(2 years, 9 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Kim Johnson (Liverpool, Riverside) (Lab)
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
The Government, of course, recognise that inflation is rising and are closely monitoring the situation together with the Bank of England. We are also putting in place policies to help families meet the rising cost of living, such as freezing duties, cutting the tax rate in universal credit and increasing the national living wage. Last month I announced to this House a £9 billion package of support to help households with rising energy bills.
Kim Johnson
The question was about what assessment has been made. The Resolution Foundation predicts that inflation will rise above 8% but benefits will increase by only 3%. Liverpool has some of the most deprived communities in this country, with 33% of children in my Riverside constituency suffering poverty. Does the Chancellor believe that now is not the time to increase national insurance contributions while the cost of living is increasing, forcing people into poverty at the highest level since the 1970s? Will he commit to putting measures in place in the spring statement?
Rishi Sunak
The hon. Lady talks about children in poverty, and I am pleased that there are now 300,000 fewer children in poverty than in 2010 thanks to the actions of Conservative-led Governments. We all know that the best way to ensure the children do not grow up in poverty is to ensure that they grow up in a house where people work, and that is why I was delighted this morning to learn that there are record numbers of people on payroll.
Gerald Jones
Citizens Advice has told me that one in six people in my constituency of Merthyr Tydfil and Rhymney are unable to pay their energy bills right now, and that is before they spike next month and before the Chancellor’s national insurance hike. Some 86% of people said that they did not think that the October energy loan scheme would make a difference in helping to pay their bills. The conflict in Ukraine will inevitably lead to a further surge in energy prices, so if he will not accept Labour’s suggestion of a windfall tax on oil and gas producers, what exactly will the Chancellor do now to relieve the pressures on people in my constituency and across the country?
Rishi Sunak
We are putting in place support to help households meet the rising cost of energy bills, and £9 billion of support will help to ensure that four out of five households in England will receive £150 starting this April, with a further £200 of support towards the autumn. Of course, councils have been given extra money for discretionary funding to help households in need as well.
Ms Rimmer
Since the Chancellor announced his household loan scheme in response to the energy crisis as well as a huge rise in national insurance, the world has changed. Other Departments have adapted to the Russian invasion of Ukraine. When will the Treasury?
Rishi Sunak
With regard to the Russian invasion of Ukraine, the Treasury has been hard at work with our international partners to put in place the most comprehensive set of economic sanctions that this country has ever had and that Russia has ever experienced. I am very proud of the job we have done.
Steve McCabe
If the Chancellor had appreciated last autumn the extent to which energy costs and other household bills would rise, would he still have advocated a national insurance rise?
Rishi Sunak
We have reacted to rising energy bills by putting in place £9 billion of support, which will get to households far faster than the proposals put forward by the Opposition, with the £150 reaching four out of five households just this April when the price cap goes up. It is also worth bearing it in mind that, because of the price cap, households will be protected from further increases all the way through to the autumn.
Jake Berry (Rossendale and Darwen) (Con)
The cost of fuel is now an eye-watering £2 a litre in some areas, which has led to a huge VAT windfall for the Treasury. When the Chancellor thinks about his spring statement, will he look not just at cutting fuel duty but at mileage recovery rates? They have been at 45p a mile for more than a decade. Now is the time to put them up to 60p at least.
Rishi Sunak
I am grateful to my right hon. Friend for his suggestions, and of course I will bear them in mind. He is right about the rising cost of fuel at the pumps, although I am pleased to see that over the last few days, the price of Brent has fallen by about 25%, illustrating the volatility of the situation.
Fay Jones (Brecon and Radnorshire) (Con)
The cost of living is biting hard in Brecon and Radnorshire. Heating oil is eye-wateringly expensive and extremely hard to come by, while a local haulage firm in Llandrindod Wells is coughing up an extra £60,000 per month on diesel. It is wrong to assume that those who live in rural areas are wealthy enough to withstand these pressures, so can my right hon. Friend reassure my constituents that he has them in mind as he considers all the options available to him?
Rishi Sunak
I can give my hon. Friend that reassurance. Representing as I do a rural constituency like hers, I know the difficulty that our constituents are facing. That is why our £9 billion package of support for energy that I announced earlier is done by electricity meter, ensuring that those who are off the gas grid also benefit.
Mr Mark Harper (Forest of Dean) (Con)
The impact on energy prices of the Russian invasion of Ukraine and the sanctions will inevitably mean that Britain is poorer. There is nothing that we can do about that overall, but we can help to smooth the impact. I welcome the announcement this morning that there are 275,000 extra people on payroll. What more can the Chancellor do to improve companies’ ability to hire workers and to enable people to keep more of their own money; for example, through the reduction in the taper rate on universal credit?
Rishi Sunak
I am grateful to my right hon. Friend for his typically thoughtful question. He is absolutely right about the circumstances we face. The data this morning shows record numbers of people on payroll, and that is to be welcomed. Indeed, the unemployment rate is now back to the levels we saw before the pandemic, thanks to our plan for jobs. There are record vacancies, and we want to get people into work. The best way to do that is to give them the skills they need and cut taxes to increase incentives. That is exactly what this Government are doing, and I expect us to make more progress in the months ahead.
Harriett Baldwin (West Worcestershire) (Con)
With council tax being one of the biggest items in household budgets, could the Chancellor remind the House which party tends to be the best, in a local council, for setting council tax?
Rishi Sunak
My hon. Friend makes an excellent and timely point. She knows that I know that, in this country, if people want good local services delivered for the lowest possible council tax, they need to vote Conservative.
Mr Speaker
You should not make the Chancellor blush.
I call the shadow Minister, Pat McFadden.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The package on energy announced by the Chancellor last month has already been rendered obsolete by Russia’s invasion of Ukraine. Some estimates of average annual household energy bills suggest that there will be rises to £3,000 or even more from October. That is a ruinous figure for many of our constituents. Will the Chancellor revisit this support package in next week’s spring statement, and will he reconsider his refusal to fund help for hard-pressed households through a windfall tax on the enormous profits that oil and gas companies are making?
Rishi Sunak
It is worth bearing it in mind that, because of the price cap, households will be protected all the way through the autumn. We do not know what the price cap will be at that point. If the right hon. Gentleman knows, he is probably in the wrong line of business, and it would be good if he could tell the rest of us. Regarding a windfall tax, Conservative Members believe in getting more investment into the North sea and exploiting our domestic resources. The roundtable that my right hon. Friends the Chief Secretary to the Treasury, the Prime Minister and the Business Secretary hosted yesterday showed that there is enormous appetite to invest more in the UK. A windfall tax would put off that investment.
Mr McFadden
Of course, there are global factors driving up energy prices and inflation in many countries, but what singles out the UK is this Government’s decision to impose a tax rise on working people right when the impact of rising energy bills is hitting people the hardest. Why are the Government so determined to make the cost of living crisis worse now with these tax rises, particularly when the Treasury is briefing anyone—including the Government’s own Back Benchers—who will listen that the Tory party is planning pre-election tax cuts?
Rishi Sunak
The right hon. Gentleman talks about exceptionalism with regard to policy. Part of the reason we are in this situation with energy prices is the decisions made by the previous Labour Government, in particular on nuclear energy, which we are now rapidly having to make up for. We are also committed to tackling the unprecedented backlogs in the NHS, getting the waiting lists down, and recovering from covid. Every single penny of the health and social care levy will go to the people’s No. 1 priority and, although things are difficult, I know that is what people want to happen.
Derek Thomas (St Ives) (Con)
I represent an area in Cornwall where a large number of people are on the state pension. I know, from conversations that I have had with the Chancellor, that he is particularly concerned about that demographic. Given the critical rise in the cost of living, I wonder whether one of the easier routes to address it would be to reinstate the triple lock for next year.
Rishi Sunak
My hon. Friend is right to highlight pensioners and to support them in the way that he does. He will know that we made a decision temporarily to move to a double lock this year because of the anomaly in the reported earnings, which would have meant a very large rise statistically that would not have been justified or fair in the circumstances. That said, I am pleased to say that pensions are now at their highest level relative to earnings in over three decades because of the Government’s policy on the triple lock, and we continue to be the party that will support those who need our help.
Alison Thewliss (Glasgow Central) (SNP)
Sanctions against Putin’s regime are absolutely necessary, but they will add an extra layer of economic harm on top of the existing Tory cost of living crisis. The Chancellor must use the upcoming spring statement to deliver an emergency package of support to householders and businesses, whose costs have spiralled out of control. Will he turn his buy now, pay later energy loan into a grant, reinstate the universal credit uplift, increase other benefits with inflation and scrap the VAT and national insurance hike that will damage so many people?
Rishi Sunak
What we are doing is tackling the cost of energy. Unlike the hon. Lady’s party, we believe in the future of the North sea and we are investing in it. We want to make sure that we promote the jobs that are there. On upcoming support for energy costs, the Scottish Government have plenty of powers on welfare and tax, and if they think that they can make a difference, they should use them.
Andy Carter (Warrington South) (Con)
Cherilyn Mackrory (Truro and Falmouth) (Con)
Henry Smith (Crawley) (Con)
Dr James Davies (Vale of Clwyd) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
Some 130,000 young people across Great Britain have benefited from the kickstart scheme so far, including in my hon. Friends’ constituencies. That is lower than the 250,000 jobs that the scheme could have funded, but the scheme was designed at a time when unemployment was expected to peak at 12%. The reality is that, thanks to the intervention by my right hon. Friend the Chancellor, the economy has recovered better than expected and unemployment peaked at 5.2% in 2020.
Andy Carter
I am grateful for that response. Last week, I went to visit Sigma, a great local business in Warrington South, which has employed nine people under kickstart, and that has made a massive difference. Can my right hon. Friend tell me what steps the Government are taking to help businesses retain young people as we approach the end of the six-month kickstart programme?
Mr Clarke
It is great to hear about my hon. Friend’s visit to Sigma, and I know that 180 kickstart jobs have been created in his constituency as of December. For those on universal credit who do not immediately continue into full-time unsubsidised work, support will continue to be available from the young person’s work coach to help them use their newly gained skills, and support will also be available from the wider DWP youth offer.
Cherilyn Mackrory
Last week I visited the jobcentre in Truro where they told me that kickstart has been a huge success. We have had around 620 kickstarters across Cornwall, providing urgently needed jobs for our young people. Given that the scheme will end this month, can my right hon. Friend expand on what the Department will do to support skills and apprenticeships, particularly for young people across Cornwall, so that we can be at the heart of the levelling-up agenda?
Mr Clarke
Spreading opportunity by levelling up our skills base is at the heart of our wider levelling-up White Paper—it is one of the core missions that it sets out. The Government will invest £3.8 billion in skills by 2024-25, which is equivalent to a cash increase of 42% compared with 2019-20. On apprenticeships, I am happy to say that last year more than 3,000 people started apprenticeships in my hon. Friend’s county of Cornwall. We want to see that work continue.
Henry Smith
Over recent months, many young people in Crawley have benefited from the kickstart scheme. In contrast to every Labour Government, which have all left office with unemployment higher than when they started, does my right hon. Friend agree that the way to recovery for our economy and the cost of living is the multi-billion pound plan for jobs that the Government are delivering?
Mr Clarke
My hon. Friend is right about the Government’s record on employment, just as he is right about the Labour party’s record on unemployment. To continue to boost employment, wages and living standards, he rightly references our plan for jobs, which is proving to be an enormous success. In total, the Department for Work and Pensions spend on labour market support will be more than £6 billion over the next three years.
Dr Davies
I recently visited the Dyserth Falls holiday park in my constituency, which is under renovation, to speak with some of the 40 members of the public who have been employed there under the kickstart scheme. Will my right hon. Friend join me in congratulating all those who have taken part in the scheme, especially those who have been given permanent jobs, and set out what ongoing support there will be for those who have completed their placements?
Mr Clarke
As my hon. Friend knows, I know Dyserth very well. In fact, I will be there the weekend after next. I join him in congratulating all those who have taken part in the kickstart scheme, especially those who have secured full-time jobs. Kickstart is, of course, only one part of the wider package of support for young people that is under way. The DWP’s youth offer, which runs until 2025 and is worth £60 million, includes a 13-week youth employment programme, supported youth hubs and, crucially, specialised youth employability coaches.
Alison McGovern (Wirral South) (Lab)
Just in case colleagues in the House did not quite hear the Chief Secretary, he admitted that kickstart has failed. It promised young people 250,000 jobs and got barely half of that. But it is worse than that. The National Audit Office said about kickstart that there was
“limited assurance over the quality of the work placements created by the scheme, or whether jobs created by employers would have existed anyway”.
So in relation to the failed kickstart scheme, what does the Chief Secretary make of the following economic expression: “dead weight loss”?
Mr Clarke
With respect to the hon. Lady, of whom I am a great admirer, that is an unfair characterisation of the success of the scheme. It clearly needs to be situated in the wider context. In fact, the British economy has performed much better than anyone expected when the scheme was set up. There are robust processes in place that make sure that we genuinely are adding additional value. So work coaches have to certify that the people on the scheme are eligible for it and would have been unlikely to find work without it. Employers need to demonstrate how the jobs created are additional. Finally, it is important to contrast this scheme with the last Labour Government’s future jobs fund, which reached its total far more slowly and was far less effective. This scheme has got 130,000 and rising young people into work. It has been a great success.
Peter Grant (Glenrothes) (SNP)
It is interesting that the Minister can call kickstart such a resounding success, given that last month the Public Accounts Committee said that the Department that runs the scheme does not know what success looks like because it launched the scheme without any idea as to what the success criteria would be. It also has no way of knowing whether the young people who are referred to kickstart jobs are the right young people and it is not properly evaluating the longer term support that employers give to those young people. Does the Minister agree with the PAC report, which was endorsed by a Committee consisting of a majority of Conservative MPs?
Mr Clarke
No, I do not agree with that report. It is an unfair characterisation of a response that was put in place at pace to meet an unprecedented crisis in our employment market. The wider success of our policy on youth employment is best measured by the fact that in January there were 500,000 more employees aged under 25 than there were in January 2021. The kickstart programme has played its full part in helping to make that possible.
Gareth Thomas (Harrow West) (Lab/Co-op)
Businesses in the steel industry are more likely to be able to support the kickstart scheme if the Government manage to get Donald Trump’s unfair tariffs of 25% on British steel exports lifted, as the Japanese and the EU have already achieved. Has the Chancellor spoken to the Chief Secretary about this issue, and if not why not?
Mr Clarke
The hon. Gentleman makes a very good point about tariffs. Obviously, the Government believe in free trade and it is something that we want to see happen too. As a Member of Parliament who represents a steel-making constituency, I am keenly aware of this as an issue. The Department for International Trade leads on the issue, and I know that the Secretary of State and her predecessor have had long and ongoing conversations with their American counterparts about getting those tariffs lifted.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
With the scheme failing to attract the numbers that were predicted by over 80,000, will the Minister outline what structure is in place to attract those who have lost out, to ensure that those young people have opportunities to find a life career? Will the new scheme be UK-wide?
Mr Clarke
Youth unemployment is lower today than it was pre-pandemic, and the wider success of the scheme has to be judged in the context that the worst-case scenario that we were looking to offset never came to pass because of the interventions that we made. If a scheme does not achieve the headline numbers that were anticipated at the time it was established because the wider economic performance of the country was so much better than anticipated, that is a success, not something to bemoan.
Carolyn Harris (Swansea East) (Lab)
The Exchequer Secretary to the Treasury (Helen Whately)
Gambling contributes over £3 billion per annum to the Exchequer. The Government keep gambling duties under regular review to ensure that the sector continues to pay its fair share. The Department for Digital, Culture, Media and Sport is reviewing the Gambling Act 2005, after which the Government will assess the impact of any reforms on the Exchequer.
Carolyn Harris
Analysis carried out by both NERA Economic Consulting and Landman Economics concluded that, given that online gambling is “labour intensive” and predominantly based offshore in avoidance of UK corporation tax, its net impact on the British economy is negative, particularly once the direct cost to Government, estimated by Public Health England to be £647 million, is factored in. Will the Government support the upcoming reviews of gambling regulation—the Minister said it is under active consideration—and welcome any moves to reduce gambling harm and the associated cost to society and the economy?
Helen Whately
I know that the hon. Lady is a committed campaigner on gambling as chair of the all-party parliamentary group on gambling related harm. Specific to her point about offshore gambling operators, I am sure that she knows that since 2014 gambling duties have been taxed on a “place of consumption” basis, so offshore operators pay taxes on profits related to UK gambling.
To the broader point of the gambling review, I spoke to the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Croydon South (Chris Philp), who is leading DCMS’s work on gambling, just yesterday, and I assure the hon. Lady that the Government stand ready to take action where there is evidence that vulnerable people, such as those suffering from gambling addictions, are being exploited by gambling operators.
Andrew Bridgen (North West Leicestershire) (Con)
The term “gambling” covers a broad spectrum of activities. Does the Minister share my concerns that over-zealous regulation of the gambling industry as a whole could lead to some damaging unintended consequences, such as driving vulnerable individuals to the black market, which is completely unregulated, loss of revenue to the Exchequer and damage to the greyhound and horse-racing industries, which employ lots of people?
Helen Whately
My hon. Friend makes an important point. There is the basic principle that people should in general be free to spend their money as they see fit. There are about 100,000 jobs in the gambling industry in this country. It is important to ensure that we protect people who are most vulnerable from exploitation, and I know that the gambling review I mentioned is looking carefully at the best way to do that.
Stephen Farry (North Down) (Alliance)
The Financial Secretary to the Treasury (Lucy Frazer)
Details of ministerial discussions are not normally disclosed. Treasury Ministers have meetings with a wide variety of organisations in the public and private sectors as part of the process of policy development. From April, universal credit and many other benefits will be uprated by 3.1%, the rate of the consumer prices index in September 2021. In addition, the Government are providing support worth over £20 billion across this financial year and next to help families with the cost of living.
Stephen Farry
Millions of families across the UK, both in and out of work, depend on universal credit and other benefits. As the Minister knows, the 3.1% uprate was set in September. We are now seeing inflation of over 7%. The Joseph Rowntree Foundation, the Trussell Trust and many other organisations highlight the real jeopardy that families are now facing. They have no plan B. Indeed, families are facing cuts in real terms of over £500 over the course of the year. Surely that decision has to be reassessed in the light of changing circumstances.
Lucy Frazer
CPI has been the default inflation measure for the Government’s statutory annual review of benefits since 2011, as the hon. Gentleman knows, but we are fully aware of the impact on households of the cost of living. That is why we are providing £20 billion of support, whether that is through £9 billion of support to help with rising energy bills or through universal credit. As he also knows, we have cut the taper rate so that families can keep an additional £1,000 annually in their pockets.
Nigel Mills (Amber Valley) (Con)
Does the Minister think that the uplift coming next month will be enough to get people all the way through next winter? If she recognises that there is a problem, will the Government consider bringing forward next April’s increase to this autumn, to give people a bit more money to help with their heating and food bills next winter?
Lucy Frazer
As my hon. Friend knows, we have introduced a range of measures to support families, both working and not working. The price of energy is now set until the autumn, and a significant amount of money is going in now and in the autumn.
Bill Esterson (Sefton Central) (Lab)
The Financial Secretary to the Treasury (Lucy Frazer)
Work is the best route out of poverty. We are investing more than £6 billion in labour market support over the next three years to help people to move into and progress in work. In addition, analysis published at the last autumn Budget shows that in 2024-25, tax, welfare and spending decision since the 2019 spending review will have benefited the poorest households the most as a percentage of income.
Bill Esterson
But real wages are falling by the largest amount since 2014, inflation is set to hit 8% and the energy price cap is going up. In the cause of fairness and sound economics, when will the Financial Secretary and her colleagues admit that it makes sense to use the record profits of North sea oil and gas to help ordinary people, who face a cost of living crisis?
Lucy Frazer
The hon. Gentleman knows from the statistics announced this morning that wages are up in real terms compared with pre-pandemic levels. In fact, unemployment is now almost back to pre-pandemic levels, and is lower than in Canada, France, Italy, Spain and Australia. On his specific question, the North sea oil industry already contributes additional taxes through a 40% rate, which is double the amount that other corporations pay.
Virginia Crosbie (Ynys Môn) (Con)
My constituency has one of the lowest rates of gross value added in the UK and is desperately in need of jobs and investment. The island is known as “energy island” because we have wind, waves, solar, tidal and—hopefully—nuclear. I was delighted to hear the Chancellor mention nuclear and the fact that he has committed to the £120 million future nuclear enabling fund, but will he also commit to publishing the criteria and bidding process, so we can move at pace in this vital sector?
Lucy Frazer
It is great to see the good work going on in my hon. Friend’s constituency. Of course, her question is for our right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, who I am sure is considering it carefully.
Nia Griffith (Llanelli) (Lab)
Lucy Allan (Telford) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
People are rightly angry that fraudsters stole from covid support schemes, as am I. When the schemes were launched, there was cross-party consensus that we needed speed to protect jobs, and because of our action unemployment peaked at 5.2%, not the 12% predicted at the start of the pandemic. We designed the schemes to prevent as much fraud as possible, and lenders stopped nearly £2.2 billion of potential fraud from the bounce back loan schemes. We continue to take action on multiple fronts to recover money that was claimed fraudulently.
Nia Griffith
It is not just a matter of fraud; it is a matter of incompetence as well. The National Audit Office has been scathing about the UK’s wasteful spending of £37 billion on private contractors to deliver the test and trace system in England, while we in Wales had a more efficient system through partnership with the Welsh Government and local councils. What guidance is the Chief Secretary giving Departments on how to avoid giving such wasteful contracts in the future? Does the guidance include considering, wherever practicable, the delivery of service contracts through public authorities, where any profit remains in the public purse?
Mr Clarke
We always continue to encourage best value, and this is at the heart of all Treasury documents on the use of public money. On the hon. Lady’s point about test and trace, it is very important to reaffirm that the great majority of the costs associated with this scheme were about testing as opposed to tracing, and it was only that scheme that allowed us to come through the enormous challenges of the period, particularly prior to the availability of the vaccine, in a way that allowed our society and our wider economy to keep going to the extent that they could.
Lucy Allan
My right hon. Friend the Chancellor has been incredibly agile in responding to exceptional crises. As he tackles the impact of Putin’s war on our economy, will the Minister take every measure to accelerate growth, including reducing taxes on fuel and energy?
Mr Clarke
As has been discussed earlier in this session, as my hon. Friend rightly highlights, the Government recognise that households do need support with the rising cost of energy. Indeed, the Chancellor has already provided support worth some £9.1 billion for the financial year 2022-23. On her wider point about boosting growth, the Chancellor outlined in his Mais lecture the importance of the Government investing in capital, people and ideas, so that we can strengthen the economy and make sure that the UK is best placed to succeed in what is a challenging set of circumstances.
James Murray (Ealing North) (Lab/Co-op)
Just in the last seven days, we have learned that 7 billion items of personal protective equipment were not fit for purpose, the Government are burning 500 lorryloads of it a month and former Treasury Minister Lord Agnew admitted that the lack of anti-fraud measures in the Government’s covid business support packages meant it was
“happy days if you were a crook”.
When billions of pounds of public money have been lost through the Chancellor’s incompetence, is the Minister ashamed to be hiking taxes on working people by billions of pounds next month?
Mr Clarke
I am afraid the hon. Gentleman misunderstands the situation in regard to PPE. Over 97% of the stock that was ordered was suitable for use. Indeed, when it comes to the wider figure covering the PPE piece, £4.7 billion of that represents PPE that will be used by the NHS, but which was procured at a greater price than it carries today owing to the scarcity that prevailed at that time, and another £3.3 billion represents PPE that can be used in non-medical settings, and the Department of Health and Social Care has already sold and donated stock in this category.
On the wider fraud point, this goes back to my earlier answer that we had to design these schemes at pace to protect jobs—I think this was agreed across the House—and we rightly, I think, made sure that that was the priority. We then built in the protections that were needed, and the protections have made sure that we are able to pursue anyone who has defrauded the taxpayer.
Alison Thewliss (Glasgow Central) (SNP)
Lord Agnew’s evidence to the Treasury Committee last week was a damning indictment of this Tory Government’s “terrible complacency”—his words—about fraud and protecting public money, and he does not buy what the Minister says about working at pace either. Lord Agnew anticipates that there will be an “avalanche of claims” from the banks on the state guarantee of the bounce back loan scheme arriving at the Treasury in the coming weeks, so can the Minister tell the House what actions he is taking to prevent yet further billions of public money from waltzing out the door in the midst of a cost of living crisis?
Mr Clarke
On the hon. Lady’s point, the Government set up the £100 million taxpayer protection taskforce at the Budget back in March 2021, and that taskforce is expected to recover between £800 million and £1 billion from fraudulent or incorrect payments over the next two years. That builds on the work that has already been done, which saw Her Majesty’s Revenue and Customs recover £536 million in 2020-21. Other agencies of the state are also involved in this important work. The National Crime Agency has made 17 arrests, 106 directors have been disqualified as of February 2022, there have been 48 bankruptcy restrictions and 13 companies have been wound up in the public interest in relation to bounce back loans.
Damien Moore (Southport) (Con)
The Exchequer Secretary to the Treasury (Helen Whately)
At last autumn’s Budget and spending review, we announced a comprehensive package of investment to level up the UK and encourage regional growth. This included the £4.8 billion levelling-up fund, the £2.6 billion shared prosperity fund and £1.6 billion of investment in the next generation of the British Business Bank’s regional investment fund.
Damien Moore
Does my hon. Friend agree that town deals are one of the most progressive ways of supporting regional growth, and that the one for Southport will kick-start our economy locally?
Helen Whately
I congratulate my hon. Friend on his hard work to secure the £37.5 million town deal for Southport, which will be truly transformative for his constituents. That funding will bring in more private investment to his constituency, building on public funding and providing new jobs and opportunities for his constituents. It will be levelling up in action.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The stark reality in the north-east is that we have seen rising child poverty and reliance on food banks in recent years, and the poorest households lost £1,000 when the Government cut universal credit in the autumn. Rising prices look set to take away another £1,000 from households, before the economic impact of what is happening in Ukraine. Ahead of the spending statement next week, may I urge the Treasury please to do more to tackle the destitution that will be inevitable if nothing is done to intervene to support households in the north-east, who will then support the local economy to grow?
Helen Whately
As other Ministers have outlined, we are supporting households with the rising cost of living, including a package worth £21 billion of support. In particular we are supporting those on universal credit by reducing the taper rate to ensure that work pays. Looking further ahead, through our commitment to levelling up we are investing across the country in skills and infrastructure, with the levelling-up fund to improve growth, boost prosperity, opportunities and pay, and thereby improve people’s standard of living.
Bim Afolami (Hitchin and Harpenden) (Con)
The Minister will be aware of the positive contribution that financial services can make to levelling up all over the country. With that in mind, and with the work of my all-party group on financial markets and services on levelling up, will she commit that the Treasury will work with the industry to spread opportunity within the financial services sector, to help that sector spread opportunity through all regions of this country?
Helen Whately
My hon. Friend makes an important point, and I know he is knowledgeable about this sector. It is important to remember that financial services are to the benefit of the whole country, with two thirds of jobs in financial services being outside London and the south-east. Financial services are absolutely an important part of our ambitions for levelling up.
Tim Farron (Westmorland and Lonsdale) (LD)
In rural communities, especially Cumbria, we are deeply concerned about the Government’s apparent lack of concern about growth in the rural parts of this country. Is the Minister aware of the enormous damage being done to farming in the UK, just at the moment when we need our farmers the most, by the reduction in basic payments? That started in December when farmers lost between 5% and 25% of their basic payment, without any availability of anything to replace it for years to come. Will she intervene now to keep basic payments where they currently are, so that we can keep Britain farming?
Helen Whately
I thank the hon. Gentleman for his question. I also represent a rural constituency with significant agricultural interest, and I assure him that we have protected agricultural funding through this Parliament. We are committed to levelling up across all parts of the UK, in rural as well as urban areas.
Mr Steve Baker (Wycombe) (Con)
What steps is the Minister taking with our right hon. Friend the Secretary of State for Levelling Up, Housing and Communities to ensure that areas that need levelling up are able to attract private sector investment?
Helen Whately
That is a very important point. Levelling up is not just about public sector investment—indeed, the lion’s share of investment in future growth in our economy will come from the private sector. One important thing that the British Business Bank is doing with its regional fund is crowding in private sector investment, so that we will get more private sector investment on top of the public sector investment we are putting in.
Dan Jarvis (Barnsley Central) (Lab)
The shared prosperity fund could be one of the Government’s most effective means of encouraging regional growth across the UK, but only if the investment goes where it is most needed. Does the Minister believe that the Treasury should apply the funding commitments that were rightly made to Cornwall also to the Tees Valley as well as to South Yorkshire?
Helen Whately
We are making a substantial investment through the shared prosperity fund and other funds across the country. We have committed to ensuring that the shared prosperity fund will be at least as much as parts of the country received before through EU funding, and I am committed to the hon. Gentleman’s area just as much as to Cornwall and other parts of the UK.
Peter Gibson (Darlington) (Con)
The Exchequer Secretary to the Treasury (Helen Whately)
By investing in local infrastructure, the levelling-up fund will strengthen local economies, boost job opportunities and improve the day-to-day lives of people across the UK. So far, we have committed £1.7 billion to 105 projects, and at the end of the month the Department for Levelling Up, Housing and Communities will publish its monitoring and evaluation strategy for the funding.
Peter Gibson
With £23.3 million invested through the towns fund, £105 million for Bank Top station and 1,700 civil service jobs coming to Darlington, we are a leading example of how the Government’s levelling-up agenda is benefiting communities in the north-east. The second round of the levelling-up fund will continue that work. Will my hon. Friend outline the timescales for the delivery of that round?
Helen Whately
My hon. Friend is a fabulous campaigner for Darlington, as evidenced in all the funding that his local town has secured. I am a regular visitor to Darlington, as are my Treasury colleagues, and have seen those investments already making a difference. He asks about the second round of the levelling-up fund. It will open for business this spring, with further details to be published shortly.
Mr Ben Bradshaw (Exeter) (Lab)
The Economic Secretary to the Treasury (John Glen)
We continue to review and reform our regulatory and enforcement approach to ensure that, as illicit finance evolves, our responses do too. We have announced an unprecedented package of sanctions, including against prominent Russian oligarchs. Last night, we brought forward the Economic Crime (Transparency and Enforcement) Act 2022 to crack down further, and we will continue to do further work on the economic crime Bill in the next session. We have also brought a new kleptocracy cell into the National Crime Agency to tackle those explicit threats.
Mr Bradshaw
But it took a group of anarchists to seize Deripaska’s London mansion yesterday, so when will the Minister do what Europe and America have already done and seize rather than just freeze Putin’s cronies’ assets? When will he close the loopholes that still allow them to escape sanction by putting their assets in their family members’ names or using shell companies based in British overseas territories?
John Glen
The Government have worked closely with the US and the EU on a whole range of interventions. We have sanctioned 500 individuals and entities, including 386 members of the Russian state Duma. We have also worked with the US on the expulsion of banks from the SWIFT banking system, cut off 3 million Russian companies from capital markets and seen $250 billion wiped of Russian stocks. We will continue to work closely with our allies to ensure that our response continues to be comprehensive.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The Government have once again delayed the long-overdue reforms to Companies House that could have deterred illicit finance, prevented covid fraud and provided vital information to the authorities. I will ask the Minister an important question, and I want him to update the House accurately. How many Russian-linked individuals and businesses have been wrongly given Treasury-backed covid-related business support?
John Glen
We worked to give widespread support to lots of individuals across the economy. I cannot give the hon. Lady the exact chapter and verse on individuals who have been supported, but we will continue to work on Companies House reform, which will be the most significant reform of the companies register in 170 years, and later this year we will publish a second economic crime plan and fraud action plan to address the threats that we continue to see.
Marsha De Cordova (Battersea) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
In response to Russia’s unprovoked aggression against Ukraine, the Treasury has helped deliver a world-leading package of economic sanctions to deliver severe consequences to the Russian economy. Across insurance, finance, trade, public and private capital markets, clearing, SWIFT, central bank assets and, indeed, bank asset freezes, we are ensuring that the Government play a leading role in making sure that Putin’s aggression does not go unpunished.
Marsha De Cordova
Families in my constituency are facing the cost of living crisis, and the planned real-terms cut to social security will force more of them into poverty and into having to make impossible decisions between eating and heating their home. According to the Trussell Trust, one in three on universal credit were not able to dress for the weather last month as they could not afford appropriate clothing or shoes. That is unacceptable. Will the Chancellor increase the level of social security support in his spring statement next week to alleviate some of the worst impacts of the cost of living crisis?
Rishi Sunak
As is common to all other years, welfare is uprated annually by September’s CPI. That will be the case next year as well, as my right hon. and learned Friend the Financial Secretary laid out. For those on universal credit we have cut the tax rate to ensure that work pays, delivering a £2 billion tax cut to 2 million on low incomes—the best route out of poverty.
Giles Watling (Clacton) (Con)
Rishi Sunak
My hon. Friend is right to point out the importance of fuel as a cost for both businesses and households. That is why I am proud that we delivered the eleventh freeze in fuel duty in a row. That has delivered huge savings for households and businesses over the past several years.
Rachel Reeves (Leeds West) (Lab)
Millions of people are worried sick about soaring bills. Meanwhile, BP says it has more cash than it knows what to do with and has compared its record profits from inflated prices to a cash machine. Those profits are not being used to fund new investment. They are going on dividends and share buybacks, so why will the Chancellor not make North sea oil and gas companies pay their fair share of taxes to tackle the enormous cost of living crisis?
Rishi Sunak
The hon. Lady talks about a fair share. It is worth bearing in mind that oil and gas companies are already taxed at double the rate of all other companies: 40% versus 19%, currently. Last year saw the lowest amount of investment in the North sea on record—just a few billion pounds. As my right hon. Friends who were at the roundtable yesterday know, there are billions of pounds of projects waiting to be unlocked. We want that investment and those jobs here in the UK.
Rachel Reeves
That is not happening with the share buybacks. The Chancellor is totally out of touch. He does not seem to understand how the cost of living crisis is affecting the least well off in society, as campaigner Jack Monroe highlighted. The Institute for Fiscal Studies confirmed that the poorest households face an inflation rate 50% higher than the richest households. The Resolution Foundation warns that between 2020 and 2022, 700,000 more children will have fallen into poverty. That is devastating, but it is not inevitable. The Chancellor can and must do more in the spring statement to provide people with real help, not just a loan. Why is he so intent on shielding oil executives, instead of protecting the poorest in society?
Rishi Sunak
The best way to help people cope with rising energy costs and bills over time is to make sure we have a diversified and secure supply of energy, more of which comes from here at home. I share the hon. Lady’s concern for those on the lowest incomes. I am proud that all the evidence points to the fact that the decisions made by this Government over the last few years have benefited those on the lowest incomes the most. We have protected those who need our help, and we will continue to do so.
Andrew Bridgen (North West Leicestershire) (Con)
The Financial Secretary to the Treasury (Lucy Frazer)
It was very interesting to meet my hon. Friend, together with his colleagues from the all-party parliamentary group on investment fraud, and to hear his idea. As we discussed, Her Majesty’s Revenue and Customs is very keen to make clear which schemes do not work. That is why, in the Finance Act 2022, the Government legislated to allow HMRC to name promoters and the schemes they promote at the earliest possible stage, to warn taxpayers of the risk of entering into those schemes, and to help those already involved to exit avoidance.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Rishi Sunak
We are spending record amounts on supporting those who are disabled. Relative to the OECD, I think we are spending in excess of the average for other leading countries. My right hon. Friend the Secretary of State for Work and Pensions has a particular programme of support in place to help those who are disabled to move into employment; plans were announced earlier this year.
John Penrose (Weston-super-Mare) (Con)
Lucy Frazer
My hon. Friend is right to highlight the effect of a high effective tax rate on incentives to work. That is why the Government reduced the universal credit taper rate from 63% to 55% and increased the universal credit work allowance by £500 per year, which is essentially a tax cut for the lowest-paid, worth more than £2 billion in 2022-23, and means that 1.9 million households will keep an extra £1,000 per year on average.
Bill Esterson (Sefton Central) (Lab)
The Exchequer Secretary to the Treasury (Helen Whately)
The changes to the taxation of red diesel were announced back in 2020, were confirmed in spring 2021 and are coming in this year, so businesses, including in the sector that the hon. Member refers to, have had plenty of time to prepare. It is absolutely right that we tax fuels that are highly polluting; unfortunately, diesel is one of them.
Jill Mortimer (Hartlepool) (Con)
Helen Whately
My hon. Friend is an active campaigner for the steel sector in her constituency. I can assure her that energy-intensive industries such as steel receive substantial support from the Government, including free allowances from the emissions trading scheme and the £315 million industrial energy transformation fund, to help them to cut energy bills.
Sammy Wilson (East Antrim) (DUP)
A statutory instrument entitled the Customs (Amendment) (EU Exit) Regulations 2022 was on yesterday’s Order Paper for approval by the House. It amends the customs arrangements for the United Kingdom by excluding Northern Ireland from them, changing the term “United Kingdom” to “Great Britain”. That runs totally contrary to the assurances given by the Prime Minister that Northern Ireland would remain part of the UK customs territory; it runs contrary to article 4 of the Northern Ireland protocol; and it now means not only that Northern Ireland is part of the single market under the European Court of Justice, but that it is outside the UK customs territory. The motion relating to the instrument was not moved. Can the Financial Secretary give an assurance that it will not be brought back to the House until there has been a meeting to explain why it is necessary, what its impact on Northern Ireland is and why the Government have brought it forward?
Lucy Frazer
I am happy to answer that question. I understand completely the concerns of people in Northern Ireland about the impact of the protocol; the right hon. Member will know how seriously the Government take those concerns and how we are negotiating with the EU to ensure that we get the right arrangement for Northern Ireland. I can give him assurances here and now about what the statutory instrument was doing: it was making very minor technical changes in a number of areas, for example in relation to the provision of information that might have to be given but that was never previously enforced. It was actually easing up the requirements for those who operate trade between Northern Ireland and Great Britain. These were technical changes, and I am very—
Mark Menzies (Fylde) (Con)
Helen Whately
My hon. Friend has made an extremely good point. Now is the moment for us to go full steam ahead with our transition away from fossil fuels. We are investing in nuclear, we are accelerating our progress on renewables, and we are boosting energy efficiency in homes across the country. This is how we will bring bills down, improve our energy security and tackle climate change.
Mrs Emma Lewell-Buck (South Shields) (Lab)
When the Government set up the coronavirus business interruption loan scheme, they recklessly failed to agree any guidance on early repayments. As a result, businesses are now being charged extortionate fees and are facing bankruptcy. Why is the Chancellor putting the profits of unscrupulous lenders above the recovery of our small businesses?
The Economic Secretary to the Treasury (John Glen)
He is not doing that. The schemes were set up in various ways, depending on the size of businesses, and it will be for the individuals who borrowed money to engage with the lenders to refinance those loans on a case-by-case basis.
Felicity Buchan (Kensington) (Con)
Helen Whately
My hon. Friend has made an important point. We recognise that some people living in mansion blocks are part of a heat network and are not covered by the price cap. I draw my hon. Friend’s attention to the £144 million in discretional funding that went to councils as part of the recent £9 billion energy support package, and to forthcoming legislation in which we will give Ofgem new powers to regulate prices in the sector as a matter of priority.
Chris Bryant (Rhondda) (Lab)
We really must start seizing assets and not just freezing them. That is the only way in which we can make sure that the money goes towards the reconstruction of Ukraine. Would it not also be a good idea for us not just to look at the really famous people like Abramovich, but to look at the people who own £750,000 properties in the UK and who may be the cousins, brothers, sisters, parents or some other proxy of Russian oligarchs in the UK? Must we not also do far more to tackle the personal finance of President Putin, much of which, I am told, is in the UK?
John Glen
As ever, the hon. Gentleman has made a powerful point about a very important matter. Work with our allies is ongoing to establish how we can deepen our response in a co-ordinated way in order to make a real impact on illicit finance.
Sir David Evennett (Bexleyheath and Crayford) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
My hon. Friend has made an excellent point. He is right to champion the value of apprenticeships, in which the Government keenly believe. I had a great roundtable with apprentices in Newcastle recently, and heard for myself just what a difference they are making both to their employer and to the wider economy.
Owen Thompson (Midlothian) (SNP)
It is estimated that the Chancellor’s smash and grab on national insurance will raise £13 billion. By happy coincidence, at the end of the financial year the Chancellor will have an extra £13 billion-worth of borrowing, because the Government have not met the borrowing expectations. Will the Chancellor use that happy coincidence to scrap the tax on jobs?
Rishi Sunak
The forecast for the public finances will be updated next week. As for jobs, I am happy to confirm that, according to today’s figures, there are record numbers of people on payrolls, record numbers of vacancies, and, indeed, more people in work now than before the crisis—and the unemployment rate is now lower than, or at the same level as, it was before coronavirus hit.
Mr David Davis (Haltemprice and Howden) (Con)
The Government have repealed many of the powers in the Coronavirus Act 2020, but they have not repealed the Act itself. This means that the Treasury can still order Her Majesty’s Revenue and Customs to start support schemes such as furlough without recourse to Parliament. Control of expenditure is Parliament’s first responsibility, so are the Government going to repeal the Act in total, or will the Treasury take action to give the proper powers back to Parliament?
Rishi Sunak
I would be very happy to look into the matter that my right hon. Friend raises.