Public Spending: Inheritance

Ben Lake Excerpts

Monday 29th July 2024 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend for raising this issue. I will ask my right hon. Friend the Transport Secretary to meet him and discuss it further.

[Ben Lake (Ceredigion Preseli) (PC)]

I am grateful for the Chancellor’s clarity on the state of the public finances and for confirming that the Government will accept the recommendations of the independent pay review bodies. She explained that doing so incurs an additional in-year cost of £9 billion and that Departments will be tasked with finding savings of up to £3 billion. Can she outline whether she anticipates that they will have to cover the entire cost of the pay review bodies’ recommendations, or does she anticipate that the Treasury will need to make additional funds available to make up the shortfall?

[Rachel Reeves]

I thank the hon. Gentleman for the question. We have asked Departments to absorb £3.2 billion of the pressures, but it will be different in different Departments. We know that in the Department of Health and Social Care and the Department for Education, for example, it will be harder to absorb those pay pressures, given the huge challenges that they face. It will be different in different Departments, as we will set out in written ministerial statements by the relevant Secretaries of State.

Finance (No. 2) Bill

Ben Lake Excerpts

Committee of the whole House
Wednesday 8th May 2024 Commons Chamber

[Drew Hendry]

Had the right hon. Gentleman done any real research, he would know that the figures for the UK are skewed dramatically by the overheated economy of London and the south-east, which buck the UK trend. If he looks at the figures for all the counties of England, including those in the north of England, he will see how the Government are letting down the people of England across the piece. But of course he does not want to do that. He just wants to make a lazy characterisation of what is happening, saying nothing about people’s potential, which is being ignored and run down by this place, this Government and the official Opposition, who have no idea how to change that.

Clauses 1 to 4 aim to maintain the current rates of income tax, including the savings rates, for another financial year. However, they do little to mitigate the Government’s broader fiscal missteps. In contrast, Scotland’s progressive approach to income tax under the SNP— I almost choked when we heard about progressive taxation earlier—has not only shielded public services from Westminster’s austerity but enhanced them, generating approximately £1.5 billion in additional revenue. We are protecting those on lower incomes, because most people in Scotland pay less income tax and dramatically less council tax than people in England.

All the scare stories about people leaving Scotland because of its progressive policies have proved to be rubbish. The report from His Majesty’s Revenue and Customs has shown that more higher-rate taxpayers have moved to Scotland. The revenue that the Scottish Government are attracting supports a wide array of social benefits, from free prescriptions to university tuition, which significantly reduces the cost of living for Scottish residents. Those are all things that this Parliament would attack, and Kezia Dugdale has today posted a warning about what would happen if Labour got its hands on the Scottish Parliament.

[Ben Lake (Ceredigion) (PC)]

New clause 5, in my name, would require the UK Government to review the impact of the tax measures announced in the spring Budget on Wales, Scotland and Northern Ireland. The Committee will, of course, recognise that the nations and regions of the UK differ in key respects—in their strengths, their weaknesses and their needs. To a large extent, the UK tax system operates as though economic and social conditions are uniform across these isles, so I would like the Government to consider what impact this universal approach to central taxation is having on different parts of the UK, in the hope that a better understanding of such matters will help to inform and improve tax policy decisions.

The laudable ambition to level up the nations and regions of the UK is testament to the different circumstances prevailing across these isles. The Welsh tax base is different from others in the UK. Wages in Wales are much lower than the UK average, productivity is lower, and our proportion of elderly citizens is higher. We should ensure that the tax system reflects that reality and, at the very least, we should make sure that we fully understand the differential impact of tax decisions, whether it be the freezing of the personal allowance, reductions to national insurance contributions, or decisions on corporation tax, on different areas.

I concede, of course, that some fiscal devolution has taken place and that the Welsh Government have the power to set supplementary Welsh rates of income tax. However, these powers are not as advanced as those possessed by the Scottish Parliament, which allow the Scottish Government to create new income tax band thresholds to better tailor their tax system to the specific needs of the Scottish people.

A review of the impact of income tax policy specifically on Wales could include looking at how it interacts with the current Welsh rates of income tax and inform the debate on any further devolution of tax-raising powers to Wales in the future. Extending the reviews to other devolved nations would allow for a comparative study on how UK tax policy interplays with the different fiscal devolution settlements in place across these islands, which would also be to the benefit of future tax policy decisions and any Government levelling-up strategy.

[Jonathan Edwards]

Following Brexit, the UK Government could have been extremely radical: they could have devolved corporation tax to Wales, Scotland and Northern Ireland, and they could have fully devolved income tax and VAT. Is it not amazing that following Brexit, and all the pain that it has caused, there is a complete lack of ambition about using any powers that Brexit enables?

[Ben Lake]

I could not agree more. We were told that one of the supposed benefits of withdrawing from the European Union would be the liberty to tailor our tax powers; to devolve them to different parts of the UK in a bespoke way, so as to promote growth and better reflect the needs of the people. I agree that it is remarkable that the UK Government have thus far failed to make real the supposed benefits of Brexit. This review of tax policy could touch on those things. It would also be useful given the important link between tax decisions and public spending and, indeed, economic growth.

[Sir John Redwood]

Were a future Parliament to grant these tax powers to Wales, would the hon. Gentleman think that in order to promote faster growth in Wales he should cut taxes below English rates, or would he put them higher than English rates?

[Ben Lake]

I am not one to make up policy on the hoof, but the review could look at that, and if the evidence shows that tax decisions could be made to promote growth and to level up, which I think the right hon. Gentleman is in favour of, we should follow that evidence and do so.

Our continued reliance on the Barnett formula to allocate funds between the UK’s nations is problematic not only due to its flaws, but because of its inconsistent application in recent years, which has meant that Wales has lost out on billions of pounds of much-needed public investment. Members will be familiar with the concerns raised by communities across Wales regarding the way in which HS2 spending has been classified. Although not a single inch of track or rail was to be laid in Wales itself, it was categorised as an England and Wales project under the statement of funding policy, thus depriving Wales of significant consequential funding that the Barnett formula would otherwise have provided. The latest estimates suggest that Wales has lost £4 billion in consequential funding—money that could have transformed the country’s public transport infrastructure.

I understand that there will be reluctance within Government to move away from the Barnett formula, not least because devising a needs-based formula is far from simple. However, if we are to retain the Barnett formula, the funding floor should at the very least be updated to use census data from 2021 rather than the 2001 data it currently uses. I am sure the Minister will agree that much has changed since 2001—when I was actually still in primary school. The needs and population of Wales have changed considerably, so it is only reasonable that the funding floor element of the Barnett formula is at least brought up to date.

Such a consideration could be included in the review that I propose, as well as a review of the implications of UK tax policy in Wales. Again, all of this analysis and information could help inform debate for future tax policy decisions and ultimately ensure that we have a tax system that is fit for purpose and meets the needs of people in Wales.

[Nigel Huddleston]

I thank the Members who have spoken for their contributions to the debate. As we have discussed, the Government have shown their commitment to keeping taxes low in order to support people to keep more of what they earn. That is why we have nearly doubled the income tax personal allowance since 2010, ensuring that some of the lowest earners do not pay income tax, while also benefiting higher-rate taxpayers.

The Government have shown that we are also committed to ensuring that older people can live with the dignity and respect they deserve, and the state pension is the foundation of state support for them. Thanks to the Government honouring our commitment to the triple lock, the basic and new state pensions increased by 8.5% this April—one of the largest ever cash increases in the state pension. Those on the new full state pension will therefore be £900 per year better off. That £900 figure is significant, because of course that is the average amount by which 27 million employees will benefit from the national insurance cut: £900 additional for many pensioners and £900 additional for 27 million workers. I think most people will agree that is fair.

Oral Answers to Questions

Ben Lake Excerpts

Tuesday 14th November 2023 Commons Chamber

[Bim Afolami]

As the hon. Member has already heard from the Chancellor, the economy is still growing. The latest labour market data shows that incomes are going up at a higher rate than inflation, so I do not recognise the picture that he paints.

[Ben Lake (Ceredigion) (PC)]

22. What assessment he has made of the financial position of households during winter 2023-24.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

The Government continue to stand by households with one of Europe’s largest support packages, amounting to some £3,300 a household on average across 2022-23 and 2023-24.

[Ben Lake]

The Minister will be aware that a big concern for rural constituencies is the cost of fuel. The RAC has found that the margin enjoyed by the big supermarkets on fuel sales in October was double the figure for the year to date at 14p per litre. That reflects concerns raised by the Competition and Markets Authority that although wholesale fuel prices fell in September and October, retail prices did not. What is the Treasury’s assessment of the impact that these higher margins will have on households in the coming winter?

[Gareth Davies]

Fuel duty is a major cost for households and businesses. We recognise that. That is why in the spring Budget 2023, the Chancellor extended the 5p temporary duty cut. That was a £5 billion saving for motorists, worth £100 for the average motorist, but we always keep these things under review.

Oral Answers to Questions

Ben Lake Excerpts

Tuesday 20th June 2023 Commons Chamber

[Jeremy Hunt]

I will happily look into what has happened. We strongly support all rural areas having access to gigabyte broadband, as an important part of our policy. We have made a lot of progress on that. I will look into detail of what is happening in the hon. Gentleman’s area and get back to him.

[Ben Lake (Ceredigion) (PC)]

11. What fiscal steps he is taking to support hospitality businesses.

[The Financial Secretary to the Treasury (Victoria Atkins)]

Hospitality businesses play an important role in local communities and the UK economy. They will benefit from business rates support worth £13.6 billion over the next five years, which includes increased generosity from the retail, hospitality and leisure relief scheme from 50% to 75% in 2023-24. There is also our Brexit pub guarantee, which means that the duty on a draught pint in a pub will always be lower than its equivalent in the supermarket.

[Ben Lake]

The Minister will be aware of long-standing calls from the sector to reduce VAT to bring it into line with European equivalents. Will the Treasury undertake an assessment of the economic benefits of doing so? Will it consider that as part of a package, alongside increasing the threshold for VAT registration from £85,000 to £100,000 to support smaller businesses?

[Victoria Atkins]

The hon. Gentleman poses many questions for me, some of which are very complicated. VAT relief for the hospitality sector was important in the aftermath of the pandemic, but it cost us a great deal of money and we have had to raise it back up to 20%. We keep the other VAT matters under review, and I would be delighted to meet him to discuss the complexities behind them.

Mortgage Market

Ben Lake Excerpts

Tuesday 13th June 2023 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

The Resolution Foundation has estimated that around 1.6 million households will see their fixed-rate deals come to a conclusion before the first quarter of 2024 and, therefore, will obviously feel the impact of increased rates. What is the Treasury’s assessment of the impact that this hit to households’ disposable incomes will have on the wider economy?

[Andrew Griffith]

We all want interest rates to fall as rapidly as possible. The Bank of England needs to conduct its monetary policy against the target that the Chancellor has set. The Government need to do everything we can to try to reduce the level of debt by controlling our spending, even when that creates difficult decisions for us to make. We will do that so that the day when interest rates fall comes more quickly. In the meantime, this Government are trying to shield households from the pressures of the cost of living, which is why we have deployed that £94 billion this year and last.

Cash Acceptance

Ben Lake Excerpts

Monday 20th March 2023 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Ms Bardell. I thank my hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) for securing this important debate. I thank the Petitions Committee, and most importantly the petitioners who allowed the debate to happen today.

This is about compelling the acceptance of cash. There have been some important points made about the fact that the issue has real implications for budgeting for many households. At its heart is the systematic reduction in the availability of cash, which has accelerated the refusal of cash. If cash is taken out of the system, of course that makes it more difficult for businesses to make that choice. That does not mean they should be allowed to make the choice to refuse cash, which should continue to be an important part of the system.

[Ben Lake (Ceredigion) (PC)]

I am grateful to my hon. Friend for giving way and for making such an important point. The reduction in banking facilities, especially in rural areas such as his and mine, has accelerated the move to a cashless society, as he rightly mentioned. With banking costs, the depositing of cash for businesses is becoming even harder and more expensive. Does he agree that in this conversation, the Government need to ensure that banking services, including deposit services, are retained in rural areas to make it easier for particularly small businesses to continue to accept cash?

[Drew Hendry]

I completely agree with my hon. Friend and his timely intervention. I will come on to that when I talk about the impacts on my constituency, which is largely rural.

Access to cash is vital for people across the communities in Inverness, Nairn, Badenoch and Strathspey. I have been speaking to people out and about in my constituency, and I want to relate some of the issues in the villages and towns. Although I will focus on one item for each of them, all these things affect all of them, all the time. It is vital for people living in the highlands to get access to cash. The lack of availability has direct impacts on our communities.

For example, Aviemore is a popular tourist destination. Large numbers of visitors come throughout the year. Cash means additional spend, and the lack of it can restrict add-on sales. Not everybody wants to tap their card. If there is an opportunity to spend some cash, they will spend it on smaller purchases, as well as some larger ones. Impulse buying is also restricted in the same way. That is all vital in an experience-based economy like we have, where visitors come to enjoy the different activities that they can take part in.

Kingussie and Newtonmore, like Aviemore, are in the Cairngorms national park area. There is limited infrastructure. The closure of bank branches and the reduction in the number of cash machines have made life in those villages far more difficult than it was before. For example, with the increased cost of transport, the extreme inconvenience makes life challenging and difficult for many, especially those with no access to private transport and precious little access to public transport.

People in Grantown-on-Spey, also in the Cairngorms national park, rely heavily on tourism as well. They are directly affected by access to cash. I can relate a personal experience from last year. The Grantown show is the big showpiece event of the year; people come from not only miles around but countries around the world to experience it. It is a fantastic event. However, by the opening time of the show last year, Grantown-on-Spey had run out of cash. The paltry cash machines that were left in the village after the others had been stripped out by the removal of the banks had actually run out, and all the shops that were able to issue cash said that they did not have any more to give out. That was before the thing had got into its swing. It is immeasurable and impossible to judge the impact that having no cash had on that key day for the local economy.

Nairn has been badly affected by bank closures and the reduction in the availability of cash. Businesses—whether they are microbusinesses, or small or medium businesses—have all historically relied on cash. It has been really difficult for businesses there, particularly looking at the struggles on the high street. The locals have performed miracles in keeping up interest in Nairn as an attractive place, and the local business improvement district organisation has done its utmost, but there has no doubt been an impact on Nairn’s ability to thrive. It is restricted from achieving its potential, at least in part.

Fort Augustus is a fantastically picturesque village at the southern end of Loch Ness in my constituency. Many older and disabled people there tell me that they rely on cash. It is a serious issue that affects people’s mobility; it affects their ability to manage their financial affairs and participate in social and economic activities in their local area. We have not even touched on younger people who are not at the point of accessing a bank account by tapping their phone or a card. They often start off with pocket money given to them in cash so they can start to learn about money. As my hon. Friend the Member for Linlithgow and East Falkirk said, the ability to handle money and count it out is a vital part of financial education. There are unintended consequences to restricting the availability of cash because some people cannot access plastic.

The lack of access across my constituency is very noticeable now. It has had a significant impact on towns and villages. I cannot mention them all today, as it would take me ages to cover all the places in my constituency, but it is important to point out that these are real issues for real people in towns and villages. Other Members in this Chamber who have rural constituencies will have these issues in common. For many communities, this is an issue of sustainability, affecting tourism, businesses, young and older people and those with disabilities.

When we hear about a banking crisis the Government jump into action to protect the banks, but where is the same activity to support our communities who are in a banking crisis? They do not have banks or access to cash anymore. Where is the activity and energy for them? The Government need to step up and make sure there is continuity for people and a reversal of this journey to drain cash out of these communities the way that has happened.

There should be a move to increase cash machines. We hear about reasonable access, but what does that mean? They are just words without any meaning. What people in my communities want to know is where, how and when they can get access to the cash they need. Yes, I support the move towards more shared hubs, but let us make sure those hubs are available to all communities and that everybody can access them in the proper way. We should be requiring banks to supply cash, particularly in rural areas when there are events coming up. This should be about protecting cash payments and access to cash.

Finally, if we are to move to a situation where the Post Office takes the strain, that is fine, but post offices must be properly supported and recompensed for taking on this social need. They are next to breaking as well. If we are relying on post offices to pick up the slack, what do we do when post offices are no longer there? People are genuinely worried about that. I thank my hon. Friend the Member for Linlithgow and East Falkirk for bringing this debate forward. We could have another half a dozen debates about the effect of lack of access to cash. I look forward to hearing from the Minister what he is actually proposing to do to help communities to maintain the cash in their communities.

Energy

Ben Lake Excerpts

Tuesday 7th March 2023 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to follow the right hon. Member for Orkney and Shetland (Mr Carmichael), because he raised a number of important points and concerns echoed by many of my constituents. Ceredigion is a mainland constituency that has one of the highest proportions of domestic households not connected to the mains gas grid—74% of properties are off grid there. Clearly, the scheme is very welcome and will offer a great deal of support for many of my constituents. However, the right hon. Gentleman drew upon a few concerns that I share and would like to bring to the Minister’s attention this evening, as I believe they warrant urgent attention.

As the right hon. Gentleman said, those who have not received the payments automatically are required to make an online application. I have already been contacted, since yesterday, by many constituents who have explained that although they are eligible and satisfy most of the criteria, their applications have been refused and they cannot proceed any further because they have not got evidence that they bought fuel after September 2022. Many of these people will have bought oil in August or July. I know and I am anticipating arguments that fuel was slightly cheaper in those months than it would have been during the winter months, and I do not deny that, but they were not to know at the time that they would be punished for buying in advance. They were not to know that if they bought in August, as they often do, they would be at a disadvantage under this scheme.

I cannot comprehend of a fair line of argument that the Government could produce to satisfy me that some of my constituents, who have been buying in the month of August for decades in some cases, should be punished when their neighbours, who perhaps were not able to buy in August—there were many difficulties at the time— will receive a £200 payment. I would be grateful if the Minister could satisfy the House that there will be some discretion for people who bought in August. Although the prices in August were cheaper than in the winter, they were still significantly higher than prices in 2021 or 2020. The prices in August 2022 were more than double those of August 2020. It is important that individuals are not punished by an arbitrary cut-off date for the online scheme.

If we need more arguments against the arbitrary cut-off date, it is obvious that those who have received the payment automatically may not have bought fuel after September 2022, but they will benefit from the £200 because they have a direct relationship with an electricity supplier. That is an unintended unfair consequence of the scheme. I support the scheme, but that is a hitch that needs to be addressed.

My other concern is that the postcode details of a number of off-grid homes in Ceredigion were not supplied to energy suppliers—for various reasons, mainly because they are new builds or new estates—so they did not receive the payments automatically. I am grateful to the Minister and the Department for clarifying that those households are eligible for the payments but that they will need to apply through the online portal. The potential problem is that because they have a direct relationship with an electricity supplier, they will have taken it for granted that they would receive the payments automatically. I am concerned that some people may not know that they need to make an application through the online portal. Could the Government initiate any steps, such as publicity campaigns, to make sure that everyone who needs to make an application knows that before the scheme concludes?

I echo the hon. Member for Kilmarnock and Loudoun (Alan Brown) when he said that we need to look ahead to next winter. The Government would do well to do the work now to support off-grid homes in winter 2023-24.

Non-domicile Tax Status

Ben Lake Excerpts

Tuesday 31st January 2023 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to follow the hon. Member for Lewisham, Deptford (Vicky Foxcroft), and I commend her for her speech.

It has been asked a few times this evening why there is all this focus on the non-domicile tax status and whether it should be abolished. This has become quite an emotive subject, partly because it has become a lightning rod for a whole range of other questions and concerns about the UK tax system and the need for reform. Those questions include, “Is it fit for purpose?”, “Does it raise sufficient revenue to resource our public services adequately?”, and “Does it distribute the burden fairly across society?” We need only look at how the tax system interacts with wealth inequality to see that there is a strong case for broader tax reform.

Wealth inequality should concern all those of us who seek to bring about a fairer and more prosperous society. At present, the wealth held by the richest 1% of households is greater than that held by 80% of the population. Such inequality poses a severe and long-term threat not only to the health of the economy, but, as my friend the hon. Member for West Dunbartonshire (Martin Docherty-Hughes) said, to the future vibrancy of the social contract—of civil society itself. I would very much like the Chancellor to set out measures to address this issue in the forthcoming Budget.

The key, in my opinion, will be how the taxation system can be reformed to ensure that the burden of taxation is distributed more fairly—we have heard a few ideas this evening—and with that endeavour in mind, I think a few obvious examples warrant further attention, such as the decision last year to lower the additional rate threshold for income tax. As a result of that change, someone earning £150,000 a year will pay almost 1% more of their income in tax, while someone earning £1.5 million will pay only about 0.1% more. We could go through the different income levels to make similar points. That raises the question of whether additional thresholds need to be introduced to the income tax system to make it far fairer and more progressive, which I believe the Scottish Government have done for taxpayers in Scotland.

Likewise, I think we need to consider whether it is acceptable for there to be such a discrepancy between the primary and upper rates of national insurance contributions. It is not appropriate for earnings of £50,000 to £170,000 to be levied with a 12% rate when earnings above that threshold incur a 2% rate. All those discrepancies, issues and inconsistencies feed into a widespread concern—one felt by many in Ceredigion—that the system is rigged and is not working fairly. That is something that we should be concerned about if we value a harmonious society and hope to build a prosperous one.

Before I bring my remarks to a close, I will touch upon an issue that needs further Government attention: the tax gap. In 2020-21, it was estimated that the tax gap was £32 billion, or 5.1% of all tax liabilities. Although that figure is contested, I am sure we can all agree that it is still a significant amount of lost revenue to the Exchequer. Given how large the gap is, one would hope that the teams responsible for pursuing this lost revenue within HMRC were appropriately resourced. However, recent analysis by TaxWatch UK considering the approaches taken to tackling tax fraud in comparison with those taken for benefit fraud, suggests that that is not the case. Despite tax fraud costing the Treasury nine times the amount lost to benefit fraud, the Department for Work and Pensions employs 3.5 times more staff in compliance than HMRC, when adjusted to the size of the tax and benefit gaps. I think that should be considered when it comes to the Budget.

Energy (oil and gas) profits levy

Ben Lake Excerpts

Tuesday 22nd November 2022 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to follow the right hon. Member for Hayes and Harlington (John McDonnell), who outlined the serious situation we all face in the economy and given the pressure on household incomes. He delivered his speech in a sombre tone that was not too dissimilar to that taken by the Chancellor last week. That is unsurprising, given that the statement was delivered against the backdrop of such high inflation and low growth, and forecasts that household disposable incomes are set to fall significantly. Given such dire economic circumstances, I was pleased that common sense prevailed and measures such as the retention of the triple lock on the state pension and the uprating of many of the benefits in line with inflation were progressed at last week’s statement. I am happy to say that they will be of great benefit and support to a high number of my constituents.

Nevertheless, I wish to outline a few of my thoughts as to why the balance between addressing the immediate inflationary pressures that everyone is facing and the longer-term productivity problems that have afflicted the economy for several years was not quite right last week. For households across Wales, last week’s statement risks offering little more than a continuation of the managed decline we have sadly come to expect. That reality was underlined by the Wales Governance Centre’s calculation that, on the present trajectory, Welsh incomes will be £10,300 lower by 2027 than they would have been had pre-financial crisis levels of growth been sustained.

If we are to have any hope of reversing that trend, the Welsh economy needs concerted investment in our underlying infrastructure: our power grid; our transport links; and digital connectivity. Many Members have spoken before about the importance of digital infrastructure and transport links, so I will not detain the House on those points, but it is worth reiterating the importance of investing in the power grid.

The Welsh Affairs Committee has been undertaking an inquiry on the potential for offshore wind generation off the coast of Pembrokeshire, in south-west Wales. We received a lot of evidence from stakeholders to show that, if that fantastic potential is to be realised and we are to progress with a cutting-edge, new industry—the manufacture, production and installation of offshore wind turbines—that is centred in south-west Wales, bringing incredibly high-wage and important careers, we need to invest in the grid to ensure that a lot of that power can be connected and fed into the UK’s grid. We need to press on and be honest with ourselves that, with the current state of play, a lot of that potential cannot be realised, it needs to be looked at again by the National Grid and, potentially, it needs further Government investment.

Likewise, the Government need to be honest on the question of our trading relationship with our nearest trading bloc. The OBR report concluded again that the UK’s trade intensity will be some 15% lower in the long term because of our new trading relationship with the EU. The UK Government can take practical steps now to help to ameliorate that economic pain by removing unnecessary trade friction, which has devastated the operations of many businesses in Ceredigion, which are finding it nigh on impossible to export goods to the EU.

I know that that is a debate for another time, but there are mutual recognition agreements that we could be exploring. If that is a step too far, I would like us to see what support there is in terms of resource and advice for small businesses in particular, many of which in my constituency are finding it very difficult to navigate the new rules. They are finding it incredibly difficult, for example, to know how to get confirmation that they are using the right goods classification code before an export or, indeed, before an import arrives at port. These are practical ways that could greatly help small businesses in places such as Ceredigion to improve a bit on their trade with the European Union. A failure to address that issue now will simply pass on the burden to future generations.

The same is true on the question of energy security. We now know that, from April 2023, energy bills will surpass the £3,000 limit. To give a sense of the impact that this increase will have, it is worth recalling that, in April this year, the Welsh Government estimated that average bills of more than £1,900 a year could push up to 45% of all households in Wales into fuel poverty, with 8% thrown into severe fuel poverty.

Given the scale of the crisis, efforts should focus on permanently reducing the impact of energy bills on households across these islands. The inefficiency of our housing stock means that households are wasting hundreds of pounds a year on energy that escapes through draughty walls, leaky windows and ceilings. That issue is particularly acute in Wales given that we have some of the oldest and least efficient housing in western Europe. The Chancellor acknowledged that issue during his statement last week, yet his answer to today’s problem is to bring forward new funding in 2025.

We are already paying the price for a lack of action in this area. The New Economics Foundation recently estimated that, if all homes in England and Wales were rated EPC C, UK Government spending on the energy price guarantee would have been around £3.5 billion less over six months and households—just as important perhaps—would save around £530 over the next year. Additional funding in home energy efficiency measures should be accelerated and would be worth every single penny.

Direct help to facilitate energy efficiency improvements now can also protect businesses from similar energy shocks in future. I encourage the UK Government to look at proposals that have been put forward by the Federation of Small Businesses, which has called on the UK Government to issue vouchers worth £5,000 for small and medium businesses to spend on qualifying energy-saving products and services.

Many of my colleagues have already touched on this topic, but I make no apologies for reiterating some of the concerns with regard to off-grid households and businesses. I plead with those on the Treasury Bench to provide greater clarity on the support for off-grid homes. The Chancellor told us last week that the support was being doubled from £100 to £200 and that the first payment was introduced to coincide with the first six months of the energy price guarantee. Given that the scheme for households who are connected to the grid will be extended, albeit at a reduced rate, from April, can off-grid homes expect a second round of the alternative fuel payment?

If I can be so bold, I would like to ask a few questions. When are we expecting these payments to be brought forward? I know that households are finding it very difficult now. We have just had a bit of a cold spell, so this is very much at the front of people’s minds. It is the same for off-grid businesses. It is unfortunate that many are starting to make very difficult decisions. Any clarity that can be given by the Government as to what sort of support they will be entitled to and when it will be brought forward could go a long way in helping them with some of their plans for the next six months.

I welcome the UK Government’s commitment to uprate many benefits in line with inflation, but I am concerned that they have been inconsistent in their approach by failing to uprate some others in line with inflation. In particular, they have failed to uprate the level of support available for rental costs via the local housing allowance, which is having a devastating impact. Wales is experiencing the second fastest growth in rental costs across Great Britain, which means that the gap between housing benefit and the cheapest rents is rising at a rapid pace. Less than 1% of private rented homes in Wales are affordable to low-income renters. I regret to have to report to the House that, in Ceredigion, it means that those in receipt of the benefit will need to earn a staggering £3,382 more per year to afford the cheapest rent.

In conclusion, will the Government bring forward much-needed support for renters in my constituency by looking again at the freeze on the local housing allowance and uprating it annually to match at least the 30th percentile of market rents? I fear that failing to move on this matter will condemn a great many people to homelessness this winter.

[Mr Deputy Speaker (Mr Nigel Evans)]

Any Members who have taken part in the debate should really make their way to the Chamber now for the wind-ups, which will follow Beth Winter.

Autumn Statement

Ben Lake Excerpts

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

My right hon. Friend understands this extremely well, and he has done very good work with his Committee. This is a national ambition, which means that the Government and every family in the country need to work together to reduce our national energy bill by tens of billions of pounds, to meet our climate change commitments, and to reduce the average bill in this country at today’s prices by nearly £500. It is really worth doing, and we are putting our money where our mouth is with billions of pounds more investment.

[Ben Lake (Ceredigion) (PC)]

The Chancellor rightly acknowledged that inflationary pressure on the budgets of public services is severe, and has an impact on the delivery of key services. He announced an additional £1.2 billion for the budget of the Welsh Government. Will he explain whether that is real-terms increase to the budget? If not, how does he expect budgets in Wales to meet the rising cost of living?

[Jeremy Hunt]

Because of the way the Barnett consequentials work, this is a cash amount that the Welsh Government will receive, but if they do what the English Government are doing with schools and hospitals —[Interruption.] If they do what the United Kingdom Government are doing in England with schools and hospitals, there will be a real-terms increase in Welsh schools and hospitals.