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Topical Questions

Volume 747: debated on Tuesday 19 March 2024

With your permission, Mr Speaker, I would like to update the House on living standards in the UK. The most recent data suggest that despite a tough couple of years caused by the pandemic and the energy crisis, living standards will return to their pre-covid peak next year: a full two years earlier than originally predicted by the OBR. They have risen by £1,700 a household in real terms since 2010, and this year’s cut in national insurance will increase living standards by 1%. In other words, to coin a phrase, now is not the time to go back to square one.

Given that the Prime Minister has been forced to abandon his plans for an election on 2 May and could soon be facing a leadership challenge, does the Chancellor of the Exchequer believe that his Budget landed well with the public or even his colleagues on the Government Benches?

I say very simply to the hon. Gentleman, who used to be an hon. Friend, that the Budget will mean that the UK economy will grow faster than that of France, Germany, Italy or Japan in the next five years. That is doing the right thing for the country.

T3. I would like to thank the Minister for the opportunity to meet UK Finance yesterday, which told me and other MPs that the industry plans to roll out 225 banking hubs in the next 18 months. Given that my constituency has lost every single bank branch over the last few years, will the Minister help me to make sure that Leigh-on-Sea, which has 250 retailers, will get one of those 225 banking hubs? (902080)

I thank my hon. Friend for her question. First, it is important to note her consistent championing of this issue for her constituents, for which she deserves huge commendation. To her precise question, it is important that industry, not the Government, makes decisions about bank branches or banking hubs, but she has made her case very ably. I urge her to work with Cash Access UK and LINK to ensure that she has the best chance of securing one of those new 225 banking hubs, as outlined by the industry, in her constituency.

After the Budget, the Chancellor wrote to Conservative party members telling them that the Government planned to abolish national insurance. The Economic Secretary said that “national insurance will vanish”, and the Prime Minister said it was his “ambition” to abolish it. Will the Chancellor confirm whether he asked the Office for Budget Responsibility to cost the Government’s unfunded plan to abolish national insurance contributions?

I am very glad that the right hon. Lady asks about national insurance cuts, because first she supported them, then she abstained in the Lobby, and now she appears to be against them—like the bankers’ bonus tax, which she was strongly in favour of and then strongly against; like £28 billion of borrowing, which she was strongly in favour of and then strongly against. Is not the actual truth that, where Labour should have an economic policy, there is just a black hole filled with platitudes?

The Chancellor did not even attempt to answer the question. The chair of the OBR told the Treasury Committee the week after the Budget:

“It was not a measure given to us to cost”.

Even the Chancellor’s predecessor, the right hon. Member for Spelthorne (Kwasi Kwarteng), who was sacked for his own kamikaze Budget, said, “If you’re going to reduce taxes, you have to show at least partially where the money’s going to come from.” So I ask the Chancellor: where will the money come from? Will it come from cuts to the NHS, the state pension and public services? Will it come from increasing taxes, including for pensioners? Or will it come from increasing borrowing? Which one, Chancellor?

Even Torsten Bell from the left-leaning Resolution Foundation said that the right hon. Lady’s argument that this was a mini Budget-style black hole was nonsense, because we specifically said that we would not fund national insurance cuts from increasing borrowing or cutting spending on public services. I gently ask her, if she wants to put on the mantle of fiscal rectitude, where is Labour going to find literally billions of pounds to fund unfunded spending pledges, from grid decarbon-isation to NHS waiting lists? We all know what that will lead to: higher taxes, like under every Labour Government in history.

T4. St Mary’s in Paddington is a much-loved, much-used hospital in my constituency. Although it was taken off the list of 40 new hospitals to be redeveloped, I am delighted to be working with my hon. Friend the Member for Kensington (Felicity Buchan) and the Minister in the Lords responsible for hospitals to make a case with the trust to ensure that it is redeveloped. Could the Chief Secretary to the Treasury please update the House on the timeframe for making available Government funding so that we can submit the planning business case for the redevelopment? (902082)

I commend my hon. Friend and my hon. Friend the Member for Kensington (Felicity Buchan) on their great work on this project. There appears to be a compelling case, and I know that the programme team at the Department of Health and Social Care is looking closely at the proposal.

T2. The Fife whisky festival took place in Cupar earlier this month, and was a great success. The industry welcomes the freeze in alcohol duty, but notes that it is only for six months. When will the Government provide the longer term consistency that the industry needs? (902079)

Our support for the Scotch Whisky Association is long-standing, and it was a pleasure to meet its representatives recently. We have frozen or cut duty for Scottish whisky in fiscal events going back many years. We are representing the Scotch Whisky Association in trade agreements, and that support will endure long into the future.

T5. In response to the spring Budget, I have heard from constituents who feel that they may have been forgotten. Under the Conservatives, the number of pensioners living in absolute poverty has been slashed by 200,000 across the country, and we have protected the triple lock, but could my right hon. Friend please remind me of all the steps that his Department is taking to support Hartlepool’s pensioners, so that I can tell them on the doorsteps this weekend? (902083)

I would be delighted to do that. The independent Resolution Foundation said that, because of measures that this Government have taken, pensioners are £1,000 better off in real terms than in 2010. We did two things specifically in the Budget: we put £6 billion into the NHS, which is used more by pensioners than anyone else; and we backed workers’ tax cuts to support growth in the economy, which means that we can continue to fund the triple lock for many years to come.

T6. One of my constituents wrote to me last week about her son Fred. He has Down’s syndrome and severe learning disabilities, is profoundly deaf and has an autism diagnosis. His parents and grandparents did the right thing and put money into a child trust fund for him. Fred will be 18 next month, but he lacks the capacity to access his money and there is no easy way for his parents to do so. Will the Chancellor work with colleagues in the Department for Work and Pensions and the Ministry of Justice to unlock the money for Fred and an estimated 80,000 disabled young people? (902084)

I am happy to meet the hon. Member to discuss the precise circumstances of his constituent’s case. In general terms, it is a priority for us to ensure that people get access to that money if it is due to them.

Did the Chancellor see an article yesterday in which the independent director of the Institute for Fiscal Studies confirmed that the average earner in the UK now has the lowest effective personal tax rate since 1975—lower than in America, France, Germany or any G7 country? Someone on £35,000—the average earnings for those working full time—faces an income tax and national insurance bill of nearly £2,000 less than they would have done on the same real earnings back in 2010. Does the Chancellor agree that now he has changed the rules on residence and domicile, the Opposition’s unfunded spending plans could lead to higher taxes—

Order. These are topical questions, and I want to get to the Members who have not yet been called.

I thank my hon. Friend for her excellent question. She is right that it is not just the lowest effective tax rate for someone on average earnings since 1975, but the lowest headline tax rate and the lowest tax rate in the G7. That is the fundamental divide in British politics: taxes have gone up, and on the Government Benches we do not think that we have to accept the status quo; on the Opposition Benches they do. Why is that? Because lower taxes mean higher growth.

T7. A recent survey from the Debt Justice campaign has shown that 13% of adults have missed three or more bill or credit payments in the past six months, and 6.7 million people are now in financial difficulty. Does the Chancellor accept that for millions of people, getting from one end of the month to the next under the Tories is a nightmarish struggle, and that people feel worse off because they are worse off? (902085)

May I gently correct the hon. Lady? As I said, living standards have risen by £1,700 per household since 2010, and the number of people in absolute poverty is down by 1.7 million. She is right to talk about the debt pressures that people face, which is why in the Budget we abolished the £90 fee for debt relief orders, having talked to Citizens Advice.

The proposed changes to wine duty will add huge costs and complexity to business. Further to my Westminster Hall debate, will my hon. Friend meet me and representatives of wine businesses to hear their concerns, and make permanent the easement that is due to end on 1 February next year?

My hon. Friend is talking about the largest and most significant reform of our alcohol duty system in 140 years. We are making it more simple by saying: the stronger the alcohol by volume, the more duty paid. We introduced the wine easement to give the wine industry two years to prepare for the changes. I continue to engage with the industry, and I will continue to engage with him.

T8. Two years ago, P&O Ferries sacked 786 workers and replaced them with agency staff paid less than the minimum wage. After that fiasco, the Government promised to review all contracts with the company. Why is it that, since then, the Government have spent £900,000 directly with P&O Ferries? Why are the Conservatives so comfortable spending taxpayers’ money on rewarding the appalling treatment of working people? (902086)

Let me say to the hon. Lady, who I very much enjoyed working with on the Select Committee, that our record is 800 more people in work for every single day of Conservative government since 2010. What will wreck that is Labour’s new deal for workers, which the president of the CBI says will destroy the job-creating machine that the UK has become.

I commend the Treasury for good fiscal policies that have resulted in inflation falling significantly since the pandemic. When might we see a commensurate fall in interest rates?

I am very sorry to disappoint my hon. Friend, but Chancellors never comment on decisions made by the Bank of England on interest rates. What I can say is that the Office for Budget Responsibility predicted at the Budget that inflation would fall to around target in the next few months. That gives the best possible prospect of interest rates starting to fall.

Last night on BBC’s “Newsnight”, it was clear that the needs of Wales, in particular on health, are not met in the UK. When has the UK Government ever given England Barnett consequentials based on needs in Wales, Scotland or Northern Ireland? Surely the model of spending under which the Government in England decides for England, and everyone else gets a consequential of that, must end. Nordic countries do not calculate spend as a percentage of their neighbours’ spend. Why is the spending of Scotland, Wales and Northern Ireland dependent on what England decides to spend?

The Barnett consequentials formula is long established. It gives a clear framework, through which we can understand spending in the devolved nations. The hon. Gentleman will know that it means higher per-person funding in each of the devolved nations than in England.

I am delighted that my right hon. Friend the Chancellor is seeking to make the tax system more family friendly, including by collecting household data in the years ahead, but being family friendly includes looking after the family home. Sweden abolished inheritance tax in 2004. The result was a boom in entrepreneurship, economic growth and higher tax revenues. Will he, or one of the excellent ministerial team, meet me to discuss that further?

I thank my right hon. Friend for his advocacy in support of families. We have had conversations, and I know that he very much welcomes the changes to the high-income child benefit charge and child benefit. We always keep taxes under review, and I am always delighted to meet him.

Does the Chancellor accept that he has caused a great deal of anxiety and further distrust among those who have been infected and affected by the contaminated blood scandal by not making any provision in his Budget for compensation, although the recommendations for compensation were made to the Government last April?

I gently say to the right hon. Lady that I stand by every word I said when I gave evidence, twice, to the infected blood inquiry. The Government have an absolute moral responsibility, not just to pay the compensation owed, but to pay it as speedily as possible.

I would like to join the Economic Secretary to the Treasury and my hon. Friend the Member for Southend West (Anna Firth) in discussing the closure of banks. Barclays bank, in particular, is both shameful and shameless in this regard. Does my hon. Friend agree that we need full transparency on the decisions made by Link and the Financial Conduct Authority? Something we learned yesterday that may be of interest to those in Chorley, Mr Speaker, is that the criteria take into consideration only the town plus areas within a 1 km circumference. That is not how the rural economy works. Will the Economic Secretary work with me to ensure that the criteria take into account the wider economy?

My right hon. Friend is another good example of a Member who is an excellent champion for her constituents, on this issue and so many others. As for her specific point, it is right for the industry to work out how it will increase provision and adapt the criteria for rural areas, but I will work with her to ensure that the banking hubs are rolled out in an equitable way, to rural as well as more urban areas.