Oral Answers to Questions

Greg Clark Excerpts

Tuesday 12th March 2013 Commons Chamber

[Jim McGovern (Dundee West) (Lab)]

3. What progress he has made on supporting victims of interest rate swap mis-selling.

[The Financial Secretary to the Treasury (Greg Clark)]

On 31 January, the Financial Services Authority published the findings of the pilot review into interest rate swap mis-selling. The full review of 40,000 cases is now under way, and the FSA says it should be completed within six months. Small business organisations played a major role in exposing the scandal, so I can announce to the House that from today bodies representing consumers, including small businesses, will be able to apply to make super-complaints to the Financial Conduct Authority, giving them fast-track access to the regulator. That important power should help to ensure that any future misconduct is detected quickly and put right.

[Jim McGovern]

I thank the Minister for that answer. My constituent, Mr James Boyle, has a contract with Clydesdale bank, which seems to be excluded from the review. The main banks—RBS, HSBC, Barclays and Lloyds—are all included. Why are the Clydesdale bank, and my constituent, excluded from the review?

[Greg Clark]

I can confirm that the Clydesdale bank has now become part of the review, as have all the other principal banks. The hon. Gentleman has raised the case of his constituent with me before; even though the product was not within the review’s terms of reference, Clydesdale has agreed to consider it as part of the review.

[Andrew Bridgen (North West Leicestershire) (Con)]

I have constituents who are concerned that the FSA may come under pressure from the banks to water down its findings and reduce the scope of the redress scheme, to their disadvantage. What can my right hon. Friend say to reassure my constituents about that important issue?

[Greg Clark]

My hon. Friend raises a very important point. The review is under the auspices of the Financial Services Authority, and each bank has had to appoint independent reviewers who are themselves accountable to the FCA. It is absolutely crucial that the objectivity they bring to bear cannot be compromised, and I have given the FSA clear feedback that it should have that in mind during the review.

[Andrew Selous (South West Bedfordshire) (Con)]

4. What steps he has taken to increase the amount of (a) lending and (b) equity financing to the real economy.

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[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

11. What recent estimate he has made of the extent to which the rate of increase of average earnings has kept in line with the rate of consumer price inflation.

[The Financial Secretary to the Treasury (Greg Clark)]

The average gross weekly earnings of full-time employees rose by 2.8% between the last quarter of 2011 and the last quarter of 2012, while consumer prices rose by 2.7%. As a result of the increases in the personal tax allowance and rising employment, average household disposable income has increased by 2.8% more than inflation.

[Chi Onwurah]

Clearly the Chancellor has no understanding of what it is like to get by on a low income when increases in prices such as VAT mean debt and hardship for many families. Equally, last week the Office for Budget Responsibility confirmed that the Prime Minister has no understanding of his economic policies either. Is that why the Chancellor is implementing a tax cut for millionaires—because he does not understand real life or economics?

[Greg Clark]

If the hon. Lady had a grasp of economics, she would understand the need to take people out of taxation, which is what we have done through the increase in the personal allowance. In fact, that increase affects the lowest paid most of all and is equivalent to a pay increase of 4.5% since the general election. A higher personal allowance is a better policy than the shadow Chancellor’s plan to introduce the 10p rate, which the Financial Times described as “a pretty basic howler”.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

The shadow Chancellor is a very gracious chap and, I am sure, would wish to commend the Government for taking 25 million people out of tax by the simple measure of increasing the personal allowance. Can my right hon. Friend share with the House what that means for an individual’s annual budget?

[Greg Clark]

Yes. By next month it will be worth £600 a year for every basic rate taxpayer, which is an enormous increase. For someone on median earnings, it is equivalent to a pay rise of 4.5%. I would have thought that the shadow Chancellor, who professes to be interested in helping the low-paid, would endorse the policy.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

12. What estimate he has made of what the annual value of his planned reduction in the additional rate of income tax to 45% would be to a person earning £1 million a year.

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

Although article 153(5) of the treaty on the functioning of the European Union may be esoteric to some, it is rather important because it prohibits the European Union from running an incomes policy. It seems to me that the bonus limit is an incomes policy; it is not a power of the European Union and therefore ought to be resisted by the Government by all possible means. Will the Chancellor take it to the European Court of Justice?

[The Financial Secretary to the Treasury (Greg Clark)]

I am delighted to answer my hon. Friend’s question. We are looking carefully at the provisions of the treaty and at every aspect of the proposals. We think that this country has a particularly rigorous set of arrangements, and we do not want to see them diluted.

[Nia Griffith (Llanelli) (Lab)]

T4. Companies are telling me that with demand at rock bottom and infrastructure projects failing to get away from the starting blocks, they see little incentive for investment in UK industry. When drawing up the Budget, will the Chancellor consider expanding the scope of enhanced capital allowances to cover a broader range of investment, and therefore encourage companies to invest in the UK rather than take their money elsewhere?

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[Mark Reckless (Rochester and Strood) (Con)]

House building approvals are up by two thirds. Does that reflect the success of the Government’s funding for lending schemes, the Financial Secretary’s successful planning reforms, or the sustained period of record low interest rates?

[Greg Clark]

All of the above.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

T7. My weekend surgeries were dominated by constituents facing backdated payment demands from Her Majesty’s Revenue and Customs, despite the fact that they had discharged their responsibilities and had been assured that their tax affairs were in order. Does the Minister think it is right to put people through financial stress and misery because of HMRC mistakes and staff cuts?