(4 months, 1 week ago)
Commons ChamberI beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House declines to give a Second Reading to the Finance (No. 2) Bill because it fails to make a much-needed reduction in VAT for the hospitality and tourism sectors; fails to reintroduce tax-free shopping for international visitors; does not establish a more progressive tax system by introducing a starter rate, in line with the Scottish Government’s approach; fails to introduce measures through the tax system that would help alleviate the cost of living crisis and reduce inequality; and fails to introduce tax relief measures to enable vital high-growth sectors, like the renewable sector, to grow the economy; and because it derives from a Budget which proposed to extend the Energy (Oil and Gas) Profits Levy, threatening the security of jobs in north east Scotland and the UK’s ability to achieve net zero.”
The Bill falls woefully short of the mark. The Scottish National party has tabled a reasoned amendment on Second Reading because, frankly, its provisions do not rise to the immense challenges faced by our constituents. The UK Government seem to operate under the illusion that the Tory Brexit cost of living crisis has come to an end, yet the reality on the ground, in homes across Scotland and the other UK nations, tells a different story. Indeed, a UK poll out today shows that 61% of people think the UK Government are not taking the measures required for the cost of living. The bad news for Labour is that they do not believe it is proposing the right things either.
The Bill, as it stands, is a stark testament to a Government who are—as we have heard, and I agree—out of touch, out of ideas and soon to be out of office. But let us be clear that the proposals in the Bill are insufficient to support households in Scotland, who continue to bear the brunt of disastrous decisions made in Westminster. The spring Budget brought devastating cuts to Scottish capital funding, yet there remains a pervasive silence among the Westminster parties about the true scale of cuts planned over the next Parliament to meet the arbitrary fiscal rules that they are both slavishly following. I note that the Labour Front Bench said “hee-haw” about public services funding over the coming years, despite the £20 billion hole that we know will lead to further misery in public services. There are elements in the Bill, such as the marginal increase in child benefit and the limited support for the film sector, which we can view as steps in the right direction, but they are but drops in the ocean compared with the vast needs of our communities.
For a UK Government who claim economic competence, it is astounding how little they understand about nurturing true economic growth, or enhancing productivity. Austerity has failed. It cannot be made to work, yet those in the Labour party continue to pretend that somehow it can. We agree with the Labour party that for every £5 coming out of the Budget for people, they are paying £10 back in, so the question that Labour Members must answer is: why are they not voting against Second Reading tonight? Why are they going to, once again, sit on their hands and allow the Bill to go through? As I have said, not a word on public services. The reality is a continuing decline in disposable incomes, a shameful record on inequality—the highest in any major European country—and a GDP per capita on its longest downward trajectory since records began. Moreover, the Chancellor’s measures are predicted to have a minimal impact on economic turnaround this year and it is highly probable that the Government will have overseen the worst Parliament for income growth in recent history.
Scotland has the highest wages in the UK, according to medium gross weekly incomes, thanks to the work of the SNP Government on promoting fairer wages and leading by example. However, the powers to avoid the scale of falling real incomes resides here in Westminster. That fall is unprecedented over the past six decades. Hundreds of thousands of people in Scotland and across the nations of the UK are locked in a vicious cycle of debt, with over 300,000 having missed a debt payment in the past year alone.
According to a report published recently by the Financial Conduct Authority, 7.4 million people across the UK are
“heavily burdened by their domestic bills and credit commitments.”
In January this year, nearly 6 million UK adults reported having no disposable income at all. The ongoing cost of living crisis continues to degrade living standards, with families struggling under the weight of high food prices, exorbitant mortgage rates and escalating energy costs that are pushing more and more households into debt. Food prices are about to spike yet again, and we can put that squarely down to Brexit—the love child of the Tory right, now adopted by the Labour party and the Liberal Democrats. A report from Allianz Trade suggests that controls to be introduced in May will increase import costs by 10% in the first year, imposing £2 billion of extra costs on UK businesses and exacerbating the cost of living crisis.
Food prices have already risen by more than a quarter since a couple of years ago owing to existing Brexit changes. This is a turbo-boost on top of what people have been facing. Where is the help for people as food bank queues grow longer and the ability to donate to those food banks dwindles? It is non-existent. Whatever the cost to households, whoever starves, “make Brexit work” seems to be the consensus of the Westminster parties, and especially this Tory Government. Even if we put aside our squandered EU membership, the fact is that they will not implement the basic food protections that other Governments have used and we have called for. This is Westminster negligence, and a failure to observe the basic values of fairness.
Particularly pressing is the escalating crisis of fuel poverty that grips many of our communities. How can it be right, in the 21st century, that there exists an energy poll tax of standing charges? In the highlands and islands, the electricity standing charge for households— the charge that has to be paid every single day, cold or warm—is 50% higher than it is in London. How can that be fair? Why have the UK Government sanctioned this blatant inequality? Should the Bill not be doing something to fix it?
This Bill could have provided for the scrapping of standing charges. The Government should be acting with urgency to start providing meaningful rebates for the people who live in the areas with the greatest degree of fuel poverty, including extreme fuel poverty—again, by the way, the highlands and islands. The irony is not lost on people living in an area that exports more than six times the amount of the electricity that it uses, and seeing massive tax returns going to the Chancellor’s Treasury while they suffer this injustice. At a bare minimum, the Bill could have ushered in legislation for a long overdue energy social tariff. Citizens Advice has reported a 14-fold increase in the number of clients seeking advice related to fuel poverty since 2019. The average fuel debt that clients present to Citizens Advice Scotland is now more than £2,300. That is not merely a statistic; it is a damning indictment of the current Government’s policies.
My hon. Friend is making some excellent points about fuel poverty. When I conducted a survey of Dalmarnock residents about its impact, I found that it had a hugely detrimental effect on their health and wellbeing. They could not even invite family members round because their houses were cold and they could not afford to switch the kettle on to give them a cup of tea. Pensioners were going to bed together early because they could not afford to keep the heating on. Does my hon. Friend think the Government understand the dire consequences of fuel poverty for people who are living in it?
That is a very good point. I do not think that the Government understand what happens to people. I do not think they are paying attention to medical advice, such as an article in The Lancet drawing attention to the health deprivations that result from living in fuel poverty or extreme fuel poverty. They do not understand the effect on children’s learning and wellbeing over this period, or, ironically, the higher costs to public services as a consequence of fuel poverty: for instance, people have to rely on the NHS more because of associated health conditions. The Bill is doing nothing substantial to alleviate such dire circumstances.
Before I move on to other issues, I have to ask why the Bill has no updated actions to stop companies taking advantage of the cost of living crisis. For example, the Government are aware, as is the Financial Conduct Authority, that car insurance in the UK is now 34% higher, and that younger and older drivers have seen bigger premium increases than others. The claims rate is under 18%, premiums have increased by 34%, and average premiums for some age groups have jumped by over 50%.
Surprise, surprise: drivers in Scotland are among those who have seen their premiums rise the most. This time, however, it is something they share with Londoners. The Government cannot put that down to the fact that there are different market forces and so on, because insurance premiums have risen by only 2% in France, 5% in Spain and 6% in Italy, so what is going on? The Bill contains no action on end-of-contract scams by mobile and broadband operators either. The Government are allowing a punishing cost of living free-for-all to continue while they are distracted with feeding their culture wars and giving peerages to their pals and donors.
While the UK Government remain idle, pretending that the cost of living crisis has ended, the Scottish Government have taken proactive steps to tackle inequality and reduce child poverty. They have implemented game-changing policies such as the Scottish child payment, which has lifted 100,000 children out of fuel poverty, yet it is an uphill swim to protect families while Westminster makes the big and wrong decisions. Austerity continues to hinder necessary investments that are essential for Scotland’s burgeoning industries. Brexit has disastrously impacted on our economic activity, international standing and business confidence. Investment in the UK remains the lowest among the G7 countries.
It is common for the Tories, and indeed the Labour party, to say that there is no magic money tree when it comes to public finances, which is why they must always cut, cut, cut to follow their so-called fiscal rules. But here is the rub: the closest thing we had to a magic money tree was our EU membership, which could still be adding to our reserves. According to research by Bloomberg, Goldman Sachs, Cambridge Econometrics and others, around 5% of our annual GDP has been lost because of Brexit. If we had that back, it would generate well over £100 billion per year, generating a potential tax take for the Treasury of over £40 billion per annum. We could plug the holes—we do not have to be going through this—but that is not the path that has been decided for us. The Government have hacked the tree down to mulch, and all that they and Labour can do now is promise more cuts.
The Bill fails business and industry, too. The SNP has long advocated a £28 billion annual investment and a robust green industrial strategy to harness the full potential of the green transition. Labour used to agree—indeed, its advisers are annoyed that the party is not going forward with it—but it has reversed on that policy, as was confirmed earlier. Such an approach is essential if we want to meet our climate change targets. Indeed, as we stand at the moment—with Scotland as part of the UK—it is one of the few industries that the UK could take forward with gusto.
Despite the obvious needs, what have the UK Government done? They have only recently decided to boost funding in allocation round 6 for offshore wind projects—an effort still inefficient to meet the necessary targets. Following the failure of the fifth round of contract for difference allocations to secure any new products, it is unacceptable that the Government have failed to rectify the shortfall in deployed capacity, leaving us well behind our 21 GW target for the upcoming rounds.
This Bill is a testament to the UK Government’s ongoing failure to adequately invest in the renewables sector, thereby endangering our net zero targets, jeopardising energy security and stunting the long-term growth of Scottish communities. It is time for a drastic change, and we need a Government who will be aligned with the needs of the Scottish people in the future—an independent Scottish Government.
Where in the Bill is the action to help our tourism and hospitality industries? Selective cuts to VAT would have been a mechanism that could have been deployed to help those sectors, and it could and should have been used to help struggling high streets and town centres. Where is the VAT-free shopping that business organisations were crying out for?
(5 months, 1 week ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I thank the right hon. Gentleman for raising that point, and I am happy to raise it with HMRC.
I am regularly contacted by constituents who have had poor services from HMRC, as I am sure many of my colleagues are. These people are pretty certain that they would still be waiting had they not got their MP involved. My constituent Mr McCall retired to care for his terminally ill wife in 2021, but has since been chased repeatedly by HMRC to provide a tax return for 2022-23. He does not use email and has described the diabolical experience he has had with the phone line; he waited 50 minutes for an automated voice, and the line then went dead. Does the Minister accept that that service level is not acceptable at all, and things must improve? Would he like to take the opportunity to apologise to Mr McCall for the distress that HMRC has caused him?
Yes, I am sorry to hear about those circumstances for the hon. Lady’s constituent. As I said, I have to be careful given the need to keep at arm’s length in individual cases, but she also raises a broader policy point. A lot of training and work goes on. I repeat that some 60,000 people work for HMRC, many of whom are dedicated, hard-working and well-trained individuals, and they often do a thankless job, but she makes a valid point, and I will happy raise that issue. I spoke incorrectly a few moments ago, so may I take the opportunity to correct what I said, Mr Speaker? HMRC staff are required to work in the office 60% of the time, not 40% of the time.
(5 months, 1 week ago)
Commons ChamberWe are acutely aware of this issue, and I have had meetings with the FSB. That is why the Chancellor has announced plans to improve the situation for small businesses. I am happy to outline that in writing to the hon. Gentleman.
One of the requests from female-led businesses in my constituency, including Cùrlach and Rock’n Rollers, was for a VAT cut for hairdressing businesses. Can the Minister tell me why that was not considered in the Budget? These businesses are an important part of our high streets and they are often led by women, who have missed out significantly in the Chancellor’s Budget.
We of course support hairdressers, our high streets and women-run businesses, which is why we have extended the retail, hospitality and leisure relief to 75%. Cutting taxes for hard-working people is what the Conservative Government do.
(9 months, 2 weeks ago)
Commons ChamberMy right hon. Friend is a brilliant advocate on these issues, and of course I would be delighted to meet him.
UK food inflation has been driven largely by global factors and has already fallen from 19.6% to 12.3%, and external forecasts expect it to continue to fall.
Between March 2021 and April 2023, the cost of first infant formula increased by 24%, on average, with the cheapest formula on the market increasing by 45%. That is an absolute catastrophe for families who rely on infant formula, but a bonanza for the formula companies, which are making significant profits out of this. Can the Chancellor tell me why he believes it is right for companies to profit while families struggle to feed their babies?
The hon. Lady is absolutely right to draw attention to the pressures on families caused by very high food inflation in a number of areas, but I can tell her that the Competition and Markets Authority, which undertook a review of the groceries sector earlier this year, has not yet found evidence that high food price inflation is being driven by weak competition. But it is continuing its review and looking at the supply chain, and we will wait to hear what it says.
(11 months, 3 weeks ago)
Commons ChamberAdam Posen, a former member of the Monetary Policy Committee, has described Brexit as a
“trade war by the UK on itself”.
This unnecessary trade war has had a real impact on small businesses in my constituency such as Guild Antiques & Restoration, which has found that its orders from the EU have fallen off a cliff edge and its costs have increased. Scotland did not choose Brexit and we are all worse off as a result. What can the Chancellor do to fill the economic gaps his hard Brexit has caused?
There is a certain irony in the Scottish National party opposing Brexit at the same time as advocating a far more draconian separation for Scotland, including a new currency and border checks. On businesses in Scotland, as part of the UK, Scotland is now an independent coastal state for the first time in nearly half a century; the 21,000 people in Scotland who work in financial services are benefiting from the Brexit freedoms in the Edinburgh reforms; and there is extra support for Scottish pubs, because, for the first time, we have a lower beer duty relative to supermarkets.
I thank my hon. Friend for his question, which I take very seriously. Just to put it in context, last year HMRC received 38 million telephone calls; around 3 million of those were to do the simplest of tasks, which can be done digitally if at all possible. If we are able to move people on to digital channels, that will free up at least 500 people to help with more complex tax affairs and help the most vulnerable. This is a period of transition for the organisation, and one that we take very seriously.
We stepped in during the energy crisis with £94 billion of support, including the energy price guarantee, which effectively paid for half of people’s energy bills. That was important while energy prices were high; wholesale gas prices have now come down.
(1 year, 2 months ago)
Commons ChamberI thank the Lords for their work in considering this important Bill. In particular, I thank Lord Tunnicliffe, Lord Livermore and Baroness Chapman, who led for the Opposition in the relevant debates. I also put on record my thanks to the Minister and his office for briefing me and my office in good time on the Government amendments.
The Labour Party supports the various amendments tabled by the Government in the other place; they represent an important step in supporting the City to take advantage of opportunities outside the EU, whether that is creating a welcoming environment for fintech or unlocking capital in the insurance industry for investment in infrastructure through the reform of Solvency II. In particular, we welcome Lords amendments 6, 11 and 16 to 25, which strengthen the accountability of the FCA and the PRA.
This Bill facilitates an unprecedented transfer of responsibilities and powers from retained EU law to the regulators. We recognise that in this new context it has never been more important that the FCA and the PRA are appropriately held to account by democratically elected politicians. That is why Lords amendments 16 to 23 are so important to ensure that Parliament can take full advantage of the expertise in the other place when assessing the effectiveness of regulators.
However, accountability cannot be left to Parliament alone. That is why we support the principle behind Lords amendment 11, which will require the regulators to set out the process for how consumer groups and industry can make representation to review a rule that they believe is not working. We must ensure that regulation works for both consumers and the financial services sector. We also support Lords amendment 6, which will require the FCA and the PRA to report after 12 and 24 months on how they have complied with their duty to advance the secondary competitiveness and growth objective. However, as I am sure the Minister will agree, that new requirement must not detract from the regulator’s primary duties of promoting financial stability and consumer protection. As the banking turbulence of recent months has reminded us all, the success of the City depends on the UK’s reputation for strong regulatory standards.
I turn now to Lords amendments 72 to 77. I am delighted that, after months of voting against Labour’s amendments to protect free access to cash, the Government have finally U-turned. I congratulate in particular my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on all her tireless campaigning on that topic. It was her determination that got us over the line.
If you will indulge me for a minute, Madam Deputy Speaker, I wish to send my condolences to my hon. Friend. I pay tribute to her sister, who was the first female secretary-general of the Labour party and an inspiration to many young women across the party.
Lords amendments 72 to 77 are especially important because they will ensure that millions of people across the country who rely on free access to cash will not be cut off from the goods and services that they need. However—the Minister will have anticipated this—I am disappointed that the amendments will do nothing to protect essential face-to-face services. Analysis published by consumer group Which? found that over half of the UK’s bank and building society branches have closed since January 2015—a shocking rate of about 54 closures each month—which risks excluding millions of people who rely on in-person services for help with opening new accounts, applying for loans, making or receiving payments, and standing orders.
The hon. Lady is making an excellent point on bank closures. Even in urban constituencies such as mine, banking closures are forcing people into the city centre to get their cash. The Albert Drive branch in Pollokshields is the latest closure proposed by the Bank of Scotland. Does she agree that such closures are very difficult for many communities to bear?
It is a similar story across my constituency. A Labour Government would give the FCA the powers it needs to protect essential in-person banking services, which would help a lot of the constituents the hon. Lady is talking about.
To be clear to the Minister, Labour is not calling for banks to be prevented from closing branches that are no longer needed. We recognise that access to face-to-face services could and should be provided increasingly through banking hubs, be they delivered at the post office, in shared bank branches or by other models of community provision. But so far, only four hubs—I repeat: only four—have been delivered. [Interruption.] The Minister is indicating that there are six, which I do not think is a massive improvement, but I will take it. Six banking hubs have been delivered, about which he seems very proud. Figures from LINK reveal that only a further 52 hubs are in the pipeline. On top of that, many of those planned banking hubs will not even provide the essential in-person services that I am speaking about, so although we welcome the progress made in Lords amendments 72 to 77, there is a lot more to do to ensure that no one is left behind.
I am disappointed that the Government have decided not to back Lords amendment 10 on financial inclusion, for which my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) has been a powerful advocate. The amendment is an important opportunity to rethink fundamentally how financial resilience, inclusion and wellbeing issues are tackled in the UK, and to empower the FCA to confront issues such as the poverty premium—the extra costs that poorer people pay for essential services such as insurance, loans or credit cards.
Although I agree with the Minister that financial inclusion is a broader social policy issue, I do not believe that that is a legitimate argument for rejecting the Lords amendment fully. As the Treasury Committee found it its report last year:
“The regulations made by the FCA, and the manner in which it supervises and enforces those regulations, could have a significant impact on financial inclusion”,
such as restricting the practice of charging the poorest in society more for paying insurance in monthly instalments. That is why the Labour party will vote for Lords amendment 10.
Finally, I will address Lords amendment 5 on sustainability disclosure requirements, and the Government amendments tabled in lieu of Lords amendment 7 on expanding the regulatory principle on net zero emissions, and in lieu of Lords amendment 36 on forest risk commodities. We welcome once again that the Government have finally U-turned and acknowledged concerns that our regulatory system must play a role in protecting nature and ending deforestation. However, as I am sure the Minister will agree, that can only be the first step in ensuring that the transition to net zero and the protection of nature are primary considerations across the financial system. The Treasury’s review of deforestation must be meaningful and put forward concrete proposals. The Government cannot continue to kick the can down the road.
Similarly, although we welcome the new requirements in Lords amendment 5 for the FCA and PRA to have regard to the Treasury’s sustainability and disclosure requirements policy statement, we have been calling on the Government to move on that for months. Even now, the Government have yet to confirm the date on which the sustainability disclosure requirements will be introduced. We need clear timing and direction so that we give businesses the confidence to invest and do not undermine their certainty.
The Labour party will support the amendments. As I am sure the Minister knows, I will continue to hold him to account on his actions regarding green finance, financial inclusion and in-person banking services.
(1 year, 2 months ago)
Commons ChamberThe hon. Gentleman is entirely right to say that the mortgage market has changed, given that 85% of deals now involve a fixed-rate element, but I still think that interest rates are the most effective tool. Other countries that have used them are seeing their inflation starting to fall, and I would expect it to do so here.
The mortgage crisis is not the only crisis over which this Government are presiding. According to StepChange Debt Charity, 45% of mortgage holders—some 7 million—are now struggling to keep up with all their other bills following the rise in interest rates. What conversations is the Chancellor having with companies providing other forms of consumer credit, and with debt advice charities which are giving support on the frontline to many people who have never had to call on their services before?
We continue to have conversations with everyone who is involved in relieving families who are in distress because of debt arrears, whatever they may be, but I think the most important help we can give people is cost of living support. The extension of the energy price guarantee has reduced people’s electricity bills, and means overall that we have paid about half people’s electricity bills over the last year.
(1 year, 3 months ago)
Commons ChamberThe hon. Lady omits to mention both the headwinds from the global pandemic and Russia’s aggression in Ukraine. Any financially literate conversation on this subject has to acknowledge that we see very similar rates of increase in inflation and rising interest rates across the developed world. In that context, this Government are focusing on stability, ensuring that we continue to pay down debt over the cycle and do not do as the previous Labour Government did and leave a note behind for their successors saying that there is no money left.
Food price inflation stood at 19.2% in March, up from February. That is causing severe problems for many in my constituency, particularly those who have no recourse to public funds status, meaning that they are not entitled to any support from the Government whatsoever. What will the Minister do to help those people, who are struggling and heading for the food banks because they cannot afford to make ends meet?
In the interest of time, I will not repeat for the hon. Lady the support for households, which averages £3,500 across the United Kingdom. If she has constituents with particular needs, the Government have recently extended the £1 billion household support fund and I suggests she works with her local authority to try to meet their needs through that.
(1 year, 5 months ago)
Commons ChamberI recognise the challenges that the distilling industry and many other industries are facing. That is why we are giving more than £100 billion of support to businesses and consumers, but I would say to the hon. Lady that Scotch whisky has received nine cuts or freezes in the last 10 Budgets, so we are doing everything we can.
It is all fine and well for the Chancellor to say that he is in correspondence with Ofgem, but the business energy sector remains unregulated and many businesses in my constituency are stuck on very high tariffs because of the increase in prices, which have now to some degree gone down. What will he do about those people who are marooned on higher tariffs? It is costing their businesses dearly and those businesses may not even survive.
That is exactly why I wrote to Ofgem. Wholesale gas prices are now lower than they were before the Ukraine invasion. The hon. Lady is right to say it is not a regulated market and I want to find out from Ofgem what it thinks should happen to avoid precisely the problem she talks about.
(1 year, 6 months ago)
Commons ChamberI am happy, once again, to refer to what the IMF said. At this morning’s press conference, Pierre-Olivier Gourinchas, the IMF’s economic counsellor, confirmed
“the good news: the UK economy has actually done relatively well in the last year. We’ve revised”
growth
“upwards to 4.1%...that’s one of the highest growth rates in Europe”.
The Minister talks about other countries, but the reason why things are so bad in the UK is squarely down to the impact that Brexit is having on the economy—a Brexit that Scotland did not vote for. Can he tell me how piling austerity on top of the austerity that has already taken place over the past decade will help us out of this economic crisis that the Tories have created?
It is astonishing that the hon. Lady would say that all our problems are solely down the Brexit. We have record energy bills. In the last year, as a country, we have had to find an additional £150 billion to fund energy because of the invasion of an independent sovereign country by Russia. That was not our fault, and nor was the pandemic—[Interruption.] She talks about austerity. We put in place £400 billion of support during the pandemic, and almost £100 billion of cost of living support and help with energy bills. That is not austerity. I will tell the House what it is: the United Kingdom Treasury backing every single part of the United Kingdom.