(1 day, 6 hours ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Chris Coghlan (Dorking and Horley) (LD)
The Economic Secretary to the Treasury (Lucy Rigby)
Innovation is a key driver of long-term economic growth, higher productivity and improved living standards. That is why this Government are investing more in R&D and why we are committed to maintaining the generosity of R&D tax reliefs. We remain open to new and innovative debt instruments and we review options regularly, but clearly new instruments need to meet a range of criteria, including value for money.
Chris Coghlan
In the 1940s, refugees fled the Nazis and built the atomic bomb; they pioneered a method of public research and development that has powered US economic dominance ever since. The EU Security Action for Europe defence bond fund offers us a similarly transformative opportunity: £20 billion invested in defence R&D could expand our economy by £100 billion. Will we join our Canadian and European allies, end our economic stagnation, and together defend the—
Mr Speaker
Order. I can see that you want to round up your question, but this is more of a statement. You are telling the history, which is important, but I hope there is a question coming now, as there are a lot of other Members to get in.
Lucy Rigby
I am grateful to the hon. Member for his question. Indeed, he and I have discussed this issue previously. We are due to meet to discuss it later this month, and I am very much looking forward to that discussion.
Bill Esterson (Sefton Central) (Lab)
Mersey Care NHS foundation trust has plans for a world-leading mental health research and development facility at Maghull health park in my constituency. Will the Minister meet me to discuss how the Treasury might support investing in such an important research and development project, not least as it is fundamental to the Government’s plans for improving healthcare?
Lucy Rigby
My hon. Friend raises an important point. This Government are investing an extra £29 billion in our national health service. I would be happy to meet him to discuss it further.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
Elaine Stewart (Ayr, Carrick and Cumnock) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
I am very sorry to see your leg in such a way, Mr Speaker.
We are committed to driving growth everywhere. The Budget ensured that Scottish public services are fairly funded, with an extra £820 million for the Scottish Government through the Barnett formula, on top of a record settlement in June this year. We are also investing in transport for city regions, and investing £5 billion in deprived neighbourhoods through the Pride in Place programme, with some of that money going to Scotland.
Kirsteen Sullivan
I welcome the fantastic news that Edinburgh and south-east Scotland will receive £37.8 million from the new local growth fund, supporting infrastructure, business support and skills development. However, I consistently hear from businesses that they struggle to recruit people with the skill sets needed to grow their operations and fuel economic growth. Can the Chancellor set out how this investment will reach beyond the cities to tackle the acute skills shortages in my constituency of Bathgate and Linlithgow?
Rachel Reeves
I thank my hon. Friend for her commitment to her constituency. It is right that the money is allocated through the regional economic partnerships in Scotland, and I have absolutely no doubt that my hon. Friend will make the case for her local area. The regional economic partnerships have already worked together to deliver the integrated regional employability and skills programme in Edinburgh and south-east Scotland, including helping people in her Bathgate and Linlithgow constituency.
Emma Foody
Ministers will be all too aware of my campaign to unlock improvement at Moor Farm roundabout, which is currently holding back growth across the north-east and causing misery to local people on a daily basis. The Government have rightly taken steps to ensure that my region gets its fair share of investment through changes to the Green Book and place-based business cases, but will the Chancellor meet me ahead of the road investment strategy to ensure that we finally get this long overdue investment in a critical piece of north-east infrastructure?
Rachel Reeves
My hon. Friend has been a tireless campaigner for the Moor Farm roundabout, which holds back both commuters and businesses, and therefore both growth and prosperity. I will continue to work with her on this. I know that the roundabout is now being properly considered for inclusion in the road investment strategy and I would be happy to meet her to discuss that further.
Elaine Stewart
The Ayrshire growth deal, which was allocated £103 million of UK Government funds, has the potential to make a real difference to our economic prospects. Despite its clear potential, though, delivery on the ground remains far too slow in turning around real progress. What action can the UK Government take to drive momentum, sharpen the strategic direction of the deal and ensure that Ayrshire finally sees the benefits of this investment?
Rachel Reeves
This Labour Government are investing more than £250 million in economic development and regeneration in Ayrshire, including but not limited to the Ayrshire growth deal. My hon. Friend is a great champion of Ayrshire, and I look forward to working with her and my good friend Anas Sarwar in the months and years ahead to deliver for the people of Ayrshire and those right across Scotland.
Christine Jardine (Edinburgh West) (LD)
According to a report this morning from the Jobs Foundation, the energy sector in north-east Scotland is on a cliff edge, with Robert Gordon University estimating that 400 jobs will be lost every two weeks. Given the importance of that sector not just to Aberdeen or Edinburgh West but to the Scottish and UK economies, will the Chancellor think about providing the regional development support that the Scottish Government are failing to provide?
Rachel Reeves
At the Budget, we published our North sea oil and gas plan and provided certainty by announcing that the energy profits levy introduced by the previous Government will end at the end of this Parliament. At the same time, we are supporting the transition to new jobs in new industries right across Scotland, including in Aberdeenshire, because the opportunities to transition to jobs in clean energy are very real, and we need to ensure that those jobs come to Scotland.
Mr Gregory Campbell (East Londonderry) (DUP)
I know the Chancellor would say that the Northern Ireland budget was an exceptionally good one, but would she agree that there are extreme circumstances pertaining to three areas in particular—policing, education and health—at the moment? Will she at least get into discussions with the First and Deputy First Ministers in Northern Ireland to see what can be done to alleviate the problems that are coming towards us?
Rachel Reeves
My right hon. Friends the Northern Ireland Secretary and the Chief Secretary to the Treasury are in discussions with the Northern Ireland Executive on some of the additional pressures they are facing. We are working through those plans and will have more to say shortly.
Dr Ellie Chowns (North Herefordshire) (Green)
Regional funding must not come at the expense of local authority funding and all devolved funding must recognise the realities in the places where funding is needed, yet under the so-called fair funding review, in just three years Herefordshire council will see a reduction in UK Government fundings to 78% of current levels. The Government have also removed the remoteness adjustment for anything except social care, but rurality does of course matter for bin collections, school transport and many other aspects. Will the Chancellor look again at the fair funding review, which is unfair for so many places, like Herefordshire, and ensure that remoteness is properly adjusted for in the calculation?
Rachel Reeves
My understanding is that the Ministry of Housing, Communities and Local Government is still consulting on this matter, so the hon. Lady and other colleagues will have a chance to feed into that process. In the spending review, we put an extra £600 million into supporting local authorities after the years of austerity under the Conservative Government. While the previous Conservative Prime Minister said he would take money away from poorer areas and give it to Tunbridge Wells, we are investing more fairly in the areas that need it most.
Richard Foord (Honiton and Sidmouth) (LD)
Paula Barker (Liverpool Wavertree) (Lab)
Sir John Whittingdale (Maldon) (Con)
Olly Glover (Didcot and Wantage) (LD)
Abtisam Mohamed (Sheffield Central) (Lab)
Marie Goldman (Chelmsford) (LD)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
There are a number of questions on this topic, and I am sure there will be more this afternoon when I make a statement to the House on a package of support in relation to business rates, with a particular focus on pubs. As previously announced, we are introducing a support package worth £4.3 billion to support rate payers who are seeing increases in their business rates.
Richard Foord
Joanna Watson runs the Elizabeth hotel and the Kingswood hotel in Sidmouth. She is essentially facing a 20% rise in her business rate costs. Joanna’s bills do not reflect what she earns; they stay high all year round, even though there are months like these in winter when income completely collapses. The Government legislated for a 20p reduction in the business rates multiplier for hospitality, and that created an expectation that it would be used. The Minister said that he will make a statement this afternoon, but will he also consider the plight of hotels such as those in Sidmouth?
Dan Tomlinson
We have considered the challenges that hospitality businesses and businesses on our high streets have been facing. That is why we put in place £4.3 billion of support at the Budget. We recognise that there are concerns as to how hotels are valued for business rates, and that will be one of the items I talk about in the statement later.
Paula Barker
I wish your leg a speedy recovery, Mr Speaker.
I recently visited the wonderful Aura salon in my constituency and spoke to the owners Victoria and Janet, who have owned the business for 24 years and are the hub of their local community. They have invested in and trained numerous young hair stylists but now their business rates and VAT are crippling them, meaning that they can no longer take on apprentices. Victoria and Janet told me that the VAT rate that they pay is unbalanced compared with other sectors that claim back VAT. Will the Minister please advise what can be done to help salons like Aura and others that are part of the Save our Salons campaign, and are there any plans for an affordable apprenticeship scheme in the hairdressing sector?
Dan Tomlinson
I thank my hon. Friend for the work that she is doing to champion salons and the beauty industry in her constituency and elsewhere. She will know that VAT is a broad-based tax; in fact, it is our third largest revenue raiser, raising £180 billion last year. That is vital revenue that pays for our public services. There are lots of issues in relation to VAT, including the differential treatment depending on how salons decide to set themselves up and pay their employees. Those are important issues, and we will consider tax changes in the usual way in the run-up to future Budgets.
Sir John Whittingdale
I recently visited the Ship Inn in Burnham-on-Crouch, which has a few hotel rooms, as well as Peaberries, a tea shop on the high street. Both are looking at existential threats as a result of business rates. Can the Minister say whether the package that he will announce later will benefit them as well?
Dan Tomlinson
I do not think that Mr Speaker would like me to pre-empt the announcements that will be made later, but the right hon. Member has given me the opportunity to reiterate that at the Budget we implemented for the first time differential rates of tax—differential multipliers—meaning that the largest businesses now pay 33% more than the smallest high street businesses. That is a big differential that was not there before but which now exists because of the big reforms that we made at the Budget.
Olly Glover
In my Oxfordshire constituency, pubs including the Fox Inn in Denchworth, the White Hart in Harwell and the Fox and Hounds in Uffington are vital to their village communities, yet they face significant business rate increases from April. Given that the chief executive of the Valuation Office Agency told the Treasury Committee that, ahead of the Budget, the VOA warned that over 5,000 pubs would see their business rates double, will the Minister tell the House why the Government decided to press on and create such uncertainty for our hospitality sector in the Budget?
Dan Tomlinson
The Government will have more to say a bit later today when it comes to pubs and the support that the Government can provide for them. We knew that the revaluations would be implemented from 1 April, and that is precisely why we came forward with a significant package of support for all businesses across the economy. We introduced significant reforms to lower the multipliers for businesses like the pubs that the hon. Member mentioned.
Abtisam Mohamed
Sheffield Central businesses continue to face disproportionately higher pressures, with ever-increasing running costs stacking up and a drop in footfall. Businesses like the Gamers Guide Café and the Dove and Rainbow pub tell me that they need much more to survive the dip in foot traffic, so will the Minister set out how he is reducing pressures on high street cafés and pubs, and will he consider targeted relief to ensure viability for hospitality businesses?
Dan Tomlinson
I thank my hon. Friend for her representations on behalf of businesses and constituents in Sheffield. One of the important things to note about the business rates system is that there are many smaller businesses on our high streets that pay no business rates at all. One in three businesses continue to benefit from small business rate relief and an additional 85,000 benefit from reduced bills as that tapers. At the Budget we announced an additional two years of small business rate relief for those businesses that expand into a second property. This will be helpful for small and independent businesses, and will support them to grow.
Marie Goldman
Chelmsford has a vibrant night-time economy. Just last Sunday, I spent the evening at a fabulous local music venue called Hot Box, right in the heart of my constituency. Venues such as Hot Box represent important cultural and social spaces for smaller cities like mine, but many are at risk due to recent Government changes to the business rates system. New analysis puts the average increase in the hospitality business rates bill in Chelmsford at nearly £23,000 over three years. For many, that is impossible to absorb. Another family-run business in Chelmsford that has been going for 25 years will see its monthly rates more than double from April. It says that it will simply have to close its doors if that goes ahead, resulting in 40 people losing their jobs. Will the Government implement the 20p discount that they have already legislated for and let all businesses in retail, leisure and hospitality get the support that they need?
Dan Tomlinson
I have got the idea, Mr Speaker!
The key thing to note here is that there is a significant difference between the change in the rateable value and the change in the business rates. This year, we have stepped in to cap the increases for bills at £800 for those coming into the system for the first time. For most high street businesses, the increase will be 15%, while the very largest will see increases of 30%. Those are the steps we have taken. When the Liberal Democrats were in government, they chose to increase VAT on businesses up and down the country.
Catherine West (Hornsey and Friern Barnet) (Lab)
I wish you a speedy recovery, Mr Speaker.
Will the Minister say something about music recording studios, such as the Church Studios, where Annie Lennox recorded “Sweet Dreams (Are Made of This)”? Could he give me a sweet dream this evening and tell me that my music recording studio is going to be fine?
Dan Tomlinson
I am very fond of my constituency neighbour, who has the privilege of sharing a part of Barnet with me. There will be news this afternoon—I am just trying to find my words, Mr Speaker.
Dan Tomlinson
I hope the microphone picked that up.
We will make further announcements this afternoon specifically focused on pubs, but I understand that there are businesses across the economy that will have seen increases in their rateable values since the pandemic. That is precisely why we have stepped in with our support package.
Valerie Vaz (Walsall and Bloxwich) (Lab)
Here’s another one: what assessment has the Minister made of the impact on really small independent high street bookshops? This is the National Year of Reading; we want them to stay open, not closed.
Dan Tomlinson
Many really small bookshops up and down the country will not pay any business rates at all because they will be in receipt of small business rate relief. Of course, there will be some that will have seen either their rateable value increase, or—because of the Government’s decision to slowly wind down the temporary pandemic support—an increase in their bills. We are capping those increases in this year and in subsequent years so that transition can be manageable for those businesses. Of course we want to support bookshops on our high streets; they are incredibly important, along with all the other high street retailers up and down the country.
James Wild (North West Norfolk) (Con)
The Chancellor promised hospitality firms that she would lower their taxes, but her business rate raid is hammering every town, village, city and high street. This is not just an attack on pubs; hotels, cafés, music venues and many more are being hit. It is two months since the Budget caused huge worry for these businesses, and we await details of this latest U-turn, but the key question is: does the Chancellor get it? Does she get that it is not just pubs but hospitality, leisure and retail businesses that need support because of her terrible choices?
Dan Tomlinson
Conservative Members do not get it, because when they were in government, they set out plans to remove the temporary pandemic rates relief overnight in 2025. That would have seen an increase of 300% in business rate bills overnight for businesses on the high street. We have taken a different, fairer and more proportional approach, phasing out the pandemic relief over a slower time period and extending it into this year.
Daisy Cooper (St Albans) (LD)
Thank you, Mr Speaker, and I wish you a speedy recovery.
We know that pubs have been badly hit by these business rates changes, but businesses right across retail, hospitality and leisure have made investment and hiring decisions based on the expectation raised by this Government that they would get a full 20p discount on their business rate multiplier. Those businesses—music venues, restaurants, soft play centres and hotels—are the high street shops that communities most love. Do Ministers accept that anything less than the full 20p discount for retail, hospitality and leisure will leave the three-to-five-year business plans of those high street businesses in total disarray?
Dan Tomlinson
We announced a 5p reduction in the multiplier on top of the 7p or thereabouts reduction that was taking place as a result of the revaluation more broadly. That is a £900 million transfer of underlying rates liability away from the smallest high street businesses towards the online giants and the largest properties. When the Liberal Democrats and the Conservatives had the chance, they kept the tax rates the same. We have introduced significant reform, and we started the work of that reform at the Budget. Of course we will continue our conversations in the months ahead.
Daisy Cooper
Businesses up and down the country know that the Government raised their expectations and then dashed them. This whole sorry saga has been an absolute shambles. The question remains: why were Ministers so blindsided, when the VOA has confirmed that it was providing data drops over a period of 12 months? Will Ministers use the opportunity in 90 minutes’ time to answer all the questions that Opposition MPs have asked and to explain what they knew and when?
Jo White (Bassetlaw) (Lab)
The Economic Secretary to the Treasury (Lucy Rigby)
The Government provide a wide range of loan support for SMEs through the British Business Bank. This includes the start up loans programme and the growth guarantee scheme, the latter of which recently supported over 4,000 businesses and over 65,000 jobs right across the country.
Jo White
I recently met Matthew Pendleton, who owns Apawtiser, a high-quality dog treat company. The company grew legs because processed dog food had made his pet dog violently ill. Matthew now needs the finances so that he can continue to expand, employ more staff and get Apawtiser on the national pet food map. I want to see businesses such as these succeed in my area, and Matthew’s small ask is: will the Government step in with the offer of an underwritten loan?
Lucy Rigby
My hon. Friend is a tireless champion of businesses in Bassetlaw, and I wish her a happy birthday for yesterday. In the recent spending review, the Government extended the growth guarantee scheme, enabling £5 billion-worth of loans over the next four years. This will support businesses like the one she mentioned, and I would be more than happy to meet her to talk about how her constituent might access that support.
Wera Hobhouse (Bath) (LD)
First-of-a-kind technologies such as DRIFT Energy in Bath face serious investment challenges and difficulties in accessing grant funding from any Government Department. DRIFT is a groundbreaking renewable energy innovator that could rapidly scale and contribute to the UK’s energy independence. What are the Government doing to ensure that first-in-kind technologies in particular receive the support that they need here in the UK, rather than being forced to go abroad?
Lucy Rigby
The hon. Member may well know that, at the spending review, we increased the financial capacity of the British Business Bank to £25.6 billion. There are a number of ways in which the British Business Bank will support companies like the one she referred to.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
As well as the British Business Bank, the National Wealth Fund plays a crucial part in investing taxpayers’ money. I welcome the Government’s response to the Select Committee’s report on that issue. Will the Minister indicate when the National Wealth Fund will have the ability to borrow from private markets in order to increase its independence, secure funding for infrastructure, and get the taxpayer off the hook?
Lucy Rigby
It is absolutely right that we have increased the amount of funding going into the National Wealth Fund. On my hon. Friend’s specific question, my understanding is that we have not set a date, but I am more than happy to write to her with further information—to the extent that it exists.
Tim Farron (Westmorland and Lonsdale) (LD)
Has the Minister assessed what proportion of British Business Bank grant funding goes to the smallest of businesses? One in four people in my constituency works for themselves or for very small businesses. To what extent is she working to ensure that smaller businesses—those employing 10 people or fewer, which are the very bedrock of our economy in the lakes and dales in Cumbria—know about the availability of those loans and are talked through the difficult process of applying for and receiving them, so that we can invest in rural communities like mine?
Lucy Rigby
On the Government’s policies vis-à-vis businesses as a whole, we support the sort of businesses the hon. Member refers to in a whole range of ways. On businesses in his area, 80% of the recent deployment of the growth guarantee scheme was outside London.
Luke Murphy (Basingstoke) (Lab)
The Parliamentary Secretary to the Treasury (Torsten Bell)
Rising living standards are the ultimate goal of economic policy, and living standards are now rising following the unprecedented fall during the last Parliament. The latest data shows that the average person’s real disposable income is £800 higher than in the final year of the previous Parliament.
Luke Murphy
As the Minister says, the previous Parliament was the worst on record for living standards, so my constituents—for many of whom the cost of living is the No.1 issue—welcome the action taken to freeze rail fares, which will save them £350 on average, and to take £150 off their energy bills, as well as today’s groundbreaking commitment to cap ground rent, which we will hear about later. Will he confirm that the Government will continue to strain every sinew, clear every obstacle and use the power of government to cut the cost of living and raise living standards for my constituents over the course of this Parliament?
Torsten Bell
My hon. Friend is a powerful campaigner on this issue; week after week, he consistently raises the issue of living standards for people in Basingstoke. He is right to highlight the key role of energy bills in that. The Budget took levies off energy bills to save families £150 on average next year, as part of wider measures to directly cut inflation by 0.4 percentage points, further supporting living standards by making it easier for banks to cut mortgage rates and giving businesses the confidence to invest. Energy bills cut, ground rents cut—change promised, change delivered.
Jim Shannon (Strangford) (DUP)
What assessment has the Minister made of the recent trends in household living standards across the United Kingdom, including through discussions with the relevant Minister in Northern Ireland? What steps has his Department taken, in conjunction with regional Administrations, to ensure that the Northern Ireland Executive can support households facing rising costs? I know that the Minister gives lots of answers, so will he give us an answer on this one, please?
Torsten Bell
We will always give the hon. Member an answer—and I mean always, at every single one of these sessions. Government Ministers, particularly at the Northern Ireland Office, spend a lot of time speaking to Ministers in Northern Ireland. He is absolutely right to say that the cost of living crisis affects not just one part but all parts of the United Kingdom. To take just one example, the six interest rate cuts since the general election have already made a big difference to those in Northern Ireland whose mortgage renewal is coming up.
Richard Fuller (North Bedfordshire) (Con)
Persistently high inflation and fears that things will get tougher for their children are top issues for the British public, but the Office for Budget Responsibility’s assessment of Labour’s plans was that:
“Growth in real household disposable income per person is projected to fall… to around ¼ per cent a year… well below the last decade’s average”.
Minister, why is the sum of all this Government’s economic policies condemning the British public to such a despairing prospect?
Torsten Bell
Mr Speaker, that is called leading with your chin. Members on the Conservative Benches were in power in the last Parliament, which saw living standards fall by 2.9%. Living standards have already risen under this Government by 1.5%, because we are turning around their mess day after day after day.
Dave Robertson (Lichfield) (Lab)
Alice Macdonald (Norwich North) (Lab/Co-op)
The Chief Secretary to the Treasury (James Murray)
Investment in our railways is a crucial part of our plan to unlock economic growth in every nation and region of the UK. Earlier this month, my right hon. Friend the Chancellor announced our plans for Northern Powerhouse Rail. That transformational programme is backed by up to £45 billion of investment in the long term, which will be key in unlocking economic potential across the north.
Dave Robertson
People across Lichfield, Burntwood and the villages are delighted that this Government have funded the midlands rail hub project, meaning a doubling of the number of trains from Lichfield to Birmingham every hour. Ministers could go even further, though, by investigating the reopening of the Derby-Burton-Lichfield line, including a stop in Alrewas for the National Memorial Arboretum. Despite warm words from my predecessor, no business case exists for that. Can the Minister confirm that this Labour Government are not done with investing in transport in the midlands, and will he look again at the Derby-Burton-Lichfield line?
James Murray
I thank my hon. Friend for highlighting the value of the midlands rail hub, which we invested in at the spending review. We are determined to invest more in transport in the midlands. Indeed, at the spending review the Government committed to investing £4.4 billion there through transport for city regions funding. My hon. Friend is a great advocate for services that will benefit his constituents, and I will ask the Rail Minister to respond about the specifics of the line that he raises.
Alice Macdonald
I welcome the investment the Government have made in rail, including East West Rail, but there are still several projects that would hugely benefit passengers and the local economy in the east. Those include upgrading the Trowse swing bridge near Norwich and, of course, Ely and Haughley junctions. Will the Chief Secretary to the Treasury meet me and other colleagues from the east of England to discuss how we can advance those key infrastructure projects for the region?
James Murray
East West Rail is a transformational project that will unlock economic growth and housing. Just yesterday, I was glad to host a representative from East West Rail at an infrastructure roundtable at the Treasury with my right hon. Friend the Secretary of State for Housing, Communities and Local Government. My hon. Friend is another powerful advocate for her local area, and I will happily discuss this matter with the Rail Minister and get back to her.
John Glen (Salisbury) (Con)
Last week I met Lawrence Bowman, the chief executive of South Western Railway. I am keen to make sure that all the Government’s changes take positive effect in Salisbury and south Wiltshire, so that tracks, signal and stock can be improved. Will the Minister make sure that there is a suitable reference board along the commuting line into Waterloo, so that when Lawrence Bowman’s business plan is delivered, there will not be any delays when he has to interact with local authorities—a concern that he raised with me last week?
James Murray
I thank the right hon. Gentleman for raising the concerns of the services used by his constituents. I can assure him that I will look into those and get back to him.
Ian Roome (North Devon) (LD)
The Tarka line in North Devon has seen a massive increase in footfall. However, the line is often closed because of the lack of infrastructure upkeep. Will the Minister meet me to discuss various funding opportunities? It is a rural line that is vital for students to get into Exeter and for people’s job opportunities—I know that the Government are all about job growth.
James Murray
The hon. Gentleman is absolutely right: we are all about job growth. I fear I will be quite busy after this set of questions with taking up projects in different constituencies, but that is absolutely right, because we all want to make sure that we have better investment—particularly in transport and infrastructure—for our constituents. I assure him that I will look into the matter and get back in touch with him.
Sally Jameson (Doncaster Central) (Lab/Co-op)
Anna Dixon (Shipley) (Lab)
The Parliamentary Secretary to the Treasury (Torsten Bell)
Energy bills are too high, and Britain is too dependent on the rollercoaster of gas prices. That is why the autumn Budget reduced the cost of levies on energy bills to save households £150 on average from April this year.
Sally Jameson
I am pleased that the Government are sticking to their pledge on reducing energy bills, as the Minister rightly points out, with an average of £150 coming off annual bills this April. Does he agree that that is a good start, but that we must continue to work across Departments to ensure that we make further progress on the cost of living in this Parliament?
Torsten Bell
My hon. Friend is absolutely right: people need to see inflation come down, and that is what the Office for Budget Responsibility and the Bank of England forecast to happen. As she said, from April our plans for energy bills will save households £150 on average, which is something she has campaigned for over the past 18 months. I am pleased energy companies have confirmed that those savings will be passed on to those with fixed tariffs. She asks that we go further, and I should add that we have extended the £150 warm home discount to a further 2.7 million of the poorest households.
Anna Dixon
I warmly welcome the Chancellor’s announcement in the Budget on scrapping the energy company obligation scheme, which will bring down energy bills by £150 on average and support some 5,000 households living in fuel poverty in my constituency of Shipley. The disastrous Tory-designed scheme, ECO4, cost £1 billion per year, yet 98% of the external wall cavity installations were faulty. What further action are the Minister and Chancellor taking to reduce energy bills and ensure that energy companies put people over profit?
Torsten Bell
My hon. Friend is entirely right. The Conservatives did not just leave Britain dependent on the rollercoaster of gas prices; they left families paying almost £2 billion on their bills for their failed energy efficiency ECO scheme. The Chair of the Public Accounts Committee described the scheme’s failings as the “worst” he had ever seen. That fuel poverty scheme cost 97% of those in fuel poverty more than it saved them, and it damaged thousands of homes. We are scrapping the ECO scheme, and cutting families’ bills.
Mr Peter Bedford (Mid Leicestershire) (Con)
A new report by the Prosperity Institute is highly critical of the Government’s net zero policies and their adverse impact on the broader economy, and my constituents’ fuel bills continue to soar because of the Government’s reluctance to use more traditional sources of fuel. Will the Minister commit to raising that with the Secretary of State for Energy Security and Net Zero, because such ideologically driven polices are having an adverse impact on the bills of my constituents?
Torsten Bell
Energy bills are too high because the Tory party left us dependent on the rollercoaster of gas prices. Wholesale gas prices today remain more than double what they were at the start of 2020. If Conservative Members think that is some kind of advert for staying on gas forever, they are living in cloud cuckoo land.
Mark Garnier (Wyre Forest) (Con)
We have already heard this morning that businesses are suffering harm from business rates and national insurance contributions going up, but on top of that, according to the Office for National Statistics, the energy bills of non-energy intensive industries such as hospitality and retail have increased under this Government by up to 10% in the last year. The Conservative are proposing our cheap power plan, which would save small businesses up to £5,000 a year on their energy bills. What is the Minister doing to help small businesses with their energy bills?
Torsten Bell
What this Government are doing is getting on with building the energy infrastructure that this country needs, and we are not going back to the 11% inflation seen under the Conservative party. This Government are supporting small businesses, because the hon. Gentleman is right on one thing, which is that high energy bills are not in the interests of British industry. That is why we are getting on with fixing the energy system that we inherited.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
This Government are determined to get back all the money that was lost through covid fraud and corruption. That is why I appointed the covid corruption commissioner when I became Chancellor, and we have already brought in £400 million that the previous Government gave up on.
Lillian Jones
This Government have recouped £400 million in covid fraud and error, with HMRC recovering a massive £1.3 billion, as well as aggressively pursuing the firm linked to Baroness Mone, PPE Medpro. Does my right hon. Friend agree that this Government’s relentless recovery action demonstrates that it is only under Labour that this money is recovered from fraudsters to do what it should do, which is to fund our public services?
Rachel Reeves
Sadly, I cannot comment on any individual cases, but I am absolutely determined to get that money back, because that money belongs in our schools, hospitals and public services, not in the pockets of Tory friends and donors.
Alison Taylor (Paisley and Renfrewshire North) (Lab)
The Economic Secretary to the Treasury (Lucy Rigby)
It is definitely right to say that the FTSE 100 performed strongly in 2025, during which it rose faster than key benchmarks, the United States and the European stock markets, and hit 10,000 points as we entered the new year. The UK is one of the world’s leading global financial hubs, and this Government are committed to the sector’s enduring leadership.
Alison Taylor
Does the Minister agree that cutting paperwork and speeding access to capital will provide a valuable boost to companies looking to list their shares on the London Stock Exchange? Is she hearing that from the companies that she is meeting, because that is what I have been hearing while I have been out engaging with businesses in Scotland?
Lucy Rigby
I can confirm that I am indeed hearing that. Last week’s introduction of the new prospectus rules will mean faster execution, reduced complexity and a simplified route to capital raising. Together with the three-year UK listing relief announced at the Budget, these initiatives will make the UK the most attractive destination for companies to start, scale, list and stay.
Alan Mak (Havant) (Con)
Just one pure technology company is now listed on the FTSE 100 and Budget measures, such as cutting venture capital trust tax relief, discourage companies from listing on the UK exchanges. Why are the Government driving away growth and investment?
Lucy Rigby
The entrepreneurship package in the Budget was incredibly important. The aim of that package, which includes the UK listing relief—the three-year stamp duty holiday that I referred to in response to my hon. Friend the Member for Paisley and Renfrewshire North (Alison Taylor)—is designed to make the UK the best place to start, scale and list a company.
Mark Garnier (Wyre Forest) (Con)
The Chancellor has been very proud that the FTSE 100 has passed through the 10,000-point barrier, citing that as an endorsement of her policies. Does she not realise that that still leaves FTSE 100 on lower valuations than comparable markets and that, in any event, over 80% of the earnings of the FTSE 100 are generated outside the UK? Is it not clear that the FTSE 100 performance is despite this Government’s policies, not because of them?
Lucy Rigby
I could not disagree more with the shadow Minister. He is constantly talking this country down. The package of reforms that this Government are making to our capital markets are strengthening those markets, and they are beginning to bear fruit.
Lincoln Jopp (Spelthorne) (Con)
The Chancellor of the Exchequer (Rachel Reeves)
While the Bank of England has overall responsibility for returning inflation to target, this Government are taking the action that we can: £150 off energy bills from April this year, freezing prescription charges for the second year in a row, and freezing rail fares for the first time in 30 years. As a result, the Office for Budget Responsibility forecast that inflation will be 0.4 percentage points lower in 2026-27 than it otherwise would have been.
Lincoln Jopp
On Friday, I visited Primark in Staines, in my Spelthorne constituency, where the team, led by Luke, is doing a fantastic job in creating a vibrant retail experience. However, the British Retail Consortium has said that the Chancellor’s jobs tax is pushing up prices and raising the cost of living, and that the Employment Rights Bill will also be inflationary. When did the Chancellor stop listening to business?
Rachel Reeves
I was at Primark just ahead of the Budget, where we announced that we were going to take action on low-value imports. That was welcomed by Primark and many other retailers who are undercut by foreign importers that do not pay customs duty on what they bring into the country. Far from working against business, we are working in conjunction with business to grow our economy. Our economy exceeded expectations for growth last year, and I am confident that it will do the same this year too.
Tom Hayes (Bournemouth East) (Lab)
The Conservatives may want to talk down Britain, but Bournemouth is building again, with a £350 million expansion at J. P. Morgan Chase following the Chancellor’s visit, a £100 million expansion planned by AFC Bournemouth, a £50 million airport upgrade, £26 million invested in Bournemouth and Poole College, £500 million provided for the Royal Bournemouth hospital development, and new land at Wessex Fields to build key worker housing and medical research facilities. Will the Chancellor continue to prioritise stability, bringing down costs, and the free trade that we need in our world, so that we can continue to protect and expand these investments into Bournemouth?
Rachel Reeves
I thank my hon. Friend for that question. He did not mention the beautiful Bournemouth pier, which we visited together in August and where we enjoyed a very nice ice cream, but he did mention J.P. Morgan, which has announced record investment in its Bournemouth campus. It is employing a shedload of apprentices on that campus, helping it to grow its business, and after this year’s Budget, J. P. Morgan has announced a new building in Canary Wharf. [Interruption.] Maybe Opposition Front Benchers do not like apprentices, but this Government do, which is why we are backing them.
Paula Barker (Liverpool Wavertree) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
This Government have a plan to grow the economy and reduce the cost of living, and it is the right plan for Britain. We are cutting the cost of living and the national debt and creating the conditions for growth in all parts of our country. We have had six cuts in interest rates since the general election, reducing typical mortgage costs by £1,200 a year, and have secured record levels of inward investment and trade deals with countries around the world. The FTSE has hit record highs, and while other countries are increasing barriers to trade, I was in Davos talking to allies about how to reduce them. Our economic plan is the right one to build a stronger and more secure Britain, and I am focused on delivering it.
Paula Barker
While I am looking forward to the statement a little later from the Exchequer Secretary to the Treasury, I would like to push him, if I may. I recently visited one of my local pubs, the Masonic Arms on Lark Lane—which is a fantastic venue—and met Guy and Amelia. Currently, the overall sector picks up 2.8% of UK business rates nationally, but has only 0.5% of the turnover of UK businesses. This is clearly not a fair tax for pubs; it is the result of a uniquely skewed business rates system that actively penalises many pubs. What long-term steps can the Minister take to help pubs like the Masonic Arms and the wider hospitality sector?
Rachel Reeves
As my hon. Friend knows, we have permanently reduced the multiplier for business rates for retail, hospitality and leisure, but my hon. Friend the Exchequer Secretary will set out the support for pubs in more detail later today. We are determined not only to support pubs, which are the lifeblood of so many communities, but also to support the whole of our retail, hospitality and leisure sector. We are putting more money in people’s pockets by cutting energy bills and train fares and getting people back to work, so that they have more money to spend on the things they love, not just on the essentials.
Sir Mel Stride (Central Devon) (Con)
Mr Speaker, I begin by associating Conservative Members with the Chancellor’s comments about your leg—we wish it well.
We are waiting with interest to hear the details of the latest U-turn on business rates this afternoon, but if the briefing is to be believed, it will be far too little, too late. The Chancellor simply does not understand the desperate situation so many of our pubs are in. Many pubs are asking why the Chancellor chose to spend billions more on the benefits bill instead of providing proper, permanent business rates support.
Rachel Reeves
Under the previous Government—when the right hon. Gentleman was in government—7,000 pubs closed. We have permanently lowered the tax rate that retail, hospitality and leisure businesses pay. When I became Chancellor of the Exchequer, we faced a situation in which all of the covid support was going to disappear overnight. We have put £4.3 billion of taxpayers’ money into supporting our retail and hospitality sector, including pubs, but we recognise the distinct problems that pubs face. That is why, unlike the previous Conservative Government, we are setting out more support.
Sir Mel Stride
They just do not get it. Of course, it is not just pubs; the whole high street—shops, restaurants and hotels—is seeing massive increases in business rates, some well over 100%. Where is the help for those businesses?
Rachel Reeves
Some of the numbers that are bandied around by the right hon. Gentleman do not reflect the reality, because they do not reflect the £4.3 billion of transitional support that we have put in to taper those increases in business rates. I do not think anyone in this House seriously believes that temporary support during the pandemic should continue infinitely. That would not be the right thing, and it would not be affordable for other taxpayers. That is why we are gradually tapering the support, with a £4.3 billion support package in the Budget and some more targeted support for pubs later today. I remind the right hon. Gentleman that he could have taken action when he was in government. Instead, there was a cliff edge, with no support for pubs or any other sector of the economy.
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
The Chief Secretary to the Treasury (James Murray)
As my hon. Friend sets out, there are significant challenges in adult social care, and we have already made available an extra £4.6 billion, including funding to start to implement the fair pay agreement. As she will probably be aware, Baroness Louise Casey is leading an independent commission to build consensus on reform. Its first phase will report this year, with a focus on how to make the most of existing resources.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
Rachel Reeves
I am not sure whether the hon. Gentleman thinks that the Chancellor of the Exchequer should not be in Davos, but I think it is important that the Chancellor is there banging the drum for Britain and bringing investment here. While I was in Davos, we secured new investment and worked with our allies on securing new trade deals for Britain. While the Opposition like to talk our country down, we are getting on and delivering a lower cost of living and higher economic growth.
Alan Strickland (Newton Aycliffe and Spennymoor) (Lab)
Rachel Reeves
I thank my hon. Friend for bringing this matter to the House’s attention. I cannot comment on individual cases of covid fraud and tax, but that person would not be the first member of Reform who took a fraudulent covid loan—[Interruption.] The hon. Member for Boston and Skegness (Richard Tice) is here just in time. I am not sure whether he is still the shadow, shadow, shadow Chancellor or not.
Munira Wilson (Twickenham) (LD)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
When the Liberal Democrats had the chance, what did they do? They put up VAT on hospitality businesses. Now they are coming up with ideas, without the plans to pay for them. They want to increase borrowing over and over again, rather than ensure that we support businesses in a fair and sustainable way over the years to come.
Preet Kaur Gill (Birmingham Edgbaston) (Lab/Co-op)
Rachel Reeves
I could not agree more with my hon. Friend, and that is why I announced—on the basis of many representations from colleagues, including her—a comprehensive set of measures at the Budget to crack down on illegal high street activity. We want our high streets to thrive, but we must crack down on these illegal businesses selling counterfeit goods and often harbouring more dangerous criminal activity. That is why we put money into that area in the Budget.
Edward Morello (West Dorset) (LD)
James Murray
Let me start by thanking the emergency services in the hon. Gentleman’s constituency for all their work to ensure that people are kept safe, and to respond to the challenges that people face as a result of flooding. We are determined to support public services across the board, and the decisions taken by my right hon. Friend the Chancellor in past Budgets and in the spending review mean that we have sustainable funding for our public services in all parts of the country.
Dame Nia Griffith (Llanelli) (Lab)
James Murray
My hon. Friend is absolutely right. The hon. Member for Clacton (Nigel Farage) is warmly welcoming people who spent 14 years undermining public services, who wrecked the economy, who botched Brexit, and who were booted out by the British people in 2024—and Reform’s latest recruit was so bad that she managed to get sacked by Liz Truss.
Wendy Chamberlain (North East Fife) (LD)
The Parliamentary Secretary to the Treasury (Torsten Bell)
That is an important question, because too many people have been let down by the scheme that was introduced by the Conservatives. I am sure that the hon. Lady noted the Energy Secretary’s announcement last week about the £15 billion warm homes plan, which will ensure that work to upgrade the quality of British homes continues in the years ahead for all households, but particularly for low-income households. She will also be aware that ongoing remediation work will take place as part of that scheme.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
James Murray
This Government are backing investment in Teesside to create the good jobs that my hon. Friend’s constituents deserve. I know that Teesside is very well placed to lead for our country across a range of sectors. For example, £4 billion is going into the UK’s first carbon capture, usage and storage cluster in Teesside, including the world’s first at-scale gas power station with CCUS.
Bobby Dean (Carshalton and Wallington) (LD)
Ten years ago, this place introduced legislation preventing banks from applying tax deductions after paying compensation for wrongdoing. Now lenders are set to pay out billions of pounds in connection with the motor finance scandal, but they will be able to reduce their tax bills because most of those companies have channelled their money via subsidiaries. Does the Minister agree that that is not in keeping with the spirit of the law, and will the Government do something about it?
The Economic Secretary to the Treasury (Lucy Rigby)
The hon. Member has referred to the motor finance redress situation. As the House would expect, we are monitoring that very closely, and we want to see the issues resolved in an efficient way that provides certainty for consumers and for firms. As the hon. Member knows, seeking to change the rules on corporation tax would mean deviating from our commitment to certainty and predictability in the tax system, as set out in our corporate tax road map.
Kevin Bonavia (Stevenage) (Lab)
I wish you a speedy recovery, Mr Speaker.
I welcome the economic steps that the Chancellor has taken against Russia’s illegal invasion of Ukraine, and I encourage her to go further, but does she agree that the British public can have confidence in our sanctions regime only if those in political leadership across all parties, including the shadow Attorney General, do not have ongoing involvement in advising Russian oligarchs?
Rachel Reeves
Like many, I was staggered by reports that senior counsel appointed by Mr Abramovich in relation to proceedings in Jersey include the shadow Attorney General. I cannot speak for the Opposition—I had many years of doing that—but our focus remains ensuring that there is no further delay in proceeds from the sale of Chelsea football club reaching humanitarian causes in Ukraine. If Mr Abramovich fails to act quickly, this Government are fully prepared to pursue legal action to release the funds. We know whose side we are on: we are on the side of the Ukrainian people, and of Britain’s national interests.
Peter Fortune (Bromley and Biggin Hill) (Con)
More than 80% of households in Bromley and Biggin Hill have at least one car or van—a figure significantly higher than the average in Greater London—so the decision to remove the 5p fuel duty reduction hits them particularly hard. This is the latest in a slew of measures against motorists, including increased congestion charges and the ultra low emission zone charge, which is really hitting them in the pocket. Why does the Labour party continue to use motorists as a cash cow?
Dan Tomlinson
We have extended the temporary 5p fuel duty cut until the end of August 2026, and rates will then gradually return to early 2022 levels. The planned increase in line with inflation will also not take place. That will save the average driver £49 next year, compared with previous plans.
Rachael Maskell (York Central) (Lab/Co-op)
While pubs may have a large lobby, we know that independents power our local economy. I have looked through the spreadsheets showing the business rates for our independent businesses after the relief has been applied. Businesses in my city will see an increase of up to 93% in their business rates. What engagement has the Minister had with small independents to ensure that they are safeguarded through the relief that he is about to announce?
Dan Tomlinson
It is important to note that there is a 40% relief in the system for smaller and independent businesses. It will be phased out over the coming years; we have put in transitional relief protection. As the Chancellor said earlier, that is reasonable. Members from across the House will agree that it would not be right to have temporary pandemic support still in place at the end of the decade.
Rupert Lowe (Great Yarmouth) (Ind)
I will not challenge you to a corridor race today, Mr Speaker, but good luck with your leg.
I wrote to the Chancellor on 8 January, with the support of 7,000 small businesses from across the spectrum—not just pubs. They are concerned about not only rate re-evaluations, and the vicious tax rises that they have had to suffer, but the cost of the Employment Rights Act 2025. When can the 7,001 of us expect a reply?
Dan Tomlinson
I regularly reply to letters and parliamentary questions from the hon. Member and those on both sides of the House.
Antonia Bance (Tipton and Wednesbury) (Lab)
There are many small and medium-sized enterprises in advanced manufacturing supply chains in my bit of the Black Country. Does the Chancellor agree that successfully implementing our industrial strategy is vital to securing the growth, through small businesses, that we need to get British industry back on track?
Rachel Reeves
I thank my hon. Friend for the work that she does to champion small businesses, and all businesses in the Black Country, but particularly those in her constituency. Advanced manufacturing is one of our industrial strategy sectors in which we have huge strengths as a country. We are determined to support such businesses in growing and fulfilling their potential.
Edward Argar (Melton and Syston) (Con)
What does the Minister say to childminders in Melton and Syston who are concerned about potentially increased administrative burdens and cash-flow pressures, as a result of changes under Making Tax Digital for businesses with a turnover of at least £50,000? It is scrapping the blanket 10% wear and tear allowance, and replacing it with a requirement for line-by-line item accounting, with childminders having to pay up front and claim back later.
Dan Tomlinson
This is an important issue that is of concern to childminders. I have replied to correspondence on this topic from the right hon. Member, I think, and from others in this place. I would be happy to talk to Members about it. I think the change is proportionate and reasonable, and we have engaged closely with the sector to make sure that the burden will be proportionate for those who are affected by it.
Sarah Coombes (West Bromwich) (Lab)
Thanks to the policies of the Labour Treasury team, Sandwell will receive £1.5 million to smarten up our towns. Does the Chancellor agree that local people should have a say in how that funding is spent, and will she encourage people in Rowley, West Bromwich and Oldbury to fill in my survey about how we spend this Government cash?
Rachel Reeves
I very much encourage people in my hon. Friend’s constituency to fill in her survey. The Pride in Place money, which we are allocating across some of the most deprived parts of the country, will make a huge difference in regenerating areas left behind by the previous Government. I encourage everyone in all our communities to get involved, and to shape those plans, because those plans can only be improved by direct contact with the people who stand to benefit from them most.
Caroline Voaden (South Devon) (LD)
Link has doubled down on its decision not to grant Totnes a banking hub, despite the Prime Minister telling Members at Prime Minister’s questions that every community that wants one should have one. Will the Chancellor agree to review the criteria for banking hubs, so that people have access to face-to-face banking services, not just access to cash, when the last bank turns its back on its customers and leaves town?
Lucy Rigby
The Government of course recognise the importance of in-person banking services and access to cash, as the hon. Member and I have discussed. As she knows, in-person services are provided through traditional bank branches, banking hubs, post offices and other means, and I will continue to monitor the situation. As she knows, I have listened very carefully to her concerns, and I am happy to do so again.
Callum Anderson (Buckingham and Bletchley) (Lab)
Earlier this month, the House of Lords Financial Services Regulation Committee published a report on private markets, highlighting the potential risks to economic stability, and the Bank of England has also undertaken a stress test of the ecosystem. What actions is the Minister considering taking with regulators to strengthen transparency and oversight of private markets, so that we can mitigate any systemic risks?
Torsten Bell
My hon. Friend is right that the rise in private markets has brought benefits, including to growth and financial stability—we have discussed that many times in the context of pensions—but it does come with new risks. The Treasury and regulators have increased their focus on those risks in the non-bank sector in recent years and, as I am sure he is aware, have played a leading role in the response to emerging non-banks’ risks internationally. In particular, the Government emphasised in the November remit letter to the Bank of England’s Financial Policy Committee that the committee should continue to consider risks in private markets. We are considering the House of Lords Committee’s recommendations, and will respond in due course.
Rebecca Smith (South West Devon) (Con)
At the weekend, Storm Ingrid caused the sea wall at Dawlish to collapse in two new places, and we wait to see the damage caused by Storm Chandra today. Both storms are once again exposing the vulnerability of the main rail line to Devon and Cornwall, which is vital for the local economy. Given the reported lack of a Treasury emergency reserve, can the Chancellor guarantee contingency funding for any urgent and unplanned resilience work required and not covered by a fiscal event?
James Murray
I thank the hon. Lady for raising the situation in her constituency. All Departments across Government have had their budgets set, and they include a contingency for covering known pressures. One of the ways that we have managed spending settlements differently from the previous Government is that all Departments must recognise that unexpected pressures will come along. They need to prepare for that, and should have robust plans for responding when such things occur.
Chris Webb (Blackpool South) (Lab)
Southshore in my constituency has the highest concentration of deprived communities and the most deprived ward in the country. We have developed a local people’s plan for work to regenerate the area. Will my right hon. Friend the Chancellor meet me to discuss this plan, so that we can regenerate the most deprived area in this country?
Rachel Reeves
We were pleased to be able to allocate Pride in Place funding to my hon. Friend’s constituency, in recognition of its levels of deprivation. That comes alongside policies such as getting rid of the cruel two-child benefit cap, which the previous Government introduced, and investing record amounts in social housing. This Government are delivering for the people of Blackpool. I am very happy to meet my hon. Friend.
Dave Doogan (Angus and Perthshire Glens) (SNP)
Constituents of mine have restored the Alyth hotel. It has gone from near dereliction to being an outstanding venue for dining and drinking, and a hotel. However, they are smothered by the compound burden of VAT rates, wage costs, duty increases, employer national insurance contributions, energy costs and the squeeze on spending. That is why there were 8,000 fewer jobs in hospitality in December than in November, and 20,000 fewer than in September. Will the Chancellor consider reducing VAT on hospitality to the 7% it is in Germany, the 9% it is in Ireland, or the 10% it is in Spain and Italy?
Rachel Reeves
I suggest that the people of Scotland ask who was in charge in Scotland for the last two decades, kick them out at the next election, and give Labour a chance.