Oral Answers to Questions

Debate between Clive Efford and Lord Hammond of Runnymede

Tuesday 17th January 2017 Commons Chamber

[Clive Efford (Eltham) (Lab)]

9. What recent assessment he has made of the effect of high levels of household debt on the economy.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

Households’ financial positions have improved. Household debt has fallen from 160% of household income in quarter 1 2008 to 144% in Q3 2016. UK households have undertaken the second-largest amount of deleveraging in the G7. However, we should be alert to signs of a recent reduction in the level of household savings. The savings ratio is now—in Q3 2016—at 5.6%, which is down from 6.6% in Q3 2015.

[Clive Efford]

Notwithstanding that, household debt is very high, and housing costs are a big proportion of households’ expenditure. Has the Chancellor made an assessment of the impact of an interest rate increase on growth, given that that growth is driven by consumer spending?

[Mr Hammond]

Yes. The Bank of England makes regular assessments of the impact of changes in interest rates—that is a central part of the modelling work that it does. The hon. Gentleman is absolutely right that one of the drivers of the relatively high household debt levels in this country is our housing model, with relatively high percentages of home ownership.

Daesh: Syria/Iraq

Debate between Clive Efford and Lord Hammond of Runnymede

Wednesday 16th December 2015 Commons Chamber

[Mr Hammond]

I suspect that those two eternal inevitabilities, death and taxes, are rather more immediately unavoidable in Daesh-controlled territory than they are in most other places. There are some signals—this was set out in the debate two weeks ago—that Daesh is facing some financial stress. Stipends paid to fighters have been cut. There are many reports of fighters being unpaid and payments to fighters being delayed. This is still a very well-funded organisation, but the huge one-off bonanza that it acquired in the early days of its surge into Iraq, where it was capturing hundreds of millions of dollars in cash in banks and simply taking it away, has ended. I think it is facing a little more pressure financially than it was then, and we intend to keep tightening the screw.

[Clive Efford (Eltham) (Lab)]

Will the Secretary of State say more about what is being done in relation to the position of the Iraqi Government on the Sunni community, who are a mainstay of Daesh in that area and are enabling it to run an effective economy and to pay wages to civil servants, soldiers and others because of the technical expertise of many of the people who have gone from Iraq into the area? If we are going to deal with Daesh in the long run, what pressure can be put on the Iraqi Government to deal with that fundamental problem?

[Mr Hammond]

We are working very closely with the Iraqi Government, and we are supporting Prime Minister al-Abadi, who remains committed to the programme of outreach to the Sunni community in Iraq but is facing significant challenges in delivering it. His immediate predecessor is opposed, and a significant bloc in Parliament is making it impossible to progress with two key pieces of legislation: on the creation of a national guard, which would see regionally based forces composed of groups that reflected the ethnicity and the confessional allegiance of the regions; and on repealing the de-Ba’athification legislation passed in the immediate aftermath of the collapse of the Saddam Hussein regime, which has driven many capable Iraqis who were associated with the Ba’ath regime into the arms of ISIL. Many of the military brains behind ISIL’s initial success were former Ba’athist military officials from the Iraqi regime.