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Topical Questions

Volume 714: debated on Tuesday 17 May 2022

First, I wish the Financial Secretary to the Treasury, my right hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), a very special and very happy birthday.

The Government of course appreciate that global inflationary forces are currently making life difficult for families, which is why we have brought forward, as we have heard, £22 billion-worth of support this year to help those in work and the most vulnerable in our society. We stand ready to do more as the situation evolves. That support is part of a broad plan that will grow our economy, encourage investment and create more skilled and high-wage jobs. That is this Government’s priority.

With so much affluence in our country, poverty is a political choice—the choice of the Chancellor and his Government. In York this week, energy companies are cutting off people’s energy supply, landlords are evicting people, budgets do not balance, poor mental health is spiralling and fear is gripping people on low wages, ill and disabled people and the elderly. That is the Chancellor’s choice. Why will he not increase social security payments? Such payments should pay, not punish, and keep people safe and secure.

The track record of this Government and previous Conservative Governments is very strong on reducing the number of people in poverty, because that is of course something that we want to achieve. On what is without question the No. 1 challenge that families currently face—energy bills—we have brought forward £9 billion-worth of support; many people in the hon. Lady’s constituency will have already benefited from £150 of that, and there is £200 more to come. Some of the actions of energy companies that the hon. Lady mentioned do not sound appropriate and I would be happy to look into the specific cases.

T3. On new year’s eve, my constituent Jamie Rees suffered a cardiac arrest and died, quite simply because the nearest defibrillator was not available—it was locked up in a school building at the time. In his memory, Jamie’s mum, Naomi Rees-Issitt, has set up a JustGiving page called “OurJay” to provide externally mounted defibrillators in and around Rugby, but she points out, quite reasonably, that it should not be left to grieving families to provide them and there should not be a postcode lottery in their availability. What funding can the Government provide to make more defibrillators available? (900077)

I thank my hon. Friend for his question and extend my heartfelt condolences to Naomi for the loss of her son. My hon. Friend may be interested to know that NHS England and NHS Improvement, along with the British Heart Foundation, Resuscitation Council UK and the Association of Ambulance Chief Executives, have developed the Circuit, which is a national defibrillator network that will register defibrillators in the UK and provide an overview of where they can be found. I know that the Chancellor and the Prime Minister are interested in this issue, as I met the Prime Minister with my hon. Friend the Member for Rushcliffe (Ruth Edwards). It is indeed an important issue.

At the spring statement, the Chancellor confirmed that the Conservative Government’s rise in national insurance—a tax increase on working people and the businesses that employ them—will go ahead. Since then, retail sales are falling, consumer confidence is tanking and GDP is falling. We are the only G7 country that is increasing taxes on working people in the middle of a cost of living crisis. National insurance is the wrong tax increase at the wrong time. Does the Chancellor still think that his tax rises on working people are the right approach?

The hon. Lady fails to mention what is about to happen, which is the biggest tax cut for working people that we have seen in decades: the rise in the national insurance threshold to £12,500. That means that 30 million people in work will receive, on average, a £330 tax cut and, contrary to what she has just said, it ensures that 70% of people in work will pay less tax this year than they paid last year.

The Chancellor expects people to thank him for increasing their taxes only then to decrease them a couple of months later. The truth is that the Chancellor should be asking those with the broadest shoulders to pay a bit more in tax—such as the North sea oil and gas companies that are making record profits—yet he chooses not to tax them. Will the Chancellor explain today why he will not close the outdated, unfair and unjustifiable tax loophole that sees 70,000 people benefit from non-dom tax status?

The hon. Lady says that we should be asking those with the broadest shoulders to pay, but that is exactly what we are doing. The NHS and social care levy means that those with the broadest shoulders, the top 15% of earners, will pay more than half the money raised from that levy. I think that she believes that that levy should be scrapped. It is an entirely progressive way to raise money to fund the tackling of NHS backlogs, for which there is, I know, huge support in this House. The Government are keen to get on and fix the pressing challenges of this country. We will fund those things in a responsible and progressive way, and that is exactly the plan that we have put in place.

T8. I am not sure whether there is much point in indulging in a blame game against the Bank of England or the Treasury, given that we are facing the unprecedented attack of a global pandemic and war in Europe. The fact remains that conservative Governments who have increased taxation during recession—such as those led by the first George Bush or John Major—go down to defeat. More importantly, millions of families are now desperately worried about how they will pay their bills. Will the Chancellor now say that his absolute priority, coming up to the Budget, is to reduce the overall tax burden on working families? (900082)

I can give my right hon. Friend that assurance. That is our priority. We started last autumn by cutting the tax rate for those on the lowest incomes and universal credit. We carried that on in the spring statement by delivering a tax cut for those on lower-middle incomes by raising the primary threshold, and our priority is to keep cutting taxes for those in work, including by cutting income tax, as soon as the public finances allow.

Inflation is running out of control, growth is flatlining, and food and energy costs are spiralling. The Governor of the Bank of England yesterday was warning of “apocalyptic” food prices. James Withers of Scotland Food & Drink says that Brexit has made nothing better and a number of things worse. People and businesses have heard absolutely nothing from this Chancellor today on how he will tackle this urgent cost of living crisis—nothing at all. Will he bring forward an emergency Budget without further delay, as the British Chambers of Commerce are asking?

The hon. Lady talks about Brexit. We have already heard about the difference that Brexit is making, with a freeport in Teesside, which, because of Brexit, we have been able to create—and not just there, but in Leith, Immingham, Southampton and other places too. As we have heard today, those innovations are bringing jobs and investment to parts of our country that need to see it. That is what this Government promised to do, and that is what this Government are delivering.

T9. I have 14 vineyards in my constituency of Wealden. This is a growing industry in rural areas. I am grateful to the Exchequer Secretary to the Treasury for meeting me recently, but may I urge her and the Chancellor to meet my vineyard owners, face to face, to hear their anxieties over the Treasury’s plans to hike tax on wine, which will create more red tape by increasing the number of rates of duty from three to 27? This industry creates thousands of jobs and it needs nurturing, so may I please propose a visit to one of my vineyards in Wealden? (900083)

My hon. Friend tempts me with a visit to a vineyard in her constituency. She has already made the argument very strongly—when I recently met the wine and spirits all-party group. Representing a wine-producing constituency, she will appreciate, I am sure, our announcement of the reduction in the duty rate for sparkling wine. As I said to my right hon. Friend the Member for Ludlow (Philip Dunne) earlier, I am speaking to businesses in the sector to make sure that we get right the practicalities of introducing these reforms.

T2. Speaking of broad shoulders, I am interested to know what makes the Chancellor, one of the richest men in the Commons and, indeed, in the UK, in any way qualified to make policy or to help the poorest people in my constituency who, as a result of the Tory cost of living crisis, have to choose between heating and eating, which he and others like him will never have to face? (900076)

I urge the British people to judge me by my actions. Over the past two years, the record of this Conservative Government stands for itself. We were there to help this country through the crisis and we are there to help them today.

Naturally, there has been criticism of the Bank of England, given the level of inflation and its inflation target, but among that criticism there have been reports that some in government, including perhaps one member of the Cabinet, have been suggesting that the independence of the Bank of England should be removed. Does my right hon. Friend agree that it is essential that our central bank is independent in order to maintain the credibility and integrity of our monetary policy? Will he give a categorical assurance to the House that there are no plans of any kind to restrain the independence of our central bank?

I thank my right hon. Friend the Chair of the Select Committee for his important intervention. I agree with him wholeheartedly. While we face challenges at the moment, the record of 25 years of central bank independence speaks for itself, with an average inflation rate of exactly 2%. I know all colleagues will want to make sure that we return to that as swiftly as possible, and I can assure him that that is both my and the Governor’s ambition.

T4. Labour has uncovered £3.5 billion-worth of covid contracts that were awarded to Tory-linked firms. Last week, Dominic Cummings said that bungs were paid, with no civil service oversight, to newspapers. Why on earth does the Chancellor think the British public should trust him with the public finances when he manages the economy with the Prime Minister’s mantra, “One rule for us, one rule for everyone else”? (900078)

Obviously we are all clear that all fraud against the Exchequer is an outrage and totally wrong. That is why we have established a £100 million taxpayer protection taskforce, which is precisely determined to focus on that. We also have a new fraud function within Government, which is heavily focused on making sure that we address those issues. We are determined to make sure that, where there has been wrongdoing, we crack down on it and recover the money to the maximum extent that we can. Obviously, when introducing these schemes, we had to balance the imperative of speed of delivery against the risks, and I think we struck the appropriate balance at that time.

There was widespread welcome for last week’s announcement that the Government will introduce a financial services and markets Bill. Can my right hon. Friend confirm that the intention of that Bill will be to ensure that future regulation is proportionate, that the regulator is publicly accountable and that we intend to maintain the international competitiveness of this great industry?

Absolutely I can. I note the observations of some economists yesterday; we will have an obligation on regulators to take account of competitiveness and of where we are in the global context.

T5. Compared with April 2020, our energy bills are now 75% more expensive and petrol is 50% more expensive. If the Chancellor thought an extra £20 a week was needed for universal credit two years ago, surely he agrees it must be reinstated as a matter of urgency? (900079)

Of course the Government recognise that energy bills are the single biggest challenge households face. That is why we have provided £9 billion-worth of support, including £150 for English households in the most recent month, with £200 more in support to come later this year.

I believe the Conservatives are and ought to be the party of hard-working families. According to a report released yesterday by the Centre for Policy Studies, reducing the cost of childcare can increase GDP by 10% and increase access to opportunities for women in the workforce. Does my right hon. Friend the Chancellor agree that helping hard-working families with childcare costs is good for the economy and that it is the Conservative thing to do?

I completely agree with my hon. Friend. In fact, we do support families with the cost of childcare. One thing we do is to provide families with access to tax-free childcare, which means they can get a 20% reduction on the cost of childcare, up to a cap of £2,000 a year.

T6. The Foreign Secretary is about to make a statement regarding unilateral changes to the Northern Ireland protocol that risk unpicking the trade and co-operation agreement and a trade war with the European Union. I understand that the Chancellor had been a voice for restraint and caution in Cabinet. Why has his view not prevailed? (900080)

I do not want to foreshadow what the Foreign Secretary may or may not say in her statement, but I assure the hon. Gentleman that with regard to the protocol, the Government’s overriding priority has been and continues to be preserving peace and stability in Northern Ireland.

Can my right hon. Friend the Chancellor confirm that a worker working full time, or 40 hours a week, on the living wage is now £1,700 a year better off in real terms than they were in 2010 and that, after July, that will rise to almost £2,000, with everybody earning less than £36,000 a year better off under this Conservative Government this year?

My hon. Friend is absolutely right, and I thank him for his support in championing policies that support his hard-working constituents. This Government will always be on the side of people on lower and middle incomes who are working hard to provide a better life for their families, and we will keep delivering for them.

T7. The Chancellor called the reduction in fuel duty in the spring statement “a tax cut…for hard-working families.”—[Official Report, 23 March 2022; Vol. 711, c. 338.]Why are those families paying more for a litre of petrol today than they were then? (900081)

Sadly, nothing we can do from this Dispatch Box can change global oil prices, but we can reduce the taxes that we are responsible for. That tax cut, together with the freeze, is worth, this year, about £100 for a typical family driver, £200 or more for a van driver, and almost £1,500 for an HGV driver.

T10. It is not only households that are impacted by the cost of living emergency; businesses in North Shropshire are facing unimaginable and unmanageable increases in their fuel bills and other input costs, and this has been compounded by the national insurance tax rise imposed by this Government and paid by employers. Does the Chancellor agree that the increase in national insurance for employers should be scrapped to keep our small businesses in business? (900084)

We are absolutely determined to reduce the burden of tax facing both businesses and individuals. We have already heard during the course of these exchanges about the action we have taken, for example, on the employment allowance and on business rates, which is precisely designed to help businesses succeed in what is obviously a challenging environment.

In my constituency, one food bank has provided 1,269 emergency food parcels in four months, 40% of which have gone to children. Food banks are now reporting shortages as people cut back to make ends meet. This is no longer about living; it is about surviving. So will the Government end their heartless policy and immediately scrap the national insurance hike that they have introduced during the cost of living crisis?

Whether it is expansion of the school breakfast club programme, the holiday activities and food programme or healthy start vouchers, this Government are supporting families in meeting the costs of food, particularly at this difficult time. The hon. Gentleman rightly talks about children growing up in poverty. The best way to support those children is to ensure that they do not grow up in a household where no one is working, and I am proud that, thanks to the actions of Conservative Governments, half a million fewer children are now growing up in a workless household.

One group of companies doing well out of the cost of living crisis is the buy now, pay later lenders, with Klarna now valued higher than Barclays or Lloyds. One in 12 of their customers are using buy now, pay later credit to pay for toiletries and basic food products. Will the Chancellor, who was boasting about our consumer credit profile earlier, name the date when our constituents can finally make good on the promise that was made in this House over 18 months ago to give people protection from these legal loan sharks and access to the Financial Ombudsman Service?

My experience over the past four years or so has proved without doubt that truly levelling up South Yorkshire and the wider north will require transformative levels of investment. Does the Chief Secretary agree, and if so, does he truly believe that the investment is there to meet the huge challenge that we undoubtedly face?

I pay tribute to the hon. Gentleman for his service as the Mayor of South Yorkshire; he did an outstanding job. It is very important that we recognise that we are going to need more great Mayors from across this House and from outside Parliament to help to deliver opportunity in the region. We are absolutely clear that our programme of investment, through a record spending review, is designed to make sure that levelling up moves from blueprint to reality over the course of the years ahead.

This Government have completely failed on growth in the economy, with the IMF, taking into account all the current Government proposals, currently forecasting that the UK will have the slowest growth in the G7 this year. The Minister will know that putting money into the pockets of the least well-off not only relieves their hardship but puts it into the local economy as they have to spend it, of necessity, back into the local economy, thus stimulating growth. Instead of choking off growth through the £20 universal credit cut, the national insurance hike and the refusal to use a windfall to relieve the hardship of these families, what new, additional measures do the Government propose to help hard-pressed families and to improve that IMF forecast on growth?

The hon. Lady cherry-picks the statistics. Last year we were the fastest-growing economy in the G7 and this year the second fastest. After the other countries have caught us up next year, we will return to being the second-fastest and then the fastest-growing economy. There is more come from this Government to support growth. In the autumn we will cut taxes on business investment and innovation, which we all know is the best way to drive up productivity and growth.

Ministers spoke earlier about using infrastructure to level up, and they are absolutely right—we need to link local communities to where the jobs are, so transport matters. Why, then, is there a lack of joined-up government? The Treasury is paying billions towards High Speed 2 coming to Manchester, yet the Bill before Parliament will sever the Metrolink line through Audenshaw in my constituency to Manchester, meaning that the tram will not be able to run for two years. That is not levelling up, is it?

What is levelling up is making sure that we have a colossal programme of transport investment designed to ensure that the connections both between regions and within regions are as strong as they can be, and I refer to the £96 billion integrated rail plan, which sits at the heart of our ambition in this space. Clearly the specifics of the proposal that the hon. Gentleman mentions are for Transport Ministers and the Mayor of Greater Manchester to discuss.