clubs? (901547)
The Government want to support all sports clubs and encourage as many people as possible to participate in grass-roots sports, which is why we recently announced changes to the community amateur sports clubs regime that we hope will benefit up to 40,000 sports clubs in this country. I hope that the club in my hon. Friend’s constituency will take advantage of that. One of the best things we have done is extend corporate gift aid so that local businesses that donate to sports clubs will be able to offset their donations against their corporation tax bill, which I hope will make a real difference to their income.
I ask the Chief Secretary to ponder the fact that when I talk with my constituents, the thing they always talk about first is, “Housing, housing, housing.” When are we going to give young people, and increasingly older people, the chance that many of us in this House have had to get their own homes, because we are not building enough houses? He knows that is true—get on with it.
In many ways I agree with the hon. Gentleman. My constituents say exactly the same thing to me. That is why we are reforming the planning system to enable housing to be built more quickly, why we are increasing substantially the number of social homes in this country, compared with his party’s lamentable record, and why we have introduced the Help to Buy scheme to help people who cannot afford a large deposit to get on the housing ladder, all of which is leading to new houses being built in this country.
Narrow measures of money show that there has been no significant growth in the money supply. However, broader measures, such as the Divisia money measure, show that there has been a significant and sharp increase since late 2011. Does that concern the Treasury, and can my hon. Friend assure the House that the monetary authorities are not cooking up yet another credit-induced boom?
My hon. Friend is well versed in these matters and makes a significant contribution to the debate on monetary policy. He will know, therefore, that monetary policy is determined by the independent Bank of England, but I will ensure that Governor Carney is made aware of his concerns.
The World Bank and the independent TEEB—the Economics of Ecosystems and Biodiversity—report both state that 7% of global GDP could be lost by the devaluation of natural capital by 2050. Will the Government investigate what percentage of UK GDP is being lost through the depletion of natural capital?
The hon. Gentleman makes an incredibly important point. We in the Treasury and this Government have been examining the issue of natural capital, which we have taken forward in a way that previous Governments have not. I will certainly get the Minister responsible to reply in more detail on the specific point that the hon. Gentleman raises, because it is very important.
In the autumn statement, in addition to very welcome changes to tax and spending in relation to housing, the Government announced a proposal to look at local authorities’ opportunities to develop much more public sector housing. How soon will that initiative see the light of day?
I am grateful to my right hon. Friend, who has been a doughty campaigner on these issues for many years. I am sure that he welcomes the increase in housing revenue account headroom for which local authorities will be able to bid to build more houses. We have also undertaken to carry out a wider review of this issue, and I will set out the terms and the process for that in the coming weeks.