Cost of Living Increases

Duncan Baker Excerpts

Monday 24th January 2022 Commons Chamber

[David Linden]

I find it rather ironic to take lectures from the hon. Gentleman about getting on with the job. He was touting for plenty of jobs recently, so that is rather a sticky wicket for him to be on. If he bears with me for a moment, we will get on to the substance of the matter. I look forward to seeing how he votes on the motion tonight and what he does for his constituents in Shrewsbury.

At the beginning of the pandemic, the Chancellor of the Exchequer was everywhere; he was all over the airwaves. Indeed, if Rishi’s slick Instagram graphics could be used as a currency, we would probably all be millionaires, just like the Chancellor himself. However, it is clear that the Chancellor does not have a plan for the biggest issue of the day: soaring costs. He talks endlessly about his plan for jobs, but it is clear that his only plan for a job is moving next door when the Prime Minster is forced from No. 10. But I guess we can all console ourselves that at least when he does take over Lord Brownlow will not have to worry about WhatsApp messages looking for a tap to pay for an expensive new wallpaper.

Spending £840 on a roll of wallpaper gets to the very heart of why this Government are so detached from the economic reality of the everyday lives of our constituents. Inflation is rising at a frighteningly rapid pace: this month it rose to 5.4%, the highest in almost 30 years, since March 1992, when it was 7.1%. But we have not reached the summit yet: Paul Dales of Capital Economics has said that inflation is now expected to hit 7% by April.

These abstract figures have a very real impact on people in difficult financial situations, and they often under-represent the true effect of rising inflation, as highlighted in an excellent Twitter thread by Jack Monroe, which I commend to the House. Monroe wrote:

“This time last year, the cheapest pasta in my local supermarket…was 29p for 500g. Today it’s 70p. That’s a 141% price increase as it hits the poorest and most vulnerable households.”

That rise becomes a pattern for many essential household items. The cheapest rice was 45p for a 1 kg bag; today it is £1 for 500 grams.

[Duncan Baker (North Norfolk) (Con)]

May I ask a quick question? Can the hon. Gentleman recall which of the following schemes rolled out since March 2020 he did not approve of: the job coaches or kickstart schemes; the restart schemes; the lifetime skills guarantee; the holiday activity fund; the household support programme; or perhaps we should just remember the furlough schemes that protected the jobs and livelihoods of millions of people throughout the United Kingdom? Did any of those schemes not help the Scots?

[David Linden]

It is on the record that the SNP supported a number of those schemes. For example, the furlough scheme was hugely important, certainly at the beginning of the pandemic; about 13,000 of my constituents were involved in that scheme and it was something the SNP called for. However, we profoundly disagreed with the Government winding the scheme down too early, and there was such a lack of clarity on that; I know personally many constituents who lost their job in the intervening period from the Government saying it would be wound down to then extending it. The Government could have continued with a number of other schemes, too. We know fine well that as we come out of the teeth of this pandemic the economy is incredibly fragile, and my criticism, which I would reflect back to the hon. Gentleman, is that so many of these schemes were wound down far too early and that has led to the difficult financial pressures many of our constituents feel right now.

I was telling the House about some of the rising costs our constituents are facing in their average supermarket shop. Canned spaghetti was 13p and is now 35p, a price increase of 169%. These price changes will force more people towards food banks, and more people towards having to make that horrendous decision between heating and eating.

On top of the increasing price of food bills, energy prices are surging, delivering yet another devastating blow to families who are already struggling. Household energy bills were the biggest driver of inflation after Ofgem, the energy regulator, lifted the price cap on domestic gas and electricity. That meant that gas bills rose by 28.1% in the year to October, while electricity climbed by 18.8%. National Energy Action estimates that there are already 4.5 million fuel-poor households in the UK, which is nothing short of a disgrace, and if the cap rises, as is predicted, the number will rise to 6 million. Only two weeks ago there was an Opposition day debate in this Chamber and I was highlighting the rising cost of energy to Ministers, yet still, two weeks on, no action has been taken; indeed, if press reports are to be believed, a meeting between the Chancellor and the Prime Minister on this issue was cancelled last Wednesday because they were both so busy courting Tory backbenchers. When I met with Age UK and Age Scotland after their snap survey, it was revealed that 96% of their respondents were worried about their energy bills.

Again, these statistics have real-life consequences. I have heard far too many stories of people in my constituency moving their beds into their sitting room so they will only have to heat or light one room over the winter months. That an image not of Victorian Britain but of 21st-century global Britain.

--- Later in debate ---

[David Linden]

I am grateful to my hon. Friend for that intervention. Yes, absolutely. The SNP has stood on successive election manifestos with a commitment to scrap the cap: both the benefit cap and the welfare cap. I am only disappointed that the SNP had to lead the charge against the welfare cap in a vote only a couple of weeks ago. Perhaps when people in Scotland are considering who best serves them, whether it is Westminster or the Government they elect in Scotland, they will reflect on that. My hon. Friend makes a very good point.

It is imperative that the Government bring forward solutions to address the cost of living crisis and lift millions of people from experiencing poverty this year, just as we have set out in the motion. The Government must introduce an emergency package to boost household incomes and reverse rising poverty levels across these islands. We want the Chancellor to launch a multi-billion-pound Brexit recovery fund to mitigate the worst, and growing, costs of Brexit.

Those solutions should go hand in hand with other suggestions to tackle rising energy prices. We need a one-off payment to low-income households, which could be identified by way of the council tax reduction mechanism. We must increase and extend the warm homes discount, delivered through customers’ bills and funded by the UK Government. We need the child payment, as seen in Scotland, to be rolled out right across these islands. We need the April benefits uprating to better reflect inflation rates and to reinstate the £20 a week uplift to universal credit which so many of our constituents described as a lifeline.

There is no shortage of suggestions to Ministers for how we can alleviate family income pressures, but there is, I am afraid, a shortage of urgency and energy on the part of a Government distracted by their own internal wrangling. I have a huge amount of respect for the Chief Secretary to the Treasury, but the fact that, on a day when we have another debate about the cost of living increase, the Chancellor of the Exchequer is nowhere to be seen raises a lot of questions about what he is doing.

In contrast to the cruel policies in Westminster, the Scottish National party Government have committed to relieving poverty wherever they have the power to do so. That is why we have doubled the Scottish child payment, rolled out 11 benefits—seven of them brand new—extended free school meals and are working actively to reduce poverty and inequality, and all the while Westminster undermines those efforts. However, the constitutional reality is that, with limited tax-raising powers, no borrowing powers and 85% of welfare spending still controlled in this place, those policies can only go so far when they are continually undermined by Tories and Tory Governments whom Scotland did not elect.

Since being elected four years ago, I have stood in this Chamber warning the Government about the impact of their policies that make life so much harder for my constituents in Garthamlock, Craigend and Easterhouse. When I make those pleas, it is not from a purely dogmatic or ideological point of view. I do so because every Friday morning at my surgeries I meet people who, because of the way life has panned out, rely on the safety net of the social security system, to which we all contribute and which is frankly no longer able to cope. I appreciate that a Tory MP in the home counties probably does not have much care for, or cause to interact with, the Department for Work and Pensions on a daily basis.

[Duncan Baker]

It is interesting listening to the number of fiscal policies mentioned that are so terrible and have led to the United Kingdom’s recovery being so poor. Can the hon. Gentleman then explain why every economist predicts that the United Kingdom economy is expected to show the highest growth and bounce back of any nation within the G7?

[David Linden]

I ask the hon. Gentleman to reflect on the fact that the UK was one of the worst hit by coronavirus, perhaps due to the bungling of this Government in the initial days in locking down far too slowly.

--- Later in debate ---

[Duncan Baker (North Norfolk) (Con)]

It was only a couple of weeks ago that I stood here and spoke in the Labour Opposition day debate. On that day, Labour Members were concerned about the cost of living but, two weeks later, it is not quite so important to them today.

We all agree that there is an issue with the cost of living. Office for National Statistics data shows that in December the consumer prices index and retail prices index showed average price increases of 5.4% and 7.5% respectively. Most economists predict that those rates will run higher still. Inflation at a 30-year high is obviously worrying, as it is for many families, but, as the Chief Secretary to the Treasury said when he was at the Dispatch Box, inflation is expected to come back to reasonable levels in the not-too-distant future. We have to analyse why that is the case.

High inflation is not a factor unique to the United Kingdom: the US is in a similar position and Germany is experiencing the same problems in the EU. There are inevitable consequences from our waking up from a global pandemic, with supply chains readjusting and struggling to meet the demand after we have been released from restrictions—restrictions that this Government have handled far better than the Governments of most other countries around the entire world. We also have to deal with the spiking of energy prices.

However as Conservative Members said in interventions at the beginning of the debate, it is fair to say that, since March 2020, the Government and the Chancellor’s response to the pandemic has been one of the best in the world, with help and support for millions and millions of people. It is widely expected that our recovery will be the best in the G7. We have unemployment back to pre-pandemic levels, and we have multiple job vacancies—last time I looked there were 1.25 million of them. The SNP must realise that we cannot spend £400 billion and be some £2.2 trillion in debt without needing some degree of responsible management of the public finances going forward, especially when we will have rising interest rates in the future.

What the Government are doing is sensible. Indeed, when I spoke in the Opposition’s debate only a fortnight ago, I said that targeted support was needed, and it is clear from reports that that is being looked at. The problem is that we cannot shield the entire country from rising food costs, or from rising energy costs—it is not feasible or practical. Anybody with a degree of understanding of economic policy will recognise that.

The Chief Secretary to the Treasury was very honest when he said that, as we emerge from the pandemic, the reality is that there will be difficult times. We have been in a coronavirus pandemic and had an economic shock the likes of which we have not seen pretty much since the second world war, and the Government are targeting support at families whose need is greatest. As we heard from my hon. Friend the Member for Broadland (Jerome Mayhew), there is the 6.6% rise in the national living wage, which is the highest ever—it is the highest rate of pay that the United Kingdom has ever had—and the universal credit taper will help some 2 million families. However, what does not grab the headlines or really get picked up in the House is the other support that the Government give, including half a billion pounds through the household support fund and £200 million for the holiday activities programme, which is still being run. That support is there specifically for local councils to roll out on the ground, because often they know the people—we have talked about them all afternoon—who need it the very most.

There are short-term issues that we must deal with and longer-term ones. However, getting the economy moving is clearly by far and away the right approach. Ever more reliance on the state and increasing public debt is wholly irresponsible and the sort of mismanagement that the Opposition would use. Thank goodness they are not in power.

Household Energy Bills: VAT

Duncan Baker Excerpts

Tuesday 11th January 2022 Commons Chamber

[Duncan Baker (North Norfolk) (Con)]

This debate highlights the fact that a severe cost-of-living crisis is upon us, as I think we can all agree. There are many factors and I will not spend my three minutes debating the whys and wherefores of those, not least because we know of the global gas price hike. I want to draw a line on what we should be doing about it and what interventions we should make and discuss. The bottom line is that with inflation running at 5% and energy bills soaring, this very real issue needs to be tackled urgently.

Labour has talked about cutting VAT and there are three reasons why that causes me great concern. It is a blunt instrument, as we have heard. That is not necessarily a bad thing, but if it is going to have an impact on people who do not necessarily need that cut, that blunt instrument needs to be reformed to make it better. Also, the change would be immaterial—the bottom line is that this crisis requires more than a 5% cut in a bill. Therefore, more targeted measures, which I will come to in a moment, would be far more hard-hitting for the people who need them. Also, as we have seen in this pandemic, there have been difficulties when we have had to take something away and then bring it back again, and my right hon. Friend the Member for Kingswood (Chris Skidmore) made a compelling case on that.

I would not necessarily agree with some Government Members about cutting green levies. If we are serious about dealing with the climate crisis we are in, then, for exactly that reason, we have to keep those levies to ensure that in the future we have energy security from sustainable sources that will help to alleviate the problems that we have today.

I want to outline two positions. As we have seen, winter fuel payments help 8 million pensioners and the warm home discount helps 2.2 million people on low incomes. That is the targeted intervention that we need. My North Norfolk constituency is particularly rural. It has the highest demographic of older people in the entire country. Those are the people who particularly need support: our older citizens, who had the triple lock taken away for one year only, for understandable reasons. I would like to see the Government taking targeted measures very seriously and costing them up to help people.

Finally, we should look at the energy companies. There are clear regulatory failures. We should look at Government-backed loans to smooth out the problem that we have seen this year and ensure that it does not recur in the next few years.

Oral Answers to Questions

Duncan Baker Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Lucy Frazer]

We want to encourage as many people as possible into jobs. The Chancellor has put forward a plan for jobs, with a number of work programmes to ensure that we get both young people and the over-50s into work. Crucially, through the restart scheme we will get people off universal credit and into jobs. We also recognise that some people cannot work, which is why six weeks ago the Chancellor announced £500 million to help those who need our support, to be distributed through local authorities.

[Duncan Baker (North Norfolk) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Rishi Sunak)]

Last week’s Budget delivered a stronger economy for the British people, with stronger public finances; support for business; stronger public services; investment in infrastructure, innovation and skills to drive future growth; and a significant tax cut for the lowest-paid, because this will always be a Government who support and reward work.

[Duncan Baker]

My constituent Peter Phillips fell victim to the loan charge in 2019 and settled before 30 September 2020. HMRC advised him, like many others, that that was the right thing to do. In effect, those who settled before the Morse review did not get the benefit of the changes that were implemented: my constituent paid more than someone who disclosed nothing to HMRC. Does my right hon. Friend think that was in the spirit of the Morse review? Has HMRC got it wrong?

[Rishi Sunak]

It is obviously difficult for me to comment on the case of a particular individual. The previous Chancellor, my right hon. Friend the Member for Bromsgrove (Sajid Javid), asked Lord Morse to conduct an independent review and the Government accepted and implemented the vast majority of its recommendations. People who settled early had the benefit of certainty from their settlement, but my hon. Friend should write to the Financial Secretary to the Treasury and we will ensure that we look at that case, as he requests.

Health and Social Care Levy Bill

Duncan Baker Excerpts

2nd reading
Tuesday 14th September 2021 Commons Chamber

[Duncan Baker (North Norfolk) (Con)]

Whether it is speaking about young carers, improving the pay and conditions of our care workers or pushing social care reforms for our older citizens, I have found myself in this place speaking about social care countless times since my election. One could conclude that I am happy that the Government are beginning to tackle this issue. I might be expected to say that as the MP who represents North Norfolk, an area where the social care sector is particularly important given the demographics of my residents.

As I have said to the many people who have asked for my thoughts on this Bill, in my view the prize of fixing social care is far greater in the long term than bickering about how we pay for it. It is regrettable, obviously, that we have to increase tax, but one simply has to be able to recognise the situation that the country finds itself in. The Exchequer cannot keep funding, in the current tax take, £12 billion to £14 billion a year—not to the extent that it has already supported the country to the tune of some £400 billion. Any reasonable person can recognise that. It would be fiscally irresponsible to continue to heap debt upon debt. There is probably no right way of creating the funding that we will require—a way that will satisfy everybody. Equally, there is no wrong way either. As I have not heard of a significant amount of consensus, a marginal rise in national insurance, to which, as we know, employees as well as employers will contribute, has, to a large degree in my constituency, been met with some understanding of the conundrum that we face.

The Opposition were asked time and again about how they would deal with this matter, but the hon. Member for Ealing North (James Murray) would not put a marker in the sand and explain what he would do.

[Geraint Davies]

I know the hon. Member said that it would be fiscally irresponsible to increase debt, but is he aware that the interest cost of debt per year has gone down by £14 billion because of historically low interest rates? Therefore, at this particular window in time, as we are coming out of a pandemic, would it not be better not to tax jobs?

[Duncan Baker]

I am sure the hon. Gentleman will remember the old adage that what goes up must come down, and, obviously, it could happen vice versa as well.

This Government have been incredibly financially prudent over the years. Most constituents around the country would say, “Thank goodness that we have had a Conservative Government looking after this country as they have produced one of the best responses to the pandemic in the entire world.”

What constituents want to see now are the tangible changes on the ground and the benefits. What we see today is probably one of the greatest welfare benefits that we have—the fact that there is a cap on how much a person pays in their later life for their care costs and that they will not have to sell their home will create security for a great number of people.

As the White Paper comes forward, I want to say three things to the Treasury and get these points on the record. First, I am a patron for the Holt Youth Project, which is a marvellous young people’s charity in my constituency. It has looked after some 50 young carers throughout the pandemic. Everybody knows that the life chances of young people are significantly affected as a result of looking after a sick or debilitated parent. I want to ensure that we can channel the funding that we get from this levy; there have been many asks today, including for dementia and other incredibly important causes, but please let us ensure that we fund young carers properly.

Secondly, let us ensure that unpaid carers are properly looked after. For those who take the burden off the state to care for their loved ones, the current allowance is £67 a week, at a cost to the Treasury of £3 billion a year. This must be looked at again.

Finally, let me address the recurring problem that we hear about all the time: the shortage of care workers. These people need to have the same high status and high regard as any NHS worker. We have to tackle and get to grips with the skills required to care for somebody with dementia or to give end of life care, and ensure that those care workers are properly rewarded.

[Mr Deputy Speaker (Mr Nigel Evans)]

To resume her seat no later than 4.45 pm—we will put the timer on—I call Nickie Aiken.

Northern Ireland Protocol

Duncan Baker Excerpts

Thursday 15th July 2021 Commons Chamber

[Duncan Baker (North Norfolk) (Con) [V]]

I thank my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) for this timely debate.

It is probably fair to say that we urgently need a fresh protocol that meets the needs of all the parties in a sensible and practical fashion. Tinkering with the text or seeking to apply it pragmatically will not do the trick. Shakespeare staged the scenario 416 years ago. From Shylock’s—sorry, the EU’s—point of view, a contract is a contract and must be implemented to the letter. Alternatives were of no interest. It may be possible legally to avoid the protocol, just as Portia avoided Shylock’s contract as it did not allow a drop of blood to be lost, but that is not the issue. If we do not want this protocol, then we need a sensible and practical replacement that delivers what all the parties require. The question now is: how can we bring that about?

The Irish protocol was devised to avoid customs posts on the border between Northern Ireland and the Republic. It may be a small island, but the border is longer than that between France and Germany and more difficult to police. Although customs border posts worked perfectly well for 70 years from 1923, the idea that reinstating them would infringe the Belfast agreement is worthy of debate in itself, but that will have to wait for another day.

A protocol that would allow free trade between the north and the south of the island makes sense, especially as the master trade agreement stipulates tariff-free trade between the EU and the UK. Unfortunately, tariffs are not the issue; non-tariff barriers are. I will come to that at the end.

The EU refused to understand how Northern Ireland could simultaneously be part of the EU and UK regulatory regimes, especially as the UK was promoting divergence. Note that no Northern Ireland politicians were involved in the original protocol negotiations, nor the renegotiations since. The UK Government think that it is purely a matter for London and Brussels, but excluding Ulster politicians, sensible as it seems from the London side, almost ensures that any protocol will receive a negative response in Belfast. It is a bit like going to the pub on a Sunday to find that the menu has been devised by the landlord and the owner, but no one has involved the chef. The relationship these days between Dublin and Belfast is good, and it is far more likely that they could find a solution, or at least a proposal that could be put to London and Brussels, and believe that they own it. At present, the DUP is focusing on the removal of the protocol, but I think it should be thinking about a replacement. If Dublin is going to buy it, the DUP needs to work it up with Dublin and possibly with other Ulster politicians, too.

For Northern Ireland to be in two competing regulatory regimes at the same time would be feasible if UK regulations applied to goods supplied from Britain for consumption only in Northern Ireland, whereas EU regulations applied to goods created in Northern Ireland for consumption in Northern Ireland or the EU. The contentious issue has been goods supplied from Britain to Northern Ireland that are intended for the Republic or are at risk of being consumed there.

The problem could be largely solved by shipping goods intended for the Republic directly to the Republic and labelling goods intended for Northern Ireland in ways that would make them unsaleable in the Republic, such as pricing in sterling, not euros, or marking as for sale in Northern Ireland only. Pricing is a factor: it is only when goods imported from Britain are much cheaper in Ulster than the equivalent goods in the Republic that any incentive to smuggle them south across the border exists.

EU trading officials, not UK officials, should deal with offenders within the EU—that is key. Each country should only police its own laws in its own country. If French brandy were illegal in the UK, the importer, not the French exporter, would be the lawbreaker. The Department for Environment, Food and Rural Affairs insists on the ludicrous VI-1 forms—I should know, because I used to fill them in—to prevent perfectly good EU wine from entering Britain, penalising British wine merchants, not the EU. The existing protocol, however, seeks to make British officials enforce EU law within British territory. We left the EU to escape that.

No doubt Portia could make a better job of unravelling the matter than I have, but what should be obvious to negotiators, but seems not to be, is that the protocol is fundamentally unfair. It will cause serious troubles until negotiators stop tinkering with it and replace it with something more sensible and practical.

Better Jobs and a Fair Deal at Work

Duncan Baker Excerpts

Wednesday 12th May 2021 Commons Chamber

[Duncan Baker (North Norfolk) (Con) [V]]

The Queen’s Speech yesterday placed at its heart recovery from the pandemic and restoring the public finances, much as the Budget did a few months previously. Protecting jobs and businesses and driving economic growth will deliver that, and the Queen’s Speech brought forward a wealth of Bills and means by which to achieve it.

It is worth remembering that, throughout the pandemic, this Government have gone further than virtually all other national Governments to protect livelihoods, with extensive financial support packages, including furloughing, grants and loans. A total of more than £300 billion is being spent. The economic forecasts point to optimism. The Bank of England predicts a faster than expected recovery, with growth predicted to be over two percentage points better than the forecast made at the start of just this year. Unemployment, which at one point was forecast by the Office for Budget Responsibility to peak at 12%, is now expected to peak at nearer 5.5% by the autumn. One should bear in mind that the rate was 4% pre-pandemic.

However, the economy is materially smaller than it was and this will take time to rebuild. A raft of Bills will help to achieve that, but how? Through investing in green industries—we are already paving the way in North Norfolk with plans to push for hydrogen research at Bacton gas terminal, which needs to transition, and that is happening around the country. A wise business invests before the uptick in economic growth, ready to take advantage of a surge in demand. The Government are no different, investing now in connectivity through the high-speed rail Bill and pouring money into 5G and gigabit broadband connectivity. We have already seen the east put on the map with the new freeport that has been granted to deliver thousands of jobs and innovation to the area.

But perhaps the jewel in the crown is the right to have an opportunity to retrain in later life at any stage through the lifetime skills guarantee. The pandemic will, and has, affected people like never before and it will make people re-evaluate what is important to them in life. Now, having the chance to take more control and to improve access to the funding and opportunities—too many people in later life do not have the freedom to explore new avenues—is a centrepiece in supporting every citizen throughout the country.

I have said that my constituency will bounce back, and it will bounce back swiftly, but North Norfolk is perhaps luckier than most. We will be propelled by high levels of domestic tourism to a beautiful corner of the country. Not every part of the country has the same beaches, but the Government are doing all they can to create that level playing field and opportunity for all.

It is quite simple. History teaches us many things. In politics, a Government who mismanage the economy are one that the electorate will not forgive. It appears that even the most pessimistic of observers recognise that the mood is confident and, as such, the country is poised to get back on its feet. These Bills will give us the tools to do so.

Financial Services Bill

Duncan Baker Excerpts

Monday 26th April 2021 Commons Chamber

[Christine Jardine (Edinburgh West) (LD) [V]]

I, too, will keep my remarks brief. In the debate tonight I, on behalf of the Liberal Democrats, will be opposing the Government’s motions to disagree with Lords amendments 1 and 8.

In particular, I would like to focus my comments on Lords amendment 8. This amendment would offer significant relief, I believe, to thousands of so-called mortgage prisoners caught in a vicious cycle of debt through no fault of their own. We have already heard the arguments rehearsed and some terrible stories of what they have been through. All that has been the result of the original decision, after the collapse of the mortgage providers, to sell off those mortgages to investment funds, and that has left as many as a quarter of a million homeowners trapped in spiralling mortgage costs for more than a decade now.

It is a situation that the Government have failed to address, even though there is clear evidence that it is jeopardising wellbeing. A recent study found that mortgage prisoners experienced higher rates of physical and mental health problems, and that they are up to 40% more likely to default as a result of coronavirus. The significance of this amendment is that it would finally unlock this trap and offer an escape from the nightmare of the past decade. Significantly, it would lower interest payments through a cap on the standard variable rate of interest for mortgage prisoners who are borrowing from a firm that no longer lends to new customers. The cap would be no higher than 2% above the Bank of England base rate, which is currently a mere 0.1%. It would also require lenders to offer mortgage prisoners new fixed interest rate deals in certain circumstances—for example, if they have kept up with payments in the past 12 months, if they have an outstanding loan amount of over £10,000, or if they have not received consent to let the property.

The misery caused to tens of thousands over the past decade and the continuing threat it poses demand that we act. We have heard tonight why. To me, it seems simple. It seems the correct thing to do, and therefore I strongly urge the House to reject the Government’s motion to disagree with this amendment—Lords amendment 8 —as well as with Lords amendment 1.

[Duncan Baker (North Norfolk) (Con)]

There is a famous saying, is there not, that an Englishman’s home is his castle, but the problems born out of the banking crisis in 2008 still persist. Indeed, there are a quarter of a million households with mortgages affected by lenders who suffered at that time. They are with inactive lenders, and in simple terms their mortgages are stuck with non-lending asset management funds.

We know that the Government have looked at many of those borrowers to try to help them so that they can switch lenders. Many of them can—almost half of them—and they can benefit largely from doing so, but it is the remaining half that are our real problems, the so-called mortgage prisoners. Their rates, as they came off the original term deals, moved on to the standard variable rate we have heard about tonight, leaving them paying such disproportionately high repayments. Their lender’s debt was sold on, and as such they cannot remortgage or switch, leaving many families struggling immensely to manage each month. Lords amendment 8 would require the FCA to introduce a cap on those standard variable rates and ensure that mortgage prisoners can access new fixed interest rate deals.

I know there are huge amounts of work going on to try to help these people, not least by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake)—I thank him for all the work he has done—but also by the Minister, who has been a tower of strength. He has been talking to me far too much about how we can help these people, and I thank him greatly for that. It is an absolute must that we do keep helping these people.

First, the 70,000 mortgage prisoners who are in arrears, would—for many reasons, unfortunately—potentially not be a better position if they were in the active market, as borrowers are unlikely to be able to switch within the market, given the very stringent risk criteria there are today. The Government are trying to support these householders with the initiatives we have heard about, such as the breathing space scheme.

It is the remaining 55,000 who have kept up their repayments that I particularly want to make sure the Treasury can really help and work on solutions for. I know there are again attempts to modify the affordability criteria assessment to try to move those people on to a new lender. Notwithstanding such efforts, those solutions are not the final answer. So what is the answer? Is it Lords amendment 8? Do we interfere with a market?

Finance (No. 2) Bill

Duncan Baker Excerpts

2nd reading
Tuesday 13th April 2021 Commons Chamber

[Duncan Baker (North Norfolk) (Con) [V]]

An unprecedented time calls for an unprecedented Budget, and that is exactly what the Chancellor delivered, which is now set out in this Bill. The Budget had at its heart a focus on supporting people and businesses as we begin to emerge from the pandemic, and it laid out how, through fair taxation measures, not austerity, we can begin to rebuild and fix the public finances. Even the latest figures, published this morning, show an economy recovering, with exports, imports and GDP all improving. We already have a vaccination policy that, thanks to this Government, has been world-beating, and we now have an economy repairing itself faster than we all expected.

Not only can North Norfolk celebrate the fact that its economy, which is driven by leisure and tourism, will no doubt boom this summer, but my constituents have even more to celebrate, North Norfolk being in the top 100 places for the UK community renewal fund. Contrary to some beliefs, this is a Government reaching out to every corner of the UK, and I thank the Chancellor for putting North Norfolk on the map.

You might expect that a chartered accountant would want to talk about the taxation measures in this Bill, and I would hate to disappoint you, Madam Deputy Speaker. There are undoubtedly those who have prospered in lockdown from a sense of a captive market, and thus the taxation policy to increase corporation tax not now but in a couple of years’ time is sensible and proportionate. Equally, our rates will still be some of the lowest in the G7. Those making the lowest profits—under £50,000—will be largely unaffected and only those earning over £250,000 will pay the top rate. The vast majority of limited companies in the UK will see little tangible difference. However, I would like the Minister to explain why the super deduction is only applicable to limited companies. I acknowledge that it is a superb incentive for investment, as it is designed to be, but why not broaden the scope? Imagine farmers in my constituency parting with the best part of half a million pounds to buy farm machinery such as combine harvesters, as many of them may do, but because they operate as partnerships they are ineligible for the tax break.

As I repeatedly and relentlessly mention in this place, my fears for the overall UK high street still remain. Yes, our high streets will have the rates reprieve for nearly another year, but in the long term they will suffer as those who have converted to shopping online continue to operate under that trend. The Government must look at modernising the rates system and consider how we level up the disparity in competition between those bricks-and-mortar stores that now face online competition. I certainly look forward to perhaps seeing more of this in the autumn. But I take nothing away from the tax breaks. The confidence that the Government have injected into the economy is working and the green shoots of a post-crisis recovery are already germinating.

Exiting the European Union (Excise)

Duncan Baker Excerpts

Wednesday 3rd February 2021 Commons Chamber

[Duncan Baker (North Norfolk) (Con) [V]]

It is an honour to speak in this debate. Although I agree that the statutory instrument does not have the snappiest title—Travellers’ Allowances and Miscellaneous Provisions (EU Exit) Regulations 2020—we should not let that hide the importance of this useful piece of legislation. As a former finance director with the unenviable joy of filling out VAT retail export scheme paperwork, I can say that, had I still been sitting in my office, I would be rejoicing at this statutory instrument as it scraps the necessity, once and for all, to fill in such declaration forms.

Why is the SI of such benefit? Well, it is another benefit of leaving the European Union. Now that we have control of our laws and our regulations, we can set out our own policy and regulation around VAT and how we administer it. In my view, it is another piece of red tape and bureaucracy that we can cope without. Those red and cream VAT retail export papers—the 407 form—either have to be extended to all countries in the EU, as we fall onto World Trade Organisation rules, or we can choose to remove the scheme altogether.

Extending the scheme would cost us £1.4 billion a year and for what benefit? None, really. We can quite rightly remove the scheme altogether. There is no real advantage to subsidising customers shopping in the UK from outside the EU and reimbursing them from the VAT on the goods that they purchase. The scheme disproportionately affects central London and places such as Bicester Village, with their high concentration of non-EU customers participating in retail shopping. Let us be honest, many customers do not even use the scheme, let alone know about it, and they certainly do not visit the UK to take advantage of reclaiming VAT. As such, I entirely welcome the move and say let it be a useful boost to the Treasury.

Furthermore, for the estimated 67 million people travelling to the EU, there is the benefit that, for the first time in 20 years, we are providing duty-free sales to UK residents. As my hon. Friend the Member for South Cambridgeshire (Anthony Browne) has said, it is another benefit of Brexit. I agree with his assessment that bringing back duty free has something of the fun factor about it, and it will be enthusiastically met by the public.

Not only is this a welcome move for people travelling to the EU, but it is a huge boost for regional airports, which will now be able to offer duty free to their passengers. Like so many airports, Norwich International —it is not in my constituency, but, at a distance of 35 miles away, it is my nearest airport—has suffered so much, and I can see it welcoming this initiative entirely. This scheme is also extended to ports and international train stations.

Finally, our inbound alcohol allowances are now one of the most generous in the world, with a quadrupling of the entitlement that passengers returning from anywhere in the world can bring into the UK.

As we leave the EU, the newspapers may like to tell us of the bumps in the road that need straightening out. Well, here is a statutory instrument that adds benefit, simplification and removes bureaucracy, and I, for one, will not miss the pink and cream forms. It is a welcome move indeed.

Equitable Life

Duncan Baker Excerpts

Thursday 21st January 2021 Commons Chamber

[Duncan Baker (North Norfolk) (Con) [V]]

I thank my hon. Friend the Member for Harrow East (Bob Blackman) for his tireless campaign. I do not think that anybody participating in this debate could fail to be moved by the stories that we have heard today. As one of my constituents said:

“As time passes and age increases, the volume of our voices are decreasing, too, so we need to keep the volume of our situation loud and clear, and look to you being one of those who will raise yours.”

Quite literally, we have heard time and again of good, honest, decent people who, after saving diligently all their lives, have had that ruined. What is striking is that this is not just about a select few or the better off, but everyone in society being affected. A total of 900,000 people affected by maladministration received just 22% of their entitlement. We know the story, and we know that it is wrong. As the MP for North Norfolk, where many people have enjoyed, and are enjoying, their retirement, I am staggered by just how many constituents have been affected by this terrible situation. I have 2,800 policyholders and dependants in my area alone. Listening to their stories is heart breaking. Some have even given their permission for me to use their names. 

Take Terry, who is 82. He retired as a plumber at 60 when his knees were too bad to continue working. He started saving for his retirement in 1979, diligently putting away, but today all those years of saving amount to virtually nothing given the collapse of Equitable. Terry told me that he cannot afford holidays and has not had a holiday abroad for 20 years. How can it be fair that we ask people in society to take responsibility for themselves, good people like Terry save for a pension, and then, through no fault of those people’s own, the pension company and the regulator fail in their duty to protect them?

We know that the Government accepted in 2010 that the victims’ losses were in the order of £4.3 billion, but the £1.3 billion set aside has not gone far enough for those constituents, such as mine, who are having their happy retirement wrecked. It is pretty clear not only that Equitable had been misleading customers with over-the-top returns and promises, but that the regulator had failed to protect customers, knowing quite well that the accumulated pension pots would not be worth what customers expected.

Let me quickly conclude with a heartbreaking story of another of my constituents. He too saved for years, but his pension is just a third of what it should have been, and it contracts every year. I will not reveal his name, but of all the stories, this encapsulates the dire situation that so many are left in. He said:

“I am sad that my wife died in 2007 but perversely, glad she hasn’t lived to see that all the sacrifices she made to allow our pension pot to grow have all been in vain. She gave up many of the more enjoyable things in life because I said we would benefit in retirement. I could cry when I think about it. But I live in the hope that one day soon justice will be done and the government will pay its debts. I very nearly didn’t make it a few weeks ago when the doctors thought I was to become another victim of Covid19. But I came through the night to everyone’s surprise and now I just want to have what is mine and live a few years longer and enjoy them.”