(1 week, 4 days ago)
Lords ChamberI am grateful to my noble friend for his question. A council tax cap of 5% was introduced by the previous Government. Councils do not have to increase council tax by 5%, but under the rules they cannot increase it by more than 5% without a local referendum. That remains the position.
My Lords, when the Treasury team are preparing the Budget, will they have a look at the precedent of Sir Geoffrey Howe’s Budget of 1981, which was delivered in very similar economic circumstances to those of today? It was the most unpopular Budget of my political lifetime but also one of the most successful, because it paved the way for recovery with growth, lower inflation and rising living standards. Does the Minister think that the present Chancellor has the courage to concentrate on the public interest and the medium-term health of the economy, or will there be an obsession with rather reckless promises in the manifesto or short-term reactions in the newspapers and opinion polls?
I am grateful to the noble Lord for his question and for his expertise. That Budget created the deepest recession in British history, so I do not know that we necessarily want to follow it in its entirety.
(2 weeks, 4 days ago)
Lords ChamberI may have agreed with the first half of the noble Viscount’s question; I am not sure I agreed with the second half of it. But, absolutely, the best way to repair the public finances is through economic growth. That is why it is our number one mission.
My Lords, since the 2008 financial crisis, this country has built an unsustainable level of public debt in relation to our GDP, and the cost of servicing that debt is a serious constraint on financing public services. Does the Minister agree that any easing of fiscal rules in those circumstances would run a serious risk of creating another financial crisis, with more hardship? Will he undertake to stick firmly to the rather lax fiscal rules we have, as the Chancellor keeps affirming, and try to put up more stalwart resistance to the left-wing Back-Benchers in his party who seem to have got into the House of Commons in rather considerable numbers?
I slightly disagree with the noble Lord’s characterisation of the Parliamentary Labour Party, but I certainly agree with what he says about the fiscal rules. They are essential to maintaining our ability to invest in our public services. The second fiscal rule absolutely allows the additional investment into our public services, but, as he says and as I have said before, the previous Government doubled the national debt, and we have to fund that. The more that it looks like we will not, the harder it becomes. I give him that undertaking. Our commitment to the fiscal rules is non-negotiable.
(1 month, 2 weeks ago)
Lords ChamberI am grateful to my noble friend for his support for the change—I was going to say in the means test, and that is obviously exactly what his question is about. I am not sure I am expert enough to engage in a debate with him about the definition of a means test. Clearly, we are raising the level at which pensioners are entitled to and benefit from this policy. As he says, it will be paid universally to all pensioners, and those with an income over £35,000 will have the winter fuel payment recovered by HMRC through the tax system.
My Lords, this is certainly a shambolic way of conducting a government, but otherwise, I find myself unfortunately rather out of step with the exchanges so far.
The winter fuel payment had nothing to do with the level of fuel bills. It was paid to everybody, rich or poor, as a prize for reaching a certain age, which is why, at the last general election that I fought successfully as a candidate, the Conservative Party manifesto contained a commitment to abolish it. Unfortunately, we never got round to that.
The Government failed to make their case, which was exploited very successfully by Nigel Farage, so now they are introducing an extraordinarily generous means test. I quite accept that this should be means tested, but we are now going to pay it out to some of the better off households in this country. Does the Minister not accept that if the Government can somewhere find £1.5 billion to spend on the alleviation of poverty, there are very many more sensible ways of spending it that might help relieve the quite excessive levels of poverty that exist in our society at the moment? Meanwhile, I thank him for the £300 that I shall be receiving in a week or two’s time, although apparently, I shall be giving it back eventually.
I am grateful to the noble Lord for his question. I am sorry that he does not share the consensus in the House on the new policy position. He is absolutely right in his characterisation of the policy. I do not know what he earns, so it is not right for me to comment on that, but if he earns above the £35,000 threshold, it will be recovered through the tax system. He describes it as an extremely generous means test. It is kind of him to say that, but it is in line with average earnings and we have decided that that is the appropriate level it should be paid at.
(5 months, 2 weeks ago)
Lords ChamberI am sorry that the noble Lord is not able to support the increases in the national minimum wage; that is a shame to hear. I do not know whether he was able to read the monetary policy report that was published alongside the growth forecast last week, but the Bank of England said that the combined effects of the measures in the Autumn Budget are expected to boost the level of GDP by around 0.75%.
The biggest mistake the Government made was during the general election, which they were obviously going to win, when they promised not to raise the basic taxes—income tax, VAT, national insurance for employees and so on—which are the normal toolbox of a Chancellor, so that when they inherited a fiscal crisis, they raised quite the worst possible tax on employers and employees. At the same time, they borrowed billions of pounds more, saying it was not more spending but investment. After this disaster, will the Minister now agree that the new Government have made a financial crisis even worse than it was when they were elected? Will they turn the March Statement into a mini-Budget to try to begin to repair the damage they have done?
With the greatest respect to the noble Lord, I completely disagree with what he says. His contention is that we should have taxed working people after a cost of living crisis, and after the previous Government froze income tax thresholds and raised taxes on working people by £30 billion. I completely disagree; if that is his contention, I think he is wrong. He also says we were wrong to increase investment in the economy. The IMF has said that the lack of public investment in the economy was one of the major constraints to economic growth, and we have rectified that—so, on that point too, I think he is wrong.
(8 months, 3 weeks ago)
Lords ChamberMy Lords, we used to have a rule of Budget purdah in this country for the very good reason that it prevented market speculation in the run-up to the House of Commons hearing the Budget details. Every Chancellor who followed me in office has steadily weakened that and, this year, we have had three months of absolutely absurd semi-debate, with hints, leaks and suggestions from the Government being debated. It began by ruling out any question of raising the four most basic taxes that everybody previously turned to when they needed more revenue, because they share the burden more fairly across the country. This has now accumulated with the Prime Minister deciding, two days before the Budget, that he will take for himself a popular announcement—to some of his Cabinet colleagues and Back-Benchers—that he will ease the fiscal rules on which the Budget is based.
Fortunately, this nonsense has so far had only a slightly dampening effect on investors and markets, but it has had an undoubtedly dampening effect on business activity for the last two or three months. Will the Minister ask his colleagues to consider returning to Budget purdah in future years? If this circus is now to be the pattern for every Budget throughout this Parliament, then, sooner or later, we are going to have market speculation and a financial crisis of the kind that followed Liz Truss’s Budget.
The noble Lord is far more experienced in these matters than me, and I have the greatest respect for him. He mentioned three types of activity. The first one he mentioned was the manifesto commitments we gave: he mentioned the major taxes and he is absolutely right. In our manifesto, we committed to not increasing taxes on working people, which is why we will not increase the basic, higher or additional rates of income tax, national insurance or VAT. I think it is perfectly right that we do that and specify that in our manifesto. He also mentioned speculation. There has been huge speculation ahead of this Budget around specific taxes which at this Dispatch Box, on multiple occasions, I have been unable to comment on, and I think he will understand why. As for announcements being made ahead of a Budget, that is a perfectly routine thing to do, and it is right that Parliament then has the opportunity to scrutinise those at the appropriate moment.
(2 years, 1 month ago)
Lords ChamberMy Lords, I declare my interest as a director of two investment companies, as stated in the register. I was interested to hear the remarks of my noble friend Lord Forsyth of Drumlean about American Express. He said that he had had a gold credit card with that company since 1979. Well, I had a gold card issued by American Express in 1978. I was very proud of having that card. I did not use it often, but it is one of those cards that clears automatically every month so there is no danger of running up unpaid debts and paying 20% or 30% interest.
In November 2021, I missed an email from them asking me for KYC information, including my passport details, proof of address and a utility bill, and I omitted to reply. I then got another email a month later—with no telephone call or letter through the post—saying that my account will be closed down. I telephoned them and, after waiting for three-quarters of an hour or so, I spoke to someone who agreed that they did not really need KYC information on me, but if I supplied it and uploaded it to their website, my account would not be cancelled, and all would be fine. I duly did that, but the account was still cancelled in about February 2022. I was not happy about this, because, as I said, I rather liked my gold card issued in 1978, so I took issue with them.
Over the past 15 months, I have spoken with them about six times; I have been on the chat function about six times. I now have two names of individuals and an email address I have been corresponding with, but my account is still cancelled—although they still send me a monthly statement through the post giving me a credit balance. I will print out the Hansard report of this debate and attach it to my next email to American Express, because I am not giving up on this.
I will not make a speech giving my experience of American Express, but it is remarkably like that of my noble friends Lord Trenchard and Lord Forsyth. I decided that I could not be bothered with such outrageous burdens being placed on me. Having had my card from some time in the 1970s, I have allowed them to cancel it. Having heard of my noble friend’s experience, I am rather glad that I just let it go and reverted to using my Barclays visa card on all occasions.
I will take my noble friends’ points further. My experience was identical to that of my noble friend Lord Forsyth. Frankly, I have cancelled the whole thing; Barclaycard does a far better job.
(5 years, 10 months ago)
Commons ChamberLet me start by saying a few words about the circumstances surrounding today’s statement. We are in uncharted waters. I understand the strong feelings around the House on these important questions, but it cannot be right for a proud, sovereign democracy to ignore the will of the people. If the House votes for the Bill this afternoon, all we will be doing is delaying what the people have entrusted to us to do, and creating even more uncertainty for our democracy and our economy through a general election that nobody wants. We cannot allow that uncertainty to distract us from delivering on the people’s priorities, so today, to give certainty where we can, I announce our spending plans for Britain’s first year outside the European Union.
After a decade of recovery from Labour’s great recession, we are turning the page on austerity and beginning a new decade of renewal. A new economic era needs a new economic plan, and today we lay the foundations with the fastest increase in day-to-day spending for 15 years. The plans I announce today mean that we will be able to build a safer Britain where our streets are more secure; a healthier Britain where we can care for people throughout their lives; and a better educated Britain where every child and young person has the opportunity to succeed, no matter where they come from or who their parents are. We will build a global Britain where we walk tall in the world with more, not less, of a presence on the international stage; a modern Britain where we embrace diversity as a strength; an enterprising Britain where we are proud of our scientists, our inventors and our entrepreneurs; and a prosperous Britain where we live within our means and growth comes from every corner of this nation. Today we lay the foundations for a stronger, fairer and more prosperous future for our great country.
It has been three years and three months since the British people gave us their instruction to leave the European Union. If people are going to have faith in the ballot box again, we absolutely have to follow through on that instruction. That is why we have set a deadline of 31 October—just 57 days away. The Government still believe that the best outcome would be to leave with a deal, and we could not be more serious about negotiating for such an outcome. My right hon. Friend the Prime Minister has set out our position, and our central ask is clear: to remove the anti-democratic backstop from the withdrawal agreement. But without the ability and willingness to walk away with no deal, we will not get a good deal.
I know that some businesses and households are concerned about what a no-deal outcome would mean for them. I recognise that, and I understand that the uncertainty around Brexit is challenging, but this is ultimately a question of trust in our democracy. In the end, a strong economy can only be built on the foundation of a successful democracy.
On a point of order, Mr Speaker. What has this got to do with the spending review?
I have to say, Mr Speaker, I did not detect many questions, so I will finish very quickly to give an opportunity for Members to ask proper questions.
The simple truth is that Labour is unfit to govern. It would not deliver Brexit. It would wreck our economy over again. Hard-working families will pay the price and we will not let it happen.
I genuinely welcome my right hon. Friend to his appointment and congratulate him on it, and I sincerely wish him every success in carrying out his extremely important duties. I also welcome the many spending announcements he made. In particular, I single out further education, to which successive Governments have been trying to give better priority for the last 30 or 40 years. I hope that it shows in effect. Will he reassure me that the announcements that he has made are consistent with the fiscal rules of his predecessors, that we are still subject to the same limits on the deficit that were laid down, and that he is still aiming to achieve year-by-year reductions in debt as a proportion of GDP? If he can give me those assurances, it demonstrates what he has just said: that he is able to make these welcome announcements because austerity has been brought to an end by the achievements of his two predecessors over the last nine years.
I welcome the warm words of my right hon. and learned Friend. I remember all the excellent work he did when he held this position and I hope that I can learn from the way in which he performed his duties as Chancellor.
My right hon. and learned Friend asks me a specific question about the fiscal rules. This spending round is within the current fiscal rules. According to our forecasts, we expect to meet both the key rules of borrowing staying inside 2% of GDP and seeing a further fall in debt as a proportion of GDP. I would, however, point him to some of the other comments I made in my statement about looking again at the fiscal rules, particularly with an eye to taking advantage of record low interest rates and investing more—credibly—in an infrastructure revolution.
(6 years, 4 months ago)
Commons ChamberOrder. It might be helpful to the House if I indicate that, given the pressure of time and the importance of subsequent business—to which reference was made earlier—it will almost certainly not be possible on this occasion for me to take everybody on this statement, which, as the House knows, is ordinarily my practice. I am looking to move on at approximately 2.45 pm. It may be possible to move on before then, but I certainly do not want it to be significantly later than then.
May I sincerely congratulate my right hon. Friend the Chancellor on keeping his head while all around are losing theirs? I am sure that he would have liked to have delivered a rather different statement if the vote had gone the other way last night. Does he agree that economic forecasting is difficult at all times, particularly at a time of slowing global growth, trade war, Chinese debt problems, and, above all, the uncertainty of Brexit? Does he agree that the optimistic forecasts by the OBR are based on a smooth progression to Brexit, with no new barriers to trade and investment with our most important market on the basis that we currently enjoy under the customs union of the single market?
Finally, will the Chancellor guarantee to me that he will keep his fiscal powder dry—keep his reserves, as he may need them to avoid a recession or a financial crisis; that he will resist the irresponsible approach of the Opposition, who have the idea of spending and borrowing money only as a policy platform on every issue; and that he will resist all the other understandable demands from all parts just to spend money in response to lobbies, because he has the duty of keeping the British economy intact at a time of almost unprecedented crisis and unforeseeable problems?
I can confirm to my right hon. and learned Friend that the OBR’s central forecast is based, as before, on an assumption of a deal done with the European Union so that we exit via a transition mechanism and have a future close trading relationship with it. I can assure him—I am sure he needs no reassurance—that I will not be remotely tempted by the policies or the profligacy of the shadow Chancellor. My right hon. and learned Friend is absolutely right that until such time as we are sure that we will not exit via a disorderly no deal, I have to keep that fiscal powder dry, but no one will be happier than me when I can release some of that headroom to support public services, capital investment and lower taxes in this economy.
(6 years, 5 months ago)
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I thank the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) for his vociferous oration, but vociferous orations are no substitute for the facts. Let me remind him of some of the facts in respect of the points he made. He says that we have made no analysis of the impact of these arrangements on the United Kingdom economy, and that is simply not the case. The information we have come forward with is a robust analysis of the future outcomes of the four different scenarios that we consider in that analysis. He levels the charge that we are in some way treating the United Kingdom with contempt, and that is certainly not the case. The House has been very deeply preoccupied with matters of Brexit and the nature of how we might exit the European Union, and the Prime Minister has set out that there will be further debate this time next week to be followed, in the event that we do not pass a meaningful vote, with another amendable motion to be considered by the House.
The right hon. Gentleman also says that the deal, as he terms it, would have a negative impact on the UK economy. The analysis clearly shows that, under every single scenario it analyses, it is better to have this deal than no deal or any of the alternatives. Finally, he decried the fact that we had not put forward a bespoke deal for analysis within our analysis, and that illustrates his lack of understanding of what the future political declaration is all about, which is a range of possible outcomes. That is entirely what the analysis models.
It is perfectly obvious to all those involved in the negotiations, both the British negotiators and the EU negotiators, that if Britain were to leave the EU with no deal, it would be disastrous for the British economy in the medium to long term and extremely damaging to the economies of many EU countries, particularly those nearest the UK. Does the Minister accept that it is rather silly to think that it is useful in these negotiations to take up the simplistic view that we must pretend we are threatening to leave with no deal to improve our bargaining position? Will he reassure me that the negotiations are proceeding on the basis that both sides know that they do not want no deal and that they are therefore trying to limit the damaging consequences of risking that? What we should really pursue is retaining the benefits of the customs union and the single market and continued free trade with our largest customer in the world, as it will always be, as is being urged on us by every industrial leader in this country.
(6 years, 6 months ago)
Commons ChamberWith respect, it is quite right to concede that some of the fears being raised about no deal are grossly exaggerated, but the problems are quite real enough. If we leave with no deal, we will be the only developed country in the world that has no trade agreement at all with anybody and that is having to fall back on WTO rules, which are made to sound marvellous by the Brexiteers but which do not actually amount to very much. We will also be erecting new barriers to trade and investment around the borders of the United Kingdom, including along the Irish border, and that is bound to disadvantage our economy very seriously indeed.
The Father of the House is as accurate as ever. Some colleagues are pursuing a dangerous argument that all our trading relationships with countries that are not in the EU are somehow currently under WTO terms, which is an absurd misconception. We have entered into trade agreements as a member of the EU that account for something like 16% of our goods exports.
Regardless of the significant impacts of a no-deal outcome, we could go further and say that to leave the EU having not secured a deal—an acrimonious departure —would damage our relationship with our most important trading partner for years to come and fundamentally undermine our credibility on the world stage. I cannot see how any serious-minded Member of this House could understand that that would not be of severe consequence for the United Kingdom, which is why it is so important that this House makes a clear statement today about the dangers of no deal.
I will be very brief, not least because my right hon. Friends the Members for Loughborough (Nicky Morgan) and for West Dorset (Sir Oliver Letwin) have described much better than I ever could why I am going to support amendment 7, which I signed almost while it was hot off the presses before Christmas. The one point I want to address is the question that has been raised, and indeed the accusation that has been made, that in doing so I and other Conservative Members are breaking faith with our constituents and somehow breaking a manifesto commitment. I believe this to be utterly wrong, and also a rather disgraceful suggestion to make.
In the referendum campaign on our membership of the European Union, I supported and indeed voted remain. However, the argument of my colleagues who voted and campaigned for leave that I found most powerful and most emotionally impactful was that Parliament is sovereign and should take control of all the decisions that affect the lives of my constituents. That was the argument that the leave campaign made that I found the most difficult to resist and the most difficult to say was worth compromising for the sake of our membership of the European Union. It is therefore somewhat extraordinary that the very same people who made that argument so eloquently and effectively during the referendum campaign should somehow have the temerity to criticise me or other hon. and right hon. Members for doing what we believe is right in the interests of our constituents and in the national interest.
I cannot think of a single leading Conservative Brexiteer who would have changed his opinions on membership of the EU in the slightest had the remain side won the referendum. They made it quite clear that they had no intention whatever of abandoning their long-held, quite sincere views, which they would have carried on arguing in this House and voting for. Does my hon. Friend share my view?
The Father of the House is completely right. I have to say—I am sure the same is true of him—that I rather admire them for it. I admire my hon. Friend the Member for Stone (Sir William Cash) for making the same arguments passionately and with principle for 40 years—longer, practically, than many Members have been alive.
I want briefly to address the question of the Conservative manifesto commitment. I should point out that quite large chunks of the Conservative manifesto were junked by the Prime Minister during her own election campaign, so I do not know quite why we have elevated it to be a sort of Moses-style tablet. Nevertheless, it contained a sentence saying that we maintain that no deal is better than a bad deal. I agree, and I agreed then, in my hospital bed, when I agreed to stand as a candidate in the election, that that was the right position for the Government to take. As my right hon. Friend the Member for South Dorset (Sir Oliver Letwin)—West Dorset; apologies to the people of Dorset—explained, it was entirely right for the Government to want to prepare for no deal. Unfortunately, as he pointed out, they failed to do so.
However, what we did not say in that manifesto is that no deal is better than any deal; we said no deal is better than a bad deal. I remind my hon. Friends that we have a deal; it is a deal that the 27 nations of the European Union have agreed, that the Prime Minister, who recently won a confidence motion in the Conservative party, and her Cabinet have endorsed and advocate, and that, at the last count, about 200 Conservative Members, including myself, intend to support when the vote is finally put. It is simply not possible to suggest that by saying that I will not countenance no deal, I am breaking that manifesto commitment. We do not have a bad deal; we may have a deal that you, individually, do not like —not you, Mr Speaker, but individual hon. and right hon. Members—but nobody can claim that we do not have a deal that it is reasonable for Conservative Members to support. It is therefore reasonable for us to say that, at this late stage, with the Government having prepared as woefully as they have for no deal, we will on no account countenance a no-deal Brexit.
Finally, I join my right hon. Friend the Member for West Dorset in very clearly saying this: I will vote on any motion, on any amendment, on any piece of legislation, proposed by whomsoever in this House to ensure that we leave the European Union on 29 March with a deal or not at all.
I will give way one last time, but I have only a couple of minutes.
I, too, extend my sympathies to my hon. Friend, who drew the short straw of responding to the debate. He is trying very eloquently to minimise the significance of the whole thing, but of course he realises there are big issues behind this. Can he tell us what contingency arrangements the Treasury has made for the fiscal impact of leaving with no deal, and its likely impact on our trade, our manufacturing industry and so on? He must concede that the published figures for future deficits, debts and so on will be made utterly meaningless if we leave with no deal, and a fiscal crisis will occur. Is the Chancellor planning the emergency Budget he will probably require?
My right hon. and learned Friend and constituency neighbour tempts me to go into areas that I should not, but the Chancellor has said that we will be prepared and that we have fiscal room available—that was what he stated in the Budget, as certified by the Office for Budget Responsibility. My right hon. and learned Friend appears to be making the case for prudent preparations in case of a no-deal scenario, which is all that clause 89 seeks to achieve.