Oral Answers to Questions

Andrew Griffith Excerpts

Tuesday 9th May 2023 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

3. What steps his Department is taking to improve the regulatory framework of the financial services sector.

[The Economic Secretary to the Treasury (Andrew Griffith)]

The Edinburgh reforms take forward the Government’s ambition to maintain the UK’s position as a world-leading global financial centre, while ensuring that our financial sector remains robust in the face of market shocks. In particular, they introduce a new secondary duty of facilitating growth and international competitiveness, which is a first for UK regulators.

[Bob Blackman]

I thank my hon. Friend for that answer. Clearly, the culture and performance of regulators is one key consideration for firms when they choose to invest in the UK. What steps is he going to take to introduce key performance indicators for financial regulators to report on their delivery against the new growth and competitiveness objective in the Financial Services and Markets Bill? Is he considering adding any measures to the Bill that would strengthen the independent scrutiny of regulators?

[Andrew Griffith]

My hon. Friend does great service as chair of the all-party group on personal banking and fairer financial services, so he knows of what he speaks. Today, the Government published a call for proposals on the metrics that regulators should publish to support scrutiny of their work; as every business leader knows, what gets measured gets managed. That responds to the significant interest shown by industry and Parliament in ensuring that appropriate and transparent public measures are in place to support scrutiny of the regulators’ performance. The Government are clear that with great power must come greater accountability.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

One measure that would improve the regulatory framework for mutuals in the financial services sector, such as Royal London or Liverpool Victoria, would be the introduction of permanent mutual shares. Given that such a reform would allow a new safe route to access the capital that such financial mutuals need to expand—and without having to demutualise—will the Minister explain why the Treasury is still dragging its feet on the introduction of such a significant reform?

[Andrew Griffith]

The hon. Gentleman and I have talked a number of times about this. I do not think it is fair to say that the Treasury is dragging its feet. We have supported reform of the mutuals sector. We welcome a diversity of provision, which involves a greater expansion of and more commercial freedom for the mutuals sector. With the Law Commission, we are looking to take its work forward to see whether we can help, and I am always happy to sit down with him, or with any representatives from the sector, as part of my widespread programme of engagement.

[Christine Jardine (Edinburgh West) (LD)]

4. What fiscal steps he is taking to support businesses with energy costs.

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[Mark Menzies (Fylde) (Con)]

11. What progress he has made on reducing the rate of inflation.

[The Economic Secretary to the Treasury (Andrew Griffith)]

The Government’s three economic priorities this year are to halve inflation, grow the economy, and get debt falling. This will require patience and discipline. Countries around the world are facing rising prices and we will not be able to make that go away overnight, but by sticking to our plan, we will halve inflation this year and help to ease the pressures that people are facing.

[Mr Hollobone]

Food price inflation is increasing far faster than the overall average increase in prices. This is affecting the poorest the hardest in Kettering and across the country. Is there any good news at all from His Majesty’s Treasury about the prospects for food price inflation over the next 12 months?

[Andrew Griffith]

My hon. Friend is a doughty champion for his constituents. The Office for Budget Responsibility this year does expect food, tobacco and alcohol inflation to fall significantly, and that is not all. The Government recognise the challenges facing households due to the elevated cost of living in general, including food, so we took action at the spring statement to support struggling families. Taken together with previous action, support to households to help with bills is worth an average of £3,300 a year across this year and next.

[Mr French]

The Government are absolutely right to prioritise reducing inflation given the significant impact it is having on families and businesses across the country. I welcome the support that the Minister has just outlined for families in my constituency of Old Bexley and Sidcup. Can he confirm what assessment has been made by the Treasury of the impact of more than a decade of abnormal monetary policy following the global financial crisis?

[Andrew Griffith]

As my hon. Friend knows, monetary policy is the responsibility of the independent Monetary Policy Committee and the Bank of England. We will continue to work closely with them to ensure that monetary and fiscal policy are well co-ordinated. The Chancellor reconfirmed the inflation target of 2% at the autumn statement and confirmed that this Government will not change the target.

[Mark Menzies]

While inflation is now heading in the right direction, the effect of the price rises is still being felt by Fylde’s older people. What steps is my hon. Friend taking and what conversations has he had with the Department for Work and Pensions to ensure that Fylde’s retired residents are well protected?

[Andrew Griffith]

I and my colleagues work closely with colleagues in the DWP, as my hon. Friend knows, on behalf of pensioners in Fylde. More than 8 million pensioner households will receive a cost of living payment of £300 this winter, but more than 12 million pensioners have benefited from a 10.1% increase to their state pension. That is the biggest percentage rise in the state pension for more than 30 years and its biggest-ever cash increase.

[Alison McGovern (Wirral South) (Lab)]

As the Minister rightly said, monetary policy is made independently by the Monetary Policy Committee in this country. However, the Government are responsible for economic stability, and for that we need investment. What policies of the past couple of years does the Minister believe have got us into this position with inflation, and how are the Government going to make sure that we have better economic stability, given their recent record?

[Andrew Griffith]

The 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.

[Alison Thewliss (Glasgow Central) (SNP)]

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?

[Andrew Griffith]

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.

[Layla Moran (Oxford West and Abingdon) (LD)]

Inflation is hitting not just individuals and families, but councils and potentially infrastructure projects. Lodge Hill junction on the A34 in Abingdon is one such key piece of local infrastructure, and when completed, will support jobs and housing across Oxfordshire and Science Vale and the economy as a whole. Homes England and the Department for Levelling Up, Housing and Communities say that the final piece of that funding now sits with the Treasury in the brownfield, infrastructure and land fund. Will the Minister meet me so that I can explain why this is such an important piece of funding to be released, and please can the Government supply the last piece of this puzzle so that we can deliver Lodge Hill junction once and—

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[Alex Cunningham (Stockton North) (Lab)]

10. What comparative assessment he has made of forecasts for the UK’s rates of (a) inflation and (b) economic growth with those for G7 countries in 2023.

[The Economic Secretary to the Treasury (Andrew Griffith)]

Compared with the G7, the UK had the highest rate of growth in each of the past two years. The International Monetary Fund UK growth forecast for 2023 has been upgraded by more than that for any other G7 country, and the IMF has said that the UK is “on the right track” for economic growth.

[Alex Cunningham]

The Minister paints a pretty picture. The British people want hope for the future, but all they see is Britain continually lagging behind on the global stage and prospects for their families getting worse. The IMF says that Britain will have a smaller economy by the end of the year and the poorest growth of the G7 over this year and next. In March, UK inflation was the highest in western Europe, and projections show that it will be the highest in the G7 this year, while food prices are rising 50% faster than in the G7. Whose fault is it?

[Andrew Griffith]

It is certainly the hon. Gentleman’s fault if, having asked that we assess performance across the G7 and we do precisely that, he does not like the answer. The reality is that across the G7, growth has fallen and inflation has risen, but we know the sources of that—it is not this Government; it is the fault of Putin and the global covid pandemic, whether the Opposition like it or not.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

My hon. Friend is right to ignore the gloom and negativity coming from the Opposition Benches. They will always find a reason to talk down the British economy. Is it not the case that today, with more people in our country going out to work than ever before, our economy is demonstrating a dynamism and resilience that few other economies around the world can emulate and a dynamism that we do not get with a Labour Government?

[Andrew Griffith]

My right hon. Friend is absolutely right. Resilience is a strong word, and thanks to the actions that this Government have taken over the past six months, the Office for Budget Responsibility has confirmed that the UK is now expected to avoid a recession this year.

[Kirsten Oswald (East Renfrewshire) (SNP)]

12. What recent assessment his Department has made of the potential impact of the UK’s withdrawal from the EU on the economy.

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[Sam Tarry (Ilford South) (Lab)]

We are clearly falling pretty short of where we need to be if we are to tackle net zero. Recent research by E3G and the World Wide Fund for Nature into clean investment showed that the gap is currently between £81 billion and £111 billion between now and 2030. That is equivalent to a quarter of the investment required in that crucial economic sector and every other sector of the economy. Public investment clearly needs to be a key driver in reaching net zero, so I wonder whether Ministers would consider increasing the capacity of the UK Infrastructure Bank on that.

[The Economic Secretary to the Treasury (Andrew Griffith)]

The Government are leading the way with the recently published green finance strategy, but that stands as part of a broader piece of work, unleashing productive finance into all parts of the economy and in particular funding the transition, which is capital intensive.

[Dr Luke Evans (Bosworth) (Con)]

I thank the Chancellor for two weeks ago meeting Leicestershire MPs and the senior leadership of the county council to discuss funding there. Of particular concern is the core funding of special educational needs and disabilities, social care and transport such as buses. What more can the Minister do to address the problems with county council funding that we have in Leicestershire?