Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what steps they are taking to (1) ensure that stabilising mortgage rates contribute to sustained growth in the housing market, and (2) address challenges faced by homebuyers concerning the increased cost of living.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The path to lower interest rates is through low inflation, and the Government is fully committed to supporting the Bank of England get inflation back down to the 2% target, including by keeping borrowing under control.
While the pricing of mortgages is ultimately a commercial decision for lenders in which the Government does not intervene, our plan is working, and the average offered mortgage rates on 2-year and 5-year fixed rates are now lower compared to their peak in Summer 2023.
The Government is committed to making the aspiration of homeownership a reality for as many households as possible and consequently operates a range of schemes that aim to increase the supply of low-deposit mortgages for credit-worthy households, including first-time buyers, increase the availability of new housing, and stimulate economic growth. These include the Mortgage Guarantee Scheme, which is open until the end of June 2025. We also help first-time buyers to save for a deposit through the Lifetime ISA and Help to Buy: ISA.
Over 876,000 households have been helped to purchase a home since spring 2010 through government-backed schemes.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact of the easing grocery price inflation on (1) consumer spending habits, and (2) household budgets.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
Inflation reduces real incomes, creates uncertainty, and threatens our growth outlook so it’s essential that the government continues with its efforts to keep inflation down. The government remains steadfast in our support for the Monetary Policy Committee of the Bank of England.
Food inflation has fallen from a peak of 19.6% in March 2023 to 5.0% in February 2024.
The latest data suggests real household disposable income per capita was 1.4% higher in Q4 2023 than in Q4 2022.
ONS retail sales remained unchanged on the month in February. This followed an increase in retail sales volumes of 3.6% on the month in January, fully offsetting the decline in December. Food store sales were 2.8% higher in February than in December.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the Department for Energy Security & Net Zero:
To ask His Majesty's Government what support they intend to provide to households to adapt to changes in energy prices.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Energy prices have fallen significantly since winter 2022-23, and the Quarter 2 2024 price cap of £1,690 has fallen by nearly 60% since the Quarter 1 2023 price cap peak. Despite this, the Government has committed to supporting households in 2024-25, with a further cut to National Insurance contributions down to 8%, an increase to benefits of 6.7%, and the largest increase to the National Living Wage.
The Warm Home Discount continues to provide a £150 rebate off energy bills for eligible low-income households until 2025-26.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of recent trends in consumer spending; and what assessment they have made of the impact of this on (1) the retail sector, and (2) the wider economy.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
Consumer confidence has strengthened considerably over the past year. The March 2024 release of the GfK index indicated that consumer confidence was 15 points stronger than in March 2023.
Government continues to back consumers and retailers. With the economy beginning to turn a corner, we are now able to make responsible tax cuts to boost growth while meeting the fiscal rules to ensure sustainable public finances. These include cutting the employee main rate of National Insurance to 8%, which will make an average worker on £35,400 over £900 a year better off than before.
At Autumn Statement 2023 we extended Retail, Hospitality and Leisure relief for 2024-5, a tax cut worth £2.4 billion, and froze the small business multiplier for a fourth consecutive year. At Spring Budget 2024, the government went further still by supporting small retailers by increasing the VAT registration threshold to £90,000 and extending the Recovery Loan Scheme, now the Growth Guarantee Scheme.
Consumer confidence is intrinsically linked to inflation, household finances and the broader economic outlook. To sustain consumer confidence, consumers need to feel assured that their government is taking the long-term decisions necessary to strengthen the economy and build a brighter future.
Combined, recent policy measures will place more money in people’s pockets, helping boost consumer confidence, and strengthen the UK’s retail sector.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, following the revision to the UK's sovereign credit outlook by global ratings agency Fitch from negative to stable, what assessment they have made of the impact of this on the UK's standing in (1) global trade, and (2) investment markets.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
On the 22nd of March 2024 Fitch returned the UK’s rating to AA- with a stable outlook, meaning all three major credit ratings agencies now indicate that the UK has a stable outlook.
This is further evidence that the economy is turning a corner. Inflation has fallen from over 11% to 3.4% and is forecast to fall back to target in a few months’ time. The economy has grown so far this year, with growth forecast to pick up both this year and next. Debt is falling in the final year of the forecast, meeting our fiscal rules.
Underlying demand for the UK’s sovereign debt remains strong and is supported by a generally well-diversified investor base. This reflects the UK’s central position in global trade and investment markets.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the factors contributing to the recent decline in consumer prices inflation.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The Monetary Policy Committee (MPC) has raised interest rates, which is helping to bring inflation down and return to the 2% target sustainably. The Government's responsible approach to borrowing has helped support the MPC as it brings inflation down.
The Office for Budget Responsibility expects CPI inflation to fall to the 2% target in the second quarter of 2024, a year earlier than they expected in November.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government, following the release of data showing that the number of children living in absolute poverty has risen by the highest rate in 30 years, what steps they are taking to address the increase in child poverty rates.
Answered by Viscount Younger of Leckie - Parliamentary Under-Secretary (Department for Work and Pensions)
These statistics cover 2022/23, a year when war in Ukraine and global supply chain challenges led to unexpected and high rates on inflation, averaging 10% over the year. These factors are reflected in the statistics. In response to these pressures, the Government provided an unprecedented cost of living support package which helped to shield households from the impact of inflation. Analysis shows that the Government’s cost of living support prevented 1.3 million people from falling into absolute poverty after housing costs in 2022/23. That includes 300,000 children, 600,000 working-age adults and 400,000 pensioners.
Since the period covered by these statistics, the Government has taken firm action to support families on the lowest incomes. The Government has spent around £276bn through the welfare system in 2023/24, including around £125bn on people of working age and children. We took action to support those on the lowest incomes by uprating benefits and State Pensions by 10.1% from April 2023. We are continuing to support people in 2024/25 by uprating working age benefits by 6.7% and raising the Local Housing Allowance rates to the 30th percentile of local market rents, benefiting 1.6 million low-income households.
With over 900,000 vacancies across the UK, our focus remains firmly on supporting parents to move into and progress in work, an approach which is based on clear evidence about the importance of parental employment - particularly where it is full-time - in substantially reducing the risk of child poverty. The latest statistics show that in 2022/23, children living in workless households were over 6 times more likely to be in absolute poverty (after housing costs) than those where all adults work.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the Department for Levelling Up, Housing & Communities:
To ask His Majesty's Government what steps they are taking to improve the effectiveness and efficiency of programmes funded under (1) the Levelling Up Fund, (2) the Towns Fund, and (3) the UK Shared Prosperity Fund, in addressing regional socio-economic divides across the UK.
Answered by Baroness Swinburne - Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)
The UK Government is committed to levelling up across the whole of the United Kingdom. As part of a wide range of policies and interventions, we are investing over £15 billion in a suite of complementary Levelling Up projects across the UK to help grow the economy, create jobs, redevelop local amenities, improve transport, provide skills training, and support local businesses.
The department plans to complete process, impact, and value for money evaluations on these funds. These evaluations will help improve effectiveness and efficiency of local growth funding.
271 bids have been awarded funding from our multi-billion-pound Levelling Up Fund, investing in infrastructure that improves everyday life for local residents across the UK. The published (attached) Levelling Up Fund Impact Evaluation Scoping Report sets out how the impact of the Fund will be estimated at the programme and project levels and at different geographies.
The UK Shared Prosperity Fund, worth £2.5 billion, is focused on overcoming deep-seated geographical inequalities, with investment in communities building pride in place, supporting high quality skills training, employment and productivity growth, and increasing life chances. Details of the UKSPF Evaluation Strategy (attached) are set out here: UK Shared Prosperity Fund: evaluation - GOV.UK (www.gov.uk).
The department has also committed £2.35 billion worth of Town Deals and £830 million of Future High Streets Funding across 170 high streets, town centres and local communities in England via the Towns Fund. Projects are now in delivery, and the funding has already provided a much-needed boost for town centres and local high streets. Details of the Towns Fund Monitoring and Evaluation Strategy (attached) are set out here: Towns Fund monitoring and evaluation strategy.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the Department for Levelling Up, Housing & Communities:
To ask His Majesty's Government what assessment they have made of regional disparities in rental prices across the UK; and what steps they are taking to address affordability challenges for tenants.
Answered by Baroness Swinburne - Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)
The ONS publishes a number of regional datasets regarding the cost of private rented sector lettings, such as the monthly (attached) Price Index of Private Rents and an annual (attached) Housing affordability report, and DLUHC publishes its own annual (attached) English Housing Survey.
Individuals who need help to make their rent payments may be eligible for a range of support through the welfare system. From April 2024, the Government will raise Local Housing Allowance rates to the 30th percentile of local market rents. This significant investment of £1.2 billion means 1.6 million low-income households will gain, on average, nearly £800 per year in additional help towards their rental costs in 2024/25. For those who face a shortfall in meeting their housing costs and need more support, Discretionary Housing Payments and Household Support Fund grants are also available from local authorities.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the Department for Business and Trade:
To ask His Majesty's Government what assessment they have made of reports that the number of company insolvencies last month were 17 per cent higher than one year earlier; and what steps they are taking to support struggling businesses.
Answered by Lord Offord of Garvel - Parliamentary Under Secretary of State (Department for Business and Trade)
Company insolvencies in 2023 were 14% higher than in 2022. However, the liquidation rate of 53.7 insolvencies per 10,000 active companies was lower than the recessionary peak of 94.7 per 10,000 in 2009. The average number of quarterly company insolvencies in the past 3 years (2021-2023) was 5,112. This is 28% higher than 2017 to 2019, when the quarterly average was 3,982.
The Government continues to support businesses, through Help to Grow: Management, Business Support Helpline, and Growth Hubs. Businesses can also access government-backed financial support from the British Business Bank. Additionally, the Help to Grow campaign and website has been refreshed, creating a one-stop shop for SMEs to find the information they need to grow and scale up.