Oral Answers to Questions

Andrew Griffith Excerpts

Tuesday 11th October 2022 Commons Chamber

[Mr Laurence Robertson (Tewkesbury) (Con)]

3. What recent discussions he has had with the Governor of the Bank of England on rising mortgage rates.

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

The Chancellor speaks regularly to the Governor of the Bank of England on a wide range of matters. As my hon. Friend knows, the Bank of England sets monetary policy, including interest rates, independently of Government.

[Mr Robertson]

I thank the Minister for that response. Obviously, the world situation is the biggest cause of the rise in interest rates, but that rise is having a detrimental effect on mortgage payers and risks negativising the welcome help that the Government have provided through energy costs and tax cuts. Will the Chancellor and Ministers meet more regularly with the Bank of England to co-ordinate policy a little more closely?

[Andrew Griffith]

I thank my hon. Friend for his question. He is a passionate advocate in this place for his constituents. The Chancellor and I regularly meet the Bank of England and all the individual lending banks in the UK. My hon. Friend knows that interest rates have increased in every major economy, despite what the Opposition may claim. That is why it is so important that we provide help with energy costs and cutting taxes.

[Dame Angela Eagle (Wallasey) (Lab)]

Surely Ministers must now apologise for the chaos that their mini-Budget, with its £45 billion of unfunded spending commitments and tax cuts, caused to the bond markets. Is it not now a fact that there is a Tory premium on every interest rate rise for every borrower in this country? They are not going to forget that when the election comes.

[Andrew Griffith]

I think we all understand that there is a clear divide in this House. The Government are supporting growth, providing support for energy bills, giving the economy the confidence and certainty that it needs this winter, and bringing forward supply-side measures that will boost the economy, not being on the side of striking workers who are bringing this economy to a halt.

[Mr Speaker]

I call the shadow Minister, Pat McFadden.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

With your permission, Mr Speaker, I wish to send my condolences to the families of all those killed in the tragic accident in Creeslough, County Donegal, last week. My parents came from quite nearby. It is a beautiful place with a close community, and they are very much in our prayers right now.

I welcome the Minister to his place. I am sure that he and the Chancellor’s team wanted their first Budget to be remembered, perhaps even studied in years to come. Well, they have certainly achieved that ambition. Two-year fixed mortgage rates are above 6% for the first time since 2008, and they have risen sharply since the Chancellor’s mini-Budget. Everyone coming off such a rate will face much higher payments over the coming year, possibly hundreds of pounds a month more. Why should people who have worked hard to buy their own home pay the price for the Government’s mistakes?

[Andrew Griffith]

I add my comments and thoughts to those on the incident in County Donegal last week.

We have already talked about our comprehensive energy support package, which will help not just every household this winter and prevent the uncertainty of energy bills that were forecast potentially to reach £6,500 per home, but help businesses. The Government are on the side of businesses and keen to improve the supply side of our economy, so that we can grow to create the tax revenues for our high-quality public services.

[Mr McFadden]

This morning, the Bank of England made a further intervention in the markets, warning of

“a material risk to UK financial stability”.

That risk comes directly from the Chancellor’s mini-Budget two and a half weeks ago. How much more will Government borrowing cost next year as a result of the rising gilt yields since the Chancellor’s statement on 23 September?

[Andrew Griffith]

As I have already observed, we are seeing interest rates rising in every major western economy. When Opposition Front Benchers are finished with their British exceptionalism, perhaps they will lift their eyes and notice that. What is more important is that we are protecting consumers and households through the difficult winter months ahead, and cutting taxes. Those are measures that Government Members support and Opposition Members oppose.

[Mr Speaker]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

Today, the International Monetary Fund observed that the Chancellor’s unfunded tax cuts have complicated the fight against inflation. As a result, the Bank of England is expected to increase the base rate to levels not seen since 2008. Families have already struggled with increasing energy prices, Kantar says that grocery inflation stands at 13.9%, and Santander is preparing for increased mortgage defaults. What is the Minister and his Treasury team doing to tackle the absolute chaos that they have created?

[Andrew Griffith]

I understand that the nationalist party likes to talk the country down at every opportunity, but the reality is that we are taking the action that we need, tackling the supply side, tackling the strikes that are grinding down the economy and building the energy supply that we need to help strengthen our economy and our currency. The hon. Member’s party opposes nuclear and opposes more oil and gas exploration.

[Ben Everitt (Milton Keynes North) (Con)]

4. What fiscal steps he is taking to support investment in infrastructure projects.

--- Later in debate ---

[Marsha De Cordova (Battersea) (Lab)]

5. What assessment he has made of the potential effect of removing the cap on banker’s bonuses on the distribution of wealth.

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

Reforming the EU’s directive on the bonus cap is not about paying people more. All it ever did was increase base pay, regardless of performance. It was never a cap on total remuneration, and no one should pretend that it was.

[Marsha De Cordova (Battersea) (Lab)]

That was total nonsense. As some families in Battersea struggle to keep up with the rising cost of living, the Government have chosen to help bankers by removing the cap on their bonuses, while maintaining the cap on household social security. Despite soaring bills and growing inflation, the cap has remained stagnant since 2016, plunging hundreds of thousands of families into deep poverty. The cap on social security is cruel. How can the Chancellor seriously justify removing the cap on bankers’ bonuses but not the social security cap? Will the Minister have a word with his colleagues at the Department for Work and Pensions and change that?

[Andrew Griffith]

The hon. Lady has fully booked her place as a member of the anti-growth coalition. The Government are not afraid to be on the side of the people who create the wealth that funds our public services. In 1979 the top 1% of earners paid about 10% of income tax; they now pay 29.1%. That is three times as much.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my hon. Friend agree that scrapping the cap on bankers’ bonuses will increase not only competitiveness, but tax receipts?

[Andrew Griffith]

Yes.

[Mr Speaker]

I call the shadow Minister.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

At a time when my constituents are struggling to make ends meet, struggling to put food on the table and struggling to put the heating on, the Government have decided that the way to increase growth in the economy is to lift the cap on bankers’ bonuses. Not a single person or a single bank that I spoke to in the City as shadow City Minister said that this was the right policy to drive growth in the economy. Does the Minister really think that the policy will drive growth in the economy, or will we see yet another U-turn from his Government?

[Andrew Griffith]

I can assure the hon. Lady that this Government are going to grow the economy. We will grow the economy by releasing the burden, or the yoke, of taxation, whether that is on ordinary people by cutting the basic rate of tax from 20p to 19p, or by today reversing the increase in national insurance, or by cutting the taxes on the businesses that she has been meeting—I welcome that—by reversing the increase in corporation tax next year.

[Anthony Mangnall (Totnes) (Con)]

6. If he will take steps to help ensure mortgage products are available for first-time buyers in the context of the reduction in stamp duty announced in the growth plan 2022.

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

This Government will back first-time buyers by increasing the level at which they start paying stamp duty. A young couple can now purchase a property for up to £425,000 without paying tax.

[Anthony Mangnall]

A core tenet of our belief is to help everyone on to the housing ladder, so what assessment has the Minister made since the growth plan about helping people and areas to build houses for those who need and want them?

[Andrew Griffith]

My right hon. Friend the Secretary of State for Levelling Up, Housing and Communities will make a statement to the House in the coming weeks.

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

A constituent wrote to me and said, “What world do the Tories live in? I guess one where you protect the rich and wealthy. The suggestion that the Treasury thinks that a person on £30k a year can buy a home in London is frankly laughable and salt in the wound.” How does the Minister expect my constituents in Vauxhall who are already struggling to pay their rent to save to buy a new home on a salary of £30k?

[Andrew Griffith]

I will be very happy to write to the hon. Lady and to talk to her constituents about the unprecedented intervention that we have made to protect them this winter from their energy bills, putting valuable certainty and confidence not just into every household, but into every business and the economy. That is why the International Monetary Fund has today increased its growth forecast for the United Kingdom.

--- Later in debate ---

[Kirsten Oswald (East Renfrewshire) (SNP)]

T2. Push payment fraud losses increased by 71% in the first half of 2021, surpassing card fraud losses for the first time. What steps is the Chancellor taking to tackle this huge surge in fraud, and importantly, to ensure that victims, including my constituents, are reimbursed for their losses, instead of being unfairly penalised for falling victim to these increasingly sophisticated scams?

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

Push payment fraud is a growing problem, which the Government take very seriously. That is why we will be taking powers in the Financial Services and Markets Bill that will mandate reimbursement to consumers.

[Theresa Villiers (Chipping Barnet) (Con)]

T7. It is a massive relief that the nightmare scenario of energy bills of £4,000, £5,000 or even £6,000 has been prevented by the energy price cap. Will the Government explain how they are reducing the cost to taxpayers of that scheme and stabilising the energy market for the future?