Oral Answers to Questions

Bim Afolami Excerpts

Tuesday 7th May 2024 Commons Chamber

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

2. What assessment he has made of the contribution of the co-operative sector to the economy.

[The Economic Secretary to the Treasury (Bim Afolami)]

The Government acknowledge the vital contribution that co-operatives make to the economy. The “Co-operative and Mutual Economy 2023” report found that co-operatives generated a combined annual turnover of £41 billion, a 3.7% increase from 2022 levels.

[Jim McMahon]

As the Minister outlines, co-operatives are worth £41 billion to the UK economy; moreover, they are, on average, 10% more productive than other businesses, twice as likely to survive the first five years of trading, and have higher rates of investment than other private businesses. What more can the Government do to encourage more co-operatives to thrive? Does he believe, as I do, that the creation of co-operative development agencies in every region has to be part of that?

[Bim Afolami]

I thank the hon. Gentleman for his point. I note his long-held interest in the co-operative sector, and the work that he does on it. So, what are the Government doing? They are doing two things specifically. First, they recently took the further step of backing the Co-operatives, Mutuals and Friendly Societies Act 2023; they also commissioned the Law Commission to review the Co-operative and Community Benefit Societies Act 2014 to make sure that co-operatives can do as much as possible to benefit the wider economy.

[Alexander Stafford (Rother Valley) (Con)]

Over the past two years, Rotherham Council has spent £240,000 promoting co-operatives and employee ownership. Does the Minister agree that this huge amount of money would be better spent on fixing potholes and opening youth clubs, rather than on an ideological viewpoint, with no measurable outcome for the people of Rotherham?

[Bim Afolami]

I do not wish to comment specifically on Rotherham, but the best way of promoting co-operatives in general is to allow them to thrive as best they can, and to support their members in doing what they do best, which is to help their local economies—not necessarily through huge amounts of public subsidy, but through doing what the co-operative movement was founded to do, which is, as I have said, to support local economies and local people.

[Kerry McCarthy (Bristol East) (Lab)]

4. What recent assessment he has made of the potential impact of his tax policies on living standards.

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[Vicky Foxcroft (Lewisham, Deptford) (Lab)]

13. Whether he has taken recent steps with Cabinet colleagues to ensure that people with disabilities can access their child trust fund when they turn 18.

[The Economic Secretary to the Treasury (Bim Afolami)]

On 9 June 2023, the Ministry of Justice launched a programme to raise awareness of the Mental Capacity Act 2005 in relation to how and when to access child trust funds. The first part of this programme is a new toolkit. The Ministry of Justice will continue that programme of work to raise awareness of how to obtain legal authority to access a child trust fund, for which a court fee waiver is available.

[Vicky Foxcroft]

The only way for parents of young people without capacity to access their child trust fund is through a deputyship order. After consulting on the introduction of a mental capacity small payment scheme, which would allow a suitable person temporary access to release the funds, Ministers opted not to legislate, and instead introduced a toolkit, as has been said. Over 80,000 young people in England and Wales remain locked out of their child trust fund, so would the Minister agree to look at this again?

[Bim Afolami]

I thank the hon. Lady for her question, and I know how avidly she campaigns in this area. The House should know—and you should know, Mr Speaker—that I recently met my right hon. Friend the Member for Horsham (Sir Jeremy Quin) and the hon. Member for Sheffield Central (Paul Blomfield) to discuss this very issue. I am very happy to meet the hon. Lady as well to discuss it and to see if we can get a solution, because we do want to get this problem fixed.

[Sir Jeremy Quin (Horsham) (Con)]

I am grateful to the Minister for the meeting to which he referred. Will he compliment financial institutions that are doing their utmost to make it easier for their disabled customers to access their child trust funds and, if his ministerial colleagues can find a way of making that easier across the board, would that have his support and that of his colleagues in the Treasury?

[Bim Afolami]

I thank my right hon. Friend for his question. Indeed, working with not just the Ministry of Justice, but the Department for Work and Pensions is key to deliver this, as is working with the Financial Conduct Authority to ensure that any financial institution that does the right thing does not lose out or face any regulatory issues. That is indeed something that has my support and that of the Treasury, and we will work across Government to get this right.

[Andrew Rosindell (Romford) (Con)]

14. Whether he plans to reintroduce VAT-free shopping for international visitors.

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[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

T8. The taskforce on nature-related financial disclosures came out with its framework last year. I would like an update on where we are with the International Sustainability Standards Board approach, because just as it has been a huge success for companies and for UK plc to switch to the recommendations of the taskforce on climate-related financial disclosure, it is vital for our planet that we also start to have the TNFD framework as standard right across the board.

[The Economic Secretary to the Treasury (Bim Afolami)]

My right hon. Friend is right that this issue is critical. I am pleased that the ISSB recently announced its intention to commence a research project on a nature thematic standard, carefully considering the TNFD’s recommendations. His Majesty’s Government have established a formal mechanism to assess the ISSB standards for suitability for the UK to ensure that with a general sustainability standard, and more specifically with a climate sustainability standard, we are doing the right thing for the UK. The Government will publish an implementation update on sustainability disclosure requirements shortly to provide further information for industry—watch this space.

[Richard Burgon (Leeds East) (Lab)]

T2. We have all seen it: the richest Prime Minister in history has spent the weekend telling the public that his plan is working. Well, it is not working for people in Leeds East, whose taxes are going through the roof while our public services are on their knees. Would a better plan not be to go after the tax dodgers, rather than making ordinary people pay the price for this Government’s abject failures?

[Sir Jacob Rees-Mogg (North East Somerset) (Con)]

The Bank of England has said that quantitative tightening is not an official part of its monetary policy targeting, yet it is at risk of costing, fiscally, £179 billion in losses underwritten by the Treasury. That is having a major effect on the fiscal situation of the country. Will His Majesty’s Government encourage the Bank of England to hold these bonds to maturity, taking the carry cost rather than taking the hit from selling them in the market and crystallising an enormous loss?

[Bim Afolami]

In relation to the asset purchase facility and how that has worked over recent years, it is not His Majesty’s Government’s—or indeed the Treasury’s—intention to change the way in which that works with the Bank of England, but as with all measures, the Chancellor keeps everything under close review.

[Kerry McCarthy (Bristol East) (Lab)]

T3.   According to the Bank of England, a typical family remortgaging this year will pay £240 a year more in mortgage payments. Does the Chancellor accept that even if the Bank cuts rates, those homeowners will still be paying a penalty because the Government crashed the economy?

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[Nick Fletcher (Don Valley) (Con)]

The best way for a business to thrive and for customers to receive a great service is for companies to employ individuals on merit. Does the Chancellor agree that the recent overreach by the Financial Conduct Authority and the Prudential Regulation Authority regarding their equality, diversity and inclusion policies is a step too far, and that it is inevitable that those policies will have a negative effect on us all?

[Bim Afolami]

My hon. Friend makes an important point. It is important that the FCA bears in mind that it should not be distracted from its core focus on conduct and regulation by things that are more marginal for the people and businesses it oversees. I urge the FCA to take into account the representations made by my hon. Friend and by industry in that regard and many others.

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[Sir Jeremy Quin (Horsham) (Con)]

The lifetime ISA is a positive instrument, but I understand that under its terms there are circumstances under which savers lose not only the benefits of the ISA but also part of their capital investment. That does not seem right; will the Minister please meet me to discuss it?

[Bim Afolami]

I am happy to meet my right hon. Friend to discuss the lifetime ISA, which is a fantastic product brought in by this Government to help young people to get on the housing ladder. I am happy to meet him to discuss ways in which we can make it more accessible for more people in more circumstances.

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

On a point of order, Mr Speaker.