Oral Answers to Questions

Andrew Griffith Excerpts

Tuesday 5th September 2023 Commons Chamber

[Fleur Anderson (Putney) (Lab)]

3. What recent assessment he has made of the potential impact of the growth plan of 23 September 2022 on mortgage interest rates.

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

Over the course of 2022, high inflation from Putin’s illegal invasion of Ukraine saw interest rates increase across most western economies. The path to lower rates is through low inflation, which is why the Prime Minister made halving inflation one of our five priorities for this year. I am pleased that the latest Bank of England forecast shows that we are on track.

[Fleur Anderson]

Mortgage and associated rental costs are soaring in Putney, Roehampton and Southfields, and the Government like to claim it is all due to global shocks or the war in Ukraine, but the latest Bank of England data from July shows that the cost of lending to buy a home remains higher in the UK than in Germany, Italy or France. Will the Minister finally concede that this difference is because those countries did not have the devastating growth plan or mini-Budget last year, and that it is because of this Government’s wider economic failure that my constituents face these costs?

[Andrew Griffith]

I am glad that the hon. Lady’s constituents, among many others, will benefit both from our mortgage interest support and from there being almost double the number of mortgage products on the market now than in October 2022. I repeat the comment of my colleague, the Exchequer Secretary to the Treasury: if the hon. Lady is so worried about her constituents, what better way of helping them with the cost of living than to do away with the Mayor’s ULEZ tax?

[Anthony Browne (South Cambridgeshire) (Con)]

In the UK, homebuyers are overwhelmingly dependent on short-term fixed rate mortgages of just two, three or five years, which means that in times of rising interest rates, as we have at the moment, they are hard hit by massively increasing mortgage bills. In most other countries, homebuyers have long-term fixed rate mortgages of 10 or 20 years, or of the entire length of the mortgage. Does my hon. Friend agree that the regulators should ensure a level playing field between short-term and long-term mortgages to give homebuyers a free choice of the sort of mortgage they want, so they can choose to have greater protection against rate rises if they want?

[Andrew Griffith]

My hon. Friend has great knowledge of these matters. It was a privilege to work with him and the sector on how we can offer consumers and homebuyers more choice. That choice includes the opportunity of long-term fixed-rate mortgages, and my officials and I continue to work on how we can reduce frictions and barriers to those mortgages.

[Mr Speaker]

I welcome Darren Jones, the new shadow Minister.

[Darren Jones (Bristol North West) (Lab)]

It is estimated that 140,000 households will face a rise in their mortgage bills this month. If someone in a random constituency, say Mid Bedfordshire, were to remortgage their house in the next six months, they could pay an average of £300 more per month compared with before the disastrous Tory mini-Budget this time last year. What can the Chancellor and his team do to reassure the country that, if the Conservatives were to win the next election, they would not just mess up the economy all over again?

[Andrew Griffith]

I am sure the constituents of Mid Bedfordshire will be very pleased to know that more than 90% of mortgage providers have signed up to our mortgage charter, which offers the opportunity for relief, to term-out mortgages and to have interest-free periods, if they face adversity at this time when interest rates are high across the world. What will not help the constituents of Mid Bedfordshire is unfunded spending promises that we know will push up the cost of borrowing and defer the point at which inflation falls.

[Darren Jones]

That is a bit rich from the Government, and it is no answer whatsoever to the people of Mid Bedfordshire who will not be able to afford to pay their bills over the coming months. It is one year ago today that the former Tory Prime Minister took a huge ideological gamble and sabotaged Britain’s economy. They crashed the pound, put pensions in peril and exploded a Tory mortgage bombshell under the homes of millions of working people. Will the Minister take this opportunity to apologise to the British people, on behalf of the Conservative party, for wrecking their hopes and aspirations?

[Andrew Griffith]

I welcome the hon. Gentleman to his position. He has had a feisty morning reading his Walworth Road brief. Let me offer him the opportunity to correct the record, because Labour has spent the past 12 months talking down our economy but it is now larger than it was when we entered covid and it has recovered and grown faster than the economies of both France and Germany.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

4. What recent assessment he has made of the potential impact of withdrawal from the EU on the economy.

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[Marco Longhi (Dudley North) (Con)]

8. What discussions he has had with representatives of the financial sector on freedom of speech.

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

The Government have been clear that debanking customers on the basis of political views is unacceptable. During recess I met banking executives to discuss debanking and lawful freedom of expression, and they have committed to comply with the changes I published on 21 July. In parallel, the Financial Conduct Authority is conducting an urgent review of debanking practices, which will report back to the Chancellor in the next couple of weeks.

[Marco Longhi]

Last week the Met Police chief finally seemed to confirm that the job of the police should be to police and not to seek to align themselves with entities or ideologies. Does the Minister agree with me that banks and the corporate world should follow that example and focus their efforts on their core business, rather than play the sinister cancelling agenda of the woke brigade that saw Nigel Farage have his account wrongfully closed?

[Andrew Griffith]

My hon. Friend represents the views of his constituents in this place clearly. He is quite right; although they are private entities, banks benefit from a privileged place in society and they should focus on doing their core functions brilliantly, treating customers fairly and making a sustainable return for shareholders, rather than taking sides on politically contentious matters.

[Jim Shannon (Strangford) (DUP)]

Today it is because some people may have a different political view; tomorrow it could be the fact that someone has a different religious viewpoint. I am a Christian, and as chair of the all-party parliamentary group for international freedom of religion or belief, I stand up for those with Christian beliefs, those with other beliefs and those with no beliefs, because I believe sincerely that they have a right to have that belief. If ever the day came when banks censured anybody because they had a different religious belief, I would stand up against that. Does the Minister agree?

[Andrew Griffith]

Let me be clear: yes, the Government agree with that. No one should be debarred from access to banking facilities in our society because of a lawfully expressed view. If he and other hon. Members wish to make representations, the Financial Conduct Authority is currently conducting a review of this matter.

[Caroline Ansell (Eastbourne) (Con)]

9. What assessment he has made of the effectiveness of the plastic packaging tax.

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[Nigel Mills (Amber Valley) (Con)]

10. What steps his Department is taking to incentivise pension schemes to invest in the UK.

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

At Mansion House, the Government presented a series of pension reforms that will increase returns for savers and enable the financial sector to unlock capital for some of the UK’s most promising industries. The Department continues work to build on the initial package of measures and will set out further details in the autumn.

[Nigel Mills]

I thank the Minister for his answer and welcome those measures. Have the Government considered what more can be done to unlock surpluses in defined-benefit schemes to allow employers to use that money more effectively, rather than having it end up going into insurance companies on buy-outs? There is a huge tax penalty on unlocking surpluses. Is there a way of relieving that to encourage the money to be invested more efficiently?

[Andrew Griffith]

My hon. Friend makes an important point. With the right precautions, it is right that we look at that to incentivise employers to deliver the highest returns for pension savers.

[Stephanie Peacock (Barnsley East) (Lab)]

The Government have to date taken £4.4 billion from the mineworkers’ pension scheme. The then cross-party Business, Energy and Industrial Strategy Committee concluded that the Government should not be “profiting from mineworkers’ pensions.” How does the Secretary of State justify their continued profiteering?

[Andrew Griffith]

I am not familiar with the issue that the hon. Lady speaks about. I would be very happy to meet her to understand it in more detail.

[Katherine Fletcher (South Ribble) (Con)]

11. What steps his Department is taking to help support pubs through the tax system.

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[Craig Tracey (North Warwickshire) (Con)]

T6. As the Minister knows, free access to cash is a vital lifeline for many people, including some of the most vulnerable in all our constituencies. Can he confirm what steps he is taking to ensure that free access is protected and continues to be available across the country, particularly in North Warwickshire and Bedworth?

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

During the summer, we announced that we have given directions to the Financial Conduct Authority in respect of access to cash: it should be no more than 1 mile in an urban area, and no more than 3 miles in my hon. Friend’s rural constituency of North Warwickshire. That is the first time that the statutory right of access to cash has existed in law.

[Mary Glindon (North Tyneside) (Lab)]

T8.   Prison officers tell me that they are at breaking point. A key source of despair and anger is their pension age of 68, which we should all agree is far too late. As the Treasury leads on public sector pension scheme policy, will the Chancellor allow the Ministry of Justice to restart negotiations to resolve this grossly unfair and dangerous situation?

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[Caroline Lucas (Brighton, Pavilion) (Green)]

Will the Chancellor consider introducing a windfall tax on banks’ excess profits? The profits of the big four banks for the first half of this year were up 700% compared with 2020, yet the Bank of England is forecast to pay out as much as £42 billion in interest on reserves to banks in 2023, at the same time as the Government have cut the level of surcharge on banks’ profits by 60%.

[Andrew Griffith]

With millions of British jobs dependent on financial services, including an estimated 20,000 jobs in Brighton and Hove, I hope the hon. Lady will join me in celebrating a sustainably profitable financial sector. It is only that that gives us the ability to invest in skills and technology.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

Will the Economic Secretary update the House on the progress he is making to enable our constituents to access personalised financial guidance if they are among the 93% of our constituents who cannot afford regulated financial advice?

[Andrew Griffith]

My hon. Friend, the Chair of the Treasury Committee, makes a really important point about what is called the advice gap. Treasury officials, the FCA and I are consulting on that, and I will publish an update this autumn.

[Richard Thomson (Gordon) (SNP)]

It has been revealed that Integrated Debt Services, a company set up by the UK Government to recover personal debt, saw its profits increase by a staggering 132% last year. Do Ministers think it is right that this company should be able to profit to that extent out of the misery of the cost of living crisis?

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[Sir Stephen Timms (East Ham) (Lab)]

I welcome the new focus on engaging pension funds with productive investment, after many years when regulation has pushed the funds into Government gilts instead, but does the Minister have proposals specifically to secure those investments for UK businesses rather than their going overseas?

[Andrew Griffith]

The right hon. Member makes a significant contribution to the debate about the nation’s pension funds. Our objective to increase investment—to drive increased returns for pension savers, but also to benefit the wider economy—stops short of mandating. There is a philosophical difference between this side of the House and the Opposition. We do not believe it is right for the Chancellor to tell pension funds where to invest, but it is our job to knock down barriers, frictions and impedances to pension funds investing in brilliant British companies.

[Mr David Davis (Haltemprice and Howden) (Con)]

The Economic Secretary told my hon. Friend the Member for North Warwickshire (Craig Tracey) that he is going to underwrite the statutory right of access to cash, but 6,000 bank branches will have closed by the end of the year, leaving only 4,000 in place, and 15,000 ATMs have closed in the last five years. How is he going to make sure that this actually happens, rather than it just being an empty promise?

[Andrew Griffith]

The FCA has significant sanctions in respect of the closure of ATMs that would leave communities without the right of free access to cash. On the closure of bank branches, we are seeing a significant change, and I hope my right hon. Friend would respect the fact that technology is changing and consumer patterns are changing. During the recess, I had the privilege of visiting the excellent community banking hub in Brixham, which I think is a brilliant opportunity. There should be more than 100 on their way, and that is my objective.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does the Chancellor accept that many people see income tax rates at the moment as exceptionally punitive, and does he also accept that there is a need to move as quickly as possible into a growth-based economy and to supercharge our economy in the United Kingdom?

[Bob Blackman (Harrow East) (Con)]

As we want to expand our financial services industry not only in this country but abroad, we need to build confidence among consumers that the right thing to do is invest. Does my hon. Friend therefore agree that it is vital that regulators respond to and deal with complaints to them and actually impose sanctions against those who breach the regulations?

[Andrew Griffith]

Yes, I agree with my hon. Friend on this matter. It is one reason why we have beefed up the role of the financial regulators review commissioner, and we will also be requiring the regulators to publish regular operating metrics on their performance, to give consumers the trust they need.

[Nick Smith (Blaenau Gwent) (Lab)]

Back in 2017, both the Treasury and the Financial Conduct Authority knew there were problems with the prepaid funeral plan market. Since then, my constituent Gary Godwin of Nantyglo lost over £6,000 to the collapse of a company called Safe Hands. Across the UK, thousands more have lost millions of pounds altogether. Will the Minister please meet me to discuss this scandal and Mr Godwin’s case?

[Andrew Griffith]

Yes, I will be very happy to meet the hon. Gentleman. What happened with Safe Hands is a scandal, and that is why we have enlarged the regulatory perimeter to bring those who seek to sell funeral plans within the regulatory conduct.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Over the summer ports have been bidding to the Government’s infrastructure fund to help them get ready for the delivery of the new floating offshore wind industry. May I encourage Ministers to look favourably on the bids from the Celtic sea ports of Milford Haven and Port Talbot, because those two ports are key to unlocking the enormous economic benefits of this new clean energy industry?