Oral Answers to Questions

Bill Esterson Excerpts

Tuesday 15th March 2022 Commons Chamber

[Lucy Frazer]

As my hon. Friend knows, we have introduced a range of measures to support families, both working and not working. The price of energy is now set until the autumn, and a significant amount of money is going in now and in the autumn.

[Bill Esterson (Sefton Central) (Lab)]

7. What recent steps he has taken to help reduce economic inequality.

[The Financial Secretary to the Treasury (Lucy Frazer)]

Work is the best route out of poverty. We are investing more than £6 billion in labour market support over the next three years to help people to move into and progress in work. In addition, analysis published at the last autumn Budget shows that in 2024-25, tax, welfare and spending decision since the 2019 spending review will have benefited the poorest households the most as a percentage of income.

[Bill Esterson]

But real wages are falling by the largest amount since 2014, inflation is set to hit 8% and the energy price cap is going up. In the cause of fairness and sound economics, when will the Financial Secretary and her colleagues admit that it makes sense to use the record profits of North sea oil and gas to help ordinary people, who face a cost of living crisis?

[Lucy Frazer]

The hon. Gentleman knows from the statistics announced this morning that wages are up in real terms compared with pre-pandemic levels. In fact, unemployment is now almost back to pre-pandemic levels, and is lower than in Canada, France, Italy, Spain and Australia. On his specific question, the North sea oil industry already contributes additional taxes through a 40% rate, which is double the amount that other corporations pay.

--- Later in debate ---

[Lucy Frazer]

My hon. Friend is right to highlight the effect of a high effective tax rate on incentives to work. That is why the Government reduced the universal credit taper rate from 63% to 55% and increased the universal credit work allowance by £500 per year, which is essentially a tax cut for the lowest-paid, worth more than £2 billion in 2022-23, and means that 1.9 million households will keep an extra £1,000 per year on average.

[Bill Esterson (Sefton Central) (Lab)]

T4.   Waste recycling businesses face an increase in tax on red diesel of thousands of pounds per month from April. I take it that the Chancellor agrees that waste recycling has important economic as well as environmental benefits, so what plans has he to address the sudden rise in costs for businesses that process and reuse waste materials?

[The Exchequer Secretary to the Treasury (Helen Whately)]

The changes to the taxation of red diesel were announced back in 2020, were confirmed in spring 2021 and are coming in this year, so businesses, including in the sector that the hon. Member refers to, have had plenty of time to prepare. It is absolutely right that we tax fuels that are highly polluting; unfortunately, diesel is one of them.